Beruflich Dokumente
Kultur Dokumente
In their bid to declare null and void the proceedings in the Recovery
case and the Ejectment cases, petitioners argued that the Caloocan Petitioners insist that this is mainly a petition for declaratory relief.
City MeTC, where the Ejectment cases were filed, and the Caloocan Section 1, Rule 63 of the 1997 Rules of Court provides:
City RTC where the Recovery case was pending, were divested of
jurisdiction since the Quezon City RTC acquired jurisdiction over the SECTION 1. Who may file petition. — Any person interested under a
subject matter.33 Petitioners specifically alleged that the MeTC’s deed, will, contract or other written instrument, or whose rights are
refusal to suspend the Ejectment cases despite the Injunction order affected by a statute, executive order or regulation, ordinance, or
Judge Querubin's query is not an action for declaratory relief. Despite this procedural remedy available to them, petitioners, under
Section 1 of Rule 64 [now Rule 63] of the Rules of Court provides the the pretext that they were in a quandary as to their rights under the
requisites of an action for declaratory relief. In interpreting these Injunction order of the Quezon City RTC, directly filed the instant
requisites, the Court has ruled that: case here. Petitioners did not bother to proffer a compelling reason
for their direct resort to this Court. This procedural faux pas proves
fatal. The Court’s exhortation against taking a procedural shortcut
xxxx
cannot be overemphasized. In Ortega v. The Quezon City
Government, 49 the Court accentuated:
The letter of Judge Querubin pertained to final orders and decisions
of the courts that are clearly not the proper subjects of a petition for
At all events, even if this petition delves on questions of law, there is
declaratory relief. Thus, the requisites prescribed by the Rules of
no statutory or jurisprudential basis for according to this Court
Court in an action for declaratory relief are not applicable to the
original and exclusive jurisdiction over declaratory relief which
letter of Judge Querubin.46 (Emphasis supplied.)
advances only questions of law.
The foregoing order is not addressed to the Caloocan City RTC. Bereft of merit too is petitioners’ argument that the Caloocan City
Neither can it be inferred from the language thereof that the MeTC cannot disregard the injunction order of the Quezon City RTC
Quezon City RTC intended to enjoin the Caloocan City RTC from hearing the Annulment/Reversion case. The established rule is that a
further proceeding with the Recovery case. The order merely pending civil action for ownership such as annulment of title shall
mentions the Caloocan City MeTCs. Nothing more. But more not ipso facto suspend an ejectment proceeding. 60 The Court
importantly, the Quezon City RTC could not have validly enjoined explained that the rationale for this is that in an ejectment case, the
the Caloocan City RTC without violating the doctrine that no court issue is possession, while in an annulment case the issue is
has the power to interfere by injunction with the judgments or ownership.61 In fact, an ejectment case can be tried apart from an
decrees of a court of concurrent or coordinate jurisdiction.55Spouses annulment case.62 Although there is an exception to this rule,
Ching v. Court of Appeals56 justifies this rule in this manner: petitioners failed to justify that this case falls within said exception.
The words of the Court on this matter are instructive:
Beginning with the case of Orais v. Escaño, down to the subsequent
cases of Nuñez v. Low, Cabigao v. del Rosario, Hubahib v. Insular In the absence of a concrete showing of compelling equitable
Drug Co., Inc., National Power Corp. v. De Veyra, Luciano v. reasons at least comparable and under circumstances analogous
Provincial Governor, De Leon v. Hon. Judge Salvador, Cojuangco v. to Amagan, we cannot override the established rule that a pending
Villegas, Darwin v. Tokonaga, we laid down the long standing civil action for ownership shall not ipso facto suspend an ejectment
doctrine that no court has the power to interfere by injunction with proceeding. Additionally, to allow a suspension on the basis of the
the judgments or decrees of a court of concurrent or coordinate reasons the petitioners presented in this case would create the
jurisdiction. The various trial courts of a province or city, having the dangerous precedent of allowing an ejectment suit to be suspended
same or equal authority, should not, cannot, and are not permitted by an action filed in another court by parties who are not involved or
to interfere with their respective cases, much less with their orders affected by the ejectment suit.63(Emphases supplied.)
WHEREFORE, premises considered, the instant petition is While the motion for reconsideration was pending with the Court,
hereby DISMISSED. The Temporary Restraining Order dated October on 16 January 2004 the Office of the City Treasurer of Baguio sent a
25, 2000 issued by this Court is LIFTED. demand letter11 which stated that:
In line with the Proclamation, the Bureau of Internal Revenue (BIR) In an Order16 dated 28 June 2005, the RTC dropped the City of
issued Revenue Regulations No. 12-976 while the Bureau of Customs Baguio as a party to the case. The remaining parties were required
(BOC) issued Customs Administrative Order No. 2-98.7 The two to submit their respective memoranda. On 14 October 2005, the
issuances provided the rules and regulations to be implemented RTC rendered its assailed order.17 It held that the decision in G.R.
within the Camp John Hay SEZ. Subsequently, however, Section 3 of No. 119775 applies retroactively because the tax exemption granted
by Proclamation No. 420 is null and void from the beginning. The
the Proclamation was declared unconstitutional in part by the RTC also ruled that the petition for declaratory relief is not the
Court en banc in John Hay Peoples Alternative Coalition v. appropriate remedy. A judgment of the court cannot be the proper
Lim, 8 when it ruled that: subject of a petition for declaratory relief; the enumeration in Rule
64 is exclusive. Moreover, the RTC held that Commonwealth Act No.
WHEREORE, the second sentence of Section 3 of 55 (CA No. 55) which proscribes the use of declaratory relief in cases
Proclamation No. 420 is hereby declared NULL and VOID where a taxpayer questions his tax liability is still in force and effect.
and is accordingly declared of no legal force and effect.
Public respondents are hereby enjoined from CJH filed a motion for reconsideration but the RTC denied it.18 Hence
implementing the aforesaid void provision. this petition, which, as earlier stated, was filed directly to this Court,
raising as it does only pure questions of law.
Proclamation No. 420, without the invalidated portion,
remains valid and effective.9 There are two issues raised in this petition, one procedural and the
other substantive. First, is the remedy of declaratory relief proper in
From the opinion of the former Chief Justice Moran may However, CJH is not left without recourse. The Tariff and Customs
be deduced that the failure to incorporate the above Code (TCC) provides for the administrative and judicial remedies
proviso [CA No. 55] in section 1, rule 66, [now Rule 64] is available to a taxpayer who is minded to contest an assessment,
not due to an intention to repeal it but rather to the desire subject of course to certain reglementary periods. The TCC provides
to leave its application to the sound discretion of the that a protest can be raised provided that payment first be made of
court, which is the sole arbiter to determine whether a the amount due.30 The decision of the Collector can be reviewed by
case is meritorious or not. And even if it be desired to the Commissioner of Customs who can approve, modify or reverse
incorporate it in rule 66, it is doubted if it could be done the
under the rule-making power of the Supreme Court
considering that the nature of said proviso decision or action of the Collector.31 If the party is not satisfied with
is substantive and not adjective, its purpose being to lay the ruling of the Commissioner, he may file the necessary appeal to
down a policy as to the right of a taxpayer to contest the the Court of Tax Appeals.32 Afterwards, the decision of the Court of
collection of taxes on the part of a revenue officer or of Tax Appeals can be appealed to this Court.
the Government. With the adoption of said proviso, our
law-making body has asserted its policy on the matter, With the foregoing disquisition on the first issue, there is no need to
which is to prohibit a taxpayer to question his liability for delve into the second issue at this juncture. It should be noted
the payment of any tax that may be collected by the though, as admitted by CJH in its Certificate of Non-Forum
Bureau of Internal Revenue. As this Court well said, Shopping,33 that even before the filing of this petition, it already had
quoting from several American cases, "The Government a pending petition for review with this Court, docketed as G.R. No.
may fix the conditions upon which it will consent to litigate 16923434 and entitled, Camp John Hay Development Corporation v.
the validity of its original taxes..." "The power of taxation Central Board of Assessment Appeals, et al. That case emanated
being legislative, all incidents are within the control of the from assessments made in 2002 for real estate taxes on CJH by the
Legislature." In other words, it is our considered opinion City of Baguio. Said assessments were duly challenged before the
that the proviso contained in Commonwealth Act No. 55 is Local Board of Assessment Appeals, the Central Board of
still in full force and effect and bars the plaintiff from filing Assessment Appeals and the Court of Tax Appeals. The petition in
the present action.22(Emphasis supplied) (Citations G.R. No. 169234 was filed with this Court in September 2005, or
omitted.) after our 2003 Decision in John Hay Peoples Alternative
Coalition had attained finality. CJH therein raised the same question
As a substantive law that has not been repealed by another statute, of law, as in this case, whether the doctrine of operative fact applies
CA No. 55 is still in effect and holds sway. Precisely, it has removed to G.R. No. 119775. Clearly, the Court in G.R. No. 169234 is better
from the courts’ jurisdiction over petitions for declaratory relief positioned to resolve that question of law, there being no
involving tax assessments. The Court cannot repeal, modify or alter antecedent jurisdictional defects that would preclude the Court
an act of the Legislature. from squarely deciding that particular issue. CJH is free to reiterate
this current point of clarification as it litigates the petition in G.R. No.
Moreover, the proper subject matter of a declaratory relief is a 169234.
deed, will, contract, or other written instrument, or the construction
or validity of statute or ordinance.23 CJH hinges its petition on the WHEREFORE, the Petition is DENIED.
demand letter or assessment sent to it by the BOC. However, it is
really not the demand letter which is the subject matter of the SO ORDERED.
petition. Ultimately, this Court is asked to determine whether the
decision of the Court en banc in G.R. No. 119775 has a retroactive
THIRD DIVISION
effect. This approach cannot be countenanced. A petition for
declaratory relief cannot properly have a court decision as its subject
matter. In Tanda v. Aldaya,24 we ruled that: G.R. No. 200670 July 6, 2015
x x x [A] court decision cannot be interpreted as included CLARK INVESTORS AND LOCATORS ASSOCIATION INC., Petitioner,
within the purview of the words "other written vs.
On March 13, 1992, Congress enacted RA No. 7227 which mandated In case of conflict between national and local laws with
the accelerated conversion of the Clark and Subic military respect to tax exemption privileges in the Subic Special
reservations into special economic zones. Section 12 thereof Economic Zone, the same shall be resolved in favor of the
provides for the creation of the Subic Special Economic Zone: latter;
SEC. 12. Subic Special Economic Zone. - Subject to the concurrence (d) No exchange control policy shall be applied and free
by resolution of the sangguniang panlungsod of the City of Olongapo markets for foreign exchange, gold, securities and futures
'and the sangguniang bayan of the Municipalities of Subic, Morong shall be allowed and maintained in the Subic Special
and Hermosa, there is hereby created a Special Economic and Free- Economic Zone;
port Zone consisting of the City of Olongapo and the Municipality of
Subic, Province of Zambales, the lands occupied by the Subic Naval
(e) The Central Bank, through the Monetary Board, shall
Base and its contiguous extensions as embraced, covered, and
supervise and regulate the operation of banks and other
defined by the 1947 Military Bases Agreement between the
financial institutions within the Subic Special Economic
Philippines and the United states of America as amended, and
Zone;
within the territorial jurisdiction of the Municipalities of Morong and
Hermosa, Province of Bataan, hereinafter referred to as the Subic
Special Economic Zone whose metes and bounds shall be delineated (f) Banking and finance shall be liberalized with the
in a proclamation to be issued by the President of the Philippines. establishment of foreign currency depository units of local
Within thirty (30) days after the approval of this Act, each local commercial banks and offshore banking units of foreign
government unit shall submit its resolution of concurrence to join banks with minimum Central Bank regulation;
the Subic Special Economic Zone to the Office of the President.
Thereafter, the President of the Philippines shall issue a (g) Any investor within the Subic Special Economic Zone
proclamation defining the metes and bounds of the zone as whose continuing investment shall not be less than Two
provided herein. hundred fifty thousand dollars ($250,000), his/her spouse
and dependent children under twenty one (21) years of
The abovementioned zone shall be subject to the following policies: age, shall be granted permanent resident status within
theSubic Special Economic Zone. They shall have freedom
of ingress and egress to and from the Subic Special
(a) Within the framework and subject to the mandate and
Economic Zone without any need of special authorization
limitations of the Constitution and the pertinent provisions
from the Bureau of Immigration and Deportation. The
of the Local Government Code, the Subic Special Economic
Subic Bay Metropolitan Authority referred to in Section 13
Zone shall be developed into a self-sustaining, industrial,
of this Act may also issue working visas renewable every
commercial, financial and investment center to generate
two (2) years to foreign executives and other aliens
employment opportunities in and around the zone and to
possessing highly-technical skills which no Filipino within
attract and promote productive foreign investments;
the Subic Special Economic Zone possesses, as certified by
the Department of Labor and Employment. The names of
(b) The Subic Special Economic Zone shall be operated aliens granted permanent residence status and working
and managed as a separate customs territory ensuring visas by the Subic Bay Metropolitan Authority shall be
free flow or movement of goods and capital within, into reported to the Bureau of Immigration and Deportation
and exported out of the Subic Special Economic Zone, as within thirty (30) days after issuance thereof;
well as provide incentives such as tax and duty-free
importations of raw materials, capital and equipment.
Rule 63 Full Text Cases andm7 of 88
(h) The defense of the zone and the security of its imposed on registered business enterprises within the CFZ. In lieu of
perimeters shall be the responsibility of the National said taxes, a five percent (5%) tax on gross income earned shall be
Government in coordination with the Subic Bay paid by all registered business enterprises within the CFZ and shall
Metropolitan Authority. The Subic Bay Metropolitan be directly remitted as follows: three percent (3%) to the National
Authority shall provide and establish its own internal Government, and two percent (2%) to the treasurer's office of the
security and fire-fighting forces; and municipality or city where they are located.
(i) Except as herein provided, the local government units "The governing body of the Clark Special Economic Zone shall
comprising the Subic Special Economic Zone shall retain likewise be established by executive proclamation with such powers
their basic autonomy and identity.1âwphi1 The cities shall and functions exercised by the Export Processing Zone Authority
be governed by their respective charters and the pursuant to Presidential Decree No. 66, as amended: Provided, That
municipalities shall operate and function in accordance it shall have no regulatory authority over public utilities, which
with Republic Act No. 7160, otherwise known as the Local authority pertains to the regulatory agencies created by law for the
Government Code of 1991. (Emphasis supplied) purpose, such as the Energy Regulatory Commission created under
Republic Act No. 9136 and the National Telecommunications
Based on Section 12 (c) above, in lieu of national and local taxes, all Commission created under Republic Act No. 7925.
businesses and enterprises operating within the Subic Special
Economic Zone shall pay a preferential gross income tax rate of five "x x x
percent (5%). In addition, Section 12 (b) also provides that such
businesses and enterprises shall be exempt from the payment of all "Subject to the concurrence by resolution of the local government
taxes and duties on the importation of raw materials, capital, and units directly affected and upon recommendation of the Philippine
equipment into the Subic Special Economic Zone. Economic Zone Authority (PEZA), the President is hereby authorized
to create by executive proclamation Special Economic Zones
Meanwhile, on March 20, 2007, Congress enacted RA No. 9400 covering the City of Balanga and the municipalities of Limay,
which extended the aforementioned tax and fiscal incentives under Mariveles, Morong, Hermosa, and Dinalupihan, Province of Bataan.
RA No. 7227 to the Clark Freeport Zone. By way of amendment,
Section 2 thereof provides: "Subject to the concurrence by resolution of the local government
units directly affected and upon recommendation of the PEZA, the
SEC. 2. Section 15 of Republic Act No. 7227, as amended, is hereby President is hereby authorized to create by executive proclamation
amended to read as follows: Special Economic Zones covering the municipalities of Castillejos,
San Marcelino, and San Antonio, Province of Zambales.
"SEC. 15. Clark Special Economic Zone (CSEZ) and Clark Freeport
Zone (CFZ). - Subject to the concurrence by resolution of the local "Duly registered business enterprises that will operate in the Special
government units directly affected, the President is hereby Economic Zones to be created shall be entitled to the same tax and
authorized to create by executive proclamation a Special Economic duty incentives as provided for under Republic Act No. 7916, as
Zone covering the lands occupied by the Clark military reservations amended: Provided that for the purpose of administering these
and its contiguous extensions as embraced, covered and defined by incentives, the PEZA shall register, regulate, and supervise all
the 194 7 Military Bases Agreement between the Philippines and the registered enterprises within the Special Economic Zones."
United States of America, as amended, located within the territorial
jurisdiction of Angeles City, municipalities of Mabalacat and Porac, Thus, the businesses and enterprises within the Clark Freeport Zone
Province of Pampanga, and the municipalities of Capas and Bamban, are similarly exempt from the payment of all taxes and duties on the
Province of Tarlac, in accordance with the provision as herein importation of raw materials, capital and equipment.
provided insofar as applied to the Clark military reservations. The
Clark Air Base proper with an area of not more than four thousand
On February 17, 2012, the DOF, upon recommendation of the BIR,
four hundred hectares (4,400 has.), with the exception of the
issued RR 2-2012 which imposed VAT and excise tax on the
twenty-two-hectare commercial area situated near the main gate
importation of petroleum and petroleum products from abroad and
and the Bayanihan Park consisting of seven and a half hectares (7.5
into the Freeport or Economic Zones. Section 3 thereof partly
has.) located outside the main gate of the Clark Special Economic
provides:
Zone, is hereby declared a freeport zone.
Similarly, in the case at bar, RR 2-2012 was also issued by the Accordingly, this petition must fail because this Court does not have
Secretary of Finance based on Section 244 of the NIRC. Section 1 of original jurisdiction over a petition for declaratory relief even if only
RR 2-2012 provides: questions of law are involved.8 The special civil action of declaratory
relief falls under the exclusive jurisdiction of the Regional Trial
SECTION 1. SCOPE - Pursuant to Section 244, in relation to Section Courts. 9 The Rules of Court is explicit that such action shall be
245, of the National Internal Revenue Code (NIRC) of 1997, as brought before the appropriate Regional Trial Court. Section 1, Rule
amended, these Regulations are hereby promulgated in order to 63 of the Rules of Court provides:
prescribe:
SECTION 1. Who may file petition. - Any person interested under a
1) the tax administration treatment of all petroleum and petroleum deed, will, contract or other written instrument, whose rights are
products imported into the Philippines, including those coming in affected by a statute, executive order or regulation, ordinance, or
through Freeport zones or Economic Zones; and 2) the refund of any other governmental regulation may, before breach or violation
Value-Added Tax (VAT) and Excise taxes paid for transactions thereof, bring an action in the appropriate Regional Trial Court to
statutorily zero-rated or exempt therefrom; and to provide determine any question of construction or validity arising, and for a
administrative guidelines on the operation and maintenance of declaration of his rights or duties, thereunder.
storage tanks, facilities, depots or terminals where commodities for
commercial use can be stored. Lastly, although this Court, the Court of Appeals and the Regional
Trial Courts have concurrent jurisdiction to issue writs of certiorari,
Relevantly, Section 244 of the NIRC provides: prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner
SEC. 244. Authority of Secretary of Finance to Promulgate Rules and unrestricted freedom of choice of court forum.10 In Heirs of Bertuldo
Regulations. -The Secretary of Finance, upon recommendation of Hinog v. Hon. Melicor, 11citing People v. Cuaresma, 12 we held:
the Commissioner, shall promulgate all needful rules and regulations
for the effective enforcement of the provisions of this Code. This Court's original jurisdiction to issue writs of certiorari is not
exclusive. It is shared by this Court with Regional Trial Courts and
Conformably with our ruling in BPI Leasing Corporation that the with the Court of Appeals. This concurrence of jurisdiction is not,
application of Section 244 of the NIRC is an exercise of quasi- however, to be taken as according to parties seeking any of the writs
legislative or rule-making powers of the Secretary of Finance, and an absolute, unrestrained freedom of choice of the court to which
since RR 2-2012 was issued by the Secretary of Finance based on application therefor will be directed. There is after all a hierarchy of
Section 244 of the NIRC, such administrative issuance is therefore courts. That hierarchy is determinative of the venue of appeals, and
quasi-legislative in nature which is outside the scope of a petition for also serves as a general determinant of the appropriate forum for
certiorari. issued by the Secretary of Finance based on Section 244 petitions for the extraordinary writs. A becoming regard for that
of the NIRC, such administrative issuance is therefore quasi- judicial hierarchy most certainly indicates that petitions for the
legislative in nature which is outside the scope of a petition for issuance of extraordinary writs against first level ("inferior") courts
certiorari. should be filed with the Regional Trial Court, and those against the
latter, with the Court of Appeals. A direct invocation of the Supreme
Court's original jurisdiction to issue these writs should be allowed
Secondly, while this case is styled as a petition for certiorari, there is,
only when there are special and important reasons therefor, clearly
however, no denying the fact that, in essence, it seeks the
and specifically set out in the petition. This is [an] established policy.
declaration by this Court of the unconstitutionality and illegality of
It is a policy necessary to prevent inordinate demands upon the
the questioned rule, thus partaking the nature, in reality, of one for
Court's time and attention which are better devoted to those
declaratory relief over which this Court has only appellate, not
matters within its exclusive jurisdiction, and to prevent further over-
original, jurisdiction. 7Section 5, Article VIII of the 1987 Philippine
crowding of the Court's docket.
Constitution provides:
(2) Review, revise, reverse, modify, or affirm on appeal or We thus affirm the judicial policy that we shall not entertain a direct
certiorari as the law or the Rules of Court may provide, resort to this Court unless the remedy cannot be obtained in the
final judgments and orders of lower courts in: apporiate courts, and exceptional and compelling circumstances,
In the case at bar, petitioner failed to allege such exceptional and SECTION 2. – Definition of Terms. Asused in this Ordinance, the
compelling circumstances which justify a direct resort to this Court. following words, terms and phrases shall mean as follows:
EO 10 was partially implemented on June 10, 2011. Thereafter, two 2. Whether or not respondent mayor committed grave
more instances followed wherein respondents demolished the abuse of discretion when he issued EO 10;
improvements introduced by Boracay West Cove, the most recent of
which was made in February 2014. a. Whether or not petitioner’s right to due
process was violated when the respondent
Alleging that the order was issued and executed with grave abuse of mayor ordered the closure and demolition of
discretion, petitioner filed a Petition for Certiorari with prayer for Boracay West Cove’s hotel without first
injunctive relief with the CA. He argued that judicial proceedings conducting judicial proceedings;
should first be conducted before the respondent mayor could order
the demolition of the company’s establishment; that Boracay West b. Whether or not the LGU’s refusal to issue
Cove was granted a FLAgT by the DENR, which bestowed the petitioner the necessary building permit and
company the right to construct permanent improvements on the clearances was justified;
area in question; thatsince the area is a forestland, it is the DENR—
and not the municipality of Malay, or any other local government
c. Whether or not petitioner’s rights under the
unit for that matter—that has primary jurisdiction over the area, and
FLAgT prevail over the municipal ordinance
that the Regional Executive Director of DENR-Region 6 had officially
providing for a no-build zone; and
issued an opinion regarding the legal issues involved in the present
case; that the Ordinance admits of exceptions; and lastly, that it is
the mayor who should be blamed for not issuing the necessary d. Whether or not the DENR has primary
clearances in the company’s favor. jurisdiction over the controversy, not the LGU.
