Republic of the Philippines two years.
By 1979, Benjamin completed the preceptorship program for the
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 166562 March 31, 2009
BENJAMIN G. TING, Petitioner,
vs.
CARMEN M. VELEZ-TING, Respondent.
DECISION
NACHURA, J.:
Before us is a petition for review on certiorari seeking to set aside the
November 17, 2003 Amended Decision1 of the Court of Appeals (CA), and
its December 13, 2004 Resolution2 in CA-G.R. CV No. 59903. The appellate
court, in its assailed decision and resolution, affirmed the January 9, 1998
Decision3 of the Regional Trial Court (RTC), Branch 23, Cebu City, declaring
the marriage between petitioner and respondent null and void ab initio
pursuant to Article 36 of the Family Code.4
The facts follow.
Petitioner Benjamin Ting (Benjamin) and respondent Carmen Velez-Ting
(Carmen) first met in 1972 while they were classmates in medical
school.5 They fell in love, and they were wed on July 26, 1975 in Cebu City
when respondent was already pregnant with their first child.
At first, they resided at Benjamin’s family home in Maguikay, Mandaue
City.6 When their second child was born, the couple decided to move to
Carmen’s family home in Cebu City.7 In September 1975, Benjamin passed
the medical board examinations8 and thereafter proceeded to take a
residency program to become a surgeon but shifted to anesthesiology after
said field9 and, in 1980, he began working for Velez Hospital, owned by
Carmen’s family, as member of its active staff,10 while Carmen worked as
the hospital’s Treasurer.11
The couple begot six (6) children, namely Dennis, born on December 9,
1975; James Louis, born on August 25, 1977; Agnes Irene, born on April 5,
1981; Charles Laurence, born on July 21, 1986; Myles Vincent, born on July
19, 1988; and Marie Corinne, born on June 16, 1991.12
On October 21, 1993, after being married for more than 18 years to
petitioner and while their youngest child was only two years old, Carmen
filed a verified petition before the RTC of Cebu City praying for the
declaration of nullity of their marriage based on Article 36 of the Family
Code. She claimed that Benjamin suffered from psychological incapacity
even at the time of the celebration of their marriage, which, however, only
became manifest thereafter. 13
In her complaint, Carmen stated that prior to their marriage, she was already
aware that Benjamin used to drink and gamble occasionally with his
friends.14 But after they were married, petitioner continued to drink regularly
and would go home at about midnight or sometimes in the wee hours of the
morning drunk and violent. He would confront and insult respondent,
physically assault her and force her to have sex with him. There were also
instances when Benjamin used his gun and shot the gate of their
house.15 Because of his drinking habit, Benjamin’s job as anesthesiologist
was affected to the point that he often had to refuse to answer the call of his
fellow doctors and to pass the task to other anesthesiologists. Some
surgeons even stopped calling him for his services because they perceived
petitioner to be unreliable. Respondent tried to talk to her husband about the
latter’s drinking problem, but Benjamin refused to acknowledge the same.16
Carmen also complained that petitioner deliberately refused to give financial
support to their family and would even get angry at her whenever she asked
for money for their children. Instead of providing support, Benjamin would
spend his money on drinking and gambling and would even buy expensive
equipment for his hobby.17 He rarely stayed home18 and even neglected his
obligation to his children.19
Aside from this, Benjamin also engaged in compulsive gambling.20 He would
gamble two or three times a week and would borrow from his friends,
brothers, or from loan sharks whenever he had no money. Sometimes,
Benjamin would pawn his wife’s own jewelry to finance his
gambling.21 There was also an instance when the spouses had to sell their
family car and even a portion of the lot Benjamin inherited from his father
just to be able to pay off his gambling debts.22 Benjamin only stopped going
to the casinos in 1986 after he was banned therefrom for having caused
trouble, an act which he said he purposely committed so that he would be
banned from the gambling establishments.23
In sum, Carmen’s allegations of Benjamin’s psychological incapacity
consisted of the following manifestations:
1. Benjamin’s alcoholism, which adversely affected his family
relationship and his profession;
2. Benjamin’s violent nature brought about by his excessive and
regular drinking;
3. His compulsive gambling habit, as a result of which Benjamin
found it necessary to sell the family car twice and the property he
inherited from his father in order to pay off his debts, because he
no longer had money to pay the same; and
4. Benjamin’s irresponsibility and immaturity as shown by his failure
and refusal to give regular financial support to his family.24
In his answer, Benjamin denied being psychologically incapacitated. He
maintained that he is a respectable person, as his peers would confirm. He
said that he is an active member of social and athletic clubs and would drink
and gamble only for social reasons and for leisure. He also denied being a
violent person, except when provoked by circumstances.25 As for his alleged
failure to support his family financially, Benjamin claimed that it was Carmen
herself who would collect his professional fees from Velez Hospital when he
was still serving there as practicing anesthesiologist.26 In his testimony,
Benjamin also insisted that he gave his family financial support within his
means whenever he could and would only get angry at respondent for
lavishly spending his hard-earned money on unnecessary things.27 He also
pointed out that it was he who often comforted and took care of their
children, while Carmen played mahjong with her friends twice a week.28
During the trial, Carmen’s testimony regarding Benjamin’s drinking and
gambling habits and violent behavior was corroborated by Susana
Wasawas, who served as nanny to the spouses’ children from 1987 to
1992.29 Wasawas stated that she personally witnessed instances when
Benjamin maltreated Carmen even in front of their children.30
Carmen also presented as witness Dr. Pureza Trinidad-Oñate, a
psychiatrist.31 Instead of the usual personal interview, however, Dr. Oñate’s
evaluation of Benjamin was limited to the transcript of stenographic notes
taken during Benjamin’s deposition because the latter had already gone to
work as an anesthesiologist in a hospital in South Africa. After reading the
transcript of stenographic notes, Dr. Oñate concluded that Benjamin’s
compulsive drinking, compulsive gambling and physical abuse of respondent
are clear indications that petitioner suffers from a personality disorder.32
To refute Dr. Oñate’s opinion, petitioner presented Dr. Renato D. Obra, a
psychiatrist and a consultant at the Department of Psychiatry in Don Vicente
Sotto Memorial Medical Center, as his expert witness.33 Dr. Obra evaluated
Benjamin’s psychological behavior based on the transcript of stenographic
notes, as well as the psychiatric evaluation report prepared by Dr. A.J.L.
Pentz, a psychiatrist from the University of Pretoria in South Africa, and his
(Dr. Obra’s) interview with Benjamin’s brothers.34 Contrary to Dr. Oñate’s
findings, Dr. Obra observed that there is nothing wrong with petitioner’s
personality, considering the latter’s good relationship with his fellow doctors
and his good track record as anesthesiologist.35
On January 9, 1998, the lower court rendered its Decision36 declaring the
marriage between petitioner and respondent null and void. The RTC gave
credence to Dr. Oñate’s findings and the admissions made by Benjamin in
the course of his deposition, and found him to be psychologically
incapacitated to comply with the essential obligations of marriage.
Specifically, the trial court found Benjamin an excessive drinker, a
compulsive gambler, someone who prefers his extra-curricular activities to
his family, and a person with violent tendencies, which character traits find
root in a personality defect existing even before his marriage to Carmen.
The decretal portion of the decision reads:
WHEREFORE, all the foregoing considered, judgment is hereby rendered
declaring the marriage between plaintiff and defendant null and void ab initio
pursuant to Art. 36 of the Family Code. x x x
xxxx
SO ORDERED.37
Aggrieved, petitioner appealed to the CA. On October 19, 2000, the CA
rendered a Decision38 reversing the trial court’s ruling. It faulted the trial
court’s finding, stating that no proof was adduced to support the conclusion
that Benjamin was psychologically incapacitated at the time he married
Carmen since Dr. Oñate’s conclusion was based only on theories and not on
established fact,39 contrary to the guidelines set forth in Santos v. Court of
Appeals40and in Rep. of the Phils. v. Court of Appeals and Molina.41
Because of this, Carmen filed a motion for reconsideration, arguing that the
Molina guidelines should not be applied to this case since the Molina
decision was promulgated only on February 13, 1997, or more than five
years after she had filed her petition with the RTC.42 She claimed that the
Molina ruling could not be made to apply retroactively, as it would run
counter to the principle of stare decisis. Initially, the CA denied the motion
for reconsideration for having been filed beyond the prescribed period.
Respondent thereafter filed a manifestation explaining compliance with the
prescriptive period but the same was likewise denied for lack of merit.
Undaunted, respondent filed a petition for certiorari43 with this Court. In a
Resolution44 dated March 5, 2003, this Court granted the petition and
directed the CA to resolve Carmen’s motion for reconsideration.45 On
review, the CA decided to reconsider its previous ruling. Thus, on November
17, 2003, it issued an Amended Decision46 reversing its first ruling and
sustaining the trial court’s decision.47
A motion for reconsideration was filed, this time by Benjamin, but the same
was denied by the CA in its December 13, 2004 Resolution.48
Hence, this petition.
For our resolution are the following issues:
I. Whether the CA violated the rule on stare decisis when it refused
to follow the guidelines set forth under the Santos and Molina
cases;
II. Whether the CA correctly ruled that the requirement of proof of
psychological incapacity for the declaration of absolute nullity of
marriage based on Article 36 of the Family Code has been
liberalized; and
III. Whether the CA’s decision declaring the marriage between
petitioner and respondent null and void [is] in accordance with law
and jurisprudence.
We find merit in the petition.
I. On the issue of stare decisis.
The principle of stare decisis enjoins adherence by lower courts to doctrinal
rules established by this Court in its final decisions. It is based on the
principle that once a question of law has been examined and decided, it
should be deemed settled and closed to further argument.49 Basically, it is a
bar to any attempt to relitigate the same issues,50necessary for two simple
reasons: economy and stability. In our jurisdiction, the principle is
entrenched in Article 8 of the Civil Code.51
This doctrine of adherence to precedents or stare decisis was applied by the
English courts and was later adopted by the United States. Associate
Justice (now Chief Justice) Reynato S. Puno’s discussion on the historical
development of this legal principle in his dissenting opinion in Lambino v.
Commission on Elections52 is enlightening:
The latin phrase stare decisis et non quieta movere means "stand by the
thing and do not disturb the calm." The doctrine started with the English
Courts. Blackstone observed that at the beginning of the 18th century, "it is
an established rule to abide by former precedents where the same points
come again in litigation." As the rule evolved, early limits to its application
were recognized: (1) it would not be followed if it were "plainly
unreasonable"; (2) where courts of equal authority developed conflicting
decisions; and, (3) the binding force of the decision was the "actual principle
or principles necessary for the decision; not the words or reasoning used to
reach the decision."
The doctrine migrated to the United States. It was recognized by the framers
of the U.S. Constitution. According to Hamilton, "strict rules and precedents"
are necessary to prevent "arbitrary discretion in the courts." Madison agreed
but stressed that "x x x once the precedent ventures into the realm of
altering or repealing the law, it should be rejected." Prof. Consovoy well
noted that Hamilton and Madison "disagree about the countervailing policy
considerations that would allow a judge to abandon a precedent." He added
that their ideas "reveal a deep internal conflict between the concreteness
required by the rule of law and the flexibility demanded in error correction. It
is this internal conflict that the Supreme Court has attempted to deal with for
over two centuries."
Indeed, two centuries of American case law will confirm Prof. Consovoy's
observation although stare decisis developed its own life in the United
States. Two strains of stare decisis have been isolated by legal scholars.
The first, known as vertical stare decisis deals with the duty of lower courts
to apply the decisions of the higher courts to cases involving the same facts.
The second, known as horizontal stare decisis requires that high courts must
follow its own precedents. Prof. Consovoy correctly observes that vertical
stare decisis has been viewed as an obligation, while horizontal stare
decisis, has been viewed as a policy, imposing choice but not a command.
Indeed, stare decisis is not one of the precepts set in stone in our
Constitution.
It is also instructive to distinguish the two kinds of horizontal stare decisis —
constitutional stare decisis and statutory stare decisis. Constitutional stare
decisis involves judicial interpretations of the Constitution while statutory
stare decisis involves interpretations of statutes. The distinction is important
for courts enjoy more flexibility in refusing to apply stare decisis in
constitutional litigations. Justice Brandeis' view on the binding effect of the
doctrine in constitutional litigations still holds sway today. In soothing prose,
Brandeis stated: "Stare decisis is not . . . a universal and inexorable
command. The rule of stare decisis is not inflexible. Whether it shall be
followed or departed from, is a question entirely within the discretion of the
court, which is again called upon to consider a question once decided." In
the same vein, the venerable Justice Frankfurter opined: "the ultimate
touchstone of constitutionality is the Constitution itself and not what we have
said about it." In contrast, the application of stare decisis on judicial
interpretation of statutes is more inflexible. As Justice Stevens explains:
"after a statute has been construed, either by this Court or by a consistent
course of decision by other federal judges and agencies, it acquires a
meaning that should be as clear as if the judicial gloss had been drafted by
the Congress itself." This stance reflects both respect for Congress' role and
the need to preserve the courts' limited resources.
In general, courts follow the stare decisis rule for an ensemble of reasons,
viz.: (1) it legitimizes judicial institutions; (2) it promotes judicial economy;
and, (3) it allows for predictability. Contrariwise, courts refuse to be bound by
the stare decisis rule where (1) its application perpetuates illegitimate and
unconstitutional holdings; (2) it cannot accommodate changing social and
political understandings; (3) it leaves the power to overturn bad
constitutional law solely in the hands of Congress; and, (4) activist judges
can dictate the policy for future courts while judges that respect stare decisis
are stuck agreeing with them.
In its 200-year history, the U.S. Supreme Court has refused to follow the
stare decisis rule and reversed its decisions in 192 cases. The most famous
of these reversals is Brown v. Board of Education which junked Plessy v.
Ferguson's "separate but equal doctrine." Plessy upheld as constitutional a
state law requirement that races be segregated on public transportation. In
Brown, the U.S. Supreme Court, unanimously held that "separate . . . is
inherently unequal." Thus, by freeing itself from the shackles of stare
decisis, the U.S. Supreme Court freed the colored Americans from the
chains of inequality. In the Philippine setting, this Court has likewise refused
to be straitjacketed by the stare decisis rule in order to promote public
welfare. In La Bugal-B'laan Tribal Association, Inc. v. Ramos, we reversed
our original ruling that certain provisions of the Mining Law are
unconstitutional. Similarly, in Secretary of Justice v. Lantion, we overturned
our first ruling and held, on motion for reconsideration, that a private
respondent is bereft of the right to notice and hearing during the evaluation
stage of the extradition process.
An examination of decisions on stare decisis in major countries will show
that courts are agreed on the factors that should be considered before
overturning prior rulings. These are workability, reliance, intervening
developments in the law and changes in fact. In addition, courts put in the
balance the following determinants: closeness of the voting, age of the prior
decision and its merits.
The leading case in deciding whether a court should follow the stare decisis
rule in constitutional litigations is Planned Parenthood v. Casey. It
established a 4-pronged test. The court should (1) determine whether the
rule has proved to be intolerable simply in defying practical workability; (2)
consider whether the rule is subject to a kind of reliance that would lend a
special hardship to the consequences of overruling and add inequity to the
cost of repudiation; (3) determine whether related principles of law have so
far developed as to have the old rule no more than a remnant of an
abandoned doctrine; and, (4) find out whether facts have so changed or
come to be seen differently, as to have robbed the old rule of significant
application or justification.53
To be forthright, respondent’s argument that the doctrinal guidelines
prescribed in Santos and Molina should not be applied retroactively for being
contrary to the principle of stare decisis is no longer new. The same
argument was also raised but was struck down in Pesca v. Pesca,54 and
again in Antonio v. Reyes.55 In these cases, we explained that the
interpretation or construction of a law by courts constitutes a part of the law
as of the date the statute is enacted. It is only when a prior ruling of this
Court is overruled, and a different view is adopted, that the new doctrine
may have to be applied prospectively in favor of parties who have relied on
the old doctrine and have acted in good faith, in accordance therewith under
the familiar rule of "lex prospicit, non respicit."
II. On liberalizing the required proof for the declaration of nullity of marriage
under Article 36.
Now, petitioner wants to know if we have abandoned the Molina doctrine.
We have not.
In Edward Kenneth Ngo Te v. Rowena Ong Gutierrez Yu-Te,56 we declared
that, in hindsight, it may have been inappropriate for the Court to impose a
rigid set of rules, as the one in Molina, in resolving all cases of psychological
incapacity. We said that instead of serving as a guideline, Molina
unintentionally became a straightjacket, forcing all cases involving
psychological incapacity to fit into and be bound by it, which is not only
contrary to the intention of the law but unrealistic as well because, with
respect to psychological incapacity, no case can be considered as on "all
fours" with another.57
By the very nature of cases involving the application of Article 36, it is logical
and understandable to give weight to the expert opinions furnished by
psychologists regarding the psychological temperament of parties in order to
determine the root cause, juridical antecedence, gravity and incurability of
the psychological incapacity. However, such opinions, while highly
advisable, are not conditions sine qua non in granting petitions for
declaration of nullity of marriage.58 At best, courts must treat such opinions
as decisive but not indispensable evidence in determining the merits of a
given case. In fact, if the totality of evidence presented is enough to sustain
a finding of psychological incapacity, then actual medical or psychological
examination of the person concerned need not be resorted to.59The trial
court, as in any other given case presented before it, must always base its
decision not solely on the expert opinions furnished by the parties but also
on the totality of evidence adduced in the course of the proceedings.
It was for this reason that we found it necessary to emphasize in Ngo Te that
each case involving the application of Article 36 must be treated distinctly
and judged not on the basis of a priori assumptions, predilections or
generalizations but according to its own attendant facts. Courts should
interpret the provision on a case-to-case basis, guided by experience, the
findings of experts and researchers in psychological disciplines, and by
decisions of church tribunals.
Far from abandoning Molina, we simply suggested the relaxation of the
stringent requirements set forth therein, cognizant of the explanation given
by the Committee on the Revision of the Rules on the rationale of the Rule
on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages (A.M. No. 02-11-10-SC), viz.:
To require the petitioner to allege in the petition the particular root cause of
the psychological incapacity and to attach thereto the verified written report
of an accredited psychologist or psychiatrist have proved to be too
expensive for the parties. They adversely affect access to justice o poor
litigants. It is also a fact that there are provinces where these experts are not
available. Thus, the Committee deemed it necessary to relax this stringent
requirement enunciated in the Molina Case. The need for the examination of
a party or parties by a psychiatrist or clinical psychologist and the
presentation of psychiatric experts shall now be determined by the court
during the pre-trial conference.60
But where, as in this case, the parties had the full opportunity to present
professional and expert opinions of psychiatrists tracing the root cause,
gravity and incurability of a party’s alleged psychological incapacity, then
such expert opinion should be presented and, accordingly, be weighed by
the court in deciding whether to grant a petition for nullity of marriage.
III. On petitioner’s psychological incapacity.
Coming now to the main issue, we find the totality of evidence adduced by
respondent insufficient to prove that petitioner is psychologically unfit to
discharge the duties expected of him as a husband, and more particularly,
that he suffered from such psychological incapacity as of the date of the
marriage eighteen (18) years ago. Accordingly, we reverse the trial court’s
and the appellate court’s rulings declaring the marriage between petitioner
and respondent null and void ab initio.
The intendment of the law has been to confine the application of Article 36 to
the most serious cases of personality disorders clearly demonstrative of an
utter insensitivity or inability to give meaning and significance to the
marriage.61 The psychological illness that must have afflicted a party at the
inception of the marriage should be a malady so grave and permanent as to
deprive one of awareness of the duties and responsibilities of the
matrimonial bond he or she is about to assume.621avvphi1.zw+
In this case, respondent failed to prove that petitioner’s "defects" were
present at the time of the celebration of their marriage. She merely cited that
prior to their marriage, she already knew that petitioner would occasionally
drink and gamble with his friends; but such statement, by itself, is insufficient
to prove any pre-existing psychological defect on the part of her husband.
Neither did the evidence adduced prove such "defects" to be incurable.
The evaluation of the two psychiatrists should have been the decisive
evidence in determining whether to declare the marriage between the
parties null and void. Sadly, however, we are not convinced that the opinions
provided by these experts strengthened respondent’s allegation of
psychological incapacity. The two experts provided diametrically
contradicting psychological evaluations: Dr. Oñate testified that petitioner’s CONSUELO YNARES-SANTIAGO
behavior is a positive indication of a personality disorder,63 while Dr. Obra Associate Justice
maintained that there is nothing wrong with petitioner’s personality. Chairperson
Moreover, there appears to be greater weight in Dr. Obra’s opinion because, CONCHITA CARPIO
aside from analyzing the transcript of Benjamin’s deposition similar to what MINITA V. CHICO-NAZARIO
MORALES*
Dr. Oñate did, Dr. Obra also took into consideration the psychological Associate Justice
Associate Justice
evaluation report furnished by another psychiatrist in South Africa who
personally examined Benjamin, as well as his (Dr. Obra’s) personal
DIOSDADO M. PERALTA
interview with Benjamin’s brothers.64 Logically, therefore, the balance tilts in
Associate Justice
favor of Dr. Obra’s findings.
ATTESTATION
Lest it be misunderstood, we are not condoning petitioner’s drinking and
gambling problems, or his violent outbursts against his wife. There is no
valid excuse to justify such a behavior. Petitioner must remember that he I attest that the conclusions in the above Decision were reached in
owes love, respect, and fidelity to his spouse as much as the latter owes the consultation before the case was assigned to the writer of the opinion of the
same to him. Unfortunately, this court finds respondent’s testimony, as well Court’s Division.
as the totality of evidence presented by the respondent, to be too
inadequate to declare him psychologically unfit pursuant to Article 36. CONSUELO YNARES-SANTIAGO
Associate Justice
It should be remembered that the presumption is always in favor of the Chairperson, Third Division
validity of marriage. Semper praesumitur pro matrimonio.65 In this case, the
presumption has not been amply rebutted and must, perforce, prevail. CERTIFICATION

WHEREFORE, premises considered, the petition for review on certiorari is Pursuant to Section 13, Article VIII of the Constitution and the Division
GRANTED. The November 17, 2003 Amended Decision and the December Chairperson's Attestation, I certify that the conclusions in the above Decision
13, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 59903 are had been reached in consultation before the case was assigned to the writer
accordingly REVERSED and SET ASIDE. of the opinion of the Court’s Division.

SO ORDERED. REYNATO S. PUNO

Chief Justice
ANTONIO EDUARDO B. NACHURA
Associate Justice

WE CONCUR: Footnotes
* Additional member in lieu of Associate Justice Ma. Alicia Austria- 12 Rollo, p. 48.
Martinez per Special Order No. 602 dated March 20, 2009.
13 Id. at 35.
1 Penned by Associate Justice Bienvenido L. Reyes, with Associate
Justices Rodrigo V. Cosico and Sergio L. Pestaño, concurring; 14 TSN, January 6, 1995, pp. 3, 8-9.
rollo, pp. 78-89.
15 Rollo, p. 36.
2 Rollo, pp. 110-111.
16 Id. at 37.
3 Id. at 35-45.
17 Id.
4 Art. 36 of the Family Code provides in full:
18 Id. at 40.
Article 36. A marriage contracted by any party who, at the
time of the celebration, was psychologically incapacitated 19 Id. at 44.
to comply with the essential marital obligations of
marriage, shall likewise be void even if such incapacity 20 Id. at 40.
becomes manifest only after its solemnization. [as
amended by Executive Order No. 227 dated July 17, 21 Id.
1987]
22 Id. at 36.
5 TSN, December 7, 1994, morning, p. 4.
23 Id. at 40.
6 Id. at 12.
24 Id. at 48-49.
7 Id. at 17.
25 Id. at 42, 49.
8 Id. at 14; Exhibit "3."
26 Id. at 49.
9 Id. at 13, 15.
27 TSN, December 7, 1994, morning, pp. 23-25.
10 Id. at 21-23.
28 Id. at 26.
11 Id. at 10.
29 TSN, August 31, 1995, pp. 5-26.
30 Id. at 7-9. 47Pertinent portion of the CA’s Amended Decision dated November
17, 2003 reads:
31 Rollo, p. 38.
The foregoing considered and taking a cue on the
32 Id. at 39. adoption x x x of the Honorable Justices of the Supreme
Court of the new "Rule On Declaration of Absolute Nullity
33 Id. at 41. of Void Marriages and Annulment of Voidable Marriages"
(A.M. No. 02-11-10-SC) which took effect on March 15,
34 Id. at 54-55. 2003, this Court hereby RECONSIDERS itself and
GRANTS the motion for reconsideration filed by the herein
35 Id. at 42. petitioner-appellee on November 29, 2000. Consequently,
respondent-appellant’s appeal is hereby DISMISSED and
the DECISION of the court below declaring the marriage
36 Id. at 35-45.
between CARMEN M. VELEZ-TING and BENJAMIN G.
TING null and void ab initio under Article 36 of the Family
37 Id. at 45. Code of the Philippines is hereby AFFIRMED.
38 Id. at 47-65. WHEREFORE, in view thereof, we can not do any less but
sustain the decision dated 29 August 2002 of the court
39 Id. at 64. below in Civil Case No. CEB-14826 declaring the
marriage between petitioner-appellee Carmen Velez-Ting
40 G.R. No. 112019, January 4, 1995, 240 SCRA 20. and respondent-appellant Benjamin G. Ting void from the
beginning under Article 36, Family Code (as amended by
41 335 Phil. 664 (1997). E.O. No. 227 dated 17 July 1987).

42 Rollo, pp. 80-81. Consequently, the Decision of this Court promulgated on

October 19, 2000 is hereby SET ASIDE and a new one
43 Docketed as G.R. No. 150479. rendered AFFIRMING the appealed Decision of the Court
a quo.
44 CA rollo, pp. 199-202.
SO ORDERED. (Id. at 88-89.)
45 Rollo, pp. 78-79.

