SPECIAL FIRST DIVISION

[G.R. No. 166357. January 14, 2015.]

VALERIO E. KALAW, petitioner, vs. MA. ELENA FERNANDEZ, respondent.
RESOLUTION
BERSAMIN, J p:
In our decision promulgated on September 19, 2011, 1 the Court dismissed the complaint for declaration of nullity of the marriage of the parties upon the following ratiocination,
to wit:
The petition has no merit. The CA committed no reversible error in setting aside the trial court's Decision for lack of legal and factual basis.
xxx xxx xxx
In the case at bar, petitioner failed to prove that his wife (respondent) suffers from psychological incapacity. He presented the testimonies of two
supposed expert witnesses who concluded that respondent is psychologically incapacitated, but the conclusions of these witnesses were premised on
the alleged acts or behavior of respondent which had not been sufficiently proven. Petitioner's experts heavily relied on petitioner's allegations of
respondent's constant mahjong sessions, visits to the beauty parlor, going out with friends, adultery, and neglect of their children. Petitioner's experts
opined that respondent's alleged habits, when performed constantly to the detriment of quality and quantity of time devoted to her duties as mother
and wife, constitute a psychological incapacity in the form of NPD.
But petitioner's allegations, which served as the bases or underlying premises of the conclusions of his experts, were not actually proven. In fact,
respondent presented contrary evidence refuting these allegations of the petitioner.
For instance, petitioner alleged that respondent constantly played mahjong and neglected their children as a result. Respondent admittedly played
mahjong, but it was not proven that she engaged in mahjong so frequently that she neglected her duties as a mother and a wife. Respondent refuted
petitioner's allegations that she played four to five times a week. She maintained it was only two to three times a week and always with the permission
of her husband and without abandoning her children at home. The children corroborated this, saying that they were with their mother when she played
mahjong in their relative's home. Petitioner did not present any proof, other than his own testimony, that the mahjong sessions were so frequent that
respondent neglected her family. While he intimated that two of his sons repeated the second grade, he was not able to link this episode to
respondent's mahjong-playing. The least that could have been done was to prove the frequency of respondent's mahjong-playing during the years
when these two children were in second grade. This was not done. Thus, while there is no dispute that respondent played mahjong, its alleged
debilitating frequency and adverse effect on the children were not proven.
Also unproven was petitioner's claim about respondent's alleged constant visits to the beauty parlor, going out with friends, and obsessive need for
attention from other men. No proof whatsoever was presented to prove her visits to beauty salons or her frequent partying with friends. Petitioner
presented Mario (an alleged companion of respondent during these nights-out) in order to prove that respondent had affairs with other men, but Mario
only testified that respondent appeared to be dating other men. Even assuming arguendo that petitioner was able to prove that respondent had an
extramarital affair with another man, that one instance of sexual infidelity cannot, by itself, be equated with obsessive need for attention from other
men. Sexual infidelity per se is a ground for legal separation, but it does not necessarily constitute psychological incapacity.
Given the insufficiency of evidence that respondent actually engaged in the behaviors described as constitutive of NPD, there is no basis for concluding
that she was indeed psychologically incapacitated. Indeed, the totality of the evidence points to the opposite conclusion. A fair assessment of the facts
would show that respondent was not totally remiss and incapable of appreciating and performing her marital and parental duties. Not once did the
children state that they were neglected by their mother. On the contrary, they narrated that she took care of them, was around when they were sick,
and cooked the food they like. It appears that respondent made real efforts to see and take care of her children despite her estrangement from their
father. There was no testimony whatsoever that shows abandonment and neglect of familial duties. While petitioner cites the fact that his two sons, Rio
and Miggy, both failed the second elementary level despite having tutors, there is nothing to link their academic shortcomings to Malyn's
actions. ADCSEa
After poring over the records of the case, the Court finds no factual basis for the conclusion of psychological incapacity. There is no error in the CA's
reversal of the trial court's ruling that there was psychological incapacity. The trial court's Decision merely summarized the allegations, testimonies,
and evidence of the respective parties, but it did not actually assess the veracity of these allegations, the credibility of the witnesses, and the weight of
the evidence. The trial court did not make factual findings which can serve as bases for its legal conclusion of psychological incapacity.
What transpired between the parties is acrimony and, perhaps, infidelity, which may have constrained them from dedicating the best of themselves to
each other and to their children. There may be grounds for legal separation, but certainly not psychological incapacity that voids a marriage.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals' May 27, 2004 Decision and its December 15, 2004 Resolution in CA-
G.R. CV No. 64240 are AFFIRMED.
SO ORDERED. 2
In his Motion for Reconsideration, 3 the petitioner implores the Court to take a thorough second look into what constitutes psychological incapacity; to uphold the findings of the
trial court as supported by the testimonies of three expert witnesses; and consequently to find that the respondent, if not both parties, were psychologically incapacitated to
perform their respective essential marital obligation.
Upon an assiduous review of the records, we resolve to grant the petitioner's Motion for Reconsideration.
I
Psychological incapacity as a ground for the nullity of marriage under Article 36 of the Family Code refers to a serious psychological illness afflicting a party even prior to the
celebration of the marriage that is permanent as to deprive the party of the awareness of the duties and responsibilities of the matrimonial bond he or she was about to assume.
Although the Family Code has not defined the term psychological incapacity, the Court has usually looked up its meaning by reviewing the deliberations of the sessions of
the Family Code Revision Committee that had drafted the Family Code in order to gain an insight on the provision. It appeared that the members of the Family Code Revision
Committee were not unanimous on the meaning, and in the end they decided to adopt the provision "with less specificity than expected" in order to have the law "allow some
resiliency in its application." 4 Illustrative of the "less specificity than expected" has been the omission by the Family Code Revision Committee to give any examples of
psychological incapacity that would have limited the applicability of the provision conformably with the principle of ejusdem generis, because the Committee desired that the
courts should interpret the provision on a case-to-case basis, guided by experience, the findings of experts and researchers in psychological disciplines, and the decisions of
church tribunals that had persuasive effect by virtue of the provision itself having been taken from the Canon Law. 5 cDCIHT
On the other hand, as the Court has observed in Santos v. Court of Appeals, 6 the deliberations of the Family Code Revision Committee and the relevant materials on
psychological incapacity as a ground for the nullity of marriage have rendered it obvious that the term psychological incapacity as used in Article 36 of the Family Code"has not
been meant to comprehend all such possible cases of psychoses as, likewise mentioned by some ecclesiastical authorities, extremely low intelligence, immaturity, and like
circumstances," and could not be taken and construed independently of "but must stand in conjunction with, existing precepts in our law on marriage." Thus correlated:
. . . "psychological incapacity" should refer to no less than a mental (not physical) incapacity that causes a party to be truly incognitive of the basic
marital covenants that concomitantly must be assumed and discharged by the parties to the marriage which, as so expressed by Article 68 of
the Family Code, include their mutual obligations to live together, observe love, respect and fidelity and render help and support. There is hardly any
doubt that the intendment of the law has been to confine the meaning of "psychological incapacity" to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage. This psychologic condition must exist at the
time the marriage is celebrated. The law does not evidently envision, upon the other hand, an inability of the spouse to have sexual relations with the
other. This conclusion is implicit under Article 54 of the Family Code which considers children conceived prior to the judicial declaration of nullity of the
void marriage to be "legitimate." 7
In time, in Republic v. Court of Appeals, 8 the Court set some guidelines for the interpretation and application of Article 36 of the Family Code, as follows:
(1) The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any doubt should be resolved in favor of the existence and
continuation of the marriage and against its dissolution and nullity. This is rooted in the fact that both our Constitution and our laws cherish the validity
of marriage and unity of the family. Thus, our Constitution devotes an entire Article on the Family, recognizing it "as the foundation of the nation." It
decrees marriage as legally "inviolable," thereby protecting it from dissolution at the whim of the parties. Both the family and marriage are to be
"protected" by the state.
The Family Code echoes this constitutional edict on marriage and the family and emphasizes their permanence, inviolability and solidarity.
(2) The root cause of the psychological incapacity must be (a) medically or clinically identified, (b) alleged in the complaint, (c) sufficiently proven by
experts and (d) clearly explained in the decision. Article 36 of the Family Code requires that the incapacity must be psychological not physical,
although its manifestations and/or symptoms may be physical. The evidence must convince the court that the parties, or one of them, was mentally or
psychically ill to such an extent that the person could not have known the obligations he was assuming, or knowing them, could not have given valid
assumption thereof. Although no example of such incapacity need be given here so as not to limit the application of the provision under the principle
of ejusdem generis, nevertheless such root cause must be identified as a psychological illness and its incapacitating nature fully explained. Expert
evidence may be given by qualified psychiatrists and clinical psychologists.
(3) The incapacity must be proven to be existing at "the time of the celebration" of the marriage. The evidence must show that the illness was existing
when the parties exchanged their "I do's." The manifestation of the illness need not be perceivable at such time, but the illness itself must have
attached at such moment, or prior thereto.
(4) Such incapacity must also be shown to be medically or clinically permanent or incurable. Such incurability may be absolute or even relative only in
regard to the other spouse, not necessarily absolutely against everyone of the same sex. Furthermore, such incapacity must be relevant to the
assumption of marriage obligations, not necessarily to those not related to marriage, like the exercise of a profession or employment in a job. Hence, a
pediatrician may be effective in diagnosing illnesses of children and prescribing medicine to cure them but may not be psychologically capacitated to
procreate, bear and raise his/her own children as an essential obligation of marriage.
(5) Such illness must be grave enough to bring about the disability of the party to assume the essential obligations of marriage. Thus, "mild
characteriological peculiarities, mood changes, occasional emotional outbursts" cannot be accepted as root causes. The illness must be shown as
downright incapacity or inability, not a refusal, neglect or difficulty, much less ill will. In other words, there is a natal or supervening disabling factor in
the person, an adverse integral element in the personality structure that effectively incapacitates the person from really accepting and thereby
complying with the obligations essential to marriage.
(6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family Code as regards the husband and wife as well as
Articles 220, 221 and 225 of the same Code in regard to parents and their children. Such non-complied marital obligation(s) must also be stated in the
petition, proven by evidence and included in the text of the decision. IAETSC
(7) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the Philippines, while not controlling or decisive,
should be given great respect by our courts. It is clear that Article 36 was taken by the Family Code Revision Committee from Canon 1095 of the New
Code of Canon Law, which became effective in 1983 and which provides:
"The following are incapable of contracting marriage: Those who are unable to assume the essential obligations of marriage due to causes
of psychological nature."
Since the purpose of including such provision in our Family Code is to harmonize our civil laws with the religious faith of our people, it stands to reason
that to achieve such harmonization, great persuasive weight should be given to decisions of such appellate tribunal. Ideally subject to our law on
evidence what is decreed as canonically invalid should also be decreed civilly void.
This is one instance where, in view of the evident source and purpose of the Family Code provision, contemporaneous religious interpretation is to be
given persuasive effect. Here, the State and the Church while remaining independent, separate and apart from each other shall walk together in
synodal cadence towards the same goal of protecting and cherishing marriage and the family as the inviolable base of the nation.
(8) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as counsel for the state. No decision shall be handed
down unless the Solicitor General issues a certification, which will be quoted in the decision, briefly stating therein his reasons for his agreement or
opposition, as the case may be, to the petition. The Solicitor General, along with the prosecuting attorney, shall submit to the court such certification
within fifteen (15) days from the date the case is deemed submitted for resolution of the court. The Solicitor General shall discharge the equivalent
function of the defensor vinculi contemplated under Canon 1095. 9
The foregoing guidelines have turned out to be rigid, such that their application to every instance practically condemned the petitions for declaration of nullity to the fate of
certain rejection. But Article 36 of the Family Code must not be so strictly and too literally read and applied given the clear intendment of the drafters to adopt its enacted version
of "less specificity" obviously to enable "some resiliency in its application." Instead, every court should approach the issue of nullity "not on the basis of a priori assumptions,
predilections or generalizations, but according to its own facts" in recognition of the verity that no case would be on "all fours" with the next one in the field of psychological
incapacity as a ground for the nullity of marriage; hence, every "trial judge must take pains in examining the factual milieu and the appellate court must, as much as possible,
avoid substituting its own judgment for that of the trial court." 10
In the task of ascertaining the presence of psychological incapacity as a ground for the nullity of marriage, the courts, which are concededly not endowed with expertise in the
field of psychology, must of necessity rely on the opinions of experts in order to inform themselves on the matter, and thus enable themselves to arrive at an intelligent and
judicious judgment. Indeed, the conditions for the malady of being grave, antecedent and incurable demand the in-depth diagnosis by experts. 11
II
The findings of the Regional Trial Court (RTC) on the existence or non-existence of a party's psychological incapacity should be final and binding for as long as such findings and
evaluation of the testimonies of witnesses and other evidence are not shown to be clearly and manifestly erroneous. 12 In every situation where the findings of the trial court are
sufficiently supported by the facts and evidence presented during trial, the appellate court should restrain itself from substituting its own judgment. 13 It is not enough reason to
ignore the findings and evaluation by the trial court and substitute our own as an appellate tribunal only because the Constitution and the Family Code regard marriage as an
inviolable social institution. We have to stress that the fulfilment of the constitutional mandate for the State to protect marriage as an inviolable social institution 14 only relates
to a valid marriage. No protection can be accorded to a marriage that is null and void ab initio, because such a marriage has no legal existence. 15
In declaring a marriage null and void ab initio, therefore, the Courts really assiduously defend and promote the sanctity of marriage as an inviolable social institution. The
foundation of our society is thereby made all the more strong and solid.
Here, the findings and evaluation by the RTC as the trial court deserved credence because it was in the better position to view and examine the demeanor of the witnesses while
they were testifying. 16 The position and role of the trial judge in the appreciation of the evidence showing the psychological incapacity were not to be downplayed but should be
accorded due importance and respect.
Yet, in the September 19, 2011 decision, the Court brushed aside the opinions tendered by Dr. Cristina Gates, a psychologist, and Fr. Gerard Healy on the ground that their
conclusions were solely based on the petitioner's version of the events. AaEDcS
After a long and hard second look, we consider it improper and unwarranted to give to such expert opinions a merely generalized consideration and treatment, least of all to
dismiss their value as inadequate basis for the declaration of the nullity of the marriage. Instead, we hold that said experts sufficiently and competently described the
psychological incapacity of the respondent within the standards of Article 36 of the Family Code. We uphold the conclusions reached by the two expert witnesses because they
were largely drawn from the case records and affidavits, and should not anymore be disputed after the RTC itself had accepted the veracity of the petitioner's factual premises. 17
Admittedly, Dr. Gates based her findings on the transcript of the petitioner's testimony, as well as on her interviews of the petitioner, his sister Trinidad, and his son Miguel.
Although her findings would seem to be unilateral under such circumstances, it was not right to disregard the findings on that basis alone. After all, her expert opinion took into
consideration other factors extant in the records, including the own opinions of another expert who had analyzed the issue from the side of the respondent herself. Moreover, it is
already settled that the courts must accord weight to expert testimony on the psychological and mental state of the parties in cases for the declaration of the nullity of marriages,
for by the very nature of Article 36 of the Family Code the courts, "despite having the primary task and burden of decision-making, must not discount but, instead, must
consider as decisive evidence the expert opinion on the psychological and mental temperaments of the parties." 18
The expert opinion of Dr. Gates was ultimately necessary herein to enable the trial court to properly determine the issue of psychological incapacity of the respondent (if not also
of the petitioner). Consequently, the lack of personal examination and interview of the person diagnosed with personality disorder, like the respondent, did not per se invalidate
the findings of the experts. The Court has stressed in Marcos v. Marcos 19 that there is no requirement for one to be declared psychologically incapacitated to be personally
examined by a physician, because what is important is the presence of evidence that adequately establishes the party's psychological incapacity. Hence, "if the totality of
evidence presented is enough to sustain a finding of psychological incapacity, then actual medical examination of the person concerned need not be resorted to." 20
Verily, the totality of the evidence must show a link, medical or the like, between the acts that manifest psychological incapacity and the psychological disorder itself. If other
evidence showing that a certain condition could possibly result from an assumed state of facts existed in the record, the expert opinion should be admissible and be weighed as
an aid for the court in interpreting such other evidence on the causation. 21 Indeed, an expert opinion on psychological incapacity should be considered as conjectural or
speculative and without any probative value only in the absence of other evidence to establish causation. The expert's findings under such circumstances would not constitute
hearsay that would justify their exclusion as evidence. 22 This is so, considering that any ruling that brands the scientific and technical procedure adopted by Dr. Gates as
weakened by bias should be eschewed if it was clear that her psychiatric evaluation had been based on the parties' upbringing and psychodynamics. 23
In that context, Dr. Gates' expert opinion should be considered not in isolation but along with the other evidence presented here.
Moreover, in its determination of the issue of psychological incapacity, the trial court was expected to compare the expert findings and opinion of Dr. Natividad Dayan, the
respondent's own witness, and those of Dr. Gates.
In her Psychological Evaluation Report, 24 Dr. Dayan impressed that the respondent had "compulsive and dependent tendencies" to the extent of being "relationship dependent."
Based from the respondent's psychological data, Dr. Dayan indicated that:
In her relationship with people, Malyne is likely to be reserved and seemingly detached in her ways. Although she likes to be around people, she may
keep her emotional distance. She, too, values her relationship but she may not be that demonstrative of her affections. Intimacy may be quite difficult
for her since she tries to maintain a certain distance to minimize opportunities for rejection. To others, Malyne may appear, critical and demanding in
her ways. She can be assertive when opinions contrary to those of her own are expressed. And yet, she is apt to be a dependent person. At a less
conscious level, Malyne fears that others will abandon her. Malyne, who always felt a bit lonely, placed an enormous value on having significant others
would depend on most times.
xxx xxx xxx
But the minute she started to care, she became a different person clingy and immature, doubting his love, constantly demanding reassurance that
she was the most important person in his life. She became relationship-dependent. 25
Dr. Dayan was able to clearly interpret the results of the Millon Clinical Multiaxial Inventory test 26 conducted on the respondent, observing that the respondent obtained high
scores on dependency, narcissism and compulsiveness, to wit:
Atty. Bretania
Q: How about this Millon Clinical Multiaxial Inventory?
A: Sir, the cut of the score which is supposed to be normal is 73 percental round and there are several scores wherein Mrs. Kalaw obtained very high
score and these are on the score of dependency, narcissism and compulsion.
Q: Would you please tell us again, Madam Witness, what is the acceptable score?
A: When your score is 73 and above, that means that it is very significant. So, if 72 and below, it will be considered as acceptable.
Q: In what area did Mrs. Kalaw obtain high score?
A: Under dependency, her score is 78; under narcissism, is 79; under compulsiveness, it is 84. 27
It is notable that Dr. Dayan's findings did not contradict but corroborated the findings of Dr. Gates to the effect that the respondent had been afflicted with Narcissistic Personality
Disorder as well as with Anti-Social Disorder. Dr. Gates relevantly testified:
ATTY. GONONG
Q: Could you please repeat for clarity. I myself is [sic] not quite familiar with psychology terms. So, more or less, could you please tell me in more
layman's terms how you arrived at your findings that the respondent is self-centered or narcissistic?
A: I moved into this particular conclusion. Basically, if you ask about her childhood background, her father died in a vehicular accident when she was in
her teens and thereafter she was prompted to look for a job to partly assume the breadwinner's role in her family. I gathered that paternal
grandmother partly took care of her and her siblings against the fact that her own mother was unable to carry out her respective duties and
responsibilities towards Elena Fernandez and her siblings considering that the husband died prematurely. And there was an indication that
Elena Fernandez on several occasions ever told petitioner that he cannot blame her for being negligent as a mother because she herself
never experienced the care and affection of her own mother herself. So, there is a precedent in her background, in her childhood, and
indeed this seems to indicate a particular script, we call it in psychology a script, the tendency to repeat some kind of experience or the
lack of care, let's say some kind of deprivation, there is a tendency to sustain it even on to your own life when you have your own family. I
did interview the son because I was not satisfied with what I gathered from both Trinidad and Valerio and even though as a young son at the
age of fourteen already expressed the he could not see, according to the child, the sincerity of maternal care on the part of Elena and that
he preferred to live with the father actually.
Q: Taking these all out, you came to the conclusion that respondent is self-centered and narcissistic? caTIDE
A: Actually respondent has some needs which tempts [sic] from a deprived childhood and she is still in search of this. In her several boyfriends, it
seems that she would jump from one boyfriend to another. There is this need for attention, this need for love on other people.
Q: And that led you to conclude?
A: And therefore I concluded that she is self-centered to the point of neglecting her duty as a wife and as a mother. 28
The probative force of the testimony of an expert does not lie in a mere statement of her theory or opinion, but rather in the assistance that she can render to the courts in
showing the facts that serve as a basis for her criterion and the reasons upon which the logic of her conclusion is founded. 29 Hence, we should weigh and consider the probative
value of the findings of the expert witnesses vis--vis the other evidence available.
The other expert of the petitioner was Fr. Healy, a canon law expert, an advocate before the Manila Archdiocese and Matrimonial Tribunal, and a consultant of the Family
Code Revision Committee. Regarding Father Healy's expert testimony, we have once declared that judicial understanding of psychological incapacity could be informed by
evolving standards, taking into account the particulars of each case, by current trends in psychological and even by canonical thought, and by experience. 30It is prudent for us
to do so because the concept of psychological incapacity adopted under Article 36 of the Family Code was derived from Canon Law.
Father Healy tendered his opinion on whether or not the respondent's level of immaturity and irresponsibility with regard to her own children and to her husband constituted
psychological incapacity, testifying thusly:
ATTY. MADRID
Q: Now, respondent Ma. Elena Fernandez claims that she is not psychologically incapacitated. On the facts as you read it based on the records of this
case before this Honorable Court, what can you say to that claim of respondent?
A: I would say it is a clear case of psychological incapacity because of her immaturity and traumatic irresponsibility with regards to her own children.
Q: So what you are saying is that, the claim of respondent that she is not psychologically incapacitated is not true?
A: Yes. It should be rejected.
Q: Why do you say so?
A: Because of what she has manifested in her whole lifestyle, inconsistent pattern has been manifested running through their life made a doubt that
this is immaturity and irresponsibility because her family was dysfunctional and then her being a model in her early life and being the
breadwinner of the family put her in an unusual position of prominence and then begun to inflate her own ego and she begun to
concentrate her own beauty and that became an obsession and that led to her few responsibility of subordinating to her children to this
lifestyle that she had embraced.
Q: You only mentioned her relationship with the children, the impact. How about the impact on the relationship of the respondent with her husband?
A: Also the same thing. It just did not fit in to her lifestyle to fulfill her obligation to her husband and to her children. She had her own priorities, her
beauty and her going out and her mahjong and associating with friends. They were the priorities of her life.
Q: And what you are saying is that, her family was merely secondary?
A: Secondary.
Q: And how does that relate to psychological incapacity?
A: That she could not appreciate or absorb or fulfill the obligations of marriage which everybody takes for granted. The concentration on the husband
and the children before everything else would be subordinated to the marriage with her. It's the other way around. Her beauty, her going
out, her beauty parlor and her mahjong, they were their priorities in her life.
Q: And in medical or clinical parlance, what specifically do you call this?
A: That is narcissism where the person falls in love with himself is from a myt[h]ical case in Roman history.
Q: Could you please define to us what narcissism is? IDEHCa
 A: It's a self-love, falling in love with oneself to make up for the loss of a dear friend as in the case of Narcissus, the myth, and then that became known
in clinical terminology as narcissism. When a person is so concern[ed] with her own beauty and prolonging and protecting it, then it
becomes the top priority in her life.
xxx xxx xxx
Q: And you stated that circumstances that prove this narcissism. How do you consider this narcissism afflicting respondent, it is grave, slight or . . . .?
A: I would say it's grave from the actual cases of neglect of her family and that causes serious obligations which she has ignored and not properly
esteemed because she is so concern[ed] with herself in her own lifestyle. Very serious.
Q: And do you have an opinion whether or not this narcissism afflicting respondent was already existing at the time or marriage or even thereafter?
xxx xxx xxx
A: When you get married you don't develop narcissism or psychological incapacity. You bring with you into the marriage and then it becomes
manifested because in marriage you accept these responsibilities. And now you show that you don't accept them and you are not capable
of fulfilling them and you don't care about them.
Q: Is this narcissism, Fr. Healy, acquired by accident or congenital or what?
A: No. The lifestyle generates it. Once you become a model and still the family was depended [sic] upon her and she was a model at Hyatt and then
Rustan's, it began to inflate her ego so much that this became the top priority in her life. It's her lifestyle.
Q: What you are saying is that, the narcissism of respondent even expanded after the marriage?
A: That could have expanded because it became very obvious after the marriage because she was neglecting such fundamental obligations.
Q: And how about the matter of curability, is this medically or clinically curable, this narcissism that you mentioned?
A: Let's say, it was manifested for so many years in her life. It was found in her family background situation. Say, almost for sure would be incurable
now.
Q: What specific background are you referring to?
A: Well, the fact when the father died and she was the breadwinner and her beauty was so important to give in her job and money and influence and so
on. But this is a very unusual situation for a young girl and her position in the family was exalted in a very very unusual manner and
therefore she had that pressure on her and in her accepting the pressure, in going along with it and putting it in top priority. 31
Given his credentials and conceded expertise in Canon Law, Father Healy's opinions and findings commanded respect. The contribution that his opinions and findings could add to
the judicial determination of the parties' psychological incapacity was substantive and instructive. He could thereby inform the trial court on the degrees of the malady that would
warrant the nullity of marriage, and he could as well thereby provide to the trial court an analytical insight upon a subject as esoteric to the courts as psychological incapacity has
been. We could not justly disregard his opinions and findings. Appreciating them together with those of Dr. Gates and Dr. Dayan would advance more the cause of justice. The
Court observed in Ngo Te v. Yu-Te: 32
By the very nature of Article 36, courts, despite having the primary task and burden of decision-making, must not discount but, instead, must
consider as decisive evidence the expert opinion on the psychological and mental temperaments of the parties.
Justice Romero explained this in Molina, as follows:
Furthermore, and equally significant, the professional opinion of a psychological expert became increasingly important in such cases. Data
about the person's entire life, both before and after the ceremony, were presented to these experts and they were asked to give
professional opinions about a party's mental capacity at the time of the wedding . These opinions were rarely challenged and tended to be
accepted as decisive evidence of lack of valid consent.
The Church took pains to point out that its new openness in this area did not amount to the addition of new grounds for annulment, but
rather was an accommodation by the Church to the advances made in psychology during the past decades. There was now the expertise to
provide the all-important connecting link between a marriage breakdown and premarital causes. HIAEcT
During the 1970s, the Church broadened its whole idea of marriage from that of a legal contract to that of a covenant. The result of this was that it
could no longer be assumed in annulment cases that a person who could intellectually understand the concept of marriage could necessarily give valid
consent to marry. The ability to both grasp and assume the real obligations of a mature, lifelong commitment are now considered a necessary
prerequisite to valid matrimonial consent.
Rotal decisions continued applying the concept of incipient psychological incapacity, "not only to sexual anomalies but to all kinds of personality
disorders that incapacitate a spouse or both spouses from assuming or carrying out the essential obligations of marriage. For marriage . . . is not
merely cohabitation or the right of the spouses to each other's body for heterosexual acts, but is, in its totality the right to the community of the whole
of life; i.e., the right to a developing lifelong relationship. Rotal decisions since 1973 have refined the meaning of psychological or psychic capacity for
marriage as presupposing the development of an adult personality; as meaning the capacity of the spouses to give themselves to each other and to
accept the other as a distinct person; that the spouses must be 'other oriented' since the obligations of marriage are rooted in a self-giving love; and
that the spouses must have the capacity for interpersonal relationship because marriage is more than just a physical reality but involves a true
intertwining of personalities. The fulfillment of the obligations of marriage depends, according to Church decisions, on the strength of this interpersonal
relationship. A serious incapacity for interpersonal sharing and support is held to impair the relationship and consequently, the ability to fulfill the
essential marital obligations. The marital capacity of one spouse is not considered in isolation but in reference to the fundamental relationship to the
other spouse.
Fr. Green, in an article in Catholic Mind, lists six elements necessary to the mature marital relationship:
"The courts consider the following elements crucial to the marital commitment: (1) a permanent and faithful commitment to the marriage
partner; (2) openness to children and partner; (3) stability; (4) emotional maturity; (5) financial responsibility; (6) an ability to cope with the
ordinary stresses and strains of marriage, etc."
Fr. Green goes on to speak about some of the psychological conditions that might lead to the failure of a marriage:
"At stake is a type of constitutional impairment precluding conjugal communion even with the best intentions of the parties. Among the
psychic factors possibly giving rise to his or her inability to fulfill marital obligations are the following: (1) antisocial personality with its
fundamental lack of loyalty to persons or sense of moral values; (2) hyperesthesia, where the individual has no real freedom of sexual
choice; (3) the inadequate personality where personal responses consistently fall short of reasonable expectations.
xxx xxx xxx
The psychological grounds are the best approach for anyone who doubts whether he or she has a case for an annulment on any other
terms. A situation that does not fit into any of the more traditional categories often fits very easily into the psychological category.
As new as the psychological grounds are, experts are already detecting a shift in their use. Whereas originally the emphasis was on the
parties' inability to exercise proper judgment at the time of the marriage (lack of due discretion), recent cases seem to be concentrating on
the parties' incapacity to assume or carry out their responsibilities and obligations as promised (lack of due competence). An advantage to
using the ground of lack of due competence is that at the time the marriage was entered into civil divorce and breakup of the family almost
always is proof of someone's failure to carry out marital responsibilities as promisedat the time the marriage was entered into."
Hernandez v. Court of Appeals emphasizes the importance of presenting expert testimony to establish the precise cause of a party's psychological
incapacity, and to show that it existed at the inception of the marriage. And as Marcos v. Marcos asserts, there is no requirement that the person to be
declared psychologically incapacitated be personally examined by a physician, if the totality of evidence presented is enough to sustain a finding of
psychological incapacity. Verily, the evidence must show a link, medical or the like, between the acts that manifest psychological incapacity and the
psychological disorder itself.
This is not to mention, but we mention nevertheless for emphasis, that the presentation of expert proof presupposes a thorough and in-depth
assessment of the parties by the psychologist or expert, for a conclusive diagnosis of a grave, severe and incurable presence of psychological
incapacity. 33 aSTAHD
Ngo Te also emphasized that in light of the unintended consequences of strictly applying the standards set in Molina, 34 the courts should consider the totality of evidence in
adjudicating petitions for declaration of nullity of marriage under Article 36 of the Family Code, viz.:
The resiliency with which the concept should be applied and the case-to-case basis by which the provision should be interpreted, as so intended by its
framers, had, somehow, been rendered ineffectual by the imposition of a set of strict standards in Molina, thus:
xxx xxx xxx
Noteworthy is that in Molina, while the majority of the Court's membership concurred in the ponencia of then Associate Justice (later Chief Justice)
Artemio V. Panganiban, three justices concurred "in the result" and another three including, as aforesaid, Justice Romero took pains to compose
their individual separate opinions. Then Justice Teodoro R. Padilla even emphasized that "each case must be judged, not on the basis of a
priori assumptions, predilections or generalizations, but according to its own facts. In the field of psychological incapacity as a ground for annulment of
marriage, it is trite to say that no case is on 'all fours' with another case. The trial judge must take pains in examining the factual milieu and the
appellate court must, as much as possible, avoid substituting its own judgment for that of the trial court."
Predictably, however, in resolving subsequent cases, the Court has applied the aforesaid standards, without too much regard for the law's clear
intention that each case is to be treated differently, as "courts should interpret the provision on a case-to-case basis; guided by experience, the
findings of experts and researchers in psychological disciplines, and by decisions of church tribunals."
In hindsight, it may have been inappropriate for the Court to impose a rigid set of rules, as the one in Molina, in resolving all cases of psychological
incapacity. Understandably, the Court was then alarmed by the deluge of petitions for the dissolution of marital bonds, and was sensitive to the OSG's
exaggeration of Article 36 as the "most liberal divorce procedure in the world." The unintended consequences of Molina, however, has taken its toll on
people who have to live with deviant behavior, moral insanity and sociopathic personality anomaly, which, like termites, consume little by little the very
foundation of their families, our basic social institutions. Far from what was intended by the Court, Molina has become a strait-jacket, forcing all sizes to
fit into and be bound by it. Wittingly or unwittingly, the Court, in conveniently applying Molina, has allowed diagnosed sociopaths, schizophrenics,
nymphomaniacs, narcissists and the like, to continuously debase and pervert the sanctity of marriage. Ironically, the Roman Rota has annulled
marriages on account of the personality disorders of the said individuals.
The Court need not worry about the possible abuse of the remedy provided by Article 36, for there are ample safeguards against this contingency,
among which is the intervention by the State, through the public prosecutor, to guard against collusion between the parties and/or fabrication of
evidence. The Court should rather be alarmed by the rising number of cases involving marital abuse, child abuse, domestic violence and incestuous
rape.
In dissolving marital bonds on account of either party's psychological incapacity, the Court is not demolishing the foundation of families, but it is
actually protecting the sanctity of marriage, because it refuses to allow a person afflicted with a psychological disorder, who cannot comply with or
assume the essential marital obligations, from remaining in that sacred bond. It may be stressed that the infliction of physical violence, constitutional
indolence or laziness, drug dependence or addiction, and psychosexual anomaly are manifestations of a sociopathic personality anomaly. Let it be
noted that in Article 36, there is no marriage to speak of in the first place, as the same is void from the very beginning. To indulge in imagery, the
declaration of nullity under Article 36 will simply provide a decent burial to a stillborn marriage.
xxx xxx xxx
Lest it be misunderstood, we are not suggesting the abandonment of Molina in this case. We simply declare that, as aptly stated by Justice Dante O.
Tinga in Antonio v. Reyes, there is need to emphasize other perspectives as well which should govern the disposition of petitions for declaration of
nullity under Article 36. At the risk of being redundant, we reiterate once more the principle that each case must be judged, not on the basis of a
priori assumptions, predilections or generalizations but according to its own facts. And, to repeat for emphasis, courts should interpret the provision on
a case-to-case basis; guided by experience, the findings of experts and researchers in psychological disciplines, and by decisions of church
tribunals. 35
III
In the decision of September 19, 2011, the Court declared as follows:
Respondent admittedly played mahjong, but it was not proven that she engaged in mahjong so frequently that she neglected her duties as a
mother and a wife. Respondent refuted petitioner's allegations that she played four to five times a week. She maintained it was only two to three
times a week and always with the permission of her husband and without abandoning her children at home. The children corroborated
 this, saying that they were with their mother when she played mahjong in their relatives home . Petitioner did not present any proof, other
than his own testimony, that the mahjong sessions were so frequent that respondent neglected her family. While he intimated that two of his sons
repeated the second grade, he was not able to link this episode to respondent's mahjong-playing. The least that could have been done was to prove the
frequency of respondent's mahjong-playing during the years when these two children were in second grade. This was not done. Thus, while there is no
dispute that respondent played mahjong, its alleged debilitating frequency and adverse effect on the children were not proven. 36 (Emphasis
supplied) TcEAIH
The frequency of the respondent's mahjong playing should not have delimited our determination of the presence or absence of psychological incapacity. Instead, the determinant
should be her obvious failure to fully appreciate the duties and responsibilities of parenthood at the time she made her marital vows. Had she fully appreciated such duties and
responsibilities, she would have known that bringing along her children of very tender ages to her mahjong sessions would expose them to a culture of gambling and other vices
that would erode their moral fiber.
Nonetheless, the long-term effects of the respondent's obsessive mahjong playing surely impacted on her family life, particularly on her very young children. We do find to be
revealing the disclosures made by Valerio Teodoro Kalaw 37 the parties' eldest son in his deposition, whereby the son confirmed the claim of his father that his mother had
been hooked on playing mahjong, viz.:
ATTY. PISON:
From the time. . . before your parent's separation, do you remember any habit or activity or practice which your mother engaged in, before the
separation?
WITNESS:
Yeah, habit? She was a heavy smoker and she likes to play mahjong a lot, and I can't remember.
xxx xxx xxx
ATTY. PISON:
You said that your mother played mahjong frequently. How frequent, do you remember?
WITNESS:
Not really, but it was a lot. Not actually, I can't, I can't. . .
ATTY. PISON:
How long would she stay playing mahjong say one session?
WITNESS:
Really long cuz' we would go to my aunt's house in White Plains and I think we would get there by lunch then leave, we fall asleep. I think it was like
one in the morning.
ATTY. PISON:
You, you went there? She brought you?
WITNESS:
Yeah, to play with my cousins, yeah and my brothers & sisters.
ATTY. PISON:
Were you brought all the time?
WITNESS:
Yeah, almost all the time but sometimes, I guess she'd go out by herself. 38
The fact that the respondent brought her children with her to her mahjong sessions did not only point to her neglect of parental duties, but also manifested her tendency to
expose them to a culture of gambling. Her willfully exposing her children to the culture of gambling on every occasion of her mahjong sessions was a very grave and serious act of
subordinating their needs for parenting to the gratification of her own personal and escapist desires. This was the observation of Father Healy himself. In that regard, Dr. Gates
and Dr. Dayan both explained that the current psychological state of the respondent had been rooted on her own childhood experience.
The respondent revealed her wanton disregard for her children's moral and mental development. This disregard violated her duty as a parent to safeguard and protect her
children, as expressly defined under Article 209 and Article 220 of the Family Code, to wit:
Article 209. Pursuant to the natural right and duty of parents over the person and property of their unemancipated children, parental authority and
responsibility shall include the caring for and rearing of such children for civic consciousness and efficiency and the development of their
moral, mental and physical character and well-being.
Article 220. The parents and those exercising parental authority shall have with respect to their unemancipated children or wards the following rights
and duties:
(1) To keep them in their company, to support, educate and instruct them by right precept and good example, and to provide for their
upbringing in keeping with their means;
(2) . . .
(3) To provide them with moral and spiritual guidance, inculcate in them honesty, integrity, self-discipline, self-reliance, industry and thrift,
stimulate their interest in civic affairs, and inspire in them compliance with the duties of citizenship;
(4) To enhance, protect, preserve and maintain their physical and mental health at all times;
(5) To furnish them with good and wholesome educational materials, supervise their activities, recreation and association with others, protect them
from bad company, and prevent them from acquiring habits detrimental to their health, studies and morals;
(6) . . .
(7) . . .
(8) . . .
(9) . . . (emphasis supplied)
The September 19, 2011 decision did not properly take into consideration the findings of the RTC to the effect that both the petitioner and the respondent had been
psychologically incapacitated, and thus could not assume the essential obligations of marriage. The RTC would not have found so without the allegation to that effect by the
respondent in her answer, 39 whereby she averred that it was not she but the petitioner who had suffered from psychological incapacity.
The allegation of the petitioner's psychological incapacity was substantiated by Dr. Dayan, as follows:
ATTY. BRETAA:
Q: You stated earlier that both parties were behaviorally immature?
A: Yes, sir.
Q: And that the marriage was a mistake?
A: Yes, sir.
Q: What is your basis for your statement that respondent was behaviorally immature? EaICAD
A: Sir, for the reason that even before the marriage Malyn had noticed already some of those short temper of the petitioner but she was very much in
love and so she lived-in with him and even the time that they were together, that they were living in, she also had noticed some of his
psychological deficits if we may say so. But as I said, because she is also dependent and she was one who determined to make the
relationship work, she was denying even those kinds of problems that she had seen.
Q: To make it clear, Madam witness, I'm talking here of the petitioner, Mr. Kalaw. What led you to conclude that Mr. Kalaw was behaviorally immature?
A: I think he also mentioned that his concept of marriage was not duly stable then. He was not really thinking of marriage except that his wife got
pregnant and so he thought that he had to marry her. And even that time he was not also a monogamous person.
Q: Are you saying, Madam Witness, that ultimately the decision to marry lied on the petitioner?
A: I think so, Sir.
Q: Now, in your report, Madam Witness, you mentioned here that the petitioner admitted to you that in his younger years he was often out seeking
other women. I'm referring specifically to page 18. He also admitted to you that the thought of commitment scared him, the petitioner.
Now, given these admissions by petitioner to you, my questions is, is it possible for such a person to enter into marriage despite this fear of
commitment and given his admission that he was a womanizer? Is it possible for this person to stop his womanizing ways during the
marriage?
A: Sir, it's difficult.
Q: It would be difficult for that person?
A: Yes, Sir.
Q: What is the probability of this person giving up his womanizing after marriage?
A: Sir, I would say the probability of his giving up is almost only 20%.
Q: So, it is entirely possible that the respondent womanized during his marriage with the respondent?
A: Yes, Sir.
Q: What is the bearing of this fear of commitment on the part of the petitioner insofar as his psychological capacity to perform his duties as a husband
is concerned?
A: Sir, it would impair his ability to have sexual integrity and also to be fully committed to the role of husband to Malyn.
Q: Madam Witness, you never directly answered my question on whether the petitioner was psychologically incapacitated to perform his duty as a
husband. You only said that the petitioner was behaviorally immature and that the marriage was a mistake. Now, may I asked [sic] you that
question again and request you to answer that directly?
A: Sir, he is psychologically incapacitated. 40
Although the petitioner, as the plaintiff, carried the burden to prove the nullity of the marriage, the respondent, as the defendant spouse, could establish the psychological
incapacity of her husband because she raised the matter in her answer. The courts are justified in declaring a marriage null and void under Article 36 of the Family
Code regardless of whether it is the petitioner or the respondent who imputes the psychological incapacity to the other as long as the imputation is fully substantiated with proof.
Indeed, psychological incapacity may exist in one party alone or in both of them, and if psychological incapacity of either or both is established, the marriage has to be deemed
null and void.
More than twenty (20) years had passed since the parties parted ways. By now, they must have already accepted and come to terms with the awful truth that their marriage,
assuming it existed in the eyes of the law, was already beyond repair. Both parties had inflicted so much damage not only to themselves, but also to the lives and psyche of their
own children. It would be a greater injustice should we insist on still recognizing their void marriage, and then force them and their children to endure some more damage. This
was the very same injustice that Justice Romero decried in her erudite dissenting opinion in Santos v. Court of Appeals: 41
It would be great injustice, I believe, to petitioner for this Court to give a much too restrictive interpretation of the law and compel the petitioner to
continue to be married to a wife who for purposes of fulfilling her marital duties has, for all practical purposes, ceased to exist. AcISTE
Besides, there are public policy considerations involved in the ruling the Court makes today. It is not, in effect, directly or indirectly, facilitating the
transformation of petitioner into a "habitual tryster" or one forced to maintain illicit relations with another woman or women with emerging problems of
illegitimate children, simply because he is denied by private respondent, his wife, the companionship and conjugal love which he has sought from her
and to which he is legally entitled?
I do not go as far as to suggest that Art. 36 of the Family Code is a sanction for absolute divorce but I submit that we should not constrict it to non-
recognition of its evident purpose and thus deny to one like petitioner, an opportunity to turn a new leaf in his life by declaring his marriage a nullity by
reason of his wife's psychological incapacity to perform an essential marital obligation.
In this case, the marriage never existed from the beginning because the respondent was afflicted with psychological incapacity at and prior to the time of the marriage. Hence,
the Court should not hesitate to declare the nullity of the marriage between the parties.
To stress, our mandate to protect the inviolability of marriage as the basic foundation of our society does not preclude striking down a marital union that is "ill-equipped to
promote family life," thus:
Now is also the opportune time to comment on another common legal guide utilized in the adjudication of petitions for declaration of nullity in the
adjudication of petitions for declaration of nullity under Article 36. All too frequently, this Court and lower courts, in denying petitions of the kind, have
favorably cited Sections 1 and 2, Article XV of the Constitution, which respectively state that "[t]he State recognizes the Filipino family as the
foundation of the nation. Accordingly, it shall strengthen its solidarity and actively promote its total developmen[t]," and that [m]arriage, as an
 inviolable social institution, is the foundation of the family and shall be protected by the State." These provisions highlight the importance of the family
and the constitutional protection accorded to the institution of marriage.
But the Constitution itself does not establish the parameters of state protection to marriage as a social institution and the foundation of the family. It
remains the province of the legislature to define all legal aspects of marriage and prescribe the strategy and the modalities to protect it, based on
whatever socio-political influences it deems proper, and subject of course to the qualification that such legislative enactment itself adheres to
the Constitution and the Bill of Rights. This being the case, it also falls on the legislature to put into operation the constitutional provisions that protect
marriage and the family. This has been accomplished at present through the enactment of the Family Code, which defines marriage and the family,
spells out the corresponding legal effects, imposes the limitations that affect married and family life, as well as prescribes the grounds for declaration of
nullity and those for legal separation. While it may appear that the judicial denial of a petition for declaration of nullity is reflective of the constitutional
mandate to protect marriage, such action in fact merely enforces a statutory definition of marriage, not a constitutionally ordained decree of what
marriage is. Indeed, if circumstances warrant, Sections 1 and 2 of Article XV need not be the only constitutional considerations to be taken into account
in resolving a petition for declaration of nullity. CSTDIE
Indeed, Article 36 of the Family Code, in classifying marriages contracted by a psychologically incapacitated person as a nullity, should be deemed as
an implement of this constitutional protection of marriage. Given the avowed State interest in promoting marriage as the foundation of the
family, which in turn serves as the foundation of the nation, there is a corresponding interest for the State to defend against
marriages ill-equipped to promote family life. Void ab initio marriages under Article 36 do not further the initiatives of the State
concerning marriage and family, as they promote wedlock among persons who, for reasons independent of their will, are not
capacitated to understand or comply with the essential obligations of marriage. 42 (Emphasis supplied)
WHEREFORE, the Court GRANTS the Motion for Reconsideration; REVERSES and SETS ASIDE the decision promulgated on September 19, 2011; and REINSTATES the
decision rendered by the Regional Trial Court declaring the marriage between the petitioner and the respondent on November 4, 1976 as NULL AND VOID AB INITIOdue to the
psychological incapacity of the parties pursuant to Article 36 of the Family Code.
No pronouncement on costs of suit.
SO ORDERED.

FIRST DIVISION
[G.R. No. 209180. February 24, 2016.]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. REGHIS M. ROMERO II and OLIVIA LAGMAN ROMERO, respondents.
[G.R. No. 209253. February 24, 2016.]
OLIVIA LAGMAN ROMERO, petitioner, vs. REGHIS M. ROMERO II, respondent.
DECISION
PERLAS-BERNABE, J p:
Before the Court are consolidated petitions 1 for review on certiorari assailing the Decision 2 dated March 21, 2013 and the Resolution 3 dated September 12,
2013 of the Court of Appeals in CA-G.R. CV No. 94337, which affirmed the Decision 4 dated November 5, 2008 of the Regional Trial Court (RTC) of Quezon City, Branch 225
(RTC Branch 225) in Civil Case No. Q-98-34627 declaring the marriage of Reghis M. Romero II (Reghis) and Olivia Lagman Romero (Olivia) null and void ab initio on the
ground of psychological incapacity pursuant to Article 36 5 of the Family Code of the Philippines (Family Code), as amended.
The Facts
Reghis and Olivia were married 6 on May 11, 1972 at the Mary the Queen Parish in San Juan City and were blessed with two (2) children, namely, Michael and
Nathaniel, born in 1973 and 1975, 7 respectively. The couple first met in Baguio City in 1971 when Reghis helped Olivia and her family who were stranded along Kennon
Road. Since then, Reghis developed a closeness with Olivia's family, especially with the latter's parents who tried to play matchmakers for Reghis and Olivia. In the desire to
please Olivia's parents, Reghis courted Olivia and, eventually, they became sweethearts. 8
Reghis was still a student at the time, determined to finish his studies and provide for the financial needs of his siblings and parents. Thus, less than a year into
their relationship, Reghis tried to break-up with Olivia because he felt that her demanding attitude would prevent him from reaching his personal and family goals. Olivia,
however, refused to end their relationship and insisted on staying with Reghis at the latter's dormitory overnight. Reghis declined and, instead, made arrangements with his
friends so that Olivia could sleep in a female dormitory. The next day, Reghis brought Olivia home and while nothing happened between them the previous night, Olivia's
parents believed that they had eloped and planned for them to get married. Reghis initially objected to the planned marriage as he was unemployed and still unprepared.
However, Olivia's parents assured him that they would shoulder all expenses and would support them until they are financially able. As Olivia's parents had treated him with
nothing but kindness, Reghis agreed. 9
The couple experienced a turbulent and tumultuous marriage, often having violent fights and jealous fits. Reghis could not forgive Olivia for dragging him into
marriage and resented her condescending attitude towards him. They became even more estranged when Reghis secured a job as a medical representative and became
engrossed in his career and focused on supporting his parents and siblings. As a result, he spent little time with his family, causing Olivia to complain that Reghis failed to be
a real husband to her. In 1986, the couple parted ways. 10
On June 16, 1998, Reghis filed a petition for declaration of nullity of marriage 11 before the RTC of Quezon City, Branch 94, 12 docketed as Civil Case No. Q-98-
34627, citing his psychological incapacity to comply with his essential marital obligations. 13 In support of his petition, Reghis testified that he married Olivia not out of love
but out of the desire to please the latter's parents who were kind and accommodating to him. Reghis further maintained that he was not prepared to comply with the
essential marital obligations at the time, as his mind was geared towards finishing his studies and finding employment to support his parents and siblings. 14He also added
that Olivia is in a relationship with a certain Eddie Garcia (Mr. Garcia) but he (Reghis) has no ill-feelings towards Mr. Garcia, as he and Olivia have been separated for a long
time. 15 CAIHTE
Reghis also presented Dr. Valentina Nicdao-Basilio (Dr. Basilio), a clinical psychologist, who submitted a Psychological Evaluation Report 16 dated April 28, 1998
and testified that Reghis suffered from Obsessive Compulsive Personality Disorder (OCPD). 17 According to Dr. Basilio, Reghis' behavioral disorder gave him a strong
obsession for whatever endeavour he chooses, such as his work, to the exclusion of other responsibilities and duties such as those pertaining to his roles as father and
husband. Dr. Basilio surmised that Reghis' OCPD was the root of the couple's disagreements and that the same is incurable, explaining too that Reghis was an unwilling
groom as marriage was farthest from his mind at the time and, as such, felt cheated into marriage. 18
For her part, 19 Olivia maintained that she and Reghis were capacitated to discharge the essential marital obligations before, at the time, and after the
celebration of their marriage. She also averred that the petition is barred by res judicata inasmuch as Reghis had previously filed petitions for the declaration of the nullity of
their marriage on the ground the she is allegedly psychologically incapacitated, but said petitions were dismissed. 20 Olivia, however, was unable to present evidence due
to the absence of her counsel which was considered by the RTC as waiver of her right to present evidence. 21
The Office of the Solicitor General (OSG), representing the Republic of the Philippines (Republic), opposed the petition. 22
The RTC Ruling
In a Decision 23 dated November 5, 2008, the RTC granted the petition and declared the marriage between Reghis and Olivia null and void ab initio on the
ground of psychological incapacity. 24 It relied on the findings and testimony of Dr. Basilio, holding that Reghis suffered from a disorder that rendered him unable to perform
the obligations of love, respect and fidelity towards Olivia as it gave him a strong obsession to succeed in his career, to the exclusion of his responsibilities as a father and
husband. It also concurred with Dr. Basilio's observation that Reghis is still deeply attached to his parents and siblings such that he pursues his business ventures for their
benefit. Likewise, it agreed that Reghis' behavioral disorder existed even before his marriage or even his adolescent years and that the same is incurable. 25
Anent the issue of res judicata, the RTC remarked that there is no identity of causes of action between the petitions previously filed, which ascribed
psychological incapacity on Olivia's part, and the present case which is brought on the ground of Reghis' own psychological incapacity. 26
The Republic and Olivia moved for reconsideration, 27 which was, however, denied by the RTC in a Resolution 28 dated July 3, 2009. Undaunted, both
appealed29 to the CA. 30
The CA Ruling
In a Decision 31 dated March 21, 2013, the CA affirmed the findings of the RTC, holding that the OCPD from which Reghis suffered made him yearn for
professional advancement and rendered him obligated to support his parents and siblings, at the expense of his marital and filial duties. It ruled that Reghis' condition
amounts to psychological incapacity within the contemplation of Article 36 of the Family Code as it is permanent in nature and incurable. It observed that Reghis' OCPD
started early in his psychological development and is now so deeply ingrained in his structure and, thus, incurable because people who suffer from it are of the belief that
nothing is wrong with them. It further concluded that Reghis' condition is severe considering that it interrupted and interfered with his normal functioning and rendered him
unable to assume the essential marital obligations.
The Republic's and Olivia's respective motions for reconsideration 32 were denied by the CA in a Resolution 33 dated September 12, 2013.
The Proceedings Before the Court
On November 19, 2013, the Republic filed a petition for review on certiorari 34 before this Court, docketed as G.R. No. 209180, where it maintained that Reghis
has not established that his alleged psychological incapacity is grave, has juridical antecedence, and is incurable. It averred that the psychological report prepared and
submitted by Dr. Basilio has no factual basis to support the conclusions found therein as she failed to describe in detail the "pattern of behavior" showing that Reghis indeed
suffered from OCPD. The Republic also claimed that the methodology employed in evaluating Reghis' condition is not comprehensive enough 35 and that based on Reghis'
own testimony, he was able to perform his marital obligations as he lived together with Olivia for years and attended to his duties to their children. 36 It pointed out that
Reghis' condition was not shown to have existed before their marriage and that the same is incurable. 37
On November 13, 2013, a separate petition for review on certiorari, 38 docketed as G.R. No. 209253 was filed by Olivia. Like the Republic, she pointed out that
Reghis himself admitted knowing his marital obligations as husband to Olivia and father to their children. 39 Olivia added that if Reghis indeed felt that he was being forced
into the marriage, he could have simply abandoned her then or refused to take his vows on their wedding day. 40
In a Resolution 41 dated February 17, 2014, the Court consolidated the present petitions.
The Issue Before the Court
The lone issue for the Court's resolution is whether or not the CA erred in sustaining the RTC's declaration of nullity on the ground of psychological
incapacity.DETACa
The Court's Ruling
The Court finds merit in the petitions.
The policy of the Constitution is to protect and strengthen the family as the basic autonomous social institution, and marriage as the foundation of the family. As
such, the Constitution decrees marriage as legally inviolable and protects it from dissolution at the whim of the parties. 42 Thus, it has consistently been held that
psychological incapacity, as a ground to nullify a marriage under Article 36 of the Family Code, should refer to the most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage. 43 It must be a malady that is so grave and permanent as to deprive
one of awareness of the duties and responsibilities of the matrimonial bond one is about to assume. 44
Verily, all people may have certain quirks and idiosyncrasies, or isolated traits associated with certain personality disorders and there is hardly any doubt that
the intention of the law has been to confine the meaning of psychological incapacity to the most serious cases. 45 Thus, to warrant the declaration of nullity of marriage,
the psychological incapacity must: (a) be grave or serious such that the party would be incapable of carrying out the ordinary duties required in a marriage; (b) have juridical
antecedence, i.e., it must be rooted in the history of the party antedating the marriage, although the overt manifestations may emerge only after the marriage; and (c) be
incurable, or even if it were otherwise, the cure would be beyond the means of the party involved. 46
In Republic v. CA, 47 the Court laid down definitive guidelines on the interpretation and application of Article 36 of the Family Code. Among others, it clarified
that the illness must be grave enough to bring about the incapacity or inability of the party to assume the essential obligations of marriage such that "mild
characteriological peculiarities, mood changes, occasional emotional outbursts" cannot be accepted as root causes. The illness must be shown as downright incapacity or
inability, not a refusal, neglect or difficulty, much less ill will. In other words, there is a natal or supervening disabling factor in the person, an adverse integral element in the
personality structure that effectively incapacitates the person from really accepting and thereby complying with the obligations essential to marriage. 48
After a thorough review of the records of this case, the Court finds that the foregoing requirements do not concur. As aptly pointed out by the petitioners, Reghis'
testimony shows that he was able to comply with his marital obligations which, therefore, negates the existence of a grave and serious psychological incapacity on his part.
Reghis admitted that he and Olivia lived together as husband and wife under one roof for fourteen (14) years and both of them contributed in purchasing their own house in
Paraaque City. Reghis also fulfilled his duty to support and take care of his family, as he categorically stated that he loves their children and that he was a good provider to
them. 49 That he married Olivia not out of love, but out of reverence for the latter's parents, does not mean that Reghis is psychologically incapacitated in the context of
Article 36 of the Family Code. In Republic v. Albios, 50 the Court held that:
 Motives for entering into a marriage are varied and complex. The State does not and cannot dictate on the kind of life that a couple
chooses to lead. Any attempt to regulate their lifestyle would go into the realm of their right to privacy and would raise serious constitutional
questions. The right to marital privacy allows married couples to structure their marriages in almost any way they see fit, to live together or live
apart, to have children or no children, to love one another or not, and so on. Thus, marriages entered into for other purposes, limited or
otherwise, such as convenience, companionship, money, status, and title, provided that they comply with all the legal requisites,
are equally valid. Love, though the ideal consideration in a marriage contract, is not the only valid cause for marriage . Other
considerations, not precluded by law, may validly support a marriage. 51 (Emphasis supplied)
Moreover, the OCPD which Reghis allegedly suffered from was not shown to have juridical antecedence. Other than Dr. Basilio's conclusion that Reghis'
"behavioral disorder . . . existed even prior to the marriage or even during his adolescent years," 52 no specific behavior or habits during his adolescent years were shown
which would explain his behavior during his marriage with Olivia. Simply put, Dr. Basilio's medical report did not establish that Reghis' incapacity existed long before he
entered into marriage.
In like manner, Dr. Basilio simply concluded that Reghis' disorder is incurable but failed to explain how she came to such conclusion. Based on the appreciation
of the RTC, Dr. Basilio did not discuss the concept of OCPD, its classification, cause, symptoms, and cure, and failed to show how and to what extent the respondent
exhibited this disorder in order to create a necessary inference that Reghis' condition had no definite treatment or is incurable. To the Court's mind, this is a glaring
deficiency that should have prompted the RTC and the CA to be more circumspect and critical in the assessment and appreciation of Dr. Basilio's testimony.
Indeed, the standards used by the Court in assessing the sufficiency of psychological evaluation reports may be deemed very strict, but these are proper, in
view of the principle that any doubt should be resolved in favor of the validity of the marriage and the indissolubility of the marital tie. 53 After all, marriage is an inviolable
institution protected by the State. Accordingly, it cannot be dissolved at the whim of the parties, especially where the pieces of evidence presented are grossly deficient to
show the juridical antecedence, gravity and incurability of the condition of the party alleged to be psychologically incapacitated to assume and perform the essential marital
duties. 54
The Court is not unaware of the rule that factual findings of trial courts, when affirmed by the CA, are binding on this Court. However, this principle does not
apply when such findings go beyond the issues of the case; run contrary to the admissions of the parties; fail to notice certain relevant facts which, if properly considered,
will justify a different conclusion; or when there is a misappreciation of facts, 55 such as in the case at bar. aDSIHc
The Court can only commiserate with the parties' plight as their marriage may have failed. It must be reiterated, however, that the remedy is not always to have
it declared void ab initio on the ground of psychological incapacity. 56 Article 36 of the Family Code must not be confused with a divorce law that cuts the marital bond at
the time the grounds for divorce manifest themselves; 57 rather, it must be limited to cases where there is a downright incapacity or inability to assume and fulfill the basic
marital obligations, not a mere refusal, neglect or difficulty, much less, ill will, on the part of the errant spouse. 58 Thus, absent sufficient evidence to prove psychological
incapacity within the context of Article 36 of the Family Code, the Court is compelled to uphold the indissolubility of the marital tie. 59
WHEREFORE, the petitions are GRANTED. The Decision dated March 21, 2013 and the Resolution dated September 12, 2013 of the Court of Appeals in CA-G.R.
CV No. 94337 are hereby REVERSED and SET ASIDE. Accordingly, the petition for declaration of nullity of marriage filed under Article 36 of the Family Code of the
Philippines, as amended, is DISMISSED.
SO ORDERED.
Sereno, C.J., Leonardo-de Castro, Bersamin and Caguioa, JJ., concur.
||| (Republic v. Romero II, G.R. Nos. 209180 & 209253, [February 24, 2016])