In rebuttal, respondents contended that the FLAgT does not excuse The Court’s Ruling
the company from complying with the Ordinance and Presidential
Decree No. 1096 (PD 1096), otherwise known as the National We deny the petition.
Building Code of the Philippines. Respondents also argued that the
demolition needed no court order because the municipal mayor has Certiorari, not declaratory relief, is the proper remedy
the express power under the Local Government Code (LGC) to order
the removal of illegally constructed buildings.
a. Declaratory relief no longer viable
Ruling of the Court of Appeals
Resolving first the procedural aspect of the case, We find merit in
petitioner’s contention that the special writ of certiorari, and not
In its assailed Decision dated August 13, 2013, the CA dismissed the declaratory relief, is the proper remedy for assailing EO 10. As
petition solely on procedural ground, i.e., the special writ of provided under Sec. 1, Rule 63 of the Rules of Court:
certiorari can only be directed against a tribunal, board, or officer
exercising judicial or quasi-judicial functions and since the issuance
of EO 10 was done in the exercise of executive functions, and not of SECTION 1. Who may file petition. – Any person interested under a
judicial or quasi-judicial functions, certiorari will not lie. Instead, the deed, will, contract or other written instrument, whose rights are
proper remedy for the petitioner, according to the CA, is to file a affected by a statute, executive order or regulation, ordinance or
petition for declaratory relief with the Regional Trial Court. any other governmental regulation may, before breach or violation
thereof, bring an action in the appropriate Regional Trial Court to
determine any question of construction or validity arising, and for a
Petitioner sought reconsideration but this was denied by the CA on declaration of his rights or duties, thereunder. x x x (emphasis
February 3, 2014 through the challenged Resolution. Hence, the added)
instant petition raising arguments on both procedure and substance.
Section 1. Petition for certiorari. — When any tribunal, board or There is no gainsaying that a city mayor is an executive official nor is
officer exercising judicial or quasi-judicial functions has acted the matter of issuing demolition notices or orders not a ministerial
without or in excess of its or his jurisdiction, or with grave abuse of one. In determining whether or not a structure is illegal or it should
discretion amounting to lack or excess of jurisdiction, and there is no be demolished, property rights are involved thereby needing notices
appeal, or any plain, speedy, and adequate remedy in the ordinary and opportunity to be heard as provided for in the constitutionally
course of law, a person aggrieved thereby may file a verified petition guaranteed right of due process. In pursuit of these functions, the
in the proper court, alleging the facts with certainty and praying that city mayor has to exercise quasi-judicial powers.
judgment be rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such incidental reliefs as With the foregoing discussion, the CA erred in ruling that the
law and justice may require. x x x respondent mayor was merely exercising his executive functions, for
clearly, the first requisite for the special writ has been satisfied.
For certiorari to prosper, the petitioner must establish the
concurrence of the following requisites, namely: Aside from the first requisite, We likewise hold that the third
element, i.e., the unavailability of a plain, speedy,or adequate
1. The writ is directed against a tribunal, board, or officer remedy, is also present herein. While it may be argued that, under
exercising judicial or quasi-judicial functions; the LGC, Executive Orders issued by mayors are subject to review by
provincial governors,10 this cannot be considered as an adequate
remedy given the exigencies of petitioner’s predicament. In a litany
2. Such tribunal, board, or officer has acted without or in
of cases, We have held that it is inadequacy, not the mere absence
excess of jurisdiction, or with grave abuse of discretion
of all other legal remedies and the danger of failure of justice
amounting to lack or excess of jurisdiction; and
without the writ, that must usually determine the propriety of
certiorari. A remedy is plain, speedy and adequate ifit will promptly
3. There is no appeal or any plain speedy, and adequate relieve the petitioner from the injurious effects of the judgment,
remedy in the ordinary course of law.5 order, or resolution of the lower court or agency. It is understood,
then, that a litigant need not mark time by resorting to the less
Guilty of reiteration, the CA immediately dismissed the Petition for speedy remedy of appeal in order to have an order annulled and set
Certiorari upon determining that the first element is wanting—that aside for being patently void for failureof the trial court to comply
respondent mayor was allegedly not exercising judicial or quasi- with the Rules of Court.11
judicial functions when he issued EO 10.
Before applying this doctrine, it must first be borne in mind that
We are not persuaded. respondents in this case have already taken measures towards
implementing EO 10. In fact, substantial segments of the hotel have
The CA fell into a trapwhen it ruled that a mayor, an officer from the already been demolished pursuant to the mayor’s directive. It is
executive department, exercises an executive function whenever he then understandable why petitioner prayed for the issuance ofan
issues an Executive Order. This is tad too presumptive for it is the injunctive writ––a provisional remedy that would otherwise have
nature of the act to be performed, rather than of the office,board, been unavailable had he sought a reversal from the office of the
or body which performs it, that determines whether or not a provincial governor of Aklan. Evidently, petitioner correctly saw the
particular act is a discharge of judicial or quasijudicial functions. The urgent need for judicial intervention via certiorari.
first requirement for certiorari is satisfied if the officers act judicially
in making their decision, whatever may be their public character.6 In light of the foregoing, the CA should have proceeded to grab the
bull by its horns and determine the existence of the second element
It is not essential that the challenged proceedings should be strictly of certiorari––whether or not there was grave abuse of discretion on
and technically judicial, in the sense in which that word is used when the part of respondents.
applied to courts of justice, but it issufficient if they are quasi-
judicial.7 To contrast, a party is said to be exercising ajudicial Upon Our finding that a petition for certiorari under Rule 65 is the
function where he has the power to determine what the law is and appropriate remedy, We will proceed to resolve the core issues in
what legal rights of the parties are, and then undertakes to view of the urgency of the reliefs prayed for in the petition.
determine these questions and adjudicate upon the rights of the Respondents did not commit grave abuse of discretion
parties, whereas quasi-judicial functionis "a term which applies to
the actions, discretion, etc., of public administrative officers or a. The hotel’s classification as a nuisance
Instead of taking the law into his own hands, petitioner could have
SECTION 9. – Permits and Clearances.
filed, as an alternative, a petition for mandamus to compel the
respondent mayor to exercise discretion and resolve the controversy
(a) No building or structure shall beallowed to start construction pending before his office. There is indeed an exception to the rule
unless a Building Permit therefore has been duly issued by the Office that matters involving judgment and discretion are beyond the
of the Municipal Engineer.Once issued, the building owner or any reach of a writ of mandamus, for such writ may be issued to compel
person in charge of the construction shall display on the lot or on action in those matters, when refused. Whether or not the decision
the building undergoing construction a placard containing the would be for or against petitioner would be for the respondent
Building Permit Number and the date of its issue. The office of the mayor to decide, for while mandamus may be invoked to compel the
Municipal Engineer shall not issue any building permit unless: exercise of discretion, it cannot compel such discretion to be
exercised in a particular way.21 What would have been important
1. The proposed construction has been duly issued a was for the respondent mayor to immediately resolve the case for
Zoning Clearance by the Office of the Municipal Zoning petitioner to be able to go through the motions that the zoning
Officer; clearance application process entailed.
2. The proposed construction has been duly endorsed by Alas, petitioner opted to defy the zoning administrator’s ruling. He
the Sangguniang Bayan through a Letter of Endorsement. consciously chose to violate not only the Ordinance but also Sec. 301
of PD 1096, laying down the requirement of building permits, which
(b) Only buildings/structures which has complied provides:
with all the requirements for its construction
asverified to by the Building Inspector and the Section 301. Building Permits. No person, firm or corporation,
Sangguniang Bayan shall be issued a Certificate including any agency or instrumentality of the government shall
of Occupancy by the Office of the Municipal erect, construct, alter, repair, move, convert or demolish any
Engineer. building or structure or cause the same to be done without first
obtaining a building permit therefor from the Building Official
(c) No Business or Mayor’s Permit shall be issued assigned in the place where the subject building is located or the
to businesses being undertaken on buildings or building work is to be done.
structures which were not issued a certificate of
Occupancy beginning January 2001 and This twin violation of law and ordinance warranted the LGU’s
thereafter. invocation of Sec. 444 (b)(3)(vi) of the LGC, which power is separate
and distinct from the power to summarily abate nuisances per se.
xxxx Under the law, insofar as illegal constructions are concerned, the
mayor can, after satisfying the requirement of due notice and
hearing, order their closure and demolition.
SECTION 10. – Penalties.
ii. Observance of procedural due process rights
xxxx
In the case at bench, the due process requirement is deemed to
(e) Any building, structure, or contraption erected in any have been sufficiently complied with. First, basic is the rule that
public place within the Municipality of Malay such as but public officers enjoy the presumption of regularity in the
not limited to streets, thoroughfares, sidewalks, plazas, performance of their duties.22 The burden is on the petitioner herein
beachesor in any other public place are hereby declared as to prove that Boracay West Cove was deprived of the opportunity to
nuisance and illegal structure.Such building structure or beheard before EO 10 was issued. Regrettably, copies of the Cease
contraption shall be demolished by the owner thereof or and Desist Order issued by the LGU and of the assailed EO 10 itself
any of his authorized representative within ten (10) days were never attached to the petition before this Court, which
from receipt of the notice to demolish. Failure or refusal documents could have readily shed light on whether or not
xxxx e. The DENR does not have primary jurisdiction over the controversy
SECTION 8. – No building or structure shall be allowed to be Lastly, in ascribing grave abuse ofdiscretion on the part of the
constructed on a swamp or other water-clogged areas unless respondent mayor, petitioner argued that the hotel site is a
authorized by the Department of Environment and Natural forestland under the primary jurisdiction of the DENR. Assuch, the
Resources. merits of the case should have been passed upon by the agency and
(b) Such basic services and facilities include, but are not limited to, SO ORDERED.
the following:
THIRD DIVISION
xxxx
G.R. No. 175064 September 18, 2009
(2) For a Municipality:
PROVINCE OF CAMARINES SUR, represented by Governor LUIS
xxxx RAYMUND F. VILLAFUERTE, Jr., Petitioner,
vs.
HONORABLE COURT OF APPEALS; and CITY OF NAGA, represented
(ii) Pursuant to national policies and subject to supervision, control
by Mayor JESSE M. ROBREDO,Respondents.
and review of the DENR, implementation of community-based
forestry projects which include integrated social forestry programs
and similar projects; management and control of communal forests DECISION
with an area not exceeding fifty (50) square kilometers;
establishment of tree parks, greenbelts, and similar forest CHICO-NAZARIO, J.:
development projects. (emphasis added)
This Petition for Certiorari1 under Rule 65 of the Rules of Court seeks
Petitioner has made much of the fact that in line with this provision, to annul and set aside the Decision2 dated 28 June 2004 and the
the DENR Region 6 had issued anopinion favourable to Resolution3 dated 11 August 2006 of the Court of Appeals in CA-G.R.
petitioner.25 To petitioner, the adverted opinion effectively reversed SP No. 56243. The assailed Decision of the appellate court denied
the findings of the respondent mayor that the structure introduced due course the Petition for Review on Certiorari4 filed by petitioner
was illegally constructed. Province of Camarines Sur (Camarines Sur), while the assailed
Resolution denied the Motion for Reconsideration of the earlier
We disagree. Decision.
In alleging that the case concernsthe development and the proper The property subject of the instant case is a parcel of land, known as
use of the country’s environment and natural resources, petitioner Plaza Rizal, situated within the territory of herein respondent City of
is skirting the principal issue, which is Boracay West Cove's non- Naga and with an aggregate area of 4,244 square meters, more or
compliance with the permit, clearance, and zoning requirements for less. Plaza Rizal is located in front of the old provincial capitol
building constructions under national and municipal laws. He building, where the Provincial Government of Camarines Sur used to
downplays Boracay West Cove's omission in a bid to justify ousting have its seat, at the time when the then Municipality of Naga was
the LGU of jurisdiction over the case and transferring the same to still the provincial capital.
the DENR. He attempts to blow the issue out of proportion when it
all boils down to whether or not the construction of the three-storey On 18 June 1948, Republic Act No. 3055 took effect and, by virtue
hotel was supported by the necessary documentary requirements. thereof, the Municipality of Naga was converted into the City of
Naga. Subsequently, on 16 June 1955, Republic Act No. 1336 6 was
Based on law and jurisprudence, the office of the mayor has approved, transferring the site of the provincial capitol of Camarines
quasijudicial powers to order the closing and demolition of Sur from the City of Naga to the barrio of Palestina, Municipality of
establishments.1âwphi1 This power granted by the LGC, as earlier Pili.7 The Municipality of Pili was also named as the new provincial
explained, We believe, is not the same power devolved in favor of capital.8
the LGU under Sec. 17 (b )(2)(ii), as abovequoted, which is subject to
review by the DENR. The fact that the building to be demolished is On 13 January 1997, the City of Naga filed a Complaint9 for
located within a forestland under the administration of the DENR is Declaratory Relief and/or Quieting of Title against Camarines Sur
of no moment, for what is involved herein, strictly speaking, is not before the Regional Trial Court (RTC) of the City of Naga, Branch 61,
an issue on environmental protection, conservation of natural which was docketed as Civil Case No. 97-3691.
resources, and the maintenance of ecological balance, but the
legality or illegality of the structure.1âwphi1 Rather than treating The City of Naga alleged that, for a considerable length of time,
this as an environmental issue then, focus should not be diverted Camarines Sur possessed and claimed ownership of Plaza Rizal
from the root cause of this debacle-compliance. because of a tax declaration over the said property in the name of
the province. As a result, Camarines Sur had long exercised
Ultimately, the purported power of review by a regional office of the administrative control and management of Plaza Rizal, to the
DENR over respondents' actions exercised through an exclusion of the City of Naga. The City of Naga could not introduce
instrumentality of an ex-parte opinion, in this case, finds no improvements on Plaza Rizal, and its constituents could not use the
First, Camarines Sur avers that the filing of the Complaint for On the other hand, Rule 45 of the Rules of Court pertains to a
Declaratory Relief and/or Quieting of Title was improper as it was Petition for Review on Certiorari, whereby "a party desiring to
hinged on a pretended controversy. Essentially, the complaint of the appeal by certiorari from a judgment, final order or resolution of the
City of Naga did not show "an active antagonistic assertion of a legal x x x the Regional Trial Court x x x, may file with the Supreme Court a
right, on one side, and a denial thereof, on the other." Such action verified petition for review on certiorari. The petition may include an
sought merely to create an unwarranted inference not of a clear application for a writ of preliminary injunction or other provisional
right, but of a theoretical implication that a property, even if not remedies and shall raise only questions of law, which must be
legally owned or possessed by a city, could be administratively distinctly set forth."29
controlled and managed by it on the sheer expediency of being
located within its territorial jurisdiction. Thus, there was no actual A perusal of the petition referred to the Court of Appeals lays bare
controversy between Camarines Sur and the City of Naga, the fact that the same was undoubtedly a Petition for Review on
considering that Camarines Sur had always managed and Certiorari under Rule 45 of the Rules of Court. Not only does the title
administratively controlled the same, the projects installed thereon of the Petition indicate it as such, but a close reading of the issues
and the programs and activities held therein, without any question and allegations set forth therein also discloses that it involved pure
from the previous Mayors of the City of Naga or from any national questions of law. A question of law arises when there is doubt as to
official, department, bureau or agency. what the law is on a certain state of facts. For a question to be one
of law, the same must not involve an examination of the probative
Second, Camarines Sur contends that since Plaza Rizal is admittedly value of the evidence presented by the litigants or any of them. The
located within the territorial jurisdiction of the City of Naga, the resolution of the issue must rest solely on what the law provides on
question of law is whether the management and administrative the given set of circumstances.30 The Court of Appeals, thus, could
control of said land should be vested in the City of Naga, simply not fault Camarines Sur for failing to allege, much less prove, grave
because of Article 1, Section 2 of the Charter of the City of Naga. abuse of discretion amounting to lack or excess of jurisdiction on the
Naga never possessed administrative control and management of part of the RTC when such is not required for a Petition for Review
Plaza Rizal when it was still a municipality, and it cannot be deemed on Certiorari.
to have been vested with the same, just because it was converted
into the City of Naga – especially when the City admits it does not Likewise, the doctrine that certiorari cannot be resorted to as a
intend to acquire ownership of Plaza Rizal. substitute for the lost remedy of appeal applies only when a party
actually files a Petition for Certiorari under Rule 65 in lieu of a
Petition for Review v. Petition for Certiorari Petition for Review under Rule 45, since the latter remedy was
already lost through the fault of the petitioning party. In the instant
At the outset, the Court holds that the Court of Appeals indeed case, Camarines Sur actually filed a Petition for Review under Rule
committed grave abuse of discretion amounting to lack or excess of 45; the Court of Appeals only mistook the same for a Petition for
jurisdiction in erroneously and inexplicably resolving the Petition, Certiorari under Rule 65.
which was initially filed by Camarines Sur before the Court, but later
referred to the appellate court, as if the same were a Petition for Be that as it may, the Court still finds that the questions of law
Certiorari under Rule 65 of the Rules of Court. This mistake is invoked by Camarines Sur must be resolved against it.
evident in the preliminary statement of the case, as found in the first
paragraph of the Decision dated 28 June 2004, where the Court of Declaratory Relief
Appeals stated that:
Declaratory relief is defined as an action by any person interested in
The petitioner Province of Camarines Sur (or Camarines Sur for a deed, will, contract or other written instrument, executive order or
brevity), represented by Gov. Luis Villafuerte, asks through this resolution, to determine any question of construction or validity
Petition for Certiorari that the Decision of Branch 61 of the Regional arising from the instrument, executive order or regulation, or
Trial Court stationed at Naga City x x x be reversed and set aside x x statute; and for a declaration of his rights and duties
x.26 (Emphasis ours.) thereunder.31 The only issue that may be raised in such a petition is
the question of construction or validity of provisions in an
For a Petition for Certiorari under Rule 65 of the Rules of Court to instrument or statute.32
prosper, the following requisites must be present: (1) the writ is
directed against a tribunal, a board or an officer exercising judicial or The requisites of an action for declaratory relief are: (1) there must
quasi-judicial functions; (2) such tribunal, board or officer has acted be a justiciable controversy between persons whose interests are
In the instant case, the controversy concerns the construction of the All other property possessed by any of them is patrimonial and shall
provisions of Republic Act No. 305 or the Charter of the City of Naga. be governed by this Code, without prejudice to the provisions of
Specifically, the City of Naga seeks an interpretation of Section 2, special laws.
Article I of its Charter, as well as a declaration of the rights of the
parties to this case thereunder. Manifestly, the definition of what constitutes the properties for
public use and patrimonial properties of local government units has
To recall, Section 2, Article I of Republic Act No. 305 defines the practically remained unchanged.
territory of the City of Naga, providing that the City shall comprise
the present territorial jurisdiction of the Municipality of Naga. By As regards properties for public use, the principle is the same:
virtue of this provision, the City of Naga prays that it be granted the property for public use can be used by everybody, even by strangers
right to administratively control and supervise Plaza Rizal, which is or aliens, in accordance with its nature; but nobody can exercise
undisputedly within the territorial jurisdiction of the City. over it the rights of a private owner.36
Clearly, the interests of the City of Naga and Camarines Sur in this It is, therefore, vital to the resolution of this case that the exact
case are adverse. The assertion by the City of Naga of a superior nature of Plaza Rizal be ascertained. In this regard, the description
right to the administrative control and management of Plaza Rizal, thereof by Camarines Sur is enlightening, viz:
because said property of the public domain is within its territorial
jurisdiction, is clearly antagonistic to and inconsistent with the The land subject of the Action filed by the City of Naga against the
insistence of Camarines Sur. The latter asserted in its Complaint for Province of Camarines Sur was a garden that served as the front
Declaratory Relief and/or Quieting of Title that it should maintain lawn of the old capitol site in Naga. A monument in honor of our
administrative control and management of Plaza Rizal having national hero was built by the Provincial Government of Camarines
continuously possessed the same under a claim of ownership, even Sur sometime in 1911 on a portion of subject land. Within the same
after the conversion of the Municipality of Naga into an independent land, a structure as a memorial for Ninoy Aquino was also
component city. The City of Naga further asserted that as a result of constructed by the Provincial Government of Camarines Sur; and
the possession by Camarines Sur, the City of Naga could not nearby, a stage in honor of President Manuel Quezon was also built.
introduce improvements on Plaza Rizal; its constituents were denied In the post-martial [law] period there was inscribed in the wall of the
adequate use of said property, since Camarines Sur required that said garden the following words: "Freedom Park of Camarines Sur."
the latter’s permission must first be sought for the use of the same;
and it was still Camarines Sur that was able to continuously use
A historical marker was erected in the said place which attests to the
Plaza Rizal for its own programs and projects. The City of Naga
long standing ownership, possession and management by the
undoubtedly has a legal interest in the controversy, given that Plaza
Province of Camarines Sur of said place.
Rizal is undisputedly within its territorial jurisdiction. Lastly, the issue
is ripe for judicial determination in that, in view of the conflicting
interests of the parties to this case, litigation is inevitable, and there All the improvements in said place, such as the construction of
is no adequate relief available in any other form or proceeding.34 monuments and memorial structures, the concreting of its flooring
and the walkways, planting of trees and ornamental plants, the
construction of the skating or skateboard ring, a public TV facility, an
Administrative control and supervision of Plaza Rizal
internet café, a gazebo where people from all walks of life discuss
religion, political, social and economic issues, a portable stage where
Republic Act No. 305 took effect on 18 June 1948. At that time, the cultural shows are held, a giant chessboard on the tiled ground with
Spanish Civil Code of 1889 was still in effect in the Philippines. large pieces for playing, where portable booths are installed for the
Properties of local government units under the Spanish Civil Code trade fairs during fiesta or Christmas season, where year-round
were limited to properties of public use and patrimonial lights are wrapped around the trees, all of which have been
property.35 Article 344 of the Spanish Civil Code provides: constructed, operated and maintained by the Province of Camarines
Sur (not by Naga City) where millions of pesos had been spent for
Art. 344. Property of public use, in provinces and in towns, construction and millions of pesos are budgeted annually for
comprises the provincial and town roads, the squares, streets, maintenance, operating expenses and personnel services by the
fountains, and public waters, the promenades, and public works of Province of Camarines Sur.37
general service paid for by such towns or provinces.