46 Supra note 1.
 SECOND DIVISION
[G.R. No. 110398. November 7, 1997]
NEGROS NAVIGATION CO., INC., petitioner, vs. THE COURT OF
APPEALS, RAMON MIRANDA, SPS. RICARDO and VIRGINIA DE
LA VICTORIA, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision of the Court of
Appeals affirming with modification the Regional Trial Courts award of
damages to private respondents for the death of relatives as a result of the
sinking of petitioners vessel.
In April of 1980, private respondent Ramon Miranda purchased from the
Negros Navigation Co., Inc. four special cabin tickets (#74411, 74412, 74413
and 74414) for his wife, daughter, son and niece who were going to Bacolod
City to attend a family reunion. The tickets were for Voyage No. 457-A of the
M/V Don Juan, leaving Manila at 1:00 p.m. on April 22, 1980.
The ship sailed from the port of Manila on schedule.
At about 10:30 in the evening of April 22, 1980, the Don Juan collided
off the Tablas Strait in Mindoro, with the M/T Tacloban City, an oil tanker
owned by the Philippine National Oil Company (PNOC) and the PNOC
Shipping and Transport Corporation (PNOC/STC). As a result, the M/V Don
Juan sank. Several of her passengers perished in the sea tragedy. The
bodies of some of the victims were found and brought to shore, but the four
members of private respondents families were never found.
Private respondents filed a complaint on July 16, 1980 in the Regional
Trial Court of Manila, Branch 34, against the Negros Navigation, the Philippine
National Oil Company (PNOC), and the PNOC Shipping and Transport
Corporation (PNOC/STC), seeking damages for the death of Ardita de la
Victoria Miranda, 48, Rosario V. Miranda, 19, Ramon V. Miranda, Jr., 16, and
Elfreda de la Victoria, 26.
In its answer, petitioner admitted that private respondents purchased
ticket numbers 74411, 74412, 74413 and 74414; that the ticket numbers were
listed in the passenger manifest; and that the Don Juan left Pier 2, North
Harbor, Manila on April 22, 1980 and sank that night after being rammed by
the oil tanker M/T Tacloban City, and that, as a result of the collision, some of
the passengers of the M/V Don Juan died. Petitioner, however, denied that
the four relatives of private respondents actually boarded the vessel as shown
by the fact that their bodies were never recovered. Petitioner further averred
that the Don Juan was seaworthy and manned by a full and competent crew,
and that the collision was entirely due to the fault of the crew of the
M/T Tacloban City.
On January 20, 1986, the PNOC and petitioner Negros Navigation Co.,
Inc. entered into a compromise agreement whereby petitioner assumed full
responsibility for the payment and satisfaction of all claims arising out of or in
connection with the collision and releasing the PNOC and the PNOC/STC
from any liability to it. The agreement was subsequently held by the trial court
to be binding upon petitioner, PNOC and PNOC/STC. Private respondents
did not join in the agreement.
After trial, the court rendered judgment on February 21, 1991, the
dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in
favor of the plaintiffs, ordering all the defendants to pay jointly and severally
to the plaintiffs damages as follows:
To Ramon Miranda:
P42,025.00 for actual damages;
P152,654.55 as compensatory damages for loss of earning capacity of
his wife;
 P90,000.00 as compensatory damages for wrongful death of three (3)
victims;
P300,000.00 as moral damages;
P50,000.00 as exemplary damages, all in the total amount
of P634,679.55; and
P40,000.00 as attorneys fees.
To Spouses Ricardo and Virginia de la Victoria:
P12,000.00 for actual damages;
P158,899.00 as compensatory damages for loss of earning capacity;
P30,000.00 as compensatory damages for wrongful death;
P100,000.00 as moral damages;
P20,000.00 as exemplary damages, all in the total amount
of P320,899.00; and
P15,000.00 as attorneys fees.
On appeal, the Court of Appeals[1] affirmed the decision of the Regional
Trial Court with modification
1. Ordering and sentencing defendants-appellants, jointly and
severally, to pay plaintiff-appellee Ramon Miranda the amount
of P23,075.00 as actual damages instead of P42,025.00;
2. Ordering and sentencing defendants-appellants, jointly and
severally, to pay plaintiff-appellee Ramon Miranda the amount
of P150,000.00, instead of P90,000.00, as compensatory
damages for the death of his wife and two children;
3. Ordering and sentencing defendants-appellants, jointly and
severally, to pay plaintiffs-appellees Dela Victoria spouses the
amount of P50,000.00, instead of P30,000.00, as
compensatory damages for the death of their daughter Elfreda
Dela Victoria;
Hence this petition, raising the following issues:
(1) whether the members of private respondents families were
actually passengers of the Don Juan;
(2) whether the ruling in Mecenas v. Court of Appeals,[2] finding the
crew members of petitioner to be grossly negligent in the
performance of their duties, is binding in this case;
(3) whether the total loss of the M/V Don Juan extinguished
petitioners liability; and
(4) whether the damages awarded by the appellate court are
excessive, unreasonable and unwarranted.
First. The trial court held that the fact that the victims were passengers
of the M/V Don Juan was sufficiently proven by private respondent Ramon
Miranda, who testified that he purchased tickets numbered 74411, 74412,
74413, and 74414 at P131.30 each from the Makati office of petitioner for
Voyage No. 47-A of the M/V Don Juan, which was leaving Manila on April 22,
1980. This was corroborated by the passenger manifest (Exh. E) on which the
numbers of the tickets and the names of Ardita Miranda and her children and
Elfreda de la Victoria appear.
Petitioner contends that the purchase of the tickets does not necessarily
mean that the alleged victims actually took the trip. Petitioner asserts that it is
common knowledge that passengers purchase tickets in advance but do not
actually use them. Hence, private respondent should also prove the presence
of the victims on the ship. The witnesses who affirmed that the victims were
on the ship were biased and unreliable.
This contention is without merit. Private respondent Ramon Miranda
testified that he personally took his family and his niece to the vessel on the
day of the voyage and stayed with them on the ship until it was time for it to
leave. There is no reason he should claim members of his family to have
perished in the accident just to maintain an action. People do not normally lie
about so grave a matter as the loss of dear ones. It would be more difficult for
private respondents to keep the existence of their relatives if indeed they are
alive than it is for petitioner to show the contrary. Petitioners only proof is that
the bodies of the supposed victims were not among those recovered from the
site of the mishap. But so were the bodies of the other passengers reported
missing not recovered, as this Court noted in the Mecenas[3] case.
Private respondent Mirandas testimony was corroborated by Edgardo
Ramirez. Ramirez was a seminarian and one of the survivors of the collision.
He testified that he saw Mrs. Miranda and Elfreda de la Victoria on the ship
and that he talked with them. He knew Mrs. Miranda who was his teacher in
the grade school. He also knew Elfreda who was his childhood friend and
townmate. Ramirez said he was with Mrs. Miranda and her children and niece
from 7:00 p.m. until 10:00 p.m. when the collision happened and that he in
fact had dinner with them. Ramirez said he and Elfreda stayed on the deck
after dinner and it was there where they were jolted by the collision of the two
vessels. Recounting the moments after the collision, Ramirez testified that
Elfreda ran to fetch Mrs. Miranda. He escorted her to the room and then tried
to go back to the deck when the lights went out. He tried to return to the cabin
but was not able to do so because it was dark and there was a stampede of
passengers from the deck.
Petitioner casts doubt on Ramirez testimony, claiming that Ramirez
could not have talked with the victims for about three hours and not run out of
stories to tell, unless Ramirez had a storehouse of stories. But what is
incredible about acquaintances thrown together on a long journey staying
together for hours on end, in idle conversation precisely to while the hours
away?
Petitioner also points out that it took Ramirez three (3) days before he
finally contacted private respondent Ramon Miranda to tell him about the fate
of his family. But it is not improbable that it took Ramirez three days before
calling on private respondent Miranda to tell him about the last hours of Mrs.
Miranda and her children and niece, in view of the confusion in the days
following the collision as rescue teams and relatives searched for survivors.
Indeed, given the facts of this case, it is improper for petitioner to even
suggest that private respondents relatives did not board the ill-fated vessel
and perish in the accident simply because their bodies were not recovered.
Second. In finding petitioner guilty of negligence and in failing to
exercise the extraordinary diligence required of it in the carriage of
passengers, both the trial court and the appellate court relied on the findings
of this Court in Mecenas v. Intermediate Appellate Court,[4] which case was
brought for the death of other passengers. In that case it was found that
although the proximate cause of the mishap was the negligence of the crew
of the M/T Tacloban City, the crew of the Don Juan was equally negligent as
it found that the latters master, Capt. Rogelio Santisteban, was playing
mahjong at the time of collision, and the officer on watch, Senior Third Mate
Rogelio De Vera, admitted that he failed to call the attention of Santisteban to
the imminent danger facing them. This Court found that Capt. Santisteban
and the crew of the M/V Don Juan failed to take steps to prevent the collision
or at least delay the sinking of the ship and supervise the abandoning of the
ship.
Petitioner Negros Navigation was found equally negligent in tolerating
the playing of mahjong by the ship captain and other crew members while on
board the ship and failing to keep the M/V Don Juan seaworthy so much so
that the ship sank within 10 to 15 minutes of its impact with the M/T Tacloban
City.
In addition, the Court found that the Don Juan was overloaded. The
Certificate of Inspection, dated August 27, 1979, issued by the Philippine
Coast Guard Commander at Iloilo City stated that the total number of persons
allowed on the ship was 864, of whom 810 are passengers, but there were
actually 1,004 on board the vessel when it sank, 140 persons more than the
maximum number that could be safely carried by it.
Taking these circumstances together, and the fact that the M/V Don
Juan, as the faster and better-equipped vessel, could have avoided a collision
with the PNOC tanker, this Court held that even if the Tacloban City had been
at fault for failing to observe an internationally-recognized rule of navigation,
the Don Juan was guilty of contributory negligence. Through Justice
Feliciano, this Court held:
The grossness of the negligence of the Don Juan is underscored when one
considers the foregoing circumstances in the context of the following
facts: Firstly, the Don Juan was more than twice as fast as the Tacloban
City. The Don Juans top speed was 17 knots; while that of the Tacloban City
was 6.3. knots. Secondly, the Don Juan carried the full complement of
officers and crew members specified for a passenger vessel of her
class. Thirdly, the Don Juan was equipped with radar which was functioning
that night. Fourthly, the Don Juans officer on-watch had sighted the
Tacloban City on his radar screen while the latter was still four (4) nautical
miles away. Visual confirmation of radar contact was established by the Don
Juan while the Tacloban City was still 2.7 miles away. In the total set of
circumstances which existed in the instant case, the Don Juan, had it taken
seriously its duty of extraordinary diligence, could have easily avoided the
collision with the Tacloban City. Indeed, the Don Juan might well have
avoided the collision even if it had exercised ordinary diligence merely.
It is true that the Tacloban City failed to follow Rule 18 of the International
Rules of the Road which requires two (2) power-driven vessels meeting end
on or nearly end on each to alter her course to starboard (right) so that each
vessel may pass on the port side (left) of the other. The Tacloban City,when
the two (2) vessels were only three-tenths (0.3) of a mile apart, turned (for
the second time) 15o to port side while the Don Juan veered hard to
starboard. . . . [But] route observance of the International Rules of the Road
will not relieve a vessel from responsibility if the collision could have been
avoided by proper care and skill on her part or even by a departure from the
rules.
In the petition at bar, the Don Juan having sighted the Tacloban City when it
was still a long way off was negligent in failing to take early preventive action
and in allowing the two (2) vessels to come to such close quarters as to
render the collision inevitable when there was no necessity for passing so
near to the Tacloban City as to create that hazard or inevitability, for the Don
Juan could choose its own distance. It is noteworthy that the Tacloban City,
upon turning hard to port shortly before the moment of collision, signalled its
intention to do so by giving two (2) short blasts with its horn. The Don Juan
gave no answering horn blast to signal its own intention and proceeded to
turn hard to starboard.
We conclude that Capt. Santisteban and Negros Navigation are properly
held liable for gross negligence in connection with the collision of the Don
Juan and Tacloban City and the sinking of the Don Juan leading to the death
of hundreds of passengers. . . .[5]
Petitioner criticizes the lower courts reliance on the Mecenas case,
arguing that, although this case arose out of the same incident as that involved
in Mecenas, the parties are different and trial was conducted
separately. Petitioner contends that the decision in this case should be based
on the allegations and defenses pleaded and evidence adduced in it or, in
short, on the record of this case.
The contention is without merit. What petitioner contends may be true
with respect to the merits of the individual claims against petitioner but not as
to the cause of the sinking of its ship on April 22, 1980 and its liability for such
accident, of which there can only be one truth.Otherwise, one would be
subscribing to the sophistry: truth on one side of the Pyrenees, falsehood on
the other!
Adherence to the Mecenas case is dictated by this Courts policy of
maintaining stability in jurisprudence in accordance with the legal maxim stare
decisis et non quieta movere (Follow past precedents and do not disturb what
has been settled.) Where, as in this case, the same questions relating to the
same event have been put forward by parties similarly situated as in a
previous case litigated and decided by a competent court, the rule of stare
decisis is a bar to any attempt to relitigate the same issue.[6] In Woulfe v.
Associated Realties Corporation,[7] the Supreme Court of New Jersey held
that where substantially similar cases to the pending case were presented
and applicable principles declared in prior decisions, the court was bound by
the principle of stare decisis. Similarly, in State ex rel. Tollinger v. Gill,[8] it was
held that under the doctrine of stare decisis a ruling is final even as to parties
who are strangers to the original proceeding and not bound by the judgment
under the res judicata doctrine. The Philadelphia court expressed itself in this
wise: Stare decisis simply declares that, for the sake of certainty, a conclusion
reached in one case should be applied to those which follow, if the facts are
substantially the same, even though the parties may be different.[9] Thus, in J.
M. Tuason v. Mariano, supra, this Court relied on its rulings in other cases
involving different parties in sustaining the validity of a land title on the
principle of stare decisis et non quieta movere.
Indeed, the evidence presented in this case was the same as those
presented in the Mecenas case, to wit:
Document Mecenas case This case
Decision of Commandant Exh. 10[10] Exh. 11-B-NN/X
Phil. Coast Guard in BMI Case
No. 415-80 dated 3/26/81
Decision of the Minister Exh. 11[11] Exh. ZZ
of National Defense dated 3/12/82
Resolution on the motion Exh. 13[12] Exh. AAA
for reconsideration of the (private respondents)
decision of the Minister of
National Defense dated 7/24/84
Certificate of inspection Exh. 1-A[13] Exh. 19-NN
dated 8/27/79
Certificate of Stability Exh. 6-A[14] Exh. 19-D-NN
dated 12/16/76
Nor is it true that the trial court merely based its decision on
the Mecenas case. The trial court made its own independent findings on the
basis of the testimonies of witnesses, such as Senior Third Mate Rogelio de
Vera, who incidentally gave substantially the same testimony on petitioners
behalf before the Board of Marine Inquiry. The trial court agreed with the
conclusions of the then Minister of National Defense finding both vessels to
be negligent.
Third. The next issue is whether petitioner is liable to pay damages
notwithstanding the total loss of its ship. The issue is not one of first
impression. The rule is well-entrenched in our jurisprudence that a shipowner
may be held liable for injuries to passengers notwithstanding the exclusively
real and hypothecary nature of maritime law if fault can be attributed to the
shipowner.[15]
In Mecenas, this Court found petitioner guilty of negligence in (1)
allowing or tolerating the ship captain and crew members in playing mahjong
during the voyage, (2) in failing to maintain the vessel seaworthy and (3) in
allowing the ship to carry more passengers than it was allowed to
carry. Petitioner is, therefore, clearly liable for damages to the full extent.
Fourth. Petitioner contends that, assuming that the Mecenas case
applies, private respondents should be allowed to claim only P43,857.14 each
as moral damages because in the Mecenas case, the amount of P307,500.00
was awarded to the seven children of the Mecenas couple. Under petitioners
formula, Ramon Miranda should receive P43,857.14, while the De la Victoria
spouses should receive P97,714.28.
Here is where the principle of stare decisis does not apply in view of
differences in the personal circumstances of the victims. For that matter,
differentiation would be justified even if private respondents had joined the
private respondents in the Mecenas case. The doctrine of stare decisis works
as a bar only against issues litigated in a previous case. Where the issue
involved was not raised nor presented to the court and not passed upon by
the court in the previous case, the decision in the previous case is not stare
decisis of the question presently presented.[16] The decision in
the Mecenas case relates to damages for which petitioner was liable to the
claimants in that case.
In the case at bar, the award of P300,000.00 for moral damages is
reasonable considering the grief petitioner Ramon Miranda suffered as a
result of the loss of his entire family. As a matter of fact, three months after
the collision, he developed a heart condition undoubtedly caused by the strain
of the loss of his family. The P100,000.00 given to Mr. and Mrs. de la Victoria
is likewise reasonable and should be affirmed.
As for the amount of civil indemnity awarded to private respondents, the
appellate courts award of P50,000.00 per victim should be sustained. The
amount of P30,000.00 formerly set in De Lima v. Laguna Tayabas
Co.,[17] Heirs of Amparo delos Santos v. Court of Appeals,[18] and Philippine
Rabbit Bus Lines, Inc. v. Intermediate Appellate Court[19] as benchmark was
subsequently increased to P50,000.00 in the case of Sulpicio Lines, Inc. v.
Court of Appeals,[20] which involved the sinking of another interisland ship on
October 24, 1988.
We now turn to the determination of the earning capacity of the
victims. With respect to Ardita Miranda, the trial court awarded damages
computed as follows:[21]
In the case of victim Ardita V. Miranda whose age at the time of the accident
was 48 years, her life expectancy was computed to be 21.33 years, and
therefore, she could have lived up to almost 70 years old. Her gross
earnings for 21.33 years based on P10,224.00 per annum, would
be P218,077.92.Deducting therefrom 30% as her living expenses, her net
earnings would be P152,654.55, to which plaintiff Ramon Miranda is entitled
to compensatory damages for the loss of earning capacity of his wife. In
considering 30% as the living expenses of Ardita Miranda, the Court takes
into account the fact that plaintiff and his wife were supporting their daughter
and son who were both college students taking Medicine and Law
respectively.
In accordance with the ruling in Villa-Rey Transit, Inc. v. Court of
Appeals,[22] we think the life expectancy of Ardita Miranda was correctly
determined to be 21.33 years, or up to age 69.Petitioner contends, however,
that Mrs. Miranda would have retired from her job as a public school teacher
at 65, hence her loss of earning capacity should be reckoned up to 17.33
years only.
The accepted formula for determining life expectancy is 2/3 multiplied by
(80 minus the age of the deceased). It may be that in the Philippines the age
of retirement generally is 65 but, in calculating the life expectancy of
individuals for the purpose of determining loss of earning capacity under Art.
2206(1) of the Civil Code, it is assumed that the deceased would have earned
income even after retirement from a particular job. In this case, the trial court
took into account the fact that Mrs. Miranda had a masters degree and a good
prospect of becoming principal of the school in which she was teaching. There
was reason to believe that her income would have increased through the
years and she could still earn more after her retirement, e.g., by becoming a
consultant, had she not died. The gross earnings which Mrs. Miranda could
reasonably be expected to earn were it not for her untimely death was,
therefore, correctly computed by the trial court to be P218,077.92 (given a
gross annual income of P10,224.00 and life expectancy of 21.33 years).
Petitioner contends that from the amount of gross earnings, 60% should
be deducted as necessary living expenses, not merely 30% as the trial court
allowed. Petitioner contends that 30% is unrealistic, considering that Mrs.
Mirandas earnings would have been subject to taxes, social security
deductions and inflation.
We agree with this contention. In Villa-Rey Transit, Inc. v. Court of
Appeals,[23] the Court allowed a deduction of P1,184.00 for living expenses
from the P2,184.00 annual salary of the victim, which is roughly 54.2%
thereof. The deceased was 29 years old and a training assistant in the
Bacnotan Cement Industries. In People v. Quilaton,[24] the deceased was a
26-year old laborer earning a daily wage. The court allowed a deduction
of P120,000.00 which was 51.3% of his annual gross earnings
of P234,000.00. In People v. Teehankee,[25] the court allowed a deduction
of P19,800.00, roughly 42.4% thereof from the deceaseds annual salary
of P46,659.21. The deceased, Maureen Hultman, was 17 years old and had
just received her first paycheck as a secretary. In the case at bar, we hold that
a deduction of 50% from Mrs. Mirandas gross earnings (P218,077.92) would
be reasonable, so that her net earning capacity should
be P109,038.96. There is no basis for supposing that her living expenses
constituted a smaller percentage of her gross income than the living expenses
in the decided cases. To hold that she would have used only a small part of
her income for herself, a larger part going to the support of her children would
be conjectural and unreasonable.
As for Elfreda de la Victoria, the trial court found that, at the time of her
death, she was 26 years old, a teacher in a private school in Malolos, Bulacan,
earning P6,192.00 per annum.Although a probationary employee, she had
already been working in the school for two years at the time of her death and
she had a general efficiency rating of 92.85% and it can be presumed that, if
not for her untimely death, she would have become a regular teacher. Hence,
her loss of earning capacity is P111,456.00, computed as follows:
net earning capacity (x) = life expectancy x [ gross annual
income less reasonable & necessary living expenses (50%) ]
x = [ 2 (80-26) ] x [P6,192.00 - P3,096.00]
3 stenographic notes, we find no reason to disturb the award of P40,000.00 for
= 36 x 3,096.00
= P111,456.00
On the other hand, the award of actual damages in the amount
of P23,075.00 was determined by the Court of Appeals on the basis of
receipts submitted by private respondents.This amount is reasonable
considering the expenses incurred by private respondent Miranda in
organizing three search teams to look for his family, spending for
transportation in going to places such as Batangas City and Iloilo, where
survivors and the bodies of other victims were found, making long distance
calls, erecting a monument in honor of the four victims, spending for obituaries
in the Bulletin Today and for food, masses and novenas.
Petitioners contention that the expenses for the erection of a monument
and other expenses for memorial services for the victims should be
considered included in the indemnity for death awarded to private
respondents is without merit. Indemnity for death is given to compensate for
violation of the rights of the deceased, i.e., his right to life and physical
integrity.[26] On the other hand, damages incidental to or arising out of such
death are for pecuniary losses of the beneficiaries of the deceased.
As for the award of attorneys fees, we agree with the Court of Appeals
that the amount of P40,000.00 for private respondent Ramon Miranda
and P15,000.00 for the de la Victoria spouses is justified. The appellate court
correctly held:
The Mecenas case cannot be made the basis for determining the award for
attorneys fees. The award would naturally vary or differ in each case. While
it is admitted that plaintiff-appellee Ramon Miranda who is himself a lawyer,
represented also plaintiffs-appellees Dela Victoria spouses, we note that
separate testimonial evidence were adduced by plaintiff-appellee Ramon
Miranda (TSN, February 26, 1982, p. 6) and plaintiffs-appellees spouses
Dela Victoria (TSN, August 13, 1981, p. 43). Considering the amount of work
and effort put into the case as indicated by the voluminous transcripts of
plaintiff-appellee Ramon Miranda and P15,000.00 for plaintiffs-appellees
Dela Victoria spouses.[27]
The award of exemplary damages should be increased to P300,000.00
for Ramon Miranda and P100,000.00 for the de la Victoria spouses in
accordance with our ruling in the Mecenas case:
Exemplary damages are designed by our civil law to permit the courts to
reshape behaviour that is socially deleterious in its consequence by creating
negative incentives or deterrents against such behaviour. In requiring
compliance with the standard of extraordinary diligence, a standard which is
in fact that of the highest possible degree of diligence, from common carriers
and in creating a presumption of negligence against them, the law seeks to
compel them to control their employees, to tame their reckless instincts and
to force them to take adequate care of human beings and their property.The
Court will take judicial notice of the dreadful regularity with which grievous
maritime disasters occur in our waters with massive loss of life. The bulk of
our population is too poor to afford domestic air transportation. So it is that
notwithstanding the frequent sinking of passenger vessels in our waters,
crowds of people continue to travel by sea. This Court is prepared to use the
instruments given to it by the law for securing the ends of law and public
policy. One of those instruments is the institution of exemplary damages;
one of those ends, of special importance in an archipelagic state like the
Philippines, is the safe and reliable carriage of people and goods by sea.[28]
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with
modification and petitioner is ORDERED to pay private respondents damages
as follows:
To private respondent Ramon Miranda:
P23,075.00 for actual damages; reimburse either of them such amount or amounts as either may have paid,
and in the event of failure of Negros Navigation Co., Inc., to make the
P109,038.96 as compensatory damages for loss of earning necessary reimbursement, PNOC and/or PNOC/STC shall be entitled to a writ
capacity of his wife; of execution without need of filing another action.
SO ORDERED.
P150,000.00 as compensatory damages for wrongful death of Regalado, (Chairman), and Puno, JJ., concur.
three (3) victims;

P300,000.00 as moral damages;

P300,000.00 as exemplary damages, all in the total amount

of P882,113.96; and

P40,000.00 as attorneys fees.

To private respondents Spouses Ricardo and Virginia de la Victoria:

P12,000.00 for actual damages;

P111,456.00 as compensatory damages for loss of earning

capacity;

P50,000.00 as compensatory damages for wrongful death;

P100,000.00 as moral damages;

P100,000.00 as exemplary damages, all in the total amount

of P373,456.00; and

P15,000.00 as attorneys fees.