EN BANC
[G.R. No. 175356. December 3, 2013.]
MANILA MEMORIAL PARK, INC. AND LA FUNERARIA PAZ-SUCAT, INC., petitioners,vs.SECRETARY OF THE DEPARTMENT OF SOCIAL
WELFARE AND DEVELOPMENT and THE SECRETARY OF THE DEPARTMENT OF FINANCE, respondents.
DECISION
DEL CASTILLO, J p:
When a party challenges the constitutionality of a law, the burden of proof rests upon him. 1
Before us is a Petition for Prohibition 2 under Rule 65 of the Rules of Court filed by petitioners Manila Memorial Park, Inc. and La Funeraria Paz-Sucat, Inc.,
domestic corporations engaged in the business of providing funeral and burial services, against public respondents Secretaries of the Department of Social Welfare and
Development (DSWD) and the Department of Finance (DOF).
Petitioners assail the constitutionality of Section 4 of Republic Act (RA) No. 7432, 3 as amended by RA 9257, 4 and the implementing rules and regulations
issued by the DSWD and DOF insofar as these allow business establishments to claim the 20% discount given to senior citizens as a tax deduction. TECcHA
Factual Antecedents
On April 23, 1992, RA 7432 was passed into law, granting senior citizens the following privileges:
SECTION 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:
a) the grant of twenty percent (20%) discount from all establishments relative to utilization of transportation services, hotels and similar lodging
establishment[s],restaurants and recreation centers and purchase of medicine anywhere in the country: Provided, That private establishments may
claim the cost as tax credit;
b) a minimum of twenty percent (20%) discount on admission fees charged by theaters, cinema houses and concert halls, circuses, carnivals and other
similar places of culture, leisure, and amusement;
c) exemption from the payment of individual income taxes: Provided, That their annual taxable income does not exceed the property level as
determined by the National Economic and Development Authority (NEDA) for that year;
d) exemption from training fees for socioeconomic programs undertaken by the OSCA as part of its work;
e) free medical and dental services in government establishment[s] anywhere in the country, subject to guidelines to be issued by the Department of
Health, the Government Service Insurance System and the Social Security System; EaHATD
f) to the extent practicable and feasible, the continuance of the same benefits and privileges given by the Government Service Insurance System
(GSIS),Social Security System (SSS) and PAG-IBIG, as the case may be, as are enjoyed by those in actual service.
On August 23, 1993, Revenue Regulations (RR) No. 02-94 was issued to implement RA 7432. Sections 2 (i) and 4 of RR No. 02-94 provide:
Sec. 2. DEFINITIONS. For purposes of these regulations:
i. Tax Credit refers to the amount representing the 20% discount granted to a qualified senior citizen by all establishments relative to their utilization
of transportation services, hotels and similar lodging establishments, restaurants, drugstores, recreation centers, theaters, cinema houses, concert
halls, circuses, carnivals and other similar places of culture, leisure and amusement, which discount shall be deducted by the said establishments from
their gross income for income tax purposes and from their gross sales for value-added tax or other percentage tax purposes.
xxx xxx xxx
Sec. 4. RECORDING/BOOKKEEPING REQUIREMENTS FOR PRIVATE ESTABLISHMENTS. Private establishments, i.e.,transport services, hotels and similar
lodging establishments, restaurants, recreation centers, drugstores, theaters, cinema houses, concert halls, circuses, carnivals and other similar places
of culture[,] leisure and amusement, giving 20% discounts to qualified senior citizens are required to keep separate and accurate record[s] of sales
made to senior citizens, which shall include the name, identification number, gross sales/receipts, discounts, dates of transactions and invoice number
for every transaction. cISDHE
 The amount of 20% discount shall be deducted from the gross income for income tax purposes and from gross sales of the business enterprise
concerned for purposes of the VAT and other percentage taxes.
In Commissioner of Internal Revenue v. Central Luzon Drug Corporation, 5 the Court declared Sections 2 (i) and 4 of RR No. 02-94 as erroneous because these
contravene RA 7432, 6 thus:
RA 7432 specifically allows private establishments to claim as tax credit the amount of discounts they grant. In turn, the Implementing Rules and
Regulations, issued pursuant thereto, provide the procedures for its availment. To deny such credit, despite the plain mandate of the law and the
regulations carrying out that mandate, is indefensible.
First, the definition given by petitioner is erroneous. It refers to tax credit as the amount representing the 20 percent discount that "shall be deducted
by the said establishments from their gross income for income tax purposes and from their gross sales for value-added tax or other percentage tax
purposes." In ordinary business language, the tax credit represents the amount of such discount. However, the manner by which the discount shall be
credited against taxes has not been clarified by the revenue regulations. aHcACT
By ordinary acceptation, a discount is an "abatement or reduction made from the gross amount or value of anything." To be more precise, it is in
business parlance "a deduction or lowering of an amount of money;" or "a reduction from the full amount or value of something, especially a price." In
business there are many kinds of discount, the most common of which is that affecting the income statement or financial report upon which the income
tax is based.
xxx xxx xxx
Sections 2.i and 4 of Revenue Regulations No. (RR) 2-94 define tax credit as the 20 percent discount deductible from gross income for income tax
purposes, or from gross sales for VAT or other percentage tax purposes. In effect, the tax credit benefit under RA 7432 is related to a sales discount.
This contrived definition is improper, considering that the latter has to be deducted from gross sales in order to compute the gross income in the
income statement and cannot be deducted again, even for purposes of computing the income tax.
When the law says that the cost of the discount may be claimed as a tax credit, it means that the amount when claimed shall be treated as a
reduction from any tax liability, plain and simple. The option to avail of the tax credit benefit depends upon the existence of a tax liability, but to limit
the benefit to a sales discount which is not even identical to the discount privilege that is granted by law does not define it at all and serves no
useful purpose. The definition must, therefore, be stricken down. DcSTaC
Laws Not Amended
by Regulations
Second, the law cannot be amended by a mere regulation. In fact, a regulation that "operates to create a rule out of harmony with the statute is a mere
nullity;" it cannot prevail.
It is a cardinal rule that courts "will and should respect the contemporaneous construction placed upon a statute by the executive officers whose duty it
is to enforce it ...." In the scheme of judicial tax administration, the need for certainty and predictability in the implementation of tax laws is crucial. Our
tax authorities fill in the details that "Congress may not have the opportunity or competence to provide." The regulations these authorities issue are
relied upon by taxpayers, who are certain that these will be followed by the courts. Courts, however, will not uphold these authorities' interpretations
when clearly absurd, erroneous or improper.
In the present case, the tax authorities have given the term tax credit in Sections 2.i and 4 of RR 2-94 a meaning utterly in contrast to what RA
7432 provides. Their interpretation has muddled . . . the intent of Congress in granting a mere discount privilege, not a sales discount. The
administrative agency issuing these regulations may not enlarge, alter or restrict the provisions of the law it administers; it cannot engraft additional
requirements not contemplated by the legislature.
In case of conflict, the law must prevail. A "regulation adopted pursuant to law is law." Conversely, a regulation or any portion thereof not adopted
pursuant to law is no law and has neither the force nor the effect of law. 7
On February 26, 2004, RA 9257 8 amended certain provisions of RA 7432, to wit: HSCATc
SECTION 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:
(a) the grant of twenty percent (20%) discount from all establishments relative to the utilization of services in hotels and similar lodging
establishments, restaurants and recreation centers, and purchase of medicines in all establishments for the exclusive use or enjoyment of senior
citizens, including funeral and burial services for the death of senior citizens;
xxx xxx xxx
The establishment may claim the discounts granted under (a),(f),(g) and (h) as tax deduction based on the net cost of the goods sold or services
rendered: Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is
granted. Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales
receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended.
To implement the tax provisions of RA 9257, the Secretary of Finance issued RR No. 4-2006, the pertinent provision of which provides:
SEC. 8. AVAILMENT BY ESTABLISHMENTS OF SALES DISCOUNTS AS DEDUCTION FROM GROSS INCOME. Establishments enumerated in subparagraph
(6) hereunder granting sales discounts to senior citizens on the sale of goods and/or services specified thereunder are entitled to deduct the said
discount from gross income subject to the following conditions: caIDSH
(1) Only that portion of the gross sales EXCLUSIVELY USED, CONSUMED OR ENJOYED BY THE SENIOR CITIZEN shall be eligible for the
deductible sales discount.
(2) The gross selling price and the sales discount MUST BE SEPARATELY INDICATED IN THE OFFICIAL RECEIPT OR SALES INVOICE issued by
the establishment for the sale of goods or services to the senior citizen.
(3) Only the actual amount of the discount granted or a sales discount not exceeding 20% of the gross selling price can be deducted from
the gross income, net of value added tax, if applicable, for income tax purposes, and from gross sales or gross receipts of the
business enterprise concerned, for VAT or other percentage tax purposes.
(4) The discount can only be allowed as deduction from gross income for the same taxable year that the discount is granted.
(5) The business establishment giving sales discounts to qualified senior citizens is required to keep separate and accurate record[s] of
sales, which shall include the name of the senior citizen, TIN, OSCA ID, gross sales/receipts, sales discount granted, [date] of
[transaction] and invoice number for every sale transaction to senior citizen.
(6) Only the following business establishments which granted sales discount to senior citizens on their sale of goods and/or services may
claim the said discount granted as deduction from gross income, namely:
xxx xxx xxx
(i) Funeral parlors and similar establishments The beneficiary or any person who shall shoulder the funeral
and burial expenses of the deceased senior citizen shall claim the discount, such as casket, embalmment,
cremation cost and other related services for the senior citizen upon payment and presentation of [his] death
certificate. TSEHcA
The DSWD likewise issued its own Rules and Regulations Implementing RA 9257, to wit: SCEDAI
RULE VI
DISCOUNTS AS TAX DEDUCTION OF ESTABLISHMENTS
Article 8. Tax Deduction of Establishments. The establishment may claim the discounts granted under Rule V, Section 4 Discounts for
Establishments, Section 9, Medical and Dental Services in Private Facilities and Sections 10 and 11 Air, Sea and Land Transportation as tax deduction
based on the net cost of the goods sold or services rendered. Provided, That the cost of the discount shall be allowed as deduction from gross income
for the same taxable year that the discount is granted;Provided, further, That the total amount of the claimed tax deduction net of value added tax if
applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the
National Internal Revenue Code, as amended; Provided, finally, that the implementation of the tax deduction shall be subject to the Revenue
Regulations to be issued by the Bureau of Internal Revenue (BIR) and approved by the Department of Finance (DOF).
Feeling aggrieved by the tax deduction scheme, petitioners filed the present recourse, praying that Section 4 of RA 7432, as amended by RA 9257, and the
implementing rules and regulations issued by the DSWD and the DOF be declared unconstitutional insofar as these allow business establishments to claim the 20% discount
given to senior citizens as a tax deduction; that the DSWD and the DOF be prohibited from enforcing the same; and that the tax credit treatment of the 20% discount under
the former Section 4 (a) of RA 7432 be reinstated.
Issues
Petitioners raise the following issues:
A.
WHETHER THE PETITION PRESENTS AN ACTUAL CASE OR CONTROVERSY.
B.
WHETHER SECTION 4 OF REPUBLIC ACT NO. 9257 AND . . . ITS IMPLEMENTING RULES AND REGULATIONS, INSOFAR AS THEY PROVIDE THAT THE
TWENTY PERCENT (20%) DISCOUNT TO SENIOR CITIZENS MAY BE CLAIMED AS A TAX DEDUCTION BY THE PRIVATE ESTABLISHMENTS, ARE INVALID
AND UNCONSTITUTIONAL. 9 IaECcH
Petitioners' Arguments
Petitioners emphasize that they are not questioning the 20% discount granted to senior citizens but are only assailing the constitutionality of the tax deduction
scheme prescribed under RA 9257 and the implementing rules and regulations issued by the DSWD and the DOF. 10
Petitioners posit that the tax deduction scheme contravenes Article III, Section 9 of the Constitution, which provides that: "[p]rivate property shall not be taken
for public use without just compensation." 11 In support of their position, petitioners cite Central Luzon Drug Corporation, 12 where it was ruled that the 20% discount
privilege constitutes taking of private property for public use which requires the payment of just compensation, 13 and Carlos Superdrug Corporation v. Department of
Social Welfare and Development, 14 where it was acknowledged that the tax deduction scheme does not meet the definition of just compensation. 15
Petitioners likewise seek a reversal of the ruling in Carlos Superdrug Corporation 16 that the tax deduction scheme adopted by the government is justified by
police power. 17 They assert that "[a]lthough both police power and the power of eminent domain have the general welfare for their object, there are still traditional
distinctions between the two" 18 and that "eminent domain cannot be made less supreme than police power." 19 Petitioners further claim that the legislature, in
amending RA 7432, relied on an erroneous contemporaneous construction that prior payment of taxes is required for tax credit. 20
Petitioners also contend that the tax deduction scheme violates Article XV, Section 4 21 and Article XIII, Section 11 22 of the Constitution because it shifts the
State's constitutional mandate or duty of improving the welfare of the elderly to the private sector. 23 Under the tax deduction scheme, the private sector shoulders 65% of
the discount because only 35% 24 of it is actually returned by the government. 25 Consequently, the implementation of the tax deduction scheme prescribed under Section
4 of RA 9257 affects the businesses of petitioners. 26 Thus, there exists an actual case or controversy of transcendental importance which deserves judicious disposition on
the merits by the highest court of the land. 27 DEcSaI
Respondents' Arguments
Respondents, on the other hand, question the filing of the instant Petition directly with the Supreme Court as this disregards the hierarchy of courts. 28 They
likewise assert that there is no justiciable controversy as petitioners failed to prove that the tax deduction treatment is not a "fair and full equivalent of the loss sustained"
by them. 29 As to the constitutionality of RA 9257 and its implementing rules and regulations, respondents contend that petitioners failed to overturn its presumption of
constitutionality. 30 More important, respondents maintain that the tax deduction scheme is a legitimate exercise of the State's police power. 31
Our Ruling
The Petition lacks merit. EICSDT
There exists an actual case or
controversy.
We shall first resolve the procedural issue.
When the constitutionality of a law is put in issue, judicial review may be availed of only if the following requisites concur: "(1) the existence of an actual and
appropriate case; (2) the existence of personal and substantial interest on the part of the party raising the [question of constitutionality];(3) recourse to judicial review is
made at the earliest opportunity; and (4) the [question of constitutionality] is the lis mota of the case." 32
 In this case, petitioners are challenging the constitutionality of the tax deduction scheme provided in RA 9257 and the implementing rules and regulations
issued by the DSWD and the DOF. Respondents, however, oppose the Petition on the ground that there is no actual case or controversy. We do not agree with respondents.
An actual case or controversy exists when there is "a conflict of legal rights" or "an assertion of opposite legal claims susceptible of judicial resolution." 33 The
Petition must therefore show that "the governmental act being challenged has a direct adverse effect on the individual challenging it." 34 In this case, the tax deduction
scheme challenged by petitioners has a direct adverse effect on them. Thus, it cannot be denied that there exists an actual case or controversy. cTECHI
The validity of the 20% senior citizen
discount and tax deduction scheme
under RA 9257, as an exercise of police
power of the State, has already been
settled in Carlos Superdrug
Corporation.
Petitioners posit that the resolution of this case lies in the determination of whether the legally mandated 20% senior citizen discount is an exercise of police
power or eminent domain. If it is police power, no just compensation is warranted. But if it is eminent domain, the tax deduction scheme is unconstitutional because it is not
a peso for peso reimbursement of the 20% discount given to senior citizens. Thus, it constitutes taking of private property without payment of just compensation.
At the outset, we note that this question has been settled in Carlos Superdrug Corporation. 35 In that case, we ruled:
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of private property. Compelling drugstore owners
and establishments to grant the discount will result in a loss of profit and capital because 1) drugstores impose a mark-up of only 5% to 10% on
branded medicines; and 2) the law failed to provide a scheme whereby drugstores will be justly compensated for the discount. HcDATC
Examining petitioners' arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax deduction scheme as a
reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens.
Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount privilege accorded to senior
citizens. This is because the discount is treated as a deduction, a tax-deductible expense that is subtracted from the gross income and results in a
lower taxable income. Stated otherwise, it is an amount that is allowed by law to reduce the income prior to the application of the tax rate to compute
the amount of tax which is due. Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but merely offers a fractional
reduction in taxes owed.
Theoretically, the treatment of the discount as a deduction reduces the net income of the private establishments concerned. The discounts given would
have entered the coffers and formed part of the gross sales of the private establishments, were it not for R.A. No. 9257.
The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for public use or benefit. This
constitutes compensable taking for which petitioners would ordinarily become entitled to a just compensation.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain
but the owner's loss. The word just is used to intensify the meaning of the word compensation,and to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full and ample. TcHCDI
A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not meet the definition of just compensation.
Having said that, this raises the question of whether the State, in promoting the health and welfare of a special group of citizens, can impose upon
private establishments the burden of partly subsidizing a government program.
The Court believes so.
The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to nation-building, and to grant benefits and privileges to
them for their improvement and well-being as the State considers them an integral part of our society.
The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself. Thus, the Act provides:
SEC. 2. Republic Act No. 7432 is hereby amended to read as follows: TaDSCA
SECTION 1. Declaration of Policies and Objectives. Pursuant to Article XV, Section 4 of the Constitution, it is the duty of
the family to take care of its elderly members while the State may design programs of social security for them. In addition to
this, Section 10 in the Declaration of Principles and State Policies provides: "The State shall provide social justice in all
phases of national development." Further, Article XIII, Section 11, provides: "The State shall adopt an integrated and
comprehensive approach to health development which shall endeavor to make essential goods, health and other social
services available to all the people at affordable cost. There shall be priority for the needs of the underprivileged sick,
elderly, disabled, women and children." Consonant with these constitutional principles the following are the declared policies
of this Act: DacASC
xxx xxx xxx
(f) To recognize the important role of the private sector in the improvement of the welfare of senior citizens
and to actively seek their partnership.
To implement the above policy, the law grants a twenty percent discount to senior citizens for medical and dental services, and diagnostic and
laboratory fees; admission fees charged by theaters, concert halls, circuses, carnivals, and other similar places of culture, leisure and amusement; fares
for domestic land, air and sea travel; utilization of services in hotels and similar lodging establishments, restaurants and recreation centers; and
purchases of medicines for the exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that business
establishments extending the twenty percent discount to senior citizens may claim the discount as a tax deduction.
The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its object . Police power is not
capable of an exact definition, but has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide
enough room for an efficient and flexible response to conditions and circumstances, thus assuring the greatest benefits. Accordingly, it has been
described as "the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs." It is "[t]he power vested
in the legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with
penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of
the same." HCaIDS
For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power because
property rights, though sheltered by due process, must yield to general welfare.
Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that they will suffer loss of
earnings and capital, the questioned provision is invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of the
provision in question, there is no basis for its nullification in view of the presumption of validity which every law has in its favor.
Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is unduly oppressive to their business, because
petitioners have not taken time to calculate correctly and come up with a financial report, so that they have not been able to show properly whether or
not the tax deduction scheme really works greatly to their disadvantage.
In treating the discount as a tax deduction, petitioners insist that they will incur losses because, referring to the DOF Opinion, for every P1.00 senior
citizen discount that petitioners would give, P0.68 will be shouldered by them as only P0.32 will be refunded by the government by way of a tax
deduction. HIaAED
To illustrate this point, petitioner Carlos Super Drug cited the anti-hypertensive maintenance drug Norvasc as an example. According to the latter, it
acquires Norvascfrom the distributors at P37.57 per tablet, and retails it at P39.60 (or at a margin of 5%).If it grants a 20% discount to senior citizens or
an amount equivalent to P7.92, then it would have to sell Norvasc at P31.68 which translates to a loss from capital of P5.89 per tablet. Even if the
government will allow a tax deduction, only P2.53 per tablet will be refunded and not the full amount of the discount which is P7.92. In short, only 32%
of the 20% discount will be reimbursed to the drugstores.
Petitioners' computation is flawed. For purposes of reimbursement, the law states that the cost of the discount shall be deducted from gross income,
the amount of income derived from all sources before deducting allowable expenses, which will result in net income. Here, petitioners tried to show a
loss on a per transaction basis, which should not be the case. An income statement, showing an accounting of petitioners' sales, expenses, and net
profit (or loss) for a given period could have accurately reflected the effect of the discount on their income. Absent any financial statement, petitioners
cannot substantiate their claim that they will be operating at a loss should they give the discount. In addition, the computation was erroneously based
on the assumption that their customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on income, not on the amount of
the discount.
Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of their medicines given the cutthroat nature of the
players in the industry. It is a business decision on the part of petitioners to peg the mark-up at 5%.Selling the medicines below acquisition cost, as
alleged by petitioners, is merely a result of this decision. Inasmuch as pricing is a property right, petitioners cannot reproach the law for being
oppressive, simply because they cannot afford to raise their prices for fear of losing their customers to competition. DIETHS
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of the business. While
the Constitution protects property rights, petitioners must accept the realities of business and the State, in the exercise of police power, can intervene
in the operations of a business which may result in an impairment of property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the precept for the protection of property, various
laws and jurisprudence, particularly on agrarian reform and the regulation of contracts and public utilities, continuously serve as . . . reminder[s] that
the right to property can be relinquished upon the command of the State for the promotion of public good.
Undeniably, the success of the senior citizens program rests largely on the support imparted by petitioners and the other private establishments
concerned. This being the case, the means employed in invoking the active participation of the private sector, in order to achieve the purpose or
objective of the law, is reasonably and directly related. Without sufficient proof that Section 4 (a) of R.A. No. 9257 is arbitrary, and that the continued
implementation of the same would be unconscionably detrimental to petitioners, the Court will refrain from quashing a legislative act. 36 (Bold in the
original; underline supplied)
We, thus, found that the 20% discount as well as the tax deduction scheme is a valid exercise of the police power of the State. ATcaEH
No compelling reason has been
proffered to overturn, modify or
abandon the ruling in Carlos
Superdrug Corporation.
Petitioners argue that we have previously ruled in Central Luzon Drug Corporation 37 that the 20% discount is an exercise of the power of eminent domain,
thus, requiring the payment of just compensation. They urge us to re-examine our ruling in Carlos Superdrug Corporation 38 which allegedly reversed the ruling inCentral
Luzon Drug Corporation. 39 They also point out that Carlos Superdrug Corporation 40 recognized that the tax deduction scheme under the assailed law does not provide for
sufficient just compensation.
We agree with petitioners' observation that there are statements in Central Luzon Drug Corporation 41 describing the 20% discount as an exercise of the power
of eminent domain, viz.:
[T]he privilege enjoyed by senior citizens does not come directly from the State, but rather from the private establishments concerned. Accordingly,
the tax creditbenefit granted to these establishments can be deemed as their just compensation for private property taken by the State for public
use.
The concept of public use is no longer confined to the traditional notion of use by the public, but held synonymous with public interest, public benefit,
public welfare,and public convenience.The discount privilege to which our senior citizens are entitled is actually a benefit enjoyed by the general public
to which these citizens belong. The discounts given would have entered the coffers and formed part of the gross sales of the private establishments
concerned, were it not for RA 7432. The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property
for public use or benefit. HDTcEI
As a result of the 20 percent discount imposed by RA 7432, respondent becomes entitled to a just compensation.This term refers not only to the
issuance of a tax creditcertificate indicating the correct amount of the discounts given, but also to the promptness in its release. Equivalent to the
payment of property taken by the State, such issuance when not done within a reasonable time from the grant of the discounts cannot be
 considered as just compensation.In effect, respondent is made to suffer the consequences of being immediately deprived of its revenues while awaiting
actual receipt, through the certificate, of the equivalent amount it needs to cope with the reduction in its revenues.
Besides, the taxation power can also be used as an implement for the exercise of the power of eminent domain. Tax measures are but "enforced
contributions exacted on pain of penal sanctions" and "clearly imposed for a public purpose." In recent years, the power to tax has indeed become a
most effective tool to realize social justice, public welfare,and the equitable distribution of wealth.
While it is a declared commitment under Section 1 of RA 7432, social justice "cannot be invoked to trample on the rights of property owners who under
ourConstitution and laws are also entitled to protection. The social justice consecrated in our [C]onstitution [is] not intended to take away rights from a
person and give them to another who is not entitled thereto." For this reason, a just compensation for income that is taken away from respondent
becomes necessary. It is in the tax credit that our legislators find support to realize social justice, and no administrative body can alter that
fact. DHESca
To put it differently, a private establishment that merely breaks even without the discounts yet will surely start to incur losses because of such
discounts. The same effect is expected if its mark-up is less than 20 percent, and if all its sales come from retail purchases by senior citizens. Aside
from the observation we have already raised earlier, it will also be grossly unfair to an establishment if the discounts will be treated merely as
deductions from either its gross income or its gross sales.Operating at a loss through no fault of its own, it will realize that the tax credit limitation
under RR 2-94 is inutile, if not improper. Worse, profit-generating businesses will be put in a better position if they avail themselves of tax credits
denied those that are losing, because no taxes are due from the latter. 42 (Italics in the original; emphasis supplied)
The above was partly incorporated in our ruling in Carlos Superdrug Corporation 43 when we stated preliminarily that
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of private property. Compelling drugstore owners
and establishments to grant the discount will result in a loss of profit and capital because 1) drugstores impose a mark-up of only 5% to 10% on
branded medicines; and 2) the law failed to provide a scheme whereby drugstores will be justly compensated for the discount. STEacI
Examining petitioners' arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax deduction scheme as a
reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens.
Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount privilege accorded to senior
citizens. This is because the discount is treated as a deduction, a tax-deductible expense that is subtracted from the gross income and results in a
lower taxable income. Stated otherwise, it is an amount that is allowed by law to reduce the income prior to the application of the tax rate to compute
the amount of tax which is due. Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but merely offers a fractional
reduction in taxes owed.
Theoretically, the treatment of the discount as a deduction reduces the net income of the private establishments concerned. The discounts given would
have entered the coffers and formed part of the gross sales of the private establishments, were it not for R.A. No. 9257.
The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for public use or benefit. This
constitutes compensable taking for which petitioners would ordinarily become entitled to a just compensation.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain
but the owner's loss. The word just is used to intensify the meaning of the word compensation,and to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full and ample.
A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not meet the definition of just compensation.
Having said that, this raises the question of whether the State, in promoting the health and welfare of a special group of citizens, can impose upon
private establishments the burden of partly subsidizing a government program.
The Court believes so. 44 TaEIAS
This, notwithstanding, we went on to rule in Carlos Superdrug Corporation 45 that the 20% discount and tax deduction scheme is a valid exercise of the police power of the
State.
The present case, thus, affords an opportunity for us to clarify the above-quoted statements in Central Luzon Drug Corporation 46 and Carlos Superdrug
Corporation. 47
First, we note that the above-quoted disquisition on eminent domain in Central Luzon Drug Corporation 48 is obiter dicta and, thus, not binding precedent. As
stated earlier, in Central Luzon Drug Corporation, 49 we ruled that the BIR acted ultra vires when it effectively treated the 20% discount as a tax deduction, under Sections
2.i and 4 of RR No. 2-94, despite the clear wording of the previous law that the same should be treated as a tax credit. We were, therefore, not confronted in that case with
the issue as to whether the 20% discount is an exercise of police power or eminent domain.
Second, although we adverted to Central Luzon Drug Corporation 50 in our ruling in Carlos Superdrug Corporation, 51 this referred only to preliminary matters.
A fair reading of Carlos Superdrug Corporation 52 would show that we categorically ruled therein that the 20% discount is a valid exercise of police power. Thus, even if the
current law, through its tax deduction scheme (which abandoned the tax credit scheme under the previous law), does not provide for a peso for peso reimbursement of the
20% discount given by private establishments, no constitutional infirmity obtains because, being a valid exercise of police power, payment of just compensation is not
warranted.
We have carefully reviewed the basis of our ruling in Carlos Superdrug Corporation 53 and we find no cogent reason to overturn, modify or abandon it. We also
note that petitioners' arguments are a mere reiteration of those raised and resolved in Carlos Superdrug Corporation. 54 Thus, we sustain Carlos Superdrug
Corporation. 55 EAIcCS
Nonetheless, we deem it proper, in what follows, to amplify our explanation in Carlos Superdrug Corporation 56 as to why the 20% discount is a valid exercise of
police power and why it may not, under the specific circumstances of this case,be considered as an exercise of the power of eminent domain contrary to the obiterin Central
Luzon Drug Corporation. 57 IaAScD
Police power versus eminent domain.
Police power is the inherent power of the State to regulate or to restrain the use of liberty and property for public welfare. 58 The only limitation is that the
restriction imposed should be reasonable, not oppressive. 59 In other words, to be a valid exercise of police power, it must have a lawful subject or objective and a lawful
method of accomplishing the goal. 60 Under the police power of the State, "property rights of individuals may be subjected to restraints and burdens in order to fulfill the
objectives of the government." 61 The State "may interfere with personal liberty, property, lawful businesses and occupations to promote the general welfare [as long as]
the interference [is] reasonable and not arbitrary." 62 Eminent domain, on the other hand, is the inherent power of the State to take or appropriate private property for
public use. 63 The Constitution, however, requires that private property shall not be taken without due process of law and the payment of just compensation. 64
Traditional distinctions exist between police power and eminent domain.
In the exercise of police power, a property right is impaired by regulation, 65 or the use of property is merely prohibited, regulated or restricted 66 to promote
public welfare. In such cases, there is no compensable taking, hence, payment of just compensation is not required. Examples of these regulations are property condemned
for being noxious or intended for noxious purposes (e.g., a building on the verge of collapse to be demolished for public safety, or obscene materials to be destroyed in the
interest of public morals) 67 as well as zoning ordinances prohibiting the use of property for purposes injurious to the health, morals or safety of the community ( e.g.,
dividing a city's territory into residential and industrial areas). 68 It has, thus, been observed that, in the exercise of police power (as distinguished from eminent domain),
although the regulation affects the right of ownership, none of the bundle of rights which constitute ownership is appropriated for use by or for the benefit of the
public. 69 HASTCa
On the other hand, in the exercise of the power of eminent domain, property interests are appropriated and applied to some public purpose which necessitates
the payment of just compensation therefor. Normally, the title to and possession of the property are transferred to the expropriating authority. Examples include the
acquisition of lands for the construction of public highways as well as agricultural lands acquired by the government under the agrarian reform law for redistribution to
qualified farmer beneficiaries. However, it is a settled rule that the acquisition of title or total destruction of the property is not essential for "taking" under the power of
eminent domain to be present. 70 Examples of these include establishment of easements such as where the land owner is perpetually deprived of his proprietary rights
because of the hazards posed by electric transmission lines constructed above his property 71 or the compelled interconnection of the telephone system between the
government and a private company. 72 In these cases, although the private property owner is not divested of ownership or possession, payment of just compensation is
warranted because of the burden placed on the property for the use or benefit of the public.
The 20% senior citizen discount is an
exercise of police power.
It may not always be easy to determine whether a challenged governmental act is an exercise of police power or eminent domain. The very nature of police
power as elastic and responsive to various social conditions 73 as well as the evolving meaning and scope of public use 74 and just compensation 75 in eminent domain
evinces that these are not static concepts. Because of the exigencies of rapidly changing times, Congress may be compelled to adopt or experiment with different measures
to promote the general welfare which may not fall squarely within the traditionally recognized categories of police power and eminent domain. The judicious approach,
therefore, is to look at the nature and effects of the challenged governmental act and decide, on the basis thereof, whether the act is the exercise of police power or
eminent domain. Thus, we now look at the nature and effects of the 20% discount to determine if it constitutes an exercise of police power or eminent domain. ASHaDT
The 20% discount is intended to improve the welfare of senior citizens who, at their age, are less likely to be gainfully employed, more prone to illnesses and
other disabilities, and, thus, in need of subsidy in purchasing basic commodities. It may not be amiss to mention also that the discount serves to honor senior citizens who
presumably spent the productive years of their lives on contributing to the development and progress of the nation. This distinct cultural Filipino practice of honoring the
elderly is an integral part of this law.
As to its nature and effects, the 20% discount is a regulation affecting the ability of private establishments to price their products and services relative to a
special class of individuals, senior citizens, for which the Constitution affords preferential concern. 76 In turn, this affects the amount of profits or income/gross sales that a
private establishment can derive from senior citizens. In other words, the subject regulation affects the pricing, and, hence, the profitability of a private establishment.
However, it does not purport to appropriate or burden specific properties, used in the operation or conduct of the business of private establishments, for the use or benefit
of the public, or senior citizens for that matter, but merely regulates the pricing of goods and services relative to, and the amount of profits or income/gross sales that such
private establishments may derive from, senior citizens. ITEcAD
The subject regulation may be said to be similar to, but with substantial distinctions from, price control or rate of return on investment control laws which are
traditionally regarded as police power measures. 77 These laws generally regulate public utilities or industries/enterprises imbued with public interest in order to protect
consumers from exorbitant or unreasonable pricing as well as temper corporate greed by controlling the rate of return on investment of these corporations considering that
they have a monopoly over the goods or services that they provide to the general public. The subject regulation differs therefrom in that (1) the discount does not prevent
the establishments from adjusting the level of prices of their goods and services, and (2) the discount does not apply to all customers of a given establishment but only to
the class of senior citizens. Nonetheless, to the degree material to the resolution of this case, the 20% discount may be properly viewed as belonging to the category of
price regulatory measures which affect the profitability of establishments subjected thereto.
On its face, therefore, the subject regulation is a police power measure.
The obiter in Central Luzon Drug Corporation, 78 however, describes the 20% discount as an exercise of the power of eminent domain and the tax credit, under
the previous law, equivalent to the amount of discount given as the just compensation therefor. The reason is that (1) the discount would have formed part of the gross
sales of the establishment were it not for the law prescribing the 20% discount, and (2) the permanent reduction in total revenues is a forced subsidy corresponding to the
taking of private property for public use or benefit. DTEScI
The flaw in this reasoning is in its premise. It presupposes that the subject regulation, which impacts the pricing and, hence, the profitability of a private
establishment, automatically amounts to a deprivation of property without due process of law. If this were so, then all price and rate of return on investment control laws
would have to be invalidated because they impact, at some level, the regulated establishment's profits or income/gross sales, yet there is no provision for payment of just
compensation. It would also mean that government cannot set price or rate of return on investment limits, which reduce the profits or income/gross sales of private
establishments, if no just compensation is paid even if the measure is not confiscatory. The obiter is, thus, at odds with the settled doctrine that the State can employ police
power measures to regulate the pricing of goods and services, and, hence, the profitability of business establishments in order to pursue legitimate State objectives for the
common good, provided that the regulation does not go too far as to amount to "taking." 79
In City of Manila v. Laguio, Jr., 80 we recognized that
...a taking also could be found if government regulation of the use of property went "too far." When regulation reaches a certain magnitude, in most
if not in all cases there must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a certain
extent, if regulation goes too far it will be recognized as a taking. cHSIAC
No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. In Mahon,Justice Holmes
recognized that it was "a question of degree and therefore cannot be disposed of by general propositions." On many other occasions as well, the U.S.
 Supreme Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks whether
justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the public as a
whole, or whether the loss should remain concentrated on those few persons subject to the public action. 81
The impact or effect of a regulation, such as the one under consideration, must, thus, be determined on a case-to-case basis. Whether that line between
permissible regulation under police power and "taking" under eminent domain has been crossed must, under the specific circumstances of this case, be subject to proof and
the one assailing the constitutionality of the regulation carries the heavy burden of proving that the measure is unreasonable, oppressive or confiscatory. The time-honored
rule is that the burden of proving the unconstitutionality of a law rests upon the one assailing it and "the burden becomes heavier when police power is at issue." 82
The 20% senior citizen discount has not
been shown to be unreasonable,
oppressive or confiscatory.
In Alalayan v. National Power Corporation, 83 petitioners, who were franchise holders of electric plants, challenged the validity of a law limiting their allowable
net profits to no more than 12% per annum of their investments plus two-month operating expenses. In rejecting their plea, we ruled that, in an earlier case, it was found
that 12% is a reasonable rate of return and that petitioners failed to prove that the aforesaid rate is confiscatory in view of the presumption of constitutionality. 84 aESHDA
We adopted a similar line of reasoning in Carlos Superdrug Corporation 85 when we ruled that petitioners therein failed to prove that the 20% discount is
arbitrary, oppressive or confiscatory. We noted that no evidence, such as a financial report, to establish the impact of the 20% discount on the overall profitability of
petitioners was presented in order to show that they would be operating at a loss due to the subject regulation or that the continued implementation of the law would be
unconscionably detrimental to the business operations of petitioners. In the case at bar, petitioners proceeded with a hypothetical computation of the alleged loss that they
will suffer similar to what the petitioners in Carlos Superdrug Corporation 86 did. Petitioners went directly to this Court without first establishing the factual bases of their
claims. Hence, the present recourse must, likewise, fail.
Because all laws enjoy the presumption of constitutionality, courts will uphold a law's validity if any set of facts may be conceived to sustain it. 87 On its face,
we find that there are at least two conceivable bases to sustain the subject regulation's validity absent clear and convincing proof that it is unreasonable, oppressive or
confiscatory. Congress may have legitimately concluded that business establishments have the capacity to absorb a decrease in profits or income/gross sales due to the
20% discount without substantially affecting the reasonable rate of return on their investments considering (1) not all customers of a business establishment are senior
citizens and (2) the level of its profit margins on goods and services offered to the general public. Concurrently, Congress may have, likewise, legitimately concluded that
the establishments, which will be required to extend the 20% discount, have the capacity to revise their pricing strategy so that whatever reduction in profits or
income/gross sales that they may sustain because of sales to senior citizens, can be recouped through higher mark-ups or from other products not subject of discounts. As a
result, the discounts resulting from sales to senior citizens will not be confiscatory or unduly oppressive. aESICD
In sum, we sustain our ruling in Carlos Superdrug Corporation 88 that the 20% senior citizen discount and tax deduction scheme are valid exercises of police
power of the State absent a clear showing that it is arbitrary, oppressive or confiscatory.
Conclusion
In closing, we note that petitioners hypothesize, consistent with our previous ratiocinations, that the discount will force establishments to raise their prices in
order to compensate for its impact on overall profits or income/gross sales. The general public, or those not belonging to the senior citizen class, are, thus, made to
effectively shoulder the subsidy for senior citizens. This, in petitioners' view, is unfair.
As already mentioned, Congress may be reasonably assumed to have foreseen this eventuality. But, more importantly, this goes into the wisdom, efficacy and
expediency of the subject law which is not proper for judicial review. In a way, this law pursues its social equity objective in a non-traditional manner unlike past and existing
direct subsidy programs of the government for the poor and marginalized sectors of our society. Verily, Congress must be given sufficient leeway in formulating welfare
legislations given the enormous challenges that the government faces relative to, among others, resource adequacy and administrative capability in implementing social
reform measures which aim to protect and uphold the interests of those most vulnerable in our society. In the process, the individual, who enjoys the rights, benefits and
privileges of living in a democratic polity, must bear his share in supporting measures intended for the common good. This is only fair.
In fine, without the requisite showing of a clear and unequivocal breach of the Constitution, the validity of the assailed law must be sustained. cSDHEC
Refutation of the Dissent
The main points of Justice Carpio's Dissent may be summarized as follows: (1) the discussion on eminent domain in Central Luzon Drug Corporation 89 is
notobiter dicta; (2) allowable taking, in police power, is limited to property that is destroyed or placed outside the commerce of man for public welfare; (3) the amount of
mandatory discount is private property within the ambit of Article III, Section 9 90 of the Constitution; and (4) the permanent reduction in a private establishment's total
revenue, arising from the mandatory discount, is a taking of private property for public use or benefit, hence, an exercise of the power of eminent domain requiring the
payment of just compensation.
I
We maintain that the discussion on eminent domain in Central Luzon Drug Corporation 91 is obiter dicta.
As previously discussed, in Central Luzon Drug Corporation, 92 the BIR, pursuant to Sections 2.i and 4 of RR No. 2-94, treated the senior citizen discount in the
previous law, RA 7432, as a tax deduction instead of a tax credit despite the clear provision in that law which stated
SECTION 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:
a) The grant of twenty percent (20%) discount from all establishments relative to utilization of transportation services, hotels and similar lodging
establishment, restaurants and recreation centers and purchase of medicines anywhere in the country: Provided, That private establishments may
claim the cost as tax credit;(Emphasis supplied)
Thus, the Court ruled that the subject revenue regulation violated the law, viz.:
The 20 percent discount required by the law to be given to senior citizens is a tax credit, not merely a tax deduction from the gross income or gross
sale of the establishment concerned. A tax credit is used by a private establishment only after the tax has been computed; a tax deduction, before the
tax is computed. RA 7432unconditionally grants a tax credit to all covered entities. Thus, the provisions of the revenue regulation that withdraw or
modify such grant are void. Basic is the rule that administrative regulations cannot amend or revoke the law. 93
As can be readily seen, the discussion on eminent domain was not necessary in order to arrive at this conclusion. All that was needed was to point out that the
revenue regulation contravened the law which it sought to implement. And, precisely, this was done in Central Luzon Drug Corporation 94 by comparing the wording of the
previous law vis- -vis the revenue regulation; employing the rules of statutory construction; and applying the settled principle that a regulation cannot amend the law it
seeks to implement. IcTEaC
A close reading of Central Luzon Drug Corporation 95 would show that the Court went on to state that the tax credit "can be deemed" as just compensation only
to explain why the previous law provides for a tax credit instead of a tax deduction. The Court surmised that the tax credit was a form of just compensation given to the
establishments covered by the 20% discount. However, the reason why the previous law provided for a tax credit and not a tax deduction was not necessary to resolve the
issue as to whether the revenue regulation contravenes the law. Hence, the discussion on eminent domain is obiter dicta.
A court, in resolving cases before it, may look into the possible purposes or reasons that impelled the enactment of a particular statute or legal provision.
However, statements made relative thereto are not always necessary in resolving the actual controversies presented before it. This was the case in Central Luzon Drug
Corporation 96 resulting in that unfortunate statement that the tax credit "can be deemed" as just compensation. This, in turn, led to the erroneous conclusion, by
deductive reasoning, that the 20% discount is an exercise of the power of eminent domain. The Dissent essentially adopts this theory and reasoning which, as will be shown
below, is contrary to settled principles in police power and eminent domain analysis.
II
The Dissent discusses at length the doctrine on "taking" in police power which occurs when private property is destroyed or placed outside the commerce of
man. Indeed, there is a whole class of police power measures which justify the destruction of private property in order to preserve public health, morals, safety or welfare.
As earlier mentioned, these would include a building on the verge of collapse or confiscated obscene materials as well as those mentioned by the Dissent with regard to
property used in violating a criminal statute or one which constitutes a nuisance. In such cases, no compensation is required.
However, it is equally true that there is another class of police power measures which do not involve the destruction of private property but merely regulate its
use. The minimum wage law, zoning ordinances, price control laws, laws regulating the operation of motels and hotels, laws limiting the working hours to eight, and the like
would fall under this category. The examples cited by the Dissent, likewise, fall under this category: Article 157 of the Labor Code, Sections 19 and 18 of the Social Security
Law, and Section 7 of the Pag-IBIG Fund Law. These laws merely regulate or, to use the term of the Dissent, burden the conduct of the affairs of business establishments. In
such cases, payment of just compensation is not required because they fall within the sphere of permissible police power measures. The senior citizen discount law falls
under this latter category. cIECTH
III
The Dissent proceeds from the theory that the permanent reduction of profits or income/gross sales, due to the 20% discount, is a "taking" of private property
for public purpose without payment of just compensation.
At the outset, it must be emphasized that petitioners never presented any evidence to establish that they were forced to suffer enormous losses or operate at
a loss due to the effects of the assailed law. They came directly to this Court and provided a hypothetical computation of the loss they would allegedly suffer due to the
operation of the assailed law. The central premise of the Dissent's argument that the 20% discount results in a permanent reduction in profits or income/gross sales, or
forces a business establishment to operate at a loss is, thus, wholly unsupported by competent evidence. To be sure, the Court can invalidate a law which, on its face, is
arbitrary, oppressive or confiscatory. 97 But this is not the case here.
In the case at bar, evidence is indispensable before a determination of a constitutional violation can be made because of the following reasons.
First, the assailed law, by imposing the senior citizen discount, does not take any of the properties used by a business establishment like, say, the land on which
a manufacturing plant is constructed or the equipment being used to produce goods or services.
Second, rather than taking specific properties of a business establishment, the senior citizen discount law merely regulates the prices of the goods or services
being sold to senior citizens by mandating a 20% discount. Thus, if a product is sold at P10.00 to the general public, then it shall be sold at P8.00 ( i.e.,P10.00 less 20%) to
senior citizens. Note that the law does not impose at what specific price the product shall be sold, only that a 20% discount shall be given to senior citizens based on the
price set by the business establishment. A business establishment is, thus, free to adjust the prices of the goods or services it provides to the general public. Accordingly, it
can increase the price of the above product to P20.00 but is required to sell it at P16.00 (i.e.,P20.00 less 20%) to senior citizens. DaIAcC
Third, because the law impacts the prices of the goods or services of a particular establishment relative to its sales to senior citizens, its profits or income/gross
sales are affected. The extent of the impact would, however, depend on the profit margin of the business establishment on a particular good or service. If a product costs
P5.00 to produce and is sold at P10.00, then the profit 98 is P5.00 99 or a profit margin 100 of 50%. 101 Under the assailed law, the aforesaid product would have to be
sold at P8.00 to senior citizens yet the business would still earn P3.00 102 or a 30% 103 profit margin. On the other hand, if the product costs P9.00 to produce and is
required to be sold at P8.00 to senior citizens, then the business would experience a loss of P1.00. 104 But note that since not all customers of a business establishment are
senior citizens, the business establishment may continue to earn P1.00 from non-senior citizens which, in turn, can offset any loss arising from sales to senior citizens.
Fourth, when the law imposes the 20% discount in favor of senior citizens, it does not prevent the business establishment from revising its pricing strategy. By
revising its pricing strategy, a business establishment can recoup any reduction of profits or income/gross sales which would otherwise arise from the giving of the 20%
discount. To illustrate, suppose A has two customers: X, a senior citizen, and Y, a non-senior citizen. Prior to the law, A sells his products at P10.00 a piece to X and Y
resulting in income/gross sales of P20.00 (P10.00 + P10.00).With the passage of the law, A must now sell his product to X at P8.00 ( i.e.,P10.00 less 20%) so that his
income/gross sales would be P18.00 (P8.00 + P10.00) or lower by P2.00. To prevent this from happening, A decides to increase the price of his products to P11.11 per piece.
Thus, he sells his product to X at P8.89 (i.e., P11.11 less 20%) and to Y at P11.11. As a result, his income/gross sales would still be P20.00 105 (P8.89 + P11.11). The
capacity, then, of business establishments to revise their pricing strategy makes it possible for them not to suffer any reduction in profits or income/gross sales, or, in the
alternative, mitigate the reduction of their profits or income/gross sales even after the passage of the law. In other words, business establishments have the capacity to
adjust their prices so that they may remain profitable even under the operation of the assailed law. acADIT
The Dissent, however, states that
The explanation by the majority that private establishments can always increase their prices to recover the mandatory discount will only encourage
private establishments to adjust their prices upwards to the prejudice of customers who do not enjoy the 20% discount. It was likewise suggested that if
a company increases its prices, despite the application of the 20% discount, the establishment becomes more profitable than it was before the
implementation of R.A. 7432. Such an economic justification is self-defeating, for more consumers will suffer from the price increase than will benefit
from the 20% discount. Even then, such ability to increase prices cannot legally validate a violation of the eminent domain clause. 106
But, if it is possible that the business establishment, by adjusting its prices, will suffer no reduction in its profits or income/gross sales (or suffer some reduction but continue
to operate profitably) despite giving the discount, what would be the basis to strike down the law? If it is possible that the business establishment, by adjusting its prices,
will not be unduly burdened, how can there be a finding that the assailed law is an unconstitutional exercise of police power or eminent domain?
 That there may be a burden placed on business establishments or the consuming public as a result of the operation of the assailed law is not, by itself, a ground
to declare it unconstitutional for this goes into the wisdom and expediency of the law. The cost of most, if not all, regulatory measures of the government on business
establishments is ultimately passed on to the consumers but that, by itself, does not justify the wholesale nullification of these measures. It is a basic postulate of our
democratic system of government that the Constitution is a social contract whereby the people have surrendered their sovereign powers to the State for the common
good. 107 All persons may be burdened by regulatory measures intended for the common good or to serve some important governmental interest, such as protecting or
improving the welfare of a special class of people for which the Constitution affords preferential concern. Indubitably, the one assailing the law has the heavy burden of
proving that the regulation is unreasonable, oppressive or confiscatory, or has gone "too far" as to amount to a "taking." Yet, here, the Dissent would have this Court nullify
the law without any proof of such nature. DCIEac
Further, this Court is not the proper forum to debate the economic theories or realities that impelled Congress to shift from the tax credit to the tax deduction
scheme. It is not within our power or competence to judge which scheme is more or less burdensome to business establishments or the consuming public and, thereafter, to
choose which scheme the State should use or pursue. The shift from the tax credit to tax deduction scheme is a policy determination by Congress and the Court will respect
it for as long as there is no showing, as here, that the subject regulation has transgressed constitutional limitations.
Unavoidably, the lack of evidence constrains the Dissent to rely on speculative and hypothetical argumentation when it states that the 20% discount is a
significant amount and not a minimal loss (which erroneously assumes that the discount automatically results in a loss when it is possible that the profit margin is greater
than 20% and/or the pricing strategy can be revised to prevent or mitigate any reduction in profits or income/gross sales as illustrated above), 108 and not all private
establishments make a 20% profit margin (which conversely implies that there are those who make more and, thus, would not be greatly affected by this regulation). 109
In fine, because of the possible scenarios discussed above, we cannot assume that the 20% discount results in a permanent reduction in profits or income/gross
sales, much less that business establishments are forced to operate at a loss under the assailed law. And, even if we gratuitously assume that the 20% discount results
in some degree of reduction in profits or income/gross sales, we cannot assume that such reduction is arbitrary, oppressive or confiscatory. To repeat, there is no actual
proof to back up this claim, and it could be that the loss suffered by a business establishment was occasioned through its fault or negligence in not adapting to the effects of
the assailed law. The law uniformly applies to all business establishments covered thereunder. There is, therefore, no unjust discrimination as the aforesaid business
establishments are faced with the same constraints.
The necessity of proof is all the more pertinent in this case because, as similarly observed by Justice Velasco in his Concurring Opinion,the law has been in
operation for over nine years now. However, the grim picture painted by petitioners on the unconscionable losses to be indiscriminately suffered by business
establishments, which should have led to the closure of numerous business establishments, has not come to pass. ScaEIT
Verily, we cannot invalidate the assailed law based on assumptions and conjectures. Without adequate proof, the presumption of constitutionality must prevail.
IV
At this juncture, we note that the Dissent modified its original arguments by including a new paragraph, to wit:
Section 9, Article III of the 1987 Constitution speaks of private property without any distinction. It does not state that there should be profit before the
taking of property is subject to just compensation. The private property referred to for purposes of taking could be inherited, donated, purchased,
mortgaged, or as in this case, part of the gross sales of private establishments. They are all private property and any taking should be attended by
corresponding payment of just compensation. The 20% discount granted to senior citizens belong to private establishments, whether these
establishments make a profit or suffer a loss. In fact, the 20% discount applies to non-profit establishments like country, social, or golf clubs which
are open to the public and not only for exclusive membership. The issue of profit or loss to the establishments is immaterial. 110
Two things may be said of this argument. HDcaAI
First, it contradicts the rest of the arguments of the Dissent. After it states that the issue of profit or loss is immaterial, the Dissent proceeds to argue that the
20% discount is not a minimal loss 111 and that the 20% discount forces business establishments to operate at a loss. 112 Even the obiter in Central Luzon Drug
Corporation, 113 which the Dissent essentially adopts and relies on, is premised on the permanent reduction of total revenues and the loss that business establishments will
be forced to suffer in arguing that the 20% discount constitutes a "taking" under the power of eminent domain. Thus, when the Dissent now argues that the issue of profit or
loss is immaterial, it contradicts itself because it later argues, in order to justify that there is a "taking" under the power of eminent domain in this case, that the 20%
discount forces business establishments to suffer a significant loss or to operate at a loss.
Second, this argument suffers from the same flaw as the Dissent's original arguments. It is an erroneous characterization of the 20% discount.
According to the Dissent, the 20% discount is part of the gross sales and, hence, private property belonging to business establishments. However, as previously
discussed, the 20% discount is not private property actually owned and/or used by the business establishment. It should be distinguished from properties like lands or
buildings actually used in the operation of a business establishment which, if appropriated for public use, would amount to a "taking" under the power of eminent domain.
Instead, the 20% discount is a regulatory measure which impacts the pricing and, hence, the profitability of business establishments. At the time the discount is
imposed, no particular property of the business establishment can be said to be "taken." That is, the State does not acquire or take anything from the business
establishment in the way that it takes a piece of private land to build a public road. While the 20% discount may form part of the potential profits or income/gross
sales 114 of the business establishment, as similarly characterized by Justice Bersamin in his Concurring Opinion, potential profits or income/gross sales are not private
property, specifically cash or money, already belonging to the business establishment. They are a mere expectancy because they are potential fruits of the successful
conduct of the business.
Prior to the sale of goods or services, a business establishment may be subject to State regulations, such as the 20% senior citizen discount, which may impact
the level or amount of profits or income/gross sales that can be generated by such establishment. For this reason, the validity of the discount is to be determined based on
its overall effects on the operations of the business establishment. DcCEHI
Again, as previously discussed, the 20% discount does not automatically result in a 20% reduction in profits, or, to align it with the term used by the Dissent, the
20% discount does not mean that a 20% reduction in gross sales necessarily results. Because (1) the profit margin of a product is not necessarily less than 20%,(2) not all
customers of a business establishment are senior citizens, and (3) the establishment may revise its pricing strategy, such reduction in profits or income/gross sales may be
prevented or, in the alternative, mitigated so that the business establishment continues to operate profitably. Thus, even if we gratuitously assume that some degree of
reduction in profits or income/gross sales occurs because of the 20% discount, it does not follow that the regulation is unreasonable, oppressive or confiscatory because the
business establishment may make the necessary adjustments to continue to operate profitably. No evidence was presented by petitioners to show otherwise. In fact, no
evidence was presented by petitioners at all.
Justice Leonen, in his Concurring and Dissenting Opinion, characterizes "profits" (or income/gross sales) as an inchoate right. Another way to view it, as stated
by Justice Velasco in his Concurring Opinion, is that the business establishment merely has a right to profits. The Constitution adverts to it as the right of an enterprise to a
reasonable return on investment. 115 Undeniably, this right, like any other right, may be regulated under the police power of the State to achieve important governmental
objectives like protecting the interests and improving the welfare of senior citizens.
It should be noted though that potential profits or income/gross sales are relevant in police power and eminent domain analyses because they may, in
appropriate cases, serve as an indicia when a regulation has gone "too far" as to amount to a "taking" under the power of eminent domain. When the deprivation or
reduction of profits or income/gross sales is shown to be unreasonable, oppressive or confiscatory, then the challenged governmental regulation may be nullified for being a
"taking" under the power of eminent domain. In such a case, it is not profits or income/gross sales which are actually taken and appropriated for public use. Rather, when
the regulation causes an establishment to incur losses in an unreasonable, oppressive or confiscatory manner, what is actually taken is capital and the right of the business
establishment to a reasonable return on investment. If the business losses are not halted because of the continued operation of the regulation, this eventually leads to the
destruction of the business and the total loss of the capital invested therein. But, again, petitioners in this case failed to prove that the subject regulation is unreasonable,
oppressive or confiscatory. ECHSDc
V.
The Dissent further argues that we erroneously used price and rate of return on investment control laws to justify the senior citizen discount law. According to
the Dissent, only profits from industries imbued with public interest may be regulated because this is a condition of their franchises. Profits of establishments without
franchises cannot be regulated permanently because there is no law regulating their profits. The Dissent concludes that the permanent reduction of total revenues or gross
sales of business establishments without franchises is a taking of private property under the power of eminent domain.
In making this argument, it is unfortunate that the Dissent quotes only a portion of the ponencia
The subject regulation may be said to be similar to, but with substantial distinctions from, price control or rate of return on investment control laws
which are traditionally regarded as police power measures. These laws generally regulate public utilities or industries/enterprises imbued with public
interest in order to protect consumers from exorbitant or unreasonable pricing as well as temper corporate greed by controlling the rate of return on
investment of these corporations considering that they have a monopoly over the goods or services that they provide to the general public. The subject
regulation differs therefrom in that (1) the discount does not prevent the establishments from adjusting the level of prices of their goods and services,
and (2) the discount does not apply to all customers of a given establishment but only to the class of senior citizens. ...116
The above paragraph, in full, states
The subject regulation may be said to be similar to, but with substantial distinctions from, price control or rate of return on investment control laws
which are traditionally regarded as police power measures. These laws generally regulate public utilities or industries/enterprises imbued with public
interest in order to protect consumers from exorbitant or unreasonable pricing as well as temper. corporate greed by controlling the rate of return on
investment of these corporations considering that they have a monopoly over the goods or services that they provide to the general public. The subject
regulation differs therefrom in that (1) the discount does not prevent the establishments from adjusting the level of prices of their goods and services,
and (2) the discount does not apply to all customers of a given establishment but only to the class of senior citizens. Nonetheless, to the degree
material to the resolution of this case, the 20% discount may be properly viewed as belonging to the category of price regulatory
measures which affects the profitability of establishments subjected thereto.(Emphasis supplied)
The point of this paragraph is to simply show that the State has, in the past, regulated prices and profits of business establishments. In other words, this type of
regulatory measures is traditionally recognized as police power measures so that the senior citizen discount may be considered as a police power measure as well. What is
more, the substantial distinctions between price and rate of return on investment control laws vis- -vis the senior citizen discount law provide greater reason to uphold the
validity of the senior citizen discount law. As previously discussed, the ability to adjust prices allows the establishment subject to the senior citizen discount to prevent or
mitigate any reduction of profits or income/gross sales arising from the giving of the discount. In contrast, establishments subject to price and rate of return on investment
control laws cannot adjust prices accordingly.
Certainly, there is no intention to say that price and rate of return on investment control laws are the justification for the senior citizen discount law. Not at all.
The justification for the senior citizen discount law is the plenary powers of Congress. The legislative power to regulate business establishments is broad and covers a wide
array of areas and subjects. It is well within Congress' legislative powers to regulate the profits or income/gross sales of industries and enterprises, even those without
franchises.For what are franchises but mere legislative enactments? SaDICE
There is nothing in the Constitution that prohibits Congress from regulating the profits or income/gross sales of industries and enterprises without franchises. On
the contrary, the social justice provisions of the Constitution enjoin the State to regulate the "acquisition, ownership, use, and disposition" of property and its
increments. 117 This may cover the regulation of profits or income/gross sales of all businesses, without qualification, to attain the objective of diffusing wealth in order to
protect and enhance the right of all the people to human dignity. 118 Thus, under the social justice policy of the Constitution, business establishments may be compelled to
contribute to uplifting the plight of vulnerable or marginalized groups in our society provided that the regulation is not arbitrary, oppressive or confiscatory, or is not in
breach of some specific constitutional limitation.
When the Dissent, therefore, states that the "profits of private establishments which are non-franchisees cannot be regulated permanently, and there is no
such law regulating their profits permanently," 119 it is assuming what it ought to prove. First, there are laws which, in effect, permanently regulate profits or income/gross
sales of establishments without franchises, and RA 9257 is one such law. And, second, Congress can regulate such profits or income/gross sales because, as previously
noted, there is nothing in the Constitution to prevent it from doing so. Here, again, it must be emphasized that petitioners failed to present any proof to show that the
effects of the assailed law on their operations has been unreasonable, oppressive or confiscatory. SCHATc
The permanent regulation of profits or income/gross sales of business establishments, even those without franchises, is not as uncommon as the Dissent depicts
it to be.
For instance, the minimum wage law allows the State to set the minimum wage of employees in a given region or geographical area. Because of the added labor
costs arising from the minimum wage, a permanent reduction of profits or income/gross sales would result, assuming that the employer does not increase the prices of his
goods or services. To illustrate, suppose it costs a company P5.00 to produce a product and it sells the same at P10.00 with a 50% profit margin. Later, the State increases
the minimum wage. As a result, the company incurs greater labor costs so that it now costs P7.00 to produce the same product. The profit per product of the company
would be reduced to P3.00 with a profit margin of 30%.The net effect would be the same as in the earlier example of granting a 20% senior citizen discount. As can be seen,
the minimum wage law could, likewise, lead to a permanent reduction of profits. Does this mean that the minimum wage law should, likewise, be declared unconstitutional
 on the mere plea that it results in a permanent reduction of profits? Taking it a step further, suppose the company decides to increase the price of its product in order to
offset the effects of the increase in labor cost; does this mean that the minimum wage law, following the reasoning of the Dissent, is unconstitutional because the
consuming public is effectively made to subsidize the wage of a group of laborers, i.e.,minimum wage earners?
The same reasoning can be adopted relative to the examples cited by the Dissent which, according to it, are valid police power regulations. Article 157 of the
Labor Code, Sections 19 and 18 of the Social Security Law, and Section 7 of the Pag-IBIG Fund Law would effectively increase the labor cost of a business establishment.
This would, in turn, be integrated as part of the cost of its goods or services. Again, if the establishment does not increase its prices, the net effect would be a permanent
reduction in its profits or income/gross sales. Following the reasoning of the Dissent that "any form of permanent taking of private property (including profits or
income/gross sales) 120 is an exercise of eminent domain that requires the State to pay just compensation," 121 then these statutory provisions would, likewise, have to be
declared unconstitutional. It does not matter that these benefits are deemed part of the employees' legislated wages because the net effect is the same, that is, it leads to
higher labor costs and a permanent reduction in the profits or income/gross sales of the business establishments. 122 HcTEaA
The point then is this most, if not all, regulatory measures imposed by the State on business establishments impact, at some level, the latter's prices and/or
profits or income/gross sales. 123 If the Court were to sustain the Dissent's theory, then a wholesale nullification of such measures would inevitably result. The police power
of the State and the social justice provisions of the Constitution would, thus, be rendered nugatory.
There is nothing sacrosanct about profits or income/gross sales. This, we made clear in Carlos Superdrug Corporation: 124
Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that they will suffer loss of
earnings and capital, the questioned provision is invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of the
provision in question, there is no basis for its nullification in view of the presumption of validity which every law has in its favor.
xxx xxx xxx
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of the business. While
the Constitution protects property rights, petitioners must accept the realities of business and the State, in the exercise of police power, can intervene
in the operations of a business which may result in an impairment of property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the precept for the protection of property, various
laws and jurisprudence, particularly on agrarian reform and the regulation of contracts and public utilities, continuously serve as a reminder that the
right to property can be relinquished upon the command of the State for the promotion of public good. ASIDTa
Undeniably, the success of the senior citizens program rests largely on the support imparted by petitioners and the other private establishments
concerned. This being the case, the means employed in invoking the active participation of the private sector, in order to achieve the purpose or
objective of the law, is reasonably and directly related. Without sufficient proof that Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued
implementation of the same would be unconscionably detrimental to petitioners, the Court will refrain from quashing a legislative act. 125
In conclusion, we maintain that the correct rule in determining whether the subject regulatory measure has amounted to a "taking" under the power of eminent
domain is the one laid down in Alalayan v. National Power Corporation 126 and followed in Carlos Superdrug Corporation 127 consistent with long standing principles in
police power and eminent domain analysis. Thus, the deprivation or reduction of profits or income/gross sales must be clearly shown to be unreasonable, oppressive or
confiscatory. Under the specific circumstances of this case, such determination can only be made upon the presentation of competent proof which petitioners failed to do. A
law, which has been in operation for many years and promotes the welfare of a group accorded special concern by the Constitution, cannot and should not be summarily
invalidated on a mere allegation that it reduces the profits or income/gross sales of business establishments. cDSaEH
WHEREFORE,the Petition is hereby DISMISSED for lack of merit.
SO ORDERED.
||| (Manila Memorial Park, Inc. v. Secretary of Social Welfare and Development, G.R. No. 175356, [December 3, 2013])