Unmistakable from the above description is that, at present, Plaza
All other property possessed by either is patrimonial and shall be Rizal partakes of the nature of a public park or promenade. As such,
governed by the provisions of this code, unless otherwise provided Plaza Rizal is classified as a property for public use.
by special laws.
In Municipality of San Carlos, Pangasinan v. Morfe,38 the Court
Under the 1950 Civil Code, the properties of local government units recognized that a public plaza is a public land belonging to, and,
are set forth in Article 424 thereof, which reads: subject to the administration and control of, the Republic of the
Philippines. Absent an express grant by the Spanish Government or
that of the Philippines, the local government unit where the plaza
Rule 63 Full Text Cases andm21 of 88
was situated, which in that case was the Municipality of San Carlos, DECISION
had no right to claim it as its patrimonial property. The Court further
held that whatever right of administration the Municipality of San NACHURA, J.:
Carlos may have exercised over said plaza was not proprietary, but
governmental in nature. The same did not exclude the national
This is a Petition for Review on Certiorari under Rule 45 of the Rules
government. On the contrary, it was possessed on behalf and in
of Court, of the Decision1 of the Court of Appeals (CA), dated
representation thereof, the municipal government of San Carlos
September 3, 2001, in CA-G.R. CV No. 67784, and its
being -- in the performance of its political functions -- a mere agency
Resolution2 dated November 19, 2001. The assailed Decision
of the Republic, acting for its benefit.
affirmed with modification the Decision3 of the Regional Trial Court
(RTC), Makati City, Branch 136, dated May 9, 2000 in Civil Case No.
Applying the above pronouncements to the instant case, Camarines 98-411.
Sur had the right to administer and possess Plaza Rizal prior to the
conversion of the then Municipality of Naga into the independent
Sometime in May 1997, respondent Bathala Marketing Industries,
City of Naga, as the plaza was then part of the territorial jurisdiction
Inc., as lessee, represented by its president Ramon H. Garcia,
of the said province. Said right of administration by Camarines Sur
renewed its Contract of Lease4 with Ponciano L. Almeda (Ponciano),
was governmental in nature, and its possession was on behalf of and
as lessor, husband of petitioner Eufemia and father of petitioner
in representation of the Republic of the Philippines, in the
Romel Almeda. Under the said contract, Ponciano agreed to lease a
performance of its political functions.
portion of the Almeda Compound, located at 2208 Pasong Tamo
Street, Makati City, consisting of 7,348.25 square meters, for a
Thereafter, by virtue of the enactment of Republic Act No. 305 and monthly rental of P1,107,348.69, for a term of four (4) years from
as specified in Section 2, Article I thereof, the City of Naga was May 1, 1997 unless sooner terminated as provided in the
created out of the territory of the old Municipality of Naga. Plaza contract.5 The contract of lease contained the following pertinent
Rizal, which was located in the said municipality, thereby ceased to provisions which gave rise to the instant case:
be part of the territorial jurisdiction of Camarines Sur and was,
instead transferred to the territorial jurisdiction of the City of Naga.
SIXTH - It is expressly understood by the parties hereto
Theretofore, the local government unit that is the proper agent of
that the rental rate stipulated is based on the present rate
the Republic of the Philippines that should administer and possess
of assessment on the property, and that in case the
Plaza Rizal is the City of Naga.
assessment should hereafter be increased or any new tax,
charge or burden be imposed by authorities on the lot and
Camarines Sur cannot claim that Plaza Rizal is part of its patrimonial building where the leased premises are located, LESSEE
property. The basis for the claim of ownership of Camarines Sur, i.e., shall pay, when the rental herein provided becomes due,
the tax declaration39 covering Plaza Rizal in the name of the the additional rental or charge corresponding to the
province, hardly convinces this Court. Well-settled is the rule that a portion hereby leased; provided, however, that in the
tax declaration is not conclusive evidence of ownership or of the event that the present assessment or tax on said property
right to possess land, when not supported by any other evidence. should be reduced, LESSEE shall be entitled to reduction in
The same is merely an indicia of a claim of ownership.40In the same the stipulated rental, likewise in proportion to the portion
manner, the Certification41 dated 14 June 1996 issued by the leased by him;
Department of Environment and Natural Resources–Community
Environment and Natural Resources Office (DENR-CENRO) in favor of
SEVENTH - In case an extraordinary inflation or
Camarines Sur, merely stating that the parcel of land described
devaluation of Philippine Currency should supervene, the
therein, purportedly Plaza Rizal, was being claimed solely by
value of Philippine peso at the time of the establishment
Camarines Sur, hardly constitutes categorical proof of the alleged
of the obligation shall be the basis of payment;6
ownership of the said property by the province.
After trial on the merits, on May 9, 2000, the RTC ruled in favor of
Petitioners now come before this Court raising the following issues:
respondent and against petitioners. The pertinent portion of the
decision reads:
I.
WHEREFORE, premises considered, this Court renders
judgment on the case as follows: WHETHER OR NOT ARTICLE 1250 OF THE NEW CIVIL CODE
IS APPLICABLE TO THE CASE AT BAR.
1) declaring that plaintiff is not liable for the payment of
Value-Added Tax (VAT) of 10% of the rent for [the] use of II.
the leased premises;
WHETHER OR NOT THE DOCTRINE ENUNCIATED IN
2) declaring that plaintiff is not liable for the payment of FILIPINO PIPE AND FOUNDRY CORP. VS. NAWASA CASE,
any rental adjustment, there being no [extraordinary] 161 SCRA 32 AND COMPANION CASES ARE (sic)
inflation or devaluation, as provided in the Seventh APPLICABLE IN THE CASE AT BAR.
Condition of the lease contract, to justify the same;
III.
3) holding defendants liable to plaintiff for the total
amount of P1,119,102.19, said amount representing WHETHER OR NOT IN NOT APPLYING THE DOCTRINE IN
payments erroneously made by plaintiff as VAT charges THE CASE OF DEL ROSARIO VS. THE SHELL COMPANY OF
and rental adjustment for the months of January, February THE PHILIPPINES, 164 SCRA 562, THE HONORABLE COURT
and March, 1999; and OF APPEALS SERIOUSLY ERRED ON A QUESTION OF LAW.
While, indeed, condition No. 7 of the contract speaks of G.R. No. L-27247 April 20, 1983
"extraordinary inflation or devaluation" as compared to Article
1250's "extraordinary inflation or deflation," we find that when the
IN THE MATTER OF THE PETITION FOR DECLARATORY JUDGMENT
parties used the term "devaluation," they really did not intend to
REGARDING THE VALIDITY OF ORDINANCE NO. 386 OF THE CITY OF
depart from Article 1250 of the Civil Code. Condition No. 7 of the
BAGUIO, BAGUIO CITIZENS ACTION INC., and JUNIOR CHAMBER OF
contract should, thus, be read in harmony with the Civil Code
BAGUIO CITY, INC., petitioners-appellants,
provision.
vs.
THE CITY COUNCIL AND CITY MAYOR OF THE CITY OF
That this is the intention of the parties is evident from petitioners' BAGUIO, respondents-appellees.
letter22 dated January 26, 1998, where, in demanding rental
adjustment ostensibly based on condition No. 7, petitioners made
DE CASTRO, J:
explicit reference to Article 1250 of the Civil Code, even quoting the
law verbatim. Thus, the application of Del Rosario is not warranted.
Rather, jurisprudential rules on the application of Article 1250 In this petition for declaratory relief originally filed in the Court of
should be considered. First Instance of Baguio, Branch II, what is involved is the validity of
Ordinance 386 passed by the City Council of Baguio City which took
effect on February 23, 1967, quoted together with the explanatory
Article 1250 of the Civil Code states:
note, as follows:
Hence, the instant appeal which was perfected in accordance with A different situation obtains in the case of Degala v. Reyes 3 cited in
the provisions of Rule 42, before the approval of Republic Act No. the decision under review. The Degala case involves the validity of
5440 on September 9, 1968. the trust created in the will of the testator. In the said case, the
Roman Catholic Church which was a necessary party, being the one
1. The case before the Court of First Instance of Baguio, Branch 1, which would be most vitally affected by the declaration of the nullity
dealt with the criminal liability of the accused for constructing their of the will was not brought in as party. The Court therefore, refused
houses without obtaining building permits, contrary to Section 47 in to make any declaratory judgment on ground of jurisdictional
relation to Section 52 of the Revised Ordinances of Baguio, which act defect, for there can be no final judgment that could be rendered
the said court considered as pardoned by Section 2 of Ordinance and the Roman Catholic not being bound by such judgment might
386. The court in said case upheld the power of the Municipal raise the Identical issue, making therefore the declaration a mere
Council to legalize the acts punished by the aforesaid provisions of exercise in futility.
the Revised Ordinances of Baguio, stating that the Municipal Council
is the policy determining body of Baguio City and therefore it can This is not true in the instant case. A declaration on the nullity of the
amend, repeal, alter or modify its own laws as it did when it enacted ordinance, would give the squatters no right which they are entitled
Ordinance 386. In deciding the case, the first branch of the court a to protect. The party most interested to sustain and defend the
quo did not declare the whole Ordinance valid. This is clear when it legality of the Ordinance is the body that passed it, the City Council,
stated that "had the issue been the legalization of illegal occupation and together with the City Mayor, is already a party in these
of public land, covered by Republic Act No. 947, ... the Ordinance in proceedings.
question should have been ultra vires and unconstitutional." 1 Said
court merely confined itself to Sections 2 and 3 of Ordinance 386. It 3. The Ordinance in question is a patent nullity. It considered all
did not make any definite pronouncement whether or not the City squatters of public land in the City of Baguio as bona-fide occupants
Council has the power to legalize the illegal occupation of public of their respective lots. As we have stated in City of Manila v.
land which is the issue in the instant case. It is noteworthy that the Garcia, 4 et al.:
court, in passing upon the validity of the aforesaid sections, was
apparently guided by the rule that where part of a statute is void as
Squatting is unlawful and no amount of
repugnant to the organic law, while another part is valid, the valid
acquiescence on the part of the city officials will
portion, if separable from the invalid may stand and be enforced.
elevate it into a lawful act. In principle, a
Contrary to what was said in the decision under review, the second
compound of illegal entry and official permit to
branch of the court a quo was not called upon to determine the
stay is obnoxious to our concept of proper
validity of the judgment of the first branch.
official norm of conduct. Because, such permit
does not serve social justice; it fosters moral
2. The non-inclusion of the squatters mentioned in the Ordinance in decadence. It does not promote public welfare;
question as party defendants in this case cannot defeat the it abets disrespect for the law. It has its roots in
jurisdiction of the Court of First Instance of Baguio. There is nothing vice; so it is an infected bargain. Official approval
in Section 2 of Rule 64 of the Rules of Court which says that the non- of squatting should not, therefore, be permitted
joinder of persons who have or claim any interest which would be to obtain in this country where there is an
affected by the declaration is a jurisdictional defect. Said section orderly form of government.
merely states that "All persons shall be made parties who have or
claim any interest which would be affected by the declaration; and
In the same case, squatting was characterized as a widespread vice
no declaration shall, except or otherwise provided in these rules,
and a blight Thus:
prejudice the rights of persons not parties to the action." This
section contemplates a situation where there are other persons who
would be affected by the declaration, but were not impleaded as Since the last global war, squatting on another's
necessary parties, in which case the declaration shall not prejudice property in this country has become a
them. If at all, the case may be dismissed not on the ground of lack widespread vice. It was and is a blight Squatter's
of jurisdiction but for the reason stated in Section 5 of the same Rule areas pose problems of health, sanitation. They
stating that "the Court may refuse to exercise the power to declare are breeding places for crime. They constitute
rights and to construe instruments in any case where a decision proof that respect for the law and the rights of
would not terminate the uncertainty or controversy which gave rise others, even those of the government are being
to the action, or any case where the declaration or construction is flouted. Knowingly, squatters have embarked on
not necessary and proper at the time under all circumstances." the pernicious act of occupying property
whenever and wherever convenient to their
interests without as much as leave, and even
It must be noted that the reason for the law requiring the joinder of
against the will, of the owner. They are
all necessary parties is that failure to do so would deprive the
emboldened seemingly because of their belief
declaration of the final and pacifying function the action for
that they could violate the law with impunity.
declaratory relief is calculated to subserve, as they would not be
The pugnaciousness of some of them has tied up
bound by the declaration and may raise the Identical issue. 2 In the
the hands of legitimate owners. The latter are
case at bar, although it is true that any declaration by the court
thus prevented from recovering possession by
would affect the squatters, the latter are not necessary parties
peaceful means. Government lands have not
because the question involved is the power of the Municipal Council
been spared by them. They know, of course, that
to enact the Ordinances in question. Whether or not they are
Nor could the enactment of Ordinance 386 be justified by stating BARREDO, J.:
that "this Ordinance is primarily designed to extend a helping hand
to the numerous landless city residents and the so called squatters
within the Baguio townsite in their desire to acquire residential lots Petition for certiorari and prohibition to annul and set aside several
which they may rightly call their own and that the reported people orders of respondent court all of which together in effect: (1)
who have violated the City's building ordinances were not so guided permitted ex-parte private respondents Jose and Susana
by any criminal perversity, but were given to it more by Conchingyan to file a third-party complaint for mandamus against
circumstances of necessity and that they are, therefore, entitled to a petitioners in a special civil. action for declaratory relief in which
more human treatment, more understanding and more of pity said Cochingyans were defendants and which was already tried and
rather than be herded before the courts, likened to hardened almost ready for decision; on the same day, (2) admitted said third-
criminals and deliberate violators of our laws and ordinances."6 party complaint and (8) further issued immediately a writ of
preliminary mandatory injunction likewise ex-parte; and which (4)
were intended to enforce said writ of injunction.
Our pronouncement in Astudillo vs. Board of Directors of PHHC 7 is
relevant to this case. Thus—
There was pending before respondent court as Civil Case No. 52318,
entitled Macario M. Ofilada vs. Reparations Commission, Jose
In carrying out its social re-adjustment policies, Cochingyan and Susana Cochingyan, a special civil action for
the government could not simply lay aside moral declaratory relief, wherein Ofilada, as the Second Receiver of the
standards, and aim to favor usurpers, squatters, World War II Veterans Enterprises, Inc. (Warvets) in Civil Case No.
and intruders, unmindful of the lawful and 34998, likewise pending in another Branch of the Court of First
unlawful origin and character of their occupancy. Instance of Manila, sought a judicial declaration as to whether,
Such a policy would perpetuate conflicts instead under the allocation granted to said Warvets to purchase
of attaining their just solution. (Bernardo vs. reparations goods, the conversion into pesos of the dollar prices of
Bernardo, 96 Phil. 202, 206.)
Rule 63 Full Text Cases andm28 of 88
said goods should be at the rate of two pesos to one dollar or at the SS GUILLERMO on September 10, 1962, and
prevailing market rate at the time for payment, which would be which to the present are still under the custody
much higher. Civil Case No. 34998 was a minority suit filed by certain and possession of the Collector of Customs and
stockholders of Warvets alleging irregularities in the management Commissioner of Customs, upon the filing of a
and disposition of the goods being purchased by the corporation by bond by the third-party plaintiffs in such amount
virtue of the aforementioned allocation, hence the need for as may be fixed by this Honorable Court to pay
receivers, of which there were two, the first being one Ramon E. for any damages that the third-party defendants
Saura and the second, Ofilada. In the same Civil Case No. 34998, an may suffer should this Honorable Court find that
order had been issued on October 9, 1962 ordering Ofilada to issuance of the preliminary mandatory
deliver to the Cochingyans the second shipment of goods under injunction is not proper. (Page 87, Record.)
Warvets' allocation. (The Cochingyans had a contract with Warvets
regarding said goods.) It appears, however, that a motion for the Without loss of time and without hearing the third-party
reconsideration of the just mentioned order of October 9, 1962 had defendants, the following order, was issued on the same day,
been filed and was still unresolved when on February 9, 1963, the February 12, 1963:
Honorable Judge Francisco Arca (now deceased) issued the following
order:
In a verified third-party complaint for mandamus
against the Commissioner of Customs, the
Considering all the foregoing, the Court is of the Collector of Customs and others, third party
opinion that the petition of Atty. Magno to defer plaintiffs Jose and Susana Cochingyan, doing
action on the motion for contempt against the business under the name and style "The Catholic
intervenors should be granted until after it can Church Mart", alleged that a shipment of 402
be definitely known whether or not the parties packages of rayon cloth which was procured by
can settle this case amicably. Resolutions on all the Reparations Commission to cover an
pending incidents, such as the motion for allocation granted by the Commission to the
reconsideration of the order authorizing the World War II Veterans Enterprises (WARVETS for
release of the second shipment, and the motions reparation consumer goods from Japan arrived
for the release of the third, fourth and fifth in Manila on September 10, 1962, consigned to
shipments, are also held in abeyance until such the Reparations Commission; that this Court in
time that the Court knows the result of the Civil Case No. 34998 entitled "Pilar Normandy et
pending settlement being negotiated among the al., vs. Calixto Duque, et al." authorized in its
parties. order of October 9, 1962, the Second Receiver of
WARVETS, Mr. Macario M. Ofilada, to release
In view of all the above, the Court hereby orders said goods to Jose and Susana Cochingyan; that
that all incidents pending resolution be held in pursuant to said order of October 9, 1962, Mr.
abeyance until after the parties have definitely Ofilada, in his capacity as second receiver of
decided whether they are going to settle this WARVETS, signed a contract of absolute sale
case or not. (Emphasis supplied.) with the Reparations Commission covering the
described reparation consumer goods and paid
It was shortly after the issuance of this order which in effect freezed in full the purchase price of said goods; that after
the order of release of October 9, 1962, that the incidents subject of receiving full payment of the purchase price of
the instant petition took place. On February 13, 1963, the said goods the Commission instead of releasing
Cochingyans filed in Civil Case No. 52318 then already tried although the goods from customs and delivering them
not yet decided by Judge Gaudencio Cloribel (now also deceased) — requested the Collector of Customs to verify and
who on February 9, 1963 had written the Secretary of Justice asking make an appraisal of the value of the goods and
for permission to go on leave for a week starting February 12, 1973 complying with said request, the Collector of
but who later changed the starting date to February 13, 1973- an ex- Customs opened and inspected each and all of
parte motion asking permission to file a third party complaint which the bales and packages compromising said
was forthwith granted. On the same day, another motion was filed shipment; that after completing said inspection
asking for immediate admission of the third party complaint, which and verification the Collector of Customs advised
likewise, was forthwith granted. The third-party complaint included the third-party plaintiffs herein that the
in the prayer, among other reliefs, the following: shipment cannot be released unless the advance
sales' tax due on the goods be first paid; that
said Collector of Customs also advised the
1. Immediately upon the filing of the herein
Reparations Commission that the goods, being
third-party complaint this Honorable Court issue
reparations goods and as such owned by the
a writ of preliminary mandatory injunction ex-
Philippine Government, cannot be subject to
parte, without notice to the other parties,
seizure or forfeiture proceedings; that of the 402
ordering the third-party defendants
packages the Commissioner and Collector of
Commissioner of Customs and Collector of
Customs have released to the said third-party
Customs and Reparations Commission to release
plaintiffs only 200 packages but have retained
immediately to the third-party plaintiffs the
202 packages supposedly to secure the payment
balance of the 202 packages of rayon clothing
of advance sales tax assessed on the shipment as
forming part of the shipment of consumer goods
recomputed on the basis of an opinion of the
originally consigned to the Reparations
Collector of Internal Revenue; that
Commission which arrived in Manila aboard the
Third-party plaintiffs further alleged that the As already stated, Civil Case No. 52318 was a special civil action for
delay in the release of the goods to them has declaratory relief under Rule 66 of the Rules of 1940 which were in
caused and will cause them grave and force when it was filed. The only purpose thereof was to secure from
irreparable damage and injury; and unless a writ the court the proper interpretation or construction of the
of preliminary injunction were to be issued ex- reparations contract between the Reparations Commission and
parte they will suffer greater and grave Warvets in regard to the rate of conversion of the dollar to the peso
damages. of the purchase price Warvets had to pay No positive or affirmative,
much less any material relief, was 'using sought therein. Indeed, it is
WHEREFORE, finding the petition for the in the very nature of a 'declaratory relief special civil action that "the
issuance of a writ of preliminary injunction to be Relief is confined to a case of actual controversy within the Court's
meritorious, the same is hereby granted, and jurisdiction, without the need of injunction, execution or other relief
upon the filing by the third-party plaintiffs of a beyond the adjudication of the legal rights which are the subject of
bond in the sum of P5,000.00 to answer for all controversy between the parties." ( 3 Moran, Comments on the
damages that the third-party defendants may Rules of Court, p. 146, 1970 ed.) In other words, the plaintiff Ofilada
sustain by reason of this injunction if it be finally in said case did not, as he could not pray for anything to be award or
decided that the third-party plaintiffs are not granted to him. Now, as regards the nature and purpose of a third-
entitled thereto, let a writ of preliminary party complaint, Section 1 of Rule 12 of the Rules of 1940 provided:
mandatory injunction be issued ordering the
third-party defendants Commissioner of SECTION 1. Claim against one not a party to an
Customs, Collector of Customs, and the action. — When a defendant claims to be
Reparations Commission, their representatives, entitled against a person not a party to the
agents, subordinates and other persons acting in action, hereinafter called the third-party
their behalf to release and deliver immediately defendant, to contribution, indemnity,
the third-party plaintiffs Jose and Susana subrogation or any other relief, in respect of the
Cochingyan, doing business under the name and plaintiff' claim, he may file, with leave of court,
style 'The Catholic, Church Mart the 202 against such person a pleading which shall state
packages of rayon cloth presently in their the nature of his claim and shall be called the
possession, custody and/or control, which goods third-party complaint.
are part of the shipment of reparation consumer
goods which arrived in Manila aboard the SS
It is obvious from this definition that a third-party complaint is
Guillermo from Japan consigned to the
inconceivable when the main case is one for nothing more' than a
Reparations Commission.
declaratory relief. In a third-party complaint, the defendant or third-
party plaintiff is supposed to seek contribution, indemnity,
SO ORDERED. subrogation or any other relief from the third-party defendant is
respect to the claim of the plaintiff against him. In the case at bar,
The writ issued pursuant to this order was served on the Law what possible relief could the Cochingyans, as defendants in Civil
Division of the Bureau of Customs at 4:55 o'clock in the afternoon of Case No. 52318, for declaratory relief, have asked for by way of
the same day, February 12, 1963. But compliance therewith did not contribution, indemnity, subrogation or any other relief from those
materialize. A motion to lift the writ was filed, and in the meanwhile, they have named third-party defendants, the Collector of Customs,
the Chairman of the Committee on Reparations of the House of Commissioner of Customs, Reparations Commission, their co-
EO 7 was published on September 10, 2010.11 It took effect on EXECUTIVE ORDER NO. 7 IS BY SUBSTANCE A LAW, WHICH
September 25, 2010 and precluded the Board of Directors, Trustees IS A DEROGATION OF CONGRESSIONAL PREROGATIVE AND
and/or Officers of GOCCs from granting and releasing bonuses and IS THEREFORE UNCONSTITUTIONAL.
allowances to members of the board of directors, and from
increasing salary rates of and granting new or additional benefits IV.
and allowances to their employees.