Petitioners are further ordered to pay costs of suit.
In the event the Philippine National Oil Company and/or the PNOC
Shipping and Transport Corporation pay or are required to pay all or a portion
of the amounts adjudged, petitioner Negros Navigation Co., Inc. shall
 Republic of the Philippines PEDRITO M. NEPOMUCENO, Former Mayor-Boac, Marinduque Former
SUPREME COURT Provincial Board Member -Province of Marinduque, Petitioner,
Manila vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III* and SECRETARY
EN BANC FLORENCIO BUTCH ABAD, DEPARTMENT OF BUDGET AND
MANAGEMENT, Respondents.
G.R. No. 208566 November 19, 2013
DECISION
GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE
L. GONZALEZ REUBEN M. ABANTE and QUINTIN PAREDES SAN PERLAS-BERNABE, J.:
DIEGO, Petitioners,
vs. "Experience is the oracle of truth."1
HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR.
SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B. ABAD, -James Madison
NATIONAL TREASURER ROSALIA V. DE LEON SENATE OF THE
PHILIPPINES represented by FRANKLIN M. DRILON m his capacity as Before the Court are consolidated petitions2 taken under Rule 65 of the
SENATE PRESIDENT and HOUSE OF REPRESENTATIVES represented Rules of Court, all of which assail the constitutionality of the Pork Barrel
by FELICIANO S. BELMONTE, JR. in his capacity as SPEAKER OF THE System. Due to the complexity of the subject matter, the Court shall
HOUSE, Respondents. heretofore discuss the system‘s conceptual underpinnings before detailing
the particulars of the constitutional challenge.
x-----------------------x
The Facts
G.R. No. 208493
I. Pork Barrel: General Concept.
SOCIAL JUSTICE SOCIETY (SJS) PRESIDENT SAMSON S.
ALCANTARA, Petitioner, "Pork Barrel" is political parlance of American -English
vs. origin.3 Historically, its usage may be traced to the degrading ritual
HONORABLE FRANKLIN M. DRILON in his capacity as SENATE of rolling out a barrel stuffed with pork to a multitude of black slaves
PRESIDENT and HONORABLE FELICIANO S. BELMONTE, JR., in his who would cast their famished bodies into the porcine feast to
capacity as SPEAKER OF THE HOUSE OF assuage their hunger with morsels coming from the generosity of
REPRESENTATIVES, Respondents. their well-fed master.4 This practice was later compared to the
actions of American legislators in trying to direct federal budgets in
x-----------------------x favor of their districts.5 While the advent of refrigeration has made
the actual pork barrel obsolete, it persists in reference to political
G.R. No. 209251 bills that "bring home the bacon" to a legislator‘s district and
constituents.6 In a more technical sense, "Pork Barrel" refers to an
 appropriation of government spending meant for localized projects
and secured solely or primarily to bring money to a representative's
district.7Some scholars on the subject further use it to refer to
legislative control of local appropriations.8
In the Philippines, "Pork Barrel" has been commonly referred to as
lump-sum, discretionary funds of Members of the
Legislature,9 although, as will be later discussed, its usage would
evolve in reference to certain funds of the Executive.
II. History of Congressional Pork Barrel in the Philippines.
A. Pre-Martial Law Era (1922-1972).
Act 3044,10 or the Public Works Act of 1922, is
considered11 as the earliest form of "Congressional Pork
Barrel" in the Philippines since the utilization of the funds
appropriated therein were subjected to post-enactment
legislator approval. Particularly, in the area of fund
release, Section 312 provides that the sums appropriated
for certain public works projects13 "shall be distributed x x
x subject to the approval of a joint committee elected by
the Senate and the House of Representatives. "The
committee from each House may also authorize one of its
members to approve the distribution made by the
Secretary of Commerce and Communications."14 Also, in
the area of fund realignment, the same section provides
that the said secretary, "with the approval of said joint
committee, or of the authorized members thereof, may, for
the purposes of said distribution, transfer unexpended
portions of any item of appropriation under this Act to any
other item hereunder."
In 1950, it has been documented15 that post-enactment
legislator participation broadened from the areas of fund
release and realignment to the area of project
identification. During that year, the mechanics of the public
works act was modified to the extent that the discretion of
choosing projects was transferred from the Secretary of
Commerce and Communications to legislators. "For the
first time, the law carried a list of projects selected by
Members of Congress, they ‘being the representatives of
the people, either on their own account or by consultation
with local officials or civil leaders.‘"16 During this period,
the pork barrel process commenced with local government
councils, civil groups, and individuals appealing to
Congressmen or Senators for projects. Petitions that were
accommodated formed part of a legislator‘s allocation, and
the amount each legislator would eventually get is
determined in a caucus convened by the majority. The
amount was then integrated into the administration bill
prepared by the Department of Public Works and
Communications. Thereafter, the Senate and the House of
Representatives added their own provisions to the bill until
it was signed into law by the President – the Public Works
Act.17 In the 1960‘s, however, pork barrel legislation
reportedly ceased in view of the stalemate between the
House of Representatives and the Senate.18
B. Martial Law Era (1972-1986).
While the previous" Congressional Pork Barrel" was
apparently discontinued in 1972 after Martial Law was
declared, an era when "one man controlled the
legislature,"19 the reprieve was only temporary. By 1982,
the Batasang Pambansa had already introduced a new
item in the General Appropriations Act (GAA) called the"
Support for Local Development Projects" (SLDP) under
the article on "National Aid to Local Government Units".
Based on reports,20 it was under the SLDP that the
practice of giving lump-sum allocations to individual
legislators began, with each assemblyman receiving
 ₱500,000.00. Thereafter, assemblymen would
communicate their project preferences to the Ministry of
Budget and Management for approval. Then, the said
ministry would release the allocation papers to the Ministry
of Local Governments, which would, in turn, issue the
checks to the city or municipal treasurers in the
assemblyman‘s locality. It has been further reported that
"Congressional Pork Barrel" projects under the SLDP also
began to cover not only public works projects, or so-
called "hard projects", but also "soft projects",21 or non-
public works projects such as those which would fall under
the categories of, among others, education, health and
livelihood.22
D. Fidel Valdez Ramos (Ramos) Administration (1992-1998).
C. Post-Martial Law Era:
Corazon Cojuangco Aquino Administration (1986-1992).
After the EDSA People Power Revolution in 1986 and the
restoration of Philippine democracy, "Congressional Pork
Barrel" was revived in the form of the "Mindanao
Development Fund" and the "Visayas Development Fund"
which were created with lump-sum appropriations of ₱480
Million and ₱240 Million, respectively, for the funding of
development projects in the Mindanao and Visayas areas
in 1989. It has been documented23 that the clamor raised
by the Senators and the Luzon legislators for a similar
funding, prompted the creation of the "Countrywide
Development Fund" (CDF) which was integrated into the
1990 GAA24 with an initial funding of ₱2.3 Billion to cover
"small local infrastructure and other priority community
projects."
Under the GAAs for the years 1991 and 1992,25 CDF
funds were, with the approval of the President, to be
released directly to the implementing agencies but
"subject to the submission of the required list of projects
and activities."Although the GAAs from 1990 to 1992 were
silent as to the amounts of allocations of the individual
legislators, as well as their participation in the identification
of projects, it has been reported26 that by 1992,
Representatives were receiving ₱12.5 Million each in CDF
funds, while Senators were receiving ₱18 Million each,
without any limitation or qualification, and that they could
identify any kind of project, from hard or infrastructure
projects such as roads, bridges, and buildings to "soft
projects" such as textbooks, medicines, and
scholarships.27
The following year, or in 1993,28 the GAA explicitly stated
that the release of CDF funds was to be made upon the
submission of the list of projects and activities identified
by, among others, individual legislators. For the first time,
the 1993 CDF Article included an allocation for the Vice-
President.29 As such, Representatives were allocated
₱12.5 Million each in CDF funds, Senators, ₱18 Million
each, and the Vice-President, ₱20 Million.
In 1994,30 1995,31 and 1996,32 the GAAs contained the
same provisions on project identification and fund release
as found in the 1993 CDF Article. In addition, however, the
Department of Budget and Management (DBM) was
directed to submit reports to the Senate Committee on
Finance and the House Committee on Appropriations on
the releases made from the funds.33
Under the 199734 CDF Article, Members of Congress and
the Vice-President, in consultation with the implementing
agency concerned, were directed to submit to the DBM
the list of 50% of projects to be funded from their
respective CDF allocations which shall be duly endorsed
by (a) the Senate President and the Chairman of the
Committee on Finance, in the case of the Senate, and (b)
the Speaker of the House of Representatives and the
Chairman of the Committee on Appropriations, in the case
of the House of Representatives; while the list for the
remaining 50% was to be submitted within six (6) months
thereafter. The same article also stated that the project
list, which would be published by the DBM,35 "shall be the
basis for the release of funds" and that "no funds
appropriated herein shall be disbursed for projects not
included in the list herein required."
The following year, or in 1998,36 the foregoing provisions
regarding the required lists and endorsements were
reproduced, except that the publication of the project list
was no longer required as the list itself sufficed for the
release of CDF Funds.
The CDF was not, however, the lone form of
"Congressional Pork Barrel" at that time. Other forms of
"Congressional Pork Barrel" were reportedly fashioned
and inserted into the GAA (called "Congressional
Insertions" or "CIs") in order to perpetuate the ad
ministration‘s political agenda.37 It has been articulated
that since CIs "formed part and parcel of the budgets of
executive departments, they were not easily identifiable
and were thus harder to monitor." Nonetheless, the
lawmakers themselves as well as the finance and budget
officials of the implementing agencies, as well as the
DBM, purportedly knew about the insertions.38 Examples
of these CIs are the Department of Education (DepEd)
School Building Fund, the Congressional Initiative
Allocations, the Public Works Fund, the El Niño Fund, and
the Poverty Alleviation Fund.39 The allocations for the
School Building Fund, particularly, ―shall be made upon
prior consultation with the representative of the legislative
district concerned.”40 Similarly, the legislators had the
power to direct how, where and when these appropriations
were to be spent.41
E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).
In 1999,42 the CDF was removed in the GAA and replaced
by three (3) separate forms of CIs, namely, the "Food
Security Program Fund,"43 the "Lingap Para Sa Mahihirap
Program Fund,"44and the "Rural/Urban Development
Infrastructure Program Fund,"45 all of which contained a
special provision requiring "prior consultation" with the
Member s of Congress for the release of the funds.
It was in the year 200046 that the "Priority Development
Assistance Fund" (PDAF) appeared in the GAA. The
requirement of "prior consultation with the respective
Representative of the District" before PDAF funds were
directly released to the implementing agency concerned
was explicitly stated in the 2000 PDAF Article. Moreover,
realignment of funds to any expense category was
expressly allowed, with the sole condition that no amount
shall be used to fund personal services and other
personnel benefits.47 The succeeding PDAF provisions
remained the same in view of the re-enactment48 of the
2000 GAA for the year 2001.
F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).
The 200249 PDAF Article was brief and straightforward as
it merely contained a single special provision ordering the
release of the funds directly to the implementing agency or
local government unit concerned, without further
qualifications. The following year, 2003,50 the same single
provision was present, with simply an expansion of
purpose and express authority to realign. Nevertheless,
the provisions in the 2003 budgets of the Department of
Public Works and Highways51 (DPWH) and the
DepEd52 required prior consultation with Members of
Congress on the aspects of implementation delegation
and project list submission, respectively. In 2004, the 2003
GAA was re-enacted.53
In 2005,54 the PDAF Article provided that the PDAF shall
be used "to fund priority programs and projects under the
ten point agenda of the national government and shall be
released directly to the implementing agencies." It also
introduced the program menu concept,55 which is
essentially a list of general programs and implementing
agencies from which a particular PDAF project may be
subsequently chosen by the identifying authority. The
2005 GAA was re-enacted56 in 2006 and hence, operated
on the same bases. In similar regard, the program menu
concept was consistently integrated into the
2007,57 2008,58 2009,59 and 201060 GAAs.
Textually, the PDAF Articles from 2002 to 2010 were silent
with respect to the specific amounts allocated for the
individual legislators, as well as their participation in the
proposal and identification of PDAF projects to be funded.
In contrast to the PDAF Articles, however, the provisions
under the DepEd School Building Program and the DPWH
budget, similar to its predecessors, explicitly required prior
consultation with the concerned Member of
Congress61anent certain aspects of project
implementation.
Significantly, it was during this era that provisions which
allowed formal participation of non-governmental
organizations (NGO) in the implementation of government
projects were introduced. In the Supplemental Budget for
2006, with respect to the appropriation for school
buildings, NGOs were, by law, encouraged to participate.
For such purpose, the law stated that "the amount of at
least ₱250 Million of the ₱500 Million allotted for the
construction and completion of school buildings shall be
made available to NGOs including the Federation of
Filipino-Chinese Chambers of Commerce and Industry,
Inc. for its "Operation Barrio School" program, with
capability and proven track records in the construction of
public school buildings x x x."62 The same allocation was
made available to NGOs in the 2007 and 2009 GAAs
under the DepEd Budget.63 Also, it was in 2007 that the
Government Procurement Policy Board64 (GPPB) issued
Resolution No. 12-2007 dated June 29, 2007 (GPPB
Resolution 12-2007), amending the implementing rules
and regulations65 of RA 9184,66 the Government
Procurement Reform Act, to include, as a form of
negotiated procurement,67 the procedure whereby the
Procuring Entity68(the implementing agency) may enter
into a memorandum of agreement with an NGO, provided
that "an appropriation law or ordinance earmarks an
amount to be specifically contracted out to NGOs."69
G. Present Administration (2010-Present).
Differing from previous PDAF Articles but similar to the
CDF Articles, the 201170 PDAF Article included an
express statement on lump-sum amounts allocated for
individual legislators and the Vice-President:
Representatives were given ₱70 Million each, broken
down into ₱40 Million for "hard projects" and ₱30 Million
for "soft projects"; while ₱200 Million was given to each
Senator as well as the Vice-President, with a ₱100 Million
allocation each for "hard" and "soft projects." Likewise, a
provision on realignment of funds was included, but with
the qualification that it may be allowed only once. The
same provision also allowed the Secretaries of Education,
Health, Social Welfare and Development, Interior and
Local Government, Environment and Natural Resources,
Energy, and Public Works and Highways to realign PDAF
Funds, with the further conditions that: (a) realignment is
within the same implementing unit and same project
category as the original project, for infrastructure projects;
(b) allotment released has not yet been obligated for the
original scope of work, and (c) the request for realignment
is with the concurrence of the legislator concerned.71
In the 201272 and 201373 PDAF Articles, it is stated that
the "identification of projects and/or designation of
beneficiaries shall conform to the priority list, standard or
design prepared by each implementing agency (priority list
requirement) x x x." However, as practiced, it would still be
the individual legislator who would choose and identify the
project from the said priority list.74
Provisions on legislator allocations75 as well as fund
realignment76 were included in the 2012 and 2013 PDAF
Articles; but the allocation for the Vice-President, which
was pegged at ₱200 Million in the 2011 GAA, had been
deleted. In addition, the 2013 PDAF Article now allowed
LGUs to be identified as implementing agencies if they
have the technical capability to implement the
projects.77 Legislators were also allowed to identify
programs/projects, except for assistance to indigent
patients and scholarships, outside of his legislative district
provided that he secures the written concurrence of the
legislator of the intended outside-district, endorsed by the
Speaker of the House.78 Finally, any realignment of PDAF
funds, modification and revision of project identification, as
well as requests for release of funds, were all required to
be favorably endorsed by the House Committee on
Appropriations and the Senate Committee on Finance, as
the case may be.79
III. History of Presidential Pork Barrel in the Philippines.
While the term "Pork Barrel" has been typically associated with
lump-sum, discretionary funds of Members of Congress, the
present cases and the recent controversies on the matter have,
however, shown that the term‘s usage has expanded to include
certain funds of the President such as the Malampaya Funds and
the Presidential Social Fund.
On the one hand, the Malampaya Funds was created as a special
fund under Section 880 of Presidential Decree No. (PD)
910,81 issued by then President Ferdinand E. Marcos (Marcos) on
March 22, 1976. In enacting the said law, Marcos recognized the
need to set up a special fund to help intensify, strengthen, and
consolidate government efforts relating to the exploration,
exploitation, and development of indigenous energy resources vital
to economic growth.82 Due to the energy-related activities of the
government in the Malampaya natural gas field in Palawan, or the
"Malampaya Deep Water Gas-to-Power Project",83 the special fund
created under PD 910 has been currently labeled as Malampaya
Funds.
On the other hand the Presidential Social Fund was created under
Section 12, Title IV84 of PD 1869,85 or the Charter of the Philippine
Amusement and Gaming Corporation (PAGCOR). PD 1869 was
similarly issued by Marcos on July 11, 1983. More than two (2)
years after, he amended PD 1869 and accordingly issued PD 1993
on October 31, 1985,86 amending Section 1287 of the former law.
As it stands, the Presidential Social Fund has been described as a
special funding facility managed and administered by the
Presidential Management Staff through which the President
provides direct assistance to priority programs and projects not
 funded under the regular budget. It is sourced from the share of the
government in the aggregate gross earnings of PAGCOR.88
IV. Controversies in the Philippines.
Over the decades, "pork" funds in the Philippines have increased
tremendously,89 owing in no small part to previous Presidents who
reportedly used the "Pork Barrel" in order to gain congressional
support.90 It was in 1996 when the first controversy surrounding the
"Pork Barrel" erupted. Former Marikina City Representative Romeo
Candazo (Candazo), then an anonymous source, "blew the lid on
the huge sums of government money that regularly went into the
pockets of legislators in the form of kickbacks."91 He said that "the
kickbacks were ‘SOP‘ (standard operating procedure) among
legislators and ranged from a low 19 percent to a high 52 percent
of the cost of each project, which could be anything from dredging,
rip rapping, sphalting, concreting, and construction of school
buildings."92 "Other sources of kickbacks that Candazo identified
were public funds intended for medicines and textbooks. A few
days later, the tale of the money trail became the banner story of
the Philippine Daily Inquirer issue of August 13, 1996,
accompanied by an illustration of a roasted pig."93 "The publication
of the stories, including those about congressional initiative
allocations of certain lawmakers, including ₱3.6 Billion for a
Congressman, sparked public outrage."94
Thereafter, or in 2004, several concerned citizens sought the
nullification of the PDAF as enacted in the 2004 GAA for being
unconstitutional. Unfortunately, for lack of "any pertinent evidentiary
support that illegal misuse of PDAF in the form of kickbacks has
become a common exercise of unscrupulous Members of
Congress," the petition was dismissed.95
Recently, or in July of the present year, the National Bureau of
Investigation (NBI) began its probe into allegations that "the
government has been defrauded of some ₱10 Billion over the past
10 years by a syndicate using funds from the pork barrel of
lawmakers and various government agencies for scores of ghost
projects."96 The investigation was spawned by sworn affidavits of
six (6) whistle-blowers who declared that JLN Corporation – "JLN"
standing for Janet Lim Napoles (Napoles) – had swindled billions of
pesos from the public coffers for "ghost projects" using no fewer
than 20 dummy NGOs for an entire decade. While the NGOs were
supposedly the ultimate recipients of PDAF funds, the whistle-
blowers declared that the money was diverted into Napoles‘ private
accounts.97 Thus, after its investigation on the Napoles controversy,
criminal complaints were filed before the Office of the Ombudsman,
charging five (5) lawmakers for Plunder, and three (3) other
lawmakers for Malversation, Direct Bribery, and Violation of the
Anti-Graft and Corrupt Practices Act. Also recommended to be
charged in the complaints are some of the lawmakers‘ chiefs -of-
staff or representatives, the heads and other officials of three (3)
implementing agencies, and the several presidents of the NGOs
set up by Napoles.98
On August 16, 2013, the Commission on Audit (CoA) released the
results of a three-year audit investigation99covering the use of
legislators' PDAF from 2007 to 2009, or during the last three (3)
years of the Arroyo administration. The purpose of the audit was to
determine the propriety of releases of funds under PDAF and the
Various Infrastructures including Local Projects (VILP)100 by the
DBM, the application of these funds and the implementation of
projects by the appropriate implementing agencies and several
government-owned-and-controlled corporations (GOCCs).101 The
total releases covered by the audit amounted to ₱8.374 Billion in
PDAF and ₱32.664 Billion in VILP, representing 58% and 32%,
respectively, of the total PDAF and VILP releases that were found
to have been made nationwide during the audit
period.102 Accordingly, the Co A‘s findings contained in its Report
No. 2012-03 (CoA Report), entitled "Priority Development
Assistance Fund (PDAF) and Various Infrastructures including
Local Projects (VILP)," were made public, the highlights of which
are as follows:103
● Amounts released for projects identified by a
considerable number of legislators significantly exceeded
their respective allocations.
● Amounts were released for projects outside of
legislative districts of sponsoring members of the Lower
House.
● Total VILP releases for the period exceeded the total
amount appropriated under the 2007 to 2009 GAAs.
● Infrastructure projects were constructed on private lots
without these having been turned over to the government.
● Significant amounts were released to implementing
agencies without the latter‘s endorsement and without
considering their mandated functions, administrative and
technical capabilities to implement projects.
● Implementation of most livelihood projects was not
undertaken by the implementing agencies themselves but
by NGOs endorsed by the proponent legislators to which
the Funds were transferred.
● The funds were transferred to the NGOs in spite of the
absence of any appropriation law or ordinance.
● Selection of the NGOs were not compliant with law and
regulations.
● Eighty-Two (82) NGOs entrusted with implementation of
seven hundred seventy two (772) projects amount to
₱6.156 Billion were either found questionable, or
submitted questionable/spurious documents, or failed to
liquidate in whole or in part their utilization of the Funds.
● Procurement by the NGOs, as well as some
implementing agencies, of goods and services reportedly
used in the projects were not compliant with law.
As for the "Presidential Pork Barrel", whistle-blowers alleged that"
at least ₱900 Million from royalties in the operation of the
Malampaya gas project off Palawan province intended for agrarian
reform beneficiaries has gone into a dummy NGO."104 According to
incumbent CoA Chairperson Maria Gracia Pulido Tan (CoA
Chairperson), the CoA is, as of this writing, in the process of
preparing "one consolidated report" on the Malampaya Funds.105
V. The Procedural Antecedents.
Spurred in large part by the findings contained in the CoA Report
and the Napoles controversy, several petitions were lodged before
the Court similarly seeking that the "Pork Barrel System" be
declared unconstitutional. To recount, the relevant procedural
antecedents in these cases are as follows:
On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President
of the Social Justice Society, filed a Petition for Prohibition of even date
under Rule 65 of the Rules of Court (Alcantara Petition), seeking that the
"Pork Barrel System" be declared unconstitutional, and a writ of prohibition
be issued permanently restraining respondents Franklin M. Drilon and
Feliciano S. Belmonte, Jr., in their respective capacities as the incumbent
Senate President and Speaker of the House of Representatives, from further
taking any steps to enact legislation appropriating funds for the "Pork Barrel
System," in whatever form and by whatever name it may be called, and from
approving further releases pursuant thereto.106 The Alcantara Petition was
docketed as G.R. No. 208493.
On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose
L. Gonzalez, Reuben M. Abante, Quintin Paredes San Diego (Belgica, et
al.), and Jose M. Villegas, Jr. (Villegas) filed an Urgent Petition For Certiorari
and Prohibition With Prayer For The Immediate Issuance of Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction dated August
27, 2013 under Rule 65 of the Rules of Court (Belgica Petition), seeking that
the annual "Pork Barrel System," presently embodied in the provisions of the
GAA of 2013 which provided for the 2013 PDAF, and the Executive‘s lump-
sum, discretionary funds, such as the Malampaya Funds and the
Presidential Social Fund,107 be declared unconstitutional and null and void
for being acts constituting grave abuse of discretion. Also, they pray that the
Court issue a TRO against respondents Paquito N. Ochoa, Jr., Florencio B.
Abad (Secretary Abad) and Rosalia V. De Leon, in their respective
capacities as the incumbent Executive Secretary, Secretary of the
Department of Budget and Management (DBM), and National Treasurer, or
their agents, for them to immediately cease any expenditure under the
aforesaid funds. Further, they pray that the Court order the foregoing
respondents to release to the CoA and to the public: (a) "the complete
schedule/list of legislators who have availed of their PDAF and VILP from
the years 2003 to 2013, specifying the use of the funds, the project or
activity and the recipient entities or individuals, and all pertinent data
thereto"; and (b) "the use of the Executive‘s lump-sum, discretionary funds,
including the proceeds from the x x x Malampaya Funds and remittances
from the PAGCOR x x x from 2003 to 2013, specifying the x x x project or
activity and the recipient entities or individuals, and all pertinent data
thereto."108 Also, they pray for the "inclusion in budgetary deliberations with
the Congress of all presently off-budget, lump-sum, discretionary funds
including, but not limited to, proceeds from the Malampaya Funds and
remittances from the PAGCOR."109 The Belgica Petition was docketed as
G.R. No. 208566.110
Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno
(Nepomuceno), filed a Petition dated August 23, 2012 (Nepomuceno
Petition), seeking that the PDAF be declared unconstitutional, and a cease
and desist order be issued restraining President Benigno Simeon S. Aquino
III (President Aquino) and Secretary Abad from releasing such funds to
Members of Congress and, instead, allow their release to fund priority
projects identified and approved by the Local Development Councils in
consultation with the executive departments, such as the DPWH, the
Department of Tourism, the Department of Health, the Department of
Transportation, and Communication and the National Economic
Development Authority.111 The Nepomuceno Petition was docketed as UDK-
14951.112
On September 10, 2013, the Court issued a Resolution of even date (a)
consolidating all cases; (b) requiring public respondents to comment on the
consolidated petitions; (c) issuing a TRO (September 10, 2013 TRO)
enjoining the DBM, National Treasurer, the Executive Secretary, or any of
the persons acting under their authority from releasing (1) the remaining
PDAF allocated to Members of Congress under the GAA of 2013, and (2)
Malampaya Funds under the phrase "for such other purposes as may be
hereafter directed by the President" pursuant to Section 8 of PD 910 but not
for the purpose of "financing energy resource development and exploitation
programs and projects of the government‖ under the same provision; and
(d) setting the consolidated cases for Oral Arguments on October 8, 2013.
On September 23, 2013, the Office of the Solicitor General (OSG) filed a
Consolidated Comment (Comment) of even date before the Court, seeking
the lifting, or in the alternative, the partial lifting with respect to educational
and medical assistance purposes, of the Court‘s September 10, 2013 TRO,
and that the consolidated petitions be dismissed for lack of merit.113
On September 24, 2013, the Court issued a Resolution of even date
directing petitioners to reply to the Comment.
Petitioners, with the exception of Nepomuceno, filed their respective replies
to the Comment: (a) on September 30, 2013, Villegas filed a separate Reply
dated September 27, 2013 (Villegas Reply); (b) on October 1, 2013, Belgica,
et al. filed a Reply dated September 30, 2013 (Belgica Reply); and (c) on
October 2, 2013, Alcantara filed a Reply dated October 1, 2013.
On October 1, 2013, the Court issued an Advisory providing for the
guidelines to be observed by the parties for the Oral Arguments scheduled
on October 8, 2013. In view of the technicality of the issues material to the
present cases, incumbent Solicitor General Francis H. Jardeleza (Solicitor
General) was directed to bring with him during the Oral Arguments
representative/s from the DBM and Congress who would be able to
competently and completely answer questions related to, among others, the
budgeting process and its implementation. Further, the CoA Chairperson
was appointed as amicus curiae and thereby requested to appear before the
Court during the Oral Arguments.
On October 8 and 10, 2013, the Oral Arguments were conducted.
Thereafter, the Court directed the parties to submit their respective
memoranda within a period of seven (7) days, or until October 17, 2013,
which the parties subsequently did.
The Issues Before the Court
Based on the pleadings, and as refined during the Oral Arguments, the
following are the main issues for the Court‘s resolution:
I. Procedural Issues.
Whether or not (a) the issues raised in the consolidated petitions involve an
actual and justiciable controversy; (b) the issues raised in the consolidated
petitions are matters of policy not subject to judicial review; (c) petitioners
have legal standing to sue; and (d) the Court‘s Decision dated August 19,
1994 in G.R. Nos. 113105, 113174, 113766, and 113888, entitled
"Philippine Constitution Association v. Enriquez"114 (Philconsa) and Decision
dated April 24, 2012 in G.R. No. 164987, entitled "Lawyers Against
Monopoly and Poverty v. Secretary of Budget and Management"115 (LAMP)
bar the re-litigatio n of the issue of constitutionality of the "Pork Barrel
System" under the principles of res judicata and stare decisis.
II. Substantive Issues on the "Congressional Pork Barrel."
Whether or not the 2013 PDAF Article and all other Congressional Pork
Barrel Laws similar thereto are unconstitutional considering that they violate
the principles of/constitutional provisions on (a) separation of powers; (b)
non-delegability of legislative power; (c) checks and balances; (d)
accountability; (e) political dynasties; and (f) local autonomy.
III. Substantive Issues on the "Presidential Pork Barrel."
Whether or not the phrases (a) "and for such other purposes as may be
hereafter directed by the President" under Section 8 of PD 910,116 relating to
the Malampaya Funds, and (b) "to finance the priority infrastructure
development projects and to finance the restoration of damaged or
destroyed facilities due to calamities, as may be directed and authorized by
the Office of the President of the Philippines" under Section 12 of PD 1869,
as amended by PD 1993, relating to the Presidential Social Fund, are
unconstitutional insofar as they constitute undue delegations of legislative
power.
These main issues shall be resolved in the order that they have been stated.
In addition, the Court shall also tackle certain ancillary issues as prompted
by the present cases.
The Court’s Ruling
The petitions are partly granted.
I. Procedural Issues.
The prevailing rule in constitutional litigation is that no question involving the
constitutionality or validity of a law or governmental act may be heard and
decided by the Court unless there is compliance with the legal requisites for
judicial inquiry,117 namely: (a) there must be an actual case or controversy
calling for the exercise of judicial power; (b) the person challenging the act
must have the standing to question the validity of the subject act or
issuance; (c) the question of constitutionality must be raised at the earliest
opportunity ; and (d) the issue of constitutionality must be the very lis mota
of the case.118 Of these requisites, case law states that the first two are the
most important119and, therefore, shall be discussed forthwith.
A. Existence of an Actual Case or Controversy.
By constitutional fiat, judicial power operates only when there is an actual
case or controversy.120 This is embodied in Section 1, Article VIII of the 1987
Constitution which pertinently states that "judicial power includes the duty of
the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable x x x." Jurisprudence provides that an
actual case or controversy is one which "involves a conflict of legal rights, an
assertion of opposite legal claims, susceptible of judicial resolution as
distinguished from a hypothetical or abstract difference or dispute.121 In other
words, "there must be a contrariety of legal rights that can be interpreted
and enforced on the basis of existing law and jurisprudence."122 Related to
the requirement of an actual case or controversy is the requirement of
"ripeness," meaning that the questions raised for constitutional scrutiny are