EN BANC
[G.R. No. 182894. April 22, 2014.]
FE FLORO VALINO, petitioner, vs. ROSARIO D. ADRIANO, FLORANTE D. ADRIANO, RUBEN D. ADRIANO, MARIA TERESA ADRIANO ONGOCO,
VICTORIA ADRIANO BAYONA, and LEAH ANTONETTE D. ADRIANO, respondents.
DECISION
MENDOZA, J p:
Challenged in this petition is the October 2, 2006 Decision 1 and the May 9, 2008 Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 61613, which
reversed the October 1, 1998 Decision 3 of the Regional Trial Court, Branch 77, Quezon City (RTC) which ruled that petitioner Fe Floro Valino (Valino) was entitled to the
remains of the decedent.
The Facts:
Atty. Adriano Adriano (Atty. Adriano), a partner in the Pelaez Adriano and Gregorio Law Office, married respondent Rosario Adriano (Rosario) on November 15, 1955. The couple
had two (2) sons, Florante and Ruben Adriano; three (3) daughters, Rosario, Victoria and Maria Teresa; and one (1) adopted daughter, Leah Antonette.
The marriage of Atty. Adriano and Rosario, however, turned sour and they were eventually separated-in-fact. Years later, Atty. Adriano courted Valino, one of his clients, until they
decided to live together as husband and wife. Despite such arrangement, he continued to provide financial support to Rosario and their children(respondents).
In 1992, Atty. Adriano died of acute emphysema. At that time, Rosario was in the United States spending Christmas with her children. As none of the family members was around,
Valino took it upon herself to shoulder the funeral and burial expenses for Atty. Adriano. When Rosario learned about the death of her husband, she immediately called Valino and
requested that she delay the interment for a few days but her request was not heeded. The remains of Atty. Adriano were then interred at the mausoleum of the family of Valino
at the Manila Memorial Park. Respondents were not able to attend the interment.
Claiming that they were deprived of the chance to view the remains of Atty. Adriano before he was buried and that his burial at the Manila Memorial Park was contrary to his
wishes, respondents commenced suit against Valino praying that they be indemnified for actual, moral and exemplary damages and attorney's fees and that the remains of Atty.
Adriano be exhumed and transferred to the family plot at the Holy Cross Memorial Cemetery in Novaliches, Quezon City.
In her defense, Valino countered that Rosario and Atty. Adriano had been separated for more than twenty (20) years before he courted her. Valino claimed that throughout the
time they were together, he had introduced her to his friends and associates as his wife. Although they were living together, Valino admitted that he never forgot his obligation to
support the respondents. She contended that, unlike Rosario, she took good care of Atty. Adriano and paid for all his medical expenses when he got seriously ill. She also claimed
that despite knowing that Atty. Adriano was in a coma and dying, Rosario still left for the United States. According to Valino, it was Atty. Adriano's last wish that his remains be
interred in the Valino family mausoleum at the Manila Memorial Park.
Valino further claimed that she had suffered damages as result of the suit brought by respondents. Thus, she prayed that she be awarded moral and exemplary damages and
attorney's fees.
Decision of the RTC
The RTC dismissed the complaint of respondents for lack of merit as well as the counterclaim of Valino after it found them to have not been sufficiently proven. DTIaHE
The RTC opined that because Valino lived with Atty. Adriano for a very long time, she knew very well that it was his wish to be buried at the Manila Memorial Park. Taking into
consideration the fact that Rosario left for the United States at the time that he was fighting his illness, the trial court concluded that Rosario did not show love and care for him.
Considering also that it was Valino who performed all the duties and responsibilities of a wife, the RTC wrote that it could be reasonably presumed that he wished to be buried in
the Valino family mausoleum. 4
In disposing of the case, the RTC noted that the exhumation and the transfer of the body of Atty. Adriano to the Adriano family plot at the Holy Cross Memorial Cemetery in
Novaliches, Quezon City, would not serve any useful purpose and so he should be spared and respected. 5
Decision of the CA
On appeal, the CA reversed and set aside the RTC decision and directed Valino to have the remains of Atty. Adriano exhumed at the expense of respondents. It likewise directed
respondents, at their expense, to transfer, transport and inter the remains of the decedent in the family plot at the Holy Cross Memorial Park in Novaliches, Quezon City.
In reaching said determination, the CA explained that Rosario, being the legal wife, was entitled to the custody of the remains of her deceased husband. Citing Article 305 of
the New Civil Code in relation to Article 199 of the Family Code, it was the considered view of the appellate court that the law gave the surviving spouse not only the duty but also
the right to make arrangements for the funeral of her husband. For the CA, Rosario was still entitled to such right on the ground of her subsisting marriage with Atty. Adriano at
the time of the latter's death, notwithstanding their 30-year separation in fact.
Like the RTC, however, the CA did not award damages in favor of respondents due to the good intentions shown by Valino in giving the deceased a decent burial when the wife
and the family were in the United States. All other claims for damages were similarly dismissed.
The Sole Issue
The lone legal issue in this petition is who between Rosario and Valino is entitled to the remains of Atty. Adriano.
The Court's Ruling
Article 305 of the Civil Code,in relation to what is now Article 199 6 of the Family Code, specifies the persons who have the right and duty to make funeral arrangements for the
deceased. Thus:
Art. 305. The duty and the right to make arrangements for the funeral of a relative shall be in accordance with the order established for support,
under Article 294. In case of descendants of the same degree, or of brothers and sisters, the oldest shall be preferred. In case of ascendants, the
paternal shall have a better right. [Emphases supplied]
Art. 199. Whenever two or more persons are obliged to give support, the liability shall devolve upon the following persons in the order herein provided:
(1) The spouse;
(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters. (294a) [Emphasis supplied]
Further, Article 308 of the Civil Code provides:
Art. 308. No human remains shall be retained, interred, disposed of or exhumed without the consent of the persons mentioned in Articles 294
and 305. [Emphases supplied]
In this connection, Section 1103 of the Revised Administrative Code provides:
Section 1103. Persons charged with the duty of burial. The immediate duty of burying the body of a deceased person, regardless of the ultimate
liability for the expense thereof, shall devolve upon the persons herein below specified:
(a) If the deceased was a married man or woman, the duty of the burial shall devolve upon the surviving spouse if he or she
possesses sufficient means to pay the necessary expenses;
xxx xxx xxx. [Emphases supplied]
From the aforecited provisions, it is undeniable that the law simply confines the right and duty to make funeral arrangements to the members of the family to the exclusion of
one's common law partner. In Tomas Eugenio, Sr. v. Velez, 7 a petition for habeas corpus was filed by the brothers and sisters of the late Vitaliana Vargas against her lover, Tomas
Eugenio, Sr., alleging that the latter forcibly took her and confined her in his residence. It appearing that she already died of heart failure due to toxemia of pregnancy, Tomas
Eugenio, Sr. sought the dismissal of the petition for lack of jurisdiction and claimed the right to bury the deceased, as the common-law husband.
In its decision, the Court resolved that the trial court continued to have jurisdiction over the case notwithstanding the death of Vitaliana Vargas. As to the claim of Tomas Eugenio,
Sr. that he should be considered a "spouse" having the right and duty to make funeral arrangements for his common-law wife, the Court ruled:
. . . Indeed, Philippine Law does not recognize common law marriages. A man and woman not legally married who cohabit for many years as
husband and wife, who represent themselves to the public as husband and wife, and who are reputed to be husband and wife in the community where
they live may be considered legally married in common law jurisdictions but not in the Philippines. SCaIcA
While it is true that our laws do not just brush aside the fact that such relationships are present in our society, and that they produce a community of
properties and interests which is governed by law, authority exists in case law to the effect that such form of co-ownership requires that the man and
woman living together must not in any way be incapacitated to contract marriage. In any case, herein petitioner has a subsisting marriage with another
 woman, a legal impediment which disqualified him from even legally marrying Vitaliana. In Santero vs. CFI of Cavite, the Court, thru Mr. Justice Paras,
interpreting Art. 188 of the Civil Code (Support of Surviving Spouse and Children During Liquidation of Inventoried Property) stated: "Be it noted,
however, that with respect to 'spouse,' the same must be the legitimate 'spouse' (not common-law spouses)."
There is a view that under Article 332 of the Revised Penal Code, the term "spouse" embraces common law relation for purposes of exemption from
criminal liability in cases of theft, swindling and malicious mischief committed or caused mutually by spouses. The Penal Code article, it is said, makes
no distinction between a couple whose cohabitation is sanctioned by a sacrament or legal tie and another who are husband and wife de facto. But this
view cannot even apply to the facts of the case at bar. We hold that the provisions of the Civil Code,unless expressly providing to the contrary as in
Article 144, when referring to a "spouse" contemplate a lawfully wedded spouse. Petitioner vis-a-vis Vitaliana was not a lawfully-wedded spouse
to her; in fact, he was not legally capacitated to marry her in her lifetime. 8 [Emphases supplied]
As applied to this case, it is clear that the law gives the right and duty to make funeral arrangements to Rosario, she being the surviving legal wife of Atty. Adriano. The fact that
she was living separately from her husband and was in the United States when he died has no controlling significance. To say that Rosario had, in effect, waived or renounced,
expressly or impliedly, her right and duty to make arrangements for the funeral of her deceased husband is baseless. The right and duty to make funeral arrangements, like any
other right, will not be considered as having been waived or renounced, except upon clear and satisfactory proof of conduct indicative of a free and voluntary
intent to that end. 9 While there was disaffection between Atty. Adriano and Rosario and their children when he was still alive, the Court also recognizes that human
compassion, more often than not, opens the door to mercy and forgiveness once a family member joins his Creator. Notably, it is an undisputed fact that the respondents wasted
no time in making frantic pleas to Valino for the delay of the interment for a few days so they could attend the service and view the remains of the deceased. As soon as they
came to know about Atty. Adriano's death in the morning of December 19, 1992 (December 20, 1992 in the Philippines), the respondents immediately contacted Valino and the
Arlington Memorial Chapel to express their request, but to no avail.
Valino insists that the expressed wishes of the deceased should nevertheless prevail pursuant to Article 307 of the Civil Code.Valino's own testimony that it was Atty. Adriano's
wish to be buried in their family plot is being relied upon heavily. It should be noted, however, that other than Valino's claim that Atty. Adriano wished to be buried at the Manila
Memorial Park, no other evidence was presented to corroborate such claim. Considering that Rosario equally claims that Atty. Adriano wished to be buried in the Adriano family
plot in Novaliches, it becomes apparent that the supposed burial wish of Atty. Adriano was unclear and undefinite. Considering this ambiguity as to the true wishes of the
deceased, it is the law that supplies the presumption as to his intent. No presumption can be said to have been created in Valino's favor, solely on account of a long-time
relationship with Atty. Adriano.
Moreover, it cannot be surmised that just because Rosario was unavailable to bury her husband when she died, she had already renounced her right to do so. Verily, in the same
vein that the right and duty to make funeral arrangements will not be considered as having been waived or renounced, the right to deprive a legitimate spouse of her legal right
to bury the remains of her deceased husband should not be readily presumed to have been exercised, except upon clear and satisfactory proof of conduct indicative of a free and
voluntary intent of the deceased to that end. Should there be any doubt as to the true intent of the deceased, the law favors the legitimate family. Here, Rosario's
keenness to exercise the rights and obligations accorded to the legal wife was even bolstered by the fact that she was joined by the children in this case.
Even assuming, ex gratia argumenti, that Atty. Adriano truly wished to be buried in the Valino family plot at the Manila Memorial Park, the result remains the same. Article 307 of
the Civil Code provides:
Art. 307. The funeral shall be in accordance with the expressed wishes of the deceased. In the absence of such expression, his religious beliefs or
affiliation shall determine the funeral rites. In case of doubt, the form of the funeral shall be decided upon by the person obliged to make
arrangements for the same, after consulting the other members of the family.
From its terms, it is apparent that Article 307 simply seeks to prescribe the "form of the funeral rites" that should govern in the burial of the deceased. As thoroughly explained
earlier, the right and duty to make funeral arrangements reside in the persons specified in Article 305 in relation to Article 199 of the Family Code. Even if Article 307 were to be
interpreted to include the place of burial among those on which the wishes of the deceased shall be followed, Dr. Arturo M. Tolentino (Dr. Tolentino), an eminent authority on civil
law, commented that it is generally recognized that any inferences as to the wishes of the deceased should be established by some form of testamentary
disposition. 10 As Article 307 itself provides, the wishes of the deceased must be expressly provided. It cannot be inferred lightly, such as from the circumstance that Atty.
Adriano spent his last remaining days with Valino. It bears stressing once more that other than Valino's claim that Atty. Adriano wished to be buried at the Valino family plot, no
other evidence was presented to corroborate it.
At any rate, it should be remembered that the wishes of the decedent with respect to his funeral are not absolute. As Dr. Tolentino further wrote:
The dispositions or wishes of the deceased in relation to his funeral, must not be contrary to law. They must not violate the legal and
reglamentary provisions concerning funerals and the disposition of the remains, whether as regards the time and manner of disposition,
or the place of burial, or the ceremony to be observed. 11 [Emphases supplied]
In this case, the wishes of the deceased with respect to his funeral are limited by Article 305 of the Civil Code in relation to Article 199 of the Family Code, and subject the
same to those charged with the right and duty to make the proper arrangements to bury the remains of their loved-one. As aptly explained by the appellate court in its
disquisition:
The testimony of defendant-appellee Fe Floro Valino that it was the oral wish of Atty. Adriano Adriano that he be interred at the Floro family's
mausoleum at the Manila Memorial Park, must bend to the provisions of the law. Even assuming arguendo that it was the express wish of the deceased
to be interred at the Manila Memorial Park, still, the law grants the duty and the right to decide what to do with the remains to the wife, in this case,
plaintiff-appellant Rosario D. Adriano, as the surviving spouse, and not to defendant-appellee Fe Floro Valino, who is not even in the list of those legally
preferred, despite the fact that her intentions may have been very commendable. The law does not even consider the emotional fact that husband and
wife had, in this case at bench, been separated-in-fact and had been living apart for more than 30 years. 12 aEHIDT
As for Valino's contention that there is no point in exhuming and transferring the remains of Atty. Adriano, it should be said that the burial of his remains in a place other than the
Adriano family plot in Novaliches runs counter to the wishes of his family. It does not only violate their right provided by law, but it also disrespects the family because the remains
of the patriarch are buried in the family plot of his live-in partner.
It is generally recognized that the corpse of an individual is outside the commerce of man. However, the law recognizes that a certain right of possession over the corpse exists,
for the purpose of a decent burial, and for the exclusion of the intrusion by third persons who have no legitimate interest in it. This quasi-property right, arising out of the duty of
those obligated by law to bury their dead, also authorizes them to take possession of the dead body for purposes of burial to have it remain in its final resting place, or to even
transfer it to a proper place where the memory of the dead may receive the respect of the living. This is a family right. There can be no doubt that persons having this right
may recover the corpse from third persons. 13
All this notwithstanding, the Court finds laudable the acts of Valino in taking care of Atty. Adriano during his final moments and giving him a proper burial. For her sacrifices, it
would indeed be unkind to assess actual or moral damages against her. As aptly explained by the CA:
The trial court found that there was good faith on the part of defendant-appellee Fe Floro Valino, who, having lived with Atty. Adriano after he was
separated in fact from his wife, lovingly and caringly took care of the well-being of Atty. Adriano Adriano * while he was alive and even took care of his
remains when he had died.
On the issue of damages, plaintiffs-appellants are not entitled to actual damages. Defendant-appellee Fe Floro Valino had all the good intentions in
giving the remains of Atty. Adriano a decent burial when the wife and family were all in the United States and could not attend to his burial. Actual
damages are those awarded in satisfaction of, or in recompense for, loss or injury sustained. To be recoverable, they must not only be capable of proof
but must actually be proven with a reasonable degree of certainty. In this case at bench, there was no iota of evidence presented to justify award of
actual damages.
Plaintiffs-appellants are not also entitled to moral and exemplary damages. Moral damages may be recovered only if the plaintiff is able to satisfactorily
prove the existence of the factual basis for the damages and its causal connection with the acts complained of because moral damages although
incapable of pecuniary estimation are designed not to impose a penalty but to compensate for injury sustained and actual damages suffered. No injury
was caused to plaintiffs-appellants, nor was any intended by anyone in this case. Exemplary damages, on the other hand, may only be awarded if
claimant is able to establish his right to moral, temperate, liquidated or compensatory damages. Unfortunately, neither of the requirements to sustain
an award for either of these damages would appear to have been adequately established by plaintiffs-appellants.
As regards the award of attorney's fees, it is an accepted doctrine that the award thereof as an item of damages is the exception rather than the rule,
and counsel's fees are not to be awarded every time a party wins a suit. The power of the court to award attorney's fees under Article 2208 of the New
Civil Code demands factual, legal and equitable justification, without which the award is a conclusion without a premise, its basis being improperly left
to speculation and conjecture. In this case, we have searched but found nothing in plaintiffs-appellants' suit that justifies the award of attorney's
fees. 14
Finally, it should be said that controversies as to who should make arrangements for the funeral of a deceased have often aggravated the bereavement of the family and
disturbed the proper solemnity which should prevail at every funeral. It is for the purpose of preventing such controversies that the Code Commission saw it best to include the
provisions on "Funerals." 15
WHEREFORE, the petition is DENIED.
SO ORDERED.
||| (Valino v. Adriano, G.R. No. 182894, [April 22, 2014])
 FIRST DIVISION
[G.R. No. 185918. April 18, 2012.]
LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC., petitioner, vs. UNIVERSITY OF THE PHILIPPINES, respondent.
DECISION
VILLARAMA, JR., J p:
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the August 20, 2008 Amended Decision 1 and December
23, 2008 Resolution 2 of the Court of Appeals (CA) in CA-G.R. SP No. 91281. ESCTIA
The antecedent facts of the case are as follows:
Petitioner Lockheed Detective and Watchman Agency, Inc. (Lockheed) entered into a contract for security services with respondent University of the Philippines (UP).
In 1998, several security guards assigned to UP filed separate complaints against Lockheed and UP for payment of underpaid wages, 25% overtime pay, premium pay for rest
days and special holidays, holiday pay, service incentive leave pay, night shift differentials, 13th month pay, refund of cash bond, refund of deductions for the Mutual Benefits
Aids System (MBAS), unpaid wages from December 16-31, 1998, and attorney's fees.
On February 16, 2000, the Labor Arbiter rendered a decision as follows:
WHEREFORE, premises considered, respondents Lockheed Detective and Watchman Agency, Inc. and UP as job contractor and principal, respectively,
are hereby declared to be solidarily liable to complainants for the following claims of the latter which are found meritorious.
Underpaid wages/salaries, premium pay for work on rest day and special holiday, holiday pay, 5 days service incentive leave pay, 13th month pay for
1998, refund of cash bond (deducted at P50.00 per month from January to May 1996, P100.00 per month from June 1996 and P200.00 from November
1997), refund of deduction for Mutual Benefits Aids System at the rate of P50.00 a month, and attorney's fees; in the total amount of P1,184,763.12
broken down as follows per attached computation of the Computation and [E]xamination Unit of this Commission, which computation forms part of this
Decision:
1. JOSE SABALAS P77,983.62
2. TIRSO DOMASIAN 76,262.70
3. JUAN TAPEL 80,546.03
4. DINDO MURING 80,546.03
5. ALEXANDER ALLORDE 80,471.78
6. WILFREDO ESCOBAR 80,160.63
7. FERDINAND VELASQUEZ 78,595.53
8. ANTHONY GONZALES 76,869.97
9. SAMUEL ESCARIO 80,509.78
10. PEDRO FAILORINA 80,350.87
11. MATEO TANELA 70,590.58
12. JOB SABALAS 59,362.40
13. ANDRES DACANAYAN 77,403.73
14. EDDIE OLIVAR 77,403.73

P1,077,057.38
plus 10% attorney's fees 107,705.74

GRAND TOTAL AWARD P1,184,763.12
===========
Third party respondent University of the Philippines is hereby declared to be liable to Third Party Complainant and cross claimant Lockheed Detective
and Watchman Agency for the unpaid legislated salary increases of the latter's security guards for the years 1996 to 1998, in the total amount of
P13,066,794.14, out of which amount the amounts due complainants here shall be paid. SEIacA
The other claims are hereby DISMISSED for lack of merit (night shift differential and 13th month pay) or for having been paid in the course of this
proceedings (salaries for December 15-31, 1997 in the amount of P40,140.44).
The claims of Erlindo Collado, Rogelio Banjao and Amor Banjao are hereby DISMISSED as amicably settled for and in consideration of the amounts of
P12,315.72, P12,271.77 and P12,819.33, respectively.
SO ORDERED. 3
Both Lockheed and UP appealed the Labor Arbiter's decision. By Decision 4 dated April 12, 2002, the NLRC modified the Labor Arbiter's decision. The NLRC held:
WHEREFORE, the decision appealed from is hereby modified as follows:
1. Complainants' claims for premium pay for work on rest day and special holiday, and 5 days service incentive leave pay, are hereby
dismissed for lack of basis.
2. The respondent University of the Philippines is still solidarily liable with Lockheed in the payment of the rest of the claims covering the
period of their service contract.
The Financial Analyst is hereby ordered to recompute the awards of the complainants in accordance with the foregoing modifications.
SO ORDERED. 5
The complaining security guards and UP filed their respective motions for reconsideration. On August 14, 2002, however, the NLRC denied said motions.
As the parties did not appeal the NLRC decision, the same became final and executory on October 26, 2002. 6 A writ of execution was then issued but later quashed by the Labor
Arbiter on November 23, 2003 on motion of UP due to disputes regarding the amount of the award. Later, however, said order quashing the writ was reversed by the NLRC by
Resolution 7 dated June 8, 2004, disposing as follows:
WHEREFORE, premises considered, we grant this instant appeal. The Order dated 23 November 2003 is hereby reversed and set aside. The Labor
Arbiter is directed to issue a Writ of Execution for the satisfaction of the judgment award in favor of Third-Party complainants.
SO ORDERED. 8
UP moved to reconsider the NLRC resolution. On December 28, 2004, the NLRC upheld its resolution but with modification that the satisfaction of the judgment award in favor of
Lockheed will be only against the funds of UP which are not identified as public funds. TICAcD
The NLRC order and resolution having become final, Lockheed filed a motion for the issuance of an alias writ of execution. The same was granted on May 23, 2005. 9
On July 25, 2005, a Notice of Garnishment 10 was issued to Philippine National Bank (PNB) UP Diliman Branch for the satisfaction of the award of P12,142,522.69 (inclusive of
execution fee).
In a letter 11 dated August 9, 2005, PNB informed UP that it has received an order of release dated August 8, 2005 issued by the Labor Arbiter directing PNB UP Diliman Branch to
release to the NLRC Cashier, through the assigned NLRC Sheriff Max L. Lago, the judgment award/amount of P12,142,522.69. PNB likewise reminded UP that the bank only has 10
working days from receipt of the order to deliver the garnished funds and unless it receives a notice from UP or the NLRC before the expiry of the 10-day period regarding the
issuance of a court order or writ of injunction discharging or enjoining the implementation and execution of the Notice of Garnishment and Writ of Execution, the bank shall be
constrained to cause the release of the garnished funds in favor of the NLRC.
On August 16, 2005, UP filed an Urgent Motion to Quash Garnishment. 12 UP contended that the funds being subjected to garnishment at PNB are government/public funds. As
certified by the University Accountant, the subject funds are covered by Savings Account No. 275-529999-8, under the name of UP System Trust Receipts, earmarked for Student
Guaranty Deposit, Scholarship Fund, Student Fund, Publications, Research Grants, and Miscellaneous Trust Account. UP argued that as public funds, the subject PNB account
cannot be disbursed except pursuant to an appropriation required by law. The Labor Arbiter, however, dismissed the urgent motion for lack of merit on August 30, 2005. 13
On September 2, 2005, the amount of P12,062,398.71 was withdrawn by the sheriff from UP's PNB account. 14
On September 12, 2005, UP filed a petition for certiorari before the CA based on the following grounds:
I.
The concept of "solidary liability" by an indirect employer notwithstanding, respondent NLRC gravely abused its discretion in a manner amounting to
lack or excess of jurisdiction by misusing such concept to justify the garnishment by the executing Sheriff of public/government funds belonging to UP.
II.
Respondents NLRC and Arbiter LORA acted without jurisdiction or gravely abused their discretion in a manner amounting to lack or excess of jurisdiction
when, by means of an Alias Writ of Execution against petitioner UP, they authorized respondent Sheriff to garnish UP's public funds. Similarly,
respondent LORA gravely abused her discretion when she resolved petitioner's Motion to Quash Notice of Garnishment addressed to, and intended for,
the NLRC, and when she unilaterally and arbitrarily disregarded an official Certification that the funds garnished are public/government funds, and
thereby allowed respondent Sheriff to withdraw the same from PNB.
III.
Respondents gravely abused their discretion in a manner amounting to lack or excess of jurisdiction when they, despite prior knowledge, effected the
execution that caused paralyzation and dislocation to petitioner's governmental functions. 15 CDHAcI
On March 12, 2008, the CA rendered a decision 16 dismissing UP's petition for certiorari. Citing Republic v. COCOFED, 17 which defines public funds as moneys belonging to the
State or to any political subdivisions of the State, more specifically taxes, customs, duties and moneys raised by operation of law for the support of the government or the
discharge of its obligations, the appellate court ruled that the funds sought to be garnished do not seem to fall within the stated definition.
On reconsideration, however, the CA issued the assailed Amended Decision. It held that without departing from its findings that the funds covered in the savings account sought
to be garnished do not fall within the classification of public funds, it reconsiders the dismissal of the petition in light of the ruling in the case of National Electrification
Administration v. Morales 18 which mandates that all money claims against the government must first be filed with the Commission on Audit (COA).
Lockheed moved to reconsider the amended decision but the same was denied in the assailed CA Resolution dated December 23, 2008. The CA cited Manila International Airport
Authority v. Court of Appeals 19 which held that UP ranks with MIAA, a government instrumentality exercising corporate powers but not organized as a stock or non-stock
corporation. While said corporations are government instrumentalities, they are loosely called government corporate entities but not government-owned and controlled
corporations in the strict sense.
Hence this petition by Lockheed raising the following arguments:
1. RESPONDENT UP IS A GOVERNMENT ENTITY WITH A SEPARATE AND DISTINCT PERSONALITY FROM THE NATIONAL GOVERNMENT AND HAS ITS OWN
CHARTER GRANTING IT THE RIGHT TO SUE AND BE SUED. IT THEREFORE CANNOT AVAIL OF THE IMMUNITY FROM SUIT OF THE
GOVERNMENT. NOT HAVING IMMUNITY FROM SUIT, RESPONDENT UP CAN BE HELD LIABLE AND EXECUTION CAN THUS ENSUE.
2. MOREOVER, IF THE COURT LENDS IT ASSENT TO THE INVOCATION OF THE DOCTRINE OF STATE IMMUNITY, THIS WILL RESULT [IN] GRAVE INJUSTICE.
3. FURTHERMORE, THE PROTESTATIONS OF THE RESPONDENT ARE TOO LATE IN THE DAY, AS THE EXECUTION PROCEEDINGS HAVE ALREADY BEEN
TERMINATED. 20
Lockheed contends that UP has its own separate and distinct juridical entity from the national government and has its own charter. Thus, it can be sued and be held liable.
Moreover, Executive Order No. 714 entitled "Fiscal Control and Management of the Funds of UP" recognizes that "as an institution of higher learning, UP has always granted full
management and control of its affairs including its financial affairs." 21 Therefore, it cannot shield itself from its private contractual liabilities by simply invoking the public
character of its funds. Lockheed also cites several cases wherein it was ruled that funds of public corporations which can sue and be sued were not exempt from
garnishment. IDSETA
Lockheed likewise argues that the rulings in the NEA and MIAA cases are inapplicable. It contends that UP is not similarly situated with NEA because the jurisdiction of COA over
the accounts of UP is only on a post-audit basis. As to the MIAA case, the liability of MIAA pertains to the real estate taxes imposed by the City of Paraaque while the obligation of
UP in this case involves a private contractual obligation. Lockheed also argues that the declaration in MIAA specifically citing UP was mere obiter dictum.
Lockheed moreover submits that UP cannot invoke state immunity to justify and perpetrate an injustice. UP itself admitted its liability and thus it should not be allowed to renege
on its contractual obligations. Lockheed contends that this might create a ruinous precedent that would likely affect the relationship between the public and private sectors.
Lastly, Lockheed contends that UP cannot anymore seek the quashal of the writ of execution and notice of garnishment as they are already fait accompli.
For its part, UP contends that it did not invoke the doctrine of state immunity from suit in the proceedings a quo and in fact, it did not object to being sued before the labor
department. It maintains, however, that suability does not necessarily mean liability. UP argues that the CA correctly applied the NEA ruling when it held that all money claims
must be filed with the COA.
As to alleged injustice that may result for invocation of state immunity from suit, UP reiterates that it consented to be sued and even participated in the proceedings below.
Lockheed cannot now claim that invocation of state immunity, which UP did not invoke in the first place, can result in injustice.
On the fait accompli argument, UP argues that Lockheed cannot wash its hands from liability for the consummated garnishment and execution of UP's trust fund in the amount of
P12,062,398.71. UP cites that damage was done to UP and the beneficiaries of the fund when said funds, which were earmarked for specific educational purposes, were
misapplied, for instance, to answer for the execution fee of P120,123.98 unilaterally stipulated by the sheriff. Lockheed, being the party which procured the illegal garnishment,
should be held primarily liable. The mere fact that the CA set aside the writ of garnishment confirms the liability of Lockheed to reimburse and indemnify in accordance with law.
The petition has no merit.
We agree with UP that there was no point for Lockheed in discussing the doctrine of state immunity from suit as this was never an issue in this case. Clearly, UP consented to be
sued when it participated in the proceedings below. What UP questions is the hasty garnishment of its funds in its PNB account.
This Court finds that the CA correctly applied the NEA case. Like NEA, UP is a juridical personality separate and distinct from the government and has the capacity to sue and be
sued. Thus, also like NEA, it cannot evade execution, and its funds may be subject to garnishment or levy. However, before execution may be had, a claim for payment of the
judgment award must first be filed with the COA. Under Commonwealth Act No. 327, 22 as amended by Section 26 of P.D. No. 1445, 23 it is the COA which has primary
jurisdiction to examine, audit and settle "all debts and claims of any sort" due from or owing the Government or any of its subdivisions, agencies and instrumentalities, including
government-owned or controlled corporations and their subsidiaries. With respect to money claims arising from the implementation of Republic Act No. 6758, 24 their allowance or
disallowance is for COA to decide, subject only to the remedy of appeal by petition for certiorari to this Court. 25 TcCDIS
We cannot subscribe to Lockheed's argument that NEA is not similarly situated with UP because the COA's jurisdiction over the latter is only on post-audit basis. A reading of the
pertinent Commonwealth Act provision clearly shows that it does not make any distinction as to which of the government subdivisions, agencies and instrumentalities, including
government-owned or controlled corporations and their subsidiaries whose debts should be filed before the COA.
As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing that can be done since the funds of UP had already been garnished, since the garnishment
was erroneously carried out and did not go through the proper procedure (the filing of a claim with the COA), UP is entitled to reimbursement of the garnished funds plus interest
of 6% per annum, to be computed from the time of judicial demand to be reckoned from the time UP filed a petition for certiorari before the CA which occurred right after the
withdrawal of the garnished funds from PNB.
WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. Petitioner Lockheed Detective and Watchman Agency, Inc. is ordered to REIMBURSErespondent
University of the Philippines the amount of P12,062,398.71 plus interest of 6% per annum, to be computed from September 12, 2005 up to the finality of this Decision, and 12%
interest on the entire amount from date of finality of this Decision until fully paid.
No pronouncement as to costs.
SO ORDERED.
Leonardo-de Castro, Peralta, * Bersamin and Reyes, ** JJ., concur.
||| (Lockheed Detective and Watchman Agency, Inc. v. UP, G.R. No. 185918, [April 18, 2012], 686 PHIL 191-203)
 SECOND DIVISION
[G.R. No. 182358. February 20, 2013.]
DEPARTMENT OF HEALTH, THE SECRETARY OF HEALTH, and MA. MARGARITA M. GALON, petitioners, vs. PHIL PHARMAWEALTH,
INC., respondent.
DECISION
DEL CASTILLO, J p:
The state may not be sued without its consent. Likewise, public officials may not be sued for acts done in the performance of their official functions or within the scope of their
authority.
This Petition for Review on Certiorari 1 assails the October 25, 2007 Decision 2 of the Court of Appeals (CA) in CA-G.R. CV No. 85670, and its March 31, 2008 Resolution 3denying
petitioners' Motion for Reconsideration. 4
Factual Antecedents
On December 22, 1998, Administrative Order (AO) No. 27 series of 1998 5 was issued by then Department of Health (DOH) Secretary Alfredo G. Romualdez (Romualdez). AO 27
set the guidelines and procedure for accreditation of government suppliers of pharmaceutical products for sale or distribution to the public, such accreditation to be valid for three
years but subject to annual review.
On January 25, 2000, Secretary Romualdez issued AO 10 series of 2000 6 which amended AO 27. Under Section VII 7 of AO 10, the accreditation period for government suppliers
of pharmaceutical products was reduced to two years. Moreover, such accreditation may be recalled, suspended or revoked after due deliberation and proper notice by the DOH
Accreditation Committee, through its Chairman.
Section VII of AO 10 was later amended by AO 66 series of 2000, 8 which provided that the two-year accreditation period may be recalled, suspended or revoked only after due
deliberation, hearing and notice by the DOH Accreditation Committee, through its Chairman. HDTSIE
On August 28, 2000, the DOH issued Memorandum No. 171-C 9 which provided for a list and category of sanctions to be imposed on accredited government suppliers of
pharmaceutical products in case of adverse findings regarding their products (e.g., substandard, fake, or misbranded) or violations committed by them during their accreditation.
In line with Memorandum No. 171-C, the DOH, through former Undersecretary Ma. Margarita M. Galon (Galon), issued Memorandum No. 209 series of 2000, 10 inviting
representatives of 24 accredited drug companies, including herein respondent Phil Pharmawealth, Inc. (PPI) to a meeting on October 27, 2000. During the meeting,
Undersecretary Galon handed them copies of a document entitled "Report on Violative Products" 11 issued by the Bureau of Food and Drugs 12 (BFAD), which detailed violations
or adverse findings relative to these accredited drug companies' products. Specifically, the BFAD found that PPI's products which were being sold to the public were unfit for
human consumption.
During the October 27, 2000 meeting, the 24 drug companies were directed to submit within 10 days, or until November 6, 2000, their respective explanations on the adverse
findings covering their respective products contained in the Report on Violative Products.
Instead of submitting its written explanation within the 10-day period as required, PPI belatedly sent a letter 13 dated November 13, 2000 addressed to Undersecretary Galon,
informing her that PPI has referred the Report on Violative Products to its lawyers with instructions to prepare the corresponding reply. However, PPI did not indicate when its reply
would be submitted; nor did it seek an extension of the 10-day period, which had previously expired on November 6, 2000, much less offer any explanation for its failure to timely
submit its reply. PPI's November 13, 2000 letter states: HcSCED
Madam,
This refers to your directive on 27 October 2000, on the occasion of the meeting with selected accredited suppliers, during which you made known to
the attendees of your requirement for them to submit their individual comments on the Report on Violative Products (the "Report") compiled by your
office and disseminated on that date.
In this connection, we inform you that we have already instructed our lawyers to prepare on our behalf the appropriate reply to the Report furnished to
us. Our lawyers in time shall revert to you and furnish you the said reply.
Please be guided accordingly.
Very truly yours,
(signed)
ATTY. ALAN A.B. ALAMBRA
Vice-President for Legal and Administrative Affairs 14
In a letter-reply 15 dated November 23, 2000 Undersecretary Galon found "untenable" PPI's November 13, 2000 letter and therein informed PPI that, effective immediately, its
accreditation has been suspended for two years pursuant to AO 10 and Memorandum No. 171-C.
In another December 14, 2000 letter 16 addressed to Undersecretary Galon, PPI through counsel questioned the suspension of its accreditation, saying that the same was made
pursuant to Section VII of AO 10 which it claimed was patently illegal and null and void because it arrogated unto the DOH Accreditation Committee powers and functions which
were granted to the BFAD under Republic Act (RA) No. 3720 17 and Executive Order (EO) No. 175. 18 PPI added that its accreditation was suspended without the benefit of notice
and hearing, in violation of its right to substantive and administrative due process. It thus demanded that the DOH desist from implementing the suspension of its accreditation,
under pain of legal redress.
On December 28, 2000, PPI filed before the Regional Trial Court of Pasig City a Complaint 19 seeking to declare null and void certain DOH administrative issuances, with prayer for
damages and injunction against the DOH, former Secretary Romualdez and DOH Undersecretary Galon. Docketed as Civil Case No. 68200, the case was raffled to Branch 160. On
February 8, 2002, PPI filed an Amended and Supplemental Complaint, 20 this time impleading DOH Secretary Manuel Dayrit (Dayrit). PPI claimed that AO 10, Memorandum No.
171-C, Undersecretary Galon's suspension order contained in her November 23, 2000 letter, and AO 14 series of 2001 21 are null and void for being in contravention of Section 26
(d) of RA 3720 as amended by EO 175, which states as follows: CcTIDH
SEC. 26.. . .
(d)When it appears to the Director [of the BFAD] that the report of the Bureau that any article of food or any drug, device, or cosmetic secured pursuant
to Section twenty-eight of this Act is adulterated, misbranded, or not registered, he shall cause notice thereof to be given to the person or persons
concerned and such person or persons shall be given an opportunity to be heard before the Bureau and to submit evidence impeaching the correctness
of the finding or charge in question.
For what it claims was an undue suspension of its accreditation, PPI prayed that AO 10, Memorandum No. 171-C, Undersecretary Galon's suspension order contained in her
November 23, 2000 letter, and AO 14 be declared null and void, and that it be awarded moral damages of P5 million, exemplary damages of P1 million, attorney's fees of P1
million, and costs of suit. PPI likewise prayed for the issuance of temporary and permanent injunctive relief. cIHDaE
In their Amended Answer, 22 the DOH, former Secretary Romualdez, then Secretary Dayrit, and Undersecretary Galon sought the dismissal of the Complaint, stressing that PPI's
accreditation was suspended because most of the drugs it was importing and distributing/selling to the public were found by the BFAD to be substandard for human consumption.
They added that the DOH is primarily responsible for the formulation, planning, implementation, and coordination of policies and programs in the field of health; it is vested with
the comprehensive power to make essential health services and goods available to the people, including accreditation of drug suppliers and regulation of importation and
distribution of basic medicines for the public.
Petitioners added that, contrary to PPI's claim, it was given the opportunity to present its side within the 10-day period or until November 6, 2000, but it failed to submit the
required comment/reply. Instead, it belatedly submitted a November 13, 2000 letter which did not even constitute a reply, as it merely informed petitioners that the matter had
been referred by PPI to its lawyer. Petitioners argued that due process was afforded PPI, but because it did not timely avail of the opportunity to explain its side, the DOH had to
act immediately by suspending PPI's accreditation to stop the distribution and sale of substandard drug products which posed a serious health risk to the public. By
exercising DOH's mandate to promote health, it cannot be said that petitioners committed grave abuse of discretion.
In a January 8, 2001 Order, 23 the trial court partially granted PPI's prayer for a temporary restraining order, but only covering PPI's products which were not included in the list of
violative products or drugs as found by the BFAD.
In a Manifestation and Motion 24 dated July 8, 2003, petitioners moved for the dismissal of Civil Case No. 68200, claiming that the case was one against the State; that the
Complaint was improperly verified; and lack of authority of the corporate officer to commence the suit, as the requisite resolution of PPI's board of directors granting to the
commencing officer PPI's Vice President for Legal and Administrative Affairs, Alan Alambra, the authority to file Civil Case No. 68200 was lacking. To this, PPI filed its
Comment/Opposition. 25
Ruling of the Regional Trial Court
In a June 14, 2004 Order, 26 the trial court dismissed Civil Case No. 68200, declaring the case to be one instituted against the State, in which case the principle of state immunity
from suit is applicable.
PPI moved for reconsideration, 27 but the trial court remained steadfast. 28 PPI appealed to the CA. ISaTCD
Ruling of the Court of Appeals
Docketed as CA-G.R. CV No. 85670, PPI's appeal centered on the issue of whether it was proper for the trial court to dismiss Civil Case No. 68200.
The CA, in the herein assailed Decision, 29 reversed the trial court ruling and ordered the remand of the case for the conduct of further proceedings. The CA concluded that it was
premature for the trial court to have dismissed the Complaint. Examining the Complaint, the CA found that a cause of action was sufficiently alleged that due to defendants'
(petitioners') acts which were beyond the scope of their authority, PPI's accreditation as a government supplier of pharmaceutical products was suspended without the required
notice and hearing as required by Section 26 (d) of RA 3720 as amended by EO 175. Moreover, the CA held that by filing a motion to dismiss, petitioners were deemed to have
hypothetically admitted the allegations in the Complaint which state that petitioners were being sued in their individual and personal capacities thus negating their claim
that Civil Case No. 68200 is an unauthorized suit against the State.
The CA further held that instead of dismissing the case, the trial court should have deferred the hearing and resolution of the motion to dismiss and proceeded to trial. It added
that it was apparent from the Complaint that petitioners were being sued in their private and personal capacities for acts done beyond the scope of their official functions. Thus,
the issue of whether the suit is against the State could best be threshed out during trial on the merits, rather than in proceedings covering a motion to dismiss.
The dispositive portion of the CA Decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order dated June 14, 2004 of the Regional Trial Court of Pasig City, Branch 160, is
hereby REVERSED and SET-ASIDE.ACCORDINGLY, this case is REMANDED to the trial court for further proceedings.
SO ORDERED. 30
Petitioners sought, but failed, to obtain a reconsideration of the Decision. Hence, they filed the present Petition.
Issue
Petitioners now raise the following lone issue for the Court's resolution:
Should Civil Case No. 68200 be dismissed for being a suit against the State? 31
Petitioners' Arguments
Petitioners submit that because PPI's Complaint prays for the award of damages against the DOH, Civil Case No. 68200 should be considered a suit against the State, for it would
require the appropriation of the needed amount to satisfy PPI's claim, should it win the case. Since the State did not give its consent to be sued, Civil Case No. 68200 must be
dismissed. They add that in issuing and implementing the questioned issuances, individual petitioners acted officially and within their authority, for which reason they should not
be held to account individually. CAIaHS
Respondent's Arguments
Apart from echoing the pronouncement of the CA, respondent insists that Civil Case No. 68200 is a suit against the petitioners in their personal capacity for acts committed
outside the scope of their authority.
Our Ruling
The Petition is granted.
The doctrine of non-suability.
The discussion of this Court in Department of Agriculture v. National Labor Relations Commission 32 on the doctrine of non-suability is enlightening.
The basic postulate enshrined in the constitution that '(t)he State may not be sued without its consent,' reflects nothing less than a recognition of the
sovereign character of the State and an express affirmation of the unwritten rule effectively insulating it from the jurisdiction of courts. It is based on
 the very essence of sovereignty. . . . [A] sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and
practical ground that there can be no legal right as against the authority that makes the law on which the right depends. True, the doctrine, not too
infrequently, is derisively called 'the royal prerogative of dishonesty' because it grants the state the prerogative to defeat any legitimate claim against
it by simply invoking its non-suability. We have had occasion to explain in its defense, however, that a continued adherence to the doctrine of non-
suability cannot be deplored, for the loss of governmental efficiency and the obstacle to the performance of its multifarious functions would be far
greater in severity than the inconvenience that may be caused private parties, if such fundamental principle is to be abandoned and the availability of
judicial remedy is not to be accordingly restricted.
The rule, in any case, is not really absolute for it does not say that the state may not be sued under any circumstance. On the contrary, as correctly
phrased, the doctrine only conveys, 'the state may not be sued without its consent;' its clear import then is that the State may at times be sued. The
State's consent may be given either expressly or impliedly. Express consent may be made through a general law or a special law. . . . Implied consent,
on the other hand, is conceded when the State itself commences litigation, thus opening itself to a counterclaim or when it enters into a contract. In
this situation, the government is deemed to have descended to the level of the other contracting party and to have divested itself of its sovereign
immunity. This rule, . . . is not, however, without qualification. Not all contracts entered into by the government operate as a waiver of its non-suability;
distinction must still be made between one which is executed in the exercise of its sovereign function and another which is done in its proprietary
capacity. 33 aTcIEH
As a general rule, a state may not be sued. However, if it consents, either expressly or impliedly, then it may be the subject of a suit. 34 There is express consent when a law,
either special or general, so provides. On the other hand, there is implied consent when the state "enters into a contract or it itself commences litigation." 35However, it must be
clarified that when a state enters into a contract, it does not automatically mean that it has waived its non-suability. 36 The State "will be deemed to have impliedly waived its
non-suability [only] if it has entered into a contract in its proprietary or private capacity. [However,] when the contract involves its sovereign or governmental capacity[,] . . . no
such waiver may be implied." 37 "Statutory provisions waiving [s]tate immunity are construed in strictissimi juris. For, waiver of immunity is in derogation of
sovereignty." 38 DHSCEc
The DOH can validly invoke state immunity.
a) DOH is an unincorporated agency which
performs sovereign or governmental functions.
In this case, the DOH, being an "unincorporated agency of the government" 39 can validly invoke the defense of immunity from suit because it has not consented, either
expressly or impliedly, to be sued. Significantly, the DOH is an unincorporated agency which performs functions of governmental character.
The ruling in Air Transportation Office v. Ramos 40 is relevant, viz.:
An unincorporated government agency without any separate juridical personality of its own enjoys immunity from suit because it is invested with an
inherent power of sovereignty. Accordingly, a claim for damages against the agency cannot prosper; otherwise, the doctrine of sovereign immunity is
violated. However, the need to distinguish between an unincorporated government agency performing governmental function and one performing
proprietary functions has arisen. The immunity has been upheld in favor of the former because its function is governmental or incidental to such
function; it has not been upheld in favor of the latter whose function was not in pursuit of a necessary function of government but was essentially a
business. 41 DSHcTC
b) The Complaint seeks to hold the DOH solidarily
and jointly liable with the other defendants for
damages which constitutes a charge or financial
liability against the state.
Moreover, it is settled that if a Complaint seeks to "impose a charge or financial liability against the state," 42 the defense of non-suability may be properly invoked. In this case,
PPI specifically prayed, in its Complaint and Amended and Supplemental Complaint, for the DOH, together with Secretaries Romualdez and Dayrit as well as Undersecretary Galon,
to be held jointly and severally liable for moral damages, exemplary damages, attorney's fees and costs of suit. 43 Undoubtedly, in the event that PPI succeeds in its suit, the
government or the state through the DOH would become vulnerable to an imposition or financial charge in the form of damages. This would require an appropriation from the
national treasury which is precisely the situation which the doctrine of state immunity aims to protect the state from.
The mantle of non-suability extends to
complaints filed against public officials for
acts done in the performance of their official
functions.
As regards the other petitioners, to wit, Secretaries Romualdez and Dayrit, and Undersecretary Galon, it must be stressed that the doctrine of state immunity extends its
protective mantle also to complaints filed against state officials for acts done in the discharge and performance of their duties. 44 "The suability of a government official depends
on whether the official concerned was acting within his official or jurisdictional capacity, and whether the acts done in the performance of official functions will result in a charge
or financial liability against the government." 45 Otherwise stated, "public officials can be held personally accountable for acts claimed to have been performed in connection with
official duties where they have acted ultra vires or where there is showing of bad faith." 46 Moreover, "[t]he 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 . . . . In such a situation, the state may move to dismiss the [C]omplaint on the ground that it has been filed without its consent." 47 AaDSTH
It is beyond doubt that the acts imputed against Secretaries Romualdez and Dayrit, as well as Undersecretary Galon, were done while in the performance and discharge of their
official functions or in their official capacities, and not in their personal or individual capacities. Secretaries Romualdez and Dayrit were being charged with the issuance of the
assailed orders. On the other hand, Undersecretary Galon was being charged with implementing the assailed issuances. By no stretch of imagination could the same be
categorized as ultra vires simply because the said acts are well within the scope of their authority. Section 4 of RA 3720 specifically provides that the BFAD is an office under the
Office of the Health Secretary. Also, the Health Secretary is authorized to issue rules and regulations as may be necessary to effectively enforce the provisions of RA 3720. 48 As
regards Undersecretary Galon, she is authorized by law to supervise the offices under the DOH's authority, 49 such as the BFAD. Moreover, there was also no showing of bad faith
on their part. The assailed issuances were not directed only against PPI. The suspension of PPI's accreditation only came about after it failed to submit its comment as directed by
Undersecretary Galon. It is also beyond dispute that if found wanting, a financial charge will be imposed upon them which will require an appropriation from the state of the
needed amount. Thus, based on the foregoing considerations, the Complaint against them should likewise be dismissed for being a suit against the state which absolutely did not
give its consent to be sued.
Based on the foregoing considerations, and regardless of the merits of PPI's case, this case deserves a dismissal. Evidently, the very foundation of Civil Case No. 68200 has
crumbled at this initial juncture.
PPI was not denied due process.
However, we cannot end without a discussion of PPI's contention that it was denied due process when its accreditation was suspended "without due notice and hearing." It is
undisputed that during the October 27, 2000 meeting, Undersecretary Galon directed representatives of pharmaceutical companies, PPI included, to submit their comment and/or
reactions to the Report on Violative Products furnished them within a period of 10 days. PPI, instead of submitting its comment or explanation, wrote a letter addressed to
Undersecretary Galon informing her that the matter had already been referred to its lawyer for the drafting of an appropriate reply. Aside from the fact that the said letter was
belatedly submitted, it also failed to specifically mention when such reply would be forthcoming. Finding the foregoing explanation to be unmeritorious, Undersecretary Galon
ordered the suspension of PPI's accreditation for two years. Clearly these facts show that PPI was not denied due process. It was given the opportunity to explain its side. Prior to
the suspension of its accreditation, PPI had the chance to rebut, explain, or comment on the findings contained in the Report on Violative Products that several of PPI's products
are not fit for human consumption. However, PPI squandered its opportunity to explain. Instead of complying with the directive of the DOH Undersecretary within the time allotted,
it instead haughtily informed Undersecretary Galon that the matter had been referred to its lawyers. Worse, it impliedly told Undersecretary Galon to just wait until its lawyers
shall have prepared the appropriate reply. PPI however failed to mention when it will submit its "appropriate reply" or how long Undersecretary Galon should wait. In the
meantime, PPI's drugs which are included in the Report on Violative Products are out and being sold in the market. Based on the foregoing, we find PPI's contention of denial of
due process totally unfair and absolutely lacking in basis. At this juncture, it would be trite to mention that "[t]he essence of due process in administrative proceedings is the
opportunity to explain one's side or seek a reconsideration of the action or ruling complained of. As long as the parties are given the opportunity to be heard before judgment is
rendered, the demands of due process are sufficiently met. What is offensive to due process is the denial of the opportunity to be heard. The Court has repeatedly stressed that
parties who chose not to avail themselves of the opportunity to answer charges against them cannot complain of a denial of due process." 50 cEaACD
Incidentally, we find it interesting that in the earlier case of Department of Health v. Phil Pharmawealth, Inc. 51 respondent filed a Complaint against DOH anchored on the same
issuances which it assails in the present case. In the earlier case of Department of Health v. Phil Pharmawealth, Inc., 52 PPI submitted to the DOH a request for the inclusion of its
products in the list of accredited drugs as required by AO 27 series of 1998 which was later amended by AO 10 series of 2000. In the instant case, however, PPI interestingly
claims that these issuances are null and void.
WHEREFORE, premises considered, the Petition is GRANTED. Civil Case No. 68200 is ordered DISMISSED.
SO ORDERED.
Carpio, Brion, Peralta * and Perez, JJ., concur.
||| (Department of Health v. Phil Pharmawealth, Inc., G.R. No. 182358, [February 20, 2013], 704 PHIL 432-449)