THE ACTS OF SUSPENDING AND IMPOSING MORATORIUM
The Petition ARE ULTRA VIRES ACTS BECAUSE J.R. NO. 4 DOES NOT
EXPRESSLY AUTHORIZE THE PRESIDENT TO EXERCISE SUCH
The petitioner claims that as a PhilHealth employee, he is affected POWERS.
by the implementation of EO 7, which was issued with grave abuse
of discretion amounting to lack or excess of jurisdiction, based on V.
the following arguments:
EXECUTIVE ORDER NO. 7 IS AN INVALID ISSUANCE
I. BECAUSE IT HAS NO SUFFICIENT STANDARDS AND IS
THEREFORE ARBITRARY, UNREASONABLE AND A
EXECUTIVE ORDER NO. 7 IS NULL AND VOID FOR LACK OF VIOLATION OF SUBSTANTIVE DUE PROCESS.
LEGAL BASIS DUE TO THE FOLLOWING GROUNDS:
VI.
A. P.D. 985 IS NOT APPLICABLE AS BASIS FOR
EXECUTIVE ORDER NO. 7 BECAUSE THE EXECUTIVE ORDER NO. 7 INVOLVES THE DETERMINATION
GOVERNMENT-OWNED AND CONTROLLED AND DISCRETION AS TO WHAT THE LAW SHALL BE AND IS
CORPORATIONS WERE SUBSEQUENTLY THEREFORE INVALID FOR ITS USURPATION OF LEGISLATIVE
GRANTED THE POWER TO FIX COMPENSATION POWER.
LONG AFTER SUCH POWER HAS BEEN REVOKED
BY P.D. 1597 AND R.A. 6758. VII.
On December 13, 2010, the respondents filed their Comment. They First, the respondents neither acted in any judicial or quasi-judicial
pointed out the following procedural defects as grounds for the capacity nor arrogated unto themselves any judicial or quasi-judicial
petition’s dismissal: (1) the petitioner lacks locus standi; (2) the prerogatives. A petition for certiorari under Rule 65 of the 1997
petitioner failed to attach a board resolution or secretary’s Rules of Civil Procedure is a special civil action that may be invoked
certificate authorizing him to question EO 7 in behalf of PhilHealth; only against a tribunal, board, or officer exercising judicial or quasi-
(3) the petitioner’s signature does not indicate his PTR Number, judicial functions.
Mandatory Continuing Legal Education (MCLE) Compliance Number
and Integrated Bar of the Philippines (IBP) Number; (4) the jurat of Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides:
the Verification and Certification of Non-Forum Shopping failed to
indicate a valid identification card as provided under A.M. No. 02-8-
SECTION 1. Petition for certiorari. — When any tribunal, board or
13-SC; (5) the President should be dropped as a party respondent as
officer exercising judicial or quasi-judicial functions has acted
he is immune from suit; and (6) certiorari is not applicable to this
without or in excess of its or his jurisdiction, or with grave abuse of
case.13
discretion amounting to lack or excess of jurisdiction, and there is no
appeal, or any plain, speedy, and adequate remedy in the ordinary
The respondents also raised substantive defenses to support the course of law, a person aggrieved thereby may file a verified petition
validity of EO 7. They claim that the President exercises control over in the proper court, alleging the facts with certainty and praying that
the governing boards of the GOCCs and GFIs; thus, he can fix their judgment be rendered annulling or modifying the proceedings of
compensation packages. In addition, EO 7 was issued in accordance such tribunal, board or officer, and granting such incidental reliefs as
with law for the purpose of controlling the grant of excessive law and justice may require.
salaries, allowances, incentives and other benefits to GOCC and GFI
employees. They also advocate the validity of Joint Resolution (J.R.)
Elsewise stated, for a writ of certiorari to issue, the following
No. 4, which they point to as the authority for issuing EO 7.14
requisites must concur: (1) it must be directed against a tribunal,
board, or officer exercising judicial or quasi-judicial functions; (2) the
Meanwhile, on June 6, 2011, Congress enacted Republic Act (R.A.) tribunal, board, or officer must have acted without or in excess of
No. 10149,15 otherwise known as the "GOCC Governance Act of jurisdiction or with grave abuse of discretion amounting [to] lack or
2011." Section 11 of RA 10149 expressly authorizes the President to excess of jurisdiction; and (3) there is no appeal or any plain, speedy,
fix the compensation framework of GOCCs and GFIs. and adequate remedy in the ordinary course of law.
(1) Exercise original jurisdiction over cases affecting B. Petitioner lacks locus standi.
ambassadors, other public ministers and consuls, and over
petitions for certiorari, prohibition, mandamus, quo "Locus standi or legal standing has been defined as a personal and
warranto, and habeas corpus. substantial interest in a case such that the party has sustained or will
sustain direct injury as a result of the governmental act that is being
(2) Review, revise, reverse, modify, or affirm on appeal or challenged. The gist of the question on standing is whether a party
certiorari as the law or the Rules of Court may provide, alleges such personal stake in the outcome of the controversy as to
final judgments and orders of lower courts in: assure that concrete adverseness which sharpens the presentation
of issues upon which the court depends for illumination of difficult
constitutional questions."24 This requirement of standing relates to
(a) All cases in which the constitutionality or
the constitutional mandate that this Court settle only actual cases or
validity of any treaty, international or executive
controversies.25
agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or
regulation is in question. (Italics supplied). Thus, as a general rule, a party is allowed to "raise a constitutional
question" when (1) he can show that he will personally suffer some
actual or threatened injury because of the allegedly illegal conduct
As such, this petition must necessar[ily] fail, as this Court does not
of the government; (2) the injury is fairly traceable to the challenged
have original jurisdiction over a petition for declaratory relief even if
action; and (3) the injury is likely to be redressed by a favorable
only questions of law are involved.18
action.26
It has been held that as to the element of injury, such aspect is not The respondents claim that the petition should be dismissed for
something that just anybody with some grievance or pain may failing to comply with Section 3, Rule 7 of the Rules of Civil
assert. It has to be direct and substantial to make it worth the Procedure, which requires the party or the counsel representing him
court’s time, as well as the effort of inquiry into the constitutionality to sign the pleading and indicate an address that should not be a
of the acts of another department of government. If the asserted post office box. The petition also allegedly violated the Supreme
injury is more imagined than real, or is merely superficial and Court En Banc Resolution dated November 12, 2001, requiring
insubstantial, then the courts may end up being importuned to counsels to indicate in their pleadings their Roll of Attorneys
decide a matter that does not really justify such an excursion into Number, their PTR Number and their IBP Official Receipt or Lifetime
constitutional adjudication.30 The rationale for this constitutional Member Number; otherwise, the pleadings would be considered
requirement of locus standi is by no means trifle. Not only does it unsigned and dismissible. Bar Matter No. 1922 likewise states that a
assure the vigorous adversary presentation of the case; more counsel should note down his MCLE Certificate of Compliance or
importantly, it must suffice to warrant the Judiciary’s overruling the Certificate of Exemption in the pleading, but the petitioner had
determination of a coordinate, democratically elected organ of failed to do so.40
government, such as the President, and the clear approval by
Congress, in this case. Indeed, the rationale goes to the very essence
We do not see any violation of Section 3, Rule 7 of the Rules of Civil
of representative democracies.31
Procedure as the petition bears the petitioner’s signature and office
address. The present suit was brought before this Court by the
Neither can the lack of locus standi be cured by the petitioner’s petitioner himself as a party litigant and not through counsel.
claim that he is instituting the present petition as a member of the Therefore, the requirements under the Supreme Court En Banc
bar in good standing who has an interest in ensuring that laws and Resolution dated November 12, 2001 and Bar Matter No. 1922 do
orders of the Philippine government are legally and validly issued. not apply. In Bar Matter No. 1132, April 1, 2003, we clarified that a
This supposed interest has been branded by the Court in Integrated party who is not a lawyer is not precluded from signing his own
Bar of the Phils. (IBP) v. Hon. Zamora,32 "as too general an interest pleadings as this is allowed by the Rules of Court; the purpose of
which is shared by other groups and [by] the whole requiring a counsel to indicate his IBP Number and PTR Number is
citizenry."33 Thus, the Court ruled in IBP that the mere invocation by merely to protect the public from bogus lawyers. A similar
the IBP of its duty to preserve the rule of law and nothing more, construction should be given to Bar Matter No. 1922, which requires
while undoubtedly true, is not sufficient to clothe it with standing in lawyers to indicate their MCLE Certificate of Compliance or
that case. The Court made a similar ruling in Prof. David v. Pres. Certificate of Exemption; otherwise, the provision that allows parties
Macapagal-Arroyo34 and held that the petitioners therein, who are to sign their own pleadings will be negated.
national officers of the IBP, have no legal standing, having failed to
allege any direct or potential injury which the IBP, as an institution,
However, the point raised by the respondents regarding the
or its members may suffer as a consequence of the issuance of
petitioner’s defective jurat is correct. Indeed, A.M. No. 02-8-13-SC,
Presidential Proclamation No. 1017 and General Order No. 5.35
dated February 19, 2008, calls for a current identification document
issued by an official agency bearing the photograph and signature of
We note that while the petition raises vital constitutional and the individual as competent evidence of identity. Nevertheless, we
statutory questions concerning the power of the President to fix the hasten to clarify that the defective jurat in the
compensation packages of GOCCs and GFIs with possible Verification/Certification of Non-Forum Shopping is not a fatal
implications on their officials and employees, the same cannot defect, as we held in In-N-Out Burger, Inc. v. Sehwani,
"infuse" or give the petitioner locus standi under the transcendental Incorporated.41 The verification is only a formal, not a jurisdictional,
importance or paramount public interest doctrine. In Velarde v. requirement that the Court may waive.
Social Justice Society,36 we held that even if the Court could have
exempted the case from the stringent locus standi requirement,
D. The petition has been mooted by supervening events.
such heroic effort would be futile because the transcendental issue
could not be resolved any way, due to procedural infirmities and
shortcomings, as in the present case.37 In other words, giving due Because of the transitory nature of EO 7, it has been pointed out
course to the present petition which is saddled with formal and that the present case has already been rendered moot by these
procedural infirmities explained above in this Resolution, cannot but supervening events: (1) the lapse on December 31, 2010 of Section
be an exercise in futility that does not merit the Court’s liberality. As 10 of EO 7 that suspended the allowances and bonuses of the
we emphasized in Lozano v. Nograles,38 "while the Court has taken directors and trustees of GOCCs and GFIs; and (2) the enactment of
an increasingly liberal approach to the rule of locus standi, evolving R.A. No. 10149 amending the provisions in the charters of GOCCs
from the stringent requirements of ‘personal injury’ to the broader and GFIs empowering their board of directors/trustees to determine
‘transcendental importance’ doctrine, such liberality is not to be their own compensation system, in favor of the grant of authority to
abused."39 the President to perform this act.
h) Conduct compensation studies, develop and recommend to the All told, in view of the supervening events rendering the petition
President a competitive compensation and remuneration system moot, as well as its patent formal and procedural infirmities, we no
which shall attract and retain talent, at the same time allowing the longer see any reason for the Court to resolve the other issues
GOCC to be financially sound and sustainable; raised in the certiorari petition.
CHICO-NAZARIO, J.:
xxxx
Respondent SM Prime thereafter received information that, As a result of the pre-trial conference held on the morning of 8
pursuant to Senate Committee Report No. 225, the DPWH Secretary August 2001, the RTC issued a Pre-Trial Order12 of even date which
and the local building officials of Manila, Quezon City, and Las Piñas limited the issues to be resolved in Civil Cases No. 00-1208 and No.
intended to institute, through the OSG, an action to enjoin 00-1210 to the following:
respondent SM Prime and similar establishments from collecting
parking fees, and to impose upon said establishments penal 1. Capacity of the plaintiff [OSG] in Civil Case No. 00-1210
sanctions under Presidential Decree No. 1096, otherwise known as to institute the present proceedings and relative thereto
the National Building Code of the Philippines (National Building whether the controversy in the collection of parking fees
Code), and its Implementing Rules and Regulations (IRR). With the by mall owners is a matter of public welfare.
threatened action against it, respondent SM Prime filed, on 3
October 2000, a Petition for Declaratory Relief8 under Rule 63 of the
2. Whether declaratory relief is proper.
Revised Rules of Court, against the DPWH Secretary and local
building officials of Manila, Quezon City, and Las Piñas. Said Petition
was docketed as Civil Case No. 00-1208 and assigned to the RTC of 3. Whether respondent Ayala Land, Robinsons, Shangri-La
Makati City, Branch 138, presided over by Judge Sixto Marella, Jr. and SM Prime are obligated to provide parking spaces in
(Judge Marella). In its Petition, respondent SM Prime prayed for their malls for the use of their patrons or the public in
judgment: general, free of charge.
a) Declaring Rule XIX of the Implementing Rules and 4. Entitlement of the parties of [sic] award of damages.13
Regulations of the National Building Code as ultra vires,
hence, unconstitutional and void; On 29 May 2002, the RTC rendered its Joint Decision in Civil Cases
No. 00-1208 and No. 00-1210.
b) Declaring [herein respondent SM Prime]’s clear legal
right to lease parking spaces appurtenant to its The RTC resolved the first two issues affirmatively. It ruled that the
department stores, malls, shopping centers and other OSG can initiate Civil Case No. 00-1210 under Presidential Decree
commercial establishments; and No. 478 and the Administrative Code of 1987.14 It also found that all
the requisites for an action for declaratory relief were present, to
c) Declaring the National Building Code of the Philippines wit:
Implementing Rules and Regulations as ineffective, not
having been published once a week for three (3) The requisites for an action for declaratory relief are: (a) there is a
consecutive weeks in a newspaper of general circulation, justiciable controversy; (b) the controversy is between persons
as prescribed by Section 211 of Presidential Decree No. whose interests are adverse; (c) the party seeking the relief has a
1096. legal interest in the controversy; and (d) the issue involved is ripe for
judicial determination.
[Respondent SM Prime] further prays for such other reliefs as may
be deemed just and equitable under the premises.9 SM, the petitioner in Civil Case No. 001-1208 [sic] is a mall operator
who stands to be affected directly by the position taken by the
The very next day, 4 October 2000, the OSG filed a Petition for government officials sued namely the Secretary of Public Highways
Declaratory Relief and Injunction (with Prayer for Temporary and the Building Officials of the local government units where it
Restraining Order and Writ of Preliminary Injunction)10 against operates shopping malls. The OSG on the other hand acts on a
respondents. This Petition was docketed as Civil Case No. 00-1210 matter of public interest and has taken a position adverse to that of
and raffled to the RTC of Makati, Branch 135, presided over by Judge the mall owners whom it sued. The construction of new and bigger
Francisco B. Ibay (Judge Ibay). Petitioner prayed that the RTC: malls has been announced, a matter which the Court can take
judicial notice and the unsettled issue of whether mall operators
should provide parking facilities, free of charge needs to be
1. After summary hearing, a temporary restraining order
resolved.15
and a writ of preliminary injunction be issued restraining
respondents from collecting parking fees from their
customers; and As to the third and most contentious issue, the RTC pronounced
that:
2. After hearing, judgment be rendered declaring that the
practice of respondents in charging parking fees is violative The Building Code, which is the enabling law and the Implementing
of the National Building Code and its Implementing Rules Rules and Regulations do not impose that parking spaces shall be
and Regulations and is therefore invalid, and making provided by the mall owners free of charge. Absent such directive[,]
permanent any injunctive writ issued in this case. Ayala Land, Robinsons, Shangri-la and SM [Prime] are under no
obligation to provide them for free. Article 1158 of the Civil Code is
clear:
Other reliefs just and equitable under the premises are likewise
prayed for.11
xxxx II
The provision on ratios of parking slots to several variables, like THE TRIAL COURT ERRED IN FAILING TO DECLARE THE
shopping floor area or customer area found in Rule XIX of the IMPLEMENTING RULES INEFFECTIVE FOR NOT HAVING BEEN
Implementing Rules and Regulations cannot be construed as a PUBLISHED AS REQUIRED BY LAW.
directive to provide free parking spaces, because the enabling law,
the Building Code does not so provide. x x x.
III
Parking spaces in shopping malls are privately owned and for their
IV
use, the mall operators collect fees. The legal relationship could be
either lease or deposit. In either case[,] the mall owners have the
right to collect money which translates into income. Should parking THE TRIAL COURT ERRED IN FAILING TO DECLARE THAT THE OSG
spaces be made free, this right of mall owners shall be gone. This, HAS NO LEGAL CAPACITY TO SUE AND/OR THAT IT IS NOT A REAL
without just compensation. Further, loss of effective control over PARTY-IN-INTEREST IN THE INSTANT CASE.21
their property will ensue which is frowned upon by law.
Respondent Robinsons filed a Motion to Dismiss Appeal of the OSG
The presence of parking spaces can be viewed in another light. They on the ground that the lone issue raised therein involved a pure
can be looked at as necessary facilities to entice the public to question of law, not reviewable by the Court of Appeals.
increase patronage of their malls because without parking spaces,
going to their malls will be inconvenient. These are[,] however[,] The Court of Appeals promulgated its Decision in CA-G.R. CV No.
business considerations which mall operators will have to decide for 76298 on 25 January 2007. The appellate court agreed with
themselves. They are not sufficient to justify a legal conclusion, as respondent Robinsons that the appeal of the OSG should suffer the
the OSG would like the Court to adopt that it is the obligation of the fate of dismissal, since "the issue on whether or not the National
mall owners to provide parking spaces for free.16 Building Code and its implementing rules require shopping mall
operators to provide parking facilities to the public for free" was
The RTC then held that there was no sufficient evidence to justify evidently a question of law. Even so, since CA-G.R. CV No. 76298 also
any award for damages. included the appeal of respondent SM Prime, which raised issues
worthy of consideration, and in order to satisfy the demands of
substantial justice, the Court of Appeals proceeded to rule on the
The RTC finally decreed in its 29 May 2002 Joint Decision in Civil
merits of the case.
Cases No. 00-1208 and No. 00-1210 that:
In its Decision, the Court of Appeals affirmed the capacity of the OSG
FOR THE REASONS GIVEN, the Court declares that Ayala Land[,] Inc.,
to initiate Civil Case No. 00-1210 before the RTC as the legal
Robinsons Land Corporation, Shangri-la Plaza Corporation and SM
representative of the government,22 and as the one deputized by
Prime Holdings[,] Inc. are not obligated to provide parking spaces in
the Senate of the Republic of the Philippines through Senate
their malls for the use of their patrons or public in general, free of
Committee Report No. 225.
charge.
Hence, in order to bring the matter of parking fees within the ambit The Court, in City of Ozamis, declared that the City had been clothed
of the National Building Code and its IRR, the OSG had to resort to with full power to control and regulate its streets for the purpose of
specious and feeble argumentation, in which the Court cannot promoting public health, safety and welfare. The City can regulate
concur. the time, place, and manner of parking in the streets and public
places; and charge minimal fees for the street parking to cover the
The OSG cannot rely on Section 102 of the National Building Code to expenses for supervision, inspection and control, to ensure the
expand the coverage of Section 803 of the same Code and Rule XIX smooth flow of traffic in the environs of the public market, and for
of the IRR, so as to include the regulation of parking fees. The OSG the safety and convenience of the public.
limits its citation to the first part of Section 102 of the National
Building Code declaring the policy of the State "to safeguard life, Republic and City of Ozamis involved parking in the local streets; in
health, property, and public welfare, consistent with the principles contrast, the present case deals with privately owned parking
of sound environmental management and control"; but totally facilities available for use by the general public. In Republic and City
ignores the second part of said provision, which reads, "and to this of Ozamis, the concerned local governments regulated parking
end, make it the purpose of this Code to provide for all buildings and pursuant to their power to control and regulate their streets; in the
structures, a framework of minimum standards and requirements to instant case, the DPWH Secretary and local building officials regulate
regulate and control their location, site, design, quality of materials, parking pursuant to their authority to ensure compliance with the
construction, use, occupancy, and maintenance." While the first part minimum standards and requirements under the National Building
of Section 102 of the National Building Code lays down the State Code and its IRR. With the difference in subject matters and the
policy, it is the second part thereof that explains how said policy bases for the regulatory powers being invoked, Republic and City of
shall be carried out in the Code. Section 102 of the National Building Ozamis do not constitute precedents for this case.
Code is not an all-encompassing grant of regulatory power to the
DPWH Secretary and local building officials in the name of life, Indeed, Republic and City of Ozamis both contain pronouncements
health, property, and public welfare. On the contrary, it limits the that weaken the position of the OSG in the case at bar. In Republic,
regulatory power of said officials to ensuring that the minimum the Court, instead of placing the burden on private persons to
standards and requirements for all buildings and structures, as set provide parking facilities to the general public, mentioned the trend
forth in the National Building Code, are complied with. in other jurisdictions wherein the municipal governments
themselves took the initiative to make more parking spaces available
Consequently, the OSG cannot claim that in addition to fixing the so as to alleviate the traffic problems, thus:
minimum requirements for parking spaces for buildings, Rule XIX of
the IRR also mandates that such parking spaces be provided by Under the Land Transportation and Traffic Code, parking in
building owners free of charge. If Rule XIX is not covered by the designated areas along public streets or highways is allowed which
enabling law, then it cannot be added to or included in the clearly indicates that provision for parking spaces serves a useful
implementing rules. The rule-making power of administrative purpose. In other jurisdictions where traffic is at least as voluminous
agencies must be confined to details for regulating the mode or as here, the provision by municipal governments of parking space is
proceedings to carry into effect the law as it has been enacted, and not limited to parking along public streets or highways. There has
it cannot be extended to amend or expand the statutory been a marked trend to build off-street parking facilities with the
requirements or to embrace matters not covered by the statute. view to removing parked cars from the streets. While the provision
Administrative regulations must always be in harmony with the of off-street parking facilities or carparks has been commonly
provisions of the law because any resulting discrepancy between the undertaken by private enterprise, municipal governments have been
two will always be resolved in favor of the basic law.27 constrained to put up carparks in response to public necessity where
private enterprise had failed to keep up with the growing public
From the RTC all the way to this Court, the OSG repeatedly referred demand. American courts have upheld the right of municipal
to Republic v. Gonzales28 and City of Ozamis v. Lumapas29 to support governments to construct off-street parking facilities as clearly
its position that the State has the power to regulate parking spaces redounding to the public benefit.30
to promote the health, safety, and welfare of the public; and it is by
virtue of said power that respondents may be required to provide In City of Ozamis, the Court authorized the collection by the City of
free parking facilities. The OSG, though, failed to consider the minimal fees for the parking of vehicles along the streets: so why
substantial differences in the factual and legal backgrounds of these then should the Court now preclude respondents from collecting
two cases from those of the Petition at bar. from the public a fee for the use of the mall parking facilities?