already ripe for adjudication. "A question is ripe for adjudication when the act
being challenged has had a direct adverse effect on the individual
challenging it. It is a prerequisite that something had then been
accomplished or performed by either branch before a court may come into
the picture, and the petitioner must allege the existence of an immediate or
threatened injury to itself as a result of the challenged action."123 "Withal,
courts will decline to pass upon constitutional issues through advisory
opinions, bereft as they are of authority to resolve hypothetical or moot
questions."124
Based on these principles, the Court finds that there exists an actual and
justiciable controversy in these cases.
The requirement of contrariety of legal rights is clearly satisfied by the
antagonistic positions of the parties on the constitutionality of the "Pork
Barrel System." Also, the questions in these consolidated cases are ripe for
adjudication since the challenged funds and the provisions allowing for their
utilization – such as the 2013 GAA for the PDAF, PD 910 for the Malampaya
Funds and PD 1869, as amended by PD 1993, for the Presidential Social
Fund – are currently existing and operational; hence, there exists an
immediate or threatened injury to petitioners as a result of the
unconstitutional use of these public funds.
As for the PDAF, the Court must dispel the notion that the issues related
thereto had been rendered moot and academic by the reforms undertaken
by respondents. A case becomes moot when there is no more actual
controversy between the parties or no useful purpose can be served in
passing upon the merits.125 Differing from this description, the Court
observes that respondents‘ proposed line-item budgeting scheme would not
terminate the controversy nor diminish the useful purpose for its resolution
since said reform is geared towards the 2014 budget, and not the 2013
PDAF Article which, being a distinct subject matter, remains legally effective
and existing. Neither will the President‘s declaration that he had already
"abolished the PDAF" render the issues on PDAF moot precisely because
the Executive branch of government has no constitutional authority to nullify
or annul its legal existence. By constitutional design, the annulment or
nullification of a law may be done either by Congress, through the passage
of a repealing law, or by the Court, through a declaration of
unconstitutionality. Instructive on this point is the following exchange
between Associate Justice Antonio T. Carpio (Justice Carpio) and the
Solicitor General during the Oral Arguments:126
Justice Carpio: The President has taken an oath to faithfully execute the
law,127 correct? Solicitor General Jardeleza: Yes, Your Honor.
Justice Carpio: And so the President cannot refuse to implement the
General Appropriations Act, correct?
Solicitor General Jardeleza: Well, that is our answer, Your Honor. In the
case, for example of the PDAF, the President has a duty to execute the laws
but in the face of the outrage over PDAF, the President was saying, "I am
not sure that I will continue the release of the soft projects," and that started,
Your Honor. Now, whether or not that … (interrupted)
Justice Carpio: Yeah. I will grant the President if there are anomalies in the
project, he has the power to stop the releases in the meantime, to
investigate, and that is Section 38 of Chapter 5 of Book 6 of the Revised
Administrative Code128 x x x. So at most the President can suspend, now if
the President believes that the PDAF is unconstitutional, can he just refuse
to implement it?
Solicitor General Jardeleza: No, Your Honor, as we were trying to say in the
specific case of the PDAF because of the CoA Report, because of the
reported irregularities and this Court can take judicial notice, even outside,
outside of the COA Report, you have the report of the whistle-blowers, the
President was just exercising precisely the duty ….
xxxx
Justice Carpio: Yes, and that is correct. You‘ve seen the CoA Report, there
are anomalies, you stop and investigate, and prosecute, he has done that.
But, does that mean that PDAF has been repealed?
Solicitor General Jardeleza: No, Your Honor x x x.
xxxx
Justice Carpio: So that PDAF can be legally abolished only in two (2) cases.
Congress passes a law to repeal it, or this Court declares it unconstitutional,
correct?
Solictor General Jardeleza: Yes, Your Honor.
Justice Carpio: The President has no power to legally abolish PDAF.
(Emphases supplied)
Even on the assumption of mootness, jurisprudence, nevertheless, dictates
that "the moot and academic‘ principle is not a magical formula that can
automatically dissuade the Court in resolving a case." The Court will decide
cases, otherwise moot, if: first, there is a grave violation of the Constitution;
second, the exceptional character of the situation and the paramount public
interest is involved; third, when the constitutional issue raised requires
formulation of controlling principles to guide the bench, the bar, and the
public; and fourth, the case is capable of repetition yet evading review.129
The applicability of the first exception is clear from the fundamental posture
of petitioners – they essentially allege grave violations of the Constitution
with respect to, inter alia, the principles of separation of powers, non-
delegability of legislative power, checks and balances, accountability and
local autonomy.
The applicability of the second exception is also apparent from the nature of
the interests involved
– the constitutionality of the very system within which significant amounts of
public funds have been and continue to be utilized and expended
undoubtedly presents a situation of exceptional character as well as a matter
of paramount public interest. The present petitions, in fact, have been
lodged at a time when the system‘s flaws have never before been magnified.
To the Court‘s mind, the coalescence of the CoA Report, the accounts of
numerous whistle-blowers, and the government‘s own recognition that
reforms are needed "to address the reported abuses of the
PDAF"130 demonstrates a prima facie pattern of abuse which only
underscores the importance of the matter. It is also by this finding that the
Court finds petitioners‘ claims as not merely theorized, speculative or
hypothetical. Of note is the weight accorded by the Court to the findings
made by the CoA which is the constitutionally-mandated audit arm of the
government. In Delos Santos v. CoA,131 a recent case wherein the Court
upheld the CoA‘s disallowance of irregularly disbursed PDAF funds, it was
emphasized that:
The COA is endowed with enough latitude to determine, prevent, and
disallow irregular, unnecessary, excessive, extravagant or unconscionable
expenditures of government funds. It is tasked to be vigilant and
conscientious in safeguarding the proper use of the government's, and
ultimately the people's, property. The exercise of its general audit power is
among the constitutional mechanisms that gives life to the check and
balance system inherent in our form of government.
It is the general policy of the Court to sustain the decisions of administrative
authorities, especially one which is constitutionally-created, such as the
CoA, not only on the basis of the doctrine of separation of powers but also
for their presumed expertise in the laws they are entrusted to enforce.
Findings of administrative agencies are accorded not only respect but also
finality when the decision and order are not tainted with unfairness or
arbitrariness that would amount to grave abuse of discretion. It is only when
the CoA has acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, that this Court
entertains a petition questioning its rulings. x x x. (Emphases supplied)
Thus, if only for the purpose of validating the existence of an actual and
justiciable controversy in these cases, the Court deems the findings under
the CoA Report to be sufficient.
The Court also finds the third exception to be applicable largely due to the
practical need for a definitive ruling on the system‘s constitutionality. As
disclosed during the Oral Arguments, the CoA Chairperson estimates that
thousands of notices of disallowances will be issued by her office in
connection with the findings made in the CoA Report. In this relation,
Associate Justice Marvic Mario Victor F. Leonen (Justice Leonen) pointed
out that all of these would eventually find their way to the
courts.132 Accordingly, there is a compelling need to formulate controlling
principles relative to the issues raised herein in order to guide the bench, the
bar, and the public, not just for the expeditious resolution of the anticipated
disallowance cases, but more importantly, so that the government may be
guided on how public funds should be utilized in accordance with
constitutional principles.
Finally, the application of the fourth exception is called for by the recognition
that the preparation and passage of the national budget is, by constitutional
imprimatur, an affair of annual occurrence.133 The relevance of the issues
before the Court does not cease with the passage of a "PDAF -free budget
for 2014."134 The evolution of the "Pork Barrel System," by its multifarious
iterations throughout the course of history, lends a semblance of truth to
petitioners‘ claim that "the same dog will just resurface wearing a different
collar."135 In Sanlakas v. Executive Secretary,136 the government had already
backtracked on a previous course of action yet the Court used the "capable
of repetition but evading review" exception in order "to prevent similar
questions from re- emerging."137 The situation similarly holds true to these
cases. Indeed, the myriad of issues underlying the manner in which certain
public funds are spent, if not resolved at this most opportune time, are
capable of repetition and hence, must not evade judicial review.
B. Matters of Policy: the Political Question Doctrine.
The "limitation on the power of judicial review to actual cases and
controversies‖ carries the assurance that "the courts will not intrude into
areas committed to the other branches of government."138 Essentially, the
foregoing limitation is a restatement of the political question doctrine which,
under the classic formulation of Baker v. Carr,139applies when there is found,
among others, "a textually demonstrable constitutional commitment of the
issue to a coordinate political department," "a lack of judicially discoverable
and manageable standards for resolving it" or "the impossibility of deciding
without an initial policy determination of a kind clearly for non- judicial
discretion." Cast against this light, respondents submit that the "the political
branches are in the best position not only to perform budget-related reforms
but also to do them in response to the specific demands of their
constituents" and, as such, "urge the Court not to impose a solution at this
stage."140
The Court must deny respondents‘ submission.
Suffice it to state that the issues raised before the Court do not present
political but legal questions which are within its province to resolve. A
political question refers to "those questions which, under the Constitution,
are to be decided by the people in their sovereign capacity, or in regard to
which full discretionary authority has been delegated to the Legislature or
executive branch of the Government. It is concerned with issues dependent
upon the wisdom, not legality, of a particular measure."141 The intrinsic
constitutionality of the "Pork Barrel System" is not an issue dependent upon
the wisdom of the political branches of government but rather a legal one
which the Constitution itself has commanded the Court to act upon.
Scrutinizing the contours of the system along constitutional lines is a task
that the political branches of government are incapable of rendering
precisely because it is an exercise of judicial power. More importantly, the
present Constitution has not only vested the Judiciary the right to exercise
judicial power but essentially makes it a duty to proceed therewith. Section
1, Article VIII of the 1987 Constitution cannot be any clearer: "The judicial
power shall be vested in one Supreme Court and in such lower courts as
may be established by law. It includes the duty of the courts of justice to
settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." In Estrada v. Desierto,142 the
expanded concept of judicial power under the 1987 Constitution and its
effect on the political question doctrine was explained as follows:143
To a great degree, the 1987 Constitution has narrowed the reach of the
political question doctrine when it expanded the power of judicial review of
this court not only to settle actual controversies involving rights which are
legally demandable and enforceable but also to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of government.
Heretofore, the judiciary has focused on the "thou shalt not's" of the
Constitution directed against the exercise of its jurisdiction. With the new
provision, however, courts are given a greater prerogative to determine what
it can do to prevent grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of government.
Clearly, the new provision did not just grant the Court power of doing
nothing. x x x (Emphases supplied)
It must also be borne in mind that ― when the judiciary mediates to allocate
constitutional boundaries, it does not assert any superiority over the other
departments; does not in reality nullify or invalidate an act of the legislature
or the executive, but only asserts the solemn and sacred obligation assigned
to it by the Constitution."144 To a great extent, the Court is laudably
cognizant of the reforms undertaken by its co-equal branches of
government. But it is by constitutional force that the Court must faithfully
perform its duty. Ultimately, it is the Court‘s avowed intention that a
resolution of these cases would not arrest or in any manner impede the
endeavors of the two other branches but, in fact, help ensure that the pillars
of change are erected on firm constitutional grounds. After all, it is in the
best interest of the people that each great branch of government, within its
own sphere, contributes its share towards achieving a holistic and genuine
solution to the problems of society. For all these reasons, the Court cannot
heed respondents‘ plea for judicial restraint.
C. Locus Standi.
"The gist of the question of standing is whether a party alleges such
personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the
court depends for illumination of difficult constitutional questions. Unless a
person is injuriously affected in any of his constitutional rights by the
operation of statute or ordinance, he has no standing."145
Petitioners have come before the Court in their respective capacities as
citizen-taxpayers and accordingly, assert that they "dutifully contribute to the
coffers of the National Treasury."146 Clearly, as taxpayers, they possess the
requisite standing to question the validity of the existing "Pork Barrel
System" under which the taxes they pay have been and continue to be
utilized. It is undeniable that petitioners, as taxpayers, are bound to suffer
from the unconstitutional usage of public funds, if the Court so rules.
Invariably, taxpayers have been allowed to sue where there is a claim that
public funds are illegally disbursed or that public money is being deflected to
any improper purpose, or that public funds are wasted through the
enforcement of an invalid or unconstitutional law,147 as in these cases.
Moreover, as citizens, petitioners have equally fulfilled the standing
requirement given that the issues they have raised may be classified as
matters "of transcendental importance, of overreaching significance to
society, or of paramount public interest."148 The CoA Chairperson‘s
statement during the Oral Arguments that the present controversy involves
"not merely a systems failure" but a "complete breakdown of
controls"149 amplifies, in addition to the matters above-discussed, the
seriousness of the issues involved herein. Indeed, of greater import than the
damage caused by the illegal expenditure of public funds is the mortal
wound inflicted upon the fundamental law by the enforcement of an invalid
statute.150 All told, petitioners have sufficient locus standi to file the instant
cases.
D. Res Judicata and Stare Decisis.
Res judicata (which means a "matter adjudged") and stare decisis non
quieta et movere (or simply, stare decisis which means "follow past
precedents and do not disturb what has been settled") are general
procedural law principles which both deal with the effects of previous but
factually similar dispositions to subsequent cases. For the cases at bar, the
Court examines the applicability of these principles in relation to its prior
rulings in Philconsa and LAMP.
The focal point of res judicata is the judgment. The principle states that a
judgment on the merits in a previous case rendered by a court of competent
jurisdiction would bind a subsequent case if, between the first and second
actions, there exists an identity of parties, of subject matter, and of causes of
action.151 This required identity is not, however, attendant hereto since
Philconsa and LAMP, respectively involved constitutional challenges against
the 1994 CDF Article and 2004 PDAF Article, whereas the cases at bar call
for a broader constitutional scrutiny of the entire "Pork Barrel System." Also,
the ruling in LAMP is essentially a dismissal based on a procedural
technicality – and, thus, hardly a judgment on the merits – in that petitioners
therein failed to present any "convincing proof x x x showing that, indeed,
there were direct releases of funds to the Members of Congress, who
actually spend them according to their sole discretion" or "pertinent
evidentiary support to demonstrate the illegal misuse of PDAF in the form of
kickbacks and has become a common exercise of unscrupulous Members of
Congress." As such, the Court up held, in view of the presumption of
constitutionality accorded to every law, the 2004 PDAF Article, and saw "no
need to review or reverse the standing pronouncements in the said case."
Hence, for the foregoing reasons, the res judicata principle, insofar as the
Philconsa and LAMP cases are concerned, cannot apply.
On the other hand, the focal point of stare decisis is the doctrine created.
The principle, entrenched under Article 8152 of the Civil Code, evokes the
general rule that, for the sake of certainty, a conclusion reached in one case
should be doctrinally applied to those that follow if the facts are substantially
the same, even though the parties may be different. It proceeds from the first
principle of justice that, absent any powerful countervailing considerations,
like cases ought to be decided alike. Thus, where the same questions
relating to the same event have been put forward by the parties similarly
situated as in a previous case litigated and decided by a competent court,
the rule of stare decisis is a bar to any attempt to re-litigate the same
issue.153
Philconsa was the first case where a constitutional challenge against a Pork
Barrel provision, i.e., the 1994 CDF Article, was resolved by the Court. To
properly understand its context, petitioners‘ posturing was that "the power
given to the Members of Congress to propose and identify projects and
activities to be funded by the CDF is an encroachment by the legislature on
executive power, since said power in an appropriation act is in
implementation of the law" and that "the proposal and identification of the
projects do not involve the making of laws or the repeal and amendment
thereof, the only function given to the Congress by the Constitution."154 In
deference to the foregoing submissions, the Court reached the following
main conclusions: one, under the Constitution, the power of appropriation, or
the "power of the purse," belongs to Congress; two, the power of
appropriation carries with it the power to specify the project or activity to be
funded under the appropriation law and it can be detailed and as broad as
Congress wants it to be; and, three, the proposals and identifications made
by Members of Congress are merely recommendatory. At once, it is
apparent that the Philconsa resolution was a limited response to a
separation of powers problem, specifically on the propriety of conferring
post-enactment identification authority to Members of Congress. On the
contrary, the present cases call for a more holistic examination of (a) the
inter-relation between the CDF and PDAF Articles with each other, formative
as they are of the entire "Pork Barrel System" as well as (b) the intra-relation
of post-enactment measures contained within a particular CDF or PDAF
Article, including not only those related to the area of project identification
but also to the areas of fund release and realignment. The complexity of the
issues and the broader legal analyses herein warranted may be, therefore,
considered as a powerful countervailing reason against a wholesale
application of the stare decisis principle.
In addition, the Court observes that the Philconsa ruling was actually riddled
with inherent constitutional inconsistencies which similarly countervail
against a full resort to stare decisis. As may be deduced from the main
conclusions of the case, Philconsa‘s fundamental premise in allowing
Members of Congress to propose and identify of projects would be that the
said identification authority is but an aspect of the power of appropriation
which has been constitutionally lodged in Congress. From this premise, the
contradictions may be easily seen. If the authority to identify projects is an
aspect of appropriation and the power of appropriation is a form of legislative
power thereby lodged in Congress, then it follows that: (a) it is Congress
which should exercise such authority, and not its individual Members; (b)
such authority must be exercised within the prescribed procedure of law
passage and, hence, should not be exercised after the GAA has already
been passed; and (c) such authority, as embodied in the GAA, has the force
of law and, hence, cannot be merely recommendatory. Justice Vitug‘s
Concurring Opinion in the same case sums up the Philconsa quandary in
this wise: "Neither would it be objectionable for Congress, by law, to
appropriate funds for such specific projects as it may be minded; to give that
authority, however, to the individual members of Congress in whatever
guise, I am afraid, would be constitutionally impermissible." As the Court
now largely benefits from hindsight and current findings on the matter,
among others, the CoA Report, the Court must partially abandon its previous
ruling in Philconsa insofar as it validated the post-enactment identification
authority of Members of Congress on the guise that the same was merely
recommendatory. This postulate raises serious constitutional inconsistencies
which cannot be simply excused on the ground that such mechanism is
"imaginative as it is innovative." Moreover, it must be pointed out that the
recent case of Abakada Guro Party List v. Purisima155(Abakada) has
effectively overturned Philconsa‘s allowance of post-enactment legislator
participation in view of the separation of powers principle. These
constitutional inconsistencies and the Abakada rule will be discussed in
greater detail in the ensuing section of this Decision.
As for LAMP, suffice it to restate that the said case was dismissed on a
procedural technicality and, hence, has not set any controlling doctrine
susceptible of current application to the substantive issues in these cases. In
fine, stare decisis would not apply.
II. Substantive Issues.
A. Definition of Terms.
Before the Court proceeds to resolve the substantive issues of these cases,
it must first define the terms "Pork Barrel System," "Congressional Pork
Barrel," and "Presidential Pork Barrel" as they are essential to the ensuing
discourse.
Petitioners define the term "Pork Barrel System" as the "collusion between
the Legislative and Executive branches of government to accumulate lump-
sum public funds in their offices with unchecked discretionary powers to
determine its distribution as political largesse."156 They assert that the
following elements make up the Pork Barrel System: (a) lump-sum funds are
allocated through the appropriations process to an individual officer; (b) the
officer is given sole and broad discretion in determining how the funds will
be used or expended; (c) the guidelines on how to spend or use the funds in
the appropriation are either vague, overbroad or inexistent; and (d) projects
funded are intended to benefit a definite constituency in a particular part of
the country and to help the political careers of the disbursing official by
yielding rich patronage benefits.157 They further state that the Pork Barrel
System is comprised of two (2) kinds of discretionary public funds: first, the
Congressional (or Legislative) Pork Barrel, currently known as the
PDAF;158 and, second, the Presidential (or Executive) Pork Barrel,
specifically, the Malampaya Funds under PD 910 and the Presidential Social
Fund under PD 1869, as amended by PD 1993.159
Considering petitioners‘ submission and in reference to its local concept and
legal history, the Court defines the Pork Barrel System as the collective body
of rules and practices that govern the manner by which lump-sum,
discretionary funds, primarily intended for local projects, are utilized through
the respective participations of the Legislative and Executive branches of
government, including its members. The Pork Barrel System involves two (2)
kinds of lump-sum discretionary funds:
First, there is the Congressional Pork Barrel which is herein defined as a
kind of lump-sum, discretionary fund wherein legislators, either individually
or collectively organized into committees, are able to effectively control
certain aspects of the fund’s utilization through various post-enactment
measures and/or practices. In particular, petitioners consider the PDAF, as it
appears under the 2013 GAA, as Congressional Pork Barrel since it is, inter
alia, a post-enactment measure that allows individual legislators to wield a
collective power;160 and
Second, there is the Presidential Pork Barrel which is herein defined as a
kind of lump-sum, discretionary fund which allows the President to
determine the manner of its utilization. For reasons earlier stated,161 the
Court shall delimit the use of such term to refer only to the Malampaya
Funds and the Presidential Social Fund.
With these definitions in mind, the Court shall now proceed to discuss the
substantive issues of these cases.
B. Substantive Issues on the Congressional Pork Barrel.
1. Separation of Powers.
a. Statement of Principle.
The principle of separation of powers refers to the constitutional demarcation
of the three fundamental powers of government. In the celebrated words of
Justice Laurel in Angara v. Electoral Commission,162 it means that the
"Constitution has blocked out with deft strokes and in bold lines, allotment of
power to the executive, the legislative and the judicial departments of the
government."163 To the legislative branch of government, through
Congress,164belongs the power to make laws; to the executive branch of
government, through the President,165 belongs the power to enforce laws;
and to the judicial branch of government, through the Court,166 belongs the
power to interpret laws. Because the three great powers have been, by
constitutional design, ordained in this respect, "each department of the
government has exclusive cognizance of matters within its jurisdiction, and
is supreme within its own sphere."167 Thus, "the legislature has no authority
to execute or construe the law, the executive has no authority to make or
construe the law, and the judiciary has no power to make or execute the
law."168 The principle of separation of powers and its concepts of autonomy
and independence stem from the notion that the powers of government must
be divided to avoid concentration of these powers in any one branch; the
division, it is hoped, would avoid any single branch from lording its power
over the other branches or the citizenry.169 To achieve this purpose, the
divided power must be wielded by co-equal branches of government that are
equally capable of independent action in exercising their respective
mandates. Lack of independence would result in the inability of one branch
of government to check the arbitrary or self-interest assertions of another or
others.170
Broadly speaking, there is a violation of the separation of powers principle
when one branch of government unduly encroaches on the domain of
another. US Supreme Court decisions instruct that the principle of
separation of powers may be violated in two (2) ways: firstly, "one branch
may interfere impermissibly with the other’s performance of its
constitutionally assigned function";171 and "alternatively, the doctrine may be
violated when one branch assumes a function that more properly is
entrusted to another."172 In other words, there is a violation of the principle
when there is impermissible (a) interference with and/or (b) assumption of
another department‘s functions.
The enforcement of the national budget, as primarily contained in the GAA,
is indisputably a function both constitutionally assigned and properly
entrusted to the Executive branch of government. In Guingona, Jr. v. Hon.
Carague173 (Guingona, Jr.), the Court explained that the phase of budget
execution "covers the various operational aspects of budgeting" and
accordingly includes "the evaluation of work and financial plans for individual
activities," the "regulation and release of funds" as well as all "other related
activities" that comprise the budget execution cycle.174 This is rooted in the
principle that the allocation of power in the three principal branches of
government is a grant of all powers inherent in them.175 Thus, unless the
Constitution provides otherwise, the Executive department should
exclusively exercise all roles and prerogatives which go into the
implementation of the national budget as provided under the GAA as well as
any other appropriation law.
In view of the foregoing, the Legislative branch of government, much more
any of its members, should not cross over the field of implementing the
national budget since, as earlier stated, the same is properly the domain of
the Executive. Again, in Guingona, Jr., the Court stated that "Congress
enters the picture when it deliberates or acts on the budget proposals of the
President. Thereafter, Congress, "in the exercise of its own judgment and
wisdom, formulates an appropriation act precisely following the process
established by the Constitution, which specifies that no money may be paid
from the Treasury except in accordance with an appropriation made by law."
Upon approval and passage of the GAA, Congress‘ law -making role
necessarily comes to an end and from there the Executive‘s role of
implementing the national budget begins. So as not to blur the constitutional
boundaries between them, Congress must "not concern it self with details
for implementation by the Executive."176
The foregoing cardinal postulates were definitively enunciated in Abakada
where the Court held that "from the moment the law becomes effective, any
provision of law that empowers Congress or any of its members to play any
role in the implementation or enforcement of the law violates the principle of
separation of powers and is thus unconstitutional."177 It must be clarified,
however, that since the restriction only pertains to "any role in the
implementation or enforcement of the law," Congress may still exercise its
oversight function which is a mechanism of checks and balances that the
Constitution itself allows. But it must be made clear that Congress‘ role must
be confined to mere oversight. Any post-enactment-measure allowing
legislator participation beyond oversight is bereft of any constitutional basis
and hence, tantamount to impermissible interference and/or assumption of
executive functions. As the Court ruled in Abakada:178
Any post-enactment congressional measure x x x should be limited to
scrutiny and investigation.1âwphi1 In particular, congressional oversight
must be confined to the following:
(1) scrutiny based primarily on Congress‘ power of appropriation
and the budget hearings conducted in connection with it, its power
to ask heads of departments to appear before and be heard by
either of its Houses on any matter pertaining to their departments
and its power of confirmation; and
(2) investigation and monitoring of the implementation of laws
pursuant to the power of Congress to conduct inquiries in aid of
legislation.
Any action or step beyond that will undermine the separation of powers
guaranteed by the Constitution. (Emphases supplied)
b. Application.
In these cases, petitioners submit that the Congressional Pork Barrel –
among others, the 2013 PDAF Article – "wrecks the assignment of
responsibilities between the political branches" as it is designed to allow
individual legislators to interfere "way past the time it should have ceased"
or, particularly, "after the GAA is passed."179 They state that the findings and
recommendations in the CoA Report provide "an illustration of how absolute
and definitive the power of legislators wield over project implementation in
complete violation of the constitutional principle of separation of
powers."180 Further, they point out that the Court in the Philconsa case only
allowed the CDF to exist on the condition that individual legislators limited
their role to recommending projects and not if they actually dictate their
implementation.181
For their part, respondents counter that the separations of powers principle
has not been violated since the President maintains "ultimate authority to
control the execution of the GAA‖ and that he "retains the final discretion to
reject" the legislators‘ proposals.182 They maintain that the Court, in
Philconsa, "upheld the constitutionality of the power of members of
Congress to propose and identify projects so long as such proposal and
identification are recommendatory."183 As such, they claim that "everything in
the Special Provisions [of the 2013 PDAF Article follows the Philconsa
framework, and hence, remains constitutional."184
The Court rules in favor of petitioners.
As may be observed from its legal history, the defining feature of all forms of
Congressional Pork Barrel would be the authority of legislators to participate
in the post-enactment phases of project implementation.
At its core, legislators – may it be through project lists,185 prior
consultations186 or program menus187 – have been consistently accorded
post-enactment authority to identify the projects they desire to be funded
through various Congressional Pork Barrel allocations. Under the 2013
PDAF Article, the statutory authority of legislators to identify projects post-
GAA may be construed from the import of Special Provisions 1 to 3 as well
as the second paragraph of Special Provision 4. To elucidate, Special
Provision 1 embodies the program menu feature which, as evinced from
past PDAF Articles, allows individual legislators to identify PDAF projects for
as long as the identified project falls under a general program listed in the
said menu. Relatedly, Special Provision 2 provides that the implementing
agencies shall, within 90 days from the GAA is passed, submit to Congress
a more detailed priority list, standard or design prepared and submitted by
implementing agencies from which the legislator may make his choice. The
same provision further authorizes legislators to identify PDAF projects
outside his district for as long as the representative of the district concerned
concurs in writing. Meanwhile, Special Provision 3 clarifies that PDAF
projects refer to "projects to be identified by legislators"188 and thereunder
provides the allocation limit for the total amount of projects identified by each
legislator. Finally, paragraph 2 of Special Provision 4 requires that any
modification and revision of the project identification "shall be submitted to
the House Committee on Appropriations and the Senate Committee on
Finance for favorable endorsement to the DBM or the implementing agency,
as the case may be." From the foregoing special provisions, it cannot be
seriously doubted that legislators have been accorded post-enactment
authority to identify PDAF projects.