SECOND DIVISION
[G.R. No. 182358. February 20, 2013.]
 DEPARTMENT OF HEALTH, THE SECRETARY OF HEALTH, and MA. MARGARITA M. GALON, petitioners, vs. PHIL PHARMAWEALTH,
INC., respondent.
DECISION
DEL CASTILLO, J p:
The state may not be sued without its consent. Likewise, public officials may not be sued for acts done in the performance of their official functions or within the scope of their
authority.
This Petition for Review on Certiorari 1 assails the October 25, 2007 Decision 2 of the Court of Appeals (CA) in CA-G.R. CV No. 85670, and its March 31, 2008 Resolution 3denying
petitioners' Motion for Reconsideration. 4
Factual Antecedents
On December 22, 1998, Administrative Order (AO) No. 27 series of 1998 5 was issued by then Department of Health (DOH) Secretary Alfredo G. Romualdez (Romualdez). AO 27
set the guidelines and procedure for accreditation of government suppliers of pharmaceutical products for sale or distribution to the public, such accreditation to be valid for three
years but subject to annual review.
On January 25, 2000, Secretary Romualdez issued AO 10 series of 2000 6 which amended AO 27. Under Section VII 7 of AO 10, the accreditation period for government suppliers
of pharmaceutical products was reduced to two years. Moreover, such accreditation may be recalled, suspended or revoked after due deliberation and proper notice by the DOH
Accreditation Committee, through its Chairman.
Section VII of AO 10 was later amended by AO 66 series of 2000, 8 which provided that the two-year accreditation period may be recalled, suspended or revoked only after due
deliberation, hearing and notice by the DOH Accreditation Committee, through its Chairman. HDTSIE
On August 28, 2000, the DOH issued Memorandum No. 171-C 9 which provided for a list and category of sanctions to be imposed on accredited government suppliers of
pharmaceutical products in case of adverse findings regarding their products (e.g., substandard, fake, or misbranded) or violations committed by them during their accreditation.
In line with Memorandum No. 171-C, the DOH, through former Undersecretary Ma. Margarita M. Galon (Galon), issued Memorandum No. 209 series of 2000, 10 inviting
representatives of 24 accredited drug companies, including herein respondent Phil Pharmawealth, Inc. (PPI) to a meeting on October 27, 2000. During the meeting,
Undersecretary Galon handed them copies of a document entitled "Report on Violative Products" 11 issued by the Bureau of Food and Drugs 12 (BFAD), which detailed violations
or adverse findings relative to these accredited drug companies' products. Specifically, the BFAD found that PPI's products which were being sold to the public were unfit for
human consumption.
During the October 27, 2000 meeting, the 24 drug companies were directed to submit within 10 days, or until November 6, 2000, their respective explanations on the adverse
findings covering their respective products contained in the Report on Violative Products.
Instead of submitting its written explanation within the 10-day period as required, PPI belatedly sent a letter 13 dated November 13, 2000 addressed to Undersecretary Galon,
informing her that PPI has referred the Report on Violative Products to its lawyers with instructions to prepare the corresponding reply. However, PPI did not indicate when its reply
would be submitted; nor did it seek an extension of the 10-day period, which had previously expired on November 6, 2000, much less offer any explanation for its failure to timely
submit its reply. PPI's November 13, 2000 letter states: HcSCED
Madam,
This refers to your directive on 27 October 2000, on the occasion of the meeting with selected accredited suppliers, during which you made known to
the attendees of your requirement for them to submit their individual comments on the Report on Violative Products (the "Report") compiled by your
office and disseminated on that date.
In this connection, we inform you that we have already instructed our lawyers to prepare on our behalf the appropriate reply to the Report furnished to
us. Our lawyers in time shall revert to you and furnish you the said reply.
Please be guided accordingly.
Very truly yours,
(signed)
ATTY. ALAN A.B. ALAMBRA
Vice-President for Legal and Administrative Affairs 14
In a letter-reply 15 dated November 23, 2000 Undersecretary Galon found "untenable" PPI's November 13, 2000 letter and therein informed PPI that, effective immediately, its
accreditation has been suspended for two years pursuant to AO 10 and Memorandum No. 171-C.
In another December 14, 2000 letter 16 addressed to Undersecretary Galon, PPI through counsel questioned the suspension of its accreditation, saying that the same was made
pursuant to Section VII of AO 10 which it claimed was patently illegal and null and void because it arrogated unto the DOH Accreditation Committee powers and functions which
were granted to the BFAD under Republic Act (RA) No. 3720 17 and Executive Order (EO) No. 175. 18 PPI added that its accreditation was suspended without the benefit of notice
and hearing, in violation of its right to substantive and administrative due process. It thus demanded that the DOH desist from implementing the suspension of its accreditation,
under pain of legal redress.
On December 28, 2000, PPI filed before the Regional Trial Court of Pasig City a Complaint 19 seeking to declare null and void certain DOH administrative issuances, with prayer for
damages and injunction against the DOH, former Secretary Romualdez and DOH Undersecretary Galon. Docketed as Civil Case No. 68200, the case was raffled to Branch 160. On
February 8, 2002, PPI filed an Amended and Supplemental Complaint, 20 this time impleading DOH Secretary Manuel Dayrit (Dayrit). PPI claimed that AO 10, Memorandum No.
171-C, Undersecretary Galon's suspension order contained in her November 23, 2000 letter, and AO 14 series of 2001 21 are null and void for being in contravention of Section 26
(d) of RA 3720 as amended by EO 175, which states as follows: CcTIDH
SEC. 26.. . .
(d)When it appears to the Director [of the BFAD] that the report of the Bureau that any article of food or any drug, device, or cosmetic secured pursuant
to Section twenty-eight of this Act is adulterated, misbranded, or not registered, he shall cause notice thereof to be given to the person or persons
concerned and such person or persons shall be given an opportunity to be heard before the Bureau and to submit evidence impeaching the correctness
of the finding or charge in question.
For what it claims was an undue suspension of its accreditation, PPI prayed that AO 10, Memorandum No. 171-C, Undersecretary Galon's suspension order contained in her
November 23, 2000 letter, and AO 14 be declared null and void, and that it be awarded moral damages of P5 million, exemplary damages of P1 million, attorney's fees of P1
million, and costs of suit. PPI likewise prayed for the issuance of temporary and permanent injunctive relief. cIHDaE
In their Amended Answer, 22 the DOH, former Secretary Romualdez, then Secretary Dayrit, and Undersecretary Galon sought the dismissal of the Complaint, stressing that PPI's
accreditation was suspended because most of the drugs it was importing and distributing/selling to the public were found by the BFAD to be substandard for human consumption.
They added that the DOH is primarily responsible for the formulation, planning, implementation, and coordination of policies and programs in the field of health; it is vested with
the comprehensive power to make essential health services and goods available to the people, including accreditation of drug suppliers and regulation of importation and
distribution of basic medicines for the public.
Petitioners added that, contrary to PPI's claim, it was given the opportunity to present its side within the 10-day period or until November 6, 2000, but it failed to submit the
required comment/reply. Instead, it belatedly submitted a November 13, 2000 letter which did not even constitute a reply, as it merely informed petitioners that the matter had
been referred by PPI to its lawyer. Petitioners argued that due process was afforded PPI, but because it did not timely avail of the opportunity to explain its side, the DOH had to
act immediately by suspending PPI's accreditation to stop the distribution and sale of substandard drug products which posed a serious health risk to the public. By
exercising DOH's mandate to promote health, it cannot be said that petitioners committed grave abuse of discretion.
In a January 8, 2001 Order, 23 the trial court partially granted PPI's prayer for a temporary restraining order, but only covering PPI's products which were not included in the list of
violative products or drugs as found by the BFAD.
In a Manifestation and Motion 24 dated July 8, 2003, petitioners moved for the dismissal of Civil Case No. 68200, claiming that the case was one against the State; that the
Complaint was improperly verified; and lack of authority of the corporate officer to commence the suit, as the requisite resolution of PPI's board of directors granting to the
commencing officer PPI's Vice President for Legal and Administrative Affairs, Alan Alambra, the authority to file Civil Case No. 68200 was lacking. To this, PPI filed its
Comment/Opposition. 25
Ruling of the Regional Trial Court
In a June 14, 2004 Order, 26 the trial court dismissed Civil Case No. 68200, declaring the case to be one instituted against the State, in which case the principle of state immunity
from suit is applicable.
PPI moved for reconsideration, 27 but the trial court remained steadfast. 28 PPI appealed to the CA. ISaTCD
Ruling of the Court of Appeals
Docketed as CA-G.R. CV No. 85670, PPI's appeal centered on the issue of whether it was proper for the trial court to dismiss Civil Case No. 68200.
The CA, in the herein assailed Decision, 29 reversed the trial court ruling and ordered the remand of the case for the conduct of further proceedings. The CA concluded that it was
premature for the trial court to have dismissed the Complaint. Examining the Complaint, the CA found that a cause of action was sufficiently alleged that due to defendants'
(petitioners') acts which were beyond the scope of their authority, PPI's accreditation as a government supplier of pharmaceutical products was suspended without the required
notice and hearing as required by Section 26 (d) of RA 3720 as amended by EO 175. Moreover, the CA held that by filing a motion to dismiss, petitioners were deemed to have
hypothetically admitted the allegations in the Complaint which state that petitioners were being sued in their individual and personal capacities thus negating their claim
that Civil Case No. 68200 is an unauthorized suit against the State.
The CA further held that instead of dismissing the case, the trial court should have deferred the hearing and resolution of the motion to dismiss and proceeded to trial. It added
that it was apparent from the Complaint that petitioners were being sued in their private and personal capacities for acts done beyond the scope of their official functions. Thus,
the issue of whether the suit is against the State could best be threshed out during trial on the merits, rather than in proceedings covering a motion to dismiss.
The dispositive portion of the CA Decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order dated June 14, 2004 of the Regional Trial Court of Pasig City, Branch 160, is
hereby REVERSED and SET-ASIDE.ACCORDINGLY, this case is REMANDED to the trial court for further proceedings.
SO ORDERED. 30
Petitioners sought, but failed, to obtain a reconsideration of the Decision. Hence, they filed the present Petition.
Issue
Petitioners now raise the following lone issue for the Court's resolution:
Should Civil Case No. 68200 be dismissed for being a suit against the State? 31
Petitioners' Arguments
Petitioners submit that because PPI's Complaint prays for the award of damages against the DOH, Civil Case No. 68200 should be considered a suit against the State, for it would
require the appropriation of the needed amount to satisfy PPI's claim, should it win the case. Since the State did not give its consent to be sued, Civil Case No. 68200 must be
dismissed. They add that in issuing and implementing the questioned issuances, individual petitioners acted officially and within their authority, for which reason they should not
be held to account individually. CAIaHS
Respondent's Arguments
Apart from echoing the pronouncement of the CA, respondent insists that Civil Case No. 68200 is a suit against the petitioners in their personal capacity for acts committed
outside the scope of their authority.
Our Ruling
The Petition is granted.
The doctrine of non-suability.
The discussion of this Court in Department of Agriculture v. National Labor Relations Commission 32 on the doctrine of non-suability is enlightening.
The basic postulate enshrined in the constitution that '(t)he State may not be sued without its consent,' reflects nothing less than a recognition of the
sovereign character of the State and an express affirmation of the unwritten rule effectively insulating it from the jurisdiction of courts. It is based on
the very essence of sovereignty. . . . [A] sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and
practical ground that there can be no legal right as against the authority that makes the law on which the right depends. True, the doctrine, not too
infrequently, is derisively called 'the royal prerogative of dishonesty' because it grants the state the prerogative to defeat any legitimate claim against
it by simply invoking its non-suability. We have had occasion to explain in its defense, however, that a continued adherence to the doctrine of non-
suability cannot be deplored, for the loss of governmental efficiency and the obstacle to the performance of its multifarious functions would be far
greater in severity than the inconvenience that may be caused private parties, if such fundamental principle is to be abandoned and the availability of
judicial remedy is not to be accordingly restricted.
The rule, in any case, is not really absolute for it does not say that the state may not be sued under any circumstance. On the contrary, as correctly
phrased, the doctrine only conveys, 'the state may not be sued without its consent;' its clear import then is that the State may at times be sued. The
 State's consent may be given either expressly or impliedly. Express consent may be made through a general law or a special law. . . . Implied consent,
on the other hand, is conceded when the State itself commences litigation, thus opening itself to a counterclaim or when it enters into a contract. In
this situation, the government is deemed to have descended to the level of the other contracting party and to have divested itself of its sovereign
immunity. This rule, . . . is not, however, without qualification. Not all contracts entered into by the government operate as a waiver of its non-suability;
distinction must still be made between one which is executed in the exercise of its sovereign function and another which is done in its proprietary
capacity. 33 aTcIEH
As a general rule, a state may not be sued. However, if it consents, either expressly or impliedly, then it may be the subject of a suit. 34 There is express consent when a law,
either special or general, so provides. On the other hand, there is implied consent when the state "enters into a contract or it itself commences litigation." 35However, it must be
clarified that when a state enters into a contract, it does not automatically mean that it has waived its non-suability. 36 The State "will be deemed to have impliedly waived its
non-suability [only] if it has entered into a contract in its proprietary or private capacity. [However,] when the contract involves its sovereign or governmental capacity[,] . . . no
such waiver may be implied." 37 "Statutory provisions waiving [s]tate immunity are construed in strictissimi juris. For, waiver of immunity is in derogation of
sovereignty." 38 DHSCEc
The DOH can validly invoke state immunity.
a) DOH is an unincorporated agency which
performs sovereign or governmental functions.
In this case, the DOH, being an "unincorporated agency of the government" 39 can validly invoke the defense of immunity from suit because it has not consented, either
expressly or impliedly, to be sued. Significantly, the DOH is an unincorporated agency which performs functions of governmental character.
The ruling in Air Transportation Office v. Ramos 40 is relevant, viz.:
An unincorporated government agency without any separate juridical personality of its own enjoys immunity from suit because it is invested with an
inherent power of sovereignty. Accordingly, a claim for damages against the agency cannot prosper; otherwise, the doctrine of sovereign immunity is
violated. However, the need to distinguish between an unincorporated government agency performing governmental function and one performing
proprietary functions has arisen. The immunity has been upheld in favor of the former because its function is governmental or incidental to such
function; it has not been upheld in favor of the latter whose function was not in pursuit of a necessary function of government but was essentially a
business. 41 DSHcTC
b) The Complaint seeks to hold the DOH solidarily
and jointly liable with the other defendants for
damages which constitutes a charge or financial
liability against the state.
Moreover, it is settled that if a Complaint seeks to "impose a charge or financial liability against the state," 42 the defense of non-suability may be properly invoked. In this case,
PPI specifically prayed, in its Complaint and Amended and Supplemental Complaint, for the DOH, together with Secretaries Romualdez and Dayrit as well as Undersecretary Galon,
to be held jointly and severally liable for moral damages, exemplary damages, attorney's fees and costs of suit. 43 Undoubtedly, in the event that PPI succeeds in its suit, the
government or the state through the DOH would become vulnerable to an imposition or financial charge in the form of damages. This would require an appropriation from the
national treasury which is precisely the situation which the doctrine of state immunity aims to protect the state from.
The mantle of non-suability extends to
complaints filed against public officials for
acts done in the performance of their official
functions.
As regards the other petitioners, to wit, Secretaries Romualdez and Dayrit, and Undersecretary Galon, it must be stressed that the doctrine of state immunity extends its
protective mantle also to complaints filed against state officials for acts done in the discharge and performance of their duties. 44 "The suability of a government official depends
on whether the official concerned was acting within his official or jurisdictional capacity, and whether the acts done in the performance of official functions will result in a charge
or financial liability against the government." 45 Otherwise stated, "public officials can be held personally accountable for acts claimed to have been performed in connection with
official duties where they have acted ultra vires or where there is showing of bad faith." 46 Moreover, "[t]he 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 . . . . In such a situation, the state may move to dismiss the [C]omplaint on the ground that it has been filed without its consent." 47 AaDSTH
It is beyond doubt that the acts imputed against Secretaries Romualdez and Dayrit, as well as Undersecretary Galon, were done while in the performance and discharge of their
official functions or in their official capacities, and not in their personal or individual capacities. Secretaries Romualdez and Dayrit were being charged with the issuance of the
assailed orders. On the other hand, Undersecretary Galon was being charged with implementing the assailed issuances. By no stretch of imagination could the same be
categorized as ultra vires simply because the said acts are well within the scope of their authority. Section 4 of RA 3720 specifically provides that the BFAD is an office under the
Office of the Health Secretary. Also, the Health Secretary is authorized to issue rules and regulations as may be necessary to effectively enforce the provisions of RA 3720. 48 As
regards Undersecretary Galon, she is authorized by law to supervise the offices under the DOH's authority, 49 such as the BFAD. Moreover, there was also no showing of bad faith
on their part. The assailed issuances were not directed only against PPI. The suspension of PPI's accreditation only came about after it failed to submit its comment as directed by
Undersecretary Galon. It is also beyond dispute that if found wanting, a financial charge will be imposed upon them which will require an appropriation from the state of the
needed amount. Thus, based on the foregoing considerations, the Complaint against them should likewise be dismissed for being a suit against the state which absolutely did not
give its consent to be sued.
Based on the foregoing considerations, and regardless of the merits of PPI's case, this case deserves a dismissal. Evidently, the very foundation of Civil Case No. 68200 has
crumbled at this initial juncture.
PPI was not denied due process.
However, we cannot end without a discussion of PPI's contention that it was denied due process when its accreditation was suspended "without due notice and hearing." It is
undisputed that during the October 27, 2000 meeting, Undersecretary Galon directed representatives of pharmaceutical companies, PPI included, to submit their comment and/or
reactions to the Report on Violative Products furnished them within a period of 10 days. PPI, instead of submitting its comment or explanation, wrote a letter addressed to
Undersecretary Galon informing her that the matter had already been referred to its lawyer for the drafting of an appropriate reply. Aside from the fact that the said letter was
belatedly submitted, it also failed to specifically mention when such reply would be forthcoming. Finding the foregoing explanation to be unmeritorious, Undersecretary Galon
ordered the suspension of PPI's accreditation for two years. Clearly these facts show that PPI was not denied due process. It was given the opportunity to explain its side. Prior to
the suspension of its accreditation, PPI had the chance to rebut, explain, or comment on the findings contained in the Report on Violative Products that several of PPI's products
are not fit for human consumption. However, PPI squandered its opportunity to explain. Instead of complying with the directive of the DOH Undersecretary within the time allotted,
it instead haughtily informed Undersecretary Galon that the matter had been referred to its lawyers. Worse, it impliedly told Undersecretary Galon to just wait until its lawyers
shall have prepared the appropriate reply. PPI however failed to mention when it will submit its "appropriate reply" or how long Undersecretary Galon should wait. In the
meantime, PPI's drugs which are included in the Report on Violative Products are out and being sold in the market. Based on the foregoing, we find PPI's contention of denial of
due process totally unfair and absolutely lacking in basis. At this juncture, it would be trite to mention that "[t]he essence of due process in administrative proceedings is the
opportunity to explain one's side or seek a reconsideration of the action or ruling complained of. As long as the parties are given the opportunity to be heard before judgment is
rendered, the demands of due process are sufficiently met. What is offensive to due process is the denial of the opportunity to be heard. The Court has repeatedly stressed that
parties who chose not to avail themselves of the opportunity to answer charges against them cannot complain of a denial of due process." 50 cEaACD
Incidentally, we find it interesting that in the earlier case of Department of Health v. Phil Pharmawealth, Inc. 51 respondent filed a Complaint against DOH anchored on the same
issuances which it assails in the present case. In the earlier case of Department of Health v. Phil Pharmawealth, Inc., 52 PPI submitted to the DOH a request for the inclusion of its
products in the list of accredited drugs as required by AO 27 series of 1998 which was later amended by AO 10 series of 2000. In the instant case, however, PPI interestingly
claims that these issuances are null and void.
WHEREFORE, premises considered, the Petition is GRANTED. Civil Case No. 68200 is ordered DISMISSED.
SO ORDERED.
Carpio, Brion, Peralta * and Perez, JJ., concur.
||| (Department of Health v. Phil Pharmawealth, Inc., G.R. No. 182358, [February 20, 2013], 704 PHIL 432-449)