Undoubtedly, respondents also incur expenses in the maintenance
In Republic, the Municipality of Malabon sought to eject the and operation of the mall parking facilities, such as electric
occupants of two parcels of land of the public domain to give way to consumption, compensation for parking attendants and security,
a road-widening project. It was in this context that the Court and upkeep of the physical structures.
pronounced:
It is not sufficient for the OSG to claim that "the power to regulate
Indiscriminate parking along F. Sevilla Boulevard and other main and control the use, occupancy, and maintenance of buildings and
thoroughfares was prevalent; this, of course, caused the build up of structures carries with it the power to impose fees and, conversely,
traffic in the surrounding area to the great discomfort and to control, partially or, as in this case, absolutely, the imposition of
inconvenience of the public who use the streets. Traffic congestion such fees." Firstly, the fees within the power of regulatory agencies
constitutes a threat to the health, welfare, safety and convenience to impose are regulatory fees. It has been settled law in this
Given the foregoing, the Court finds no more need to address the
issue persistently raised by respondent SM Prime concerning the We deny the motions for reconsideration.
unconstitutionality of Rule XIX of the IRR. In addition, the said issue
was not among those that the parties, during the pre-trial I.
conference for Civil Cases No. 12-08 and No. 00-1210, agreed to Far-reaching implications of the legal issue justify
submit for resolution of the RTC. It is likewise axiomatic that the treatment of petition for declaratory relief as one for mandamus.
constitutionality of a law, a regulation, an ordinance or an act will
Contrary to Pangilinan’s narrow view, the serious economic The opinions of the SEC, as well as of the Department of Justice
consequences resulting in the interpretation of the term "capital" in (DOJ), on the definition of the term "capital" as referring to both
Section 11, Article XII of the Constitution undoubtedly demand an voting and non-voting shares (combined total of common and
immediate adjudication of this issue. Simply put, the far-reaching preferred shares) are, in the first place, conflicting and inconsistent.
implications of this issue justify the treatment of the petition as There is no basis whatsoever to the claim that the SEC and the DOJ
one for mandamus.7 have consistently and uniformly adopted a definition of the term
"capital" contrary to the definition that this Court adopted in its 28
In Luzon Stevedoring Corp. v. Anti-Dummy Board,8 the Court deemed June 2011 Decision.
it wise and expedient to resolve the case although the petition for
declaratory relief could be outrightly dismissed for being In DOJ Opinion No. 130, s. 1985,10 dated 7 October 1985, the scope
procedurally defective. There, appellant admittedly had already of the term "capital" in Section 9, Article XIV of the 1973
committed a breach of the Public Service Act in relation to the Anti- Constitution was raised, that is, whether the term "capital" includes
Dummy Law since it had been employing non- American aliens long "both preferred and common stocks." The issue was raised in
before the decision in a prior similar case. However, the main issue relation to a stock-swap transaction between a Filipino and a
in Luzon Stevedoring was of transcendental importance, involving Japanese corporation, both stockholders of a domestic corporation
the exercise or enjoyment of rights, franchises, privileges, properties that owned lands in the Philippines. Then Minister of Justice Estelito
and businesses which only Filipinos and qualified corporations could P. Mendoza ruled that the resulting ownership structure of the
exercise or enjoy under the Constitution and the statutes. corporation would be unconstitutional because 60% of the voting
Moreover, the same issue could be raised by appellant in an stock would be owned by Japanese while Filipinos would own only
appropriate action. Thus, in Luzon Stevedoring the Court deemed it 40% of the voting stock, although when the non-voting stock is
necessary to finally dispose of the case for the guidance of all added, Filipinos would own 60% of the combined voting and non-
concerned, despite the apparent procedural flaw in the petition. voting stock. This ownership structure is remarkably similar to the
current ownership structure of PLDT. Minister Mendoza ruled:
The circumstances surrounding the present case, such as the
supposed procedural defect of the petition and the pivotal legal xxxx
issue involved, resemble those in Luzon Stevedoring. Consequently,
in the interest of substantial justice and faithful adherence to the Thus, the Filipino group still owns sixty (60%) of the entire
Constitution, we opted to resolve this case for the guidance of the subscribed capital stock (common and preferred) while the Japanese
public and all concerned parties. investors control sixty percent (60%) of the common (voting) shares.
The SEC admits during the Oral Arguments that only the SEC en
Further, under, and for purposes of, the FIA, MLRC and BFDC are
banc, and not any of its individual commissioners or legal staff, is
both Philippine nationals, considering that: (1) sixty percent (60%) of
empowered to issue opinions which have the same binding effect as
their respective outstanding capital stock entitled to vote is owned
SEC rules and regulations, thus:
by a Philippine national (i.e., by the Trustee, in the case of MLRC;
and by MLRC, in the case of BFDC); and (2) at least 60% of their
respective board of directors are Filipino citizens. (Boldfacing and JUSTICE CARPIO:
italicization supplied)
So, under the law, it is the Commission En Banc
Clearly, these DOJ and SEC opinions are compatible with the Court’s that can issue an
interpretation of the 60-40 ownership requirement in favor of
Filipino citizens mandated by the Constitution for certain economic SEC Opinion, correct?
activities. At the same time, these opinions highlight the conflicting,
contradictory, and inconsistent positions taken by the DOJ and the COMMISSIONER GAITE:13
SEC on the definition of the term "capital" found in the economic
provisions of the Constitution.
That’s correct, Your Honor.
The opinions issued by SEC legal officers do not have the force and
effect of SEC rules and regulations because only the SEC en banc can JUSTICE CARPIO:
adopt rules and regulations. As expressly provided in Section 4.6 of
the Securities Regulation Code,12 the SEC cannot delegate to any of Can the Commission En Banc delegate this
its individual Commissioner or staff the power to adopt any rule or function to an SEC officer?
regulation. Further, under Section 5.1 of the same Code, it is the
SEC as a collegial body, and not any of its legal officers, that is COMMISSIONER GAITE:
empowered to issue opinions and approve rules and
regulations. Thus:
Yes, Your Honor, we have delegated it to the
General Counsel.
4.6. The Commission may, for purposes of efficiency, delegate any of
its functions to any department or office of the Commission, an
JUSTICE CARPIO:
individual Commissioner or staff member of the
Commission except its review or appellate authority and its power
to adopt, alter and supplement any rule or regulation. It can be delegated. What cannot be delegated
by the Commission En Banc to a commissioner or
an individual employee of the Commission?
The Commission may review upon its own initiative or upon the
petition of any interested party any action of any department or
office, individual Commissioner, or staff member of the Commission. COMMISSIONER GAITE:
SEC. 5. Powers and Functions of the Commission.- 5.1. The Novel opinions that [have] to be decided by the
Commission shall act with transparency and shall have the powers En Banc...
COMMISSIONER GAITE: MR. VILLEGAS. We have just had a long discussion with the members
of the team from the UP Law Center who provided us a draft. The
phrase that is contained here which we adopted from the UP draft is
They are not rules and regulations. ‘60 percent of voting stock.’
JUSTICE CARPIO: MR. NOLLEDO. That must be based on the subscribed capital stock,
because unless declared delinquent, unpaid capital stock shall be
If they are not rules and regulations, they apply entitled to vote.
only to that particular situation and will not
constitute a precedent, correct? MR. VILLEGAS. That is right.
COMMISSIONER GAITE: MR. NOLLEDO. Thank you. With respect to an investment by one
corporation in another corporation, say, a corporation with 60-40
Yes, Your Honor.14 (Emphasis supplied) percent equity invests in another corporation which is permitted by
the Corporation Code, does the Committee adopt the grandfather
Significantly, the SEC en banc, which is the collegial body statutorily rule?
empowered to issue rules and opinions on behalf of the SEC, has
adopted even the Grandfather Rule in determining compliance with MR. VILLEGAS. Yes, that is the understanding of the Committee.
the 60-40 ownership requirement in favor of Filipino citizens
mandated by the Constitution for certain economic activities. This MR. NOLLEDO. Therefore, we need additional Filipino capital?
prevailing SEC ruling, which the SEC correctly adopted to thwart any
circumvention of the required Filipino "ownership and control," is
laid down in the 25 March 2010 SEC en banc ruling in Redmont MR. VILLEGAS. Yes. (Boldfacing and underscoring supplied;
Consolidated Mines, Corp. v. McArthur Mining, Inc., et al.,15 to wit: italicization in the original)
The avowed purpose of the Constitution is to place in the hands of This SEC en banc ruling conforms to our 28 June 2011 Decision that
Filipinos the exploitation of our natural resources. Necessarily, the 60-40 ownership requirement in favor of Filipino citizens in the
therefore, the Rule interpreting the constitutional provision should Constitution to engage in certain economic activities applies not
not diminish that right through the legal fiction of corporate only to voting control of the corporation, but also to the beneficial
ownership and control. But the constitutional provision, as ownership of the corporation. Thus, in our 28 June 2011 Decision
interpreted and practiced via the 1967 SEC Rules, has favored we stated:
foreigners contrary to the command of the Constitution. Hence, the
Grandfather Rule must be applied to accurately determine the Mere legal title is insufficient to meet the 60 percent Filipinoowned
actual participation, both direct and indirect, of foreigners in a "capital" required in the Constitution. Full beneficial ownership of
corporation engaged in a nationalized activity or business. 60 percent of the outstanding capital stock, coupled with 60
In his motion for reconsideration, the PSE President cites the cases Section 19. The State shall develop a self-reliant and independent
of National Telecommunications Commission v. Court of national economy effectively controlled by Filipinos.
Appeals17 and Philippine Long Distance Telephone Company v.
National Telecommunications Commission18 in arguing that the
Fortifying the State policy of a Filipino-controlled economy, the
Court has already defined the term "capital" in Section 11, Article XII
Constitution decrees:
of the 1987 Constitution.19
Pursuant to the express mandate of Section 11, Article XII of the x x x in the Philippines x x x without first securing from the Board of
1987 Constitution, Congress enacted Republic Act No. 7042 or Investments a written certificate to the effect that such business or
the Foreign Investments Act of 1991 (FIA), as amended, which economic activity x x x would not conflict with the Constitution or
defined a "Philippine national" as follows: laws of the Philippines."27 Thus, a "non-Philippine national" cannot
own and operate a reserved economic activity like a public utility.
This means, of course, that only a "Philippine national" can own and
SEC. 3. Definitions. - As used in this Act:
operate a public utility.
Article 14. "Philippine national" shall mean a citizen of the The FIA, like all its predecessor statutes, clearly defines a
Philippines; or a domestic partnership or association wholly owned "Philippine national" as a Filipino citizen, or a domestic corporation
by citizens of the Philippines; or a corporation organized under the "at least sixty percent (60%) of the capital stock outstanding and
laws of the Philippines of which at least sixty per cent (60%) of the entitled to vote" is owned by Filipino citizens. A domestic
capital stock outstanding and entitled to vote is owned and held by corporation is a "Philippine national" only if at least 60% of its voting
citizens of the Philippines; or a trustee of funds for pension or other stock is owned by Filipino citizens. This definition of a "Philippine
employee retirement or separation benefits, where the trustee is a national" is crucial in the present case because the FIA reiterates and
Philippine national and at least sixty per cent (60%) of the fund will clarifies Section 11, Article XII of the 1987 Constitution, which limits
accrue to the benefit of Philippine nationals: Provided, That where a the ownership and operation of public utilities to Filipino citizens or
corporation and its non-Filipino stockholders own stock in a to corporations or associations at least 60% Filipino-owned.
registered enterprise, at least sixty per cent (60%) of the capital
stock outstanding and entitled to vote of both corporations must be The FIA is the basic law governing foreign investments in the
owned and held by the citizens of the Philippines and at least sixty Philippines, irrespective of the nature of business and area of
per cent (60%) of the members of the Board of Directors of both investment. The FIA spells out the procedures by which non-
corporations must be citizens of the Philippines in order that the Philippine nationals can invest in the Philippines. Among the key
corporation shall be considered a Philippine national. (Boldfacing, features of this law is the concept of a negative list or the Foreign
italicization and underscoring supplied) Investments Negative List.32 Section 8 of the law states:
Under Article 69(3) of the Omnibus Investments Code of 1981, "no SEC. 8. List of Investment Areas Reserved to Philippine
corporation x x x which is not a ‘Philippine national’ x x x shall do Nationals [Foreign Investment Negative List]. - The Foreign
business x x x in the Philippines x x x without first securing a written Investment Negative List shall have two 2 component lists: A and B:
certificate from the Board of Investments to the effect that such
business or economic activity x x x would not conflict with the
a. List A shall enumerate the areas of activities reserved to
Constitution or laws of the Philippines."29 Thus, a "non-Philippine
Philippine nationals by mandate of the Constitution and specific
national" cannot own and operate a reserved economic activity like
laws.
a public utility. Again, this means that only a "Philippine national"
can own and operate a public utility.
b. List B shall contain the areas of activities and enterprises
regulated pursuant to law:
Prior to the Omnibus Investments Code of 1981, Republic Act No.
518630 or the Investment Incentives Act, which took effect on 16
September 1967, contained a similar definition of a "Philippine 1. which are defense-related activities, requiring prior clearance and
national," to wit: authorization from the Department of National Defense [DND] to
engage in such activity, such as the manufacture, repair, storage
and/or distribution of firearms, ammunition, lethal weapons,
(f) "Philippine National" shall mean a citizen of the Philippines; or a
military ordinance, explosives, pyrotechnics and similar materials;
partnership or association wholly owned by citizens of the
unless such manufacturing or repair activity is specifically
Philippines; or a corporation organized under the laws of the
authorized, with a substantial export component, to a non-
Philippines of which at least sixty per cent of the capital stock
Philippine national by the Secretary of National Defense; or
outstanding and entitled to vote is owned and held by citizens of
the Philippines; or a trustee of funds for pension or other employee
retirement or separation benefits, where the trustee is a Philippine 2. which have implications on public health and morals, such as the
National and at least sixty per cent of the fund will accrue to the manufacture and distribution of dangerous drugs; all forms of
benefit of Philippine Nationals: Provided, That where a corporation gambling; nightclubs, bars, beer houses, dance halls, sauna and
and its non-Filipino stockholders own stock in a registered steam bathhouses and massage clinics. (Boldfacing, underscoring
enterprise, at least sixty per cent of the capital stock outstanding and italicization supplied)
and entitled to vote of both corporations must be owned and held
by the citizens of the Philippines and at least sixty per cent of the Section 8 of the FIA enumerates the investment areas "reserved to
members of the Board of Directors of both corporations must be Philippine nationals." Foreign Investment Negative List A consists of
citizens of the Philippines in order that the corporation shall be "areas of activities reserved to Philippine nationals by mandate of
considered a Philippine National. (Boldfacing, italicization and the Constitution and specific laws," where foreign equity
underscoring supplied) participation in any enterprise shall be limited to the maximum
percentage expressly prescribed by the Constitution and other
Under Section 3 of Republic Act No. 5455 or the Foreign Business specific laws. In short, to own and operate a public utility in the
Regulations Act, which took effect on 30 September 1968, if the Philippines one must be a "Philippine national" as defined in the
investment in a domestic enterprise by non-Philippine nationals FIA. The FIA is abundant notice to foreign investors to what extent
exceeds 30% of its outstanding capital stock, such enterprise must they can invest in public utilities in the Philippines.
obtain prior approval from the Board of Investments before
accepting such investment. Such approval shall not be granted if the To repeat, among the areas of investment covered by the Foreign
investment "would conflict with existing constitutional provisions Investment Negative List A is the ownership and operation of public
and laws regulating the degree of required ownership by Philippine utilities, which the Constitution expressly reserves to Filipino citizens
nationals in the enterprise."31 A "non-Philippine national" cannot and to corporations at least 60% owned by Filipino citizens. In other
own and operate a reserved economic activity like a public utility. words, Negative List A of the FIA reserves the ownership and
Rule 63 Full Text Cases andm50 of 88
operation of public utilities only to "Philippine nationals," defined And, you are also aware that under the
in Section 3(a) of the FIA as "(1) a citizen of the Philippines; x x x or predecessor law of the Foreign Investments Act
(3) a corporation organized under the laws of the Philippines of of 1991, the Omnibus Investments Act of 1987,
which at least sixty percent (60%) of the capital stock the same provisions apply: x x x only Philippine
outstanding and entitled to vote is owned and held by citizens of nationals can own and operate a public utility
the Philippines; or (4) a corporation organized abroad and and the Philippine national, if it is a corporation,
registered as doing business in the Philippines under the x x x sixty percent (60%) of the capital stock of
Corporation Code of which one hundred percent (100%) of the that corporation must be owned by citizens of
capital stock outstanding and entitled to vote is wholly owned by the Philippines, correct?
Filipinos or a trustee of funds for pension or other employee
retirement or separation benefits, where the trustee is a Philippine COMMISSIONER GAITE:
national and at least sixty percent (60%) of the fund will accrue to
the benefit of Philippine nationals."
Correct, Your Honor.
6. SEC-OGC Opinion No. 17-07, addressed to Mr. Reynaldo The 28 June 2011 Decision declares that the 60 percent Filipino
G. David; and ownership required by the Constitution to engage in certain
economic activities applies not only to voting control of the
corporation, but also to the beneficial ownership of the
7. SEC-OGC Opinion No. 03-08, addressed to Attys. Ruby
corporation. To repeat, we held:
Rose J. Yusi and Rudyard S. Arbolado.
VI.
MR. AZCUNA. So if the Davide amendment is lost, we are stuck with
Intent of the framers of the Constitution
60 percent of the capital to be owned by citizens.
The OSG, in its own behalf and as counsel for the State,43 agrees fully The last sentence of Section 11, Article XII of the 1987 Constitution
with the Court’s interpretation of the term "capital." In its reads:
Consolidated Comment, the OSG explains that the deletion of the
phrase "controlling interest" and replacement of the word "stock"
The participation of foreign investors in the governing body of any
with the term "capital" were intended specifically to extend the
public utility enterprise shall be limited to their proportionate share
scope of the entities qualified to operate public utilities to include
in its capital, and all the executive and managing officers of such
associations without stocks. The framers’ omission of the phrase
corporation or association must be citizens of the Philippines.
"controlling interest" did not mean the inclusion of all shares of
stock, whether voting or non-voting. The OSG reiterated essentially
the Court’s declaration that the Constitution reserved exclusively to During the Oral Arguments, the OSG emphasized that there was
Philippine nationals the ownership and operation of public utilities never a question on the intent of the framers of the Constitution to
consistent with the State’s policy to "develop a self-reliant and limit foreign ownership, and assure majority Filipino ownership and
independent national economy effectively controlled by Filipinos." control of public utilities. The OSG argued, "while the delegates
disagreed as to the percentage threshold to adopt, x x x the records
show they clearly understood that Filipino control of the public
As we held in our 28 June 2011 Decision, to construe broadly the
utility corporation can only be and is obtained only through the
term "capital" as the total outstanding capital stock, treated as
election of a majority of the members of the board."
a single class regardless of the actual classification of shares, grossly
contravenes the intent and letter of the Constitution that the "State
shall develop a self-reliant and independent national Indeed, the only point of contention during the deliberations of the
economy effectively controlled by Filipinos." We illustrated the Constitutional Commission on 23 August 1986 was the extent of
glaring anomaly which would result in defining the term "capital" as majority Filipino control of public utilities. This is evident from the
the total outstanding capital stock of a corporation, treated as following exchange:
MR. JAMIR. Madam President, my proposed amendment on lines 20 While they had differing views on the percentage of Filipino
and 21 is to delete the phrase "two thirds of whose voting stock or ownership of capital, it is clear that the framers of the Constitution
controlling interest," and instead substitute the words "SIXTY intended public utilities to be majority Filipino-owned and
PERCENT OF WHOSE CAPITAL" so that the sentence will read: "No controlled. To ensure that Filipinos control public utilities, the
franchise, certificate, or any other form of authorization for the framers of the Constitution approved, as additional safeguard, the
operation of a public utility shall be granted except to citizens of the inclusion of the last sentence of Section 11, Article XII of the
Philippines or to corporations or associations organized under the Constitution commanding that "[t]he participation of foreign
laws of the Philippines at least SIXTY PERCENT OF WHOSE CAPITAL is investors in the governing body of any public utility enterprise shall
owned by such citizens." be limited to their proportionate share in its capital, and all the
executive and managing officers of such corporation or association
xxxx must be citizens of the Philippines." In other words, the last
sentence of Section 11, Article XII of the Constitution mandates that
(1) the participation of foreign investors in the governing body of the
THE PRESIDENT: Will Commissioner Jamir first explain?
corporation or association shall be limited to their proportionate
share in the capital of such entity; and (2) all officers of the
MR. JAMIR. Yes, in this Article on National Economy and Patrimony, corporation or association must be Filipino citizens.
there were two previous sections in which we fixed the Filipino
equity to 60 percent as against 40 percent for foreigners. It is only in
Commissioner Rosario Braid proposed the inclusion of the phrase
this Section 15 with respect to public utilities that the committee
requiring the managing officers of the corporation or association to
proposal was increased to two-thirds. I think it would be better to
be Filipino citizens specifically to prevent management contracts,
harmonize this provision by providing that even in the case of public
which were designed primarily to circumvent the Filipinization of
utilities, the minimum equity for Filipino citizens should be 60
public utilities, and to assure Filipino control of public utilities, thus:
percent.
MS. ROSARIO BRAID. Yes, in the interest of equal time, may I also MR. OPLE. I think a number of us have agreed to ask Commissioner
read from a memorandum by the spokesman of the Philippine Rosario Braid to propose an amendment with respect to the
Chamber of Communications on why they would like to maintain the operating management of public utilities, and in this amendment,
present equity, I am referring to the 66 2/3. They would prefer to we are associated with Fr. Bernas, Commissioners Nieva and
have a 75-25 ratio but would settle for 66 2/3. x x x Rodrigo. Commissioner Rosario Braid will state this amendment
now.
xxxx
Thank you.
MS. ROSARIO BRAID. I have added a clause that will put THE PRESIDENT. This is still on Section 15.
management in the hands of Filipino citizens.
xxxx
The results show 29 votes in favor and none against; so the
proposed amendment is approved.
FR. BERNAS. Madam President.
xxxx
THE PRESIDENT. Commissioner Bernas is recognized.
THE PRESIDENT. All right. Can we proceed now to vote on Section
FR. BERNAS. Will the committee accept a reformulation of the first 15?
part?
MR. RAMA. Yes, Madam President.
MR. BENGZON. Let us hear it.
THE PRESIDENT. Will the chairman of the committee please read
FR. BERNAS. The reformulation will be essentially the formula of the Section 15?