Aside from the area of project identification, legislators have also been
accorded post-enactment authority in the areas of fund release and
realignment. Under the 2013 PDAF Article, the statutory authority of
legislators to participate in the area of fund release through congressional
committees is contained in Special Provision 5 which explicitly states that
"all request for release of funds shall be supported by the documents
prescribed under Special Provision No. 1 and favorably endorsed by House
Committee on Appropriations and the Senate Committee on Finance, as the
case may be"; while their statutory authority to participate in the area of fund
realignment is contained in: first , paragraph 2, Special Provision 4189 which
explicitly state s, among others, that "any realignment of funds shall be
submitted to the House Committee on Appropriations and the Senate
Committee on Finance for favorable endorsement to the DBM or the
implementing agency, as the case may be‖ ; and, second , paragraph 1,
also of Special Provision 4 which authorizes the "Secretaries of Agriculture,
Education, Energy, Interior and Local Government, Labor and Employment,
Public Works and Highways, Social Welfare and Development and Trade
and Industry190 x x x to approve realignment from one project/scope to
another within the allotment received from this Fund, subject to among
others (iii) the request is with the concurrence of the legislator concerned."
Clearly, these post-enactment measures which govern the areas of project
identification, fund release and fund realignment are not related to functions
of congressional oversight and, hence, allow legislators to intervene and/or
assume duties that properly belong to the sphere of budget execution.
Indeed, by virtue of the foregoing, legislators have been, in one form or
another, authorized to participate in – as Guingona, Jr. puts it – "the various
operational aspects of budgeting," including "the evaluation of work and
financial plans for individual activities" and the "regulation and release of
funds" in violation of the separation of powers principle. The fundamental
rule, as categorically articulated in Abakada, cannot be overstated – from
the moment the law becomes effective, any provision of law that empowers
Congress or any of its members to play any role in the implementation or
enforcement of the law violates the principle of separation of powers and is
thus unconstitutional.191 That the said authority is treated as merely
recommendatory in nature does not alter its unconstitutional tenor since the
prohibition, to repeat, covers any role in the implementation or enforcement
of the law. Towards this end, the Court must therefore abandon its ruling in
Philconsa which sanctioned the conduct of legislator identification on the
guise that the same is merely recommendatory and, as such, respondents‘
reliance on the same falters altogether.
Besides, it must be pointed out that respondents have nonetheless failed to
substantiate their position that the identification authority of legislators is only
of recommendatory import. Quite the contrary, respondents – through the
statements of the Solicitor General during the Oral Arguments – have
admitted that the identification of the legislator constitutes a mandatory
requirement before his PDAF can be tapped as a funding source, thereby
highlighting the indispensability of the said act to the entire budget execution
process:192
Justice Bernabe: Now, without the individual legislator’s identification of the
project, can the PDAF of the legislator be utilized?
Solicitor General Jardeleza: No, Your Honor.
Justice Bernabe: It cannot?
Solicitor General Jardeleza: It cannot… (interrupted)
Justice Bernabe: So meaning you should have the identification of the
project by the individual legislator?
Solicitor General Jardeleza: Yes, Your Honor.
xxxx
Justice Bernabe: In short, the act of identification is mandatory?
Solictor General Jardeleza: Yes, Your Honor. In the sense that if it is not
done and then there is no identification.
xxxx
Justice Bernabe: Now, would you know of specific instances when a project
was implemented without the identification by the individual legislator?
Solicitor General Jardeleza: I do not know, Your Honor; I do not think so but
I have no specific examples. I would doubt very much, Your Honor, because
to implement, there is a need for a SARO and the NCA. And the SARO and
the NCA are triggered by an identification from the legislator.
xxxx
Solictor General Jardeleza: What we mean by mandatory, Your Honor, is we
were replying to a question, "How can a legislator make sure that he is able
to get PDAF Funds?" It is mandatory in the sense that he must identify, in
that sense, Your Honor. Otherwise, if he does not identify, he cannot avail of
the PDAF Funds and his district would not be able to have PDAF Funds,
only in that sense, Your Honor. (Emphases supplied)
Thus, for all the foregoing reasons, the Court hereby declares the 2013
PDAF Article as well as all other provisions of law which similarly allow
legislators to wield any form of post-enactment authority in the
implementation or enforcement of the budget, unrelated to congressional
oversight, as violative of the separation of powers principle and thus
unconstitutional. Corollary thereto, informal practices, through which
legislators have effectively intruded into the proper phases of budget
execution, must be deemed as acts of grave abuse of discretion amounting
to lack or excess of jurisdiction and, hence, accorded the same
unconstitutional treatment. That such informal practices do exist and have,
in fact, been constantly observed throughout the years has not been
substantially disputed here. As pointed out by Chief Justice Maria Lourdes
P.A. Sereno (Chief Justice Sereno) during the Oral Arguments of these
cases:193
Chief Justice Sereno:
Now, from the responses of the representative of both, the DBM and two (2)
Houses of Congress, if we enforces the initial thought that I have, after I had
seen the extent of this research made by my staff, that neither the Executive
nor Congress frontally faced the question of constitutional compatibility of
how they were engineering the budget process. In fact, the words you have
been using, as the three lawyers of the DBM, and both Houses of Congress
has also been using is surprise; surprised that all of these things are now
surfacing. In fact, I thought that what the 2013 PDAF provisions did was to
codify in one section all the past practice that had been done since 1991. In
a certain sense, we should be thankful that they are all now in the PDAF
Special Provisions. x x x (Emphasis and underscoring supplied)
Ultimately, legislators cannot exercise powers which they do not have,
whether through formal measures written into the law or informal practices
institutionalized in government agencies, else the Executive department be
deprived of what the Constitution has vested as its own.
2. Non-delegability of Legislative Power.
a. Statement of Principle.
As an adjunct to the separation of powers principle,194 legislative power shall
be exclusively exercised by the body to which the Constitution has conferred
the same. In particular, Section 1, Article VI of the 1987 Constitution states
that such power shall be vested in the Congress of the Philippines which
shall consist of a Senate and a House of Representatives, except to the
extent reserved to the people by the provision on initiative and
referendum.195 Based on this provision, it is clear that only Congress, acting
as a bicameral body, and the people, through the process of initiative and
referendum, may constitutionally wield legislative power and no other. This
premise embodies the principle of non-delegability of legislative power, and
the only recognized exceptions thereto would be: (a) delegated legislative
power to local governments which, by immemorial practice, are allowed to
legislate on purely local matters;196 and (b) constitutionally-grafted
exceptions such as the authority of the President to, by law, exercise powers
necessary and proper to carry out a declared national policy in times of war
or other national emergency,197or fix within specified limits, and subject to
such limitations and restrictions as Congress may impose, tariff rates, import
and export quotas, tonnage and wharfage dues, and other duties or imposts
within the framework of the national development program of the
Government.198
Notably, the principle of non-delegability should not be confused as a
restriction to delegate rule-making authority to implementing agencies for the
limited purpose of either filling up the details of the law for its enforcement
(supplementary rule-making) or ascertaining facts to bring the law into actual
operation (contingent rule-making).199The conceptual treatment and
limitations of delegated rule-making were explained in the case of People v.
Maceren200 as follows:
The grant of the rule-making power to administrative agencies is a relaxation
of the principle of separation of powers and is an exception to the
nondelegation of legislative powers. Administrative regulations or
"subordinate legislation" calculated to promote the public interest are
necessary because of "the growing complexity of modern life, the
multiplication of the subjects of governmental regulations, and the increased
difficulty of administering the law."
xxxx
Nevertheless, it must be emphasized that the rule-making power must be
confined to details for regulating the mode or proceeding to carry into effect
the law as it has been enacted. The power cannot be extended to amending
or expanding the statutory requirements or to embrace matters not covered
by the statute. Rules that subvert the statute cannot be sanctioned.
(Emphases supplied)
b. Application.
In the cases at bar, the Court observes that the 2013 PDAF Article, insofar
as it confers post-enactment identification authority to individual legislators,
violates the principle of non-delegability since said legislators are effectively
allowed to individually exercise the power of appropriation, which – as
settled in Philconsa – is lodged in Congress.201 That the power to
appropriate must be exercised only through legislation is clear from Section
29(1), Article VI of the 1987 Constitution which states that: "No money shall
be paid out of the Treasury except in pursuance of an appropriation made by
law." To understand what constitutes an act of appropriation, the Court, in
Bengzon v. Secretary of Justice and Insular Auditor202 (Bengzon), held that
the power of appropriation involves (a) the setting apart by law of a certain
sum from the public revenue for (b) a specified purpose. Essentially, under
the 2013 PDAF Article, individual legislators are given a personal lump-sum
fund from which they are able to dictate (a) how much from such fund would
go to (b) a specific project or beneficiary that they themselves also
determine. As these two (2) acts comprise the exercise of the power of
appropriation as described in Bengzon, and given that the 2013 PDAF
Article authorizes individual legislators to perform the same, undoubtedly,
said legislators have been conferred the power to legislate which the
Constitution does not, however, allow. Thus, keeping with the principle of
non-delegability of legislative power, the Court hereby declares the 2013
PDAF Article, as well as all other forms of Congressional Pork Barrel which
contain the similar legislative identification feature as herein discussed, as
unconstitutional.
3. Checks and Balances.
a. Statement of Principle; Item-Veto Power.
The fact that the three great powers of government are intended to be kept
separate and distinct does not mean that they are absolutely unrestrained
and independent of each other. The Constitution has also provided for an
elaborate system of checks and balances to secure coordination in the
workings of the various departments of the government.203
A prime example of a constitutional check and balance would be the
President’s power to veto an item written into an appropriation, revenue or
tariff bill submitted to him by Congress for approval through a process
known as "bill presentment." The President‘s item-veto power is found in
Section 27(2), Article VI of the 1987 Constitution which reads as follows:
Sec. 27. x x x.
xxxx
(2) The President shall have the power to veto any particular item or items in
an appropriation, revenue, or tariff bill, but the veto shall not affect the item
or items to which he does not object.
The presentment of appropriation, revenue or tariff bills to the President,
wherein he may exercise his power of item-veto, forms part of the "single,
finely wrought and exhaustively considered, procedures" for law-passage as
specified under the Constitution.204 As stated in Abakada, the final step in
the law-making process is the "submission of the bill to the President for
approval. Once approved, it takes effect as law after the required
publication."205
Elaborating on the President‘s item-veto power and its relevance as a check
on the legislature, the Court, in Bengzon, explained that:206
The former Organic Act and the present Constitution of the Philippines make
the Chief Executive an integral part of the law-making power. His
disapproval of a bill, commonly known as a veto, is essentially a legislative
act. The questions presented to the mind of the Chief Executive are
precisely the same as those the legislature must determine in passing a bill,
except that his will be a broader point of view.
The Constitution is a limitation upon the power of the legislative department
of the government, but in this respect it is a grant of power to the executive
department. The Legislature has the affirmative power to enact laws; the
Chief Executive has the negative power by the constitutional exercise of
which he may defeat the will of the Legislature. It follows that the Chief
Executive must find his authority in the Constitution. But in exercising that
authority he may not be confined to rules of strict construction or hampered
by the unwise interference of the judiciary. The courts will indulge every
intendment in favor of the constitutionality of a veto in the same manner as
they will presume the constitutionality of an act as originally passed by the
Legislature. (Emphases supplied)
The justification for the President‘s item-veto power rests on a variety of
policy goals such as to prevent log-rolling legislation,207 impose fiscal
restrictions on the legislature, as well as to fortify the executive branch‘s role
in the budgetary process.208 In Immigration and Naturalization Service v.
Chadha, the US Supreme Court characterized the President‘s item-power as
"a salutary check upon the legislative body, calculated to guard the
community against the effects of factions, precipitancy, or of any impulse
unfriendly to the public good, which may happen to influence a majority of
that body"; phrased differently, it is meant to "increase the chances in favor
of the community against the passing of bad laws, through haste,
inadvertence, or design."209
For the President to exercise his item-veto power, it necessarily follows that
there exists a proper "item" which may be the object of the veto. An item, as
defined in the field of appropriations, pertains to "the particulars, the details,
the distinct and severable parts of the appropriation or of the bill." In the
case of Bengzon v. Secretary of Justice of the Philippine Islands,210 the US
Supreme Court characterized an item of appropriation as follows:
An item of an appropriation bill obviously means an item which, in itself, is a
specific appropriation of money, not some general provision of law which
happens to be put into an appropriation bill. (Emphases supplied)
On this premise, it may be concluded that an appropriation bill, to ensure
that the President may be able to exercise his power of item veto, must
contain "specific appropriations of money" and not only "general provisions"
which provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an
item characterized by singular correspondence – meaning an allocation of a
specified singular amount for a specified singular purpose, otherwise known
as a "line-item."211 This treatment not only allows the item to be consistent
with its definition as a "specific appropriation of money" but also ensures that
the President may discernibly veto the same. Based on the foregoing
formulation, the existing Calamity Fund, Contingent Fund and the
Intelligence Fund, being appropriations which state a specified amount for a
specific purpose, would then be considered as "line- item" appropriations
which are rightfully subject to item veto. Likewise, it must be observed that
an appropriation may be validly apportioned into component percentages or
values; however, it is crucial that each percentage or value must be
allocated for its own corresponding purpose for such component to be
considered as a proper line-item. Moreover, as Justice Carpio correctly
pointed out, a valid appropriation may even have several related purposes
that are by accounting and budgeting practice considered as one purpose,
e.g., MOOE (maintenance and other operating expenses), in which case the
related purposes shall be deemed sufficiently specific for the exercise of the
President‘s item veto power. Finally, special purpose funds and discretionary
funds would equally square with the constitutional mechanism of item-veto
for as long as they follow the rule on singular correspondence as herein
discussed. Anent special purpose funds, it must be added that Section
25(4), Article VI of the 1987 Constitution requires that the "special
appropriations bill shall specify the purpose for which it is intended, and shall
be supported by funds actually available as certified by the National
Treasurer, or t o be raised by a corresponding revenue proposal therein."
Meanwhile, with respect to discretionary funds, Section 2 5(6), Article VI of
the 1987 Constitution requires that said funds "shall be disbursed only for
public purposes to be supported by appropriate vouchers and subject to
such guidelines as may be prescribed by law."
In contrast, what beckons constitutional infirmity are appropriations which
merely provide for a singular lump-sum amount to be tapped as a source of
funding for multiple purposes. Since such appropriation type necessitates
the further determination of both the actual amount to be expended and the
actual purpose of the appropriation which must still be chosen from the
multiple purposes stated in the law, it cannot be said that the appropriation
law already indicates a "specific appropriation of money‖ and hence, without
a proper line-item which the President may veto. As a practical result, the
President would then be faced with the predicament of either vetoing the
entire appropriation if he finds some of its purposes wasteful or undesirable,
or approving the entire appropriation so as not to hinder some of its
legitimate purposes. Finally, it may not be amiss to state that such
arrangement also raises non-delegability issues considering that the
implementing authority would still have to determine, again, both the actual
amount to be expended and the actual purpose of the appropriation. Since
the foregoing determinations constitute the integral aspects of the power to
appropriate, the implementing authority would, in effect, be exercising
legislative prerogatives in violation of the principle of non-delegability.
b. Application.
In these cases, petitioners claim that "in the current x x x system where the
PDAF is a lump-sum appropriation, the legislator‘s identification of the
projects after the passage of the GAA denies the President the chance to
veto that item later on."212 Accordingly, they submit that the "item veto power
of the President mandates that appropriations bills adopt line-item
budgeting" and that "Congress cannot choose a mode of budgeting which
effectively renders the constitutionally-given power of the President
useless."213
On the other hand, respondents maintain that the text of the Constitution
envisions a process which is intended to meet the demands of a
modernizing economy and, as such, lump-sum appropriations are essential
to financially address situations which are barely foreseen when a GAA is
enacted. They argue that the decision of the Congress to create some lump-
sum appropriations is constitutionally allowed and textually-grounded.214
The Court agrees with petitioners.
Under the 2013 PDAF Article, the amount of ₱24.79 Billion only appears as
a collective allocation limit since the said amount would be further divided
among individual legislators who would then receive personal lump-sum
allocations and could, after the GAA is passed, effectively appropriate PDAF
funds based on their own discretion. As these intermediate appropriations
are made by legislators only after the GAA is passed and hence, outside of
the law, it necessarily means that the actual items of PDAF appropriation
would not have been written into the General Appropriations Bill and thus
effectuated without veto consideration. This kind of lump-sum/post-
enactment legislative identification budgeting system fosters the creation of
a budget within a budget" which subverts the prescribed procedure of
presentment and consequently impairs the President‘s power of item veto.
As petitioners aptly point out, the above-described system forces the
President to decide between (a) accepting the entire ₱24.79 Billion PDAF
allocation without knowing the specific projects of the legislators, which may
or may not be consistent with his national agenda and (b) rejecting the
whole PDAF to the detriment of all other legislators with legitimate
projects.215
Moreover, even without its post-enactment legislative identification feature,
the 2013 PDAF Article would remain constitutionally flawed since it would
then operate as a prohibited form of lump-sum appropriation above-
characterized. In particular, the lump-sum amount of ₱24.79 Billion would
be treated as a mere funding source allotted for multiple purposes of
spending, i.e., scholarships, medical missions, assistance to indigents,
preservation of historical materials, construction of roads, flood control, etc.
This setup connotes that the appropriation law leaves the actual amounts
and purposes of the appropriation for further determination and, therefore,
does not readily indicate a discernible item which may be subject to the
President‘s power of item veto.
In fact, on the accountability side, the same lump-sum budgeting scheme
has, as the CoA Chairperson relays, "limited state auditors from obtaining
relevant data and information that would aid in more stringently auditing the
utilization of said Funds."216 Accordingly, she recommends the adoption of a
"line by line budget or amount per proposed program, activity or project, and
per implementing agency."217
Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF
Article, as well as all Congressional Pork Barrel Laws of similar operation, to
be unconstitutional. That such budgeting system provides for a greater
degree of flexibility to account for future contingencies cannot be an excuse
to defeat what the Constitution requires. Clearly, the first and essential truth
of the matter is that unconstitutional means do not justify even
commendable ends.218
c. Accountability.
Petitioners further relate that the system under which various forms of
Congressional Pork Barrel operate defies public accountability as it renders
Congress incapable of checking itself or its Members. In particular, they
point out that the Congressional Pork Barrel "gives each legislator a direct,
financial interest in the smooth, speedy passing of the yearly budget" which
turns them "from fiscalizers" into "financially-interested partners."219 They
also claim that the system has an effect on re- election as "the PDAF excels
in self-perpetuation of elective officials." Finally, they add that the "PDAF
impairs the power of impeachment" as such "funds are indeed quite useful,
‘to well, accelerate the decisions of senators.‘"220
The Court agrees in part.
The aphorism forged under Section 1, Article XI of the 1987 Constitution,
which states that "public office is a public trust," is an overarching reminder
that every instrumentality of government should exercise their official
functions only in accordance with the principles of the Constitution which
embodies the parameters of the people‘s trust. The notion of a public trust
connotes accountability,221 hence, the various mechanisms in the
Constitution which are designed to exact accountability from public officers.
Among others, an accountability mechanism with which the proper
expenditure of public funds may be checked is the power of congressional
oversight. As mentioned in Abakada,222 congressional oversight may be
performed either through: (a) scrutiny based primarily on Congress‘ power of
appropriation and the budget hearings conducted in connection with it, its
power to ask heads of departments to appear before and be heard by either
of its Houses on any matter pertaining to their departments and its power of
confirmation;223 or (b) investigation and monitoring of the implementation of
laws pursuant to the power of Congress to conduct inquiries in aid of
legislation.224
The Court agrees with petitioners that certain features embedded in some
forms of Congressional Pork Barrel, among others the 2013 PDAF Article,
has an effect on congressional oversight. The fact that individual legislators
are given post-enactment roles in the implementation of the budget makes it
difficult for them to become disinterested "observers" when scrutinizing,
investigating or monitoring the implementation of the appropriation law. To a
certain extent, the conduct of oversight would be tainted as said legislators,
who are vested with post-enactment authority, would, in effect, be checking
on activities in which they themselves participate. Also, it must be pointed
out that this very same concept of post-enactment authorization runs afoul of
Section 14, Article VI of the 1987 Constitution which provides that:
Sec. 14. No Senator or Member of the House of Representatives may
personally appear as counsel before any court of justice or before the
Electoral Tribunals, or quasi-judicial and other administrative bodies. Neither
shall he, directly or indirectly, be interested financially in any contract with, or
in any franchise or special privilege granted by the Government, or any
subdivision, agency, or instrumentality thereof, including any government-
owned or controlled corporation, or its subsidiary, during his term of office.
He shall not intervene in any matter before any office of the Government for
his pecuniary benefit or where he may be called upon to act on account of
his office. (Emphasis supplied)
Clearly, allowing legislators to intervene in the various phases of project
implementation – a matter before another office of government – renders
them susceptible to taking undue advantage of their own office.
The Court, however, cannot completely agree that the same post-enactment
authority and/or the individual legislator‘s control of his PDAF per se would
allow him to perpetuate himself in office. Indeed, while the Congressional
Pork Barrel and a legislator‘s use thereof may be linked to this area of
interest, the use of his PDAF for re-election purposes is a matter which must
be analyzed based on particular facts and on a case-to-case basis.
Finally, while the Court accounts for the possibility that the close operational
proximity between legislators and the Executive department, through the
former‘s post-enactment participation, may affect the process of
impeachment, this matter largely borders on the domain of politics and does
not strictly concern the Pork Barrel System‘s intrinsic constitutionality. As
such, it is an improper subject of judicial assessment.
In sum, insofar as its post-enactment features dilute congressional oversight
and violate Section 14, Article VI of the 1987 Constitution, thus impairing
public accountability, the 2013 PDAF Article and other forms of
Congressional Pork Barrel of similar nature are deemed as unconstitutional.
4. Political Dynasties.
One of the petitioners submits that the Pork Barrel System enables
politicians who are members of political dynasties to accumulate funds to
perpetuate themselves in power, in contravention of Section 26, Article II of
the 1987 Constitution225 which states that:
Sec. 26. The State shall guarantee equal access to opportunities for public
service, and prohibit political dynasties as may be defined by law. (Emphasis
and underscoring supplied)
At the outset, suffice it to state that the foregoing provision is considered as
not self-executing due to the qualifying phrase "as may be defined by law."
In this respect, said provision does not, by and of itself, provide a judicially
enforceable constitutional right but merely specifies guideline for legislative
or executive action.226 Therefore, since there appears to be no standing law
which crystallizes the policy on political dynasties for enforcement, the Court
must defer from ruling on this issue.
In any event, the Court finds the above-stated argument on this score to be
largely speculative since it has not been properly demonstrated how the
Pork Barrel System would be able to propagate political dynasties.
5. Local Autonomy.
The State‘s policy on local autonomy is principally stated in Section 25,
Article II and Sections 2 and 3, Article X of the 1987 Constitution which read
as follows:
ARTICLE II
Sec. 25. The State shall ensure the autonomy of local governments.
ARTICLE X
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
Sec. 3. The Congress shall enact a local government code which shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization with effective mechanisms of
recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide
for the qualifications, election, appointment and removal, term, salaries,
powers and functions and duties of local officials, and all other matters
relating to the organization and operation of the local units.
Pursuant thereto, Congress enacted RA 7160,227 otherwise known as the
"Local Government Code of 1991" (LGC), wherein the policy on local
autonomy had been more specifically explicated as follows:
Sec. 2. Declaration of Policy. – (a) It is hereby declared the policy of the
State that the territorial and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective
partners in the attainment of national goals. Toward this end, the State shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government
units shall be given more powers, authority, responsibilities, and resources.
The process of decentralization shall proceed from the National Government
to the local government units.
xxxx
(c) It is likewise the policy of the State to require all national agencies and
offices to conduct periodic consultations with appropriate local government
units, nongovernmental and people‘s organizations, and other concerned
sectors of the community before any project or program is implemented in
their respective jurisdictions. (Emphases and underscoring supplied)
The above-quoted provisions of the Constitution and the LGC reveal the
policy of the State to empower local government units (LGUs) to develop
and ultimately, become self-sustaining and effective contributors to the
national economy. As explained by the Court in Philippine Gamefowl
Commission v. Intermediate Appellate Court:228
This is as good an occasion as any to stress the commitment of the
Constitution to the policy of local autonomy which is intended to provide the
needed impetus and encouragement to the development of our local political
subdivisions as "self - reliant communities." In the words of Jefferson,
"Municipal corporations are the small republics from which the great one
derives its strength." The vitalization of local governments will enable their
inhabitants to fully exploit their resources and more important, imbue them
with a deepened sense of involvement in public affairs as members of the
body politic. This objective could be blunted by undue interference by the
national government in purely local affairs which are best resolved by the
officials and inhabitants of such political units. The decision we reach today
conforms not only to the letter of the pertinent laws but also to the spirit of
the Constitution.229 (Emphases and underscoring supplied)
In the cases at bar, petitioners contend that the Congressional Pork Barrel
goes against the constitutional principles on local autonomy since it allows
district representatives, who are national officers, to substitute their
judgments in utilizing public funds for local development.230 The Court
agrees with petitioners.
Philconsa described the 1994 CDF as an attempt "to make equal the
unequal" and that "it is also a recognition that individual members of
Congress, far more than the President and their congressional colleagues,
are likely to be knowledgeable about the needs of their respective
constituents and the priority to be given each project."231 Drawing strength
from this pronouncement, previous legislators justified its existence by
stating that "the relatively small projects implemented under the
Congressional Pork Barrel complement and link the national development
goals to the countryside and grassroots as well as to depressed areas which
are overlooked by central agencies which are preoccupied with mega-
projects.232 Similarly, in his August 23, 2013 speech on the "abolition" of
PDAF and budgetary reforms, President Aquino mentioned that the
Congressional Pork Barrel was originally established for a worthy goal,
which is to enable the representatives to identify projects for communities
that the LGU concerned cannot afford.233
Notwithstanding these declarations, the Court, however, finds an inherent
defect in the system which actually belies the avowed intention of "making
equal the unequal." In particular, the Court observes that the gauge of PDAF
and CDF allocation/division is based solely on the fact of office, without
taking into account the specific interests and peculiarities of the district the
legislator represents. In this regard, the allocation/division limits are clearly
not based on genuine parameters of equality, wherein economic or
geographic indicators have been taken into consideration. As a result, a
district representative of a highly-urbanized metropolis gets the same
amount of funding as a district representative of a far-flung rural province
which would be relatively "underdeveloped" compared to the former. To add,
what rouses graver scrutiny is that even Senators and Party-List
Representatives – and in some years, even the Vice-President – who do not
represent any locality, receive funding from the Congressional Pork Barrel
as well. These certainly are anathema to the Congressional Pork Barrel‘s
original intent which is "to make equal the unequal." Ultimately, the PDAF
and CDF had become personal funds under the effective control of each
legislator and given unto them on the sole account of their office.
The Court also observes that this concept of legislator control underlying the
CDF and PDAF conflicts with the functions of the various Local
Development Councils (LDCs) which are already legally mandated to "assist
the corresponding sanggunian in setting the direction of economic and social
development, and coordinating development efforts within its territorial
jurisdiction."234 Considering that LDCs are instrumentalities whose functions
are essentially geared towards managing local affairs,235 their programs,
policies and resolutions should not be overridden nor duplicated by
individual legislators, who are national officers that have no law-making
authority except only when acting as a body. The undermining effect on local
autonomy caused by the post-enactment authority conferred to the latter
was succinctly put by petitioners in the following wise:236
With PDAF, a Congressman can simply bypass the local development
council and initiate projects on his own, and even take sole credit for its
execution. Indeed, this type of personality-driven project identification has
not only contributed little to the overall development of the district, but has
even contributed to "further weakening infrastructure planning and
coordination efforts of the government."
Thus, insofar as individual legislators are authorized to intervene in purely
local matters and thereby subvert genuine local autonomy, the 2013 PDAF