FIRST DIVISION
[G.R. No. 167290. November 26, 2014.]
HERMANO OIL MANUFACTURING & SUGAR CORPORATION, petitioner, vs. TOLL REGULATORY BOARD, ENGR. JAIME S. DUMLAO, JR.,
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC) and DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, respondents.
DECISION
BERSAMIN, J p:
The issue to be determined concerns the demand of the petitioner to have access to the North Luzon Expressway (NLEX) by way of an easement of right of way. The demand was
rebuffed by the respondents, and upheld by both the trial and appellate courts.
The Case
On appeal by review on certiorari is the decision promulgated on October 27, 2004, 1 whereby the Court of Appeals (CA) affirmed the dismissal of the petitioner's complaint for
specific performance by the Regional Trial Court (RTC) in Malolos, Bulacan, Branch 7, through the order issued on March 6, 2002. 2
Antecedents
The petitioner owned a parcel of land located at the right side of the Sta. Rita Exit of the NLEX situated at Barangay Sta. Rita, Guiguinto, Bulacan and covered by Transfer
Certificate of Title (TCT) No. T-134222 in its name issued by the Registry of Deeds of Bulacan. 3 The parcel of land was bounded by an access fence along the NLEX. In its letter
dated September 7, 2001, 4 the petitioner requested that respondent Toll Regulatory Board (TRB) grant an easement of right of way, contending that it had been totally deprived
of the enjoyment and possession of its property by the access fence that had barred its entry into and exit from the NLEX. On September 26, 2001, however, the TRB denied the
petitioner's request, explaining thusly:
It is with regret that we cannot favorably consider your client's request at this point in time. Said request is inconsistent with the provision of Section
7.0 of Republic Act No. 2000, also known as the Limited Access Highway Act. Moreover, allowing easement of right-of-way may have
detrimental/adverse effect on the scheduled rehabilitation and improvement of the North Luzon Expressway Interchanges, as well as on the operational
problems, i.e., traffic conflicts that may arise, if approved. 5
Thereafter, the petitioner sued the TRB and Engr. Jaime S. Dumlao, the TRB's Executive Director, in the RTC, 6 demanding specific performance, the grant of the easement of right
of way and damages (Civil Case No. 37-M-2002). The petitioner amended its complaint to implead the Philippine National Construction Corporation (PNCC) and the Department of
Public Works and Highways (DPWH) as indispensable parties. 7 acIASE
The petitioner alleged in its amended complaint that the access fence had totally deprived it of the use and enjoyment of its property by preventing ingress and egress to its
property; that the only access leading to its property was the road network situated in front of its property; that it was thereby deprived of its property without due process of law
and just compensation; and that it was also denied equal protection of the law because adjacent property owners had been given ingress and egress access to their properties. It
prayed that the RTC:
1. Immediately issue a writ of preliminary injunction/temporary restraining order enjoining the defendants, its agents and/or representatives from
depriving plaintiff to ingress and egress of its property;
2. After due hearing:
a) Render the foregoing writ of preliminary injunction perpetual;
b) Granting plaintiff a right of way;
c) Declare the condemnation of plaintiff's property as null and void. Alternatively, plaintiff prays that defendants be ordered to pay plaintiff a just and
fair compensation of the latter's property in the amount of not less than Four Thousand Pesos (Ps.4,000.00) per square meter;
d) To pay plaintiff the amount of THREE HUNDRED THOUSAND PESOS (Ps.300,000.00) and Ps.5,000.00 per court appearance by way of Attorney's fees;
e) To pay plaintiff Moral and Exemplary Damages in the amount of Ps.200,000.00; and
f) To pay plaintiff the costs of suit.
Plaintiff further prays for such other reliefs and remedies as may be deemed just and equitable under the premises. 8
Appearing for the TRB, the Office of the Solicitor General (OSG) filed a Motion to Dismiss with Opposition to the Application for the Issuance of Temporary Restraining Order and/or
Writ of Preliminary Injunction based on the following grounds: 9
I.
THE HONORABLE COURT HAS NO JURISDICTION OVER THE CASE
II.
THE PETITION STATES NO CAUSE OF ACTION CONSIDERING THAT:
A. PLAINTIFF IS NOT THE REAL PARTY IN INTEREST
B. EASEMENT WILL NOT LIE BECAUSE THE LIMITED ACCESS TO THE NORTH LUZON EXPRESSWAY IS ALLOWED UNDER REPUBLIC ACT 2000
C. THE STATE CANNOT BE SUED WITHOUT ITS CONSENT
III.
THE REQUISITES FOR THE ISSUANCE OF TEMPORARY RESTRAINING ORDER AND/OR WRIT OF INJUNCTION ARE NOT PRESENT
IV.
THE COMPLAINT HAS NO LEGAL BASIS, THE PROPER REMEDY AVAILABLE IN THIS CASE IS NOT COMPLAINT BUT A PETITION FOR CERTIORARI UNDER
RULE 65 OF THE RULES OF COURT.
In its order dated March 6, 2002, 10 the RTC granted the motion to dismiss, observing as follows:
The present action against the defendants Toll Regulatory Board and its Executive Director, Engr. Jaime S. Dumlao, Jr., could be considered as a suit
against the state without its consent as among the reliefs prayed for in the complaint is to require the said defendants to pay, jointly and severally, a
just and reasonable compensation of the plaintiff's property which, if awarded in the judgment against said defendants, would ultimately involve an
appropriation by the state of the amount needed to pay the compensation and damages so awarded. Moreover, as pointed out by the defendants-
movants, defendant Jaime S. Dumlao, Jr. is sued in his official capacity so that the instant complaint against him is tantamount to a claim against the
state which cannot be sued without its consent.
This principle applies with equal force as regards new defendant Department of Public Works and Highways (DPWH).
Defendant Philippine National Construction Corporation (PNCC), on the other hand, was impleaded as additional defendant being the entity that
operates the North Luzon Expressway and was primarily responsible in depriving the plaintiff of the use and enjoyment of its property by reason of the
construction of the access or right of way fence that prevents ingress to and egress from the subject property, considering further that the other
defendants had refused to grant plaintiff's request for an easement of right of way. CSDTac
The main objective and prayer of the plaintiff is for this court to issue a writ of injunction that will restrain the defendants from depriving it of ingress
and egress to its property in question or to grant to it a right of way to its property.
Suffice it to say that the main relief sought by the plaintiff is beyond the jurisdiction of this court to grant as provided for under Presidential Decree No.
1818 andRepublic Act No. 8975 which essentially prohibit the courts from issuing temporary restraining orders and/or writs of injunction against
government infrastructure projects, and which expressly declares any such TRO or writ of injunction void under Section 3 of R.A. No. 8975.
In view of all the foregoing, the motion to dismiss is hereby GRANTED.
WHEREFORE, the instant complaint is hereby DISMISSED.
SO ORDERED. 11
The petitioner sought reconsideration, but the RTC denied its motion on July 25, 2002. 12
The petitioner appealed. 13
Judgment of the CA
On October 27, 2004, the CA promulgated its assailed judgment, affirming the RTC's dismissal of the complaint, to wit:
The law is clear. Plaintiff-appellant does not deny that the NLEX is a limited access facility. Neither did it put forward any reason why it should not be
covered by the said law. Plaintiff-appellant, therefore, cannot expect any court to issue a decision in its favor in violation of an existing law. The Court
further notes that plaintiff-appellant skirted this issue in its pleadings perhaps because it recognizes the fact that its prayers in the complaint before the
trial court is in violation of the said law.
Moreover, as pointed out by defendants-appellees (Rollo, pp. 19 and 127-128), when plaintiff-appellant acquired the property on December 14, 1999
(See: Records, p. 33), the NLEX was already in existence and as a matter of fact Entry No. 189568 in the title indicated that a portion of the property
was already sold to the Republic of the Philippines (See: Dorsal portion, Records, p. 33). It is basic that a person cannot demand an easement of right of
way if the isolation of the property was due to owner's own act (Art. 649, NCC; Villanueva v. Velasco, 346 SCRA 99[2000]). In the present case, when
the plaintiff-appellant bought the property in 1999, the NLEX was already in existence and so was the access fence. In short, its predecessors-in-
interest allowed the property to be isolated. Plaintiff-appellant is now bound by the acts of its predecessors-in-interest.
Moreover, as admitted by plaintiff-appellant in its amended complaint, there is a road network in front of the property which serves as its access
(Records, p. 28). It is settled that to be able to demand a compulsory right of way, the dominant estate must not have adequate access to a public
highway (Villanueva v. Velasco, supra). Plaintiff-appellant did not complaint about the adequacy of the existing road works.
Also, as pointed out by defendants-appellees, the action below was one for specific performance which is proper only in case of contractual breach. In
the present case, plaintiff-appellant cannot claim that defendants-appellees committed a breach of contract because there is precisely no contract
between them.
As to the matter of non-suability, the Court notes that while defendant-appellee PNCC is a government owned and controlled corporation, the other
defendants-appellees are either agencies of the State (DPWH and TRB) or an employee of a government agency. Plaintiff-appellant argued that the
principle of non-suability of the state does not apply when the government acted in a non-governmental capacity. The Court, however, notes that
plaintiff-appellant merely cites cases to this effect but did not put forward any argument why the maintenance of NLEX should be considered as a non-
governmental function. It cannot be denied that the maintenance of the highways is part of the necessary functions of the government of maintaining
public infrastructures.
Coming now to PNCC although it is not strictly a government agency, its function is a necessary incident to a government function and, hence, it should
likewise enjoy immunity from suit (See: Union Insurance Society of Canton, Ltd. v. Republic of the Philippines, 46 SCRA 120[1972]).
As to the assertion that no expropriation proceeding was taken against the subject property, the Court agrees with the PNCC that these arguments
were not raised in the Court below and, hence, is no longer proper at this stage. Moreover, the Court notes that the proper party to complain against
the alleged lack of proper expropriation proceeding is the previous owner, when portion of the property was sold to the Republic of the Philippines in
1979.
WHEREFORE, the appealed Order dated March 6, 2002 of the Regional Trial Court of Malolos, Bulacan, Branch 7, in Civil Case No. 37-M-2002 is
hereby AFFIRMED.
SO ORDERED. 14
Issues
The present appeal is anchored on the following grounds, namely:
FIRST
THE DECISION OF THE COURT OF APPEALS IS REPUGNANT TO THE DUE PROCESS AND EQUAL PROTECTION CLAUSE ENSHRINED IN OUR CONSTITUTION
ANDPREVAILING JURISPRUDENCE.
SECOND
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN DECLARING THAT ENTRY NO. 189568 IN THE TITLE OF HEREIN PETITIONER
WAS ALREADY IN EXISTENCE WHICH SHOWED THAT EVEN BEFORE THE ACQUISITION OF THE PROPERTY IN 1999, THE NLEX WAS ALREADY IN EXISTENCE
AND SO WAS THE ACCESS FENCE. THUS, ITS PREDECESSORS-IN-INTEREST ALLOWED THE PROPERTY TO BE ISOLATED.
THIRD
THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT RESPONDENT PNCC, ALTHOUGH NOT STRICTLY A GOVERNMENT AGENCY, SHOULD
LIKEWISE ENJOY IMMUNITY FROM SUIT. 15
The foregoing grounds boil down to the issue of whether Civil Case No. 37-M-2002 was properly dismissed. HEacAS
Ruling
We concur with both lower courts.
In our view, the TRB, Dumlao and the DPWH correctly invoked the doctrine of sovereign immunity in their favor. The TRB and the DPWH performed purely or essentially
government or public functions. As such, they were invested with the inherent power of sovereignty. Being unincorporated agencies or entities of the National Government, they
could not be sued as such. On his part, Dumlao was acting as the agent of the TRB in respect of the matter concerned.
In Air Transportation Office v. Ramos, 16 we expounded on the doctrine of sovereign immunity in the following manner:
An unincorporated government agency without any separate juridical personality of its own enjoys immunity from suit because it is invested with an
inherent power of sovereignty. Accordingly, a claim for damages against the agency cannot prosper; otherwise, the doctrine of sovereign immunity is
violated. However, the need to distinguish between an unincorporated government agency performing governmental function and one performing
proprietary functions has arisen. The immunity has been upheld in favor of the former because its function is governmental or incidental to such
function; it has not been upheld in favor of the latter whose function was not in pursuit of a necessary function of government but was essentially a
business.
Nonetheless, the petitioner properly argued that the PNCC, being a private business entity, was not immune from suit. The PNCC was incorporated in 1966 under its original name
of Construction Development Corporation of the Philippines (CDCP) for a term of fifty years pursuant to the Corporation Code. 17 In 1983, the CDCP changed its corporate name
to the PNCC to reflect the extent of the Government's equity investment in the company, a situation that came about after the government financial institutions converted their
loans into equity following the CDCP's inability to pay the loans. 18 Hence, the Government owned 90.3% of the equity of the PNCC, and only 9.70% of the PNCC's voting equity
remained under private ownership. 19 Although the majority or controlling shares of the PNCC belonged to the Government, the PNCC was essentially a private corporation due to
its having been created in accordance with the Corporation Code, the general corporation statute. 20 More specifically, the PNCC was an acquired asset corporation
under Administrative Order No. 59, and was subject to the regulation and jurisdiction of the Securities and Exchange Commission. 21 Consequently, the doctrine of sovereign
immunity had no application to the PNCC.
The foregoing conclusion as to the PNCC notwithstanding, the Court affirms the dismissal of the complaint due to lack of jurisdiction and due to lack of cause of action.
It appears that the petitioner's complaint principally sought to restrain the respondents from implementing an access fence on its property, and to direct them to grant it a right of
way to the NLEX. Clearly, the reliefs being sought by the petitioner were beyond the jurisdiction of the RTC because no court except the Supreme Court could issue an injunction
against an infrastructure project of the Government. This is because Presidential Decree No. 1818, issued on January 16, 1981, prohibited judges from issuing restraining orders
against government infrastructure projects, stating in its sole provision: "No court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or
preliminary order, preliminary mandatory injunction in any case, dispute or controversy involving an infrastructure project." Presidential Decree No. 1818 was amended
by Republic Act No. 8975, 22 approved on November 7, 2000, whose pertinent parts provide:
Section 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. No court,
except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the
government, or any of its subdivisions, officials or any person or entity, whether public or private, acting under the government's direction, to restrain,
prohibit or compel the following acts:
(a) Acquisition, clearance and development of the right-of-way and/or site or location of any national government project;
(b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof;
(c) Commencement, prosecution, execution, implementation, operation of any such contract or project;
(d) Termination or rescission of any such contract/project; and
(e) The undertaking or authorization of any other lawful activity necessary for such contract/project.
This prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but not limited to cases filed by bidders or
those claiming to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme
urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. The
applicant shall file a bond, in an amount to be fixed by the court, which bond shall accrue in favor of the government if the court should finally decide
that the applicant was not entitled to the relief sought.
If after due hearing the court finds that the award of the contract is null and void, the court may, if appropriate under the circumstances, award the
contract to the qualified and winning bidder or order a rebidding of the same, without prejudice to any liability that the guilty party may incur
under existing laws.
Section 4. Nullity of Writs and Orders. Any temporary restraining order, preliminary injunction or preliminary mandatory injunction issued in violation
of Section 3 hereof is void and of no force and effect.
Section 5. Designation of Regional Trial Courts. The Supreme Court may designate regional trial courts to act as commissioners with the sole function
of receiving facts of the case involving acquisition, clearance and development of right-of-way for government infrastructure projects. The designated
regional trial court shall within thirty (30) days from the date of receipt of the referral, forward its findings of facts to the Supreme Court for appropriate
action. . . .
As to what was embraced by the term infrastructure project as used in Presidential Decree No. 1818, the Court has ruled in Francisco, Jr. v. UEM-MARA Philippines Corporation: 23
PD 1818 proscribes the issuance of a writ of preliminary injunction in any case involving an infrastructure project of the government. The aim of the
prohibition, as expressed in its second whereas clause, is to prevent delay in the implementation or execution of government infrastructure projects
(particularly through the use of provisional remedies) to the detriment of the greater good since it disrupts the pursuit of essential government projects
and frustrates the economic development effort of the nation.
Petitioner argues that the collection of toll fees is not an infrastructure project of the government. He cites the definition of "infrastructure projects" we
used inRepublic v. Silerio:
The term "infrastructure projects" means "construction, improvement and rehabilitation of roads, and bridges, railways, airports, seaports,
communication facilities, irrigation, flood control and drainage, water supply and sewage systems, shore protection, power facilities,
national buildings, school buildings, hospital buildings, and other related construction projects that form part of the government capital
investment." CTAIDE
xxx xxx xxx
The definition of infrastructure projects specifically includes the improvement and rehabilitation of roads and not just its construction.
Accordingly, even if the Coastal Road was merely upgraded and not constructed from scratch, it is still covered by the definition. Moreover, PD
1818 itself states that any person, entity or governmental official cannot be prohibited from continuing the execution or
implementation of such project or pursuing any lawful activity necessary for such execution or implementation . Undeniably, the
collection of toll fees is part of the execution or implementation of the MCTEP as agreed upon in the TOA. The TOA is valid since it has not been
nullified. Thus it is a legitimate source of rights and obligations. It has the force and effect of law between the contracting parties and is entitled to
recognition by this Court. The MCTEP is an infrastructure project of the government forming part of the government capital investment considering that
under the TOA, the government owns the expressways comprising the project. (Emphasis supplied.)
There can be no question that the respondents' maintenance of safety measures, including the establishment of the access fence along the NLEX, was a component of the
continuous improvement and development of the NLEX. Consequently, the lower courts could not validly restrain the implementation of the access fence by granting the
petitioner its right of way without exceeding its jurisdiction.
Nor did the establishment of the access fence violate the petitioner's constitutional and legal rights.
It is relevant to mention that the access fence was put up pursuant to Republic Act No. 2000 (Limited Access Highway Act), the enforcement of which was under the authority of
the DOTC. Clarifying the DOTC's jurisdiction under this law in Mirasol v. Department of Public Works and Highways, 24 the Court has said
RA 2000, otherwise known as the Limited Access Highway Act, was approved on 22 June 1957. Section 4 of RA 2000 provides that "[t]he Department of
Public Works and Communications is authorized to do so design any limited access facility and to so regulate, restrict, or prohibit access as to best
serve the traffic for which such facility is intended." The RTC construed this authorization to regulate, restrict, or prohibit access to limited access
facilities to apply to the Department of Public Works and Highways (DPWH).
The RTC's ruling is based on a wrong premise. The RTC assumed that the DPWH derived its authority from its predecessor, the Department of Public
Works and Communications, which is expressly authorized to regulate, restrict, or prohibit access to limited access facilities under Section 4 of RA 2000.
However, such assumption fails to consider the evolution of the Department of Public Works and Communications.
xxx xxx xxx
Upon the ratification of the 1987 Constitution in February 1987, the former Ministry of Public Works and Highways became the Department of Public
Works and Highways (DPWH) and the former Ministry of Transportation and Communications became the Department of Transportation and
Communications (DOTC).
DPWH issued DO 74 and DO 215 declaring certain expressways as limited access facilities on 5 April 1993 and 25 June 1998, respectively. Later, the
TRB, under the DPWH, issued the Revised Rules and Regulations on Limited Access Facilities. However, on 23 July 1979, long before these department
orders and regulations were issued, the Ministry of Public Works, Transportation and Communications was divided into two agencies the Ministry of
Public Works and the Ministry of Transportation and Communications by virtue of EO 546. The question is, which of these two agencies is now
authorized to regulate, restrict, or prohibit access to limited access facilities?
Under Section 1 of EO 546, the Ministry of Public Works (now DPWH) assumed the public works functions of the Ministry of Public
Works, Transportation and Communications. On the other hand, among the functions of the Ministry of Transportation and
Communications (now Department of Transportation and Communications [DOTC]) were to (1) formulate and recommend national
policies and guidelines for the preparation and implementation of an integrated and comprehensive transportation and
communications systems at the national, regional, and local levels; and (2) regulate, whenever necessary, activities relative to
transportation and communications and prescribe and collect fees in the exercise of such power. Clearly, under EO 546, it is the DOTC,
not the DPWH, which has authority to regulate, restrict, or prohibit access to limited access facilities.
Even under Executive Order No. 125 (EO 125) and Executive Order No. 125-A (EO 125-A), which further reorganized the DOTC, the
authority to administer and enforce all laws, rules and regulations relative to transportation is clearly with the DOTC.
Thus, DO 74 and DO 215 are void because the DPWH has no authority to declare certain expressways as limited access facilities.
Under the law, it is the DOTC which is authorized to administer and enforce all laws, rules and regulations in the field of
transportation and to regulate related activities. (Emphasis supplied.)
Moreover, the putting up of the access fence on the petitioner's property was in the valid exercise of police power, assailable only upon proof that such putting up unduly violated
constitutional limitations like due process and equal protection of the law. 25 In Mirasol v. Department of Public Works and Highways, the Court has further noted that:
A toll way is not an ordinary road. As a facility designed to promote the fastest access to certain destinations, its use, operation, and maintenance
require close regulation. Public interest and safety require the imposition of certain restrictions on toll ways that do not apply to ordinary roads. As a
special kind of road, it is but reasonable that not all forms of transport could use it. 26
Clearly, therefore, the access fence was a reasonable restriction on the petitioner's property given the location thereof at the right side of Sta. Rita Exit of the NLEX. Although
some adjacent properties were accorded unrestricted access to the expressway, there was a valid and reasonable classification for doing so because their owners provided
ancillary services to motorists using the NLEX, like gasoline service stations and food stores. 27 A classification based on practical convenience and common knowledge is not
unconstitutional simply because it may lack purely theoretical or scientific uniformity. 28
Lastly, the limited access imposed on the petitioner's property did not partake of a compensable taking due to the exercise of the power of eminent domain. There is no question
that the property was not taken and devoted for public use. Instead, the property was subjected to a certain restraint, i.e., the access fence, in order to secure the general safety
and welfare of the motorists using the NLEX. There being a clear and valid exercise of police power, the petitioner was certainly not entitled to any just compensation. 29
WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated on October 27, 2004; and ORDERS the petitioner to pay the costs of
suit.
SO ORDERED.
EN BANC
[G.R. No. 206510. September 16, 2014.]
MOST REV. PEDRO D. ARIGO, Vicar Apostolic of Puerto Princesa D.D.; MOST REV. DEOGRACIAS S. INIGUEZ, JR., Bishop-Emeritus of
Caloocan, FRANCES Q. QUIMPO, CLEMENTE G. BAUTISTA, JR., Kalikasan-PNE, MARIA CAROLINA P. ARAULLO, RENATO M. REYES, JR.,
Bagong Alyansang Makabayan, HON. NERI JAVIER COLMENARES, Bayan Muna Party-list, ROLAND G. SIMBULAN, PH.D., Junk VFA
Movement, TERESITA R. PEREZ, PH.D., HON. RAYMOND V. PALATINO, Kabataan Party-list, PETER SJ. GONZALES, Pamalakaya, GIOVANNI
A. TAPANG, PH. D., Agham, ELMER C. LABOG, Kilusang Mayo Uno, JOAN MAY E. SALVADOR, Gabriela, JOSE ENRIQUE A. AFRICA,
THERESA A. CONCEPCION, MARY JOAN A. GUAN, NESTOR T. BAGUINON, PH.D., A. EDSEL F. TUPAZ, petitioners, vs. SCOTT H. SWIFT in his
capacity as Commander of the U.S. 7th Fleet, MARK A. RICE in his capacity as Commanding Officer of the USS Guardian, PRESIDENT
BENIGNO S. AQUINO III in his capacity as Commander-in-Chief of the Armed Forces of the Philippines, HON. ALBERT F. DEL ROSARIO,
Secretary, Department of Foreign Affairs, HON. PAQUITO OCHOA, JR., Executive Secretary, Office of the President, HON. VOLTAIRE T.
GAZMIN, Secretary, Department of National Defense, HON. RAMON JESUS P. PAJE, Secretary, Department of Environment and Natural
Resources, VICE ADMIRAL JOSE LUIS M. ALANO, Philippine Navy Flag Officer in Command, Armed Forces of the Philippines, ADMIRAL
RODOLFO D. ISORENA, Commandant, Philippine Coast Guard, COMMODORE ENRICO EFREN EVANGELISTA, Philippine Coast Guard
Palawan, MAJOR GEN. VIRGILIO O. DOMINGO, Commandant of Armed Forces of the Philippines Command and LT. GEN. TERRY G.
ROBLING, US Marine Corps Forces, Pacific and Balikatan 2013 Exercise Co-Director, respondents.
DECISION
VILLARAMA, JR., J p:
Before us is a petition for the issuance of a Writ of Kalikasan with prayer for the issuance of a Temporary Environmental Protection Order (TEPO) under Rule 7 of A.M. No. 09-6-8-
SC, otherwise known as the Rules of Procedure for Environmental Cases (Rules), involving violations of environmental laws and regulations in relation to the grounding of the US
military ship USS Guardian over the Tubbataha Reefs.
Factual Background
The name "Tubbataha" came from the Samal (seafaring people of southern Philippines) language which means "long reef exposed at low tide." Tubbataha is composed of two
huge coral atolls the north atoll and the south atoll and the Jessie Beazley Reef, a smaller coral structure about 20 kilometers north of the atolls. The reefs of Tubbataha and
Jessie Beazley are considered part of Cagayancillo, a remote island municipality of Palawan. 1
In 1988, Tubbataha was declared a National Marine Park by virtue of Proclamation No. 306 issued by President Corazon C. Aquino on August 11, 1988. Located in the middle of
Central Sulu Sea, 150 kilometers southeast of Puerto Princesa City, Tubbataha lies at the heart of the Coral Triangle, the global center of marine biodiversity.
In 1993, Tubbataha was inscribed by the United Nations Educational Scientific and Cultural Organization (UNESCO) as a World Heritage Site. It was recognized as one of the
Philippines' oldest ecosystems, containing excellent examples of pristine reefs and a high diversity of marine life. The 97,030-hectare protected marine park is also an important
habitat for internationally threatened and endangered marine species. UNESCO cited Tubbataha's outstanding universal value as an important and significant natural habitat
for in situ conservation of biological diversity; an example representing significant on-going ecological and biological processes; and an area of exceptional natural beauty and
aesthetic importance. 2
On April 6, 2010, Congress passed Republic Act (R.A.) No. 10067, 3 otherwise known as the "Tubbataha Reefs Natural Park (TRNP) Act of 2009" "to ensure the protection and
conservation of the globally significant economic, biological, sociocultural, educational and scientific values of the Tubbataha Reefs into perpetuity for the enjoyment of present
and future generations." Under the "no-take" policy, entry into the waters of TRNP is strictly regulated and many human activities are prohibited and penalized or fined, including
fishing, gathering, destroying and disturbing the resources within the TRNP. The law likewise created the Tubbataha Protected Area Management Board (TPAMB) which shall be the
sole policy-making and permit-granting body of the TRNP.
The USS Guardian is an Avenger-class mine countermeasures ship of the US Navy. In December 2012, the US Embassy in the Philippines requested diplomatic clearance for the
said vessel "to enter and exit the territorial waters of the Philippines and to arrive at the port of Subic Bay for the purpose of routine ship replenishment, maintenance, and crew
liberty." 4 On January 6, 2013, the ship left Sasebo, Japan for Subic Bay, arriving on January 13, 2013 after a brief stop for fuel in Okinawa, Japan.
On January 15, 2013, the USS Guardian departed Subic Bay for its next port of call in Makassar, Indonesia. On January 17, 2013 at 2:20 a.m. while transiting the Sulu Sea, the ship
ran aground on the northwest side of South Shoal of the Tubbataha Reefs, about 80 miles east-southeast of Palawan. No one was injured in the incident, and there have been no
reports of leaking fuel or oil.
On January 20, 2013, U.S. 7th Fleet Commander, Vice Admiral Scott Swift, expressed regret for the incident in a press statement. 5 Likewise, US Ambassador to the Philippines
Harry K. Thomas, Jr., in a meeting at the Department of Foreign Affairs (DFA) on February 4, "reiterated his regrets over the grounding incident and assured Foreign Affairs
Secretary Albert F. del Rosario that the United States will provide appropriate compensation for damage to the reef caused by the ship." 6 By March 30, 2013, the US Navy-led
salvage team had finished removing the last piece of the grounded ship from the coral reef. CDcaSA
On April 17, 2013, the above-named petitioners on their behalf and in representation of their respective sector/organization and others, including minors or generations yet
unborn, filed the present petition against Scott H. Swift in his capacity as Commander of the US 7th Fleet, Mark A. Rice in his capacity as Commanding Officer of the USS
Guardian and Lt. Gen. Terry G. Robling, US Marine Corps Forces, Pacific and Balikatan 2013 Exercises Co-Director ("US respondents"); President Benigno S. Aquino III in his
capacity as Commander-in-Chief of the Armed Forces of the Philippines (AFP), DFA Secretary Albert F. Del Rosario, Executive Secretary Paquito Ochoa, Jr., Secretary Voltaire T.
Gazmin (Department of National Defense), Secretary Jesus P. Paje (Department of Environment and Natural Resources), Vice-Admiral Jose Luis M. Alano (Philippine Navy Flag
Officer in Command, AFP), Admiral Rodolfo D. Isorena (Philippine Coast Guard Commandant), Commodore Enrico Efren Evangelista (Philippine Coast Guard-Palawan), and Major
General Virgilio O. Domingo (AFP Commandant), collectively the "Philippine respondents."
The Petition
Petitioners claim that the grounding, salvaging and post-salvaging operations of the USS Guardian cause and continue to cause environmental damage of such magnitude as to
affect the provinces of Palawan, Antique, Aklan, Guimaras, Iloilo, Negros Occidental, Negros Oriental, Zamboanga del Norte, Basilan, Sulu, and Tawi-Tawi, which events violate their
constitutional rights to a balanced and healthful ecology. They also seek a directive from this Court for the institution of civil, administrative and criminal suits for acts committed
in violation of environmental laws and regulations in connection with the grounding incident.
Specifically, petitioners cite the following violations committed by US respondents under R.A. No. 10067: unauthorized entry (Section 19); non-payment of conservation fees
(Section 21); obstruction of law enforcement officer (Section 30); damages to the reef (Section 20); and destroying and disturbing resources (Section 26 [g]). Furthermore,
petitioners assail certain provisions of the Visiting Forces Agreement (VFA) which they want this Court to nullify for being unconstitutional.
The numerous reliefs sought in this case are set forth in the final prayer of the petition, to wit:
WHEREFORE, in view of the foregoing, Petitioners respectfully pray that the Honorable Court:
1. Immediately issue upon the filing of this petition a Temporary Environmental Protection Order (TEPO) and/or a Writ of Kalikasan, which shall, in
particular,
a. Order Respondents and any person acting on their behalf, to cease and desist all operations over the Guardian grounding incident;
b. Initially demarcating the metes and bounds of the damaged area as well as an additional buffer zone;
c. Order Respondents to stop all port calls and war games under ' Balikatan' because of the absence of clear guidelines, duties, and liability
schemes for breaches of those duties, and require Respondents to assume responsibility for prior and future environmental
damage in general, and environmental damage under the Visiting Forces Agreement in particular.
d. Temporarily define and describe allowable activities of ecotourism, diving, recreation, and limited commercial activities by fisherfolk and
indigenous communities near or around the TRNP but away from the damaged site and an additional buffer zone; ISCDEA
2. After summary hearing, issue a Resolution extending the TEPO until further orders of the Court;
3. After due proceedings, render a Decision which shall include, without limitation:
a. Order Respondents Secretary of Foreign Affairs, following the dispositive portion of Nicolas v. Romulo, "to forthwith negotiate with the
United States representatives for the appropriate agreement on [environmental guidelines and environmental accountability]
under Philippine authorities as provided in Art. V[ ] of the VFA. . ."
b. Direct Respondents and appropriate agencies to commence administrative, civil, and criminal proceedings against erring officers and
individuals to the full extent of the law, and to make such proceedings public;
c. Declare that Philippine authorities may exercise primary and exclusive criminal jurisdiction over erring U.S. personnel under the
circumstances of this case;
d. Require Respondents to pay just and reasonable compensation in the settlement of all meritorious claims for damages caused to the
Tubbataha Reef on terms and conditions no less severe than those applicable to other States, and damages for personal injury
or death, if such had been the case;
e. Direct Respondents to cooperate in providing for the attendance of witnesses and in the collection and production of evidence , including
seizure and delivery of objects connected with the offenses related to the grounding of the Guardian;
f. Require the authorities of the Philippines and the United States to notify each other of the disposition of all cases , wherever heard, related
to the grounding of the Guardian;
g. Restrain Respondents from proceeding with any purported restoration, repair, salvage or post salvage plan or plans, including cleanup
plans covering the damaged area of the Tubbataha Reef absent a just settlement approved by the Honorable Court;
h. Require Respondents to engage in stakeholder and LGU consultations in accordance with the Local Government Code and R.A. 10067;
i. Require Respondent US officials and their representatives to place a deposit to the TRNP Trust Fund defined under Section 17 of RA 10067
as a bona fidegesture towards full reparations;
j. Direct Respondents to undertake measures to rehabilitate the areas affected by the grounding of the Guardian in light of Respondents'
experience in thePort Royale grounding in 2009, among other similar grounding incidents;
k. Require Respondents to regularly publish on a quarterly basis and in the name of transparency and accountability such environmental
damage assessment, valuation, and valuation methods, in all stages of negotiation;
l. Convene a multisectoral technical working group to provide scientific and technical support to the TPAMB;
m. Order the Department of Foreign Affairs, Department of National Defense, and the Department of Environment and Natural Resources
to review the Visiting Forces Agreement and the Mutual Defense Treaty to consider whether their provisions allow for the
exercise of erga omnes rights to a balanced and healthful ecology and for damages which follow from any violation of those
rights;
n. Narrowly tailor the provisions of the Visiting Forces Agreement for purposes of protecting the damaged areas of TRNP; ADHaTC
o. Declare the grant of immunity found in Article V ("Criminal Jurisdiction") and Article VI of the Visiting Forces Agreement
unconstitutional for violating equal protection and/or for violating the preemptory norm of nondiscrimination incorporated as
part of the law of the land under Section 2, Article II, of thePhilippine Constitution;
p. Allow for continuing discovery measures;
q. Supervise marine wildlife rehabilitation in the Tubbataha Reefs in all other respects; and
4. Provide just and equitable environmental rehabilitation measures and such other reliefs as are just and equitable under the
premises. 7 (Underscoring supplied.)
Since only the Philippine respondents filed their comment 8 to the petition, petitioners also filed a motion for early resolution and motion to proceed ex parte against the US
respondents. 9
Respondents' Consolidated Comment
In their consolidated comment with opposition to the application for a TEPO and ocular inspection and production orders, respondents assert that: (1) the grounds relied upon for
the issuance of a TEPO or writ of Kalikasan have become fait accompli as the salvage operations on the USS Guardian were already completed; (2) the petition is defective in form
and substance; (3) the petition improperly raises issues involving the VFA between the Republic of the Philippines and the United States of America; and (4) the determination of
the extent of responsibility of the US Government as regards the damage to the Tubbataha Reefs rests exclusively with the executive branch.
The Court's Ruling
As a preliminary matter, there is no dispute on the legal standing of petitioners to file the present petition.
Locus standi is "a right of appearance in a court of justice on a given question." 10 Specifically, it is "a party's personal and substantial interest in a case where he has sustained
or will sustain direct injury as a result" of the act being challenged, and "calls for more than just a generalized grievance." 11 However, the rule on standing is a procedural matter
which this Court has relaxed for non-traditional plaintiffs like ordinary citizens, taxpayers and legislators when the public interest so requires, such as when the subject matter of
the controversy is of transcendental importance, of overreaching significance to society, or of paramount public interest. 12
In the landmark case of Oposa v. Factoran, Jr., 13 we recognized the "public right" of citizens to "a balanced and healthful ecology which, for the first time in our constitutional
history, is solemnly incorporated in the fundamental law." We declared that the right to a balanced and healthful ecology need not be written in the Constitution for it is assumed,
like other civil and political rights guaranteed in the Bill of Rights, to exist from the inception of mankind and it is an issue of transcendental importance with intergenerational
implications. Such right carries with it the correlative duty to refrain from impairing the environment. 14
On the novel element in the class suit filed by the petitioners minors in Oposa, this Court ruled that not only do ordinary citizens have legal standing to sue for the enforcement of
environmental rights, they can do so in representation of their own and future generations. Thus: SaHcAC
Petitioners minors assert that they represent their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for
themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the
succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and
healthful ecology is concerned. Such a right, as hereinafter expounded, considers the "rhythm and harmony of nature." Nature means the created
world in its entirety. Such rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their
exploration, development and utilization be equitably accessible to the present as well as future generations. Needless to say, every generation has a
responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the
minors' assertion of their right to a sound environment constitutes, at the same time, the performance of their obligation to ensure the protection of
that right for the generations to come. 15 (Emphasis supplied.)
The liberalization of standing first enunciated in Oposa, insofar as it refers to minors and generations yet unborn, is now enshrined in the Rules which allows the filing of a citizen
suit in environmental cases. The provision on citizen suits in the Rules "collapses the traditional rule on personal and direct interest, on the principle that humans are stewards of
nature." 16
Having settled the issue of locus standi, we shall address the more fundamental question of whether this Court has jurisdiction over the US respondents who did not submit any
pleading or manifestation in this case.
The immunity of the State from suit, known also as the doctrine of sovereign immunity or non-suability of the State, 17 is expressly provided in Article XVI of the 1987
Constitution which states:
Section 3. The State may not be sued without its consent.
In United States of America v. Judge Guinto, 18 we discussed the principle of state immunity from suit, as follows:
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. . . . .
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 which the right depends." [ Kawanakoa v. Polybank, 205 U.S. 349] 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." [De Haber v. Queen of
Portugal, 17 Q. B. 171]
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. [Garcia v. Chief of Staff, 16 SCRA 120]
In such a situation, the state may move to dismiss the complaint on the ground that it has been filed without its consent. 19 (Emphasis
supplied.) aEcDTC
Under the American Constitution,the doctrine is expressed in the Eleventh Amendment which reads:
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the
United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
In the case of Minucher v. Court of Appeals, 20 we further expounded on the immunity of foreign states from the jurisdiction of local courts, as follows:
The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customary international law then closely identified
with the personal immunity of a foreign sovereign from suit and, with the emergence of democratic states, made to attach not just to the person of the
head of state, or his representative, but also distinctly to the state itself in its sovereign capacity. If the acts giving rise to a suit are those of a
foreign government done by its foreign agent, although not necessarily a diplomatic personage, but acting in his official capacity, the
complaint could be barred by the immunity of the foreign sovereign from suit without its consent. Suing a representative of a state is
believed to be, in effect, suing the state itself. The proscription is not accorded for the benefit of an individual but for the State, in whose service he is,
under the maxim par in parem, non habet imperium that all states are sovereign equals and cannot assert jurisdiction over one another. The
implication, in broad terms, is that if the judgment against an official would require the state itself to perform an affirmative act to satisfy the award,
such as the appropriation of the amount needed to pay the damages decreed against him, the suit must be regarded as being against the state itself,
although it has not been formally impleaded. 21 (Emphasis supplied.)
In the same case we also mentioned that in the case of diplomatic immunity, the privilege is not an immunity from the observance of the law of the territorial sovereign or from
ensuing legal liability; it is, rather, an immunity from the exercise of territorial jurisdiction. 22
In United States of America v. Judge Guinto, 23 one of the consolidated cases therein involved a Filipino employed at Clark Air Base who was arrested following a buy-bust
operation conducted by two officers of the US Air Force, and was eventually dismissed from his employment when he was charged in court for violation of R.A. No. 6425. In a
complaint for damages filed by the said employee against the military officers, the latter moved to dismiss the case on the ground that the suit was against the US Government
which had not given its consent. The RTC denied the motion but on a petition for certiorari and prohibition filed before this Court, we reversed the RTC and dismissed the
complaint. We held that petitioners US military officers 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. 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.
This traditional rule of State immunity which exempts a State from being sued in the courts of another State without the former's consent or waiver has evolved into a restrictive
doctrine which distinguishes sovereign and governmental acts (jure imperii) from private, commercial and proprietary acts (jure gestionis). Under the restrictive rule of State
immunity, State immunity extends only to acts jure imperii. 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. 24
In Shauf v. Court of Appeals, 25 we discussed the limitations of the State immunity principle, thus:
It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the
rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications, et al. vs. Aligaen, etc., et al.:
"Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials or officers are not acts of the State, and an
action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit
against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity against a
State officer or the director of a State department on the ground that, while claiming to act for the State, he violates or invades the personal and
property rights of the plaintiff, under an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the State
within the constitutional provision that the State may not be sued without its consent." The rationale for this ruling is that the doctrine of state
immunity cannot be used as an instrument for perpetrating an injustice.
xxx xxx xxx
The aforecited authorities are clear on the matter. They state that the doctrine of immunity from suit will not apply and may not be invoked
where the public official is being sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the
officers and agents of the government is removed the moment they are sued in their individual capacity. This situation usually arises where the public
official acts without authority or in excess of the powers vested in him. It is a well-settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused by his act done with malice and in bad faith, or beyond the scope
of his authority or jurisdiction. 26 (Emphasis supplied.)
In this case, the US respondents were sued in their official capacity as commanding officers of the US Navy who had control and supervision over the USS Guardian and its crew.
The alleged act or omission resulting in the unfortunate grounding of the USS Guardian on the TRNP was committed while they were performing official military duties.
Considering that the satisfaction of a judgment against said officials will require remedial actions and appropriation of funds by the US government, the suit is deemed to be one
against the US itself. The principle of State immunity therefore bars the exercise of jurisdiction by this Court over the persons of respondents Swift, Rice and Robling. cEATSI
During the deliberations, Senior Associate Justice Antonio T. Carpio took the position that the conduct of the US in this case, when its warship entered a restricted area in violation
of R.A. No. 10067 and caused damage to the TRNP reef system, brings the matter within the ambit of Article 31 of the United Nations Convention on the Law of the Sea (UNCLOS).
He explained that while historically, warships enjoy sovereign immunity from suit as extensions of their flag State, Art. 31 of the UNCLOS creates an exception to this rule in cases
where they fail to comply with the rules and regulations of the coastal State regarding passage through the latter's internal waters and the territorial sea.
According to Justice Carpio, although the US to date has not ratified the UNCLOS, as a matter of long-standing policy the US considers itself bound by customary international
rules on the "traditional uses of the oceans" as codified in UNCLOS, as can be gleaned from previous declarations by former Presidents Reagan and Clinton, and the US judiciary in
the case of United States v. Royal Caribbean Cruise Lines, Ltd. 27
The international law of the sea is generally defined as "a body of treaty rules and customary norms governing the uses of the sea, the exploitation of its resources, and the
exercise of jurisdiction over maritime regimes. It is a branch of public international law, regulating the relations of states with respect to the uses of the oceans." 28The UNCLOS is
a multilateral treaty which was opened for signature on December 10, 1982 at Montego Bay, Jamaica. It was ratified by the Philippines in 1984 but came into force on November
16, 1994 upon the submission of the 60th ratification.
The UNCLOS is a product of international negotiation that seeks to balance State sovereignty (mare clausum) and the principle of freedom of the high seas (mare liberum). 29 The
freedom to use the world's marine waters is one of the oldest customary principles of international law. 30 The UNCLOS gives to the coastal State sovereign rights in varying
degrees over the different zones of the sea which are: 1) internal waters, 2) territorial sea, 3) contiguous zone, 4) exclusive economic zone, and 5) the high seas. It also gives
coastal States more or less jurisdiction over foreign vessels depending on where the vessel is located. 31 TCHEDA
Insofar as the internal waters and territorial sea is concerned, the Coastal State exercises sovereignty, subject to the UNCLOS and other rules of international law. Such
sovereignty extends to the air space over the territorial sea as well as to its bed and subsoil. 32
In the case of warships, 33 as pointed out by Justice Carpio, they continue to enjoy sovereign immunity subject to the following exceptions:
Article 30
Non-compliance by warships with the laws and regulations of the coastal State
If any warship does not comply with the laws and regulations of the coastal State concerning passage through the territorial sea and disregards any
request for compliance therewith which is made to it, the coastal State may require it to leave the territorial sea immediately.
Article 31
Responsibility of the flag State for damage caused by a warship or other government ship operated for non-commercial purposes
The flag State shall bear international responsibility for any loss or damage to the coastal State resulting from the non-compliance by a
warship or other government ship operated for non-commercial purposes with the laws and regulations of the coastal State concerning
passage through the territorial sea or with the provisions of this Convention or other rules of international law.
Article 32
Immunities of warships and other government ships operated for non-commercial purposes
With such exceptions as are contained in subsection A and in articles 30 and 31, nothing in this Convention affects the immunities of warships and
other government ships operated for non-commercial purposes. (Emphasis supplied.)
A foreign warship's unauthorized entry into our internal waters with resulting damage to marine resources is one situation in which the above provisions may apply. But what if the
offending warship is a non-party to the UNCLOS, as in this case, the US?
An overwhelming majority over 80% of nation states are now members of UNCLOS, but despite this the US, the world's leading maritime power, has not ratified it.
While the Reagan administration was instrumental in UNCLOS' negotiation and drafting, the U.S. delegation ultimately voted against and refrained from
signing it due to concerns over deep seabed mining technology transfer provisions contained in Part XI. In a remarkable, multilateral effort to induce
U.S. membership, the bulk of UNCLOS member states cooperated over the succeeding decade to revise the objectionable provisions. The revisions
satisfied the Clinton administration, which signed the revised Part XI implementing agreement in 1994. In the fall of 1994, President Clinton transmitted
UNCLOS and the Part XI implementing agreement to the Senate requesting its advice and consent. Despite consistent support from President Clinton,
each of his successors, and an ideologically diverse array of stakeholders, the Senate has since withheld the consent required for the President to
internationally bind the United States to UNCLOS.
While UNCLOS cleared the Senate Foreign Relations Committee (SFRC) during the 108th and 110th Congresses, its progress continues to be hamstrung
by significant pockets of political ambivalence over U.S. participation in international institutions. Most recently, 111th Congress SFRC Chairman
Senator John Kerry included "voting out" UNCLOS for full Senate consideration among his highest priorities. This did not occur, and no Senate action has
been taken on UNCLOS by the 112th Congress. 34THaCAI
Justice Carpio invited our attention to the policy statement given by President Reagan on March 10, 1983 that the US will "recognize the rights of the other states in the waters off
their coasts, as reflected in the convention [UNCLOS], so long as the rights and freedom of the United States and others under international law are recognized by such coastal
states", and President Clinton's reiteration of the US policy "to act in a manner consistent with its [UNCLOS] provisions relating to traditional uses of the oceans and to encourage
other countries to do likewise." Since Article 31 relates to the "traditional uses of the oceans," and "if under its policy, the US 'recognize[s] the rights of the other states in the
waters off their coasts,'" Justice Carpio postulates that "there is more reason to expect it to recognize the rights of other states in their internal waters, such as the Sulu Sea in this
case."
As to the non-ratification by the US, Justice Carpio emphasizes that "the US' refusal to join the UNCLOS was centered on its disagreement with UNCLOS' regime of deep seabed
mining (Part XI) which considers the oceans and deep seabed commonly owned by mankind," pointing out that such "has nothing to do with its [the US'] acceptance of customary
international rules on navigation."
It may be mentioned that even the US Navy Judge Advocate General's Corps publicly endorses the ratification of the UNCLOS, as shown by the following statement posted on its
official website:
The Convention is in the national interest of the United States because it establishes stable maritime zones, including a maximum outer limit for
territorial seas; codifies innocent passage, transit passage, and archipelagic sea lanes passage rights; works against "jurisdictional creep" by preventing
coastal nations from expanding their own maritime zones; and reaffirms sovereign immunity of warships, auxiliaries and government aircraft.
xxx xxx xxx
Economically, accession to the Convention would support our national interests by enhancing the ability of the US to assert its sovereign rights over the
resources of one of the largest continental shelves in the world. Further, it is the Law of the Sea Convention that first established the concept of a
maritime Exclusive Economic Zone out to 200 nautical miles, and recognized the rights of coastal states to conserve and manage the natural resources
in this Zone. 35
We fully concur with Justice Carpio's view that non-membership in the UNCLOS does not mean that the US will disregard the rights of the Philippines as a Coastal State over its
internal waters and territorial sea. We thus expect the US to bear "international responsibility" under Art. 31 in connection with the USS Guardian grounding which adversely
affected the Tubbataha reefs. Indeed, it is difficult to imagine that our long-time ally and trading partner, which has been actively supporting the country's efforts to preserve our
vital marine resources, would shirk from its obligation to compensate the damage caused by its warship while transiting our internal waters. Much less can we comprehend a
Government exercising leadership in international affairs, unwilling to comply with the UNCLOS directive for all nations to cooperate in the global task to protect and preserve the
marine environment as provided in Article 197, viz.:
Article 197
Cooperation on a global or regional basis.
States shall cooperate on a global basis and, as appropriate, on a regional basis, directly or through competent international organizations, in
formulating and elaborating international rules, standards and recommended practices and procedures consistent with this Convention, for the
protection and preservation of the marine environment, taking into account characteristic regional features. HEcIDa
In fine, the relevance of UNCLOS provisions to the present controversy is beyond dispute. Although the said treaty upholds the immunity of warships from the jurisdiction of
Coastal States while navigating the latter's territorial sea, the flag States shall be required to leave the territorial sea immediately if they flout the laws and regulations of the
Coastal State, and they will be liable for damages caused by their warships or any other government vessel operated for non-commercial purposes under Article 31.
Petitioners argue that there is a waiver of immunity from suit found in the VFA. Likewise, they invoke federal statutes in the US under which agencies of the US have statutorily
waived their immunity to any action. Even under the common law tort claims, petitioners asseverate that the US respondents are liable for negligence, trespass and nuisance.
We are not persuaded.
The VFA is an agreement which defines the treatment of United States troops and personnel visiting the Philippines to promote "common security interests" between the US and
the Philippines in the region. It provides for the guidelines to govern such visits of military personnel, and further defines the rights of the United States and the Philippine
government in the matter of criminal jurisdiction, movement of vessel and aircraft, importation and exportation of equipment, materials and supplies. 36The invocation of US
federal tort laws and even common law is thus improper considering that it is the VFA which governs disputes involving US military ships and crew navigating Philippine waters in
pursuance of the objectives of the agreement.
As it is, the waiver of State immunity under the VFA pertains only to criminal jurisdiction and not to special civil actions such as the present petition for issuance of a writ
of Kalikasan. In fact, it can be inferred from Section 17, Rule 7 of the Rules that a criminal case against a person charged with a violation of an environmental law is to be filed
separately:
SEC. 17. Institution of separate actions. The filing of a petition for the issuance of the writ of kalikasan shall not preclude the filing of separate civil,
criminal or administrative actions. IEHSDA
In any case, it is our considered view that a ruling on the application or non-application of criminal jurisdiction provisions of the VFA to US personnel who may be found responsible
for the grounding of the USS Guardian, would be premature and beyond the province of a petition for a writ of Kalikasan. We also find it unnecessary at this point to determine
whether such waiver of State immunity is indeed absolute. In the same vein, we cannot grant damages which have resulted from the violation of environmental laws.
The Rules allows the recovery of damages, including the collection of administrative fines under R.A. No. 10067, in a separate civil suit or that deemed instituted with the criminal
action charging the same violation of an environmental law. 37
Section 15, Rule 7 enumerates the reliefs which may be granted in a petition for issuance of a writ of Kalikasan, to wit:
SEC. 15. Judgment. Within sixty (60) days from the time the petition is submitted for decision, the court shall render judgment granting or denying
the privilege of the writ of kalikasan.
The reliefs that may be granted under the writ are the following:
(a) Directing respondent to permanently cease and desist from committing acts or neglecting the performance of a duty in violation of environmental
laws resulting in environmental destruction or damage;
(b) Directing the respondent public official, government agency, private person or entity to protect, preserve, rehabilitate or restore the environment;
(c) Directing the respondent public official, government agency, private person or entity to monitor strict compliance with the decision and orders of
the court;
(d) Directing the respondent public official, government agency, or private person or entity to make periodic reports on the execution of the final
judgment; and
(e) Such other reliefs which relate to the right of the people to a balanced and healthful ecology or to the protection, preservation, rehabilitation or
restoration of the environment, except the award of damages to individual petitioners. (Emphasis supplied.)
We agree with respondents (Philippine officials) in asserting that this petition has become moot in the sense that the salvage operation sought to be enjoined or restrained had
already been accomplished when petitioners sought recourse from this Court. But insofar as the directives to Philippine respondents to protect and rehabilitate the coral reef
structure and marine habitat adversely affected by the grounding incident are concerned, petitioners are entitled to these reliefs notwithstanding the completion of the removal of
the USS Guardian from the coral reef.
However, we are mindful of the fact that the US and Philippine governments both expressed readiness to negotiate and discuss the matter of compensation for the damage
caused by the USS Guardian. The US Embassy has also declared it is closely coordinating with local scientists and experts in assessing the extent of the damage and appropriate
methods of rehabilitation.
Exploring avenues for settlement of environmental cases is not proscribed by the Rules. As can be gleaned from the following provisions, mediation and settlement are available
for the consideration of the parties, and which dispute resolution methods are encouraged by the court, to wit:
RULE 3
xxx xxx xxx
SEC. 3. Referral to mediation. At the start of the pre-trial conference, the court shall inquire from the parties if they have settled the dispute;
otherwise, the court shall immediately refer the parties or their counsel, if authorized by their clients, to the Philippine Mediation Center (PMC) unit for
purposes of mediation. If not available, the court shall refer the case to the clerk of court or legal researcher for mediation. CSTDIE
Mediation must be conducted within a non-extendible period of thirty (30) days from receipt of notice of referral to mediation.
The mediation report must be submitted within ten (10) days from the expiration of the 30-day period.
SEC. 4. Preliminary conference. If mediation fails, the court will schedule the continuance of the pre-trial. Before the scheduled date of continuance,
the court may refer the case to the branch clerk of court for a preliminary conference for the following purposes:
(a) To assist the parties in reaching a settlement;
xxx xxx xxx
SEC. 5. Pre-trial conference; consent decree. The judge shall put the parties and their counsels under oath, and they shall remain under oath in all
pre-trial conferences.
The judge shall exert best efforts to persuade the parties to arrive at a settlement of the dispute. The judge may issue a consent decree approving the
agreement between the parties in accordance with law, morals, public order and public policy to protect the right of the people to a balanced and
healthful ecology.
xxx xxx xxx
SEC. 10. Efforts to settle. The court shall endeavor to make the parties to agree to compromise or settle in accordance with law at any stage of the
proceedings before rendition of judgment. (Underscoring supplied.)
The Court takes judicial notice of a similar incident in 2009 when a guided-missile cruiser, the USS Port Royal, ran aground about half a mile off the Honolulu Airport Reef Runway
and remained stuck for four days. After spending $6.5 million restoring the coral reef, the US government was reported to have paid the State of Hawaii $8.5 million in settlement
over coral reef damage caused by the grounding. 38 aSIAHC
To underscore that the US government is prepared to pay appropriate compensation for the damage caused by the USS Guardian grounding, the US Embassy in the Philippines
has announced the formation of a US interdisciplinary scientific team which will "initiate discussions with the Government of the Philippines to review coral reef rehabilitation
options in Tubbataha, based on assessments by Philippine-based marine scientists." The US team intends to "help assess damage and remediation options, in coordination with
the Tubbataha Management Office, appropriate Philippine government entities, non-governmental organizations, and scientific experts from Philippine universities." 39
A rehabilitation or restoration program to be implemented at the cost of the violator is also a major relief that may be obtained under a judgment rendered in a citizens' suit under
the Rules, viz.:
RULE 5
SECTION 1. Reliefs in a citizen suit. If warranted, the court may grant to the plaintiff proper reliefs which shall include the protection, preservation or
rehabilitation of the environment and the payment of attorney's fees, costs of suit and other litigation expenses. It may also require the violator to
submit a program of rehabilitation or restoration of the environment, the costs of which shall be borne by the violator, or to contribute to a special trust
fund for that purpose subject to the control of the court.
In the light of the foregoing, the Court defers to the Executive Branch on the matter of compensation and rehabilitation measures through diplomatic channels. Resolution of these
issues impinges on our relations with another State in the context of common security interests under the VFA. It is settled that "[t]he conduct of the foreign relations of our
government is committed by the Constitution to the executive and legislative "the political" departments of the government, and the propriety of what may be done in the
exercise of this political power is not subject to judicial inquiry or decision." 40
On the other hand, we cannot grant the additional reliefs prayed for in the petition to order a review of the VFA and to nullify certain immunity provisions thereof.
As held in BAYAN (Bagong Alyansang Makabayan) v. Exec. Sec. Zamora, 41 the VFA was duly concurred in by the Philippine Senate and has been recognized as a treaty by the
United States as attested and certified by the duly authorized representative of the United States government. The VFA being a valid and binding agreement, the parties are
required as a matter of international law to abide by its terms and provisions. 42 The present petition under the Rules is not the proper remedy to assail the constitutionality of its
provisions.
WHEREFORE, the petition for the issuance of the privilege of the Writ of Kalikasan is hereby DENIED.
No pronouncement as to costs.
SO ORDERED.
 EN BANC
[G.R. No. 174153. October 25, 2006.]
RAUL L. LAMBINO and ERICO B. AUMENTADO, TOGETHER WITH 6,327,952 REGISTERED VOTERS, petitioners, vs. THE COMMISSION ON
ELECTIONS,respondent.
ALTERNATIVE LAW GROUPS, INC., intervenor.
ONEVOICE INC., CHRISTIAN S. MONSOD, RENE B. AZURIN, MANUEL L. QUEZON III, BENJAMIN T. TOLOSA, JR., SUSAN V. OPLE and
CARLOS P. MEDINA, JR., intervenors.
ATTY. PETE QUIRINO QUADRA, intervenor.
BAYAN represented by its Chairperson Dr. Carolina Pagaduan-Araullo, BAYAN MUNA represented by its Chairperson Dr. Reynaldo
Lesaca, KILUSANG MAYO UNO represented by its Secretary General Joel Maglunsod, HEAD represented by its Secretary General Dr.
Gene Alzona Nisperos, ECUMENICAL BISHOPS FORUM represented by Fr. Dionito Cabillas, MIGRANTE represented by its Chairperson
Concepcion Bragas-Regalado, GABRIELA represented by its Secretary General Emerenciana de Jesus, GABRIELA WOMEN'S PARTY
represented by Sec. Gen. Cristina Palabay, ANAKBAYAN represented by Chairperson Eleanor de Guzman, LEAGUE OF FILIPINO
STUDENTS represented by Chair Vencer Crisostomo Palabay, JOJO PINEDA of the League of Concerned Professionals and Businessmen,
DR. DARBY SANTIAGO of the Solidarity of Health Against Charter Change, DR. REGINALD PAMUGAS of Health Action for Human
Rights, intervenors.
LORETA ANN P. ROSALES, MARIO JOYO AGUJA, and ANA THERESA HONTIVEROS-BARAQUEL, intervenors.
LUWALHATI RIACASA ANTONINO, intervenor.
ARTURO M. DE CASTRO, intervenor.
TRADE UNION CONGRESS OF THE PHILIPPINES, intervenor.
LUWALHATI RICASA ANTONINO, intervenor.
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), CONRADO F. ESTRELLA, TOMAS C. TOLEDO, MARIANO M. TAJON, FROILAN M.
BACUNGAN, JOAQUIN T. VENUS, JR., FORTUNATO P. AGUAS, and AMADO GAT INCIONG, intervenors.
RONALD L. ADAMAT, ROLANDO MANUEL RIVERA, and RUELO BAYA, intervenors.
PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (PTGWO) and MR. VICTORINO F. BALAIS, intervenors.
SENATE OF THE PHILIPPINES, represented by its President, MANUEL VILLAR, JR., intervenor.
SULONG BAYAN MOVEMENT FOUNDATION, INC., intervenor.
JOSE ANSELMO I. CADIZ, BYRON D. BOCAR, MA. TANYA KARINA A. LAT, ANTONIO L. SALVADOR, and RANDALL TABAYOYONG, intervenors.
INTEGRATED BAR OF THE PHILIPPINES, CEBU CITY AND CEBU PROVINCE CHAPTERS, intervenors.
SENATE MINORITY LEADER AQUILINO Q. PIMENTEL, JR. and SENATORS SERGIO R. OSMEA III, JAMBY MADRIGAL, JINGGOY ESTRADA,
ALFREDO S. LIM and PANFILO LACSON, intervenors.
JOSEPH EJERCITO ESTRADA and PWERSA NG MASANG PILIPINO, intervenors.
[G.R. No. 174299. October 25, 2006.]
MAR-LEN ABIGAIL BINAY, SOFRONIO UNTALAN, JR., and RENE A.V. SAGUISAG, petitioners, vs. COMMISSION ON ELECTIONS, represented
by Chairman BENJAMIN S. ABALOS, SR., and Commissioners RESURRECCION Z. BORRA, FLORENTINO A. TUASON, JR., ROMEO A.
BRAWNER, RENE V. SARMIENTO NICODEMO T. FERRER, and John Doe and Peter Doe, respondents.
DECISION
CARPIO, J p:
 The Case
These are consolidated petitions on the Resolution dated 31 August 2006 of the Commission on Elections ("COMELEC") denying due course to an initiative petition to amend
the 1987 Constitution.
Antecedent Facts
On 15 February 2006, petitioners in G.R. No. 174153, namely Raul L. Lambino and Erico B. Aumentado ("Lambino Group"), with other groups 1 and individuals, commenced
gathering signatures for an initiative petition to change the 1987 Constitution. On 25 August 2006, the Lambino Group filed a petition with the COMELEC to hold a plebiscite that
will ratify their initiative petition under Section 5(b) and (c) 2 and Section 7 3 of Republic Act No. 6735 or the Initiative and Referendum Act ("RA 6735").
The Lambino Group alleged that their petition had the support of 6,327,952 individuals constituting at least twelve per centum (12%) of all registered voters, with each legislative
district represented by at least three per centum (3%) of its registered voters. The Lambino Group also claimed that COMELEC election registrars had verified the signatures of the
6.3 million individuals.
The Lambino Group's initiative petition changes the 1987 Constitution by modifying Sections 1-7 of Article VI (Legislative Department) 4 and Sections 1-4 of Article VII (Executive
Department) 5 and by adding Article XVIII entitled "Transitory Provisions." 6 These proposed changes will shift the present Bicameral-Presidential system to a Unicameral-
Parliamentary form of government. The Lambino Group prayed that after due publication of their petition, the COMELEC should submit the following proposition in a plebiscite for
the voters' ratification:
DO YOU APPROVE THE AMENDMENT OF ARTICLES VI AND VII OF THE 1987 CONSTITUTION, CHANGING THE FORM OF GOVERNMENT FROM THE PRESENT
BICAMERAL-PRESIDENTIAL TO A UNICAMERAL-PARLIAMENTARY SYSTEM, AND PROVIDING ARTICLE XVIII AS TRANSITORY PROVISIONS FOR THE ORDERLY
SHIFT FROM ONE SYSTEM TO THE OTHER?
On 30 August 2006, the Lambino Group filed an Amended Petition with the COMELEC indicating modifications in the proposed Article XVIII (Transitory Provisions) of their
initiative. 7
The Ruling of the COMELEC
On 31 August 2006, the COMELEC issued its Resolution denying due course to the Lambino Group's petition for lack of an enabling law governing initiative petitions to amend the
Constitution. The COMELEC invoked this Court's ruling in Santiago v. Commission on Elections 8 declaring RA 6735 inadequate to implement the initiative clause on proposals
to amend the Constitution. 9
In G.R. No. 174153, the Lambino Group prays for the issuance of the writs of certiorari and mandamus to set aside the COMELEC Resolution of 31 August 2006 and to compel the
COMELEC to give due course to their initiative petition. The Lambino Group contends that the COMELEC committed grave abuse of discretion in denying due course to their
petition since Santiago is not a binding precedent. Alternatively, the Lambino Group claims that Santiago binds only the parties to that case, and their petition deserves
cognizance as an expression of the "will of the sovereign people."
In G.R. No. 174299, petitioners ("Binay Group") pray that the Court require respondent COMELEC Commissioners to show cause why they should not be cited in contempt for the
COMELEC's verification of signatures and for "entertaining" the Lambino Group's petition despite the permanent injunction in Santiago. The Court treated the Binay Group's
petition as an opposition-in-intervention.
In his Comment to the Lambino Group's petition, the Solicitor General joined causes with the petitioners, urging the Court to grant the petition despite the Santiagoruling. The
Solicitor General proposed that the Court treat RA 6735 and its implementing rules "as temporary devises to implement the system of initiative."
Various groups and individuals sought intervention, filing pleadings supporting or opposing the Lambino Group's petition. The supporting intervenors 10 uniformly hold the view
that the COMELEC committed grave abuse of discretion in relying on Santiago. On the other hand, the opposing intervenors 11 hold the contrary view and maintain
that Santiago is a binding precedent. The opposing intervenors also challenged (1) the Lambino Group's standing to file the petition; (2) the validity of the signature gathering
and verification process; (3) the Lambino Group's compliance with the minimum requirement for the percentage of voters supporting an initiative petition under Section 2, Article
XVII of the 1987 Constitution; 12 (4) the nature of the proposed changes as revisions and not mere amendments as provided under Section 2, Article XVII of the 1987
Constitution; and (5) the Lambino Group's compliance with the requirement in Section 10(a) of RA 6735 limiting initiative petitions to only one subject. ACETIa
The Court heard the parties and intervenors in oral arguments on 26 September 2006. After receiving the parties' memoranda, the Court considered the case submitted for
resolution.
The Issues
The petitions raise the following issues:
1. Whether the Lambino Group's initiative petition complies with Section 2, Article XVII of the Constitution on amendments to the Constitution through a
people's initiative;
2. Whether this Court should revisit its ruling in Santiago declaring RA 6735 "incomplete, inadequate or wanting in essential terms and conditions" to
implement the initiative clause on proposals to amend the Constitution; and
3. Whether the COMELEC committed grave abuse of discretion in denying due course to the Lambino Group's petition.
The Ruling of the Court
There is no merit to the petition.
The Lambino Group miserably failed to comply with the basic requirements of the Constitution for conducting a people's initiative. Thus, there is even no need to revisitSantiago,
as the present petition warrants dismissal based alone on the Lambino Group's glaring failure to comply with the basic requirements of the Constitution. For following the Court's
ruling in Santiago, no grave abuse of discretion is attributable to the Commission on Elections.
1. The Initiative Petition Does Not Comply with Section 2, Article XVII of the Constitution on Direct Proposal by the People
Section 2, Article XVII of the Constitution is the governing constitutional provision that allows a people's initiative to propose amendments to the Constitution. This section states:
Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through initiative upon a petition of at least
twelve per centum of the total number of registered voters of which every legislative district must be represented by at least three per centum of the
registered voters therein. . . . . (Emphasis supplied)
The deliberations of the Constitutional Commission vividly explain the meaning of an amendment "directly proposed by the people through initiative upon a petition,"
thus:
MR. RODRIGO: Let us look at the mechanics. Let us say some voters want to propose a constitutional amendment. Is the draft of the proposed
constitutional amendment ready to be shown to the people when they are asked to sign?

MR. SUAREZ: That can be reasonably assumed, Madam President.

MR. RODRIGO: What does the sponsor mean? The draft is ready and shown to them before they sign. Now, who prepares the draft?
MR. SUAREZ: The people themselves, Madam President.
MR. RODRIGO: No, because before they sign there is already a draft shown to them and they are asked whether or not they want to
propose this constitutional amendment.
MR. SUAREZ: As it is envisioned, any Filipino can prepare that proposal and pass it around for signature. 13 (Emphasis supplied)
Clearly, the framers of the Constitution intended that the "draft of the proposed constitutional amendment" should be "ready and shown" to the people "before" they
sign such proposal. The framers plainly stated that "before they sign there is already a draft shown to them." The framers also "envisioned" that the people should
sign on the proposal itself because the proponents must "prepare that proposal and pass it around for signature."
The essence of amendments "directly proposed by the people through initiative upon a petition" is that the entire proposal on its face is a petition by the people.
This means two essential elements must be present. First, the people must author and thus sign the entire proposal. No agent or representative can sign on their behalf. Second,
as an initiative upon a petition, the proposal must be embodied in a petition.
These essential elements are present only if the full text of the proposed amendments is first shown to the people who express their assent by signing such complete proposal in
a petition. Thus, an amendment is "directly proposed by the people through initiative upon a petition" only if the people sign on a petition that contains the full
text of the proposed amendments.
The full text of the proposed amendments may be either written on the face of the petition, or attached to it. If so attached, the petition must state the fact of such attachment.
This is an assurance that every one of the several millions of signatories to the petition had seen the full text of the proposed amendments before signing. Otherwise, it is
physically impossible, given the time constraint, to prove that every one of the millions of signatories had seen the full text of the proposed amendments before signing.
The framers of the Constitution directly borrowed 14 the concept of people's initiative from the United States where various State constitutions incorporate an initiative clause. In
almost all States 15 which allow initiative petitions, the unbending requirement is that the people must first see the full text of the proposed amendments before
they sign to signify their assent, and that the people must sign on an initiative petition that contains the full text of the proposed amendments . 16
The rationale for this requirement has been repeatedly explained in several decisions of various courts. Thus, in Capezzuto v. State Ballot Commission, the Supreme Court of
Massachusetts, affirmed by the First Circuit Court of Appeals, declared:
[A] signature requirement would be meaningless if the person supplying the signature has not first seen what it is that he or she is
signing. Further, and more importantly, loose interpretation of the subscription requirement can pose a significant potential for fraud. A person
permitted to describe orally the contents of an initiative petition to a potential signer, without the signer having actually examined the petition, could
easily mislead the signer by, for example, omitting, downplaying, or even flatly misrepresenting, portions of the petition that might not be to the
signer's liking. This danger seems particularly acute when, in this case, the person giving the description is the drafter of the petition,
who obviously has a vested interest in seeing that it gets the requisite signatures to qualify for the ballot. 17 (Boldfacing and
underscoring supplied)
Likewise, in Kerr v. Bradbury, 18 the Court of Appeals of Oregon explained:
The purposes of "full text" provisions that apply to amendments by initiative commonly are described in similar terms. . . . (The purpose of the full
text requirement is to provide sufficient information so that registered voters can intelligently evaluate whether to sign the initiative
petition."); . . . (publication of full text of amended constitutional provision required because it is "essential for the elector to have . . . the section
which is proposed to be added to or subtracted from. If he is to vote intelligently, he must have this knowledge. Otherwise in many instances he would
be required to vote in the dark.") (Emphasis supplied)
Moreover, "an initiative signer must be informed at the time of signing of the nature and effect of that which is proposed" and failure to do so is "deceptive and
misleading" which renders the initiative void. 19
Section 2, Article XVII of the Constitution does not expressly state that the petition must set forth the full text of the proposed amendments. However, the deliberations of the
framers of our Constitution clearly show that the framers intended to adopt the relevant American jurisprudence on people's initiative. In particular, the deliberations of the
Constitutional Commission explicitly reveal that the framers intended that the people must first see the full text of the proposed amendments before they sign, and
that the people must sign on a petition containing such full text. Indeed, Section 5(b) of Republic Act No. 6735, the Initiative and Referendum Act that the Lambino Group
invokes as valid, requires that the people must sign the "petition . . . as signatories." cADTSH
The proponents of the initiative secure the signatures from the people. The proponents secure the signatures in their private capacity and not as public officials. The proponents
are not disinterested parties who can impartially explain the advantages and disadvantages of the proposed amendments to the people. The proponents present favorably their
proposal to the people and do not present the arguments against their proposal. The proponents, or their supporters, often pay those who gather the signatures.
Thus, there is no presumption that the proponents observed the constitutional requirements in gathering the signatures. The proponents bear the burden of proving that they
complied with the constitutional requirements in gathering the signatures that the petition contained, or incorporated by attachment, the full text of the proposed
amendments.
The Lambino Group did not attach to their present petition with this Court a copy of the paper that the people signed as their initiative petition. The Lambino Group submitted to
this Court a copy of a signature sheet 20 after the oral arguments of 26 September 2006 when they filed their Memorandum on 11 October 2006. The signature sheet with this
Court during the oral arguments was the signature sheet attached 21 to the opposition in intervention filed on 7 September 2006 by intervenor Atty. Pete Quirino-Quadra.
The signature sheet attached to Atty. Quadra's opposition and the signature sheet attached to the Lambino Group's Memorandum are the same. We reproduce below the
signature sheet in full:
Province: City/Municipality: No. of
Verified
Legislative District: Barangay: Signatures:
PROPOSITION: "DO YOU APPROVE OF THE AMENDMENT OF ARTICLES VI AND VII OF THE 1987 CONSTITUTION, CHANGING THE FORM OF GOVERNMENT FROM THE PRESENT
BICAMERAL-PRESIDENTIAL TO A UNICAMERAL-PARLIAMENTARY SYSTEM OF GOVERNMENT, IN ORDER TO ACHIEVE GREATER EFFICIENCY, SIMPLICITY AND ECONOMY IN
GOVERNMENT; AND PROVIDING AN ARTICLE XVIII AS TRANSITORY PROVISIONS FOR THE ORDERLY SHIFT FROM ONE SYSTEM TO ANOTHER?"
 I hereby APPROVE the proposed amendment to the 1987 Constitution. My signature herein which shall form part of the petition for initiative to amend the
Constitution signifies my support for the filing thereof.

There is not a single word, phrase, or sentence of text of the Lambino Group's proposed changes in the signature sheet. Neither does the signature sheet
state that the text of the proposed changes is attached to it. Petitioner Atty. Raul Lambino admitted this during the oral arguments before this Court on 26 September
2006.
The signature sheet merely asks a question whether the people approve a shift from the Bicameral-Presidential to the Unicameral-Parliamentary system of government. The
signature sheet does not show to the people the draft of the proposed changes before they are asked to sign the signature sheet. Clearly, the signature sheet is
not the "petition" that the framers of the Constitution envisioned when they formulated the initiative clause in Section 2, Article XVII of the Constitution.
Petitioner Atty. Lambino, however, explained that during the signature-gathering from February to August 2006, the Lambino Group circulated, together with the signature sheets,
printed copies of the Lambino Group's draft petition which they later filed on 25 August 2006 with the COMELEC. When asked if his group also circulated the draft of
their amended petition filed on 30 August 2006 with the COMELEC, Atty. Lambino initially replied that they circulated both. However, Atty. Lambino changed his answer and
stated that what his group circulated was the draft of the 30 August 2006 amended petition, not the draft of the 25 August 2006 petition.
The Lambino Group would have this Court believe that they prepared the draft of the 30 August 2006 amended petition almost seven months earlier in February 2006 when
they started gathering signatures. Petitioner Erico B. Aumentado's "Verification/Certification" of the 25 August 2006 petition, as well as of the 30 August 2006 amended petition,
filed with the COMELEC, states as follows:
I have caused the preparation of the foregoing [Amended] Petition in my personal capacity as a registered voter, for and on behalf of the Union of
Local Authorities of the Philippines, as shown by ULAP Resolution No. 2006-02 hereto attached, and as representative of the mass of
signatories hereto. (Emphasis supplied)

The Lambino Group failed to attach a copy of ULAP Resolution No. 2006-02 to the present petition. However, the "Official Website of the Union of Local Authorities of the
Philippines" 22 has posted the full text of Resolution No. 2006-02, which provides:

RESOLUTION NO. 2006-02

RESOLUTION SUPPORTING THE PROPOSALS OF THE PEOPLE'S CONSULTATIVE COMMISSION ON CHARTER CHANGE THROUGH PEOPLE'S
INITIATIVE AND REFERENDUM AS A MODE OF AMENDING THE 1987 CONSTITUTION
WHEREAS, there is a need for the Union of Local Authorities of the Philippines (ULAP) to adopt a common stand on the approach to support the
proposals of the People's Consultative Commission on Charter Change;
WHEREAS, ULAP maintains its unqualified support to the agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms as
embodied in the ULAP Joint Declaration for Constitutional Reforms signed by the members of the ULAP and the majority coalition of the House of
Representatives in Manila Hotel sometime in October 2005;
WHEREAS, the People's Consultative Commission on Charter Change created by Her Excellency to recommend amendments to the 1987
Constitution has submitted its final report sometime in December 2005;
WHEREAS, the ULAP is mindful of the current political developments in Congress which militates against the use of the expeditious form of amending
the 1987 Constitution;
WHEREAS, subject to the ratification of its institutional members and the failure of Congress to amend the Constitution as a constituent assembly,
ULAP has unanimously agreed to pursue the constitutional reform agenda through People's Initiative and Referendum without prejudice to other
pragmatic means to pursue the same;
WHEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, THAT ALL THE MEMBER-LEAGUES OF THE UNION OF LOCAL AUTHORITIES OF
THE PHILIPPINES (ULAP) SUPPORT THE PORPOSALS (SIC) OF THE PEOPLE'S CONSULATATIVE (SIC) COMMISSION ON CHARTER CHANGE
THROUGH PEOPLE'S INITIATIVE AND REFERENDUM AS A MODE OF AMENDING THE 1987 CONSTITUTION;
DONE, during the ULAP National Executive Board special meeting held on 14 January 2006 at the Century Park Hotel, Manila. 23 (Underscoring
supplied)
ULAP Resolution No. 2006-02 does not authorize petitioner Aumentado to prepare the 25 August 2006 petition, or the 30 August 2006 amended petition, filed with the
COMELEC. ULAP Resolution No. 2006-02 "support(s) the porposals (sic) of the Consulatative (sic) Commission on Charter Change through people's initiative and
referendum as a mode of amending the 1987 Constitution." The proposals of the Consultative Commission 24 are vastly different from the proposed changes of the Lambino
Group in the 25 August 2006 petition or 30 August 2006 amended petition filed with the COMELEC.
For example, the proposed revisions of the Consultative Commission affect all provisions of the existing Constitution,from the Preamble to the Transitory Provisions. The
proposed revisions have profound impact on the Judiciary and the National Patrimony provisions of the existing Constitution,provisions that the Lambino Group's proposed
changes do not touch. The Lambino Group's proposed changes purport to affect only Articles VI and VII of the existingConstitution,including the introduction of new Transitory
Provisions.
The ULAP adopted Resolution No. 2006-02 on 14 January 2006 or more than six months before the filing of the 25 August 2006 petition or the 30 August 2006 amended petition
with the COMELEC. However, ULAP Resolution No. 2006-02 does not establish that ULAP or the Lambino Group caused the circulation of the draft petition, together with the
signature sheets, six months before the filing with the COMELEC. On the contrary, ULAP Resolution No. 2006-02 casts grave doubt on the Lambino Group's claim that they
circulated the draft petition together with the signature sheets. ULAP Resolution No. 2006-02 does not refer at all to the draft petition or to the Lambino Group's
proposed changes.
In their Manifestation explaining their amended petition before the COMELEC, the Lambino Group declared:
After the Petition was filed, Petitioners belatedly realized that the proposed amendments alleged in the Petition, more specifically, paragraph 3 of
Section 4 and paragraph 2 of Section 5 of the Transitory Provisions were inaccurately stated and failed to correctly reflect their proposed
amendments. AaDSEC
The Lambino Group did not allege that they were amending the petition because the amended petition was what they had shown to the people during the February to
August 2006 signature-gathering. Instead, the Lambino Group alleged that the petition of 25 August 2006 "inaccurately stated and failed to correctly reflect their proposed
amendments."
The Lambino Group never alleged in the 25 August 2006 petition or the 30 August 2006 amended petition with the COMELEC that they circulated printed copies of the draft
petition together with the signature sheets. Likewise, the Lambino Group did not allege in their present petition before this Court that they circulated printed copies of the draft
petition together with the signature sheets. The signature sheets do not also contain any indication that the draft petition is attached to, or circulated with, the signature sheets.
It is only in their Consolidated Reply to the Opposition-in-Interventions that the Lambino Group first claimed that they circulated the "petition for initiative filed with the
COMELEC," thus:
 [T]here is persuasive authority to the effect that "(w)here there is not (sic) fraud, a signer who did not read the measure attached to a
referendum petition cannot question his signature on the ground that he did not understand the nature of the act." [82 C.J.S. S128h. Mo.
State v. Sullivan, 224, S.W. 327, 283 Mo. 546.] Thus, the registered voters who signed the signature sheets circulated together with the
petition for initiative filed with the COMELEC below, are presumed to have understood the proposition contained in the petition. (Emphasis
supplied)
The Lambino Group's statement that they circulated to the people "the petition for initiative filed with the COMELEC" appears an afterthought, made after the intervenors
Integrated Bar of the Philippines (Cebu City Chapter and Cebu Province Chapters) and Atty. Quadra had pointed out that the signature sheets did not contain the text of the
proposed changes. In their Consolidated Reply, the Lambino Group alleged that they circulated "the petition for initiative" but failed to mention the amended petition. This
contradicts what Atty. Lambino finally stated during the oral arguments that what they circulated was the draft of the amended petition of 30 August 2006.
The Lambino Group cites as authority Corpus Juris Secundum, stating that "a signer who did not read the measure attached to a referendum petition cannot question his
signature on the ground that he did not understand the nature of the act." The Lambino Group quotes an authority that cites a proposed changeattached to the petition
signed by the people. Even the authority the Lambino Group quotes requires that the proposed change must be attached to the petition. The same authority the Lambino
Group quotes requires the people to sign on the petition itself.
Indeed, it is basic in American jurisprudence that the proposed amendment must be incorporated with, or attached to, the initiative petition signed by the people. In the present
initiative, the Lambino Group's proposed changes were not incorporated with, or attached to, the signature sheets. The Lambino Group's citation of Corpus Juris Secundum pulls
the rug from under their feet.
It is extremely doubtful that the Lambino Group prepared, printed, circulated, from February to August 2006 during the signature-gathering period, the draft of the petition or
amended petition they filed later with the COMELEC. The Lambino Group are less than candid with this Court in their belated claim that they printed and circulated, together with
the signature sheets, the petition or amended petition. Nevertheless, even assuming the Lambino Group circulated the amended petition during the signature-
gathering period, the Lambino Group admitted circulating only very limited copies of the petition.
During the oral arguments, Atty. Lambino expressly admitted that they printed only 100,000 copies of the draft petition they filed more than six months later
with the COMELEC. Atty. Lambino added that he also asked other supporters to print additional copies of the draft petition but he could not state with certainty how many
additional copies the other supporters printed. Atty. Lambino could only assure this Court of the printing of 100,000 copies because he himself caused the printing
of these 100,000 copies.
Likewise, in the Lambino Group's Memorandum filed on 11 October 2006, the Lambino Group expressly admit that "petitioner Lambino initiated the printing and
reproduction of 100,000 copies of the petition for initiative . . . ." 25 This admission binds the Lambino Group and establishes beyond any doubt that the
Lambino Group failed to show the full text of the proposed changes to the great majority of the people who signed the signature sheets.
Thus, of the 6.3 million signatories, only 100,000 signatories could have received with certainty one copy each of the petition, assuming a 100 percent distribution with no
wastage. If Atty. Lambino and company attached one copy of the petition to each signature sheet, only 100,000 signature sheets could have circulated with the petition. Each
signature sheet contains space for ten signatures. Assuming ten people signed each of these 100,000 signature sheets with the attached petition, the maximum number of people
who saw the petition before they signed the signature sheets would not exceed 1,000,000.
With only 100,000 printed copies of the petition, it would be physically impossible for all or a great majority of the 6.3 million signatories to have seen the petition before they
signed the signature sheets. The inescapable conclusion is that the Lambino Group failed to show to the 6.3 million signatories the full text of the proposed
changes. If ever, not more than one million signatories saw the petition before they signed the signature sheets.