1973 Constitution which reads: "THE PARTICIPATION OF FOREIGN
INVESTORS IN THE GOVERNING BODY OF ANY PUBLIC UTILITY
MR. VILLEGAS. The entire Section 15, as amended, reads: "No
ENTERPRISE SHALL BE LIMITED TO THEIR PROPORTIONATE SHARE IN
franchise, certificate, or any other form of authorization for the
THE CAPITAL THEREOF AND..."
operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the
MR. VILLEGAS. "ALL THE EXECUTIVE AND MANAGING OFFICERS OF laws of the Philippines at least 60 PERCENT OF WHOSE CAPITAL is
SUCH CORPORATIONS AND ASSOCIATIONS MUST BE CITIZENS OF owned by such citizens." May I request Commissioner Bengzon to
THE PHILIPPINES." please continue reading.
MR. BENGZON. Will Commissioner Bernas read the whole thing MR. BENGZON. "THE PARTICIPATION OF FOREIGN INVESTORS IN THE
again? GOVERNING BODY OF ANY PUBLIC UTILITY ENTERPRISE SHALL BE
LIMITED TO THEIR PROPORTIONATE SHARE IN THE CAPITAL
FR. BERNAS. "THE PARTICIPATION OF FOREIGN INVESTORS IN THE THEREOF AND ALL THE EXECUTIVE AND MANAGING OFFICERS OF
GOVERNING BODY OF ANY PUBLIC UTILITY ENTERPRISE SHALL BE SUCH CORPORATIONS OR ASSOCIATIONS MUST BE CITIZENS OF THE
LIMITED TO THEIR PROPORTIONATE SHARE IN THE CAPITAL PHILIPPINES."
THEREOF..." I do not have the rest of the copy.
MR. VILLEGAS. "NOR SHALL SUCH FRANCHISE, CERTIFICATE OR
MR. BENGZON. "AND ALL THE EXECUTIVE AND MANAGING AUTHORIZATION BE EXCLUSIVE IN CHARACTER OR FOR A PERIOD
OFFICERS OF SUCH CORPORATIONS OR ASSOCIATIONS MUST BE LONGER THAN TWENTY-FIVE YEARS RENEWABLE FOR NOT MORE
CITIZENS OF THE PHILIPPINES." Is that correct? THAN TWENTY-FIVE YEARS. Neither shall any such franchise or right
be granted except under the condition that it shall be subject to
MR. VILLEGAS. Yes. amendment, alteration, or repeal by Congress when the common
good so requires. The State shall encourage equity participation in
public utilities by the general public."
MR. BENGZON. Madam President, I think that was said in a more
elegant language. We accept the amendment. Is that all right with
Commissioner Rosario Braid? VOTING
xxxx The results show 29 votes in favor and 4 against; Section 15, as
amended, is approved.48 (Emphasis supplied)
VIII. Granting that only the SEC Chairman was impleaded in this case, the
The undisputed facts Court has ample powers to order the SEC’s compliance with its
directive contained in the 28 June 2011 Decision in view of the far-
There is no dispute, and respondents do not claim the contrary, that reaching implications of this case. In Domingo v. Scheer,52 the Court
(1) foreigners own 64.27% of the common shares of PLDT, which dispensed with the amendment of the pleadings to implead the
class of shares exercises the sole right to vote in the election of Bureau of Customs considering (1) the unique backdrop of the case;
directors, and thus foreigners control PLDT; (2) Filipinos own only (2) the utmost need to avoid further delays; and (3) the issue of
35.73% of PLDT’s common shares, constituting a minority of the public interest involved. The Court held:
voting stock, and thus Filipinos do not control PLDT; (3) preferred
shares, 99.44% owned by Filipinos, have no voting rights; (4) The Court may be curing the defect in this case by adding the BOC as
preferred shares earn only 1/70 of the dividends that common party-petitioner. The petition should not be dismissed because the
shares earn;50 (5) preferred shares have twice the par value of second action would only be a repetition of the first. In Salvador, et
common shares; and (6) preferred shares constitute 77.85% of the al., v. Court of Appeals, et al., we held that this Court has full
authorized capital stock of PLDT and common shares only 22.15%. powers, apart from that power and authority which is inherent, to
amend the processes, pleadings, proceedings and decisions by
Despite the foregoing facts, the Court did not decide, and in fact substituting as party-plaintiff the real party-in-interest. The Court
refrained from ruling on the question of whether PLDT violated the has the power to avoid delay in the disposition of this case, to
60-40 ownership requirement in favor of Filipino citizens in Section order its amendment as to implead the BOC as party-respondent.
11, Article XII of the 1987 Constitution. Such question indisputably Indeed, it may no longer be necessary to do so taking into account
calls for a presentation and determination of evidence through a the unique backdrop in this case, involving as it does an issue of
hearing, which is generally outside the province of the Court’s public interest. After all, the Office of the Solicitor General has
jurisdiction, but well within the SEC’s statutory powers. Thus, for represented the petitioner in the instant proceedings, as well as in
obvious reasons, the Court limited its decision on the purely legal the appellate court, and maintained the validity of the deportation
and threshold issue on the definition of the term "capital" in Section order and of the BOC’s Omnibus Resolution. It cannot, thus, be
11, Article XII of the Constitution and directed the SEC to apply such claimed by the State that the BOC was not afforded its day in court,
definition in determining the exact percentage of foreign ownership simply because only the petitioner, the Chairperson of the BOC, was
in PLDT. the respondent in the CA, and the petitioner in the instant recourse.
In Alonso v. Villamor, we had the occasion to state:
IX.
PLDT is not an indispensable party; There is nothing sacred about processes or pleadings, their forms
SEC is impleaded in this case. or contents. Their sole purpose is to facilitate the application of
justice to the rival claims of contending parties. They were created,
not to hinder and delay, but to facilitate and promote, the
In his petition, Gamboa prays, among others:
administration of justice. They do not constitute the thing itself,
which courts are always striving to secure to litigants. They are
xxxx designed as the means best adapted to obtain that thing. In other
words, they are a means to an end. When they lose the character of
5. For the Honorable Court to issue a declaratory relief that the one and become the other, the administration of justice is at
ownership of common or voting shares is the sole basis in fault and courts are correspondingly remiss in the performance of
determining foreign equity in a public utility and that any other their obvious duty.53 (Emphasis supplied)
government rulings, opinions, and regulations inconsistent with this
declaratory relief be declared unconstitutional and a violation of the In any event, the SEC has expressly manifested54 that it will abide
intent and spirit of the 1987 Constitution; by the Court’s decision and defer to the Court’s definition of the
term "capital" in Section 11, Article XII of the Constitution. Further,
6. For the Honorable Court to declare null and void all sales of the SEC entered its special appearance in this case and argued
common stocks to foreigners in excess of 40 percent of the total during the Oral Arguments, indicating its submission to the Court’s
subscribed common shareholdings; and jurisdiction. It is clear, therefore, that there exists no legal
impediment against the proper and immediate implementation of
7. For the Honorable Court to direct the Securities and Exchange the Court’s directive to the SEC.
Commission and Philippine Stock Exchange to require PLDT to make
a public disclosure of all of its foreign shareholdings and their PLDT is an indispensable party only insofar as the other issues,
actual and real beneficial owners. particularly the factual questions, are concerned. In other words,
PLDT must be impleaded in order to fully resolve the issues on (1)
Other relief(s) just and equitable are likewise prayed for. (Emphasis whether the sale of 111,415 PTIC shares to First Pacific violates the
supplied) constitutional limit on foreign ownership of PLDT; (2) whether the
sale of common shares to foreigners exceeded the 40 percent limit
on foreign equity in PLDT; and (3) whether the total percentage of
Rule 63 Full Text Cases andm57 of 88
the PLDT common shares with voting rights complies with the 60-40 JUSTICE CARPIO:
ownership requirement in favor of Filipino citizens under the
Constitution for the ownership and operation of PLDT. These issues I would like also to get from you Dr. Villegas if you have additional
indisputably call for an examination of the parties’ respective information on whether this high FDI59 countries in East Asia have
evidence, and thus are clearly within the jurisdiction of the SEC. In allowed foreigners x x x control [of] their public utilities, so that we
short, PLDT must be impleaded, and must necessarily be heard, in can compare apples with apples.
the proceedings before the SEC where the factual issues will be
thoroughly threshed out and resolved.
DR. VILLEGAS:
Filipinos have only to remind themselves of how this country was This petition for review on certiorari1 seeks to set aside the
exploited under the Parity Amendment, which gave Americans the Decision2 dated January 31, 2005 and Resolution3dated March 15,
same rights as Filipinos in the exploitation of natural resources, and 2005 of the Court of Appeals in CA-G.R. SP No. 62211. The Court of
in the ownership and control of public utilities, in the Philippines. To Appeals dismissed the Complaint4 for Quieting of Title and Damages
do this the 1935 Constitution, which contained the same 60 percent filed by Phil-Ville Development and Housing Corporation (Phil-Ville)
Filipino ownership and control requirement as the present 1987 and denied its Motion for Reconsideration.5
Constitution, had to be amended to give Americans parity rights
with Filipinos. There was bitter opposition to the Parity The factual antecedents, as culled from the records, are as follows.
Amendment62 and many Filipinos eagerly awaited its expiration. In
late 1968, PLDT was one of the American-controlled public utilities
that became Filipino-controlled when the controlling American Phil-Ville Development and Housing Corporation is the registered
stockholders divested in anticipation of the expiration of the Parity owner of three parcels of land designated as Lots 1-G-1, 1-G-2 and 1-
Amendment on 3 July 1974.63 No economic suicide happened when G-3 of the subdivision plan Psd-1-13-006209, located in Caloocan
control of public utilities and mining corporations passed to City, having a total area of 8,694 square meters and covered by
Filipinos’ hands upon expiration of the Parity Amendment. Transfer Certificates of Title (TCT) Nos. 270921,6 2709227 and
270923.8 Prior to their subdivision, the lots were collectively
designated as Lot 1-G of the subdivision plan Psd-2731 registered in
Movants’ interpretation of the term "capital" would bring us back to the name of Phil-Ville under TCT No. T-148220.9 Said parcels of land
the same evils spawned by the Parity Amendment, effectively giving form part of Lot 23-A of the Maysilo Estate originally covered by
foreigners parity rights with Filipinos, but this time even without Original Certificate of Title (OCT) No. 99410 registered on May 3,
any amendment to the present Constitution. Worse, movants’ 1917 in the name of Isabel Gil de Sola as the judicial administratrix
interpretation opens up our national economy to effective of the estate of Gonzalo Tuason and thirty-one (31) others. Phil-Ville
control not only by Americans but also by all foreigners, be they acquired the lots by purchase from N. Dela Merced and Sons, Inc. on
Indonesians, Malaysians or Chinese, even in the absence of July 24, 1984.
reciprocal treaty arrangements. At least the Parity Amendment, as
implemented by the Laurel-Langley Agreement, gave the capital-
starved Filipinos theoretical parity – the same rights as Americans to
Rule 63 Full Text Cases andm59 of 88
Earlier, on September 27, 1961, a group composed of Eleuteria circumstances surrounding the issuance of OCT No. 994 and its
Rivera, Bartolome P. Rivera, Josefa R. Aquino, Gregorio R. Aquino, derivative titles.
Pelagia R. Angeles, Modesta R. Angeles, Venancio R. Angeles, Felipe
R. Angeles Fidela R. Angeles and Rosauro R. Aquino, claiming to be On April 29, 1997, the Court of Appeals rendered a Decision21 in CA-
the heirs of Maria de la Concepcion Vidal, a co-owner to the extent G.R. SP No. 43034 granting Rosauro R. Aquino’s petition and setting
of 1-189/1000% of the properties covered by OCT Nos. 982, 983, aside the RTC’s Order of September 9, 1996, which granted Eleuteria
984, 985 and 994 of the Hacienda Maysilo, filed a petition with the Rivera’s prayer for partition and adjudicated in her favor portions of
Court of First Instance (CFI) of Rizal in Land Registration Case No. Lots 23, 28-A-1 and 28-A-2 of the Maysilo Estate. The appellate court
4557. They prayed for the substitution of their names on OCT No. likewise set aside the Order and the Writ of Possession dated
994 in place of Maria de la Concepcion Vidal. Said petition was December 26, 1996.
granted by the CFI in an Order11 dated May 25, 1962.
Nonetheless, on June 5, 1997, petitioner filed a complaint for
Afterwards, the alleged heirs of Maria de la Concepcion Vidal filed a quieting of title and damages against the surviving heirs of Eleuteria
petition for the partition of the properties covered by OCT Nos. 982, Rivera Vda. de Bonifacio (namely Maximo R. Bonifacio, Ceferino R.
983, 984, 985 and 994. The case was docketed as Civil Case No. C- Bonifacio, Apolonia B. Tan, Benita B. Caina, Crispina B. Pascual,
424 in the CFI of Rizal, Branch 12, Caloocan City. On December 29, Rosalia B. de Gracia, Teresita S. Doronia, Christina B. Goco, Arsenio
1965, the CFI granted the petition and appointed three C. Bonifacio, Carmen B. Bernardino and Danilo C. Bonifacio) and the
commissioners to determine the most equitable division of the Register of Deeds of Caloocan City. The case was docketed as Civil
properties.12 Said commissioners, however, failed to submit a Case No. C-507 in the RTC of Caloocan City, Branch 122.
recommendation.
On October 7, 1997, then Senator Marcelo B. Fernan filed P.S.
Thirty-one (31) years later, on May 22, 1996, Eleuteria Rivera filed a Resolution No. 1032 directing the Senate Committees on Justice and
Supplemental Motion13 in Civil Case No. C-424, for the partition and Human Rights and on Urban Planning, Housing and Resettlement to
segregation of portions of the properties covered by OCT No. 994. conduct a thorough investigation, in aid of legislation, of the
The Regional Trial Court (RTC), Branch 120, of Caloocan City, through irregularities surrounding the titling of the properties in the Maysilo
Judge Jaime D. Discaya, to whom the case was transferred, granted Estate.
said motion. In an Order14 dated September 9, 1996, Judge Discaya
directed the segregation of portions of Lots 23, 28-A-1 and 28-A-2
In a Decision22 dated March 24, 2000, the Caloocan RTC ordered the
and ordered the Register of Deeds of Caloocan City to issue to
quieting of Phil-Ville’s titles over Lots 1-G-1, 1-G-2 and 1-G-3,
Eleuteria Rivera new certificates of title over them. Three days later,
declaring as valid TCT Nos. 270921, 270922 and 270923 in Phil-Ville’s
the Register of Deeds of Caloocan, Yolanda O. Alfonso, issued to
name. The fallo of said Decision reads:
Eleuteria Rivera TCT No. C-31453715 covering a portion of Lot 23
with an area of 14,391.54 square meters. On December 12, 1996,
the trial court issued another Order directing the acting Branch Clerk WHEREFORE, and in view of the foregoing, judgment is hereby
to issue a Certificate of Finality of the Order dated September 9, rendered as follows:
1996.
1. Ordering the quieting of title of the plaintiff over Lots 1-
Thereafter, one Rosauro R. Aquino filed a petition for certiorari G-1, 1-G-2 and 1-G-3, all the subd. plan Psd-1-13-006209,
contesting said Order of December 12, 1996 and impugning the being a portion of Lot 1-G, Psd-2731, LRC Rec. No. 4429,
partial partition and adjudication to Eleuteria Rivera of Lots 23, 28- situated in Kalookan City, as owner thereof in fee simple
A-1 and 28-A-2 of the Maysilo Estate. The case was docketed as CA- and with full faith and credit;
G.R. SP No. 43034 at the Court of Appeals.
2. Declaring Transfer Ce[r]tificates of Title Nos. 270921,
Meanwhile, a writ of possession16 was issued in Eleuteria Rivera’s 270922 and 270923 in the name of Phil-Ville Development
favor on December 26, 1996 upon the Order17of Judge Discaya and Housing Corporation over the foregoing parcels of
issued on the same date. Accordingly, Sheriff Cesar L. Cruz served a land issued by the Registry of Deeds for Kalookan City, as
Notice to Vacate18 dated January 2, 1997 upon Phil-Ville, requiring it valid and effective;
to vacate Lots 23-A and 28. Bonifacio Shopping Center, Inc., which
occupied Lot 28-A-2, was also served a copy of the notice. 3. Declaring Transfer Certificate of Title No. C-314537 over
Aggrieved, Bonifacio Shopping Center, Inc. filed a petition for Lot 23, being a portion of Maysilo Estate situated in
certiorari and prohibition, docketed as CA-G.R. SP No. 43009, before Maysilo, Kalookan City, in the name of Eleuteria Rivera,
the Court of Appeals. In a Decision19 dated February 19, 1997, the issued by the Registry of Deeds for Kalookan City, as null
appellate court set aside and declared as void the Order and Writ of and void and with no force and effect;
Possession dated December 26, 1996 and the Notice to Vacate
dated January 2, 1997. The appellate court explained that a party 4. Ordering the private defendants to surrender to the
who has not been impleaded in a case cannot be bound by a writ of Registry of Deeds for Kalookan City, thru this Court, the
possession issued in connection therewith. Owner’s Duplicate Certificate of said Transfer Certificate of
Title No. C-314537 in the name of Eleuteria Rivera;
Subsequently, on February 22, 1997, Eleuteria Rivera
Vda. de Bonifacio died at the age of 96.20 5. Directing the public defendant, Register of Deeds of
Kalookan City to cancel both Transfer Certificate of Title
On April 23, 1997, the Secretary of Justice issued Department Order Nos. C-314537 in the name of Eleuteria Rivera on file with
No. 137 creating a special committee to investigate the the Register of Deeds for Kalookan City, and the Owner’s
81679 December 15, 1960 Pacifico … First, there is only one OCT 994. As it appears on the record, that
Nepomuceno, Sofia mother title was received for transcription by the Register of Deeds
N. Jugo, Soledad N. on 3 May 1917, and that should be the date which should be
de Jesus reckoned as the date of registration of the title. It may also be
acknowledged, as appears on the title, that OCT No. 994 resulted
(81680) 17745 December 15, 1960 Pacifico Nepomuceno from the issuance of the decree of registration on [19] April 1917,
& Co. although such date cannot be considered as the date of the title or
the date when the title took effect.
C-13794 April 21, 1978 Pacifico Nepomuceno
& Co. Inc.
Second. Any title that traces its source to OCT No. 994 dated [19]
C-14603 May 16, 1978 N. de La Merced & April 1917 is void, for such mother title is inexistent. The fact that
Sons, Inc. the Dimson and CLT titles made specific reference to an OCT No. 994
dated [19] April 1917 casts doubt on the validity of such titles since
T-148220 April 22, 1987 Phil-Ville they refer to an inexistent OCT. This error alone is, in fact, sufficient
Development and to invalidate the Dimson and CLT claims over the subject property if
Housing Corp.42 singular reliance is placed by them on the dates appearing on their
respective titles.
Petitioner likewise presented the Proyecto de particion de la
Hacienda de Maysilo43 to prove that Lot 23-A, of which petitioner’s Third. The decisions of this Court in MWSS v. Court of Appeals and
Lots 1-G-1, 1-G-2 and 1-G-3 form part, is among the 34 lots covered Gonzaga v. Court of Appeals cannot apply to the cases at bar,
by OCT No. 994 registered on May 3, 1917. It produced tax receipts especially in regard to their recognition of an OCT No. 994 dated 19
accompanied by a Certification44 dated September 15, 1997 issued April 1917, a title which we now acknowledge as inexistent. Neither
by the City Treasurer of Caloocan stating that Phil-Ville has been could the conclusions in MWSS [and] Gonzaga with respect to an
religiously paying realty taxes on the lots. Its documentary evidence OCT No. 994 dated 19 April 1917 bind any other case operating
Yet, petitioner was well aware that the lots encompassed by its titles WHEREFORE, the petition for review on certiorari is GRANTED. The
are not the same as that covered by respondents’ title. In its Decision dated January 31, 2005 and Resolution dated March 15,
complaint, Phil-Ville alleges: 2005 of the Court of Appeals in CA-G.R. SP No. 62211 are SET ASIDE.
The Decision dated March 24, 2000 of the Caloocan RTC in Civil Case
27.4. That Lot 23, being a portion of Maysilo Estate, as described in No. C-507 is hereby REINSTATED and UPHELD.
said TCT No. C-314537 of the late Eleuteria Rivera when plotted
using its tie line to MBM No. 1, Caloocan Cadastre is outside Lot 23- No pronouncement as to costs.
A of the Maysilo Estate. This must be so because Lot 23 is not [a]
portion of Lot 23-A, Maysilo Estate….58 SO ORDERED.
GARCIA, J.:
By removing the police force from under the control and supervision Indeed, to bar payment of retirement pay differential to INP
of military officers, the bill seeks to restore and underscore the members who were already retired before R.A. No. 6975 became
civilian character of police work - an otherwise universal concept effective would even run counter to the purpose of NAPOLCOM
that was muddled up by the martial law years. Resolution No. 8 itself, as expressed in its preambulatory clause,
which is to rationalize the retirement system of the PNP taking into
Indeed, were the legislative intent was for the INP’s abolition such consideration existing retirement and benefit systems (including R.A.
that nothing would be left of it, the word "abolish" or what passes No. 6975 and P.D. No. 1184) of the different components thereof "to
for it could have easily found its way into the very text of the law ensure that no member of the PNP shall suffer any diminution in the
itself, what with the abundant use of the word during the legislative retirement benefits due them before the creation of the PNP." 23
deliberations. But as can be gleaned from said deliberations, the
lawmakers’ concern centered on the fact that if the entire PC-INP Most importantly, the perceived restriction could not plausibly
corps join the PNP, then the PC-INP will necessarily be abolished, for preclude the respondents from asserting their entitlement to
who then would be its members? Of more consequence, the retirement benefits adjusted to the level when R.A. No. 6975 took
lawmakers were one in saying that there should never be two effect. Such adjustment hews with the constitutional warrant that
national police agencies at the same time. "the State shall, from time to time, review to upgrade the pensions
and other benefits due to retirees of both the government and
With the conclusion herein reached that the INP was not in fact private sectors,"24 and the implementing mandate under the Senior
abolished but was merely transformed to become the PNP, Citizen’s Law25 that "to the extent practicable and feasible,
members of the INP which include the herein respondents are, retirement benefits xxx shall be upgraded to be at par with the
therefore, not excluded from availing themselves of the retirement current scale enjoyed by those in actual service."1awphi1.nét
benefits accorded to PNP retirees under Sections 7417 and 7518 of
R.A. No. 6975, as amended by R.A. No. 8551. It may be that Certainly going for the respondents in their bid to enjoy the same
respondents were no longer in the government service at the time retirement benefits granted to PNP retirees, either under R.A. No.
of the enactment of R.A. No. 6975. This fact, however, without 6975 or R.A. No. 8551, is Section 34 of the latter law which amended
more, would not pose as an impediment to the respondents’ Section 75 of R.A. No. 6975 by adding thereto the following proviso:
entitlement to the new retirement scheme set forth under the
aforecited sections. As correctly ratiocinated by the CA to which we Section 75. Retirement benefits. x x x: Provided, finally, That
are in full accord: retirement pay of the officers/non-officers of the PNP shall be subject
to adjustments based on the prevailing scale of base pay of police
personnel in the active service.