Article as well as all other similar forms of Congressional Pork Barrel is
deemed unconstitutional.
With this final issue on the Congressional Pork Barrel resolved, the Court
now turns to the substantive issues involving the Presidential Pork Barrel.
C. Substantive Issues on the Presidential Pork Barrel.
1. Validity of Appropriation.
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of
PD1869 (now, amended by PD 1993), which respectively provide for the
Malampaya Funds and the Presidential Social Fund, as invalid
appropriations laws since they do not have the "primary and specific"
purpose of authorizing the release of public funds from the National
Treasury. Petitioners submit that Section 8 of PD 910 is not an appropriation
law since the "primary and specific‖ purpose of PD 910 is the creation of an
Energy Development Board and Section 8 thereof only created a Special
Fund incidental thereto.237 In similar regard, petitioners argue that Section 12
of PD 1869 is neither a valid appropriations law since the allocation of the
Presidential Social Fund is merely incidental to the "primary and specific"
purpose of PD 1869 which is the amendment of the Franchise and Powers
of PAGCOR.238 In view of the foregoing, petitioners suppose that such funds
are being used without any valid law allowing for their proper appropriation
in violation of Section 29(1), Article VI of the 1987 Constitution which states
that: "No money shall be paid out of the Treasury except in pursuance of an
appropriation made by law."239
The Court disagrees.
"An appropriation made by law‖ under the contemplation of Section 29(1),
Article VI of the 1987 Constitution exists when a provision of law (a) sets
apart a determinate or determinable240 amount of money and (b) allocates
the same for a particular public purpose. These two minimum designations
of amount and purpose stem from the very definition of the word
"appropriation," which means "to allot, assign, set apart or apply to a
particular use or purpose," and hence, if written into the law, demonstrate
that the legislative intent to appropriate exists. As the Constitution "does not
provide or prescribe any particular form of words or religious recitals in
which an authorization or appropriation by Congress shall be made, except
that it be ‘made by law,‘" an appropriation law may – according to Philconsa
– be "detailed and as broad as Congress wants it to be" for as long as the
intent to appropriate may be gleaned from the same. As held in the case of
Guingona, Jr.:241
There is no provision in our Constitution that provides or prescribes any
particular form of words or religious recitals in which an authorization or
appropriation by Congress shall be made, except that it be "made by law,"
such as precisely the authorization or appropriation under the questioned
presidential decrees. In other words, in terms of time horizons, an
appropriation may be made impliedly (as by past but subsisting legislations)
as well as expressly for the current fiscal year (as by enactment of laws by
the present Congress), just as said appropriation may be made in general as
well as in specific terms. The Congressional authorization may be embodied
in annual laws, such as a general appropriations act or in special provisions
of laws of general or special application which appropriate public funds for
specific public purposes, such as the questioned decrees. An appropriation
measure is sufficient if the legislative intention clearly and certainly appears
from the language employed (In re Continuing Appropriations, 32 P. 272),
whether in the past or in the present. (Emphases and underscoring supplied)
Likewise, as ruled by the US Supreme Court in State of Nevada v. La
Grave:242
To constitute an appropriation there must be money placed in a fund
applicable to the designated purpose. The word appropriate means to allot,
assign, set apart or apply to a particular use or purpose. An appropriation in
the sense of the constitution means the setting apart a portion of the public
funds for a public purpose. No particular form of words is necessary for the
purpose, if the intention to appropriate is plainly manifested. (Emphases
supplied)
Thus, based on the foregoing, the Court cannot sustain the argument that
the appropriation must be the "primary and specific" purpose of the law in
order for a valid appropriation law to exist. To reiterate, if a legal provision
designates a determinate or determinable amount of money and allocates
the same for a particular public purpose, then the legislative intent to
appropriate becomes apparent and, hence, already sufficient to satisfy the
requirement of an "appropriation made by law" under contemplation of the
Constitution.
Section 8 of PD 910 pertinently provides:
Section 8. Appropriations. x x x
All fees, revenues and receipts of the Board from any and all sources
including receipts from service contracts and agreements such as
application and processing fees, signature bonus, discovery bonus,
production bonus; all money collected from concessionaires, representing
unspent work obligations, fines and penalties under the Petroleum Act of
1949; as well as the government share representing royalties, rentals,
production share on service contracts and similar payments on the
exploration, development and exploitation of energy resources, shall form
part of a Special Fund to be used to finance energy resource development
and exploitation programs and projects of the government and for such other
purposes as may be hereafter directed by the President. (Emphases
supplied)
Whereas Section 12 of PD 1869, as amended by PD 1993, reads:
Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent
as Franchise Tax, the Fifty (50%) percent share of the Government in the
aggregate gross earnings of the Corporation from this Franchise, or 60% if
the aggregate gross earnings be less than ₱150,000,000.00 shall be set
aside and shall accrue to the General Fund to finance the priority
infrastructure development projects and to finance the restoration of
damaged or destroyed facilities due to calamities, as may be directed and
authorized by the Office of the President of the Philippines. (Emphases
supplied)
Analyzing the legal text vis-à-vis the above-mentioned principles, it may then
be concluded that (a) Section 8 of PD 910, which creates a Special Fund
comprised of "all fees, revenues, and receipts of the Energy Development
Board from any and all sources" (a determinable amount) "to be used to
finance energy resource development and exploitation programs and
projects of the government and for such other purposes as may be hereafter
directed by the President" (a specified public purpose), and (b) Section 12 of
PD 1869, as amended by PD 1993, which similarly sets aside, "after
deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent share
of the Government in the aggregate gross earnings of PAGCOR, or 60%, if
the aggregate gross earnings be less than ₱150,000,000.00" (also a
determinable amount) "to finance the priority infrastructure development
projects and x x x the restoration of damaged or destroyed facilities due to
calamities, as may be directed and authorized by the Office of the President
of the Philippines" (also a specified public purpose), are legal appropriations
under Section 29(1), Article VI of the 1987 Constitution.
In this relation, it is apropos to note that the 2013 PDAF Article cannot be
properly deemed as a legal appropriation under the said constitutional
provision precisely because, as earlier stated, it contains post-enactment
measures which effectively create a system of intermediate appropriations.
These intermediate appropriations are the actual appropriations meant for
enforcement and since they are made by individual legislators after the GAA
is passed, they occur outside the law. As such, the Court observes that the
real appropriation made under the 2013 PDAF Article is not the ₱24.79
Billion allocated for the entire PDAF, but rather the post-enactment
determinations made by the individual legislators which are, to repeat,
occurrences outside of the law. Irrefragably, the 2013 PDAF Article does not
constitute an "appropriation made by law" since it, in its truest sense, only
authorizes individual legislators to appropriate in violation of the non-
delegability principle as afore-discussed.
2. Undue Delegation.
On a related matter, petitioners contend that Section 8 of PD 910 constitutes
an undue delegation of legislative power since the phrase "and for such
other purposes as may be hereafter directed by the President" gives the
President "unbridled discretion to determine for what purpose the funds will
be used."243 Respondents, on the other hand, urged the Court to apply the
principle of ejusdem generis to the same section and thus, construe the
phrase "and for such other purposes as may be hereafter directed by the
President" to refer only to other purposes related "to energy resource
development and exploitation programs and projects of the government."244
The Court agrees with petitioners‘ submissions.
While the designation of a determinate or determinable amount for a
particular public purpose is sufficient for a legal appropriation to exist, the
appropriation law must contain adequate legislative guidelines if the same
law delegates rule-making authority to the Executive245 either for the
purpose of (a) filling up the details of the law for its enforcement, known as
supplementary rule-making, or (b) ascertaining facts to bring the law into
actual operation, referred to as contingent rule-making.246 There are two (2)
fundamental tests to ensure that the legislative guidelines for delegated rule-
making are indeed adequate. The first test is called the "completeness test."
Case law states that a law is complete when it sets forth therein the policy to
be executed, carried out, or implemented by the delegate. On the other
hand, the second test is called the "sufficient standard test." Jurisprudence
holds that a law lays down a sufficient standard when it provides adequate
guidelines or limitations in the law to map out the boundaries of the
delegate‘s authority and prevent the delegation from running riot.247 To be
sufficient, the standard must specify the limits of the delegate‘s authority,
announce the legislative policy, and identify the conditions under which it is
to be implemented.248
In view of the foregoing, the Court agrees with petitioners that the phrase
"and for such other purposes as may be hereafter directed by the President"
under Section 8 of PD 910 constitutes an undue delegation of legislative
power insofar as it does not lay down a sufficient standard to adequately
determine the limits of the President‘s authority with respect to the purpose
for which the Malampaya Funds may be used. As it reads, the said phrase
gives the President wide latitude to use the Malampaya Funds for any other
purpose he may direct and, in effect, allows him to unilaterally appropriate
public funds beyond the purview of the law. That the subject phrase may be
confined only to "energy resource development and exploitation programs
and projects of the government" under the principle of ejusdem generis,
meaning that the general word or phrase is to be construed to include – or
be restricted to – things akin to, resembling, or of the same kind or class as
those specifically mentioned,249 is belied by three (3) reasons: first, the
phrase "energy resource development and exploitation programs and
projects of the government" states a singular and general class and hence,
cannot be treated as a statutory reference of specific things from which the
general phrase "for such other purposes" may be limited; second, the said
phrase also exhausts the class it represents, namely energy development
programs of the government;250 and, third, the Executive department has, in
fact, used the Malampaya Funds for non-energy related purposes under the
subject phrase, thereby contradicting respondents‘ own position that it is
limited only to "energy resource development and exploitation programs and
projects of the government."251 Thus, while Section 8 of PD 910 may have
passed the completeness test since the policy of energy development is
clearly deducible from its text, the phrase "and for such other purposes as
may be hereafter directed by the President" under the same provision of law
should nonetheless be stricken down as unconstitutional as it lies
independently unfettered by any sufficient standard of the delegating law.
This notwithstanding, it must be underscored that the rest of Section 8,
insofar as it allows for the use of the Malampaya Funds "to finance energy
resource development and exploitation programs and projects of the
government," remains legally effective and subsisting. Truth be told, the
declared unconstitutionality of the aforementioned phrase is but an
assurance that the Malampaya Funds would be used – as it should be used
– only in accordance with the avowed purpose and intention of PD 910.
As for the Presidential Social Fund, the Court takes judicial notice of the fact
that Section 12 of PD 1869 has already been amended by PD 1993 which
thus moots the parties‘ submissions on the same.252 Nevertheless, since the
amendatory provision may be readily examined under the current
parameters of discussion, the Court proceeds to resolve its constitutionality.
Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that
the Presidential Social Fund may be used "to first, finance the priority
infrastructure development projects and second, to finance the restoration of
damaged or destroyed facilities due to calamities, as may be directed and
authorized by the Office of the President of the Philippines." The Court finds
that while the second indicated purpose adequately curtails the authority of
the President to spend the Presidential Social Fund only for restoration
purposes which arise from calamities, the first indicated purpose, however,
gives him carte blanche authority to use the same fund for any infrastructure
project he may so determine as a "priority". Verily, the law does not supply a
definition of "priority in frastructure development projects" and hence, leaves
the President without any guideline to construe the same. To note, the
delimitation of a project as one of "infrastructure" is too broad of a
classification since the said term could pertain to any kind of facility. This
may be deduced from its lexicographic definition as follows: "the underlying
framework of a system, especially public services and facilities (such as
highways, schools, bridges, sewers, and water-systems) needed to support
commerce as well as economic and residential development."253 In fine, the
phrase "to finance the priority infrastructure development projects" must be
stricken down as unconstitutional since – similar to the above-assailed
provision under Section 8 of PD 910 – it lies independently unfettered by any
sufficient standard of the delegating law. As they are severable, all other
provisions of Section 12 of PD 1869, as amended by PD 1993, remains
legally effective and subsisting.
D. Ancillary Prayers. 1.
Petitioners’ Prayer to be Furnished Lists and Detailed Reports.
Aside from seeking the Court to declare the Pork Barrel System
unconstitutional – as the Court did so in the context of its pronouncements
made in this Decision – petitioners equally pray that the Executive Secretary
and/or the DBM be ordered to release to the CoA and to the public: (a) "the
complete schedule/list of legislators who have availed of their PDAF and
VILP from the years 2003 to 2013, specifying the use of the funds, the
project or activity and the recipient entities or individuals, and all pertinent
data thereto" (PDAF Use Schedule/List);254 and (b) "the use of the
Executive‘s lump-sum, discretionary funds, including the proceeds from the
x x x Malampaya Funds and remittances from the PAGCOR x x x from 2003
to 2013, specifying the x x x project or activity and the recipient entities or
individuals, and all pertinent data thereto"255 (Presidential Pork Use Report).
Petitioners‘ prayer is grounded on Section 28, Article II and Section 7, Article
III of the 1987 Constitution which read as follows:
ARTICLE II
Sec. 28. Subject to reasonable conditions prescribed by law, the State
adopts and implements a policy of full public disclosure of all its transactions
involving public interest.
ARTICLE III Sec. 7.
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents and papers
pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be
afforded the citizen, subject to such limitations as may be provided by law.
The Court denies petitioners‘ submission.
Case law instructs that the proper remedy to invoke the right to information
is to file a petition for mandamus. As explained in the case of Legaspi v. Civil
Service Commission:256
While the manner of examining public records may be subject to reasonable
regulation by the government agency in custody thereof, the duty to disclose
the information of public concern, and to afford access to public records
cannot be discretionary on the part of said agencies. Certainly, its
performance cannot be made contingent upon the discretion of such
agencies. Otherwise, the enjoyment of the constitutional right may be
rendered nugatory by any whimsical exercise of agency discretion. The
constitutional duty, not being discretionary, its performance may be
compelled by a writ of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us,
the public right to be enforced and the concomitant duty of the State are
unequivocably set forth in the Constitution.
The decisive question on the propriety of the issuance of the writ of
mandamus in this case is, whether the information sought by the petitioner is
within the ambit of the constitutional guarantee. (Emphases supplied)
Corollarily, in the case of Valmonte v. Belmonte Jr.257 (Valmonte), it has
been clarified that the right to information does not include the right to
compel the preparation of "lists, abstracts, summaries and the like." In the
same case, it was stressed that it is essential that the "applicant has a well -
defined, clear and certain legal right to the thing demanded and that it is the
imperative duty of defendant to perform the act required." Hence, without the
foregoing substantiations, the Court cannot grant a particular request for
information. The pertinent portions of Valmonte are hereunder quoted:258
Although citizens are afforded the right to information and, pursuant thereto,
are entitled to "access to official records," the Constitution does not accord
them a right to compel custodians of official records to prepare lists,
abstracts, summaries and the like in their desire to acquire information on
matters of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that
the applicant has a well-defined, clear and certain legal right to the thing
demanded and that it is the imperative duty of defendant to perform the act
required. The corresponding duty of the respondent to perform the required
act must be clear and specific Lemi v. Valencia, G.R. No. L-20768,
November 29,1968,126 SCRA 203; Ocampo v. Subido, G.R. No. L-28344,
August 27, 1976, 72 SCRA 443.
The request of the petitioners fails to meet this standard, there being no duty
on the part of respondent to prepare the list requested. (Emphases supplied)
In these cases, aside from the fact that none of the petitions are in the
nature of mandamus actions, the Court finds that petitioners have failed to
establish a "a well-defined, clear and certain legal right" to be furnished by
the Executive Secretary and/or the DBM of their requested PDAF Use
Schedule/List and Presidential Pork Use Report. Neither did petitioners
assert any law or administrative issuance which would form the bases of the
latter‘s duty to furnish them with the documents requested. While petitioners
pray that said information be equally released to the CoA, it must be pointed
out that the CoA has not been impleaded as a party to these cases nor has
it filed any petition before the Court to be allowed access to or to compel the
release of any official document relevant to the conduct of its audit
investigations. While the Court recognizes that the information requested is
a matter of significant public concern, however, if only to ensure that the
parameters of disclosure are properly foisted and so as not to unduly
hamper the equally important interests of the government, it is constrained
to deny petitioners‘ prayer on this score, without prejudice to a proper
mandamus case which they, or even the CoA, may choose to pursue
through a separate petition.
It bears clarification that the Court‘s denial herein should only cover
petitioners‘ plea to be furnished with such schedule/list and report and not in
any way deny them, or the general public, access to official documents
which are already existing and of public record. Subject to reasonable
regulation and absent any valid statutory prohibition, access to these
documents should not be proscribed. Thus, in Valmonte, while the Court
denied the application for mandamus towards the preparation of the list
requested by petitioners therein, it nonetheless allowed access to the
documents sought for by the latter, subject, however, to the custodian‘s
reasonable regulations,viz.:259
In fine, petitioners are entitled to access to the documents evidencing loans
granted by the GSIS, subject to reasonable regulations that the latter may
promulgate relating to the manner and hours of examination, to the end that
damage to or loss of the records may be avoided, that undue interference
with the duties of the custodian of the records may be prevented and that
the right of other persons entitled to inspect the records may be insured
Legaspi v. Civil Service Commission, supra at p. 538, quoting Subido v.
Ozaeta, 80 Phil. 383, 387. The petition, as to the second and third
alternative acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by
petitioners, i.e.,
"to furnish petitioners the list of the names of the Batasang Pambansa
members belonging to the UNIDO and PDP-Laban who were able to secure
clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos."
The Court, therefore, applies the same treatment here.
2. Petitioners’ Prayer to Include Matters in Congressional Deliberations.
Petitioners further seek that the Court "order the inclusion in budgetary
deliberations with the Congress of all presently, off-budget, lump sum,
discretionary funds including but not limited to, proceeds from the x x x
Malampaya Fund, remittances from the PAGCOR and the PCSO or the
Executive‘s Social Funds."260
Suffice it to state that the above-stated relief sought by petitioners covers a
matter which is generally left to the prerogative of the political branches of
government. Hence, lest the Court itself overreach, it must equally deny their
prayer on this score.
3. Respondents’ Prayer to Lift TRO; Consequential Effects of Decision.
The final issue to be resolved stems from the interpretation accorded by the
DBM to the concept of released funds. In response to the Court‘s September
10, 2013 TRO that enjoined the release of the remaining PDAF allocated for
the year 2013, the DBM issued Circular Letter No. 2013-8 dated September
27, 2013 (DBM Circular 2013-8) which pertinently reads as follows:
3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a
Special Allotment Release Order (SARO) has been issued by the DBM and
such SARO has been obligated by the implementing agencies prior to the
issuance of the TRO, may continually be implemented and disbursements
thereto effected by the agencies concerned.
Based on the text of the foregoing, the DBM authorized the continued
implementation and disbursement of PDAF funds as long as they are: first,
covered by a SARO; and, second, that said SARO had been obligated by
the implementing agency concerned prior to the issuance of the Court‘s
September 10, 2013 TRO.
Petitioners take issue with the foregoing circular, arguing that "the issuance
of the SARO does not yet involve the release of funds under the PDAF, as
release is only triggered by the issuance of a Notice of Cash Allocation
[(NCA)]."261 As such, PDAF disbursements, even if covered by an obligated
SARO, should remain enjoined.
For their part, respondents espouse that the subject TRO only covers
"unreleased and unobligated allotments." They explain that once a SARO
has been issued and obligated by the implementing agency concerned, the
PDAF funds covered by the same are already "beyond the reach of the TRO
because they cannot be considered as ‘remaining PDAF.‘" They conclude
that this is a reasonable interpretation of the TRO by the DBM.262
The Court agrees with petitioners in part.
At the outset, it must be observed that the issue of whether or not the
Court‘s September 10, 2013 TRO should be lifted is a matter rendered moot
by the present Decision. The unconstitutionality of the 2013 PDAF Article as
declared herein has the consequential effect of converting the temporary
injunction into a permanent one. Hence, from the promulgation of this
Decision, the release of the remaining PDAF funds for 2013, among others,
is now permanently enjoined.
The propriety of the DBM‘s interpretation of the concept of "release" must,
nevertheless, be resolved as it has a practical impact on the execution of the
current Decision. In particular, the Court must resolve the issue of whether
or not PDAF funds covered by obligated SAROs, at the time this Decision is
promulgated, may still be disbursed following the DBM‘s interpretation in
DBM Circular 2013-8.
On this score, the Court agrees with petitioners‘ posturing for the
fundamental reason that funds covered by an obligated SARO are yet to be
"released" under legal contemplation. A SARO, as defined by the DBM itself
in its website, is "aspecific authority issued to identified agencies to incur
obligations not exceeding a given amount during a specified period for the
purpose indicated. It shall cover expenditures the release of which is subject
to compliance with specific laws or regulations, or is subject to separate
approval or clearance by competent authority."263
Based on this definition, it may be gleaned that a SARO only evinces the
existence of an obligation and not the directive to pay. Practically speaking,
the SARO does not have the direct and immediate effect of placing public
funds beyond the control of the disbursing authority. In fact, a SARO may
even be withdrawn under certain circumstances which will prevent the actual
release of funds. On the other hand, the actual release of funds is brought
about by the issuance of the NCA,264 which is subsequent to the issuance of
a SARO. As may be determined from the statements of the DBM
representative during the Oral Arguments:265
Justice Bernabe: Is the notice of allocation issued simultaneously with the
SARO?
xxxx
Atty. Ruiz: It comes after. The SARO, Your Honor, is only the go signal for
the agencies to obligate or to enter into commitments. The NCA, Your
Honor, is already the go signal to the treasury for us to be able to pay or to
liquidate the amounts obligated in the SARO; so it comes after. x x x The
NCA, Your Honor, is the go signal for the MDS for the authorized
government-disbursing banks to, therefore, pay the payees depending on
the projects or projects covered by the SARO and the NCA.
Justice Bernabe: Are there instances that SAROs are cancelled or revoked?
Atty. Ruiz: Your Honor, I would like to instead submit that there are
instances that the SAROs issued are withdrawn by the DBM.
Justice Bernabe: They are withdrawn?
Atty. Ruiz: Yes, Your Honor x x x. (Emphases and underscoring supplied)
Thus, unless an NCA has been issued, public funds should not be treated as
funds which have been "released." In this respect, therefore, the
disbursement of 2013 PDAF funds which are only covered by obligated
SAROs, and without any corresponding NCAs issued, must, at the time of
this Decision’s promulgation, be enjoined and consequently reverted to the
unappropriated surplus of the general fund. Verily, in view of the declared
unconstitutionality of the 2013 PDAF Article, the funds appropriated
pursuant thereto cannot be disbursed even though already obligated, else
the Court sanctions the dealing of funds coming from an unconstitutional
source.
This same pronouncement must be equally applied to (a) the Malampaya
Funds which have been obligated but not released – meaning, those merely
covered by a SARO – under the phrase "and for such other purposes as
may be hereafter directed by the President" pursuant to Section 8 of PD
910; and (b) funds sourced from the Presidential Social Fund under the
phrase "to finance the priority infrastructure development projects" pursuant
to Section 12 of PD 1869, as amended by PD 1993, which were altogether
declared by the Court as unconstitutional. However, these funds should not
be reverted to the general fund as afore-stated but instead, respectively
remain under the Malampaya Funds and the Presidential Social Fund to be
utilized for their corresponding special purposes not otherwise declared as
unconstitutional.
E. Consequential Effects of Decision.
As a final point, it must be stressed that the Court‘s pronouncement anent
the unconstitutionality of (a) the 2013 PDAF Article and its Special
Provisions, (b) all other Congressional Pork Barrel provisions similar thereto,
and (c) the phrases (1) "and for such other purposes as may be hereafter
directed by the President" under Section 8 of PD 910, and (2) "to finance the
priority infrastructure development projects" under Section 12 of PD 1869,
as amended by PD 1993, must only be treated as prospective in effect in
view of the operative fact doctrine.
To explain, the operative fact doctrine exhorts the recognition that until the
judiciary, in an appropriate case, declares the invalidity of a certain
legislative or executive act, such act is presumed constitutional and thus,
entitled to obedience and respect and should be properly enforced and
complied with. As explained in the recent case of Commissioner of Internal
Revenue v. San Roque Power Corporation,266 the doctrine merely "reflects
awareness that precisely because the judiciary is the governmental organ
which has the final say on whether or not a legislative or executive measure
is valid, a period of time may have elapsed before it can exercise the power
of judicial review that may lead to a declaration of nullity. It would be to
deprive the law of its quality of fairness and justice then, if there be no
recognition of what had transpired prior to such adjudication."267 "In the
language of an American Supreme Court decision: ‘The actual existence of
a statute, prior to such a determination of unconstitutionality, is an operative
fact and may have consequences which cannot justly be ignored.‘"268
For these reasons, this Decision should be heretofore applied prospectively.
Conclusion
The Court renders this Decision to rectify an error which has persisted in the
chronicles of our history. In the final analysis, the Court must strike down the
Pork Barrel System as unconstitutional in view of the inherent defects in the
rules within which it operates. To recount, insofar as it has allowed
legislators to wield, in varying gradations, non-oversight, post-enactment
authority in vital areas of budget execution, the system has violated the
principle of separation of powers; insofar as it has conferred unto legislators
the power of appropriation by giving them personal, discretionary funds from
which they are able to fund specific projects which they themselves
determine, it has similarly violated the principle of non-delegability of
legislative power ; insofar as it has created a system of budgeting wherein
items are not textualized into the appropriations bill, it has flouted the
prescribed procedure of presentment and, in the process, denied the
President the power to veto items ; insofar as it has diluted the effectiveness
of congressional oversight by giving legislators a stake in the affairs of
budget execution, an aspect of governance which they may be called to
monitor and scrutinize, the system has equally impaired public accountability
; insofar as it has authorized legislators, who are national officers, to
intervene in affairs of purely local nature, despite the existence of capable
local institutions, it has likewise subverted genuine local autonomy ; and
again, insofar as it has conferred to the President the power to appropriate
funds intended by law for energy-related purposes only to other purposes he
may deem fit as well as other public funds under the broad classification of
"priority infrastructure development projects," it has once more transgressed
the principle of non-delegability.
For as long as this nation adheres to the rule of law, any of the multifarious
unconstitutional methods and mechanisms the Court has herein pointed out
should never again be adopted in any system of governance, by any name
or form, by any semblance or similarity, by any influence or effect.
Disconcerting as it is to think that a system so constitutionally unsound has
monumentally endured, the Court urges the people and its co-stewards in
government to look forward with the optimism of change and the awareness
of the past. At a time of great civic unrest and vociferous public debate, the
Court fervently hopes that its Decision today, while it may not purge all the
wrongs of society nor bring back what has been lost, guides this nation to
the path forged by the Constitution so that no one may heretofore detract
from its cause nor stray from its course. After all, this is the Court‘s bounden
duty and no other‘s.
WHEREFORE, the petitions are PARTLY GRANTED. In view of the
constitutional violations discussed in this Decision, the Court hereby
declares as UNCONSTITUTIONAL: (a) the entire 2013 PDAF Article; (b) all
legal provisions of past and present Congressional Pork Barrel Laws, such
as the previous PDAF and CDF Articles and the various Congressional
Insertions, which authorize/d legislators – whether individually or collectively
organized into committees – to intervene, assume or participate in any of the
various post-enactment stages of the budget execution, such as but not
limited to the areas of project identification, modification and revision of
project identification, fund release and/or fund realignment, unrelated to the
power of congressional oversight; (c) all legal provisions of past and present
Congressional Pork Barrel Laws, such as the previous PDAF and CDF
Articles and the various Congressional Insertions, which confer/red
personal, lump-sum allocations to legislators from which they are able to
fund specific projects which they themselves determine; (d) all informal
practices of similar import and effect, which the Court similarly deems to be
acts of grave abuse of discretion amounting to lack or excess of jurisdiction;
and (e) the phrases (1) "and for such other purposes as may be hereafter
directed by the President" under Section 8 of Presidential Decree No. 910
and (2) "to finance the priority infrastructure development projects" under
Section 12 of Presidential Decree No. 1869, as amended by Presidential
Decree No. 1993, for both failing the sufficient standard test in violation of
the principle of non-delegability of legislative power.
Accordingly, the Court‘s temporary injunction dated September 10, 2013 is
hereby declared to be PERMANENT. Thus, the disbursement/release of the
remaining PDAF funds allocated for the year 2013, as well as for all previous
years, and the funds sourced from (1) the Malampaya Funds under the
phrase "and for such other purposes as may be hereafter directed by the
President" pursuant to Section 8 of Presidential Decree No. 910, and (2) the
Presidential Social Fund under the phrase "to finance the priority
infrastructure development projects" pursuant to Section 12 of Presidential
Decree No. 1869, as amended by Presidential Decree No. 1993, which are,
at the time this Decision is promulgated, not covered by Notice of Cash
Allocations (NCAs) but only by Special Allotment Release Orders (SAROs),
whether obligated or not, are hereby ENJOINED. The remaining PDAF
funds covered by this permanent injunction shall not be disbursed/released
but instead reverted to the unappropriated surplus of the general fund, while
the funds under the Malampaya Funds and the Presidential Social Fund
shall remain therein to be utilized for their respective special purposes not
otherwise declared as unconstitutional.