In any event, the Lambino Group's signature sheets do not contain the full text of the proposed changes, either on the face of the signature sheets, or as attachment with an
indication in the signature sheet of such attachment. Petitioner Atty. Lambino admitted this during the oral arguments, and this admission binds the Lambino
Group. This fact is also obvious from a mere reading of the signature sheet. This omission is fatal. The failure to so include the text of the proposed changes in the
signature sheets renders the initiative void for non-compliance with the constitutional requirement that the amendment must be "directly proposed by the people through
initiative upon a petition." The signature sheet is not the "petition" envisioned in the initiative clause of the Constitution.
For sure, the great majority of the 6.3 million people who signed the signature sheets did not see the full text of the proposed changes before signing. They could not have known
the nature and effect of the proposed changes, among which are:
1. The term limits on members of the legislature will be lifted and thus members of Parliament can be re-elected indefinitely; 26
2. The interim Parliament can continue to function indefinitely until its members, who are almost all the present members of Congress, decide to call for
new parliamentary elections. Thus, the members of the interim Parliament will determine the expiration of their own term of
office; 27
3. Within 45 days from the ratification of the proposed changes, the interim Parliament shall convene to propose further amendments or
revisions to the Constitution. 28
These three specific amendments are not stated or even indicated in the Lambino Group's signature sheets. The people who signed the signature sheets had no idea that they
were proposing these amendments. These three proposed changes are highly controversial. The people could not have inferred or divined these proposed changes merely from a
reading or rereading of the contents of the signature sheets.
During the oral arguments, petitioner Atty. Lambino stated that he and his group assured the people during the signature-gathering that the elections for the regular
Parliament would be held during the 2007 local elections if the proposed changes were ratified before the 2007 local elections. However, the text of the proposed
changes belies this.
The proposed Section 5(2), Article XVIII on Transitory Provisions, as found in the amended petition, states:
Section 5(2). The interim Parliament shall provide for the election of the members of Parliament, which shall be synchronized and held
simultaneously with the election of all local government officials. . . . . (Emphasis supplied)
Section 5(2) does not state that the elections for the regular Parliament will be held simultaneously with the 2007 local elections. This section merely requires that the
elections for the regular Parliament shall be held simultaneously with the local elections without specifying the year.
Petitioner Atty. Lambino, who claims to be the principal drafter of the proposed changes, could have easily written the word "next" before the phrase "election of all local
government officials." This would have insured that the elections for the regular Parliament would be held in the next local elections following the ratification of the proposed
changes. However, the absence of the word "next" allows the interim Parliament to schedule the elections for the regular Parliament simultaneously withany future local
elections. CDISAc
Thus, the members of the interim Parliament will decide the expiration of their own term of office. This allows incumbent members of the House of Representatives to hold office
beyond their current three-year term of office, and possibly even beyond the five-year term of office of regular members of the Parliament. Certainly, this is contrary to the
representations of Atty. Lambino and his group to the 6.3 million people who signed the signature sheets. Atty. Lambino and his group deceived the 6.3
million signatories, and even the entire nation.
This lucidly shows the absolute need for the people to sign an initiative petition that contains the full text of the proposed amendments to avoid fraud or misrepresentation. In
the present initiative, the 6.3 million signatories had to rely on the verbal representations of Atty. Lambino and his group because the signature sheets did not contain the full
text of the proposed changes. The result is a grand deception on the 6.3 million signatories who were led to believe that the proposed changes would require the holding in
2007 of elections for the regular Parliament simultaneously with the local elections.
The Lambino Group's initiative springs another surprise on the people who signed the signature sheets. The proposed changes mandate the interim Parliament to make further
amendments or revisions to the Constitution. The proposed Section 4(4), Article XVIII on Transitory Provisions, provides:
Section 4(4). Within forty-five days from ratification of these amendments, the interim Parliament shall convene to propose amendments to, or
revisions of, thisConstitution consistent with the principles of local autonomy, decentralization and a strong bureaucracy. (Emphasis supplied)
During the oral arguments, Atty. Lambino stated that this provision is a "surplusage" and the Court and the people should simply ignore it. Far from being a surplusage, this
provision invalidates the Lambino Group's initiative.
Section 4(4) is a subject matter totally unrelated to the shift from the Bicameral-Presidential to the Unicameral-Parliamentary system. American jurisprudence on initiatives
outlaws this as logrolling when the initiative petition incorporates an unrelated subject matter in the same petition. This puts the people in a dilemma since they can answer
only either yes or no to the entire proposition, forcing them to sign a petition that effectively contains two propositions, one of which they may find unacceptable.
Under American jurisprudence, the effect of logrolling is to nullify the entire proposition and not only the unrelated subject matter. Thus, in Fine v. Firestone, 29 the
Supreme Court of Florida declared:
Combining multiple propositions into one proposal constitutes "logrolling," which, if our judicial responsibility is to mean anything, we
cannot permit. The very broadness of the proposed amendment amounts to logrolling because the electorate cannot know what it is voting on the
amendment's proponents' simplistic explanation reveals only the tip of the iceberg. . . . . The ballot must give the electorate fair notice of the proposed
amendment being voted on. . . . . The ballot language in the instant case fails to do that. The very broadness of the proposal makes it impossible to
state what it will affect and effect and violates the requirement that proposed amendments embrace only one subject. (Emphasis supplied)
Logrolling confuses and even deceives the people. In Yute Air Alaska v. McAlpine, 30 the Supreme Court of Alaska warned against "inadvertence, stealth and fraud" in
logrolling:
Whenever a bill becomes law through the initiative process, all of the problems that the single-subject rule was enacted to prevent are exacerbated.
There is a greater danger of logrolling, or the deliberate intermingling of issues to increase the likelihood of an initiative's passage, and there is a
greater opportunity for "inadvertence, stealth and fraud" in the enactment-by-initiative process. The drafters of an initiative operate
independently of any structured or supervised process. They often emphasize particular provisions of their proposition, while remaining silent on other
(more complex or less appealing) provisions, when communicating to the public. . . . Indeed, initiative promoters typically use simplistic
advertising to present their initiative to potential petition-signers and eventual voters. Many voters will never read the full text of the
initiative before the election. More importantly, there is no process for amending or splitting the several provisions in an initiative proposal. These
difficulties clearly distinguish the initiative from the legislative process. (Emphasis supplied)
Thus, the present initiative appears merely a preliminary step for further amendments or revisions to be undertaken by the interim Parliament as a constituent assembly. The
people who signed the signature sheets could not have known that their signatures would be used to propose an amendment mandating the interim Parliament to
propose further amendments or revisions to the Constitution.
Apparently, the Lambino Group inserted the proposed Section 4(4) to compel the interim Parliament to amend or revise again the Constitution within 45 days from ratification of
the proposed changes, or before the May 2007 elections. In the absence of the proposed Section 4(4), the interim Parliament has the discretion whether to amend or revise
again the Constitution. With the proposed Section 4(4), the initiative proponents want the interim Parliament mandated to immediately amend or revise again the Constitution.
However, the signature sheets do not explain the reason for this rush in amending or revising again so soon the Constitution. The signature sheets do not also explain what
specific amendments or revisions the initiative proponents want the interim Parliament to make, and why there is a need for such further amendments or revisions. The people
are again left in the dark to fathom the nature and effect of the proposed changes. Certainly, such an initiative is not "directly proposed by the people" because the
people do not even know the nature and effect of the proposed changes.
There is another intriguing provision inserted in the Lambino Group's amended petition of 30 August 2006. The proposed Section 4(3) of the Transitory Provisions states:
Section 4(3). Senators whose term of office ends in 2010 shall be members of Parliament until noon of the thirtieth day of June 2010.

After 30 June 2010, not one of the present Senators will remain as member of Parliament if the interim Parliament does not schedule elections for the regular Parliament by
30 June 2010. However, there is no counterpart provision for the present members of the House of Representatives even if their term of office will all end on 30 June 2007,
three years earlier than that of half of the present Senators. Thus, all the present members of the House will remain members of the interim Parliament after 30 June 2010.
The term of the incumbent President ends on 30 June 2010. Thereafter, the Prime Minister exercises all the powers of the President. If the interim Parliament does not schedule
elections for the regular Parliament by 30 June 2010, the Prime Minister will come only from the present members of the House of Representatives to theexclusion of the present
Senators.
The signature sheets do not explain this discrimination against the Senators. The 6.3 million people who signed the signature sheets could not have known that their
signatures would be used to discriminate against the Senators. They could not have known that their signatures would be used to limit, after 30 June 2010,
the interim Parliament's choice of Prime Minister only to members of the existing House of Representatives.
An initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception, and can operate as
a gigantic fraud on the people. That is why the Constitution requires that an initiative must be "directly proposed by the people . . . in a petition" meaning that the
people must sign on a petition that contains the full text of the proposed amendments. On so vital an issue as amending the nation's fundamental law, the writing of the text of
the proposed amendments cannot be hidden from the people under a general or special power of attorney to unnamed, faceless, and unelected individuals.
The Constitution entrusts to the people the power to directly propose amendments to the Constitution. This Court trusts the wisdom of the people even if the members of this
Court do not personally know the people who sign the petition. However, this trust emanates from a fundamental assumption: the full text of the proposed
amendment is first shown to the people before they sign the petition, not after they have signed the petition.
In short, the Lambino Group's initiative is void and unconstitutional because it dismally fails to comply with the requirement of Section 2, Article XVII of the Constitutionthat the
initiative must be "directly proposed by the people through initiative upon a petition."
2. The Initiative Violates Section 2, Article XVII of the Constitution Disallowing Revision through Initiatives
A people's initiative to change the Constitution applies only to an amendment of the Constitution and not to its revision. In contrast, Congress or a constitutional convention can
propose both amendments and revisions to the Constitution. Article XVII of the Constitution provides:
ARTICLE XVII
AMENDMENTS OR REVISIONS
Sec. 1. Any amendment to, or revision of, this Constitution may be proposed by:
(1) The Congress, upon a vote of three-fourths of all its Members, or CcTIDH
(2) A constitutional convention.
Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through initiative . . . . (Emphasis supplied)
Article XVII of the Constitution speaks of three modes of amending the Constitution. The first mode is through Congress upon three-fourths vote of all its Members. The second
mode is through a constitutional convention. The third mode is through a people's initiative.
Section 1 of Article XVII, referring to the first and second modes, applies to "[A]ny amendment to, or revision of, this Constitution." In contrast, Section 2 of Article XVII,
referring to the third mode, applies only to "[A]mendments to this Constitution." This distinction was intentional as shown by the following deliberations of the Constitutional
Commission:
MR. SUAREZ: Thank you, Madam President.
May we respectfully call the attention of the Members of the Commission that pursuant to the mandate given to us last night, we submitted this
afternoon a complete Committee Report No. 7 which embodies the proposed provision governing the matter of initiative. This is now covered by Section
2 of the complete committee report. With the permission of the Members, may I quote Section 2:
The people may, after five years from the date of the last plebiscite held, directly propose amendments to this Constitution thru initiative
upon petition of at least ten percent of the registered voters.
This completes the blanks appearing in the original Committee Report No. 7. This proposal was suggested on the theory that this matter of initiative,
which came about because of the extraordinary developments this year, has to be separated from the traditional modes of amending the
Constitution as embodied in Section 1. The committee members felt that this system of initiative should be limited to amendments to the
Constitution and should not extend to the revision of the entire Constitution,so we removed it from the operation of Section 1 of the
proposed Article on Amendment or Revision. . . . .
xxx xxx xxx
MS. AQUINO: [I] am seriously bothered by providing this process of initiative as a separate section in the Article on Amendment. Would the sponsor be
amenable to accepting an amendment in terms of realigning Section 2 as another subparagraph (c) of Section 1, instead of setting it up as another
separate section as if it were a self-executing provision?
MR. SUAREZ: We would be amenable except that, as we clarified a while ago, this process of initiative is limited to the matter of amendment
and should not expand into a revision which contemplates a total overhaul of the Constitution. That was the sense that was conveyed by
the Committee.
MS. AQUINO: In other words, the Committee was attempting to distinguish the coverage of modes (a) and (b) in Section 1 to include the
process of revision; whereas, the process of initiation to amend, which is given to the public, would only apply to amendments?
MR. SUAREZ: That is right. Those were the terms envisioned in the Committee.
MS. AQUINO: I thank the sponsor; and thank you, Madam President.
xxx xxx xxx
MR. MAAMBONG: My first question: Commissioner Davide's proposed amendment on line 1 refers to "amendments." Does it not cover
the word "revision" as defined by Commissioner Padilla when he made the distinction between the words "amendments" and
"revision"?
MR. DAVIDE: No, it does not, because "amendments" and "revision" should be covered by Section 1. So insofar as initiative is
concerned, it can only relate to "amendments" not "revision."
MR. MAAMBONG: Thank you. 31 (Emphasis supplied)
There can be no mistake about it. The framers of the Constitution intended, and wrote, a clear distinction between "amendment" and "revision" of the Constitution. The
framers intended, and wrote, that only Congress or a constitutional convention may propose revisions to the Constitution. The framers intended, and wrote, that a people's
initiative may propose only amendments to the Constitution. Where the intent and language of the Constitution clearly withhold from the people the power to propose revisions
to the Constitution, the people cannot propose revisions even as they are empowered to propose amendments.
This has been the consistent ruling of state supreme courts in the United States. Thus, in McFadden v. Jordan, 32 the Supreme Court of California ruled:
The initiative power reserved by the people by amendment to the Constitution . . . applies only to the proposing and the adopting or
rejecting of 'laws and amendments to the Constitution' and does not purport to extend to a constitutional revision. . . . . It is thus clear
that a revision of the Constitution may be accomplished only through ratification by the people of a revised constitution proposed by a convention
called for that purpose as outlined hereinabove. Consequently if the scope of the proposed initiative measure (hereinafter termed 'the measure') now
before us is so broad that if such measure became law a substantial revision of our present state Constitution would be effected, then the measure may
not properly be submitted to the electorate until and unless it is first agreed upon by a constitutional convention, and the writ sought by petitioner
should issue. . . . . (Emphasis supplied)
Likewise, the Supreme Court of Oregon ruled in Holmes v. Appling: 33
It is well established that when a constitution specifies the manner in which it may be amended or revised, it can be altered by those who favor
amendments, revision, or other change only through the use of one of the specified means. The constitution itself recognizes that there is a difference
between an amendment and a revision; and it is obvious from an examination of the measure here in question that it is not an amendment as that term
is generally understood and as it is used in Article IV, Section 1. The document appears to be based in large part on the revision of the
constitution drafted by the 'Commission for Constitutional Revision' authorized by the 1961 Legislative Assembly, . . . and submitted to the 1963
Legislative Assembly. It failed to receive in the Assembly the two-third's majority vote of both houses required by Article XVII, Section 2, and hence
failed of adoption, . . . .
While differing from that document in material respects, the measure sponsored by the plaintiffs is, nevertheless, a thorough overhauling of the present
constitution . . . .
To call it an amendment is a misnomer.
Whether it be a revision or a new constitution, it is not such a measure as can be submitted to the people through the initiative. If a revision, it is
subject to the requirements of Article XVII, Section 2(1); if a new constitution, it can only be proposed at a convention called in the manner provided in
Article XVII, Section 1. . . . .

Similarly, in this jurisdiction there can be no dispute that a people's initiative can only propose amendments to the Constitution since the Constitution itself limits initiatives to
amendments. There can be no deviation from the constitutionally prescribed modes of revising the Constitution. A popular clamor, even one backed by 6.3 million signatures,
cannot justify a deviation from the specific modes prescribed in the Constitution itself.
As the Supreme Court of Oklahoma ruled in In re Initiative Petition No. 364: 34
It is a fundamental principle that a constitution can only be revised or amended in the manner prescribed by the instrument itself, and
that any attempt to revise a constitution in a manner other than the one provided in the instrument is almost invariably treated as
extra-constitutional and revolutionary. . . . . "While it is universally conceded that the people are sovereign and that they have power to adopt
a constitution and to change their own work at will, they must, in doing so, act in an orderly manner and according to the settled principles of
constitutional law. And where the people, in adopting a constitution,have prescribed the method by which the people may alter or amend it, an attempt
to change the fundamental law in violation of the self-imposed restrictions, is unconstitutional." . . . . (Emphasis supplied)
This Court, whose members are sworn to defend and protect the Constitution, cannot shirk from its solemn oath and duty to insure compliance with the clear command
of the Constitution that a people's initiative may only amend, never revise, the Constitution.
The question is, does the Lambino Group's initiative constitute an amendment or revision of the Constitution? If the Lambino Group's initiative constitutes a revision, then the
present petition should be dismissed for being outside the scope of Section 2, Article XVII of the Constitution.
Courts have long recognized the distinction between an amendment and a revision of a constitution. One of the earliest cases that recognized the distinction described the
fundamental difference in this manner:
[T]he very term "constitution" implies an instrument of a permanent and abiding nature, and the provisions contained therein for its revision
indicate the will of the people that the underlying principles upon which it rests, as well as the substantial entirety of the instrument,
shall be of a like permanent and abiding nature. On the other hand, the significance of the term "amendment" implies such an addition or change
within the lines of the original instrument as will effect an improvement, or better carry out the purpose for which it was framed. 35 (Emphasis
supplied) CDISAc
Revision broadly implies a change that alters a basic principle in the constitution, like altering the principle of separation of powers or the system of checks-and-balances.
There is also revision if the change alters the substantial entirety of the constitution, as when the change affects substantial provisions of the constitution. On the
other hand, amendment broadly refers to a change that adds, reduces, or deletes without altering the basic principle involved. Revision generally affects several
provisions of the constitution, while amendment generally affects only the specific provision being amended.
In California where the initiative clause allows amendments but not revisions to the constitution just like in our Constitution,courts have developed a two-part test: the
quantitative test and the qualitative test. The quantitative test asks whether the proposed change is "so extensive in its provisions as to change directly the 'substantial entirety'
of the constitution by the deletion or alteration of numerous existing provisions." 36 The court examines only the number of provisions affected and does not consider the degree
of the change.
The qualitative test inquires into the qualitative effects of the proposed change in the constitution. The main inquiry is whether the change will "accomplish such far reaching
changes in the nature of our basic governmental plan as to amount to a revision." 37 Whether there is an alteration in the structure of government is a proper subject of inquiry.
Thus, "a change in the nature of [the] basic governmental plan" includes "change in its fundamental framework or the fundamental powers of its Branches." 38 A change in the
nature of the basic governmental plan also includes changes that "jeopardize the traditional form of government and the system of check and balances." 39
Under both the quantitative and qualitative tests, the Lambino Group's initiative is a revision and not merely an amendment. Quantitatively, the Lambino Group's proposed
changes overhaul two articles Article VI on the Legislature and Article VII on the Executive affecting a total of 105 provisions in the entire Constitution. 40Qualitatively, the
proposed changes alter substantially the basic plan of government, from presidential to parliamentary, and from a bicameral to a unicameral legislature.
A change in the structure of government is a revision of the Constitution, as when the three great co-equal branches of government in the present Constitution are reduced into
two. This alters the separation of powers in the Constitution. A shift from the present Bicameral-Presidential system to a Unicameral-Parliamentary system is a revision
of the Constitution. Merging the legislative and executive branches is a radical change in the structure of government.
The abolition alone of the Office of the President as the locus of Executive Power alters the separation of powers and thus constitutes a revision of the Constitution. Likewise, the
abolition alone of one chamber of Congress alters the system of checks-and-balances within the legislature and constitutes a revision of the Constitution.
By any legal test and under any jurisdiction, a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system, involving the abolition of the Office of the President
and the abolition of one chamber of Congress, is beyond doubt a revision, not a mere amendment. On the face alone of the Lambino Group's proposed changes, it is readily
apparent that the changes will radically alter the framework of government as set forth in the Constitution. Father Joaquin Bernas, S.J., a leading member of the
Constitutional Commission, writes:
An amendment envisages an alteration of one or a few specific and separable provisions. The guiding original intention of an amendment is to improve
specific parts or to add new provisions deemed necessary to meet new conditions or to suppress specific portions that may have become obsolete or
that are judged to be dangerous. In revision, however, the guiding original intention and plan contemplates a re-examination of the entire document, or
 of provisions of the document which have over-all implications for the entire document, to determine how and to what extent they should be
altered. Thus, for instance a switch from the presidential system to a parliamentary system would be a revision because of its over-all
impact on the entire constitutional structure. So would a switch from a bicameral system to a unicameral system be because of its
effect on other important provisions of the Constitution. 41 (Emphasis supplied)
In Adams v. Gunter, 42 an initiative petition proposed the amendment of the Florida State constitution to shift from a bicameral to a unicameral legislature. The issue
turned on whether the initiative "was defective and unauthorized where [the] proposed amendment would . . . affect several other provisions of [the]Constitution." The Supreme
Court of Florida, striking down the initiative as outside the scope of the initiative clause, ruled as follows:
The proposal here to amend Section 1 of Article III of the 1968 Constitution to provide for a Unicameral Legislature affects not only many other
provisions of the Constitution but provides for a change in the form of the legislative branch of government, which has been in existence
in the United States Congress and in all of the states of the nation, except one, since the earliest days. It would be difficult to visualize a more
revolutionary change. The concept of a House and a Senate is basic in the American form of government. It would not only radically change the
whole pattern of government in this state and tear apart the whole fabric of the Constitution, but would even affect the physical
facilities necessary to carry on government.
xxx xxx xxx
We conclude with the observation that if such proposed amendment were adopted by the people at the General Election and if the Legislature at its
next session should fail to submit further amendments to revise and clarify the numerous inconsistencies and conflicts which would result, or if after
submission of appropriate amendments the people should refuse to adopt them, simple chaos would prevail in the government of this State. The same
result would obtain from an amendment, for instance, of Section 1 of Article V, to provide for only a Supreme Court and Circuit Courts-and there could
be other examples too numerous to detail. These examples point unerringly to the answer.
The purpose of the long and arduous work of the hundreds of men and women and many sessions of the Legislature in bringing about the
Constitution of 1968 was to eliminate inconsistencies and conflicts and to give the State a workable, accordant, homogenous and up-to-date document.
All of this could disappear very quickly if we were to hold that it could be amended in the manner proposed in the initiative petition here. 43 (Emphasis
supplied)
The rationale of the Adams decision applies with greater force to the present petition. The Lambino Group's initiative not only seeks a shift from a bicameral to a unicameral
legislature, it also seeks to merge the executive and legislative departments. The initiative in Adams did not even touch the executive department.

In Adams, the Supreme Court of Florida enumerated 18 sections of the Florida Constitution that would be affected by the shift from a bicameral to a unicameral legislature. In the
Lambino Group's present initiative, no less than 105 provisions of the Constitution would be affected based on the count of Associate Justice Romeo J. Callejo, Sr. 44 There
is no doubt that the Lambino Group's present initiative seeks far more radical changes in the structure of government than the initiative inAdams.
The Lambino Group theorizes that the difference between "amendment" and "revision" is only one of procedure, not of substance. The Lambino Group posits that when a
deliberative body drafts and proposes changes to the Constitution, substantive changes are called "revisions" because members of the deliberative body work full-time on
the changes. However, the same substantive changes, when proposed through an initiative, are called "amendments" because the changes are made by ordinary people
who do not make an "occupation, profession, or vocation" out of such endeavor.
Thus, the Lambino Group makes the following exposition of their theory in their Memorandum:
99. With this distinction in mind, we note that the constitutional provisions expressly provide for both "amendment" and "revision" when it speaks of
legislators and constitutional delegates, while the same provisions expressly provide only for "amendment" when it speaks of the people. It would seem
that the apparent distinction is based on the actual experience of the people, that on one hand the common people in general are not expected to work
full-time on the matter of correcting the constitution because that is not their occupation, profession or vocation; while on the other hand, the
legislators and constitutional convention delegates are expectedto work full-time on the same matter because that is their occupation, profession or
vocation. Thus, the difference between the words "revision" and "amendment" pertain only to the process or procedure of coming up
with the corrections, for purposes of interpreting the constitutional provisions.
100. Stated otherwise, the difference between "amendment" and "revision" cannot reasonably be in the substance or extent of the
correction. . . . . (Underlining in the original; boldfacing supplied)
The Lambino Group in effect argues that if Congress or a constitutional convention had drafted the same proposed changes that the Lambino Group wrote in the present initiative,
the changes would constitute a revision of the Constitution. Thus, the Lambino Group concedes that the proposed changes in the present initiative constitute a
revision if Congress or a constitutional convention had drafted the changes. However, since the Lambino Group as private individuals drafted the proposed changes, the
changes are merely amendments to the Constitution. The Lambino Group trivializes the serious matter of changing the fundamental law of the land.
The express intent of the framers and the plain language of the Constitution contradict the Lambino Group's theory. Where the intent of the framers and the language
of the Constitution are clear and plainly stated, courts do not deviate from such categorical intent and language. 45 Any theory espousing a construction contrary to such intent
and language deserves scant consideration. More so, if such theory wreaks havoc by creating inconsistencies in the form of government established in the Constitution. Such a
theory, devoid of any jurisprudential mooring and inviting inconsistencies in the Constitution, only exposes the flimsiness of the Lambino Group's position. Any theory advocating
that a proposed change involving a radical structural change in government does not constitute a revision justly deserves rejection.
The Lambino Group simply recycles a theory that initiative proponents in American jurisdictions have attempted to advance without any success. In Lowe v. Keisling, 46the
Supreme Court of Oregon rejected this theory, thus:
Mabon argues that Article XVII, section 2, does not apply to changes to the constitution proposed by initiative. His theory is that Article XVII,
section 2 merely provides a procedure by which the legislature can propose a revision of the constitution, but it does not affect
proposed revisions initiated by the people. AcaEDC
Plaintiffs argue that the proposed ballot measure constitutes a wholesale change to the constitution that cannot be enacted through the initiative
process. They assert that the distinction between amendment and revision is determined by reviewing the scope and subject matter of the proposed
enactment, and that revisions are not limited to "a formal overhauling of the constitution." They argue that this ballot measure proposes far reaching
changes outside the lines of the original instrument, including profound impacts on existing fundamental rights and radical restructuring of the
government's relationship with a defined group of citizens. Plaintiffs assert that, because the proposed ballot measure "will refashion the most basic
principles of Oregon constitutional law," the trial court correctly held that it violated Article XVII, section 2, and cannot appear on the ballot without the
prior approval of the legislature.
We first address Mabon's argument that Article XVII, section 2(1), does not prohibit revisions instituted by initiative. In Holmes v. Appling, . . ., the
Supreme Court concluded that a revision of the constitution may not be accomplished by initiative, because of the provisions of Article XVII, section 2.
After reviewing Article XVII, section1, relating to proposed amendments, the court said:
"From the foregoing it appears that Article IV, Section 1, authorizes the use of the initiative as a means of amending the Oregon
Constitution,but it contains no similar sanction for its use as a means of revising the constitution." . . . .
It then reviewed Article XVII, section 2, relating to revisions, and said: "It is the only section of the constitution which provides the means for
constitutional revision and it excludes the idea that an individual, through the initiative, may place such a measure before the electorate." . . . .
Accordingly, we reject Mabon's argument that Article XVII, section 2, does not apply to constitutional revisions proposed by initiative.
(Emphasis supplied)
Similarly, this Court must reject the Lambino Group's theory which negates the express intent of the framers and the plain language of the Constitution.
We can visualize amendments and revisions as a spectrum, at one end green for amendments and at the other end red for revisions. Towards the middle of the spectrum, colors
fuse and difficulties arise in determining whether there is an amendment or revision. The present initiative is indisputably located at the far end of the red spectrum where
revision begins. The present initiative seeks a radical overhaul of the existing separation of powers among the three co-equal departments of government, requiring far-reaching
amendments in several sections and articles of the Constitution.
Where the proposed change applies only to a specific provision of the Constitution without affecting any other section or article, the change may generally be considered an
amendment and not a revision. For example, a change reducing the voting age from 18 years to 15 years 47 is an amendment and not a revision. Similarly, a change reducing
Filipino ownership of mass media companies from 100 percent to 60 percent is an amendment and not a revision. 48 Also, a change requiring a college degree as an additional
qualification for election to the Presidency is an amendment and not a revision. 49
The changes in these examples do not entail any modification of sections or articles of the Constitution other than the specific provision being amended. These changes do not
also affect the structure of government or the system of checks-and-balances among or within the three branches. These three examples are located at the far green end of the
spectrum, opposite the far red end where the revision sought by the present petition is located.
However, there can be no fixed rule on whether a change is an amendment or a revision. A change in a single word of one sentence of the Constitution may be a revision and not
an amendment. For example, the substitution of the word "republican" with "monarchic" or "theocratic" in Section 1, Article II 50 of the Constitutionradically overhauls the entire
structure of government and the fundamental ideological basis of the Constitution. Thus, each specific change will have to be examined case-by-case, depending on how it affects
other provisions, as well as how it affects the structure of government, the carefully crafted system of checks-and-balances, and the underlying ideological basis of the existing
Constitution.
Since a revision of a constitution affects basic principles, or several provisions of a constitution,a deliberative body with recorded proceedings is best suited to undertake a
revision. A revision requires harmonizing not only several provisions, but also the altered principles with those that remain unaltered. Thus, constitutions normally authorize
deliberative bodies like constituent assemblies or constitutional conventions to undertake revisions. On the other hand, constitutions allow people's initiatives, which do not have
fixed and identifiable deliberative bodies or recorded proceedings, to undertake only amendments and not revisions.
In the present initiative, the Lambino Group's proposed Section 2 of the Transitory Provisions states:
Section 2. Upon the expiration of the term of the incumbent President and Vice President, with the exception of Sections 1, 2, 3, 4, 5, 6 and 7 of Article
VI of the 1987 Constitution which shall hereby be amended and Sections 18 and 24 which shall be deleted, all other Sections of Article VI are hereby
retained and renumbered sequentially as Section 2, ad seriatim up to 26, unless they are inconsistent with the Parliamentary system of
government, in which case, they shall be amended to conform with a unicameral parliamentary form of government; . . . . (Emphasis
supplied)

The basic rule in statutory construction is that if a later law is irreconcilably inconsistent with a prior law, the later law prevails. This rule also applies to construction of
constitutions. However, the Lambino Group's draft of Section 2 of the Transitory Provisions turns on its head this rule of construction by stating that in case of such irreconcilable
inconsistency, the earlier provision "shall be amended to conform with a unicameral parliamentary form of government." The effect is to freeze the two irreconcilable provisions
until the earlier one "shall be amended," which requires a future separate constitutional amendment.
Realizing the absurdity of the need for such an amendment, petitioner Atty. Lambino readily conceded during the oral arguments that the requirement of a future amendment is a
"surplusage." In short, Atty. Lambino wants to reinstate the rule of statutory construction so that the later provision automatically prevails in case of irreconcilable inconsistency.
However, it is not as simple as that.
The irreconcilable inconsistency envisioned in the proposed Section 2 of the Transitory Provisions is not between a provision in Article VI of the 1987 Constitution and a provision
in the proposed changes. The inconsistency is between a provision in Article VI of the 1987 Constitution and the "Parliamentary system of government," and the
inconsistency shall be resolved in favor of a "unicameral parliamentary form of government."
Now, what "unicameral parliamentary form of government" do the Lambino Group's proposed changes refer to the Bangladeshi, Singaporean, Israeli, or New Zealand
models, which are among the few countries with unicameral parliaments? The proposed changes could not possibly refer to the traditional and well-known parliamentary forms
of government the British, French, Spanish, German, Italian, Canadian, Australian, or Malaysian models, which have all bicameral parliaments. Did the people who signed the
signature sheets realize that they were adopting the Bangladeshi, Singaporean, Israeli, or New Zealand parliamentary form of government?
This drives home the point that the people's initiative is not meant for revisions of the Constitution but only for amendments. A shift from the present Bicameral-Presidential to a
Unicameral-Parliamentary system requires harmonizing several provisions in many articles of the Constitution. Revision of the Constitution through a people's initiative will only
result in gross absurdities in the Constitution.
In sum, there is no doubt whatsoever that the Lambino Group's initiative is a revision and not an amendment. Thus, the present initiative is void and unconstitutional because it
violates Section 2, Article XVII of the Constitution limiting the scope of a people's initiative to "[A]mendments to this Constitution."
3. A Revisit of Santiago v. COMELEC is Not Necessary
The present petition warrants dismissal for failure to comply with the basic requirements of Section 2, Article XVII of the Constitution on the conduct and scope of a people's
initiative to amend the Constitution. There is no need to revisit this Court's ruling in Santiago declaring RA 6735 "incomplete, inadequate or wanting in essential terms and
conditions" to cover the system of initiative to amend the Constitution. An affirmation or reversal of Santiago will not change the outcome of the present petition. Thus, this
Court must decline to revisit Santiago which effectively ruled that RA 6735 does not comply with the requirements of the Constitution to implement the initiative clause on
amendments to the Constitution.
This Court must avoid revisiting a ruling involving the constitutionality of a statute if the case before the Court can be resolved on some other grounds. Such avoidance is a logical
consequence of the well-settled doctrine that courts will not pass upon the constitutionality of a statute if the case can be resolved on some other grounds. 51
Nevertheless, even assuming that RA 6735 is valid to implement the constitutional provision on initiatives to amend the Constitution, this will not change the result here because
the present petition violates Section 2, Article XVII of the Constitution. To be a valid initiative, the present initiative must first comply with Section 2, Article XVII of the
Constitution even before complying with RA 6735. IATSHE
Even then, the present initiative violates Section 5(b) of RA 6735 which requires that the "petition for an initiative on the 1987 Constitution must have at least twelve per
centum (12%) of the total number of registered voters as signatories." Section 5(b) of RA 6735 requires that the people must sign the "petition . . . as signatories."
The 6.3 million signatories did not sign the petition of 25 August 2006 or the amended petition of 30 August 2006 filed with the COMELEC. Only Atty. Lambino, Atty.
Demosthenes B. Donato, and Atty. Alberto C. Agra signed the petition and amended petition as counsels for "Raul L. Lambino and Erico B. Aumentado,
Petitioners." In the COMELEC, the Lambino Group, claiming to act "together with" the 6.3 million signatories, merely attached the signature sheets to the petition and
amended petition. Thus, the petition and amended petition filed with the COMELEC did not even comply with the basic requirement of RA 6735 that the Lambino Group claims as
valid.
The Lambino Group's logrolling initiative also violates Section 10(a) of RA 6735 stating, "No petition embracing more than one (1) subject shall be submitted to the
electorate; . . . ." The proposed Section 4(4) of the Transitory Provisions, mandating the interim Parliament to propose further amendments or revisions to the Constitution, is a
subject matter totally unrelated to the shift in the form of government. Since the present initiative embraces more than one subject matter, RA 6735prohibits submission of the
initiative petition to the electorate. Thus, even if RA 6735 is valid, the Lambino Group's initiative will still fail.
4. The COMELEC Did Not Commit Grave Abuse of Discretion in Dismissing the Lambino Group's Initiative
In dismissing the Lambino Group's initiative petition, the COMELEC en banc merely followed this Court's ruling in Santiago and People's Initiative for Reform, Modernization
and Action (PIRMA) v. COMELEC. 52 For following this Court's ruling, no grave abuse of discretion is attributable to the COMELEC. On this ground alone, the present petition
warrants outright dismissal. Thus, this Court should reiterate its unanimous ruling in PIRMA:
The Court ruled, first, by a unanimous vote, that no grave abuse of discretion could be attributed to the public respondent COMELEC in dismissing the
petition filed by PIRMA therein, it appearing that it only complied with the dispositions in the Decisions of this Court in G.R. No. 127325, promulgated on
March 19, 1997, and its Resolution of June 10, 1997.
5. Conclusion
The Constitution, as the fundamental law of the land, deserves the utmost respect and obedience of all the citizens of this nation. No one can trivialize the Constitutionby
cavalierly amending or revising it in blatant violation of the clearly specified modes of amendment and revision laid down in the Constitution itself.
To allow such change in the fundamental law is to set adrift the Constitution in unchartered waters, to be tossed and turned by every dominant political group of the day. If this
Court allows today a cavalier change in the Constitution outside the constitutionally prescribed modes, tomorrow the new dominant political group that comes will demand its own
set of changes in the same cavalier and unconstitutional fashion. A revolving-door constitution does not augur well for the rule of law in this country.
An overwhelming majority 16,622,111 voters comprising 76.3 percent of the total votes cast 53 approved our Constitution in a national plebiscite held on 11
February 1987. That approval is the unmistakable voice of the people, the full expression of the people's sovereign will. That approval included the prescribed
modes for amending or revising the Constitution.
No amount of signatures, not even the 6,327,952 million signatures gathered by the Lambino Group, can change our Constitution contrary to the specific modes that the people,
in their sovereign capacity, prescribed when they ratified the Constitution. The alternative is an extra-constitutional change, which means subverting the people's sovereign
will and discarding the Constitution. This is one act the Court cannot and should never do. As the ultimate guardian of the Constitution, this Court is sworn to perform its
solemn duty to defend and protect the Constitution, which embodies the real sovereign will of the people.
Incantations of "people's voice," "people's sovereign will," or "let the people decide" cannot override the specific modes of changing the Constitution as prescribed in the
Constitution itself. Otherwise, the Constitution the people's fundamental covenant that provides enduring stability to our society becomes easily susceptible to manipulative
changes by political groups gathering signatures through false promises. Then, the Constitution ceases to be the bedrock of the nation's stability.
The Lambino Group claims that their initiative is the "people's voice." However, the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their
petition with the COMELEC, that "ULAP maintains its unqualified support to the agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms." The
Lambino Group thus admits that their "people's" initiative is an "unqualified support to the agenda" of the incumbent President to change the Constitution. This forewarns
the Court to be wary of incantations of "people's voice" or "sovereign will" in the present initiative.
This Court cannot betray its primordial duty to defend and protect the Constitution. The Constitution, which embodies the people's sovereign will, is the bible of this Court. This
Court exists to defend and protect the Constitution. To allow this constitutionally infirm initiative, propelled by deceptively gathered signatures, to alter basic principles
in the Constitution is to allow a desecration of the Constitution. To allow such alteration and desecration is to lose this Court's raison d'etre.

WHEREFORE, we DISMISS the petition in G.R. No. 174153.

SO ORDERED.
||| (Lambino v. Commission on Elections, G.R. No. 174153, 174299, , [October 25, 2006], 536 PHIL 1-364)
 EN BANC
[G.R. No. 174153. October 25, 2006.]
RAUL L. LAMBINO and ERICO B. AUMENTADO, TOGETHER WITH 6,327,952 REGISTERED VOTERS, petitioners, vs. THE COMMISSION ON
ELECTIONS,respondent.
ALTERNATIVE LAW GROUPS, INC., intervenor.
ONEVOICE INC., CHRISTIAN S. MONSOD, RENE B. AZURIN, MANUEL L. QUEZON III, BENJAMIN T. TOLOSA, JR., SUSAN V. OPLE and
CARLOS P. MEDINA, JR., intervenors.
ATTY. PETE QUIRINO QUADRA, intervenor.
BAYAN represented by its Chairperson Dr. Carolina Pagaduan-Araullo, BAYAN MUNA represented by its Chairperson Dr. Reynaldo
Lesaca, KILUSANG MAYO UNO represented by its Secretary General Joel Maglunsod, HEAD represented by its Secretary General Dr.
Gene Alzona Nisperos, ECUMENICAL BISHOPS FORUM represented by Fr. Dionito Cabillas, MIGRANTE represented by its Chairperson
Concepcion Bragas-Regalado, GABRIELA represented by its Secretary General Emerenciana de Jesus, GABRIELA WOMEN'S PARTY
represented by Sec. Gen. Cristina Palabay, ANAKBAYAN represented by Chairperson Eleanor de Guzman, LEAGUE OF FILIPINO
STUDENTS represented by Chair Vencer Crisostomo Palabay, JOJO PINEDA of the League of Concerned Professionals and Businessmen,
DR. DARBY SANTIAGO of the Solidarity of Health Against Charter Change, DR. REGINALD PAMUGAS of Health Action for Human
Rights, intervenors.
LORETA ANN P. ROSALES, MARIO JOYO AGUJA, and ANA THERESA HONTIVEROS-BARAQUEL, intervenors.
LUWALHATI RIACASA ANTONINO, intervenor.
ARTURO M. DE CASTRO, intervenor.
TRADE UNION CONGRESS OF THE PHILIPPINES, intervenor.
LUWALHATI RICASA ANTONINO, intervenor.
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), CONRADO F. ESTRELLA, TOMAS C. TOLEDO, MARIANO M. TAJON, FROILAN M.
BACUNGAN, JOAQUIN T. VENUS, JR., FORTUNATO P. AGUAS, and AMADO GAT INCIONG, intervenors.
RONALD L. ADAMAT, ROLANDO MANUEL RIVERA, and RUELO BAYA, intervenors.
PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (PTGWO) and MR. VICTORINO F. BALAIS, intervenors.
SENATE OF THE PHILIPPINES, represented by its President, MANUEL VILLAR, JR., intervenor.
SULONG BAYAN MOVEMENT FOUNDATION, INC., intervenor.
JOSE ANSELMO I. CADIZ, BYRON D. BOCAR, MA. TANYA KARINA A. LAT, ANTONIO L. SALVADOR, and RANDALL TABAYOYONG, intervenors.
INTEGRATED BAR OF THE PHILIPPINES, CEBU CITY AND CEBU PROVINCE CHAPTERS, intervenors.
SENATE MINORITY LEADER AQUILINO Q. PIMENTEL, JR. and SENATORS SERGIO R. OSMEA III, JAMBY MADRIGAL, JINGGOY ESTRADA,
ALFREDO S. LIM and PANFILO LACSON, intervenors.
JOSEPH EJERCITO ESTRADA and PWERSA NG MASANG PILIPINO, intervenors.
[G.R. No. 174299. October 25, 2006.]
MAR-LEN ABIGAIL BINAY, SOFRONIO UNTALAN, JR., and RENE A.V. SAGUISAG, petitioners, vs. COMMISSION ON ELECTIONS, represented
by Chairman BENJAMIN S. ABALOS, SR., and Commissioners RESURRECCION Z. BORRA, FLORENTINO A. TUASON, JR., ROMEO A.
BRAWNER, RENE V. SARMIENTO NICODEMO T. FERRER, and John Doe and Peter Doe, respondents.
DECISION
CARPIO, J p:
The Case
These are consolidated petitions on the Resolution dated 31 August 2006 of the Commission on Elections ("COMELEC") denying due course to an initiative petition to amend
the 1987 Constitution.
Antecedent Facts
On 15 February 2006, petitioners in G.R. No. 174153, namely Raul L. Lambino and Erico B. Aumentado ("Lambino Group"), with other groups 1 and individuals, commenced
gathering signatures for an initiative petition to change the 1987 Constitution. On 25 August 2006, the Lambino Group filed a petition with the COMELEC to hold a plebiscite that
will ratify their initiative petition under Section 5(b) and (c) 2 and Section 7 3 of Republic Act No. 6735 or the Initiative and Referendum Act ("RA 6735").
The Lambino Group alleged that their petition had the support of 6,327,952 individuals constituting at least twelve per centum (12%) of all registered voters, with each legislative
district represented by at least three per centum (3%) of its registered voters. The Lambino Group also claimed that COMELEC election registrars had verified the signatures of the
6.3 million individuals.
The Lambino Group's initiative petition changes the 1987 Constitution by modifying Sections 1-7 of Article VI (Legislative Department) 4 and Sections 1-4 of Article VII (Executive
Department) 5 and by adding Article XVIII entitled "Transitory Provisions." 6 These proposed changes will shift the present Bicameral-Presidential system to a Unicameral-
Parliamentary form of government. The Lambino Group prayed that after due publication of their petition, the COMELEC should submit the following proposition in a plebiscite for
the voters' ratification:
DO YOU APPROVE THE AMENDMENT OF ARTICLES VI AND VII OF THE 1987 CONSTITUTION, CHANGING THE FORM OF GOVERNMENT FROM THE PRESENT
BICAMERAL-PRESIDENTIAL TO A UNICAMERAL-PARLIAMENTARY SYSTEM, AND PROVIDING ARTICLE XVIII AS TRANSITORY PROVISIONS FOR THE ORDERLY
SHIFT FROM ONE SYSTEM TO THE OTHER?
On 30 August 2006, the Lambino Group filed an Amended Petition with the COMELEC indicating modifications in the proposed Article XVIII (Transitory Provisions) of their
initiative. 7
The Ruling of the COMELEC
On 31 August 2006, the COMELEC issued its Resolution denying due course to the Lambino Group's petition for lack of an enabling law governing initiative petitions to amend the
Constitution. The COMELEC invoked this Court's ruling in Santiago v. Commission on Elections 8 declaring RA 6735 inadequate to implement the initiative clause on proposals
to amend the Constitution. 9
In G.R. No. 174153, the Lambino Group prays for the issuance of the writs of certiorari and mandamus to set aside the COMELEC Resolution of 31 August 2006 and to compel the
COMELEC to give due course to their initiative petition. The Lambino Group contends that the COMELEC committed grave abuse of discretion in denying due course to their
petition since Santiago is not a binding precedent. Alternatively, the Lambino Group claims that Santiago binds only the parties to that case, and their petition deserves
cognizance as an expression of the "will of the sovereign people."
In G.R. No. 174299, petitioners ("Binay Group") pray that the Court require respondent COMELEC Commissioners to show cause why they should not be cited in contempt for the
COMELEC's verification of signatures and for "entertaining" the Lambino Group's petition despite the permanent injunction in Santiago. The Court treated the Binay Group's
petition as an opposition-in-intervention.
In his Comment to the Lambino Group's petition, the Solicitor General joined causes with the petitioners, urging the Court to grant the petition despite the Santiagoruling. The
Solicitor General proposed that the Court treat RA 6735 and its implementing rules "as temporary devises to implement the system of initiative."
Various groups and individuals sought intervention, filing pleadings supporting or opposing the Lambino Group's petition. The supporting intervenors 10 uniformly hold the view
that the COMELEC committed grave abuse of discretion in relying on Santiago. On the other hand, the opposing intervenors 11 hold the contrary view and maintain
that Santiago is a binding precedent. The opposing intervenors also challenged (1) the Lambino Group's standing to file the petition; (2) the validity of the signature gathering
and verification process; (3) the Lambino Group's compliance with the minimum requirement for the percentage of voters supporting an initiative petition under Section 2, Article
XVII of the 1987 Constitution; 12 (4) the nature of the proposed changes as revisions and not mere amendments as provided under Section 2, Article XVII of the 1987
Constitution; and (5) the Lambino Group's compliance with the requirement in Section 10(a) of RA 6735 limiting initiative petitions to only one subject. ACETIa
The Court heard the parties and intervenors in oral arguments on 26 September 2006. After receiving the parties' memoranda, the Court considered the case submitted for
resolution.
The Issues
The petitions raise the following issues:
1. Whether the Lambino Group's initiative petition complies with Section 2, Article XVII of the Constitution on amendments to the Constitution through a
people's initiative;
2. Whether this Court should revisit its ruling in Santiago declaring RA 6735 "incomplete, inadequate or wanting in essential terms and conditions" to
implement the initiative clause on proposals to amend the Constitution; and
3. Whether the COMELEC committed grave abuse of discretion in denying due course to the Lambino Group's petition.
The Ruling of the Court
There is no merit to the petition.
The Lambino Group miserably failed to comply with the basic requirements of the Constitution for conducting a people's initiative. Thus, there is even no need to revisitSantiago,
as the present petition warrants dismissal based alone on the Lambino Group's glaring failure to comply with the basic requirements of the Constitution. For following the Court's
ruling in Santiago, no grave abuse of discretion is attributable to the Commission on Elections.
1. The Initiative Petition Does Not Comply with Section 2, Article XVII of the Constitution on Direct Proposal by the People
Section 2, Article XVII of the Constitution is the governing constitutional provision that allows a people's initiative to propose amendments to the Constitution. This section states:
Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through initiative upon a petition of at least
twelve per centum of the total number of registered voters of which every legislative district must be represented by at least three per centum of the
registered voters therein. . . . . (Emphasis supplied)
The deliberations of the Constitutional Commission vividly explain the meaning of an amendment "directly proposed by the people through initiative upon a petition,"
thus:
MR. RODRIGO: Let us look at the mechanics. Let us say some voters want to propose a constitutional amendment. Is the draft of the proposed
constitutional amendment ready to be shown to the people when they are asked to sign?

MR. SUAREZ: That can be reasonably assumed, Madam President.

MR. RODRIGO: What does the sponsor mean? The draft is ready and shown to them before they sign. Now, who prepares the draft?
MR. SUAREZ: The people themselves, Madam President.
MR. RODRIGO: No, because before they sign there is already a draft shown to them and they are asked whether or not they want to
propose this constitutional amendment.
MR. SUAREZ: As it is envisioned, any Filipino can prepare that proposal and pass it around for signature. 13 (Emphasis supplied)
Clearly, the framers of the Constitution intended that the "draft of the proposed constitutional amendment" should be "ready and shown" to the people "before" they
sign such proposal. The framers plainly stated that "before they sign there is already a draft shown to them." The framers also "envisioned" that the people should
sign on the proposal itself because the proponents must "prepare that proposal and pass it around for signature."
The essence of amendments "directly proposed by the people through initiative upon a petition" is that the entire proposal on its face is a petition by the people.
This means two essential elements must be present. First, the people must author and thus sign the entire proposal. No agent or representative can sign on their behalf. Second,
as an initiative upon a petition, the proposal must be embodied in a petition.
These essential elements are present only if the full text of the proposed amendments is first shown to the people who express their assent by signing such complete proposal in
a petition. Thus, an amendment is "directly proposed by the people through initiative upon a petition" only if the people sign on a petition that contains the full
text of the proposed amendments.
The full text of the proposed amendments may be either written on the face of the petition, or attached to it. If so attached, the petition must state the fact of such attachment.
This is an assurance that every one of the several millions of signatories to the petition had seen the full text of the proposed amendments before signing. Otherwise, it is
physically impossible, given the time constraint, to prove that every one of the millions of signatories had seen the full text of the proposed amendments before signing.
The framers of the Constitution directly borrowed 14 the concept of people's initiative from the United States where various State constitutions incorporate an initiative clause. In
almost all States 15 which allow initiative petitions, the unbending requirement is that the people must first see the full text of the proposed amendments before
they sign to signify their assent, and that the people must sign on an initiative petition that contains the full text of the proposed amendments . 16
The rationale for this requirement has been repeatedly explained in several decisions of various courts. Thus, in Capezzuto v. State Ballot Commission, the Supreme Court of
Massachusetts, affirmed by the First Circuit Court of Appeals, declared:
[A] signature requirement would be meaningless if the person supplying the signature has not first seen what it is that he or she is
signing. Further, and more importantly, loose interpretation of the subscription requirement can pose a significant potential for fraud. A person
permitted to describe orally the contents of an initiative petition to a potential signer, without the signer having actually examined the petition, could
easily mislead the signer by, for example, omitting, downplaying, or even flatly misrepresenting, portions of the petition that might not be to the
signer's liking. This danger seems particularly acute when, in this case, the person giving the description is the drafter of the petition,
who obviously has a vested interest in seeing that it gets the requisite signatures to qualify for the ballot. 17 (Boldfacing and
underscoring supplied)
Likewise, in Kerr v. Bradbury, 18 the Court of Appeals of Oregon explained:
The purposes of "full text" provisions that apply to amendments by initiative commonly are described in similar terms. . . . (The purpose of the full
text requirement is to provide sufficient information so that registered voters can intelligently evaluate whether to sign the initiative
petition."); . . . (publication of full text of amended constitutional provision required because it is "essential for the elector to have . . . the section
which is proposed to be added to or subtracted from. If he is to vote intelligently, he must have this knowledge. Otherwise in many instances he would
be required to vote in the dark.") (Emphasis supplied)
Moreover, "an initiative signer must be informed at the time of signing of the nature and effect of that which is proposed" and failure to do so is "deceptive and
misleading" which renders the initiative void. 19
Section 2, Article XVII of the Constitution does not expressly state that the petition must set forth the full text of the proposed amendments. However, the deliberations of the
framers of our Constitution clearly show that the framers intended to adopt the relevant American jurisprudence on people's initiative. In particular, the deliberations of the
Constitutional Commission explicitly reveal that the framers intended that the people must first see the full text of the proposed amendments before they sign, and
that the people must sign on a petition containing such full text. Indeed, Section 5(b) of Republic Act No. 6735, the Initiative and Referendum Act that the Lambino Group
invokes as valid, requires that the people must sign the "petition . . . as signatories." cADTSH
The proponents of the initiative secure the signatures from the people. The proponents secure the signatures in their private capacity and not as public officials. The proponents
are not disinterested parties who can impartially explain the advantages and disadvantages of the proposed amendments to the people. The proponents present favorably their
proposal to the people and do not present the arguments against their proposal. The proponents, or their supporters, often pay those who gather the signatures.
Thus, there is no presumption that the proponents observed the constitutional requirements in gathering the signatures. The proponents bear the burden of proving that they
complied with the constitutional requirements in gathering the signatures that the petition contained, or incorporated by attachment, the full text of the proposed
amendments.
The Lambino Group did not attach to their present petition with this Court a copy of the paper that the people signed as their initiative petition. The Lambino Group submitted to
this Court a copy of a signature sheet 20 after the oral arguments of 26 September 2006 when they filed their Memorandum on 11 October 2006. The signature sheet with this
Court during the oral arguments was the signature sheet attached 21 to the opposition in intervention filed on 7 September 2006 by intervenor Atty. Pete Quirino-Quadra.
The signature sheet attached to Atty. Quadra's opposition and the signature sheet attached to the Lambino Group's Memorandum are the same. We reproduce below the
signature sheet in full:
Province: City/Municipality: No. of
Verified
Legislative District: Barangay: Signatures:
PROPOSITION: "DO YOU APPROVE OF THE AMENDMENT OF ARTICLES VI AND VII OF THE 1987 CONSTITUTION, CHANGING THE FORM OF GOVERNMENT FROM THE PRESENT
BICAMERAL-PRESIDENTIAL TO A UNICAMERAL-PARLIAMENTARY SYSTEM OF GOVERNMENT, IN ORDER TO ACHIEVE GREATER EFFICIENCY, SIMPLICITY AND ECONOMY IN
GOVERNMENT; AND PROVIDING AN ARTICLE XVIII AS TRANSITORY PROVISIONS FOR THE ORDERLY SHIFT FROM ONE SYSTEM TO ANOTHER?"
I hereby APPROVE the proposed amendment to the 1987 Constitution. My signature herein which shall form part of the petition for initiative to amend the
Constitution signifies my support for the filing thereof.
There is not a single word, phrase, or sentence of text of the Lambino Group's proposed changes in the signature sheet. Neither does the signature sheet
state that the text of the proposed changes is attached to it. Petitioner Atty. Raul Lambino admitted this during the oral arguments before this Court on 26 September
2006.
The signature sheet merely asks a question whether the people approve a shift from the Bicameral-Presidential to the Unicameral-Parliamentary system of government. The
signature sheet does not show to the people the draft of the proposed changes before they are asked to sign the signature sheet. Clearly, the signature sheet is
not the "petition" that the framers of the Constitution envisioned when they formulated the initiative clause in Section 2, Article XVII of the Constitution.
Petitioner Atty. Lambino, however, explained that during the signature-gathering from February to August 2006, the Lambino Group circulated, together with the signature sheets,
printed copies of the Lambino Group's draft petition which they later filed on 25 August 2006 with the COMELEC. When asked if his group also circulated the draft of
their amended petition filed on 30 August 2006 with the COMELEC, Atty. Lambino initially replied that they circulated both. However, Atty. Lambino changed his answer and
stated that what his group circulated was the draft of the 30 August 2006 amended petition, not the draft of the 25 August 2006 petition.
The Lambino Group would have this Court believe that they prepared the draft of the 30 August 2006 amended petition almost seven months earlier in February 2006 when
they started gathering signatures. Petitioner Erico B. Aumentado's "Verification/Certification" of the 25 August 2006 petition, as well as of the 30 August 2006 amended petition,
filed with the COMELEC, states as follows:
I have caused the preparation of the foregoing [Amended] Petition in my personal capacity as a registered voter, for and on behalf of the Union of
Local Authorities of the Philippines, as shown by ULAP Resolution No. 2006-02 hereto attached, and as representative of the mass of
signatories hereto. (Emphasis supplied)

The Lambino Group failed to attach a copy of ULAP Resolution No. 2006-02 to the present petition. However, the "Official Website of the Union of Local Authorities of the
Philippines" 22 has posted the full text of Resolution No. 2006-02, which provides:

RESOLUTION NO. 2006-02

RESOLUTION SUPPORTING THE PROPOSALS OF THE PEOPLE'S CONSULTATIVE COMMISSION ON CHARTER CHANGE THROUGH PEOPLE'S
INITIATIVE AND REFERENDUM AS A MODE OF AMENDING THE 1987 CONSTITUTION
WHEREAS, there is a need for the Union of Local Authorities of the Philippines (ULAP) to adopt a common stand on the approach to support the
proposals of the People's Consultative Commission on Charter Change;
WHEREAS, ULAP maintains its unqualified support to the agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms as
embodied in the ULAP Joint Declaration for Constitutional Reforms signed by the members of the ULAP and the majority coalition of the House of
Representatives in Manila Hotel sometime in October 2005;
WHEREAS, the People's Consultative Commission on Charter Change created by Her Excellency to recommend amendments to the 1987
Constitution has submitted its final report sometime in December 2005;
WHEREAS, the ULAP is mindful of the current political developments in Congress which militates against the use of the expeditious form of amending
the 1987 Constitution;
WHEREAS, subject to the ratification of its institutional members and the failure of Congress to amend the Constitution as a constituent assembly,
ULAP has unanimously agreed to pursue the constitutional reform agenda through People's Initiative and Referendum without prejudice to other
pragmatic means to pursue the same;
WHEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, THAT ALL THE MEMBER-LEAGUES OF THE UNION OF LOCAL AUTHORITIES OF
THE PHILIPPINES (ULAP) SUPPORT THE PORPOSALS (SIC) OF THE PEOPLE'S CONSULATATIVE (SIC) COMMISSION ON CHARTER CHANGE
THROUGH PEOPLE'S INITIATIVE AND REFERENDUM AS A MODE OF AMENDING THE 1987 CONSTITUTION;
DONE, during the ULAP National Executive Board special meeting held on 14 January 2006 at the Century Park Hotel, Manila. 23 (Underscoring
supplied)
ULAP Resolution No. 2006-02 does not authorize petitioner Aumentado to prepare the 25 August 2006 petition, or the 30 August 2006 amended petition, filed with the
COMELEC. ULAP Resolution No. 2006-02 "support(s) the porposals (sic) of the Consulatative (sic) Commission on Charter Change through people's initiative and
referendum as a mode of amending the 1987 Constitution." The proposals of the Consultative Commission 24 are vastly different from the proposed changes of the Lambino
Group in the 25 August 2006 petition or 30 August 2006 amended petition filed with the COMELEC.
For example, the proposed revisions of the Consultative Commission affect all provisions of the existing Constitution,from the Preamble to the Transitory Provisions. The
proposed revisions have profound impact on the Judiciary and the National Patrimony provisions of the existing Constitution,provisions that the Lambino Group's proposed
changes do not touch. The Lambino Group's proposed changes purport to affect only Articles VI and VII of the existingConstitution,including the introduction of new Transitory
Provisions.
The ULAP adopted Resolution No. 2006-02 on 14 January 2006 or more than six months before the filing of the 25 August 2006 petition or the 30 August 2006 amended petition
with the COMELEC. However, ULAP Resolution No. 2006-02 does not establish that ULAP or the Lambino Group caused the circulation of the draft petition, together with the
signature sheets, six months before the filing with the COMELEC. On the contrary, ULAP Resolution No. 2006-02 casts grave doubt on the Lambino Group's claim that they
circulated the draft petition together with the signature sheets. ULAP Resolution No. 2006-02 does not refer at all to the draft petition or to the Lambino Group's
proposed changes.
In their Manifestation explaining their amended petition before the COMELEC, the Lambino Group declared:
After the Petition was filed, Petitioners belatedly realized that the proposed amendments alleged in the Petition, more specifically, paragraph 3 of
Section 4 and paragraph 2 of Section 5 of the Transitory Provisions were inaccurately stated and failed to correctly reflect their proposed
amendments. AaDSEC
The Lambino Group did not allege that they were amending the petition because the amended petition was what they had shown to the people during the February to
August 2006 signature-gathering. Instead, the Lambino Group alleged that the petition of 25 August 2006 "inaccurately stated and failed to correctly reflect their proposed
amendments."
The Lambino Group never alleged in the 25 August 2006 petition or the 30 August 2006 amended petition with the COMELEC that they circulated printed copies of the draft
petition together with the signature sheets. Likewise, the Lambino Group did not allege in their present petition before this Court that they circulated printed copies of the draft
petition together with the signature sheets. The signature sheets do not also contain any indication that the draft petition is attached to, or circulated with, the signature sheets.
It is only in their Consolidated Reply to the Opposition-in-Interventions that the Lambino Group first claimed that they circulated the "petition for initiative filed with the
COMELEC," thus:
[T]here is persuasive authority to the effect that "(w)here there is not (sic) fraud, a signer who did not read the measure attached to a
referendum petition cannot question his signature on the ground that he did not understand the nature of the act." [82 C.J.S. S128h. Mo.
State v. Sullivan, 224, S.W. 327, 283 Mo. 546.] Thus, the registered voters who signed the signature sheets circulated together with the
petition for initiative filed with the COMELEC below, are presumed to have understood the proposition contained in the petition. (Emphasis
supplied)
The Lambino Group's statement that they circulated to the people "the petition for initiative filed with the COMELEC" appears an afterthought, made after the intervenors
Integrated Bar of the Philippines (Cebu City Chapter and Cebu Province Chapters) and Atty. Quadra had pointed out that the signature sheets did not contain the text of the
proposed changes. In their Consolidated Reply, the Lambino Group alleged that they circulated "the petition for initiative" but failed to mention the amended petition. This
contradicts what Atty. Lambino finally stated during the oral arguments that what they circulated was the draft of the amended petition of 30 August 2006.
The Lambino Group cites as authority Corpus Juris Secundum, stating that "a signer who did not read the measure attached to a referendum petition cannot question his
signature on the ground that he did not understand the nature of the act." The Lambino Group quotes an authority that cites a proposed changeattached to the petition
signed by the people. Even the authority the Lambino Group quotes requires that the proposed change must be attached to the petition. The same authority the Lambino
Group quotes requires the people to sign on the petition itself.
Indeed, it is basic in American jurisprudence that the proposed amendment must be incorporated with, or attached to, the initiative petition signed by the people. In the present
initiative, the Lambino Group's proposed changes were not incorporated with, or attached to, the signature sheets. The Lambino Group's citation of Corpus Juris Secundum pulls
the rug from under their feet.
It is extremely doubtful that the Lambino Group prepared, printed, circulated, from February to August 2006 during the signature-gathering period, the draft of the petition or
amended petition they filed later with the COMELEC. The Lambino Group are less than candid with this Court in their belated claim that they printed and circulated, together with
the signature sheets, the petition or amended petition. Nevertheless, even assuming the Lambino Group circulated the amended petition during the signature-
gathering period, the Lambino Group admitted circulating only very limited copies of the petition.
During the oral arguments, Atty. Lambino expressly admitted that they printed only 100,000 copies of the draft petition they filed more than six months later
with the COMELEC. Atty. Lambino added that he also asked other supporters to print additional copies of the draft petition but he could not state with certainty how many
additional copies the other supporters printed. Atty. Lambino could only assure this Court of the printing of 100,000 copies because he himself caused the printing
of these 100,000 copies.
Likewise, in the Lambino Group's Memorandum filed on 11 October 2006, the Lambino Group expressly admit that "petitioner Lambino initiated the printing and
reproduction of 100,000 copies of the petition for initiative . . . ." 25 This admission binds the Lambino Group and establishes beyond any doubt that the
Lambino Group failed to show the full text of the proposed changes to the great majority of the people who signed the signature sheets.
Thus, of the 6.3 million signatories, only 100,000 signatories could have received with certainty one copy each of the petition, assuming a 100 percent distribution with no
wastage. If Atty. Lambino and company attached one copy of the petition to each signature sheet, only 100,000 signature sheets could have circulated with the petition. Each
signature sheet contains space for ten signatures. Assuming ten people signed each of these 100,000 signature sheets with the attached petition, the maximum number of people
who saw the petition before they signed the signature sheets would not exceed 1,000,000.
With only 100,000 printed copies of the petition, it would be physically impossible for all or a great majority of the 6.3 million signatories to have seen the petition before they
signed the signature sheets. The inescapable conclusion is that the Lambino Group failed to show to the 6.3 million signatories the full text of the proposed
changes. If ever, not more than one million signatories saw the petition before they signed the signature sheets.