No costs.
Now, there is nothing in the nature of a special civil action for
declaratory relief that proscribes the filing of a counterclaim based
on the same transaction, deed or contract subject of the complaint. SO ORDERED.
A special civil action is after all not essentially different from an
ordinary civil action, which is generally governed by Rules 1 to 56 of EN BANC
the Rules of Court, except that the former deals with a special
subject matter which makes necessary some special regulation. But G.R. No. 159357 April 28, 2004
the identity between their fundamental nature is such that the same
rules governing ordinary civil suits may and do apply to special civil
Brother MARIANO "MIKE" Z. VELARDE, petitioner,
actions if not inconsistent with or if they may serve to supplement
vs.
the provisions of the peculiar rules governing special civil actions. 28
SOCIAL JUSTICE SOCIETY, respondent.
x x x Under Sec. 6 of Rule 64, the action for declaratory relief may be A decision that does not conform to the form and substance
converted into an ordinary action and the parties allowed to file required by the Constitution and the law is void and deemed legally
such pleadings as may be necessary or proper, if before the final inexistent. To be valid, decisions should comply with the form, the
termination of the case "a breach or violation of an … ordinance, procedure and the substantive requirements laid out in the
should take place." In the present case, no breach or violation of the Constitution, the Rules of Court and relevant circulars/orders of the
ordinance occurred. The petitioner decided to pay "under protest"
Rule 63 Full Text Cases andm69 of 88
Supreme Court. For the guidance of the bench and the bar, the there is no justiciable controversy. They were ordered to
Court hereby discusses these forms, procedures and requirements. submit a pleading by way of advisement, which was closely
followed by another Order denying all the Motions to
The Case Dismiss. Bro. Mike Velarde, Bro. Eddie Villanueva and
Executive Minister Eraño Manalo moved to reconsider the
denial. His Eminence Jaime Cardinal L. Sin, asked for
Before us is a Petition for Review1 under Rule 45 of the Rules of
extension to file memorandum. Only Bro. Eli Soriano
Court, assailing the June 12, 2003 Decision2 and July 29, 2003
complied with the first Order by submitting his
Order3 of the Regional Trial Court (RTC) of Manila (Branch 49).4
Memorandum. x x x.
"1. Did the RTC Decision conform to the form As pointed out by Brother Eliseo F. Soriano in his Comment,19 what
and substance required by the Constitution, the exactly has he done that merited the attention of SJS? He confesses
law and the Rules of Court? that he does not know the answer, because the SJS Petition (as well
as the assailed Decision of the RTC) "yields nothing in this respect."
"2. May religious leaders like herein petitioner, His Eminence, Jaime Cardinal Sin, adds that, at the time SJS filed its
Bro. Mike Velarde, be prohibited from endorsing Petition on January 28, 2003, the election season had not even
candidates for public office? Corollarily, may started yet; and that, in any event, he has not been actively involved
they be banned from campaigning against said in partisan politics.
candidates?"
An initiatory complaint or petition filed with the trial court should
The Court’s Ruling contain "a plain, concise and direct statement of the ultimate facts
on which the party pleading relies for his claim x x x."20 Yet, the SJS
Petition stated no ultimate facts.
The Petition of Brother Mike Velarde is meritorious.
Indeed, SJS merely speculated or anticipated without factual
Procedural Issues: moorings that, as religious leaders, the petitioner and his co-
respondents below had endorsed or threatened to endorse a
Requisites of Petitions for Declaratory Relief candidate or candidates for elective offices; and that such actual or
threatened endorsement "will enable [them] to elect men to public
Section 1 of Rule 63 of the Rules of Court, which deals with petitions office who [would] in turn be forever beholden to their leaders,
for declaratory relief, provides in part: enabling them to control the government"[;]21 and "pos[ing] a clear
and present danger of serious erosion of the people’s faith in the
electoral process[;] and reinforc[ing] their belief that religious
"Section 1. Who may file petition.- Any person interested
leaders determine the ultimate result of elections,"22 which would
under a deed, will, contract or other written instrument,
then be violative of the separation clause.
whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental
regulation may, before breach or violation thereof, bring Such premise is highly speculative and merely theoretical, to say the
an action in the appropriate Regional Trial Court to least. Clearly, it does not suffice to constitute a justiciable
determine any question of construction or validity arising, controversy. The Petition does not even allege any indication or
and for a declaration of his rights or duties thereunder." manifest intent on the part of any of the respondents below to
champion an electoral candidate, or to urge their so-called flock to
vote for, or not to vote for, a particular candidate. It is a time-
Based on the foregoing, an action for declaratory relief should be
honored rule that sheer speculation does not give rise to an
filed by a person interested under a deed, a will, a contract or other
actionable right.
written instrument, and whose rights are affected by a statute, an
executive order, a regulation or an ordinance. The purpose of the
remedy is to interpret or to determine the validity of the written Obviously, there is no factual allegation that SJS’ rights are being
instrument and to seek a judicial declaration of the parties’ rights or subjected to any threatened, imminent and inevitable violation that
duties thereunder.16 The essential requisites of the action are as should be prevented by the declaratory relief sought. The judicial
follows: (1) there is a justiciable controversy; (2) the controversy is power and duty of the courts to settle actual controversies involving
between persons whose interests are adverse; (3) the party seeking rights that are legally demandable and enforceable23 cannot be
the relief has a legal interest in the controversy; and (4) the issue is exercised when there is no actual or threatened violation of a legal
ripe for judicial determination.17 right.
Justiciable Controversy
The failure of a complaint to state a cause of action is a ground for Legal Standing
its outright dismissal.30 However, in special civil actions for
declaratory relief, the concept of a cause of action under ordinary Legal standing or locus standi has been defined as a personal and
civil actions does not strictly apply. The reason for this exception is substantial interest in the case, such that the party has sustained or
that an action for declaratory relief presupposes that there has been will sustain direct injury as a result of the challenged
no actual breach of the instruments involved or of rights arising act.37 Interest means a material interest in issue that is affected by
thereunder.31 Nevertheless, a breach or violation should be the questioned act or instrument, as distinguished from a mere
impending, imminent or at least threatened. incidental interest in the question involved.38
A perusal of the Petition filed by SJS before the RTC discloses no Petitioner alleges that "[i]n seeking declaratory relief as to the
explicit allegation that the former had any legal right in its favor that constitutionality of an act of a religious leader to endorse, or require
it sought to protect. We can only infer the interest, supposedly in its the members of the religious flock to vote for a specific candidate,
favor, from its bare allegation that it "has thousands of members herein Respondent SJS has no legal interest in the controversy";39 it
who are citizens-taxpayers-registered voters and who are keenly has failed to establish how the resolution of the proffered question
interested in a judicial clarification of the constitutionality of the would benefit or injure it.
partisan participation of religious leaders in Philippine politics and in
the process to insure adherence to the Constitution by everyone x x
Parties bringing suits challenging the constitutionality of a law, an
x."32
act or a statute must show "not only that the law [or act] is invalid,
but also that [they have] sustained or [are] in immediate or
Such general averment does not, however, suffice to constitute a imminent danger of sustaining some direct injury as a result of its
legal right or interest. Not only is the presumed interest not personal enforcement, and not merely that [they] suffer thereby in some
in character; it is likewise too vague, highly speculative and indefinite way."40 They must demonstrate that they have been, or
uncertain.33 The Rules require that the interest must be material to are about to be, denied some right or privilege to which they are
the issue and affected by the questioned act or instrument, as lawfully entitled, or that they are about to be subjected to some
burdens or penalties by reason of the statute or act complained of.41
In any event, SJS urges the Court to take cognizance of the Petition, When an answer fails to tender an issue or admits the material
even sans legal standing, considering that "the issues raised are of allegations of the adverse party’s pleading, the court may, on
paramount public interest." motion of that party, direct judgment on such pleading (except in
actions for declaration of nullity or annulment of marriage or for
In not a few cases, the Court has liberalized the locus standi legal separation).61 Meanwhile, a party seeking to recover upon a
requirement when a petition raises an issue of transcendental claim, a counterclaim or crossclaim -- or to obtain a declaratory
significance or paramount importance to the people.46 Recently, relief -- may, at any time after the answer thereto has been served,
after holding that the IBP had no locus standi to bring the suit, the move for a summary judgment in its favor.62 Similarly, a party
Court in IBP v. Zamora47 nevertheless entertained the Petition against whom a claim, a counterclaim or crossclaim is asserted -- or
therein. It noted that "the IBP has advanced constitutional issues a declaratory relief sought -- may, at any time, move for a summary
which deserve the attention of this Court in view of their judgment in its favor.63 After the motion is heard, the judgment
seriousness, novelty and weight as precedents."48 sought shall be rendered forthwith if there is a showing that, except
as to the amount of damages, there is no genuine issue as to any
material fact; and that the moving party is entitled to a judgment as
Similarly in the instant case, the Court deemed the constitutional
a matter of law.64
issue raised in the SJS Petition to be of paramount interest to the
Filipino people. The issue did not simply concern a delineation of the
separation between church and state, but ran smack into the Within the time for -- but before -- filing the answer to the complaint
governance of our country. The issue was both transcendental in or petition, the defendant may file a motion to dismiss based on any
importance and novel in nature, since it had never been decided of the grounds stated in Section 1 of Rule 16 of the Rules of Court.
before. During the hearing of the motion, the parties shall submit their
arguments on the questions of law, and their evidence on the
questions of fact.65 After the hearing, the court may dismiss the
The Court, thus, called for Oral Argument to determine with
action or claim, deny the motion, or order the amendment of the
certainty whether it could resolve the constitutional issue despite
pleadings. It shall not defer the resolution of the motion for the
the barren allegations in the SJS Petition as well as the abbreviated
reason that the ground relied upon is not indubitable. In every case,
proceedings in the court below. Much to its chagrin, however,
the resolution shall state clearly and distinctly the reasons
counsels for the parties -- particularly for Respondent SJS -- made no
therefor.66
satisfactory allegations or clarifications that would supply the
deficiencies hereinabove discussed. Hence, even if the Court would
exempt this case from the stringent locus standi requirement, such If the motion is denied, the movant may file an answer within the
heroic effort would be futile because the transcendental issue balance of the period originally prescribed to file an answer, but not
cannot be resolved anyway. less than five (5) days in any event, computed from the receipt of
the notice of the denial. If the pleading is ordered to be amended,
the defendant shall file an answer within fifteen (15) days, counted
Proper Proceedings Before the Trial Court
from the service of the amended pleading, unless the court provides
a longer period.67
To prevent a repetition of this waste of precious judicial time and
effort, and for the guidance of the bench and the bar, the Court
Thereafter, the case shall be set for trial,74 in which the parties shall Apparently, contrary to the requirement of Section 2 of Rule 16 of
adduce their respective evidence in support of their claims and/or the Rules of Court, the Motions were not heard. Worse, the Order
defenses. By their written consent or upon the application of either purportedly resolving the Motions to Dismiss did not state any
party, or on its own motion, the court may also order any or all of reason at all for their denial, in contravention of Section 3 of the said
the issues to be referred to a commissioner, who is to be appointed Rule 16. There was not even any statement of the grounds relied
by it or to be agreed upon by the parties.75 The trial or hearing upon by the Motions; much less, of the legal findings and
before the commissioner shall proceed in all respects as it would if conclusions of the trial court.
held before the court.76
Thus, Velarde, Villanueva and Manalo moved for reconsideration.
Upon the completion of such proceedings, the commissioner shall Pending the resolution of these Motions for Reconsideration,
file with the court a written report on the matters referred by the Villanueva filed a Motion to suspend the filing of the parties’
parties.77 The report shall be set for hearing, after which the court memoranda. But instead of separately resolving the pending
shall issue an order adopting, modifying or rejecting it in whole or in Motions fairly and squarely, the trial court again transgressed the
part; or recommitting it with instructions; or requiring the parties to Rules of Court when it immediately proceeded to issue its Decision,
present further evidence before the commissioner or the court.78 even before tackling the issues raised in those Motions.
Finally, a judgment or final order determining the merits of the case Furthermore, the RTC issued its "Decision" without allowing the
shall be rendered. The decision shall be in writing, personally and parties to file their answers. For this reason, there was no joinder of
directly prepared by the judge, stating clearly and distinctly the facts the issues. If only it had allowed the filing of those answers, the trial
and the law on which it is based, signed by the issuing magistrate, court would have known, as the Oral Argument revealed, that the
and filed with the clerk of court.79 petitioner and his co-respondents below had not committed or
threatened to commit the act attributed to them (endorsing
Based on these elementary guidelines, let us examine the candidates) -- the act that was supposedly the factual basis of the
proceedings before the trial court in the instant case. suit.
First, with respect to the initiatory pleading of the SJS. Even a Parenthetically, the court a quo further failed to give a notice of the
cursory perusal of the Petition immediately reveals its gross Petition to the OSG, which was entitled to be heard upon questions
inadequacy. It contained no statement of ultimate facts upon which involving the constitutionality or validity of statutes and other
the petitioner relied for its claim. Furthermore, it did not specify the measures.87
relief it sought from the court, but merely asked it to answer a
hypothetical question. Moreover, as will be discussed in more detail, the questioned
Decision of the trial court was utterly wanting in the requirements
Relief, as contemplated in a legal action, refers to a specific coercive prescribed by the Constitution and the Rules of Court.
measure prayed for as a result of a violation of the rights of a
plaintiff or a petitioner.80 As already discussed earlier, the Petition All in all, during the loosely abbreviated proceedings of the case, the
before the trial court had no allegations of fact81 or of any specific trial court indeed acted with inexplicable haste, with total ignorance
violation of the petitioner’s rights, which the respondents had a duty of the law -- or, worse, in cavalier disregard of the rules of procedure
to respect. Such deficiency amounted to a failure to state a cause of -- and with grave abuse of discretion.
action; hence, no coercive relief could be sought and adjudicated.
The Petition evidently lacked substantive requirements and, we
Contrary to the contentions of the trial judge and of SJS, proceedings
repeat, should have been dismissed at the outset.
for declaratory relief must still follow the process described above --
the petition must state a cause of action; the proceedings must
Second, with respect to the trial court proceedings. Within the undergo the procedure outlined in the Rules of Court; and the
period set to file their respective answers to the SJS Petition, decision must adhere to constitutional and legal requirements.
Velarde, Villanueva and Manalo filed Motions to Dismiss; Cardinal
"Faithful adherence to the requirements of Section 14, Article VIII of What were the antecedents that necessitated the filing of the
the Constitution is indisputably a paramount component of due Petition? What exactly were the distinct facts that gave rise to the
process and fair play. It is likewise demanded by the due process question sought to be resolved by SJS? More important, what were
clause of the Constitution. The parties to a litigation should be the factual findings and analysis on which the trial court based its
informed of how it was decided, with an explanation of the factual legal findings and conclusions? None were stated or implied. Indeed,
and legal reasons that led to the conclusions of the court. The court the RTC’s Decision cannot be upheld for its failure to express clearly
cannot simply say that judgment is rendered in favor of X and and distinctly the facts on which it was based. Thus, the trial court
against Y and just leave it at that without any justification clearly transgressed the constitutional directive.
whatsoever for its action. The losing party is entitled to know why
he lost, so he may appeal to the higher court, if permitted, should he The significance of factual findings lies in the value of the decision as
believe that the decision should be reversed. A decision that does a precedent. How can it be so if one cannot apply the ruling to
not clearly and distinctly state the facts and the law on which it is similar circumstances, simply because such circumstances are
based leaves the parties in the dark as to how it was reached and is unknown? Otherwise stated, how will the ruling be applied in the
precisely prejudicial to the losing party, who is unable to pinpoint future, if there is no point of factual comparison?
the possible errors of the court for review by a higher tribunal. More
than that, the requirement is an assurance to the parties that, in
"The resolution of the Court on a given issue as embodied An introduction may consist of a concise but comprehensive
in the dispositive part of the decision or order is the statement of the principal factual or legal issue/s of the case. In
investitive or controlling factor that determines and settles some cases -- particularly those concerning public interest; or
the rights of the parties and the questions presented involving complicated commercial, scientific, technical or otherwise
therein, notwithstanding the existence of statements or rare subject matters -- a longer introduction or prologue may serve
declaration in the body of said order that may be to acquaint readers with the specific nature of the controversy and
confusing." the issues involved. An epilogue may be a summation of the
important principles applied to the resolution of the issues of
The assailed Decision in the present case leaves us in the dark as to paramount public interest or significance. It may also lay down an
its final resolution of the Petition. To recall, the original Petition was enduring philosophy of law or guiding principle.
for declaratory relief. So, what relief did the trial court grant or
deny? What rights of the parties did it conclusively declare? Its final Let us now, again for the guidance of the bench and the bar, discuss
statement says, "SO ORDERED." But what exactly did the court the essential parts of a good decision.
order? It had the temerity to label its issuance a "Decision," when
nothing was in fact decided. 1. Statement of the Case
Respondent SJS insists that the dispositive portion can be found in The Statement of the Case consists of a legal definition of the nature
the body of the assailed Decision. It claims that the issue is disposed of the action. At the first instance, this part states whether the
of and the Petition finally resolved by the statement of the trial action is a civil case for collection, ejectment, quieting of title,
court found on page 10 of its 14-page Decision, which reads: foreclosure of mortgage, and so on; or, if it is a criminal case, this
"Endorsement of specific candidates in an election to any public part describes the specific charge -- quoted usually from the
office is a clear violation of the separation clause."95 accusatory portion of the information -- and the plea of the accused.
Also mentioned here are whether the case is being decided on
We cannot agree. appeal or on a petition for certiorari, the court of origin, the case
number in the trial court, and the dispositive portion of the assailed
In Magdalena Estate, Inc. v. Caluag,96 the obligation of the party decision.
imposed by the Court was allegedly contained in the text of the
original Decision. The Court, however, held: In a criminal case, the verbatim reproduction of the criminal
information serves as a guide in determining the nature and the
"x x x The quoted finding of the lower court cannot supply gravity of the offense for which the accused may be found culpable.
deficiencies in the dispositive portion. It is a mere opinion As a rule, the accused cannot be convicted of a crime different from
of the court and the rule is settled that where there is a or graver than that charged.
conflict between the dispositive part and the opinion, the
former must prevail over the latter on the theory that the Also, quoting verbatim the text of the information is especially
dispositive portion is the final order while the opinion is important when there is a question on the sufficiency of the charge,
merely a statement ordering nothing." (Italics in the or on whether qualifying and modifying circumstances have been
original) adequately alleged therein.
Thus, the dispositive portion cannot be deemed to be the statement To ensure that due process is accorded, it is important to give a
quoted by SJS and embedded in the last paragraph of page 10 of the short description of the proceedings regarding the plea of the
assailed 14-page Decision. If at all, that statement is merely an accused. Absence of an arraignment, or a serious irregularity
answer to a hypothetical legal question and just a part of the therein, may render the judgment void, and further consideration by
opinion of the trial court. It does not conclusively declare the rights the appellate court would be futile. In some instances, especially in
(or obligations) of the parties to the Petition. Neither does it grant appealed cases, it would also be useful to mention the fact of the
any -- much less, the proper -- relief under the circumstances, as appellants’ detention, in order to dispose of the preliminary query --
required of a dispositive portion. whether or not they have abandoned their appeal by absconding or
jumping bail.
Failure to comply with the constitutional injunction is a grave abuse
of discretion amounting to lack or excess of jurisdiction. Decisions or Mentioning the court of origin and the case number originally
orders issued in careless disregard of the constitutional mandate are assigned helps in facilitating the consolidation of the records of the
a patent nullity and must be struck down as void.97 case in both the trial and the appellate courts, after entry of final
judgment.
Parts of a Decision
Finally, the reproduction of the decretal portion of the assailed
In general, the essential parts of a good decision consist of the decision informs the reader of how the appealed case was decided
following: (1) statement of the case; (2) statement of facts; (3) issues by the court a quo.
or assignment of errors; (4) court ruling, in which each issue is, as a
QUISUMBING, J.:
3. Whether or not the matters relating to a [bona Section 1, Rule 63 of the Rules of Court reads:
fide] public offering by Telecommunication Entities are
within the regulatory power or authority of the National Any person interested under a deed, will, contract or other written
Telecommunications Commission (NTC)? instrument, or whose rights are affected by a statute, executive
order or regulation, ordinance, or any other governmental
4. Whether or not the petitioner, which is not in a position regulation may, before breach or violation thereof, bring an action in
to make a [bona fide] public offering due to the negative the appropriate Regional Trial Court to determine any question of
condition of the economy, the negative interest of the construction or validity arising, and for a declaration of his rights or
investing public in the stock market and the condition of duties, thereunder.
the company, is still bound by the provisions under section
21 of the Telecommunications Law…8 xxxx
Simply stated, we are asked to resolve: (1) Whether there is an For such an action for declaratory relief before a trial court to
ambiguity in the cited provision of Section 21, Rep. Act No. 7925 prosper, it must be shown that (a) there is a justiciable controversy,
which justifies an action for declaratory relief. And, also whether (b) the controversy is between persons whose interests are adverse,
there is a justiciable controversy ripe for judicial determination. (2) If (c) the party seeking the relief has a legal interest in the controversy,
so, is petitioner excused from complying with Section 21 of Rep. Act and (d) the issue invoked is ripe for judicial
No. 7925? determination.10 Respondents contest the presence of the first and
last requisites insofar as petitioner’s case is concerned.
Petitioner contends that there is a justiciable controversy ripe for
judicial determination as it faces a possible sanction from the NTC A justiciable controversy is a definite and concrete dispute touching
for its inability to comply with the mandate of Rep. Act No. 7925. It on the legal relations of parties having adverse legal interests, which
claims that the present case falls within the exceptions to the may be resolved by a court of law through the application of a
general rule of exhaustion of administrative remedies, since there is law.11 In the case at bar, petitioner fears the risk of possible
no administrative review provided by law as the NTC does not have sanctions. However, a mere apprehension of an administrative
the power to decide the validity of the law and the questions sanction does not give rise to a justiciable controversy.12 Rep. Act
involved are essentially judicial. No. 7925 does not provide for a penalty for noncompliance with
Section 21, and as correctly pointed out by the Solicitor General,
Petitioner contends that applying blindly the literal import of Section there are yet no implementing rules or guidelines to carry into effect
21 would lead to absurd and destructive results because the huge the requirement imposed by the said provision. Whatever sanctions
amount needed to undertake a public offering could only bring more petitioner fears are merely hypothetical.
losses to the corporation in case it fails to attract the investing public
due to its unattractive financial condition. It maintains that An issue is ripe for judicial determination when litigation is
impossibility or impracticability of compliance excuses it from inevitable,13 or when administrative remedies have been
complying with said provision. exhausted.14 There is no showing of either in the present case.