On the other hand, due to improper recourse and lack of proper

substantiation, the Court hereby DENIES petitioners‘ prayer seeking that the
Executive Secretary and/or the Department of Budget and Management be
ordered to provide the public and the Commission on Audit complete
lists/schedules or detailed reports related to the availments and utilization of
the funds subject of these cases. Petitioners‘ access to official documents
already available and of public record which are related to these funds must,
however, not be prohibited but merely subjected to the custodian‘s
reasonable regulations or any valid statutory prohibition on the same. This
denial is without prejudice to a proper mandamus case which they or the
Commission on Audit may choose to pursue through a separate petition.

The Court also DENIES petitioners prayer to order the inclusion of the funds
subject of these cases in the budgetary deliberations of Congress as the
same is a matter left to the prerogative of the political branches of
government.

Finally, the Court hereby DIRECTS all prosecutorial organs of the

government to, within the bounds of reasonable dispatch, investigate and
accordingly prosecute all government officials and/or private individuals for
possible criminal offenses related to the irregular, improper and/or unlawful
disbursement/utilization of all funds under the Pork Barrel System.

This Decision is immediately executory but prospective in effect.

 EN BANC
July 25, 2017
G.R. No. 228628
REP. REYNALDO V. UMALI, in his capacity as Chairman of the House
of Representatives Committee on Justice and Ex Officio Member of the
JBC, Petitioner
vs.
THE JUDICIAL AND BAR COUNCIL, chaired by THE HON. MARIA
LOURDES P.A. SERENO, Chief Justice and Ex Officio Chairperson,
Respondent
DECISION
VELASCO, JR., J.:
Stare decisis et non quieta movere. This principle of adherence to
precedents has not lost its luster and continues to guide the bench in
keeping with the need to maintain stability in the law.1
This Petition for Certiorari and Mandamus under Rule 65 of the Rules of
Court filed directly with this Court by herein petitioner Rep. Reynaldo V.
Umali, current Chair of the House of Representatives Committee on Justice,
impugns the present-day practice of six-month rotational representation of
Congress in the Judicial and Bar Council (JBC) for it unfairly deprives both
Houses of Congress of their full participation in the said body. The
aforementioned practice was adopted by the JBC in light of the ruling
in Chavez v. Judicial and Bar Council.2
As an overview, in Chavez, the constitutionality of the practice of having two
representatives from both houses of Congress with one vote each in the
JBC, thus, increasing its membership from seven to eight, was challenged.
With that, this Court examined the constitutional provision that states the
composition of the JBC, that is, Section 8(1), Article VIII of the 1987
Constitution, which reads:
SECTION 8. (1) A Judicial and Bar Council is hereby created under the
supervision of the Supreme Court composed of the Chief Justice as ex
officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of the Integrated Bar, a
professor of law, a retired Member of the Supreme Court, and a
representative of the private sector. (Emphasis supplied.)
Following a painstaking analysis, this Court, in a Decision dated July 17,
2012, declared the said practice of having two representatives from
Congress with one vote each in the JBC unconstitutional. This Court
enunciated that the use of the singular letter "a" preceding "representative of
the Congress" in the aforequoted provision is unequivocal and leaves no
room for any other construction or interpretation. The same is indicative of
the Framers' intent that Congress may designate only one representative to
the JBC. Had it been otherwise, they could have, in no uncertain terms, so
provided. This Court further articulated that in the context of JBC
representation, the term "Congress" must be taken to mean the entire
legislative department as no liaison between the two houses exists in the
workings of the JBC. There is no mechanism required between the Senate
and the House of Representatives in the screening and nomination of
judicial officers. Moreover, this Court, quoting the keen observation of
Retired Supreme Court Associate Justice Consuelo Ynares-Santiago, who is
also a JBC Consultant, stated that the ex officio members of the JBC consist
of representatives from the three main branches of government, to wit: the
Chief Justice of the Supreme Court representing the judiciary, the Secretary
of Justice representing the executive, and a representative of the Congress
representing the legislature. It can be deduced therefrom that the
unmistakable tenor of Section 8(1), Article VIII of the 1987 Constitution was
to treat each ex officio member as representing one co-equal branch of
government having equal say in the choice of judicial nominees. Now, to
allow the legislature to have more than one representative in the JBC would
negate the principle of equality among these three branches of the
government, which is enshrined in the Constitution.3
The subsequent motion for reconsideration thereof was denied in a
Resolution dated April 16, 2013, where this Court reiterated that Section
8(1), Article VIII of the 1987 Constitution providing for "a representative of
the Congress" in the JBC is clear and unambiguous and does not need any
further interpretation. Besides, this Court is not convinced that the Framers
simply failed to adjust the aforesaid constitutional provision, by sheer
inadvertence, to their decision to shift to a bicameral form of legislature.
Even granting that there was, indeed, such omission, this Court cannot
supply the same. Following the rule of casus omissus, that is, a case omitted
is to be held as intentionally omitted, this Court cannot under its power of
interpretation supply the omission even if the same may have resulted from
inadvertence or it was not foreseen or contemplated for to do so would
amount to judicial legislation. Ergo, this Court has neither power nor
authority to add another member in the JBC simply by judicial construction.4
In light of these Decision and Resolution, both Houses of Congress agreed
on a six-month rotational representation in the JBC, wherein the House of
Representatives will represent Congress from January to June and the
Senate from July to December.5This is now the current practice in the JBC.
It is by reason of this arrangement that the votes cast by the petitioner for
the selection of nominees for the vacancies of then retiring Supreme Court
Associate Justices Jose P. Perez (Perez) and Arturo Brion (Brion) were not
counted by the JBC during its En Banc deliberations held last December 2
and 9, 2016. Instead, the petitioner's votes were simply placed in an
envelope and sealed subject to any further disposition as this Court may
direct in a proper proceeding.6 This is the root of the present controversy
that prompted the petitioner to file the instant Petition for Certiorari and
Mandamus based on the following grounds:
I.
THE WRIT OF CERTIORARI IS PROPER TO ENJOIN THE JBC TO
CORRECT ITS UNWARRANTED DENIAL OF THE VOTES REGISTERED
BY [HEREIN PETITIONER] DURING THE EN BANC DELIBERATIONS ON
DECEMBER 2 AND 9, 2016 BECAUSE THE DECISION IN
THE CHAVEZ CASE IS DEFECTIVE/FLA WED.
II.
THE WRIT OF MANDAMUS IS PROPER TO MANDATE THE JBC TO
ACCEPT/COUNT SAID VOTES CAST BY [PETITIONER] BECAUSE THE
RECONSTITUTION OF THE JBC IS DEFECTIVE/FLA WED AND
UNCONSTITUTIONAL.
III.
THE PRESENT PRACTICE OF THE JBC IN ALLOWING ONLY ONE
REPRESENTATIVE FROM THE SENATE OR THE HOUSE OF
[REPRESENTATIVES] TO PARTICIPATE AND VOTE ON A [6- MONTH]
ROTATION BASIS IS IMPRACTICABLE, ABSURD AND
UNCONSTITUTIONAL, CREATES AN [INSTITUTIONAL] IMBALANCE
BETWEEN THE TWO INDEPENDENT CHAMBERS OF CONGRESS, AND
INSTITUTES AN INHERENT AND CONTINUING CONSTITUTIONAL
DEFECT IN THE PROCEEDINGS OF THE JBC THAT ADVERSELY
AFFECTS APPOINTMENTS TO THE JUDICIAL DEPARTMENT,
INCLUDING AND PARTICULARLY [THIS COURT].
IV.
THE 1987 CONSTITUTION CLEARLY REQUIRES PARTICIPATION AND
VOTING BY REPRESENTATIVES FROM THE SENATE AND THE HOUSE
OF REPRESENTATIVES IN JBC PROCEEDINGS AND ALL
APPOINTMENTS TO THE JUDICIAL DEPARTMENT, INCLUDING AND
PARTICULARLY [TIDS COURT].
A. THE BICAMERAL NATURE OF THE LEGISLATIVE DEPARTMENT
WAS BELATEDLY DECIDED UNDER THE 1987 CONSTITUTION, BUT
MUST BE DEEMED AS INCORPORATED AND MODIFYING THE JBC
STRUCTURE UNDER SECTION 8(1)[,] ARTICLE VIII OF THE [1987]
CONSTITUTION, TO GIVE FULL MEANING TO THE INTENT OF ITS
FRAMERS.
B. THERE WAS A CLEAR OVERSIGHT AND TECHNICAL OMISSION
INVOLVING SECTIONS 8(1)[,] ARTICLE VIII OF THE [1987]
CONSTITUTION THAT SHOULD BE RECTIFIED BY [TIDS COURT].
C. THE FULL REPRESENTATION OF CONGRESS IN THE JBC IS
POSSIBLE ONLY WITH PARTICIPATING AND VOTING FROM
REPRESENTATIVES FROM THE TWO INDEPENDENT CHAMBERS,
OTHERWISE THE JBC PROCEEDINGS ARE UNCONSTITUTIONAL.
D. THE PRESENCE OF THE SENATE AND [THE] HOUSE OF
REPRESENTATIVES MEMBERS IN THE JBC UPHOLDS THE CO-EQUAL
REPRESENTATION IN THE COUNCIL OF THE THREE MAIN BRANCHES
OF GOVERNMENT.7
As instructed by this Court,8 both Houses of Congress, through the
Manifestation of the Office of the Solicitor General (OSG), which acts as the
People's Tribune in this case, and the JBC commented on the Petition.
The OSG wants this Court to revisit Chavez for its alleged unexecutability
arising from constitutional constraints. It holds that the current practice of
alternate representation was only arrived at because of time constraints and
difficulty in securing the agreement of both Houses of Congress.9 And, since
the Constitution itself did not clearly state who is the Congress'
representative in the JBC, the provision, therefore, regarding the latter's
composition must be harmonized to give effect to the current bicameral
system.10 With this in view, the OSG believes that it is only proper for both
Houses of Congress to be given equal representation in the JBC as neither
House can bind the other for there can be no single member of either House
who can fully represent the entire legislature for to do so would definitely
result in absurdity.11
Further, the OSG avers that Chavez's strict interpretation of Section 8(1),
Article VIII of the 1987 Constitution violates the very essence of
bicameralism and sets aside the inherent dichotomy between the two
Houses of Congress.12 To note, a JBC member's votes are reflective of the
position and the interest such member wants to uphold, such that when the
representatives from each House of Congress vote for a certain judicial
nominee, they carry the interests and views of the group they represent.
Thus, when only one would represent both Houses of Congress in the JBC,
the vote would not be representative of the interests embodied by the
Congress as a whole.13
In the same way, the OSG contends that the bicameral nature of the
legislature strictly adheres to the distinct and separate personality of both
Houses of Congress; thus, no member of Congress can represent the entire
Congress. Besides, the phrase "a representative of the Congress" in Section
8(1), Article VIII of the 1987 Constitution is qualified by the phrase "ex officio
members." The ex officio nature of the position derives its authority from the
principal office. It, thus, follows that each house of Congress must be
represented in the JBC.14
Also, the OSG states that the constitutional intent in creating the JBC is to
ensure community representation from the different sectors of society, as
well as from the three branches of government, and to eliminate partisan
politics in the selection of members of the judiciary. The focus, therefore, is
more on proper representation rather than qualitative limitation. It even
insists that when the Framers deliberated on Section 8(1 ), Article VIII of the
1987 Constitution, they were still thinking of a unicameral legislature,
thereby, giving Congress only one representative to the JBC. However, with
the shift from unicameralism to bicameralism, "a representative of the
Congress" in the JBC should now be understood to mean one
representative from each House of Congress. For had it been the intention
of the Framers for the JBC to be composed only of seven members, they
would have specified the numbers just like in the other constitutional
provisions. As such, the membership in the JBC should not be limited to
seven members. More so, an eventual deadlock in the voting would not
pose any problem since the voting in the JBC is not through a "yes" or a "no"
vote.15
As its final argument, the OSG maintains that while Congress' participation
in the JBC may be non-legislative, still, the involvement of both Houses of
Congress in its every proceeding is indispensable, as each House
represents different constituencies and would necessarily bring a unique
perspective to the recommendation process of the JBC.16
For its part, the JBC vehemently pleads that the present Petition be
dismissed as its adopted rotational scheme and the necessary
consequences thereof are not the proper subjects of a certiorari and even a
mandamus petition for the same do not involve an exercise of judicial, quasi-
judicial or ministerial functions. Apart from that, it committed no grave abuse
of discretion in refusing to recognize, accept and count the petitioner's votes
during its En Banc deliberations last December 2 and 9, 2016 for it merely
acted in accordance with the Constitution and with the ruling
in Chavez. More so, there is no showing that the petitioner has no plain,
speedy and adequate remedy other than this Petition for nowhere herein did
he assert that he exerted all efforts to have his concern addressed by
Congress, such as asking the latter to repudiate the rotational arrangement.
Thus, for the petitioner's failure to exhaust all remedies available to him in
Congress, he deprived the latter of an opportunity to address the matter.
Also, the practice and acquiescence of both Houses of Congress to such an
arrangement operates as an estoppel against any member thereof to deny
its validity. As regards a writ of mandamus, it cannot be issued to compel the
JBC to count the petitioner's votes for it will not lie to control the
performance of a discretionary act.17
The JBC further enunciates that the petitioner has no locus standi to institute
this Petition in his capacity as Chairman of the House of Representatives
Committee on Justice and Ex Officio Member of the JBC without the
requisite resolution from both Houses of Congress authorizing him to sue as
a member thereof, which absence is a fatal defect rendering this Petition
dismissible.18
In the same vein, the JBC asseverates that this Petition should also be
dismissed as the allegations herein are mere rehash of the arguments and
dissents in Chavez, which have already been exhaustively litigated and
settled therein by this Court, more in particular, the interpretation of Section
8(1), Article VIII of the 1987 Constitution, hence, barred by the doctrine
of stare decisis. Similarly, there exists no substantial reason or even
supervening event or material change of circumstances that
warrants Chavez's reversal.19
The JBC likewise insists that it was the intent of the Framers of the
Constitution for the JBC to have only seven members. The reason for that
was laid down in Chavez, that is, to provide a solution should there be a
stalemate in the voting. As to the alleged oversight and technical omission of
the Framers in changing the provision on the JBC to reflect the bicameral
nature of Congress, these are flimsy excuses to override the clear provision
of the Constitution and to disturb settled jurisprudence. As explained
in Chavez, Congress' membership in the JBC was not in the interest of a
certain constituency but in reverence to it as a major branch of
government.20
Last of all, the JBC holds that should this Petition be granted, there would be
an imbalance in favor of Congress with respect to the representation in the
JBC of the three main and co-equal branches of the government. For the
unmistakable tenor of Section 8(1), Article VIII of the 1987 Constitution was
to treat each ex officio member as representing one co-equal branch of
government. And, even assuming that the current six-month rotational
scheme in the JBC created an imbalance between the two Houses of
Congress, it is not within the power of this Court or the JBC to remedy such
imbalance. For the remedy lies in the amendment of this constitutional
provision.21
Given the foregoing arguments, the issues ought to be addressed by this
Court can be summed up into: (1) whether the petitioner has locus standi to
file this Petition even without the requisite resolution from both Houses of
Congress permitting him to do so; (2) whether the petitioner's direct resort to
this Court via a Petition for Certiorari and Mandamus is the plain, speedy
and adequate remedy available to him to assail the JBC's adoption of the
rotational representation leading to the non-counting of his votes in its En
Banc deliberations last December 2 and 9, 2016; (3) whether the JBC acted
with grave abuse of discretion in adopting the six-month rotational scheme
of both Houses of Congress resulting in the non-counting of the petitioner's
votes in its En Banc deliberations last December 2 and 9, 2016; (4) whether
the JBC can be compelled through mandamus to count the petitioner's votes
in its En Banc deliberations last December 2 and 9, 2016; and (4) whether
this Court's ruling in Chavez applies as stare decisis to the present case.
Before delving into the above-stated issues, this Court would like to note that
this Petition was primarily filed because of the non-counting of the
petitioner's votes in the JBC En Banc deliberations last December 2 and 9,
2016 held for the purpose of determining, among others, who will be the
possible successors of the then retiring Associate Justices of the Supreme
Court Perez and Brion, whose retirements were set on December 14 and
29, 2016, respectively. The list of nominees will then be forwarded to the
President as the appointing authority. With the appointments of Associate
Justices Samuel R. Martires (Martires) and Noel G. Tijam (Tijam) on March
2 and 8, 2017, respectively, this Petition has now been rendered moot
insofar as the petitioner's prayers to (1) reverse and set aside the JBC En
Banc deliberations last December 2 and 9, 2016; and (2) direct the JBC to
count his votes therein as its ex officio member,22 are concerned.
As a rule, courts do not entertain moot questions. An issue becomes moot
and academic when it ceases to present a justiciable controversy so that a
declaration on the issue would be of no practical use or value. This
notwithstanding, the Court in a number of cases held that the moot and
academic principle is not a magical formula that can automatically dissuade
the courts from resolving a case. Courts will still decide cases otherwise,
moot and academic if: (1) there is a grave violation of the Constitution; (2)
the exceptional character of the situation and the paramount public interest
is involved; (3) when the constitutional issue raised requires formulation of
controlling principles to guide the bench, the bar, and the public; and (4) the
case is capable of repetition yet evading review.23Considering that all the
arguments herein once again boil down to the proper interpretation of
Section 8(1), Article VIII of the 1987 Constitution on congressional
representation in the JBC, this Court deems it proper to proceed on deciding
this Petition despite its mootness to settle the matter once and for all.
Having said that, this Court shall now resolve the issues in seriatim.
On petitioner's locus standi. The petitioner brings this suit in his capacity as
the current Chairman of the House of Representatives Committee on Justice
and Ex Officio Member of the JBC. His legal standing was challenged by the
JBC for lack of an enabling resolution for that purpose coming from both
Houses of Congress.
Locus standi or legal standing is defined as a personal and substantial
interest in a case such that the party has sustained or will sustain direct
injury as a result of the challenged governmental act. It requires a personal
stake in the outcome of the controversy as to assure the concrete
adverseness which sharpens the presentation of issues upon which the
court so largely depends for illumination of difficult constitutional
questions.24 With that definition, therefore, a party will be allowed to litigate
only when he can demonstrate that (1) he has personally suffered some
actual or threatened injury because of the allegedly illegal conduct of the
government; (2) the injury is fairly traceable to the challenged action; and (3)
the injury is likely to be redressed by the remedy being sought.25Otherwise,
he/she would not be allowed to litigate. Nonetheless, in a long line of cases,
concerned citizens, taxpayers and legislators when specific requirements
have been met have been given standing by this Court. This was succinctly
explained in Francisco, Jr. v. The House of Representatives, thus:
When suing as a citizen, the interest of the petitioner assailing the
constitutionality of a statute must be direct and personal. He must be able to
show, not only that the law or any government act is invalid, but also that he
sustained or is in imminent danger of sustaining some direct injury as a
result of its enforcement, and not merely that he suffers thereby in some
indefinite way. It must appear that the person complaining has been or is
about to be denied some right or privilege to which he is lawfully entitled or
that he is about to be subjected to some burdens or penalties by reason of
the statute or act complained of. In fine, when the proceeding involves the
assertion of a public right, the mere fact that he is a citizen satisfies the
requirement of personal interest.
In the case of a taxpayer, he is allowed to sue where there is a claim that
public funds are illegally disbursed, or that public money is being deflected
to any improper purpose, or that there is a wastage of public funds through
the enforcement of an invalid or unconstitutional law. Before he can invoke
the power of judicial review, however, he must specifically prove that he has
sufficient interest in preventing the illegal expenditure of money raised by
taxation and that he would sustain a direct injury as a result of the
enforcement of the questioned statute or contract. It is not sufficient that he
has merely a general interest common to all members of the public.
xxxx
As for a legislator, he is allowed to sue to question the validity of any official
action which he claims infringes his prerogatives as a legislator. Indeed, a
member of the House of Representatives has standing to maintain inviolate
the prerogatives, powers and privileges vested by the Constitution in his
office.26 (Emphasis and underscoring supplied.)
The legal standing of each member of Congress was also upheld
in Philippine Constitution Association v. Enriquez,27 where this Court
pronounced that:
The legal standing of the Senate, as an institution, was recognized
in Gonzales v. Macaraig, Jr. (citation omitted). In said case, 23 Senators,
comprising the entire membership of the Upper House of Congress, filed a
petition to nullify the presidential veto of Section 55 of the GAA of 1989. The
filing of the suit was authorized by Senate Resolution No. 381, adopted on
February 2, 1989, and which reads as follows:
Authorizing and Directing the Committee on Finance to Bring in the Name of
the Senate of the Philippines the Proper Suit with the Supreme Court of the
Philippines contesting the Constitutionality of the Veto by the President of
Special and General Provisions, particularly Section 55, of the General
Appropriation Bill of 1989 (H.B. No. 19186) and For Other Purposes.
In the United States, the legal standing of a House of Congress to sue has
been recognized (citation omitted).
While the petition in G.R. No. 113174 was filed by 16 Senators, including the
Senate President and the Chairman of the Committee on Finance, the suit
was not authorized by the Senate itself. Likewise, the petitions in G.R. Nos.
113766 and 113888 were filed without an enabling resolution for the
purpose.
Therefore, the question of the legal standing of petitioners in the three cases
becomes a preliminary issue before this Court can inquire into the validity of
the presidential veto and the conditions for the implementation of some
items in the GAA of 1994.
We rule that a member of the Senate, and of the House of Representatives
for that matter, has the legal standing to question the validity of a
presidential veto or a condition imposed on an item in an appropriation bill.
Where the veto is claimed to have been made without or in excess of the
authority vested on the President by the Constitution, the issue of an
impermissible intrusion of the Executive into the domain of the Legislature
arises (citation omitted).
To the extent the powers of Congress are impaired, so is the power of each
member thereof, since his office confers a right to participate in the exercise
of the powers of that institution (citation omitted).
An act of the Executive which injures the institution of Congress causes a
derivative but nonetheless substantial injury, which can be questioned by a
member of Congress (citation omitted). In such a case, any member of
Congress can have a resort to the courts.
Former Chief Justice Enrique M. Fernando, as Amicus Curiae, noted:
This is, then, the clearest case of the Senate as a whole or individual
Senators as such having a substantial interest in the question at issue. It
could likewise be said that there was the requisite injury to their rights as
Senators. It would then be futile to raise any locus standi issue. Any
intrusion into the domain appertaining to the Senate is to be resisted.
Similarly, if the situation were reversed, and it is the Executive Branch that
could allege a transgression, its officials could likewise file the corresponding
action. What cannot be denied is that a Senator has standing to maintain
inviolate the prerogatives, powers and privileges vested by the Constitution
in his office (citation omitted).28 (Emphases and underscoring supplied.)
It is clear therefrom that each member of Congress has a legal standing to
sue even without an enabling resolution for that purpose so long as the
questioned acts invade the powers, prerogatives and privileges of Congress.
Otherwise stated, whenever the acts affect the powers, prerogatives and
privileges of Congress, anyone of its members may validly bring an action to
challenge the same to safeguard and maintain the sanctity thereof.
With the foregoing, this Court sustains the petitioner's legal standing as
Member of the House of Representatives and as the Chairman of its
Committee on Justice to assail the alternate representation of Congress in
the JBC, which arrangement led to the non-counting of his votes in its En
Banc deliberations last December 2 and 9, 2016, as it allegedly affects
adversely Congress' prerogative to be fully represented before the said
body.
On petitioner's direct resort to this Court via certiorari petition. The JBC
questions the propriety of the petitioner's direct resort to this Court via the
present Petition to assail its adoption of the rotational representation of
Congress resulting in the non-counting of his votes in its En Banc
deliberations last December 2 and 9, 2016. The JBC insists that the said
scheme was a creation of Congress itself; as such, the petitioner's plain,
speedy and adequate remedy is to appeal to Congress to repudiate the
same. Direct resort to this Court should not be allowed if there is a remedy
available to the petitioner before Congress.
Generally, the writ of certiorari can only be availed of in the absence of an
appeal or any plain, speedy and adequate remedy in the ordinary course of
law. In Bordomeo v. Court of Appeals, however, this Court clarified that it is
inadequacy that must usually determine the propriety of certiorari and not
the mere absence of all other remedies and the danger of failure of justice
without the writ. A remedy is considered plain, speedy and adequate if it will
promptly relieve the petitioner from the injurious effects of the judgment,
order, or resolution of the lower court or agency.29
In the same way, as a matter of policy, direct resort to this Court will not be
entertained unless the redress desired cannot be obtained in the appropriate
lower courts, and exceptional and compelling circumstances, such as in
cases involving national interest and those of serious implications, justify the
availment of the extraordinary remedy of the writ of certiorari, calling for the
exercise of its primary jurisdiction.30 In The Diocese of Bacolod v.
Commission on Elections,31 and again in Maza v. Turla,32this Court took
pains in enumerating the circumstances that would warrant a direct resort to
this Court, to wit: (1) when there are genuine issues of constitutionality that
must be addressed at the most immediate time; (2) when the issues
involved are of transcendental importance; (3) cases of first impression as
no jurisprudence yet exists that will guide the lower courts on this matter; (4)
the constitutional issues raised are better decided by this court; (5) the time
element presented in this case cannot be ignored; (6) the filed petition
reviews the act of a constitutional organ; (7) petitioners rightly claim that they
had no other plain, speedy, and adequate remedy in the ordinary course of
law; and (8) the petition includes questions that are dictated by public
welfare and the advancement of public policy, or demanded by the broader
interest of justice, or the orders complained of were found to be patent
nullities, or the appeal was considered as clearly an inappropriate remedy.33
Here, while this Court agrees with the JBC that the petitioner's preliminary
remedy to question the rotational arrangement of Congress is to ask the
latter to repudiate the same, this, however, cannot be considered plain,
speedy and adequate. This Court is, thus, inclined to sustain the petitioner's
direct resort to this Court not only because it is the plain, speedy and
adequate remedy available to him but also by reason of the constitutional
issues involved herein and the urgency of the matter. As correctly pointed
out by the OSG, the Constitution mandates that any vacancy to the office of
an Associate Justice of the Supreme Court must be filled up within the 90-
day period from its occurrence. Therefore, the JBC must submit the list of
nominees prior to the start of that period. As the nominations covered by the
questioned December 2016 JBC En Banc deliberations were intended for
vacancies created by then Associate Justices Perez and Brion, who
respectively retired last December 14 and 29, 2016, hence, any resort to
Congress during that time would already be inadequate since the JBC list of
nominees would be submitted any moment to the Office of the President for
the appointment of the next Associate Justices of the Supreme Court. Since
time is of the essence, the petitioner's direct resort to this Court is
warranted.
On the alleged grave abuse of discretion of the JBC in adopting the
rotational representation of Congress correctible by certiorari. The petitioner
ascribed grave abuse of discretion on the part of the JBC in its adoption of
the rotational scheme, which led to the non-counting of his votes in its En
Banc deliberations last December 2 and 9, 2016, as it deprives Congress of
its full representation therein. The JBC, on the other hand, believes
otherwise for it merely acted in accordance with the mandate of the
Constitution and with the ruling in Chavez. Also, such rotational scheme was
a creation of Congress, which it merely adopted.
Certiorari and Prohibition under Rule 65 of the present Rules of Court are
the two special civil actions used for determining and correcting grave abuse
of discretion amounting to lack or excess of jurisdiction. The sole office of
the writ of certiorari is the correction of errors of jurisdiction, which
necessarily includes the commission of grave abuse of discretion amounting
to lack of jurisdiction.34 The burden is on the petitioner to prove that the
respondent tribunal committed not merely a reversible error but also a grave
abuse of discretion amounting to lack or excess of jurisdiction. Showing
mere abuse of discretion is not enough, for the abuse must be shown to be
grave. Grave abuse of discretion means either that the judicial or quasi-
judicial power was exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, or that the respondent judge, tribunal or board
evaded a positive duty, or virtually refused to perform the duty enjoined or to
act in contemplation of law, such as when such judge, tribunal or board
exercising judicial or quasi-judicial powers acted in a capricious or whimsical
manner as to be equivalent to lack of jurisdiction.35
But, the remedies of certiorari and prohibition are necessarily broader in
scope and reach before this Court as the writs may be issued to correct
errors of jurisdiction committed not only by a tribunal, corporation, board or
officer exercising judicial, quasi-judicial or ministerial functions but also to set
right, undo and restrain any act of grave abuse of discretion amounting to
lack or excess of jurisdiction by any branch or instrumentality of the
Government, even if the latter does not exercise judicial, quasi-judicial or
ministerial functions. Thus, they are appropriate remedies to raise
constitutional issues and to review and/or prohibit or nullify the acts of
legislative and executive officials.36
Here, it is beyond question that the JBC does not fall within the scope of a
tribunal, board, or officer exercising judicial or quasi-judicial
functions.1âwphi1 Neither did it act in any judicial or quasi-judicial capacity
nor did it assume any performance of judicial or quasi-judicial prerogative in
adopting the rotational scheme of Congress, which was the reason for not
counting the votes of the petitioner in its En Banc deliberations last
December 2 and 9, 2016. But, despite this, its act is still not beyond this
Court's reach as the same is correctible by certiorari if it is tainted with grave
abuse of discretion even if it is not exercising judicial and quasi-judicial
functions. Now, did the JBC abuse its discretion in adopting the six-month
rotational arrangement and in not counting the votes of the petitioner? This
Court answers in the negative. As correctly pointed out by the JBC, in
adopting the said arrangement, it merely acted pursuant to the Constitution
and the Chavez ruling, which both require only one representative from
Congress in the JBC. It cannot, therefore, be faulted for simply complying
with the Constitution and jurisprudence. Moreover, said arrangement was
crafted by both Houses of Congress and the JBC merely adopted the same.
By no stretch of imagination can it be regarded as grave abuse of discretion
on the part of the JBC.
With the foregoing, despite this Court's previous declaration that certiorari is
the plain, speedy and adequate remedy available to petitioner, still the same
cannot prosper for the petitioner's failure to prove that the JBC acted with
grave abuse of discretion in adopting the rotational scheme.
On the propriety of mandamus. It is essential to the issuance of a writ of
mandamus that the applicant has a clear legal right to the thing demanded
and it must be the imperative duty of the respondent to perform the act
required. The burden is on the petitioner to show that there is such a clear
legal right to the performance of the act, and a corresponding compelling
duty on the part of the respondent to perform the act. As an extraordinary
writ, it lies only to compel an officer to perform a ministerial duty, not a
discretionary one.37 A clear line demarcates a discretionary act from a
ministerial one. A purely ministerial act is one which an officer or tribunal
performs in a given state of facts, in a prescribed manner, in obedience to
the mandate of legal authority, without regard to or the exercise of his own
judgment upon the propriety or impropriety of the act done.38 On the other
hand, if the law imposes a duty upon a public officer and gives him the right
to decide how or when the duty shall be performed, such duty is
discretionary and not ministerial. The duty is ministerial only when the
discharge of the same requires neither the exercise of official discretion or
judgment.39 Clearly, the use of discretion and the performance of a
ministerial act are mutually exclusive. Further, the writ of mandamus does
not issue to control or review the exercise of discretion or to compel a
course of conduct.40
In the case at bench, the counting of votes in the selection of the nominees
to the judiciary may only be considered a ministerial duty of the JBC if such
votes were cast by its rightful members and not by someone, like the
petitioner, who is not considered a member during the En Banc deliberations
last December 2 and 9, 2016. For during the questioned period, the lawful
representative of Congress to the JBC is a member of the Senate and not of
the House of Representatives as per their agreed rotational scheme.
Considering that a member of the Senate already cast his vote therein, the
JBC has the full discretion not to count the votes of the petitioner for it is
mandated by both the Constitution and jurisprudence to maintain that
Congress will only have one representative in the JBC. As the act of the JBC
involves a discretionary one, accordingly, mandamus will not lie.
On the application of Chavez as stare decisis in this case. The petitioner
strongly maintains that Chavez must be revisited and reversed due to its
unexecutability. But the JBC insists that the arguments herein are mere
rehash of those in Chavez, hence, already barred by the doctrine of stare
decisis. Also, there is no cogent reason for Chavez's reversal.
This Court takes another glance at the arguments in Chavez and compares
them with the present arguments of the petitioner. A careful perusal,
however, reveals that, although the petitioner questioned the JBC's adoption
of the six-month rotational representation of Congress leading to the non-
counting of his votes in its En Banc deliberations last December 2 and 9,
2016, the supporting arguments hereof still boil down to the proper
interpretation of Section 8(1), Article VIII of the 1987 Constitution. Hence,
being mere rehash of the arguments in Chavez, the application of the
doctrine of stare decisis in this case is inevitable. More so, the petitioner
failed to present strong and compelling reason not to rule this case in the
same way that this Court ruled Chavez.
As stated in the beginning of this ponencia, stare decisis et non quieta
movere is a doctrine which means to adhere to precedents and not to
unsettle things which are established. This is embodied in Article 8 of the
Civil Code of the Philippines which provides, thus:
ART. 8. Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the Philippines.
The doctrine enjoins adherence to judicial precedents and requires courts in
a country to follow the rule established in a decision of the Supreme Court
thereof. That decision becomes a judicial precedent to be followed in
subsequent cases by all courts in the land. The doctrine is based on the
principle that once a question of law bas been examined and decided, it
should be deemed settled and closed to further argument. The same is
grounded on the necessity for securing certainty and stability of judicial
decisions, thus, time and again, the court has held that it is a very desirable
and necessary judicial practice that when a court bas laid down a principle of
law as applicable to a certain state of facts, it will adhere to that principle and
apply it to all future cases in which the facts are substantially the same. It
simply means that for the sake of certainty, a conclusion reached in one
case should be applied to those that follow if the facts are substantially the
same, even though the parties may be different. It proceeds from the first
principle of justice that, absent any powerful countervailing considerations,
like cases ought to be decided alike. Thus, where the same questions
relating to the same event have been put forward by the parties similarly
situated as in a previous case litigated and decided by a competent court,
the rule of stare decisis is a bar to any attempt to relitigate the same issue.
The doctrine has assumed such value in our judicial system that the Court
has ruled that " [a]bandonment thereof must be based only on strong and
compelling reasons, otherwise, the becoming virtue of predictability which is
expected from this Court would be immeasurably affected and the public's
confidence in the stability of the solemn pronouncements diminished."
Verily, only upon showing that circumstances attendant in a particular case
override the great benefits derived by our judicial system from the doctrine
of stare decisis, can the courts be justified in setting aside the same.41
Here, the facts are exactly the same as in Chavez, where this Court has
already settled the issue of interpretation of Section 8(1), Article VIII of the
1987 Constitution. Truly, such ruling may not be unanimous, but it is
undoubtedly a reflection of the wisdom of the majority of members of this
Court on that matter. Chavez cannot simply be regarded as an erroneous
application of the questioned constitutional provision for it merely applies the
clear mandate of the law, that is, Congress is entitled to only one
representative in the JBC in the same way that its co-equal branches are.
As this Court declared in Chavez, Section 8(1), Article VIII of the 1987
Constitution is clear, categorical and unambiguous. Thus, it needs no further
construction or interpretation. Time and time again, it has been repeatedly
declared by this Court that where the law speaks in clear and categorical
language, there is no room for interpretation, only application.42 The
wordings of Section 8(1), Article VIII of the 1987 Constitution are to be
considered as indicative of the final intent of its Framers, that is, for
Congress as a whole to only have one representative to sit in the JBC. This
Court, therefore, cannot simply make an assumption that the Framers
merely by oversight failed to take into account the bicameral nature of
Congress in drafting the same. As further laid down in Chavez, the Framers
were not keen on adjusting the provision on congressional representation in
the JBC as it was not in the exercise of its primary function, which is to
legislate. Notably, the JBC was created to support the executive power to
appoint, and Congress, as one whole body, was merely assigned a
contributory non-legislative function. No parallelism can be drawn between
the representative of Congress in the JBC and the exercise by Congress of
its legislative powers under Article VI and constituent powers under Article
XVII of the Constitution. Congress, in relation to the executive and judicial
branches of government, is constitutionally treated as another co-equal
branch in the matter of its JBC representation.43
This Court cannot succumb to the argument that Congress, being composed
of two distinct and separate chambers, cannot represent each other in the
JBC. Again, as this Court explained in Chavez, such an argument is
misplaced because in the JBC, any member of Congress, whether from the
Senate or the House of Representatives, is constitutionally empowered to
represent the entire Congress. It may be a constricted constitutional
authority, but it is not an absurdity. To broaden the scope of congressional
representation in the JBC is tantamount to the inclusion of a subject matter
which was not included in the provision as enacted. True to its constitutional
mandate, the Court cannot craft and tailor constitutional provisions in order
to accommodate all situations no matter how ideal or reasonable the
proposed solution may sound. To the exercise of this intrusion, the Court
declines.44
While it is true that Section 8(1), Article VIII of the 1987 Constitution did not
explicitly state that the JBC shall be composed of seven members, however,
the same is implied in the enumeration of who will be the members thereof.
And though it is unnecessary for the JBC composition to be an odd number
as no tie-breaker is needed in the preparation of a shortlist since judicial
nominees are not decided by a "yes" or "no" vote, still, JBC's membership
cannot be increased from seven to eight for it will be a clear violation of the
aforesaid constitutional provision. To add another member in the JBC or to
increase the representative of Congress to the JBC, the remedy is not
judicial but constitutional amendment.
In sum, this Court will not overthrow Chavez for it is in accord with the
constitutional mandate of giving Congress "a representative" in the JBC. In
the same manner, the adoption of the rotational scheme will not in any way
deprive Congress of its full participation in the JBC for such an arrangement
is also in line with that constitutional mandate.