In any event, the Lambino Group's signature sheets do not contain the full text of the proposed changes, either on the face of the signature sheets, or as attachment with an
indication in the signature sheet of such attachment. Petitioner Atty. Lambino admitted this during the oral arguments, and this admission binds the Lambino
Group. This fact is also obvious from a mere reading of the signature sheet. This omission is fatal. The failure to so include the text of the proposed changes in the
signature sheets renders the initiative void for non-compliance with the constitutional requirement that the amendment must be "directly proposed by the people through
initiative upon a petition." The signature sheet is not the "petition" envisioned in the initiative clause of the Constitution.
For sure, the great majority of the 6.3 million people who signed the signature sheets did not see the full text of the proposed changes before signing. They could not have known
the nature and effect of the proposed changes, among which are:
1. The term limits on members of the legislature will be lifted and thus members of Parliament can be re-elected indefinitely; 26
2. The interim Parliament can continue to function indefinitely until its members, who are almost all the present members of Congress, decide to call for
new parliamentary elections. Thus, the members of the interim Parliament will determine the expiration of their own term of
office; 27
3. Within 45 days from the ratification of the proposed changes, the interim Parliament shall convene to propose further amendments or
revisions to the Constitution. 28
These three specific amendments are not stated or even indicated in the Lambino Group's signature sheets. The people who signed the signature sheets had no idea that they
were proposing these amendments. These three proposed changes are highly controversial. The people could not have inferred or divined these proposed changes merely from a
reading or rereading of the contents of the signature sheets.
During the oral arguments, petitioner Atty. Lambino stated that he and his group assured the people during the signature-gathering that the elections for the regular
Parliament would be held during the 2007 local elections if the proposed changes were ratified before the 2007 local elections. However, the text of the proposed
changes belies this.
The proposed Section 5(2), Article XVIII on Transitory Provisions, as found in the amended petition, states:
Section 5(2). The interim Parliament shall provide for the election of the members of Parliament, which shall be synchronized and held
simultaneously with the election of all local government officials. . . . . (Emphasis supplied)
Section 5(2) does not state that the elections for the regular Parliament will be held simultaneously with the 2007 local elections. This section merely requires that the
elections for the regular Parliament shall be held simultaneously with the local elections without specifying the year.
Petitioner Atty. Lambino, who claims to be the principal drafter of the proposed changes, could have easily written the word "next" before the phrase "election of all local
government officials." This would have insured that the elections for the regular Parliament would be held in the next local elections following the ratification of the proposed
changes. However, the absence of the word "next" allows the interim Parliament to schedule the elections for the regular Parliament simultaneously withany future local
elections. CDISAc
Thus, the members of the interim Parliament will decide the expiration of their own term of office. This allows incumbent members of the House of Representatives to hold office
beyond their current three-year term of office, and possibly even beyond the five-year term of office of regular members of the Parliament. Certainly, this is contrary to the
representations of Atty. Lambino and his group to the 6.3 million people who signed the signature sheets. Atty. Lambino and his group deceived the 6.3
million signatories, and even the entire nation.
This lucidly shows the absolute need for the people to sign an initiative petition that contains the full text of the proposed amendments to avoid fraud or misrepresentation. In
the present initiative, the 6.3 million signatories had to rely on the verbal representations of Atty. Lambino and his group because the signature sheets did not contain the full
text of the proposed changes. The result is a grand deception on the 6.3 million signatories who were led to believe that the proposed changes would require the holding in
2007 of elections for the regular Parliament simultaneously with the local elections.
The Lambino Group's initiative springs another surprise on the people who signed the signature sheets. The proposed changes mandate the interim Parliament to make further
amendments or revisions to the Constitution. The proposed Section 4(4), Article XVIII on Transitory Provisions, provides:
Section 4(4). Within forty-five days from ratification of these amendments, the interim Parliament shall convene to propose amendments to, or
revisions of, thisConstitution consistent with the principles of local autonomy, decentralization and a strong bureaucracy. (Emphasis supplied)
During the oral arguments, Atty. Lambino stated that this provision is a "surplusage" and the Court and the people should simply ignore it. Far from being a surplusage, this
provision invalidates the Lambino Group's initiative.
Section 4(4) is a subject matter totally unrelated to the shift from the Bicameral-Presidential to the Unicameral-Parliamentary system. American jurisprudence on initiatives
outlaws this as logrolling when the initiative petition incorporates an unrelated subject matter in the same petition. This puts the people in a dilemma since they can answer
only either yes or no to the entire proposition, forcing them to sign a petition that effectively contains two propositions, one of which they may find unacceptable.
Under American jurisprudence, the effect of logrolling is to nullify the entire proposition and not only the unrelated subject matter. Thus, in Fine v. Firestone, 29 the
Supreme Court of Florida declared:
Combining multiple propositions into one proposal constitutes "logrolling," which, if our judicial responsibility is to mean anything, we
cannot permit. The very broadness of the proposed amendment amounts to logrolling because the electorate cannot know what it is voting on the
amendment's proponents' simplistic explanation reveals only the tip of the iceberg. . . . . The ballot must give the electorate fair notice of the proposed
amendment being voted on. . . . . The ballot language in the instant case fails to do that. The very broadness of the proposal makes it impossible to
state what it will affect and effect and violates the requirement that proposed amendments embrace only one subject. (Emphasis supplied)
Logrolling confuses and even deceives the people. In Yute Air Alaska v. McAlpine, 30 the Supreme Court of Alaska warned against "inadvertence, stealth and fraud" in
logrolling:
Whenever a bill becomes law through the initiative process, all of the problems that the single-subject rule was enacted to prevent are exacerbated.
There is a greater danger of logrolling, or the deliberate intermingling of issues to increase the likelihood of an initiative's passage, and there is a
greater opportunity for "inadvertence, stealth and fraud" in the enactment-by-initiative process. The drafters of an initiative operate
independently of any structured or supervised process. They often emphasize particular provisions of their proposition, while remaining silent on other
(more complex or less appealing) provisions, when communicating to the public. . . . Indeed, initiative promoters typically use simplistic
advertising to present their initiative to potential petition-signers and eventual voters. Many voters will never read the full text of the
initiative before the election. More importantly, there is no process for amending or splitting the several provisions in an initiative proposal. These
difficulties clearly distinguish the initiative from the legislative process. (Emphasis supplied)
Thus, the present initiative appears merely a preliminary step for further amendments or revisions to be undertaken by the interim Parliament as a constituent assembly. The
people who signed the signature sheets could not have known that their signatures would be used to propose an amendment mandating the interim Parliament to
propose further amendments or revisions to the Constitution.
Apparently, the Lambino Group inserted the proposed Section 4(4) to compel the interim Parliament to amend or revise again the Constitution within 45 days from ratification of
the proposed changes, or before the May 2007 elections. In the absence of the proposed Section 4(4), the interim Parliament has the discretion whether to amend or revise
again the Constitution. With the proposed Section 4(4), the initiative proponents want the interim Parliament mandated to immediately amend or revise again the Constitution.
However, the signature sheets do not explain the reason for this rush in amending or revising again so soon the Constitution. The signature sheets do not also explain what
specific amendments or revisions the initiative proponents want the interim Parliament to make, and why there is a need for such further amendments or revisions. The people
are again left in the dark to fathom the nature and effect of the proposed changes. Certainly, such an initiative is not "directly proposed by the people" because the
people do not even know the nature and effect of the proposed changes.
There is another intriguing provision inserted in the Lambino Group's amended petition of 30 August 2006. The proposed Section 4(3) of the Transitory Provisions states:
Section 4(3). Senators whose term of office ends in 2010 shall be members of Parliament until noon of the thirtieth day of June 2010.

After 30 June 2010, not one of the present Senators will remain as member of Parliament if the interim Parliament does not schedule elections for the regular Parliament by
30 June 2010. However, there is no counterpart provision for the present members of the House of Representatives even if their term of office will all end on 30 June 2007,
three years earlier than that of half of the present Senators. Thus, all the present members of the House will remain members of the interim Parliament after 30 June 2010.
The term of the incumbent President ends on 30 June 2010. Thereafter, the Prime Minister exercises all the powers of the President. If the interim Parliament does not schedule
elections for the regular Parliament by 30 June 2010, the Prime Minister will come only from the present members of the House of Representatives to theexclusion of the present
Senators.
The signature sheets do not explain this discrimination against the Senators. The 6.3 million people who signed the signature sheets could not have known that their
signatures would be used to discriminate against the Senators. They could not have known that their signatures would be used to limit, after 30 June 2010,
the interim Parliament's choice of Prime Minister only to members of the existing House of Representatives.
An initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception, and can operate as
a gigantic fraud on the people. That is why the Constitution requires that an initiative must be "directly proposed by the people . . . in a petition" meaning that the
people must sign on a petition that contains the full text of the proposed amendments. On so vital an issue as amending the nation's fundamental law, the writing of the text of
the proposed amendments cannot be hidden from the people under a general or special power of attorney to unnamed, faceless, and unelected individuals.
The Constitution entrusts to the people the power to directly propose amendments to the Constitution. This Court trusts the wisdom of the people even if the members of this
Court do not personally know the people who sign the petition. However, this trust emanates from a fundamental assumption: the full text of the proposed
amendment is first shown to the people before they sign the petition, not after they have signed the petition.
In short, the Lambino Group's initiative is void and unconstitutional because it dismally fails to comply with the requirement of Section 2, Article XVII of the Constitutionthat the
initiative must be "directly proposed by the people through initiative upon a petition."
2. The Initiative Violates Section 2, Article XVII of the Constitution Disallowing Revision through Initiatives
A people's initiative to change the Constitution applies only to an amendment of the Constitution and not to its revision. In contrast, Congress or a constitutional convention can
propose both amendments and revisions to the Constitution. Article XVII of the Constitution provides:
ARTICLE XVII
AMENDMENTS OR REVISIONS
Sec. 1. Any amendment to, or revision of, this Constitution may be proposed by:
(1) The Congress, upon a vote of three-fourths of all its Members, or CcTIDH
(2) A constitutional convention.
Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through initiative . . . . (Emphasis supplied)
Article XVII of the Constitution speaks of three modes of amending the Constitution. The first mode is through Congress upon three-fourths vote of all its Members. The second
mode is through a constitutional convention. The third mode is through a people's initiative.
Section 1 of Article XVII, referring to the first and second modes, applies to "[A]ny amendment to, or revision of, this Constitution." In contrast, Section 2 of Article XVII,
referring to the third mode, applies only to "[A]mendments to this Constitution." This distinction was intentional as shown by the following deliberations of the Constitutional
Commission:
MR. SUAREZ: Thank you, Madam President.
May we respectfully call the attention of the Members of the Commission that pursuant to the mandate given to us last night, we submitted this afternoon a
complete Committee Report No. 7 which embodies the proposed provision governing the matter of initiative. This is now covered by Section 2 of the complete
committee report. With the permission of the Members, may I quote Section 2:
The people may, after five years from the date of the last plebiscite held, directly propose amendments to this Constitution thru initiative upon petition of at least ten
percent of the registered voters.
This completes the blanks appearing in the original Committee Report No. 7. This proposal was suggested on the theory that this matter of initiative, which came
about because of the extraordinary developments this year, has to be separated from the traditional modes of amending the Constitution as embodied in Section
1. The committee members felt that this system of initiative should be limited to amendments to the Constitution and should not extend to the
revision of the entire Constitution,so we removed it from the operation of Section 1 of the proposed Article on Amendment or Revision. . . . .
xxx xxx xxx
 MS. AQUINO: [I] am seriously bothered by providing this process of initiative as a separate section in the Article on Amendment. Would the sponsor be
amenable to accepting an amendment in terms of realigning Section 2 as another subparagraph (c) of Section 1, instead of setting it up as another
separate section as if it were a self-executing provision?
MR. SUAREZ: We would be amenable except that, as we clarified a while ago, this process of initiative is limited to the matter of amendment
and should not expand into a revision which contemplates a total overhaul of the Constitution. That was the sense that was conveyed by
the Committee.
MS. AQUINO: In other words, the Committee was attempting to distinguish the coverage of modes (a) and (b) in Section 1 to include the
process of revision; whereas, the process of initiation to amend, which is given to the public, would only apply to amendments?
MR. SUAREZ: That is right. Those were the terms envisioned in the Committee.
MS. AQUINO: I thank the sponsor; and thank you, Madam President.
xxx xxx xxx
MR. MAAMBONG: My first question: Commissioner Davide's proposed amendment on line 1 refers to "amendments." Does it not cover
the word "revision" as defined by Commissioner Padilla when he made the distinction between the words "amendments" and
"revision"?
MR. DAVIDE: No, it does not, because "amendments" and "revision" should be covered by Section 1. So insofar as initiative is
concerned, it can only relate to "amendments" not "revision."
MR. MAAMBONG: Thank you. 31 (Emphasis supplied)
There can be no mistake about it. The framers of the Constitution intended, and wrote, a clear distinction between "amendment" and "revision" of the Constitution. The
framers intended, and wrote, that only Congress or a constitutional convention may propose revisions to the Constitution. The framers intended, and wrote, that a people's
initiative may propose only amendments to the Constitution. Where the intent and language of the Constitution clearly withhold from the people the power to propose revisions
to the Constitution, the people cannot propose revisions even as they are empowered to propose amendments.
This has been the consistent ruling of state supreme courts in the United States. Thus, in McFadden v. Jordan, 32 the Supreme Court of California ruled:
The initiative power reserved by the people by amendment to the Constitution . . . applies only to the proposing and the adopting or
rejecting of 'laws and amendments to the Constitution' and does not purport to extend to a constitutional revision. . . . . It is thus clear
that a revision of the Constitution may be accomplished only through ratification by the people of a revised constitution proposed by a convention
called for that purpose as outlined hereinabove. Consequently if the scope of the proposed initiative measure (hereinafter termed 'the measure') now
before us is so broad that if such measure became law a substantial revision of our present state Constitution would be effected, then the measure may
not properly be submitted to the electorate until and unless it is first agreed upon by a constitutional convention, and the writ sought by petitioner
should issue. . . . . (Emphasis supplied)
Likewise, the Supreme Court of Oregon ruled in Holmes v. Appling: 33
It is well established that when a constitution specifies the manner in which it may be amended or revised, it can be altered by those who favor
amendments, revision, or other change only through the use of one of the specified means. The constitution itself recognizes that there is a difference
between an amendment and a revision; and it is obvious from an examination of the measure here in question that it is not an amendment as that term
is generally understood and as it is used in Article IV, Section 1. The document appears to be based in large part on the revision of the
constitution drafted by the 'Commission for Constitutional Revision' authorized by the 1961 Legislative Assembly, . . . and submitted to the 1963
Legislative Assembly. It failed to receive in the Assembly the two-third's majority vote of both houses required by Article XVII, Section 2, and hence
failed of adoption, . . . .
While differing from that document in material respects, the measure sponsored by the plaintiffs is, nevertheless, a thorough overhauling of the present
constitution . . . .
To call it an amendment is a misnomer.
Whether it be a revision or a new constitution, it is not such a measure as can be submitted to the people through the initiative. If a revision, it is
subject to the requirements of Article XVII, Section 2(1); if a new constitution, it can only be proposed at a convention called in the manner provided in
Article XVII, Section 1. . . . .

Similarly, in this jurisdiction there can be no dispute that a people's initiative can only propose amendments to the Constitution since the Constitution itself limits initiatives to
amendments. There can be no deviation from the constitutionally prescribed modes of revising the Constitution. A popular clamor, even one backed by 6.3 million signatures,
cannot justify a deviation from the specific modes prescribed in the Constitution itself.
As the Supreme Court of Oklahoma ruled in In re Initiative Petition No. 364: 34
It is a fundamental principle that a constitution can only be revised or amended in the manner prescribed by the instrument itself, and
that any attempt to revise a constitution in a manner other than the one provided in the instrument is almost invariably treated as
extra-constitutional and revolutionary. . . . . "While it is universally conceded that the people are sovereign and that they have power to adopt
a constitution and to change their own work at will, they must, in doing so, act in an orderly manner and according to the settled principles of
constitutional law. And where the people, in adopting a constitution,have prescribed the method by which the people may alter or amend it, an attempt
to change the fundamental law in violation of the self-imposed restrictions, is unconstitutional." . . . . (Emphasis supplied)
This Court, whose members are sworn to defend and protect the Constitution, cannot shirk from its solemn oath and duty to insure compliance with the clear command
of the Constitution that a people's initiative may only amend, never revise, the Constitution.
The question is, does the Lambino Group's initiative constitute an amendment or revision of the Constitution? If the Lambino Group's initiative constitutes a revision, then the
present petition should be dismissed for being outside the scope of Section 2, Article XVII of the Constitution.
Courts have long recognized the distinction between an amendment and a revision of a constitution. One of the earliest cases that recognized the distinction described the
fundamental difference in this manner:
[T]he very term "constitution" implies an instrument of a permanent and abiding nature, and the provisions contained therein for its revision
indicate the will of the people that the underlying principles upon which it rests, as well as the substantial entirety of the instrument,
shall be of a like permanent and abiding nature. On the other hand, the significance of the term "amendment" implies such an addition or change
within the lines of the original instrument as will effect an improvement, or better carry out the purpose for which it was framed. 35 (Emphasis
supplied) CDISAc
Revision broadly implies a change that alters a basic principle in the constitution, like altering the principle of separation of powers or the system of checks-and-balances.
There is also revision if the change alters the substantial entirety of the constitution, as when the change affects substantial provisions of the constitution. On the
other hand, amendment broadly refers to a change that adds, reduces, or deletes without altering the basic principle involved. Revision generally affects several
provisions of the constitution, while amendment generally affects only the specific provision being amended.
In California where the initiative clause allows amendments but not revisions to the constitution just like in our Constitution,courts have developed a two-part test: the
quantitative test and the qualitative test. The quantitative test asks whether the proposed change is "so extensive in its provisions as to change directly the 'substantial entirety'
of the constitution by the deletion or alteration of numerous existing provisions." 36 The court examines only the number of provisions affected and does not consider the degree
of the change.
The qualitative test inquires into the qualitative effects of the proposed change in the constitution. The main inquiry is whether the change will "accomplish such far reaching
changes in the nature of our basic governmental plan as to amount to a revision." 37 Whether there is an alteration in the structure of government is a proper subject of inquiry.
Thus, "a change in the nature of [the] basic governmental plan" includes "change in its fundamental framework or the fundamental powers of its Branches." 38 A change in the
nature of the basic governmental plan also includes changes that "jeopardize the traditional form of government and the system of check and balances." 39
Under both the quantitative and qualitative tests, the Lambino Group's initiative is a revision and not merely an amendment. Quantitatively, the Lambino Group's proposed
changes overhaul two articles Article VI on the Legislature and Article VII on the Executive affecting a total of 105 provisions in the entire Constitution. 40Qualitatively, the
proposed changes alter substantially the basic plan of government, from presidential to parliamentary, and from a bicameral to a unicameral legislature.
A change in the structure of government is a revision of the Constitution, as when the three great co-equal branches of government in the present Constitution are reduced into
two. This alters the separation of powers in the Constitution. A shift from the present Bicameral-Presidential system to a Unicameral-Parliamentary system is a revision
of the Constitution. Merging the legislative and executive branches is a radical change in the structure of government.
The abolition alone of the Office of the President as the locus of Executive Power alters the separation of powers and thus constitutes a revision of the Constitution. Likewise, the
abolition alone of one chamber of Congress alters the system of checks-and-balances within the legislature and constitutes a revision of the Constitution.
By any legal test and under any jurisdiction, a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system, involving the abolition of the Office of the President
and the abolition of one chamber of Congress, is beyond doubt a revision, not a mere amendment. On the face alone of the Lambino Group's proposed changes, it is readily
apparent that the changes will radically alter the framework of government as set forth in the Constitution. Father Joaquin Bernas, S.J., a leading member of the
Constitutional Commission, writes:
An amendment envisages an alteration of one or a few specific and separable provisions. The guiding original intention of an amendment is to improve
specific parts or to add new provisions deemed necessary to meet new conditions or to suppress specific portions that may have become obsolete or
that are judged to be dangerous. In revision, however, the guiding original intention and plan contemplates a re-examination of the entire document, or
of provisions of the document which have over-all implications for the entire document, to determine how and to what extent they should be
altered. Thus, for instance a switch from the presidential system to a parliamentary system would be a revision because of its over-all
impact on the entire constitutional structure. So would a switch from a bicameral system to a unicameral system be because of its
effect on other important provisions of the Constitution. 41 (Emphasis supplied)
In Adams v. Gunter, 42 an initiative petition proposed the amendment of the Florida State constitution to shift from a bicameral to a unicameral legislature. The issue
turned on whether the initiative "was defective and unauthorized where [the] proposed amendment would . . . affect several other provisions of [the]Constitution." The Supreme
Court of Florida, striking down the initiative as outside the scope of the initiative clause, ruled as follows:
The proposal here to amend Section 1 of Article III of the 1968 Constitution to provide for a Unicameral Legislature affects not only many other
provisions of the Constitution but provides for a change in the form of the legislative branch of government, which has been in existence
in the United States Congress and in all of the states of the nation, except one, since the earliest days. It would be difficult to visualize a more
revolutionary change. The concept of a House and a Senate is basic in the American form of government. It would not only radically change the
whole pattern of government in this state and tear apart the whole fabric of the Constitution, but would even affect the physical
facilities necessary to carry on government.
xxx xxx xxx
We conclude with the observation that if such proposed amendment were adopted by the people at the General Election and if the Legislature at its
next session should fail to submit further amendments to revise and clarify the numerous inconsistencies and conflicts which would result, or if after
submission of appropriate amendments the people should refuse to adopt them, simple chaos would prevail in the government of this State. The same
result would obtain from an amendment, for instance, of Section 1 of Article V, to provide for only a Supreme Court and Circuit Courts-and there could
be other examples too numerous to detail. These examples point unerringly to the answer.
The purpose of the long and arduous work of the hundreds of men and women and many sessions of the Legislature in bringing about the
Constitution of 1968 was to eliminate inconsistencies and conflicts and to give the State a workable, accordant, homogenous and up-to-date document.
All of this could disappear very quickly if we were to hold that it could be amended in the manner proposed in the initiative petition here. 43 (Emphasis
supplied)
The rationale of the Adams decision applies with greater force to the present petition. The Lambino Group's initiative not only seeks a shift from a bicameral to a unicameral
legislature, it also seeks to merge the executive and legislative departments. The initiative in Adams did not even touch the executive department.

In Adams, the Supreme Court of Florida enumerated 18 sections of the Florida Constitution that would be affected by the shift from a bicameral to a unicameral legislature. In the
Lambino Group's present initiative, no less than 105 provisions of the Constitution would be affected based on the count of Associate Justice Romeo J. Callejo, Sr. 44 There
is no doubt that the Lambino Group's present initiative seeks far more radical changes in the structure of government than the initiative inAdams.
The Lambino Group theorizes that the difference between "amendment" and "revision" is only one of procedure, not of substance. The Lambino Group posits that when a
deliberative body drafts and proposes changes to the Constitution, substantive changes are called "revisions" because members of the deliberative body work full-time on
the changes. However, the same substantive changes, when proposed through an initiative, are called "amendments" because the changes are made by ordinary people
who do not make an "occupation, profession, or vocation" out of such endeavor.
Thus, the Lambino Group makes the following exposition of their theory in their Memorandum:
99. With this distinction in mind, we note that the constitutional provisions expressly provide for both "amendment" and "revision" when it speaks of
legislators and constitutional delegates, while the same provisions expressly provide only for "amendment" when it speaks of the people. It would seem
that the apparent distinction is based on the actual experience of the people, that on one hand the common people in general are not expected to work
full-time on the matter of correcting the constitution because that is not their occupation, profession or vocation; while on the other hand, the
legislators and constitutional convention delegates are expectedto work full-time on the same matter because that is their occupation, profession or
vocation. Thus, the difference between the words "revision" and "amendment" pertain only to the process or procedure of coming up
with the corrections, for purposes of interpreting the constitutional provisions.
100. Stated otherwise, the difference between "amendment" and "revision" cannot reasonably be in the substance or extent of the
correction. . . . . (Underlining in the original; boldfacing supplied)
The Lambino Group in effect argues that if Congress or a constitutional convention had drafted the same proposed changes that the Lambino Group wrote in the present initiative,
the changes would constitute a revision of the Constitution. Thus, the Lambino Group concedes that the proposed changes in the present initiative constitute a
revision if Congress or a constitutional convention had drafted the changes. However, since the Lambino Group as private individuals drafted the proposed changes, the
changes are merely amendments to the Constitution. The Lambino Group trivializes the serious matter of changing the fundamental law of the land.
The express intent of the framers and the plain language of the Constitution contradict the Lambino Group's theory. Where the intent of the framers and the language
of the Constitution are clear and plainly stated, courts do not deviate from such categorical intent and language. 45 Any theory espousing a construction contrary to such intent
and language deserves scant consideration. More so, if such theory wreaks havoc by creating inconsistencies in the form of government established in the Constitution. Such a
theory, devoid of any jurisprudential mooring and inviting inconsistencies in the Constitution, only exposes the flimsiness of the Lambino Group's position. Any theory advocating
that a proposed change involving a radical structural change in government does not constitute a revision justly deserves rejection.
The Lambino Group simply recycles a theory that initiative proponents in American jurisdictions have attempted to advance without any success. In Lowe v. Keisling, 46the
Supreme Court of Oregon rejected this theory, thus:
Mabon argues that Article XVII, section 2, does not apply to changes to the constitution proposed by initiative. His theory is that Article XVII,
section 2 merely provides a procedure by which the legislature can propose a revision of the constitution, but it does not affect
proposed revisions initiated by the people. AcaEDC
Plaintiffs argue that the proposed ballot measure constitutes a wholesale change to the constitution that cannot be enacted through the initiative
process. They assert that the distinction between amendment and revision is determined by reviewing the scope and subject matter of the proposed
enactment, and that revisions are not limited to "a formal overhauling of the constitution." They argue that this ballot measure proposes far reaching
changes outside the lines of the original instrument, including profound impacts on existing fundamental rights and radical restructuring of the
government's relationship with a defined group of citizens. Plaintiffs assert that, because the proposed ballot measure "will refashion the most basic
principles of Oregon constitutional law," the trial court correctly held that it violated Article XVII, section 2, and cannot appear on the ballot without the
prior approval of the legislature.
We first address Mabon's argument that Article XVII, section 2(1), does not prohibit revisions instituted by initiative. In Holmes v. Appling, . . ., the
Supreme Court concluded that a revision of the constitution may not be accomplished by initiative, because of the provisions of Article XVII, section 2.
After reviewing Article XVII, section1, relating to proposed amendments, the court said:
"From the foregoing it appears that Article IV, Section 1, authorizes the use of the initiative as a means of amending the Oregon
Constitution,but it contains no similar sanction for its use as a means of revising the constitution." . . . .
It then reviewed Article XVII, section 2, relating to revisions, and said: "It is the only section of the constitution which provides the means for
constitutional revision and it excludes the idea that an individual, through the initiative, may place such a measure before the electorate." . . . .
Accordingly, we reject Mabon's argument that Article XVII, section 2, does not apply to constitutional revisions proposed by initiative.
(Emphasis supplied)
Similarly, this Court must reject the Lambino Group's theory which negates the express intent of the framers and the plain language of the Constitution.
We can visualize amendments and revisions as a spectrum, at one end green for amendments and at the other end red for revisions. Towards the middle of the spectrum, colors
fuse and difficulties arise in determining whether there is an amendment or revision. The present initiative is indisputably located at the far end of the red spectrum where
revision begins. The present initiative seeks a radical overhaul of the existing separation of powers among the three co-equal departments of government, requiring far-reaching
amendments in several sections and articles of the Constitution.
Where the proposed change applies only to a specific provision of the Constitution without affecting any other section or article, the change may generally be considered an
amendment and not a revision. For example, a change reducing the voting age from 18 years to 15 years 47 is an amendment and not a revision. Similarly, a change reducing
Filipino ownership of mass media companies from 100 percent to 60 percent is an amendment and not a revision. 48 Also, a change requiring a college degree as an additional
qualification for election to the Presidency is an amendment and not a revision. 49
The changes in these examples do not entail any modification of sections or articles of the Constitution other than the specific provision being amended. These changes do not
also affect the structure of government or the system of checks-and-balances among or within the three branches. These three examples are located at the far green end of the
spectrum, opposite the far red end where the revision sought by the present petition is located.
However, there can be no fixed rule on whether a change is an amendment or a revision. A change in a single word of one sentence of the Constitution may be a revision and not
an amendment. For example, the substitution of the word "republican" with "monarchic" or "theocratic" in Section 1, Article II 50 of the Constitutionradically overhauls the entire
structure of government and the fundamental ideological basis of the Constitution. Thus, each specific change will have to be examined case-by-case, depending on how it affects
other provisions, as well as how it affects the structure of government, the carefully crafted system of checks-and-balances, and the underlying ideological basis of the existing
Constitution.
Since a revision of a constitution affects basic principles, or several provisions of a constitution,a deliberative body with recorded proceedings is best suited to undertake a
revision. A revision requires harmonizing not only several provisions, but also the altered principles with those that remain unaltered. Thus, constitutions normally authorize
deliberative bodies like constituent assemblies or constitutional conventions to undertake revisions. On the other hand, constitutions allow people's initiatives, which do not have
fixed and identifiable deliberative bodies or recorded proceedings, to undertake only amendments and not revisions.
In the present initiative, the Lambino Group's proposed Section 2 of the Transitory Provisions states:
Section 2. Upon the expiration of the term of the incumbent President and Vice President, with the exception of Sections 1, 2, 3, 4, 5, 6 and 7 of Article
VI of the 1987 Constitution which shall hereby be amended and Sections 18 and 24 which shall be deleted, all other Sections of Article VI are hereby
retained and renumbered sequentially as Section 2, ad seriatim up to 26, unless they are inconsistent with the Parliamentary system of
government, in which case, they shall be amended to conform with a unicameral parliamentary form of government; . . . . (Emphasis
supplied)

The basic rule in statutory construction is that if a later law is irreconcilably inconsistent with a prior law, the later law prevails. This rule also applies to construction of
constitutions. However, the Lambino Group's draft of Section 2 of the Transitory Provisions turns on its head this rule of construction by stating that in case of such irreconcilable
inconsistency, the earlier provision "shall be amended to conform with a unicameral parliamentary form of government." The effect is to freeze the two irreconcilable provisions
until the earlier one "shall be amended," which requires a future separate constitutional amendment.
Realizing the absurdity of the need for such an amendment, petitioner Atty. Lambino readily conceded during the oral arguments that the requirement of a future amendment is a
"surplusage." In short, Atty. Lambino wants to reinstate the rule of statutory construction so that the later provision automatically prevails in case of irreconcilable inconsistency.
However, it is not as simple as that.
The irreconcilable inconsistency envisioned in the proposed Section 2 of the Transitory Provisions is not between a provision in Article VI of the 1987 Constitution and a provision
in the proposed changes. The inconsistency is between a provision in Article VI of the 1987 Constitution and the "Parliamentary system of government," and the
inconsistency shall be resolved in favor of a "unicameral parliamentary form of government."
Now, what "unicameral parliamentary form of government" do the Lambino Group's proposed changes refer to the Bangladeshi, Singaporean, Israeli, or New Zealand
models, which are among the few countries with unicameral parliaments? The proposed changes could not possibly refer to the traditional and well-known parliamentary forms
of government the British, French, Spanish, German, Italian, Canadian, Australian, or Malaysian models, which have all bicameral parliaments. Did the people who signed the
signature sheets realize that they were adopting the Bangladeshi, Singaporean, Israeli, or New Zealand parliamentary form of government?
This drives home the point that the people's initiative is not meant for revisions of the Constitution but only for amendments. A shift from the present Bicameral-Presidential to a
Unicameral-Parliamentary system requires harmonizing several provisions in many articles of the Constitution. Revision of the Constitution through a people's initiative will only
result in gross absurdities in the Constitution.
In sum, there is no doubt whatsoever that the Lambino Group's initiative is a revision and not an amendment. Thus, the present initiative is void and unconstitutional because it
violates Section 2, Article XVII of the Constitution limiting the scope of a people's initiative to "[A]mendments to this Constitution."
3. A Revisit of Santiago v. COMELEC is Not Necessary
The present petition warrants dismissal for failure to comply with the basic requirements of Section 2, Article XVII of the Constitution on the conduct and scope of a people's
initiative to amend the Constitution. There is no need to revisit this Court's ruling in Santiago declaring RA 6735 "incomplete, inadequate or wanting in essential terms and
conditions" to cover the system of initiative to amend the Constitution. An affirmation or reversal of Santiago will not change the outcome of the present petition. Thus, this
Court must decline to revisit Santiago which effectively ruled that RA 6735 does not comply with the requirements of the Constitution to implement the initiative clause on
amendments to the Constitution.
This Court must avoid revisiting a ruling involving the constitutionality of a statute if the case before the Court can be resolved on some other grounds. Such avoidance is a logical
consequence of the well-settled doctrine that courts will not pass upon the constitutionality of a statute if the case can be resolved on some other grounds. 51
Nevertheless, even assuming that RA 6735 is valid to implement the constitutional provision on initiatives to amend the Constitution, this will not change the result here because
the present petition violates Section 2, Article XVII of the Constitution. To be a valid initiative, the present initiative must first comply with Section 2, Article XVII of the
Constitution even before complying with RA 6735. IATSHE
Even then, the present initiative violates Section 5(b) of RA 6735 which requires that the "petition for an initiative on the 1987 Constitution must have at least twelve per
centum (12%) of the total number of registered voters as signatories." Section 5(b) of RA 6735 requires that the people must sign the "petition . . . as signatories."
The 6.3 million signatories did not sign the petition of 25 August 2006 or the amended petition of 30 August 2006 filed with the COMELEC. Only Atty. Lambino, Atty.
Demosthenes B. Donato, and Atty. Alberto C. Agra signed the petition and amended petition as counsels for "Raul L. Lambino and Erico B. Aumentado,
Petitioners." In the COMELEC, the Lambino Group, claiming to act "together with" the 6.3 million signatories, merely attached the signature sheets to the petition and
amended petition. Thus, the petition and amended petition filed with the COMELEC did not even comply with the basic requirement of RA 6735 that the Lambino Group claims as
valid.
The Lambino Group's logrolling initiative also violates Section 10(a) of RA 6735 stating, "No petition embracing more than one (1) subject shall be submitted to the
electorate; . . . ." The proposed Section 4(4) of the Transitory Provisions, mandating the interim Parliament to propose further amendments or revisions to the Constitution, is a
subject matter totally unrelated to the shift in the form of government. Since the present initiative embraces more than one subject matter, RA 6735prohibits submission of the
initiative petition to the electorate. Thus, even if RA 6735 is valid, the Lambino Group's initiative will still fail.
4. The COMELEC Did Not Commit Grave Abuse of Discretion in Dismissing the Lambino Group's Initiative
In dismissing the Lambino Group's initiative petition, the COMELEC en banc merely followed this Court's ruling in Santiago and People's Initiative for Reform, Modernization
and Action (PIRMA) v. COMELEC. 52 For following this Court's ruling, no grave abuse of discretion is attributable to the COMELEC. On this ground alone, the present petition
warrants outright dismissal. Thus, this Court should reiterate its unanimous ruling in PIRMA:
The Court ruled, first, by a unanimous vote, that no grave abuse of discretion could be attributed to the public respondent COMELEC in dismissing the
petition filed by PIRMA therein, it appearing that it only complied with the dispositions in the Decisions of this Court in G.R. No. 127325, promulgated on
March 19, 1997, and its Resolution of June 10, 1997.
5. Conclusion
The Constitution, as the fundamental law of the land, deserves the utmost respect and obedience of all the citizens of this nation. No one can trivialize the Constitutionby
cavalierly amending or revising it in blatant violation of the clearly specified modes of amendment and revision laid down in the Constitution itself.
To allow such change in the fundamental law is to set adrift the Constitution in unchartered waters, to be tossed and turned by every dominant political group of the day. If this
Court allows today a cavalier change in the Constitution outside the constitutionally prescribed modes, tomorrow the new dominant political group that comes will demand its own
set of changes in the same cavalier and unconstitutional fashion. A revolving-door constitution does not augur well for the rule of law in this country.
An overwhelming majority 16,622,111 voters comprising 76.3 percent of the total votes cast 53 approved our Constitution in a national plebiscite held on 11
February 1987. That approval is the unmistakable voice of the people, the full expression of the people's sovereign will. That approval included the prescribed
modes for amending or revising the Constitution.
No amount of signatures, not even the 6,327,952 million signatures gathered by the Lambino Group, can change our Constitution contrary to the specific modes that the people,
in their sovereign capacity, prescribed when they ratified the Constitution. The alternative is an extra-constitutional change, which means subverting the people's sovereign
will and discarding the Constitution. This is one act the Court cannot and should never do. As the ultimate guardian of the Constitution, this Court is sworn to perform its
solemn duty to defend and protect the Constitution, which embodies the real sovereign will of the people.
Incantations of "people's voice," "people's sovereign will," or "let the people decide" cannot override the specific modes of changing the Constitution as prescribed in the
Constitution itself. Otherwise, the Constitution the people's fundamental covenant that provides enduring stability to our society becomes easily susceptible to manipulative
changes by political groups gathering signatures through false promises. Then, the Constitution ceases to be the bedrock of the nation's stability.
The Lambino Group claims that their initiative is the "people's voice." However, the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their
petition with the COMELEC, that "ULAP maintains its unqualified support to the agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms." The
Lambino Group thus admits that their "people's" initiative is an "unqualified support to the agenda" of the incumbent President to change the Constitution. This forewarns
the Court to be wary of incantations of "people's voice" or "sovereign will" in the present initiative.
This Court cannot betray its primordial duty to defend and protect the Constitution. The Constitution, which embodies the people's sovereign will, is the bible of this Court. This
Court exists to defend and protect the Constitution. To allow this constitutionally infirm initiative, propelled by deceptively gathered signatures, to alter basic principles
in the Constitution is to allow a desecration of the Constitution. To allow such alteration and desecration is to lose this Court's raison d'etre.

WHEREFORE, we DISMISS the petition in G.R. No. 174153.

SO ORDERED.
||| (Lambino v. Commission on Elections, G.R. No. 174153, 174299, , [October 25, 2006], 536 PHIL 1-364)