Instead, petitioner asserts that this case falls within the exceptions
Respondents counter that Section 21 is clear and unambiguous, to the rule on exhaustion of administrative remedies, specifically
hence, there is no need for judicial interpretation. They maintain when there is no administrative review provided by law or when the
that petitioner’s claim of impossibility or impracticability of questions involved are essentially judicial. To our mind, petitioner
compliance is purely speculative, adding that there are a good should have first raised its concerns with the NTC, the agency
number of publicly listed telecommunication companies. Besides, authorized to implement Rep. Act No. 7925. Only after a categorical
respondents argue, Section 21 does not provide for any exception. denial of its claim of exemption from or deferment of compliance
with Section 21 can petitioner proceed to court. As it is now, we
Respondents state, however, that there were yet no implementing agree with the trial and appellate courts that petitioner has no cause
rules and guidelines by the NTC or any administrative agency to of action.
carry into effect the requirement imposed by Section 21 of Rep. Act
No. 7925. Hence, according to respondents, petitioner’s Observance of the mandate regarding exhaustion of administrative
apprehension of an administrative sanction was merely conjectural remedies is a sound practice and policy. The doctrine insures an
and anticipatory. Citing Garcia v. Executive Secretary,9 they argue orderly procedure which favors a preliminary sifting process and
that under the circumstances, there is no justiciable controversy ripe withholds judicial interference until administrative process would
for judicial determination. Respondents also contend that courts do have been allowed to duly run its course.15 The underlying principle
not have the power to order the suspension of the application of a of the rule rests on the presumption that the administrative agency,
law or its provision especially where there is no constitutional if afforded a complete chance to pass upon the matter, will decide
challenge to such legal provision. They assert that the NTC has the correctly.16
power and authority to implement Rep. Act No. 7925, hence they
aver that the issue of suspension or deferment of the initial public
G.R. No. 170656 August 15, 2007 WHEREAS, the traffic situation in Metro Manila
has affected the adjacent provinces of Bulacan,
THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and Cavite, Laguna, and Rizal, owing to the continued
BAYANI FERNANDO as Chairman of the Metropolitan Manila movement of residents and industries to more
Development Authority, petitioners, affordable and economically viable locations in
vs. these provinces;
VIRON TRANSPORTATION CO., INC., respondent.
WHEREAS, the Metropolitan Manila
x --------------------------------------------- x Development Authority (MMDA) is tasked to
undertake measures to ease traffic congestion in
Metro Manila and ensure the convenient and
G.R. No. 170657 August 15, 2007
efficient travel of commuters within its
jurisdiction;
HON. ALBERTO G. ROMULO, Executive Secretary, the
METROPOLITAN MANILA DEVELOPMENT AUTHORITY and BAYANI
WHEREAS, a primary cause of traffic congestion
FERNANDO as Chairman of the Metropolitan Manila Development
in Metro Manila has been the numerous buses
Authority,petitioners,
plying the streets that impedes [sic] the flow of
vs.
vehicles and commuters due to the inefficient
MENCORP TRANSPORTATION SYSTEM, INC., respondent.
connectivity of the different transport modes;
DECISION
WHEREAS, the MMDA has recommended a plan
to decongest traffic by eliminating the bus
CARPIO MORALES, J.: terminals now located along major Metro Manila
thoroughfares and providing more convenient
The following conditions in 1969, as observed by this Court: access to the mass transport system to the
commuting public through the provision of mass
Vehicles have increased in number. Traffic congestion has transport terminal facilities that would integrate
moved from bad to worse, from tolerable to critical. The the existing transport modes, namely the buses,
number of people who use the thoroughfares has the rail-based systems of the LRT, MRT and PNR
multiplied x x x,1 and to facilitate and ensure efficient travel
through the improved connectivity of the
different transport modes;
have remained unchecked and have reverberated to this day. Traffic
jams continue to clog the streets of Metro Manila, bringing vehicles
to a standstill at main road arteries during rush hour traffic and WHEREAS, the national government must
sapping people’s energies and patience in the process. provide the necessary funding requirements to
immediately implement and render operational
these projects; and extent to MMDA such other
The present petition for review on certiorari, rooted in the traffic assistance as may be warranted to ensure their
congestion problem, questions the authority of the Metropolitan expeditious prosecution.
Manila Development Authority (MMDA) to order the closure of
provincial bus terminals along Epifanio de los Santos Avenue (EDSA)
and major thoroughfares of Metro Manila. NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, President of the Philippines, by virtue
of the powers vested in me by law, do hereby
Specifically challenged are two Orders issued by Judge Silvino T. order:
Pampilo, Jr. of the Regional Trial Court (RTC) of Manila, Branch 26 in
Civil Case Nos. 03-105850 and 03-106224.
Mencorp Transportation System, Inc. (Mencorp), another provincial Hence, this petition, which faults the trial court for failing to rule
bus operator, later filed a similar petition for declaratory that: (1) the requisites of declaratory relief are not present, there
relief14 against Executive Secretary Alberto G. Romulo and MMDA being no justiciable controversy in Civil Case Nos. 03-105850 and 03-
Chairman Fernando. 106224; and (2) the President has the authority to undertake or
cause the implementation of the Project.19
Mencorp asked the court to declare the E.O. unconstitutional and
illegal for transgressing the possessory rights of owners and Petitioners contend that there is no justiciable controversy in the
operators of public land transportation units over their respective cases for declaratory relief as nothing in the body of the E.O.
terminals. mentions or orders the closure and elimination of bus terminals
along the major thoroughfares of Metro Manila. Viron and Mencorp,
Averring that MMDA Chairman Fernando had begun to implement a they argue, failed to produce any letter or communication from the
plan to close and eliminate all provincial bus terminals along EDSA Executive Department apprising them of an immediate plan to close
and in the whole of the metropolis and to transfer their operations down their bus terminals.
to common bus terminals,15 Mencorp prayed for the issuance of a
temporary restraining order (TRO) and/or writ of preliminary And petitioners maintain that the E.O. is only an administrative
injunction to restrain the impending closure of its bus terminals directive to government agencies to coordinate with the MMDA and
which it was leasing at the corner of EDSA and New York Street in to make available for use government property along EDSA and
Cubao and at the intersection of Blumentritt, Laon Laan and Halcon South Expressway corridors. They add that the only relation created
Streets in Quezon City. The petition was docketed as Civil Case No. by the E.O. is that between the Chief Executive and the
03-106224 and was raffled to Branch 47 of the RTC of Manila. implementing officials, but not between third persons.
Mencorp’s petition was consolidated on June 19, 2003 with Viron’s The petition fails.
petition which was raffled to Branch 26 of the RTC, Manila.
It is true, as respondents have pointed out, that the alleged
Mencorp’s prayer for a TRO and/or writ of injunction was denied as deficiency of the consolidated petitions to meet the requirement of
was its application for the issuance of a preliminary injunction.16 justiciability was not among the issues defined for resolution in the
Pre-Trial Order of January 12, 2004. It is equally true, however, that
In the Pre-Trial Order17 issued by the trial court, the issues were the question was repeatedly raised by petitioners in their Answer to
narrowed down to whether 1) the MMDA’s power to regulate traffic Viron’s petition,20 their Comment of April 29, 2003 opposing
in Metro Manila included the power to direct provincial bus Mencorp’s prayer for the issuance of a TRO,21 and their Position
operators to abandon and close their duly established and existing Paper of August 23, 2004.22
bus terminals in order to conduct business in a common terminal;
(2) the E.O. is consistent with the Public Service Act and the In bringing their petitions before the trial court, both respondents
Constitution; and (3) provincial bus operators would be deprived of pleaded the existence of the essential requisites for their respective
their real properties without due process of law should they be petitions for declaratory relief,23 and refuted petitioners’ contention
required to use the common bus terminals. that a justiciable controversy was lacking.24 There can be no
denying, therefore, that the issue was raised and discussed by the
Upon the agreement of the parties, they filed their respective parties before the trial court.
position papers in lieu of hearings.
The following are the essential requisites for a declaratory relief
By Decision18 of January 24, 2005, the trial court sustained the petition: (a) there must be a justiciable controversy; (b) the
constitutionality and legality of the E.O. pursuant to R.A. No. 7924, controversy must be between persons whose interests are adverse;
which empowered the MMDA to administer Metro Manila’s basic (c) the party seeking declaratory relief must have a legal interest in
services including those of transport and traffic management. the controversy; and (d) the issue invoked must be ripe for judicial
determination.25
The trial court held that the E.O. was a valid exercise of the police
power of the State as it satisfied the two tests of lawful subject The requirement of the presence of a justiciable controversy is
matter and lawful means, hence, Viron’s and Mencorp’s property satisfied when an actual controversy or the ripening seeds thereof
rights must yield to police power. exist between the parties, all of whom are sui juris and before the
court, and the declaration sought will help in ending the
controversy.26 A question becomes justiciable when it is translated
into a claim of right which is actually contested.27
Rule 63 Full Text Cases andm82 of 88
In the present cases, respondents’ resort to court was prompted by enforcement."31 Consequently, the established rule that the
the issuance of the E.O. The 4th Whereas clause of the E.O. sets out constitutionality of a law or administrative issuance can be
in clear strokes the MMDA’s plan to "decongest traffic challenged by one who will sustain a direct injury as a result of its
by eliminating the bus terminals now located along major Metro enforcement has been satisfied by respondents.
Manila thoroughfares and providing more convenient access to the
mass transport system to the commuting public through the On to the merits of the case.
provision of mass transport terminal facilities x x x." (Emphasis
supplied)
Respondents posit that the MMDA is devoid of authority to order
the elimination of their bus terminals under the E.O. which, they
Section 2 of the E.O. thereafter lays down the immediate argue, is unconstitutional because it violates both the Constitution
establishment of common bus terminals for north- and south-bound and the Public Service Act; and that neither is the MMDA clothed
commuters. For this purpose, Section 8 directs the Department of with such authority under R.A. No. 7924.
Budget and Management to allocate funds of not more than one
hundred million pesos (P100,000,000) to cover the cost of the
Petitioners submit, however, that the real issue concerns the
construction of the north and south terminals. And the E.O. was
President’s authority to undertake or to cause the implementation
made effective immediately.
of the Project. They assert that the authority of the President is
derived from E.O. No. 125, "Reorganizing the Ministry of
The MMDA’s resolve to immediately implement the Project, its Transportation and Communications Defining its Powers and
denials to the contrary notwithstanding, is also evident from telltale Functions and for Other Purposes," her residual power and/or E.O.
circumstances, foremost of which was the passage by the MMC of No. 292, otherwise known as the Administrative Code of 1987. They
Resolution No. 03-07, Series of 2003 expressing its full support of add that the E.O. is also a valid exercise of the police power.
the immediate implementation of the Project.
E.O. No. 125,32 which former President Corazon Aquino issued in the
Notable from the 5th Whereas clause of the MMC Resolution is the exercise of legislative powers, reorganized the then Ministry (now
plan to "remove the bus terminals located along major Department) of Transportation and Communications. Sections 4, 5,
thoroughfares of Metro Manila and an urgent need to integrate the 6 and 22 of E.O. 125, as amended by E.O. 125-A,33 read:
different transport modes." The 7th Whereas clause proceeds to
mention the establishment of the North and South terminals.
SECTION 4. Mandate. — The Ministry shall be
the primary policy, planning, programming, coordinating,
As alleged in Viron’s petition, a diagram of the GMA-MTS North implementing, regulating and administrative entity of the
Bus/Rail Terminal had been drawn up, and construction of the Executive Branch of the government in the promotion,
terminal is already in progress. The MMDA, in its Answer28 and development and regulation of dependable and
Position Paper,29 in fact affirmed that the government had begun to coordinated networks of transportationand
implement the Project. communication systems as well as in the fast, safe,
efficient and reliable postal, transportation and
It thus appears that the issue has already transcended the communications services.
boundaries of what is merely conjectural or anticipatory.lawphil
To accomplish such mandate, the Ministry shall have the
Under the circumstances, for respondents to wait for the actual following objectives:
issuance by the MMDA of an order for the closure of respondents’
bus terminals would be foolhardy for, by then, the proper action to (a) Promote the development of
bring would no longer be for declaratory relief which, under Section dependable and coordinated networks
1, Rule 6330 of the Rules of Court, must be brought before there is a of transportation and communications
breach or violation of rights. systems;
As for petitioners’ contention that the E.O. is a mere administrative (b) Guide government and private
issuance which creates no relation with third persons, it does not investment in the development of the
persuade. Suffice it to stress that to ensure the success of the country’s intermodal transportation
Project for which the concerned government agencies are directed and communications systems in a
to coordinate their activities and resources, the existing bus most practical, expeditious, and
terminals owned, operated or leased by third persons like orderly fashion for maximum safety,
respondents would have to be eliminated; and respondents would service, and cost effectiveness;
be forced to operate from the common bus terminals. (Emphasis and underscoring supplied)
It cannot be gainsaid that the E.O. would have an adverse effect on xxxx
respondents. The closure of their bus terminals would mean, among
other things, the loss of income from the operation and/or rentals of
SECTION 5. Powers and Functions. — To accomplish its
stalls thereat. Precisely, respondents claim a deprivation of their
mandate, the Ministry shall have the following powers and
constitutional right to property without due process of law.
functions:
SECTION 22. Implementing Authority of Minister. — The Thus, whenever a specific function is entrusted by law or regulation
Minister shall issue such orders, rules, regulations and to a subordinate, the President may act directly or merely direct the
other issuances as may be necessary to ensure the performance of a duty.34
effective implementation of the provisions of this
Executive Order. (Emphasis and underscoring supplied)
Respecting the President’s authority to order the implementation of
the Project in the exercise of the police power of the State, suffice it
It is readily apparent from the abovequoted provisions of E.O. No. to stress that the powers vested in the DOTC Secretary to establish
125, as amended, that the President, then possessed of and and administer comprehensive and integrated programs for
exercising legislative powers, mandated the DOTC to be the transportation and communications and to issue orders, rules and
primary policy, planning, programming, coordinating, implementing, regulations to implement such mandate (which, as previously
regulating and administrative entity to promote, develop and discussed, may also be exercised by the President) have been so
regulate networks of transportation and communications. The grant delegated for the good and welfare of the people. Hence, these
of authority to the DOTC includes the power powers partake of the nature of police power.
to establishand administer comprehensive and integrated programs
for transportation and communications.
Police power is the plenary power vested in the legislature to make,
ordain, and establish wholesome and reasonable laws, statutes and
As may be seen further, the Minister (now Secretary) of the DOTC is ordinances, not repugnant to the Constitution, for the good and
vested with the authority and responsibility to exercise the mandate welfare of the people.35 This power to prescribe regulations to
given to the department. Accordingly, the DOTC Secretary is promote the health, morals, education, good order or safety, and
authorized to issue such orders, rules, regulations and other general welfare of the people flows from the recognition that salus
The authority of the President to order the implementation of the (e) The MMDA shall set the policies concerning
Project notwithstanding, the designation of the MMDA as the traffic in Metro Manila, and shall coordinate
implementing agency for the Project may not be sustained. It is ultra and regulate the implementation of all
vires, there being no legal basis therefor. programs and projects concerning traffic
management, specifically pertaining to
It bears stressing that under the provisions of E.O. No. 125, as enforcement, engineering and education. Upon
amended, it is the DOTC, and not the MMDA, which is authorized to request, it shall be extended assistance and
establish and implement a project such as the one subject of the cooperation, including but not limited to,
cases at bar. Thus, the President, although authorized to establish or assignment of personnel, by all other
cause the implementation of the Project, must exercise the government agencies and offices concerned;
authority through the instrumentality of the DOTC which, by law,
is the primary implementing and administrative entity in the (f) Install and administer a single ticketing
promotion, development and regulation of networks of system, fix, impose and collect fines and
transportation, and the one so authorized to establish and penalties for all kinds of violations of traffic
implement a project such as the Project in question. rules and regulations, whether moving or non-
moving in nature, and confiscate and suspend or
By designating the MMDA as the implementing agency of the revoke drivers’ licenses in the enforcement of
Project, the President clearly overstepped the limits of the authority such traffic laws and regulations, the provisions
conferred by law, rendering E.O. No. 179 ultra vires. of RA 4136 and PD 1605 to the contrary
notwithstanding. For this purpose, the Authority
shall impose all traffic laws and regulations in
In another vein, the validity of the designation of MMDA flies in the
Metro Manila, through its traffic operation
absence of a specific grant of authority to it under R.A. No. 7924.
center, and may deputize members of the PNP,
traffic enforcers of local government units, duly
To recall, R.A. No. 7924 declared the Metropolitan Manila area39 as a licensed security guards, or members of non-
"special development and administrative region" and placed the governmental organizations to whom may be
administration of "metro-wide" basic services affecting the region delegated certain authority, subject to such
under the MMDA. conditions and requirements as the Authority
may impose; and
Section 2 of R.A. No. 7924 specifically authorizes the MMDA to
perform "planning, monitoring and coordinative functions, and in (g) Perform other related functions required to
the process exercise regulatory and supervisory authority over the achieve the objectives of the MMDA, including
delivery of metro-wide services," including transport and traffic the undertaking of delivery of basic services to
management.40 Section 5 of the same law enumerates the powers the local government units, when deemed
and functions of the MMDA as follows: necessary subject to prior coordination with and
consent of the local government unit
(a) Formulate, coordinate and regulate the concerned." (Emphasis and underscoring
implementation of medium and long-term plans supplied)
and programs for the delivery of metro-wide
services, land use and physical development The scope of the function of MMDA as an administrative,
within Metropolitan Manila, consistent with coordinating and policy-setting body has been settled
national development objectives and priorities; in Metropolitan Manila Development Authority (MMDA) v. Bel-Air
Village Association, Inc.41 In that case, the Court stressed:
(b) Prepare, coordinate and regulate the
implementation of medium-term investment Clearly, the scope of the MMDA’s function is limited to the
programs for metro-wide services which shall delivery of the seven (7) basic services. One of these
indicate sources and uses of funds for priority is transport and traffic management which includes the
programs and projects, and which shall include formulation and monitoring of policies, standards and
the packaging of projects and presentation to projects to rationalize the existing transport operations,
funding institutions; infrastructure requirements, the use of thoroughfares and
promotion of the safe movement of persons and goods. It
(c) Undertake and manage on its own metro- also covers the mass transport system and the institution
wide programs and projects for the delivery of of a system of road regulation, the administration of all
A due deference to the rights of the individual thus Paragraph (a), Section 13 of Chapter II of the Public Service Act (now
requires a more careful formulation of solutions to societal Section 5 of Executive Order No. 202, creating the Land
problems. Transportation Franchising and Regulatory Board or LFTRB) vested
the Public Service Commission (PSC, now the LTFRB) with "x x x
From the memorandum filed before this Court by jurisdiction, supervision and control over all public services and their
petitioner, it is gathered that the Sangguniang Panlungsod franchises, equipment and other properties x x x."
had identified the cause of traffic congestion to be the
indiscriminate loading and unloading of passengers by Consonant with such grant of authority, the PSC was empowered to
buses on the streets of the city proper, hence, the "impose such conditions as to construction, equipment,
conclusion that the terminals contributed to the maintenance, service, or operation as the public interests and
proliferation of buses obstructing traffic on the city convenience may reasonably require"53 in approving any franchise
streets. or privilege.
Bus terminals per se do not, however, impede or help Further, Section 16 (g) and (h) of the Public Service Act54 provided
impede the flow of traffic. How the outright proscription that the Commission shall have the power, upon proper notice and
against the existence of all terminals, apart from that hearing in accordance with the rules and provisions of this Act,
franchised to petitioner, can be considered as reasonably subject to the limitations and exceptions mentioned and saving
necessary to solve the traffic problem, this Court has not provisions to the contrary:
been enlightened. If terminals lack adequate space such
that bus drivers are compelled to load and unload (g) To compel any public service to furnish safe, adequate,
passengers on the streets instead of inside the terminals, and proper service as regards the manner of furnishing
then reasonable specifications for the size of terminals the same as well as the maintenance of the necessary
could be instituted, with permits to operate the same material and equipment.
denied those which are unable to meet the specifications.
(h) To require any public service to establish, construct,
In the subject ordinances, however, the scope of the maintain, and operate any reasonable extension of its
proscription against the maintenance of terminals is so existing facilities, where in the judgment of said
broad that even entities which might be able to provide Commission, such extension is reasonable and practicable
facilities better than the franchised terminal are barred and will furnish sufficient business to justify the
from operating at all. (Emphasis and underscoring construction and maintenance of the same and when the
supplied) financial condition of the said public service reasonably
warrants the original expenditure required in making and
As in Lucena, this Court fails to see how the prohibition against the operating such extension.(Emphasis and underscoring
existence of respondents’ terminals can be considered a reasonable supplied)
necessity to ease traffic congestion in the metropolis. On the
contrary, the elimination of respondents’ bus terminals brings forth The establishment, as well as the maintenance of vehicle parking
the distinct possibility and the equally harrowing reality of traffic areas or passenger terminals, is generally considered a necessary
congestion in the common parking areas, a case of transference service to be provided by provincial bus operators like respondents,
from one site to another. hence, the investments they have poured into the acquisition or
lease of suitable terminal sites. Eliminating the terminals would thus
Less intrusive measures such as curbing the proliferation of run counter to the provisions of the Public Service Act.
"colorum" buses, vans and taxis entering Metro Manila and using
the streets for parking and passenger pick-up points, as respondents This Court commiserates with the MMDA for the roadblocks thrown
suggest, might even be more effective in easing the traffic situation. in the way of its efforts at solving the pestering problem of traffic
So would the strict enforcement of traffic rules and the removal of congestion in Metro Manila. These efforts are commendable, to say
obstructions from major thoroughfares. the least, in the face of the abominable traffic situation of our roads
day in and day out. This Court can only interpret, not change, the
As to the alleged confiscatory character of the E.O., it need only to law, however. It needs only to be reiterated that it is the DOTC ─ as
be stated that respondents’ certificates of public convenience confer the primary policy, planning, programming, coordinating,
no property right, and are mere licenses or privileges.52 As such, implementing, regulating and administrative entity to promote,
these must yield to legislation safeguarding the interest of the develop and regulate networks of transportation and
people. communications ─ which has the power to establish and administer
a transportation project like the Project subject of the case at bar.
Even then, for reasons which bear reiteration, the MMDA cannot
order the closure of respondents’ terminals not only because no
Rule 63 Full Text Cases andm87 of 88
No matter how noble the intentions of the MMDA may be then, any
plan, strategy or project which it is not authorized to implement
cannot pass muster.
SO ORDERED.