FIRST DIVISION
[G.R. No. 180418. August 28, 2013.]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. LUZ REYES-BAKUNAWA, MANUEL BAKUNAWA, JR., MANUEL BAKUNAWA III, FERDINAND E.
MARCOS AND IMELDA R. MARCOS, respondents.
DECISION
BERSAMIN, J p:
Assets or properties, to be considered as ill-gotten wealth, must be shown to have originated from the Government itself, and should have been taken by former President Marcos,
the members of his immediate family, relatives, close subordinates and close associates by illegal means. That one served as a government official or employee during the
Marcos administration did not immediately make her a close subordinate or close associate of former President Marcos. 1
The Case
The Republic appeals the adverse decision rendered on April 10, 2002, 2 and the resolution issued on November 8, 2007, 3 whereby the Sandiganbayan respectively dismissed
the complaint for reconveyance, reversion, accounting, restitution and damages filed against respondents in Civil Case No. 0023, and denied the Republic's motion for
reconsideration.
Antecedents
Civil Case No. 0023 is an action for reconveyance, reversion, accounting, restitution and damages brought by the Republic against respondents Luz Reyes-Bakunawa, Manuel
Bakunawa, Jr., Manuel Bakunawa III, President Marcos and First Lady Imelda R. Marcos for having allegedly acquired and accumulated ill-gotten wealth consisting of funds and
other property "in unlawful concert with one another" and "in flagrant breach of trust and of their fiduciary obligations as public officers, with grave abuse of right and power and
in brazen violation of the Constitution and laws of the Republic of the Philippines, thus resulting in their unjust enrichment." 4
The complaint alleged that respondent Luz Reyes-Bakunawa (Luz Bakunawa) had served as Imelda Marcos' Social Secretary during the Marcos administration; that it was during
that period of her incumbency in that position that Luz Bakunawa and her husband Manuel Bakunawa had acquired assets, funds and other property grossly and manifestly
disproportionate to her salaries and their other lawful income; 5 and that Luz Bakunawa, "by herself and/or in unlawful concert with Defendants Ferdinand E. Marcos and Imelda R.
Marcos, taking undue advantage of her position, influence and connection with the latter Defendant spouses, for their benefit and unjust enrichment and in order to prevent
disclosure and recovery of assets illegally obtained, engaged in devices, schemes and stratagems," 6 particularly:
1)acted as dummies, nominees, and/or agents of the Marcos spouses and, with the active collaboration, knowledge and willing participation of the
other defendants, established several corporations engaged in a wide range of economic activities, such as construction and cattle
ranching; CSHDTE
2)secured favorable contracts with the Department of Public Works and Communications for the construction of government projects through grossly
undercapitalized corporations and without complying with such usual requirements as public bidding, notice and publication of contractors;
3)unlawfully acquired heads of cattle from the government dispersal program and raised them on ranch lands encroaching on forest zones;
4)unlawfully encroached upon a mangrove-forested section in Masbate, Masbate and converted it into a fishpond;
5)unlawfully amassed funds by obtaining huge credit lines from government financial institutions, and incorporating into their contracts a cost-
escalation adjustment provision to justify collection of grossly arbitrary and unconscionable amounts unsupported by evidence of increase in prices;
6)unlawfully imported hundreds of brand-new units of heavy equipment without paying customs duties and other allied taxes amounting to millions
of pesos, by falsely representing said heavy equipment to be for official government use and selling them at very low prices to avoid paying the
required taxes. 7
The Republic prayed for: (a) the reconveyance to itself of all funds and other property impressed with constructive trust, as well as funds and other property acquired by
respondents' abuse of right and power and through unjust enrichment, plus interests; (b) accounting of all beneficial interests in funds, properties and assets in excess of their
unlawful earnings; and (c) payment of actual damages to be proved during the trial, moral damages of P50,000,000,000.00, temperate, nominal and exemplary damages,
attorney's fees, litigation expenses and treble judicial costs. 8
In their amended answer, the Bakunawas alleged that Luz Bakunawa was never the Social Secretary of Imelda Marcos, but only an employee in the office of the Social Secretary;
that the properties acquired while Luz Bakunawa was employed in the Government were purchased with honestly earned money and their acquisition was well within their
legitimate income; that their family owned and controlled five closed family corporations, namely: (1) Hi-Tri Development Corporation; (2) 7-R Development Corporation; (3) 7-R
Heavy Equipment, Inc.; (4) 7-R Sales Company, Inc.; and (5) 7-R Ranch, Inc.; that their public works contracts were awarded to them in accordance with law; that their acquisition
of the heads of cattle were legal; 9 and that they did not commit any breach of trust while in public office, and did not possess illegally acquired funds that rendered them liable
under constructive trust in favor of the Republic. 10
During the pre-trial on August 26, 1999, the Bakunawas admitted that: (a) the properties enumerated in Annex A of the complaint 11 belonged to or were connected to them,
except three corporations, namely: 7-R International Trading, 7-R Enterprise, Inc., and 7-R Group of Companies; and (b) two parcels of land that belonged to one of their
children. 12
Also during the pre-trial, the parties agreed on the following statement of the issues, to wit:
[t]he fundamental issue in this case is whether or not defendant Luz Bakunawa, considering her position in Malacaang during the incumbency of
President Ferdinand E. Marcos from 1970 up to 1986, occupied a confidential position in Malacaang, and was able to obtain contracts, run businesses
and acquire real properties as enumerated in the Complaint, using her office and the influence of either or both of the [s]pouses Ferdinand and Imelda
Marcos. The parties agreed that it is the use of the influence of the Spouses Marcos that constitutes the essence of the case, and not the failure to
report the Statement of Assets and Liabilities or any other impropriety in the acquisition of the properties herein, this case having been filed under the
authority given to the Presidential Commission on Good Government under Executive Orders No. 1, 2,14 and 14-a. 13
After the Republic rested its case, respondents filed their motion to dismiss, 14 insisting that the Republic "has failed to establish even prima facie, its case and/or charges against
them." 15 SAcCIH
Ruling of the Sandiganbayan
On April 10, 2002, the Sandiganbayan rendered its decision in favor of respondents, to wit: 16
xxx xxx xxx
As the evidence stands, neither the presence of the link with the Marcoses, nor the irrefutability of the evidence against the Bakunawas for their misuse
of that connection exists to justify the instant action by the PCGG.
In view of all the above, this Court is constrained to grant the Motion to Dismiss, as it hereby dismisses, the Complaint of the plaintiff for its failure to
prove the essential allegations thereof.
The writs of sequestration issued and in force against the properties of the Bakunawas as enumerated in Annex A of the Complaint (page 24 and p. 34,
Vol. I, Record) are lifted, set aside and declared of no further force and effect.
SO ORDERED.
The Sandiganbayan justified its decision in the following manner:
xxx xxx xxx
Many of the plaintiff's allegations in its specific averments (Article V) in the complaint are alluded to in the evidence in a general fashion: engaging in
cattle ranching and construction [para. 12 (a)], entering into public works contracts [para. 12 (b)], acquisition of mangrove areas [para. 12 (c)]. Nothing
exists in the record, however, with respect to undercapitalization of the corporation, non-compliance with bidding requirements, encroachment of
ranches into forest zones, huge credit lines, unjustified claims of cost escalation adjustment, and importation of heavy equipment.
Properties have been shown in the name of the spouses Bakunawa or either of them; testimonies have been rendered about eviction, official
documents presented with respect to public works contracts, and finally, a Statement of Assets and Liabilities for the year 1985. Indeed, to hear some
of the witnesses, acts of oppression appear to have been committed if not by the wife then by the husband Manuel Bakunawa. There is no indication
however, that the acts of oppression involved the improper use of influence on the part of the defendant Luz Bakunawa by reason of her having been
employed in the office of the Social Secretary of Imelda Marcos when the latter was the First Lady.
xxx xxx xxx
An examination of the testimonial evidence for the Plaintiff, as summarized in the first part of this decision, shows its concentration in the alleged
dispossession of some landowners of their occupied land in the province of Masbate by the defendants Bakunawa and the allegedly (sic) inaction by the
Bureau of Forestry and the police agencies thereon. Thus, the almost uniform allegation of witnesses is that they were dispossessed of pasture lands
which they believed they were entitled to possess. There were documents presented to prove that, indeed, the witnesses had claims to these pieces of
property or had occupied them and had introduced improvements thereon.
The tenor of the testimony of the said witnesses is that while there was no force directly applied in the dispossession of their properties, their lands,
however, were fenced in, and occupied by, other people, allegedly the Bakunawas and secured by armed and uniformed men.
 There is likewise the contention of the plaintiff's witnesses that they did not know who these men were, although it has been said that one or two of the
men who helped in fencing off these properties were employees of the Bakunawas.
What is clear is that with the evidence thus far, the Bakunawas, or more specifically, Manuel Bakunawa, ignored the Bureau of Forestry summons, and
caused the unceremonious exclusion of people who had apparently occupied rather large tracts of land under permits for the Bureau or those with
pending applications. TDcAaH
There also seems to be evidence that defendant Luz Bakunawa did quite a bit of work in her capacity as a member of the staff of the Social Secretary of
Imelda Marcos. While the influence of Luz Bakunawa may be assumed or conjectured, there has been no evidence which would categorically show that
the position of defendant Luz Bakunawa in Malacaang "in concert with the spouses Marcos" or either of them was the explanation for the absence of
the law enforcement officers or the inaction of the administrative officers of the government.
xxx xxx xxx
The influence may be assumed and in common parlance, it might be reasonably made. But to conclude that there was abuse of office by Luz Bakunawa
or her utilization of the influence of her office or of the spouses Marcos cannot be assumed or stated in any certainty.
And since, as aforesaid, the action herein is confiscatory in character, assumptions will not do to obtain judgment against the defendants Bakunawa. 17
The Sandiganbayan ruled that in civil suits initiated by the Presidential Commission on Good Government (PCGG) for the recovery of illegally acquired property pursuant
to Republic Act No. 1379, 18 the Republic must show not only that defendant was a subordinate of the Marcos spouses or of either of them, but also that the relationship was
similar to that of an immediate member of the Marcos family or a dummy of the Marcoses. 19 It concluded that no proof established the link between the alleged acts of the
Bakunawas and those of the Marcoses, or even the proximity of Luz Bakunawa as a Marcos relative or Marcos dummy.
The Republic sought the reconsideration of the decision, arguing that the Sandiganbayan erred in holding that it did not show the Bakunawas' link with the Marcoses, and in ruling
that it did not prove that the Bakunawas had abused their connections or close association with the Marcoses. 20
On November 8, 2007, the Sandiganbayan denied the Republic's motion for reconsideration, 21 reiterating its ruling that the Republic did not discharge its burden of proving the
close links between the Bakunawas and the Marcoses, and of proving how the Bakunawas had abused said links, assuming that the links existed.
Hence, this appeal.
Issues
The Republic ascribes the following errors, to wit:
I.
THE QUANTUM OF PROOF REQUIRED TO PROVE PETITIONER'S CASE AGAINST THE BAKUNAWAS IS MERE PREPONDERANCE OF EVIDENCE.
II.
THE LINK BETWEEN AND/OR AMONG THE BAKUNAWAS AND THE MARCOSES WAS SATISFACTORILY ESTABLISHED BY PETITIONER.
III.
PETITIONER WAS ABLE TO ESTABLISH THAT THE BAKUNAWAS AMASSED ASSETS, FUNDS AND PROPERTIES GROSSLY AND MANIFESTLY
DISPROPORTIONATE TO THEIR SALARIES AND OTHER LAWFUL INCOME BECAUSE OF THEIR POSITION IN THE GOVERNMENT AND/OR CLOSE
ASSOCIATION AND CONNECTION WITH THE MARCOSES TO THE PREJUDICE OF PETITIONER AND THE FILIPINO PEOPLE. 22
In their comment, 23 respondents mainly submit that the Republic failed to present a justiciable issue to warrant the reversal of the Sandiganbayan's decision; and that the April
10, 2002 decision already become final and could no longer be reviewed and modified because of the belated filing of the petition for review.
On her part, First Lady Marcos opted not to file her comment. 24 aSADIC
Ruling
The appeal lacks merit.
1.
Appeal of the Republic was timely
The Bakunawas contend that the April 10, 2002 decision already became final because of the Republic's failure to file the petition for review on time.
We cannot sustain the contention.
The Republic had until November 24, 2007 within which to file the petition for review. It filed a motion seeking an extension of 30 days of its period to file, or until December 24,
2007. Although it did not file the petition within the requested extension period, the Court directed it on June 30, 2008 to file the petition for review within 15 days from notice.
Considering that it received the resolution of June 30, 2008 on August 11, 2008, 25 its filing of the petition for review on August 26, 2008 was timely.
2.
Preponderance of evidence is required
in actions brought to recover ill-gotten wealth
In its decision of April 10, 2002, the Sandiganbayan stated as follows:
Considering the confiscatory character of proceedings described in E.O. No. 14 in actions for recovery of alleged unlawfully acquired property such as
the instant case, evidence must be substantial, if not beyond reasonable doubt, akin to the actions for forfeiture under Republic Act No. 1379; this,
notwithstanding the statements in Sec. 3 of the Executive Order which states the adequacy of mere preponderance of evidence. 26
The Republic argues that the Sandiganbayan thereby erred in seemingly requiring a degree of proof greater than that required by Executive Order (E.O.) No. 14-A. 27This was also
its submission in the motion for reconsideration vis- -vis the decision of April 10, 2002.
In denying the Republic's motion for reconsideration through the November 8, 2007 resolution, the Sandiganbayan agreed with the Republic's submission to the effect that
preponderance of evidence was all that was required for this case. However, the Sandiganbayan pointed out that even on that basis the Republic still did not satisfy its quantum
of proof because the facts it established were not sufficient to prove its case against respondents. 28
We uphold the Sandiganbayan.
We first clarify that the Republic correctly submits that only a preponderance of evidence was needed to prove its demand for reconveyance or recovery of ill-gotten wealth. That
is quite clear from Section 1 of E.O. No. 14-A, which provides:
Section 1.Section 3 of Executive Order No. 14 dated May 7, 1986 is hereby amended to read as follows:
Sec. 3.The civil suits to recover unlawfully acquired property under Republic Act No. 1379 or for restitution, reparation of damages, or indemnification
for consequential and other damages or any other civil actions under the Civil Code or other existing laws filed with the Sandiganbayan against
Ferdinand E. Marcos, Imelda R. Marcos, members of their immediate family, close relatives, subordinates, close and/or business associates, dummies,
agents and nominees, may proceed independently of any criminal proceedings and may be proved by a preponderance of evidence.
By preponderance of evidence is meant that the evidence adduced by one side is, as a whole, superior to that of the other side. Essentially, preponderance of evidence refers to
the comparative weight of the evidence presented by the opposing parties. As such, it has been defined as "the weight, credit, and value of the aggregate evidence on either
side," and is usually considered to be synonymous with the term greater weight of the evidence or greater weight of the credible evidence. It is proof that is more convincing to
the court as worthy of belief than that which is offered in opposition thereto. 29 AEDcIH
Here, the Bakunawas filed a motion to dismiss, by which they specifically demurred to the evidence adduced against them. A demurrer to evidence is an objection by one of the
parties in an action to the effect that the evidence that his adversary produced, whether true or not, is insufficient in point of law to make out a case or to sustain the issue. The
demurring party thereby challenges the sufficiency of the whole evidence to sustain a judgment. The court, in passing upon the sufficiency of the evidence, is required merely to
ascertain whether there is competent or sufficient evidence to sustain the indictment or claim, or to support a verdict of guilt or liability.30
Under the rule on preponderance of evidence, the court is instructed to find for and to dismiss the case against the defendant should the scales hang in equipoise and there is
nothing in the evidence that tilts the scales to one or the other side. The plaintiff who had the burden of proof has failed to establish its case, and the parties are no better off than
before they proceeded upon their litigation. In that situation, the court should leave the parties as they are. 31
Moreover, although the evidence of the plaintiff may be stronger than that of the defendant, there is no preponderance of evidence on the plaintiff's side if its evidence alone is
insufficient to establish its cause of action. 32 Similarly, when only one side is able to present its evidence, and the other side demurs to the evidence, a preponderance of
evidence can result only if the plaintiff's evidence is sufficient to establish the cause of action. For this purpose, the sheer volume of the evidence presented by one party cannot
tip the scales in its favor. Quality, not quantity, is the primordial consideration in evaluating evidence.
3.
The evidence of the Republic did not preponderantly
establish the ill-gotten nature of the Bakunawas' wealth
The decisive query is whether the Republic preponderantly showed that the Bakunawas had acquired ill-gotten wealth during Luz Bakunawa's employment during the Marcos
administration.
In Republic v. Sandiganbayan (First Division), decided on April 12, 2011, 33 the Court settled not only the meaning of ill-gotten wealth but also who were the persons liable to
illegally acquire or amass such wealth, viz.:
xxx xxx xxx
II
The Concept and Genesis of
Ill-Gotten Wealth in the Philippine Setting
A brief review of the Philippine law and jurisprudence pertinent to ill-gotten wealth should furnish an illuminating backdrop for further discussion.
In the immediate aftermath of the peaceful 1986 EDSA Revolution, the administration of President Corazon C. Aquino saw to it, among others, that rules
defining the authority of the government and its instrumentalities were promptly put in place. It is significant to point out, however, that the
administration likewise defined the limitations of the authority.
The first official issuance of President Aquino, which was made on February 28, 1986, or just two days after the EDSA Revolution, was Executive Order (E.O.)
No. 1, which created the Presidential Commission on Good Government (PCGG). Ostensibly, E.O. No. 1 was the first issuance in light of the EDSA
Revolution having come about mainly to address the pillage of the nation's wealth by President Marcos, his family, and cronies.
E.O. No. 1 contained only two WHEREAS Clauses, to wit:
WHEREAS, vast resources of the government have been amassed by former President Ferdinand E. Marcos, his immediate family, relatives,
and close associates both here and abroad;
WHEREAS, there is an urgent need to recover all ill-gotten wealth; AEcTaS
Paragraph (4) of E.O. No. 2 34 further required that the wealth, to be ill-gotten, must be "acquired by them through or as a result of improper or illegal use of
or the conversion of funds belonging to the Government of the Philippines or any of its branches, instrumentalities, enterprises, banks or financial
institutions, or by taking undue advantage of their official position, authority, relationship, connection or influence to unjustly enrich themselves at the
expense and to the grave damage and prejudice of the Filipino people and the Republic of the Philippines."
Although E.O. No. 1 and the other issuances dealing with ill-gotten wealth (i.e., E.O. No. 2, E.O. No. 14, and E.O. No. 14-A) only identified the subject matter of
ill-gotten wealth and the persons who could amass ill-gotten wealth and did not include an explicit definition of ill-gotten wealth, we can still discern the
meaning and concept ofill-gotten wealth from the WHEREAS Clauses themselves of E.O. No. 1, in that ill-gotten wealth consisted of the "vast resources
of the government" amassed by "former President Ferdinand E. Marcos, his immediate family, relatives and close associates both here and abroad." It is
clear, therefore, that ill-gotten wealth would not include all the properties of President Marcos, his immediate family, relatives, and close associates but
only the part that originated from the "vast resources of the government."
In time and unavoidably, the Supreme Court elaborated on the meaning and concept of ill-gotten wealth. In Bataan Shipyard & Engineering Co., Inc. v. Presidential
Commission on Good Government, or BASECO, for the sake of brevity, the Court held that:
. . . until it can be determined, through appropriate judicial proceedings, whether the property was in truth "ill-gotten," i.e., acquired through or as a result of
improper or illegal use of or the conversion of funds belonging to the Government or any of its branches, instrumentalities, enterprises, banks or
financial institutions, or by taking undue advantage of official position, authority, relationship, connection or influence, resulting in unjust enrichment of the
ostensible owner and grave damage and prejudice to the State. And this, too, is the sense in which the term is commonly understood in other jurisdictions.
The BASECO definition of ill-gotten wealth was reiterated in Presidential Commission on Good Government v. Lucio C. Tan, where the Court said:
On this point, we find it relevant to define "ill-gotten wealth." In Bataan Shipyard and Engineering Co., Inc., this Court described "ill-gotten wealth" as follows:
"Ill-gotten wealth is that acquired through or as a result of improper or illegal use of or the conversion of funds belonging to the Government or any of its branches,
instrumentalities, enterprises, banks or financial institutions, or by taking undue advantage of official position, authority, relationship, connection or influence,
resulting in unjust enrichment of the ostensible owner and grave damage and prejudice to the State. And this, too, is the sense in which the term is commonly
understood in other jurisdiction."
 Concerning respondents' shares of stock here, there is no evidence presented by petitioner that they belong to the Government of the Philippines or any of its
branches, instrumentalities, enterprises, banks or financial institutions. Nor is there evidence that respondents, taking undue advantage of their connections or
relationship with former President Marcos or his family, relatives and close associates, were able to acquire those shares of stock.
Incidentally, in its 1998 ruling in Chavez v. Presidential Commission on Good Government, the Court rendered an identical definition of ill-gotten wealth, viz.:
. . . . We may also add that 'ill-gotten wealth', by its very nature, assumes a public character. Based on the aforementioned Executive Orders, 'ill-gotten wealth'
refers to assets and properties purportedly acquired, directly or indirectly, by former President Marcos, his immediate family, relatives and close associates
through or as a result of their improper or illegal use of government funds or properties; or their having taken undue advantage of their public
office; or their use of powers, influence or relationships, "resulting in their unjust enrichment and causing grave damage and prejudice to the Filipino people
and the Republic of the Philippines." Clearly, the assets and properties referred to supposedly originated from the government itself. To all intents and
purposes, therefore, they belong to the people. As such, upon reconveyance they will be returned to the public treasury, subject only to the
satisfaction of positive claims of certain persons as may be adjudged by competent courts. Another declared overriding consideration for the expeditious recovery of
ill-gotten wealth is that it may be used for national economic recovery. SCEDAI
All these judicial pronouncements demand two concurring elements to be present before assets or properties were considered as ill-gotten wealth,
namely: (a) they must have "originated from the government itself," and (b) they must have been taken by former President Marcos, his immediate
family, relatives, and close associatesby illegal means.
But settling the sources and the kinds of assets and property covered by E.O. No. 1 and related issuances did not complete the definition of ill-gotten wealth. The further
requirement was that the assets and property should have been amassed by former President Marcos, his immediate family, relatives, and close associates both here and
abroad. In this regard, identifying former President Marcos, his immediate family, and relatives was not difficult, but identifying other persons who might be the close
associates of former President Marcos presented an inherent difficulty, because it was not fair and just to include within the term close associateseveryone who had had any
association with President Marcos, his immediate family, and relatives.
Again, through several rulings, the Court became the arbiter to determine who were the close associates within the coverage of E.O. No. 1.
In Republic v. Migrio, the Court held that respondents Migrio, et al. were not necessarily among the persons covered by the term close subordinate or close associateof
former President Marcos by reason alone of their having served as government officials or employees during the Marcos administration, viz.:
It does not suffice, as in this case, that the respondent is or was a government official or employee during the administration of former Pres. 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. This is so because otherwise the respondent's case will fall under existing general laws and procedures on the matter. . . .
In Cruz, Jr. v. Sandiganbayan, the Court declared that the petitioner was not a close associate as the term was used in E.O. No. 1 just because he had served as the President
and General Manager of the GSIS during the Marcos administration.
In Republic v. Sandiganbayan, the Court stated that respondent Maj. Gen. Josephus Q. Ramas' having been a Commanding General of the Philippine Army during the Marcos
administration "d[id] not automatically make him a subordinate of former President Ferdinand Marcos as this term is used in Executive Order Nos. 1, 2, 14 and 14-A absent a
showing that he enjoyed close association with former President Marcos."
It is well to point out, consequently, that the distinction laid down by E.O. No. 1 and its related issuances, and expounded by relevant judicial pronouncements unavoidably
required competent evidentiary substantiation made in appropriate judicial proceedings to determine: (a) whether the assets or properties involved had come from the vast
resources of government, and (b) whether the individuals owning or holding such assets or properties were close associates of President Marcos. The requirement
of competent evidentiary substantiation made in appropriate judicial proceedings was imposed because the factual premises for the reconveyance of the assets or properties
in favor of the government due to their being ill-gotten wealth could not be simply assumed. Indeed, in BASECO, the Court made this clear enough by emphatically observing:
6.Government's Right and Duty to Recover All Ill-gotten Wealth
There can be no debate about the validity and eminent propriety of the Government's plan "to recover all ill-gotten wealth."
Neither can there be any debate about the proposition that assuming the above described factual premises of the Executive Orders and Proclamation No. 3 to be true, to be
demonstrable by competent evidence, the recovery from Marcos, his family and his minions of the assets and properties involved, is not only a right but a duty on the part of
Government. TcICEA
But however plain and valid that right and duty may be, still a balance must be sought with the equally compelling necessity that a proper respect be
accorded and adequate protection assured, the fundamental rights of private property and free enterprise which are deemed pillars of a free society such as
ours, and to which all members of that society may without exception lay claim.
. . . Democracy, as a way of life enshrined in the Constitution, embraces as its necessary components freedom of conscience, freedom of expression, and freedom in the
pursuit of happiness. Along with these freedoms are included economic freedom and freedom of enterprise within reasonable bounds and under proper control. . . . Evincing
much concern for the protection of property, the Constitution distinctly recognizes the preferred position which real estate has occupied in law for ages. Property is bound up
with every aspect of social life in a democracy as democracy is conceived in the Constitution. The Constitution realizes the indispensable role which property, owned in
reasonable quantities and used legitimately, plays in the stimulation to economic effort and the formation and growth of a solid social middle class that is said to be the
bulwark of democracy and the backbone of every progressive and happy country.
a.Need of Evidentiary Substantiation in Proper Suit
Consequently, the factual premises of the Executive Orders cannot simply be assumed. They will have to be duly established by adequate proof in each case,
in a proper judicial proceeding, so that the recovery of the ill-gotten wealth may be validly and properly adjudged and consummated; although there are some
who maintain that the fact that an immense fortune, and "vast resources of the government have been amassed by former President Ferdinand E. Marcos, his immediate
family, relatives, and close associates both here and abroad," and they have resorted to all sorts of clever schemes and manipulations to disguise and hide their illicit
acquisitions is within the realm of judicial notice, being of so extensive notoriety as to dispense with proof thereof. Be this as it may, the requirement of evidentiary
substantiation has been expressly acknowledged, and the procedure to be followed explicitly laid down, in Executive Order No. 14.
Accordingly, the Republic should furnish to the Sandiganbayan in proper judicial proceedings the competent evidence proving who were the close associates of President
Marcos who had amassed assets and properties that would be rightly considered as ill-gotten wealth.
xxx xxx xxx
As can be gleaned from the foregoing pronouncement, evidentiary substantiation of the allegations of how the wealth was illegally acquired and by whom was
necessary. For that purpose, the mere holding of a position in the Marcos administration did not necessarily make the holder a close associate within the context of E.O. No.
1. According to Republic v. Migrio, 35 the term subordinate as used in E.O. No. 1 36 and E.O. No. 2 37 referred to a person who enjoyed a close association with President
Marcos and/or his wife similar to that of an immediate family member, relative, and close associate, or to that of a close relative, business associate, dummy, agent, or
nominee. Indeed, a prima facie showing must be made to show that one unlawfully accumulated wealth by virtue of a close association or relation with President Marcos
and/or his wife. 38 It would not suffice, then, that one served during the administration of President Marcos as a government official or employee. HCaDIS
The Republic particularly insists that Luz Bakunawa served as the Social Secretary or the Assistant Social Secretary of First Lady Marcos; and mentions several other
circumstances that indicated her close relationship with the Marcoses, such as her assumption of office in the early part of the Marcos administration, 39 the accommodations
extended to her during her various travels, 40 the fact that her close relationship with the Marcoses was of common knowledge among the Masbateos, 41 and the negotiated
contracts the Bakunawas entered into during the Marcos administration. 42
However, Luz Bakunawa maintains that she was not First Lady Marcos' Social Secretary but a mere member of the staff of the Social Secretary; and that the assets of the
Bakunawas were honestly earned and acquired well within the legitimate income of their businesses.
We hold that the Sandiganbayan correctly ruled that the evidence of the Republic was able to establish, at best, that Luz Bakunawa had been an employee in Malacaang Palace
during the Marcos administration, and did not establish her having a close relationship with the Marcoses, or her having abused her position or employment in order to amass the
assets subject of this case. Consequently, Luz Bakunawa could not be considered a close associate or subordinate of the Marcoses within the context of E.O. No. 1 and E.O. No. 2.
The determination by the Sandiganbayan of the equiponderance or insufficiency of evidence involved its appreciation of the evidence. We cannot undo such determination unless
the Republic makes a strong demonstration to us that the determination was whimsical or capricious. 43 Alas, the Republic did not make such demonstration. Its evidence could
not sustain the belief that the Bakunawas had used their influence, or the Marcoses' influence in acquiring their properties. Nor did it prove that the ties or relationship between
the Bakunawas and the Marcoses had been "similar to that of an immediate member of the family or a dummy."
On another important aspect, the evidence of the Republic was likewise wanting. The Sandiganbayan enumerated in its decision five activities in which the Bakunawas had
acquired their ill-gotten wealth, namely: (a) land-grabbing and cattle-ranching; (b) engaging in government construction projects; (c) operating fishponds; (d)obtaining credit lines
from government financial institutions; and (e) importing heavy equipment. 44 However, the decision dwelt only on land-grabbing and the construction projects for the reason
that the Republic attempted to substantiate only those two activities. The Court is thus limited to the review of the findings on the two activities.
Anent land-grabbing, the records show that although the Bakunawas had ignored the summons from the Bureau of Forestry, and that the several persons occupying large tracts of
land under permits from the Bureau of Forestry or under still-pending applications had been dispossessed thereof, the dispossessed persons whom the Republic presented as
witnesses could not tell in court that the Bakunawas had employed the people who had fenced or occupied the lands in question. Such witnesses admitted that they did not put
up much resistance against their forcible dispossession because of their belief that the Bakunawas had been very influential and had enjoyed very close ties with the Marcoses.
However, they did not show that they had at the time any direct contact or communication with the Bakunawas, which could only mean that they only surmised and suspected
the participation of the Bakunawas in their dispossession. As such, the Republic's evidence in that regard could not be sufficient, for surmises and suspicions could not support
any conclusion either that the Bakunawas had taken advantage of their close ties with the Marcoses in order to dispossess the affected witnesses, or that Luz Bakunawa had
abused her influence arising from her close association with the Marcoses.
The Republic presented documents tending to prove that the dispossessed witnesses had retained claims to the affected properties, 45 and that the Bakunawas themselves had
been issued pasture leases over the same areas. 46 Given that both the dispossessed witnesses and the Bakunawas held legal rights of possession respecting the same areas
independently of each other, the Sandiganbayan did not err in ruling that "the plaintiff's evidence is not conclusive proof of the ill-gotten character of the lands in the possession
of the defendants Bakunawas." 47 This is really a good reason for the Sandiganbayan to hold that the Republic had not preponderantly shown that the acts of dispossession and
oppression had involved the improper use of her influence by Luz Bakunawa on account of her close association with the Marcoses. 48 TaCIDS
Concerning the negotiated construction contracts, the Republic posits that the contracts had been entered into when Luz Bakunawa was a member of the Presidential Staff during
the Marcos administration, laying heavy emphasis on the notations and handwritten instructions by President Marcos found on the written communications from Manuel
Bakunawa to then DPWH Secretary Baltazar Aquino.
Yet, the Republic offered the negotiated contracts solely to prove that the Bakunawas had been incorporators or owners, or had held key positions in the corporations that entered
into the contracts. 49 The Sandiganbayan correctly ruled, therefore, that the contracts could be considered and appreciated only for those stated purposes, not for the purpose of
proving the irregularity of the contracts, opining as follows:
. . . . The documents appear to be public documents and are, therefore, considered prima facie evidence of the fact of their issuance and that they were
signed by the persons whose signatures appear therein. It is, indeed, apparent on the face of the documents that government projects were awarded to
the defendants Bakunawas through negotiated contracts, and that at least one was approved by then President Marcos himself. Outside of these,
however, there can be no other facts that can be inferred from the aforesaid documents. 50
The Court upholds the Sandiganbayan. It was basic enough that the Sandiganbayan could not consider any evidence that was not formally offered; and could consider evidence
only for the purposes it was specifically offered. Section 34, Rule 132 of the Rules of Court explicitly states:
Section 34.Offer of evidence. The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is
offered must be specified.
The need to formally offer evidence by specifying the purpose of the offer cannot be overemphasized. This need is designed to meet the demand for due process by apprising the
adverse party as well as the trial court on what evidence the court would soon be called upon to decide the litigation. The offer and purpose will also put the trial court in the
position to determine which rules of evidence it shall apply in admitting or denying admission to the evidence being offered. According to Union Bank of the Philippines v. Tiu: 51
. . . a formal offer is necessary because judges are mandated to rest their findings of facts and their judgment only and strictly upon the evidence
offered by the parties at the trial. It has several functions: (1) to enable the trial judge to know the purpose or purposes for which the proponent is
presenting the evidence; (2) to allow opposing parties to examine the evidence and object to its admissibility; and (3) to facilitate review by the
appellate court, which will not be required to review documents not previously scrutinized by the trial court. . . . .
Expounding on the office of the offer and statement of the purposes, the Court has cogently said in Candido v. Court of Appeals: 52
A document, or any article for that matter, is not evidence when it is simply marked for identification; it must be formally offered, and the opposing
counsel given an opportunity to object to it or cross-examine the witness called upon to prove or identify it. A formal offer is necessary since judges are
required to base their findings of fact and judgment only and strictly upon the evidence offered by the parties at the trial. To allow a party to
attach any document to his pleading and then expect the court to consider it as evidence may draw unwarranted consequences. The opposing party
will be deprived of his chance to examine the document and object to its admissibility. The appellate court will have difficulty reviewing documents not
 previously scrutinized by the court below. The pertinent provisions of the Revised Rules of Court on the inclusion on appeal of documentary evidence or
exhibits in the records cannot be stretched as to include such pleadings or documents not offered at the hearing of the case. aETAHD
At any rate, the Court must point out that negotiated contracts are not per se illegal. A negotiated contract is one that is awarded on the basis of a direct agreement between the
Government and the contractor, without going through the normal procurement process, like obtaining the prior approval from another authority, or a competitive bidding
process. It is generally resorted to for convenience, or "when time is of the essence, or where there is a lack of qualified bidders or contractors, or where there is conclusive
evidence that greater economy and efficiency would be achieved." 53 The Court has upheld the validity of a negotiated contract made pursuant to law, like a negotiated contract
entered into by a City Mayor pursuant to the then existing Local Government Code, 54 or a negotiated contract that eventually redounded to the benefit of the general public,
even if there was no specific covering appropriation pursuant to COA rules, 55 or a negotiated contract that was made due to an emergency in the health sector, 56 or a
negotiated contract for long overdue repair and renovation needed to provide better health services. 57
Absent evidence proving that the negotiated construction contracts had been irregularly entered into by the Bakunawas, or that the public had been thereby prejudiced, it is
pointless for the Court to declare their invalidity. On the contrary, the Sandiganbayan correctly observed that the presumption of the validity of the contracts prevailed. 58
It is true that the recovery of ill-gotten wealth should be relentlessly pursued. But the pursuit should not be mindless as to be oppressive towards anyone. Due process requires
that there be sufficient competent evidence of the asset being ill-gotten wealth, and of the person or persons charged with the illegal acquisition of ill-gotten wealth being a close
associate or subordinate of the Marcoses who took advantage of such ties with the Marcoses to enrich themselves. In that effort, the Republic carries the heavy burden of proof,
and must discharge such burden fully; otherwise, the effort would fail and fall.
WHEREFORE, we DENY the petition for review on certiorari for its lack of merit; and AFFIRM the decision rendered on April 10, 2002, without pronouncements on costs of suit.
SO ORDERED.
Sereno, C.J., Abad, * Mendoza ** and Reyes, JJ., concur.
Footnotes
||| (Republic v. Reyes-Bakunawa, G.R. No. 180418, [August 28, 2013])

THIRD DIVISION
[G.R. No. 174462. February 10, 2016.]
 PHILIPPINE OVERSEAS TELECOMMUNICATIONS CORPORATION (POTC), PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION
(PHILCOMSAT),petitioners, vs. SANDIGANBAYAN (3rd Division), REPUBLIC OF THE PHILIPPINES represented by PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT (PCGG), respondents.
DECISION
PEREZ, J p:
Before this Court is a Petition for Certiorari filed under Rule 65 of the Rules of Court, seeking to nullify the Resolution 1 of public respondent Sandiganbayan
dated 20 October 2005 in Civil Case No. 0009, entitled "Republic of the Philippines v. Jose L. Africa, Manuel H. Nieto, Jr., Ferdinand E. Marcos, Imelda R. Marcos, Ferdinand R.
Marcos, Jr., Roberto S. Benedicto, Juan Ponce Enrile, Potenciano Ilusorio." The assailed Resolution denied petitioners' Omnibus Motion, which sought the lifting of the
sequestration order issued by the Presidential Commission on Good Government (PCGG) on Philippine Overseas Telecommunications Corporation (POTC) and Philippine
Communications Satellite Corporation (PHILCOMSAT).
The antecedent facts are as follows:
However whoever reads recent Philippine history, the EDSA People Power Revolution in February 1986 is a singular political phenomenon. Unprecedented,
unique, unnatural even, the revolution was unarmed. But it succeeded. The unnatural means yielded results natural to a revolution. The vanquished and its acts had to yield
to the victors and its reactions. The new President Corazon Cojuangco Aquino, exercising revolutionary government powers issued Executive Order Nos. 1and 2, creating the
PCGG to recover properties amassed by the unseated President Ferdinand Edralin Marcos, Sr., his immediate family, relatives, and cronies, "by taking undue advantage of
their public office and/or using their powers, authority, influence, connections or relationship," 2 and to sequester and take over such properties. The present litigation is
one of the many offsprings of the revolutionary orders.
Pursuant to Executive Order Nos. 1 and 2, on 14 March 1986, then PCGG Commissioner Ramon A. Diaz issued a letter 3 directing Officer-in-Charge Carlos M.
Ferrales to:
a. Sequester and immediately take over POTC and PHILCOMSAT among others, and
b. To freeze all withdrawals, transfers and/or remittances under any type of deposit accounts, trust accounts or placements.
POTC is a private corporation, which is a main stockholder of PHILCOMSAT, a government-owned and controlled corporation, which was established in 1966 and
was granted a legislative telecommunications franchise by virtue of Republic Act No. 5514, as amended by Republic Act No. 7949, to establish and operate international
satellite communication in the Philippines.
On 22 July 1987, the Office of the Solicitor General (OSG), on behalf of the Republic of the Philippines, filed a Complaint for Reconveyance, Reversion, Accounting
and Restitution, and Damages, docketed as Civil Case No. 0009, against Jose L. Africa, Manuel H. Nieto, Jr., Ferdinand E. Marcos, Imelda R. Marcos, Ferdinand R. Marcos, Jr.,
Roberto S. Benedicto, Juan Ponce Enrile, and Potenciano Ilusorio (collectively hereinafter referred to as "defendants"). The Complaint averred the following:
(a) . . . through manipulations and dubious arrangements with officers and members of the Board of the National Development Corporation (NDC), . . . purchased NDC's
shareholdings in the Philippine Communications Satellite Corporation (PHILCOMSAT), . . . under highly unconscionable terms and conditions manifestly disadvantageous to
Plaintiff and the Filipino people[;]
(b) . . .
(c) illegally manipulated, under the guise of expanding the operations of PHILCOMSAT, the purchase of major shareholdings of Cable and Wireless Limited, a London-based
telecommunication company, in Eastern Telecommunications Philippines, Incorporated (ETPI), which shareholdings Defendants Roberto S. Benedicto, Jose L. Africa and Manuel
H. Nieto, Jr., by themselves and through corporations namely Polygon Investors and Managers, Inc., Aeroco[m] Investors and Managers, Inc. and Universal Molasses
corporation organized by them, were beneficially held for themselves and for Defendants Ferdinand E. Marcos and Imelda R. Marcos; CAIHTE
(d) illegally effected, . . . contracts involving corporations which they owned and/or controlled, such as: The contract between ETPI and Polygon Investors and Managers, Inc.,
thereby ensuring effective control of ETPI and advancing Defendants' scheme to monopolize the telecommunications industry;
(e) acted in collaboration with each other as dummies, nominees and/or agents of Defendants Ferdinand E. Marcos, Imelda R. Marcos and Ferdinand R. Marcos, Jr. in several
corporations, such as, the Mid-Pasig Land Development Corporation and Independent Realty Corporation which, through manipulations by said Defendants, appropriated a
substantial portion of the shareholdings in POTC-PHILCOMSAT held by the late Honorio Poblador, Jr., Jose Valdez and Francisco Reyes, thereby further advancing Defendants'
scheme to monopolize the telecommunications industry;
(f) received improper payments such as bribes, kickbacks or commissions from an overprice in the purchase of equipment for DOMSAT[.] 4
As alleged in the Complaint, through clever schemes, the wealth that should go to the coffers of the government, which should be deemed acquired for the
benefit of the Republic, went to the defendants in their own individual accounts some, however, through conduits or corporations. The property supposedly acquired
illegally was specifically set out in a list appended to the Complaint as Annex A. For instance, Jose L. Africa, one of the defendants, allegedly channelled the ill-gotten wealth
in shares of stock in twenty (20) corporations, to wit:
1. Security Bank and Trust Company
2. SBTC Trust, Class A, Account No. 2016
3. SBTC Trust, Class A, Account No. 2017
4. SBTC Trust, Class A, Account No. 2018
5. Oceanic Wireless Network, Inc.
6. Bukidnon Sugar [Milling] Co., Inc.
7. Domestic Satellite Phils., Inc.
8. Northern Lines, Inc.
9. Philippine Communications Satellite Corp.
10. Far East Managers and Investors, Inc.
11. Traders Royal Bank
12. Philippine Overseas Telecommunications Corp.
13. Eastern Telecommunications Philippines, Inc.
14. Polygon Investors & Managers, Inc.
15. Universal Molasses Corp.
16. Silangan Investors and Managers, Inc.
17. Masters Assets Corp., Class B
18. Gainful Assets Corp., Class B
19. Aerocom Investors and Managers, Inc.
20. Luzon Stevedoring Corp.
21. Amalgamated Motors (Philippines), Inc.
22. Philippine National Construction Corp.
23. Consolidated Tobacco Industries of the Philippines. 5
Another defendant, Manuel H. Nieto, Jr., allegedly channelled ill-gotten wealth into shares of stock in fifteen (15) corporations, namely:
1. Ozamis Agricultural Development, Inc.
2. Eastern Telecommunications Philippines, Inc.
3. Rang'ay Farms
4. Hacienda San Martin, Inc.
5. Domestic Satellite
6. Bukidnon Sugar Milling Co., Inc.
7. Sunnyday Farms Company, Inc.
8. Silangan Investors & Managers, Inc.
9. Phil. Communications Satellite Corp.
10. Oceanic Wireless Network, Inc.
11. Integral Factors Corp.
12. Phil. Overseas Telecommunication[s] Corp.
13. Aerocom Investors and Managers, Inc.
14. Del Carmen Investments, Inc.
15. Polygon Ventures & Land Development Corp. 6
As borne by the records, 7 the following are the stockholdings in POTC of the defendants in Civil Case No. 0009:
1. (Estate of) Jose L. Africa 1
2. Manuel H. Nieto, Jr. 107
3. Ferdinand and Imelda Marcos 08
4. Ferdinand Marcos, Jr. 09
5. (Estate of) Roberto Benedicto 464 (reverted to the Republic)
6. Juan Ponce Enrile 0 10
7. (Estate of) Potenciano Ilusorio 16 (reverted to the Republic)

Pursuant to its power to sequester and to avoid further dissipation of the sequestered properties, the PCGG appointed a comptroller, who controlled the
disbursement of funds of POTC and PHILCOMSAT. At the same time, in a Memorandum 11 by the PCGG dated 24 October 2000 to the Bangko Sentral ng Pilipinas (BSP), the
PCGG informed the BSP that in all cash withdrawals, transfer of funds, money market placements and disbursements of POTC and PHILCOMSAT, the approval of the PCGG
appointed comptroller is required. The Memorandum was to be disseminated to all commercial banks and other non-bank financial institutions performing quasi-banking
functions. DETACa
From Civil Case No. 0009 sprung other cases: (1) Injunction; (2) Mandamus; and (3) Approval of the Compromise Agreement.
On 1 March 1991, POTC and PHILCOMSAT filed separate complaints for Injunction with the Sandiganbayan against the Republic to nullify and lift the
sequestration order issued against them for failure to file the necessary judicial action against them within the period prescribed by the Constitution and to enjoin the PCGG
from interfering with their management and operation, which the Sandiganbayan granted on 4 December 1991 through a Resolution. 12
On 23 January 1995, however, this Court, in Republic v. Sandiganbayan (First Division), G.R. No. 96073, 240 SCRA 376, January 23, 1995, reversed the
Sandiganbayan Resolution and ruled that the filing of Complaint for Reconveyance, Reversion, Accounting and Restitution, and Damages, docketed as Civil Case No. 0009,
was filed within the required 6-month period.
Besides the complaint for Injunction, POTC also filed a complaint for Mandamus against the Republic before the Sandiganbayan to compel the PCGG to return
POTC's Stock and Transfer Book and Stock Certificate Booklets. The case was docketed as Civil Case No. 0148.
On 13 May 1993, the Sandiganbayan granted the Mandamus, and the Decision became final and executory.
On 28 June 1996, Atty. Potenciano Ilusorio (Ilusorio), one of the defendants in the Civil Case No. 0009, entered into a Compromise Agreement with the Republic.
Out of 5,400 or 40% of the shares of stock of POTC in the names of Mid-Pasig Land Development Corporation (MLDC) and Independent Realty Corporation (IRC), the
government recovered 4,727 shares or 34.9% of the shares of stock. Ilusorio, on the other hand, retained 673 shares or 5% of the shares of stock.
The Compromise Agreement was approved by the Sandiganbayan in an Order 13 dated 8 June 1998.
In opposition to the Compromise Agreement, MLDC and IRC filed a Motion to Vacate the Compromise Agreement on 16 August and 2 October 1998, respectively,
which was denied by the Sandiganbayan in a Resolution 14 dated 20 December 1999. In the same Resolution, the Sandiganbayan directed the Corporate Secretary of POTC
to issue within ten (10) days from receipt thereof, the corresponding Stock Certificate of the government. Pursuant to the Order, 4,727 or 34.9% shares of stock of POTC
were transferred in the name of the Republic of the Philippines. HEITAD
Aggrieved, the PCGG, MLDC, and IRC filed separate petitions before this Court to nullify the Order of the Sandiganbayan approving the Compromise Agreement,
which this Court, on 15 June 2005, declared valid in Republic of the Phils. v. Sandiganbayan, G.R. Nos. 141796 and 141804. The Decision of the Court has long become final
and executory. The dispositive portion of the Decision reads:
Having been sealed with court approval, the Compromise Agreement has the force of res judicata between the parties and should be
complied with in accordance with its terms. Pursuant thereto, Victoria C. de los Reyes, Corporate Secretary of the POTC, transmitted to Mr.
 Magdangal B. Elma, then Chief Presidential Legal Counsel and Chairman of PCGG, Stock Certificate No. 131 dated January 10, 2000, issued in the
name of the Republic of the Philippines, for 4,727 POTC shares. Thus, the Compromise Agreement was partly implemented.
WHEREFORE, the instant petitions are hereby DISMISSED.
SO ORDERED. 15 (Citations omitted)
By virtue of the aforesaid Decision in Republic of the Phils. v. Sandiganbayan, POTC and PHILCOMSAT filed an Omnibus Motion 16 dated 28 February 2005, which
sought to nullify and/or discharge the continued sequestration of POTC and PHILCOMSAT and to declare null and void the PCGG Memorandum to the BSP dated 24 October
2000.
On 20 October 2005, the Sandiganbayan denied POTC and PHILCOMSAT's Omnibus Motion in the assailed Resolution. 17 The Motion for Reconsideration was
likewise denied in a Resolution 18 dated 2 August 2006.
Hence, the present Petition, which raises the following assignment of errors.
ASSIGNMENT OF ERRORS
(A)
The public respondent Sandiganbayan erred, and in fact, gravely abused its discretion amounting to lack or excess of jurisdiction, when
it ruled that the sequestration of POTC and PHILCOMSAT is still necessary under the present circumstances.
(B)
The public respondent Sandiganbayan erred, and in fact, gravely abused its discretion amounting to lack or excess of jurisdiction, when
it ruled that the appointment of a PCGG fiscal agent in POTC and PHILCOMSAT is justified under the present circumstances.
(C)
The public respondent Sandiganbayan erred, and in fact, [gravely] abused its discretion amounting to lack or excess of jurisdiction, when
it ruled that the sequestration order against the petitioners is valid despite clear fatal legal infirmities thereto. 19
Arguments of POTC and PHILCOMSAT
POTC and PHILCOMSAT aver that the Sandiganbayan committed grave abuse of discretion amounting to lack or in excess of jurisdiction by affirming the
continued sequestration of the shares, disregarding the final and executory Decision and Resolution of the Sandiganbayan dated 15 June 2005 and 7 September 2005
in Republic of the Phils. v. Sandiganbayan, which already ruled on the ownership of the subject shares. In the aforesaid case, the Court upheld the Compromise Agreement
between the government and Ilusorio. As a consequence, the government is now the undisputed owner of 34.9% of the shares of stock of the sequestered corporations.
Pursuant to the final and executory Decision of the Court, there is no longer need for the continued sequestration of POTC and PHILCOMSAT. POTC and PHILCOMSAT cited the
pronouncement of this Court in Bataan Shipyard and Engineering Co., Inc. (BASECO) v. PCGG, which held that, as the writ of sequestration is merely a conservatory
measure, thus, provisional and temporary in character, the final adjudication of the Court, which finally disposed the sequestered shares, rendered the writ unnecessary.
The POTC and PHILCOMSAT aver that while the PCGG has the power to sequester, such power is merely provisional. The POTC and PHILCOMSAT cite Executive
Order No. 1, Section 3, which grants the PCGG the power to take over sequestered properties provisionally, such that, after the sequestered properties have been finally
disposed of by the proper authorities, the writ shall be lifted.
Ruling of the Sandiganbayan
On the other hand, as it held, the Sandiganbayan posits that the sequestration of POTC and PHILCOMSAT should not be lifted. The Sandiganbayan ruled in this
wise:
Executive Order No. 1 declares that the sequestration of property the acquisition if which is suspect shall last until the transactions
leading to such acquisition can be disposed of by the appropriate authorities. . . . .
Also, this Court had already ruled in the Resolution dated April 1, 2003 that there was prima facie evidence that the herein defendants
have ill-gotten wealth consisting of funds and properties and that POTC and PHILCOMSAT, among others, were used in acquiring and concealing their
ill-gotten wealth. 20 (Emphasis supplied) ATICcS
Hence, the main issue of whether or not the continued sequestration is necessary.
Our Ruling
We rule in favor of POTC and PHILCOMSAT.
I
First, the threshold issue of whether or not the failure to properly implead POTC and PHILCOMSAT as defendants in Civil Case No. 0009 is a fatal jurisdictional
error.
Section 26, Article XVIII of the Constitution mandates that if no judicial action has been filed within six (6) months after the ratification of the 1987
Constitution,21 the writ of sequestration shall automatically be lifted. In the case at bar, there was no judicial action filed against POTC and PHILCOMSAT. There has never
been any appropriate judicial action for reconveyance or recovery ever instituted by the Republic against POTC and PHILCOMSAT.
A perusal of the instant Complaint, docketed as Civil Case No. 0009 dated 22 July 1987, reveals that it was filed against private individuals, namely, Jose L.
Africa, Manuel H. Nieto, Jr., Ferdinand E. Marcos, Imelda R. Marcos, Ferdinand R. Marcos, Jr., Roberto S. Benedicto, Juan Ponce Enrile, Potenciano Ilusorio. 22 Nowhere was
POTC and PHILCOMSAT impleaded in the Complaint.
The facts surrounding the present case square with those in PCGG v. Sandiganbayan (PCGG). 23 In PCGG, the complaint was filed against private individuals,
Nieto and Africa, who are shareholders in Aerocom. The Court ruled that the failure to implead Aerocom, the corporation, violated the fundamental principle that a
corporation's legal personality is distinct and separate from its stockholders, and that mere annexation to the list of corporations does not suffice. In the same manner
as PCGG, in the case at bar, the Complaint was filed only against POTC and PHILCOMSAT's stockholders, who are private individuals. Similarly, POTC and PHILCOMSAT were
also merely annexed to the list of corporations and were not properly impleaded in the case. The suit was against its individual shareholders, herein respondents, Jose L.
Africa, Manuel H. Nieto, Jr., Ferdinand E. Marcos, Imelda R. Marcos, Ferdinand R. Marcos, Jr., Roberto S. Benedicto, Juan Ponce Enrile, and Potenciano Ilusorio.
Failure to implead POTC and PHILCOMSAT is a violation of the fundamental principle that a corporation has a legal personality distinct and separate from its
stockholders; 24 that, the filing of a complaint against a stockholder is not ipso facto a complaint against the corporation. Our pronouncement in Aerocom is apt:
There is no existing sequestration to talk about in this case, as the writ issued against Aerocom, to repeat, is invalid for reasons
hereinbefore stated. Ergo, the suit in Civil Case No. 0009 against Mr. Nieto and Mr. Africa as shareholders in Aerocom is not and
cannot ipso facto be a suit against the unimpleaded Aerocom itself without violating the fundamental principle that a corporation
has a legal personality distinct and separate from its stockholders . Such is the ruling laid down in PCGG v. Interco reiterated anew in a case
of more recent vintage Republic v. Sandiganbayan, Sipalay Trading Corp. and Allied Banking Corp.where this Court, speaking through Mr. Justice
Ricardo J. Francisco, hewed to the lone dissent of Mr. Justice Teodoro R. Padilla in the very same Republic v. Sandiganbayan case herein invoked by
the PCGG, to wit:
xxx xxx xxx. (Emphasis supplied, citations omitted)
The basic tenets of fair play and principles of justice dictate that a corporation, as a legal entity distinct and separate from its stockholders, must be impleaded
as defendants, giving it the opportunity to be heard. The failure to properly implead POTC and PHILCOMSAT not only violates the latters' legal personality, but is repugnant
on POTC's and PHILCOMSAT's right to due process. "[F]ailure to implead these corporations as defendants and merely annexing a list of such corporations to the complaints
is a violation of their right to due process for it would in effect be disregarding their distinct and separate personality without a hearing." 25 As already settled, a suit against
individual stockholders is not a suit against the corporation.
Proceeding from the foregoing, as POTC and PHILCOMSAT were not impleaded, there is no longer any existing sequestration on POTC and PHILCOMSAT. 26 The
sequestration order over POTC and PHILCOMSAT was automatically lifted six (6) months after the ratification of the 1987 Constitution on 2 February 1987 for failure to
implead POTC and PHILCOMSAT in Civil Case No. 0009 before the Sandiganbayan or before any court for that matter. 27 To recite Section 26, Article XVIII of theConstitution,
if no judicial action has been filed within six (6) months after the ratification of the 1987 Constitution, the writ of sequestration shall automatically be lifted. Note must be
made of the fact that we do not here touch our previous holding that Civil Case No. 0009 was filed within the 6-month period. We now say that such notwithstanding, and as
shown by the facts on record, the POTC and PHILCOMSAT were not impleaded in the Civil Case.
II
For one more reason should this Petition be granted. This concerns the shares in petitioner corporations of Potenciano Ilusorio covered by the Compromise
Agreement entered into between Ilusorio and PCGG, which was upheld by the Court in Republic of the Phils. v. Sandiganbayan, the decision in which is now final and
executory. TIADCc
a. Sequestration is merely provisional
To effectively recover all ill-gotten wealth amassed by former President Marcos and his cronies, the President granted the PCGG, among others, power and
authority to sequester, provisionally take over or freeze suspected ill-gotten wealth. The subject of the present case is the extent of PCGG's power to sequester.
Sequestration is the means to place or cause to be placed under the PCGG's possession or control properties, building or office, including business enterprises
and entities, for the purpose of preventing the destruction, concealment or dissipation of, and otherwise conserving and preserving the same until it can be determined
through appropriate judicial proceedings, whether the property was in truth "ill-gotten." 28
However, the power of the PCGG to sequester is merely provisional. 29 None other than Executive Order No. 1, Section 3 (c) expressly provides for the
provisional nature of sequestration, to wit:
c) To provisionally take over in the public interest or to prevent its disposal or dissipation, business enterprises and properties taken over by the
government of the Marcos Administration or by entities or persons close to former President Marcos, until the transactions leading to such
acquisition by the latter can be disposed of by the appropriate authorities. 30 (Emphasis supplied).
In the notable case of Bataan Shipyard & Engineering Co., Inc. (BASECO) v. PCGG, 31 the Court clearly pronounced that sequestration is provisional, that such
sequestration shall last "until the transactions leading to such acquisition . . . can be disposed of by the appropriate authorities." 32
Sequestration is akin to the provisional remedy of preliminary attachment, or receivership. 33 Similarly, in attachment, the property of the defendant is seized
as a security for the satisfaction of any judgment that may be obtained, and not disposed of, or dissipated, or lost intentionally or otherwise, pending litigation. 34 In a
receivership, the property is placed in the possession and control of a receiver appointed by the court, who shall conserve the property pending final determination of
ownership or right of possession of the parties. 35 In sequestration, the same principle holds true. The sequestered properties are placed under the control of the PCGG,
subject to the final determination of whether the property was in truth ill-gotten. We reiterate the disquisition of this Court in BASECO:
By the clear terms of the law, the power of the PCGG to sequester property claimed to be "ill-gotten" means to place or cause to be
placed under its possession or control said property, or any building or office wherein any such property and any records pertaining thereto may be
found, including "business enterprises and entities," for the purpose of preventing the destruction, concealment or dissipation of, and otherwise
conserving and preserving, the same until it can be determined, through appropriate judicial proceedings, whether the property was
in truth "ill-gotten," i.e., acquired through or as a result of improper or illegal use of or the conversion of funds belonging to the Government or
any of its branches, instrumentalities, enterprises, banks or financial institutions, or by taking undue advantage of official position, authority
relationship, connection or influence, resulting in unjust enrichment of the ostensible owner and grave damage and prejudice to the
State. . . . . 36 (Emphasis supplied, citations omitted)
Sequestration is a conservatory writ, 37 which purpose is to preserve properties in custodia legis, lest the dissipation and concealment of the "ill-gotten" wealth
the former President Marcos and his allies may resort to, pending the final disposition of the properties. 38 It is to prevent the disappearance or dissipation pending
adjudgment of whether the acquisition thereof by the apparent owner was attended by some vitiating anomaly or attended by some illegal means. 39 Thus by no means is
it permanent in character. Upon the final disposition of the sequestered properties, the sequestration is rendered functus officio.
b. Ownership of the sequestered properties
have already been finally adjudged
As sequestration is a provisional remedy, a transitional state of affairs, in order to prevent the disappearance or dissipation of the property pending the final
disposition of the property, the ultimate purpose of sequestration is to bring an intended permanent effect while the PCGG investigates in pursuit of a judicial proceeding
to dispose of the sequestered properties. Tersely put, the ultimate purpose of sequestration is to recover the sequestered properties in favor of the government in case they
turn out to be ill-gotten. This function to dispose of the property is reserved to the Sandiganbayan. Until the Sandiganbayan determines whether the property was in truth
and in fact "ill-gotten", the sequestration shall subsist. In case of a finding that the sequestered properties are ill-gotten, the property shall be returned to the lawful owner,
to the people, through the government; otherwise, the sequestered property shall be returned to the previous owner.
Clearly, the purpose of sequestration is to take control until the property is finally disposed of by the proper authorities. However, when such property has
already been disposed of, such that the owner has already been adjudged by the Court, must the sequestration still subsist? AIDSTE
 In the case at bar, the 34.9% ownership of the sequestered property has been finally adjudged; the ultimate purpose of sequestration was already accomplished
when the ownership thereof was adjudged to the government by this Court in Republic of the Phils. v. Sandiganbayan. Moreover, the said shares in the ownership of the
sequestered properties have reverted to the Government. The government now owns 4,727 shares or 34.9% of the sequestered corporations.
As the sequestered property has already been disposed, the ultimate purpose of sequestration has already been attained; the evil sought to be prevented is no
longer present. Evidently, the sequestered property which was already returned to the government cannot anymore be dissipated or concealed. Otherwise stated, the
sequestered properties need no longer be subject of reversion proceedings because they have already reverted back to the government. Thus, as the sequestration is
rendered functus officio, it is merely ministerial upon the Sandiganbayan to lift the same.
In fact, on 4 November 2010, the Department of Justice (DOJ), which has supervision over the PCGG, acknowledged the need to lift the writ of sequestration in the DOJ
Memorandum LML-M-4K10-368. 40 The pertinent portion of the DOJ Memorandum reads:
It bears stressing that the PCGG, which is now under the administrative supervision of this Department pursuant to Executive Order No. 643 s. 2007,
has lost "authority" over the shares of the Republic in POTC. This is due to the fact that in PCGG Resolution No. 2007-024 dated 4 September 2007, it
was resolved that the 4,727 shares of stock of POTC, which is under the name of the Republic of the Philippines, be now transferred to the
Department of Finance (DOF) for disposition. . . . . (Boldface omitted)
xxx xxx xxx
In view of the foregoing, you are hereby directed to immediately implement PCGG Resolution No. 2007-024 by immediately transferring to the DOF, for its proper disposition,
POTC Stock Certificate No. 131. Corollary to this is the lifting of the sequestration orders, if any, that covers the 4,727 shares of stock of the Republic in
POTC. . . . . 41 (Emphasis supplied)
Quite telling is this Court's unequivocal pronouncement in a rather recent case of Palm Avenue Holding Co., Inc. v. Sandiganbayan, 42 which involved very similar factual
antecedents to those pertaining to petitioners POTC and PHILCOMSAT.
"Section 26, Article XVIII of the 1987 Constitution provides:
xxx xxx xxx
A sequestration or freeze order shall be issued only upon showing of a prima facie case. The order and the list of the sequestered of frozen properties shall forthwith be
registered with the proper court. For orders issued before the ratification of this Constitution, the corresponding judicial action or proceeding shall be filed within six months
from its ratification. For those issued after such ratification, the judicial action or proceeding shall be commenced within six months from the issuance thereof.
The sequestration or freeze order is deemed automatically lifted if no judicial action or proceeding is commenced as herein provided.
The aforesaid provision mandates the Republic to file the corresponding judicial action or proceedings within a six-month period (from its ratification on February 2, 1987) in
order to maintain sequestration, non-compliance with which would result in the automatic lifting of the sequestration order. The Court's ruling in Presidential Commission on
Good Government v. Sandiganbayan, which remains good law, reiterates the necessity of the Republic to actually implead corporations as defendants in the complaint, out of
recognition for their distinct and separate personalities, failure to do so would necessarily be denying such entities their right to due process. Here, the writ of sequestration
issued against the assets of the Palm Companies is not valid because the suit in Civil Case No. 0035 against Benjamin Romualdez as shareholder in the Palm Companies is not
a suit against the latter. The Court has held, contrary to the assailed Sandiganbayan Resolution in G.R. No. 173082, that failure to implead these corporations as defendants
and merely annexing a list of such corporations to the complaints is a violation of their right to due process for it would be, in effect, disregarding their distinct and separate
personality without a hearing. Here, the Palm Companies were merely mentioned as Item Nos. 47 and 48, Annex A of the Complaint, as among the corporations where
defendant Romualdez owns shares of stocks. Furthermore, while the writ of sequestration was issued on October 27, 1986, the Palm Companies were impleaded in the case
only in 1997, or already a decade from the ratification of theConstitution in 1987, way beyond the prescribed period. AaCTcI
The argument that the beneficial owner of these corporations was, anyway, impleaded as party-defendant can only be interpreted as a tacit admission of the failure to file the
corresponding judicial action against said corporations pursuant to the constitutional mandate. Whether or not the impleaded defendant in Civil Case No. 0035 is indeed the
beneficial owner of the Palm Companies is a matter which the PCGG merely assumes and still has to prove in said case.
The sequestration order issued against the Palm Companies is therefore deemed automatically lifted due to the failure of the Republic to commence the
proper judicial action or to implead them therein within the period under the Constitution. However, the lifting of the writ of sequestration will not necessarily be
fatal to the main case since the same does not ipso facto mean that the sequestered properties are, in fact, not illgotten. The effect of the lifting of the sequestration will
merely be the termination of the government's role as conservator. In other words, the PCGG may no longer exercise administrative or housekeeping powers, and its nominees
may no longer vote the sequestered shares to enable them to sit in the corporate board of the subject company. 43(Emphasis supplied, citations omitted)
The glaring similarity in the circumstances attendant in the case involving Palm Companies with the situation of petitioners POTC and PHILCOMSAT compels us to rule in this
case as we did in Palm case.
On a final note, while sequestration is the means to revert the amassed ill-gotten wealth back to the coffers of our government, we must still safeguard the protection of
property rights from overzealousness. Sequestration as statutorily and constitutionally recognized is not permanent. It must be lifted when the law and proven facts warrant, or
when the purpose has been accomplished.
WHEREFORE, the Petition is GRANTED. The assailed Resolution issued by the Sandiganbayan dated 20 October 2005 and 2 August 2006 are REVERSED. The writ of
sequestration issued against petitioner POTC and PHILCOMSAT is hereby declared LIFTED six (6) months after the ratification of the 1987 Constitution on 2 February 1987.
SO ORDERED.
Carpio, * Velasco, Jr., Brion ** and Reyes, JJ., concur.
||| (Philippine Overseas Telecommunications Corp. v. Sandiganbayan, G.R. No. 174462, [February 10, 2016])