WHEREFORE, premises considered, the instant Petition for Certiorari and

Mandamus is hereby DISMISSED for lack of merit.

SO ORDERED.
 SECOND DIVISION
[G.R. No. 141600. September 12, 2003]
ROBERTO FULGENCIO, ROLANDO A. LAYA, SR., SUSANO A. ATIENZA,
CARLITO S. DE GUZMAN, HERMAN DELIMA, EDGARDO H.
REYES, RAMIL HERNANDEZ, WILFREDO Y. BRUN, ROMULO C.
MAGPILI, GERARDO S. DE GUZMAN, JORGE CIPRIANO,
CRISOSTOMO D. DOROMPILI, JAIME CALIPAYAN (deceased),
and ANGELITO REALINGO, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION (FIRST DIVISION) and RAYCOR
AIRCONTROL SYSTEMS, INC., respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari filed under Rule 45 of the 1997
Rules of Civil Procedure, assailing the September 10, 1999 Resolution of the
Court of Appeals (CA) in CA-G.R. SP No. 54641 which dismissed outright the
petitioners petition for certiorari for alleged failure to comply with the formal
requirements of the rules, and its January 18, 2000 Resolution denying the
petitioners motion for reconsideration.
As culled from the records, the petition at bar stemmed from the
following factual antecedents:
The private respondent Raycor Aircontrol Systems, Inc. was engaged in
the installation of airconditioning systems in the buildings of its clients. In
connection with such installation work, the herein petitioners were among
those hired by the private respondent to work in various capacities, such as
tinsmith, leadsman, aircon mechanic, installer, welder and painter.
On different dates in 1992, the private respondent served the petitioners
with uniformly worded notices of termination of employment. As a result, the
petitioners joined other employees in filing three separate cases of illegal
dismissal against the private respondent, docketed as NLRC-NCR Nos. 00-
03-01930-92, 00-05-02789-92 and 00-07-03699-92. The proceedings in all
the cases were subsequently consolidated.
On January 22, 1993, the Labor Arbiter rendered judgment dismissing
the complaints for lack of merit.[1] On appeal, the National Labor Relations
Commission (NLRC) reversed the labor arbiters findings and ruled as follows:
WHEREFORE, the appealed Decision is hereby SET ASIDE and a new one
entered ordering respondent to:
1. Immediately reinstate complainants to their former positions without loss
of seniority rights and privileges; and
2. Pay them full backwages from the time they were dismissed up to the
time they are actually reinstated.[2]
The private respondents motion for reconsideration having been denied
by the NLRC, the private respondent filed a petition for certiorari[3] assailing
the above-quoted decision with the Supreme Court which rendered judgment
on September 9, 1996,[4] the decretal portion of which reads:
WHEREFORE, the foregoing considered, the assailed Decision is
hereby SET ASIDE and a new one rendered holding that petitioner has
failed to discharge its burden of proof in the instant case and
therefore ORDERING the reinstatement of private respondents as regular
employees of petitioner, without loss of seniority rights and privileges and
with payment of backwages from the day they were dismissed up to the time
they are actually reinstated. No costs.
SO ORDERED.
The judgment of the court became final and executory on November 18,
1996.[5] The private respondent filed a motion for clarification claiming that it
had offered reinstatement to the petitioners on July 13, 1992 but that the latter
spurned its offer. The Court denied the said motion. The case was remanded
to the NLRC for implementation. In due course, the Research and Information
Unit of the NLRC computed the benefits due the petitioners and submitted an
updated computation on April 15, 1997, viz:
RE: UPDATED COMPUTATION OF AWARD
AS PER NLRC DECISION DATED NOV. 29, 1993[6]
Backwages Additional
Name (as of 4/30/96) Backwages TOTAL
1. Rolando Laya, Sr. P179,674.60 P54,232.10 P233,906.70
2. Romulo Magpili 180,637.60 54,232.10 234,869.16
3. Wilfredo Brun 179,474.62 54,232.10 233,706.72
4. Ramil Hernandez 179,474.62 54,232.10 233,706.72
5. Eduardo Reyes 179,474.62 54,232.10 233,706.72
6. Crisostomo Dorompili 179,474.62 54,232.10 233,706.72
7. Herman Delima 174,489.12 54,232.10 228,721.22
8. Angelito Realizo 191,672.48 54,232.10 245,904.58
9. Roberto Fulgencio 191,672.48 54,232.10 245,904.58
10. Susano Atienza 191,672.48 54,232.10 245,904.58
11. Jorge Cipriano 191,672.48 54,232.10 245,904.58
12. Gerardo de Guzman 191,672.48 54,232.10 245,904.58
13. Jaime Calipayan 191,672.48 54,232.10 245,904.58
14. Gerardo de Guzman 192,630.28 54,232.10 246,862.38
15. Florencio Espina 191,761.77 54,232.10 245,993.87
TOTAL AWARD (as of 4/15/97) 3,600,607.69
Computation of Additional Backwages
5/1/96 2/5/97 = 9.16 mos.
P165 x 26 days x 9.16 mos. = P39,296.40
2/6/97 4/15/97 = 2.30 mos.
P180 x 26 days x 2.30 mos. = 10,764.00
P50,060.40
13th Mo. Pay (1/12 of P50,060.40) 4,171.70
Total P54,232.10
=========
The Labor Arbiter approved the computation in an Order dated August
15, 1997.[7]
Meanwhile, on motion of the petitioners, a writ of execution[8] was issued
by the Labor Arbiter on January 28, 1998, directing the sheriff of the NLRC,
as follows:
NOW THEREFORE, you are hereby commanded to accompany
complainants Rolando Laya Sr., Romulo Magpili, Wilfredo Brun, Ramil
Hernandez, Eduardo Reyes, Crisostomo Dorompili, Hernan Delima, Angelito
Ralizo, Roberto Fulgencio, Susano Atienza, Jorge Cipriano, Gerardo de
Guzman, Jaime Calipay, Carlito de Guzman and Florencio Espino to the
premises of respondent located at Room 306, 20th Century Building,
Mandaluyong City, for the purpose of reinstating them to their former
position and collect from said respondent the amount of P3,960,668.45
corresponding to complainants backwages and attorneys lien. If you fail to
collect sufficient amount in cash, you are further commanded to satisfy the
award from the movable and immovable properties of respondent not
exempt from execution and deposit the amount you have with the Cashier of
this Office. You may also collect your execution fees in the amount of
P4,450.60 pursuant to Section 5, Rule IX of the Manual of Instructions for
Sheriffs and likewise to turnover the same to the Cashier or authorized
Disbursing Officer of this Office. You shall return this writ within fifteen (15)
days from receipt hereof with the proceedings endorsed thereon.[9]
Pursuant to the above writ, the sheriff on February 10, 1998 garnished
the funds of the private respondent amounting to P3,960,668.45 which was in
the possession of Intel Technology Philippines, Inc.[10] The same amount was
subsequently remitted by Intel to the Cashier of the NLRC on March 19,
1998.[11]
On February 13, 1998, the private respondent appealed the January 27,
1998 Order of the Labor Arbiter to the NLRC which rendered judgment on
June 16, 1998, to wit:
We therefore sum up our ruling as follows:
a) The backwages of the complainant will not be reduced by their salaries
obtained elsewhere during the period of their dismissal until the offer of
reinstatement was made.
b) The computation of backwages stopped on July 13, 1992, when the
return-to-work [order] was made by the respondent but was refused by the
complainants.
c) The backwages should be based on the complainants wage rate in 1992.
d) The complainants are awarded 13th Month Pay.
...
WHEREFORE, the appeal is hereby GRANTED but the petition for
preliminary injunction is DENIED for being moot and academic. The Cashier
is hereby ordered to release the amount of TWO HUNDRED TWO
THOUSAND THIRTY PESOS AND TWENTY-NINE CENTAVOS
(P202,030.29) for distribution to the individual complainants in accordance
with the above computation and to remit the balance of the garnished and
deposited amount to the respondent.[12]
The petitioners filed a motion for the reconsideration of the above-
quoted decision, contending that by computing the backwages of the
petitioners up to July 13, 1992 only, the NLRC modified the already final and
executory decision of the Supreme Court. The NLRC issued an Order dated
May 11, 1999 denying the said motion.[13] On August 31, 1999, the petitioners
filed a petition for certiorari with a prayer for the issuance of a writ of
preliminary injunction[14] with the CA which outrightly dismissed the petition in
a Resolution dated September 10, 1999,[15] which reads:
Section 3, Rule 46 as amended by the Supreme Court in Bar Matter No. 803
which took effect on September 1, 1998 provides that In actions filed under
Rule 65, the petition shall further indicate the material dates showing when
notice of the judgment or final order or resolution subject thereof was
received, when a motion for new trial or reconsideration, if any, was filed and
when notice of the denial thereof was received. The petition has no such
statement of material dates, violating the aforecited rule and is a sufficient
ground for the dismissal thereof.
Also, We note that the petitioners have failed to include in their petition the
required explanation on why personal service upon the respondents was not
resorted to pursuant to Sec. 11, Rule 13 of the 1997 Rules of Civil
Procedure, as amended. Strict compliance with this rule is mandated. (Solar
Team Entertainment, Inc. vs. Hon. Helen Bautista-Ricafort, et al., G.R. No.
132007, August 5, 1998).
Petition is hereby DISMISSED outright.[16]
The petitioners instituted the present recourse, assigning to the CA the
following errors:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING
OUTRIGHT THE PETITION FOR CERTIORARI WITH WRIT OF
PRELIMINARY INJUNCTION ON THE ALLEGED GROUND THAT THE
SAID PETITION HAS NO SUCH STATEMENT OF MATERIAL DATES, IN
VIOLATION OF RULE 65.
II
THE HONORABLE COURT OF APPEALS ERRED IN STRICTLY
ADHERING TO TECHNICALITIES, RATHER THAN IN SUBSTANTIAL
COMPLIANCE, IN THE APPLICATION OF THE PROVISIONS OF THE
RULES OF COURT.[17]
We find the petition meritorious.
It appears that the petitioners failed to indicate in their petition with the
CA the dates showing when they received notice of the NLRCs June 16, 1998
Decision, and the date when they filed a motion for reconsideration therefrom,
in violation of Section 3, Rule 46 of the Revised Rules of Court, as
amended.[18] Petitioners also failed to include in their petition the required
explanation under Section 11, Rule 13 of the same Rules[19] as to why
personal service upon the respondents was not resorted to. The petitioners,
however, submit that they raised meritorious arguments in their petition;
hence, the dismissal thereof by the CA on a mere technicality would cause a
miscarriage of justice. The petitioners, therefore, invoke considerations of
substantial justice for this Court to give their petition due course and pray that
the questioned resolutions be set aside.
For its part, the private respondent asserts that the CA did not commit
any reversible error in dismissing the petition in CA-G.R. SP No. 51288 for it
simply applied the express and categorical mandate of the Rules. The private
respondent argues that while it is true that the Rules of Court should be
liberally construed, it is also equally true that the Rules cannot be ignored
since strict observance thereof is indispensable to the orderly and speedy
discharge of judicial business.
We agree that for the petitioners failure to comply with Section 3, Rule
46 and Section 11, Rule 13 of the Revised Rules of Court, as amended, the
petition should be dismissed, pursuant to the last paragraph of Section 3 of
Rule 46 of the Rules. In the case of Solar Team Entertainment, Inc. v.
Ricafort,[20] cited in the assailed September 10, 1999 Resolution of the CA, we
indeed underscored the mandatory character of Section 11 of Rule 13, thus:
We thus take this opportunity to clarify that under Section 11, Rule 13 of the
1997 Rules of Civil Procedure, personal service and filing is the general rule,
and resort to other modes of service and filing, the exception.Henceforth,
whenever personal service or filing is practicable, in light of the
circumstances of time, place and person, personal service or filing is
mandatory. Only when personal service or filing is not practicable may resort
to other modes be had, which must then be accompanied by a written
explanation as to why personal service or filing was not practicable to begin
with. In adjudging the plausibility of an explanation, a court shall likewise
consider the importance of the subject matter of the case or the issues
involved therein, and the prima facie merit of the pleading sought to be
expunged for violation of Section 11. This Court cannot rule otherwise, lest
we allow circumvention of the innovation introduced by the 1997 Rules in
order to obviate delay in the administration of justice.
Nonetheless, we resolve to give due course to the petition to avert a
miscarriage of justice. For judicial cases do not come and go through the
portals of a court of law by the mere mandate of technicalities. Where a rigid
application of the rules will result in a manifest failure or miscarriage of justice,
technicalities should be disregarded in order to resolve the case.[21] In Aguam
v. CA,[22] we ruled that:
The court has the discretion to dismiss or not to dismiss an appellant's
appeal. It is a power conferred on the court, not a duty. The "discretion must
be a sound one, to be exercised in accordance with the tenets of justice and
fair play, having in mind the circumstances obtaining in each case."
Technicalities, however, must be avoided. The law abhors technicalities that
impede the cause of justice. The court's primary duty is to render or
dispense justice. "A litigation is not a game of technicalities." "Lawsuits
unlike duels are not to be won by a rapier's thrust. Technicality, when it
deserts its proper office as an aid to justice and becomes its great hindrance
and chief enemy, deserves scant consideration from courts." Litigations
must be decided on their merits and not on technicality. Every party litigant
must be afforded the amplest opportunity for the proper and just
determination of his cause, free from the unacceptable plea of technicalities.
Thus, dismissal of appeals purely on technical grounds is frowned upon
where the policy of the court is to encourage hearings of appeals on their
merits and the rules of procedure ought not to be applied in a very rigid,
technical sense; rules of procedure are used only to help secure, not
override substantial justice. It is a far better and more prudent course of
action for the court to excuse a technical lapse and afford the parties a
review of the case on appeal to attain the ends of justice rather than dispose
of the case on technicality and cause a grave injustice to the parties, giving
a false impression of speedy disposal of cases while actually resulting in
more delay, if not a miscarriage of justice.[23]
The rules of procedure are merely tools designed to facilitate the
attainment of justice. They were conceived and promulgated to effectively aid
the court in the dispensation of justice. Courts are not slaves to or robots of
technical rules, shorn of judicial discretion. In rendering justice, courts have
always been, as they ought to be, conscientiously guided by the norm that on
the balance, technicalities take a backseat against substantive rights, and not
the other way around. Thus, if the application of the Rules would tend to
frustrate rather than promote justice, it is always within our power to suspend
the rules, or except a particular case from its operation.[24]
In this case, the Court finds compelling reasons to disregard the
petitioners procedural lapses in order to obviate a patent injustice. And to
avert further delay, we have also opted to resolve the petition on its merits
rather than remand the case to the appellate court, a remand not being
necessary where, as in the instant case, the ends of justice would not be
subserved thereby and we are in a position to resolve the dispute based on
the records before us.[25]
We are convinced beyond cavil that the NLRC committed a grave abuse
of its discretion amounting to lack or excess of jurisdiction in reversing the
order of the Labor Arbiter, for in so doing, the NLRC modified the decision of
this Court in Raycor Aircontrol Systems, Inc. v. NLRC.[26]
It bears stressing that in our decision in G.R. No. 114290, we specifically
enjoined the petitioners reinstatement coupled with the payment of
backwages, from the time of their dismissal up to the time of their actual
reinstatement. However, the NLRC, in its assailed June 16, 1998 Decision,
directed the payment of the petitioners backwages from the time of dismissal
up to July 13, 1992, thus sustaining the claim of the private respondent that
when the petitioners were directed to return to work on the said date, they
refused. In so doing, the NLRC sought to enforce the final judgment in G.R.
No. 114290 in a manner contrary to the explicit terms thereof. We cannot and
should not countenance such a travesty. Thus, in Solidbank Corporation v.
Court of Appeals,[27] we held that:
It is a settled general principle that a writ of execution must conform
substantially to every essential particular of the judgment
promulgated. Execution not in harmony with the judgment is bereft of
validity. It must conform, more particularly, to that ordained or decreed in the
dispositive portion of the decision.
Corollary thereto, it must be stressed that a judgment which has acquired
finality becomes immutable and unalterable, and hence may no longer be
modified in any respect except only to correct clerical errors or mistakes all
the issues between the parties being deemed resolved and laid to rest. This
is meant to preserve the stability of decisions rendered by the courts, and to
dissuade parties from trifling with court processes. One who has submitted
his case to a regular court necessarily commits himself to abide by whatever
decision the court may render. Any error in the decision which has not been
considered in a timely motion for reconsideration or appeal cannot be
impugned when such error becomes apparent only during execution.
We note that in its Decision dated June 16, 1998, the NLRC reversed
the Labor Arbiters dismissal of the case and directed the payment of
backwages, to be reckoned from the time of the petitioners dismissal up to
the time of their actual reinstatement.[28] If the private respondent believed the
aforesaid computation to be erroneous in the light of the factual circumstances
obtaining between the parties, it should have assigned the same as an error
when it filed its petition for certiorari in G.R. No. 114290 assailing the said
NLRC judgment. The private respondent did not do so.Although the private
respondent filed a motion for clarification of the decision of this Court in the
said case, the said motion was, however, denied by this Court in its Resolution
dated October 15, 1997[29] considering that entry of judgment had already IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The
been made. Decision of the NLRC dated June 16, 1998 is SET ASIDE. The Order of the
Labor Arbiter dated August 15, 1997 is AFFIRMED.
It is, therefore, crystal-clear that the manner of the computation of the
petitioners backwages is an issue which was already resolved by this Court SO ORDERED.
in its decision in G.R. No. 114290 which had long acquired finality. Hence, the
Courts decision in G.R. No. 114290, which directed the payment of the
petitioners backwages from the time they were dismissed up to the time they
are actually reinstated, has become the law of the case which now binds the
NLRC and the private respondent. The law of the case doctrine has been
defined as a term applied to an established rule that when an appellate court
passes on a question and remands the case to the lower court for further
proceedings, the question there settled becomes the law of the case upon
subsequent appeal.[30] The private respondent, therefore, on appeal to the
NLRC in the course of the execution proceedings in the case, is barred from
challenging anew the issue of the manner in which the petitioners backwages
should be computed. Corollarily, the NLRC can no longer modify the ruling of
the Court on the matter. Judgment of courts should attain finality at some point
in time, as in this case, otherwise, there would be no end to
litigation. In Hufana v. Genato,[31] we held that:

It is well established that when a right or fact has been judicially tried and
determined by a court of competent jurisdiction, so long as it remains
unreversed, it should be conclusive upon the parties and those in privity with
them. The dictum therein laid down became the law of the case and what
was once irrevocably established as the controlling legal rule or decision,
continues to be binding between the same parties as long as the facts on
which the decision was predicated, continue to be the facts of the case
before the court. Hence, the binding effect and enforceability of that dictum
can no longer be relitigated anew since said issue had already been
resolved and finally laid to rest in that aforementioned case (Miranda v. CA,
141 SCRA 306 [1986]), if not by the principle of res judicata, but at least by
conclusiveness of judgment (Vda. de Sta. Romana v. PCIB 118 SCRA 335
[1982]).
 FIRST DIVISION
March 22, 2017
G.R. No. 214864
PHILIPPINE PORTS AUTHORITY (PPA), represented by Oscar M.
Sevilla, General Manager, Benjamin B. Cecilio, Assistant Manager for
Operations, and Sisali B. Arap, Port Manager, Petitioner
vs
NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES,
INC. (NIASSI), represented by Ramon Calo, Respondent
DECISION
CAGUIOA, J.:
This is a Petition for Review on Certiorari1 (Petition) filed under Rule 45 of
the Rules of Court against the Amended Decision2 dated September 15,
2014 (Amended Decision) in CA-G.R. SP No. 04828-MIN rendered by the
Court of Appeals, Cagayan de Oro City, Special Former Twenty-Second
Division (CA). The Amended Decision stems from an Amended Petition for
Mandamus with Prayer for the Writ of Preliminary Mandatory Injunction
and/or Temporary Restraining Order3 filed before the Regional Trial Court of
Butuan City (RTC) by respondent Nasipit Integrated Arrastre and
Stevedoring Services, Inc. (NIASSI) against petitioner Philippine Ports
Authority (PP A),4 which sought to compel the latter to formally execute the
10-year cargo-handling contract awarded in NIASSI's favor.
The Facts
PP A is a government agency created by virtue of Presidential Decree No.
505 (PD 505). Under PD 505, PPA is charged with the management and
control of all ports in the Philippines.5 On the other hand, NIASSI is a duly
organized Philippine corporation engaged in the business of cargo
handling.6
Sometime in November 2000, PP A, through its Pre-qualification, Bids and
Awards Committee (PBAC) accepted bids for a 10-year contract to operate
as the sole cargo handler at the port of Nasipit, Agusan del Norte (Nasipit
Port).7 Subsequently, PBAC issued Resolution No. 005-
20008 recommending that the 10-year cargo-handling contract be awarded
to NIASSI as the winning bidder.9
On November 20, 2000, the second highest bidder, Concord Arrastre and
Stevedoring Corporation (CASCOR) filed a protest with PPA's General
Manager, Oscar M. Sevilla10 (Sevilla), alleging that two of NIASSI's
stockholders on record are legislators who are constitutionally prohibited
from having any direct or indirect financial interest in any contract with the
government or any of its agencies during the term of their office.11
Notwithstanding the protest, PPA issued a Notice of Award in favor of
NIASSI on December 21, 2000.12 The Notice of Award directed NIASSI to
signify its concurrence thereto by signing the conforme portion and returning
the same to PP A within 10 days from receipt.13 PP A received notice of
NIASSI's conformity to the Notice of Award on January 3, 2001.14
However, instead of formally executing a written contract, NIASSI requested
PP A to issue a Hold-Over Authority (HOA) in its favor, in view of CASCOR's
pending protest. PPA granted NIASSI's request and issued a HOA dated
August 1, 2001, effective until October 31, 2001, "or until [such time] a
cargo[-]handling contract shall have been awarded, whichever comes first."15
Meanwhile, the Office of the Government Corporate Counsel (OGCC)
issued Opinion No. 028, series of2002 on February 7, 2002 (OGCC Opinion)
which confirmed the authority of PP A to bid out the cargo-handling contract
and affirmed the validity of the award in NIASSI's favor.16 Despite this, the
HOA was subsequently extended several times upon NIASSI' s request.
While the exact number of extensions and their particulars cannot be
ascertained from the records, the last extension of the HOA appears to have
been issued on October 13, 2004, for a term of six months.17
However, barely two months after the last extension of the HOA, PPA,
through its Assistant General Manager for Operations, Benjamin B. Cecilio
(Cecilio), issued a letter dated December 6, 2004 revoking the
extension.18 In said letter, Cecilio advised NIASSI that PPA received
numerous complaints regarding the poor quality of its services due to the
use of inadequately maintained equipment. Cecilio further relayed that PPA
would take over the cargo-handling services at the Nasipit Port beginning
December 10, 2004.19
Proceedings before the RTC
On the scheduled date of the take-over, NIASSI filed with the RTC a Petition
for Injunction with Prayer for the Writ of Preliminary Injunction and/or
Temporary Restraining Order. The petition was later amended to a Petition
for Mandamus with Prayer for the Writ of Preliminary Mandatory Injunction
and/or Temporary Restraining Order on December 22, 2004. (Amended
Petition).20
The Amended Petition prayed for the issuance of a writ of mandamus
directing PPA to formally execute a written contract, and a writ of preliminary
mandatory injunction directing PP A to turn over the management and
operations of Nasipit Port's cargo-handling services back to NIASSI.21
On March 18, 2005, the RTC issued a resolution granting NIASSI's prayer
for a writ of preliminary mandatory injunction, conditioned upon the posting
of a ₱1,000,000.00 surety bond.22 The pertinent portion of the said
resolution reads:
It is undeniable that petitioner spent a considerable capital outlay, in the
form of equipment, machineries and appliances in the establishment of its
port operation. Moreover, it has also supplied the necessary manpower to
wheel its operation.
When the PPA took an active part in the management, control and
supervision of the port operations, it practically utilized all the available
resources supplied by the petitioner.
What actually happened was that PP A made only adjustment/correction in
the port operation to improve the delivery of basic services. No additional
capital outlay was spent.
In summation, this Court recognizes and declares that petitioner's right to
continue the cargo handling operations should be protected. It cannot be
denied that the continued operation by respondents will probably work
injustice to the petitioner, causing irreparable damage to the latter. The
better ends of justice [will] be served if the state of affairs [will] be maintained
prior to respondent's actual takeover, until finally the main action is
disposed.23
After NIASSI posted the required surety bond, the RTC issued the writ of
preliminary mandatory injunction on March 28, 2005.24 PP A filed a Motion
for Reconsideration on even date, followed by a Supplemental Motion on
March 30, 2005. The Supplemental Motion alleged that the writ of
preliminary mandatory injunction should be quashed since its corresponding
surety bond designated NIASSI's President Ramon Calo as principal,
instead ofNIASSI itself.25
Subsequently, PP A filed a Manifestation expressing its willingness to file a
counter-bond in the event that its Motion for Reconsideration is
granted.26 Thereafter, NIASSI filed an Opposition/Reply to PPA's Motion for
Reconsideration.27
On April 11, 2005, the RTC issued an order (April 2005 RTC Order) granting
PPA's Motion for Reconsideration. The April 2005 RTC Order immediately
dissolved the writ of preliminary mandatory injunction and directed NIASSI to
surrender the management and control of Nasipit Port's cargo-handling
operations to PPA.28
Prompted by the April 2005 RTC Order, NIASSI filed a Petition
for Certiorari before the CA (CA petition), docketed as CA-G.R. SP No.
00214.29 The CA petition assailed the immediately executory nature of the
April 2005 RTC Order and questioned the dissolution of the writ of
preliminary injunction without prior hearing. In addition, the CA petition
alleged that the April 2005 RTC Order reversed the RTC's previous order
despite the absence of new matters or issues raised.30 The CA petition thus
prayed for the reversal of the April 2005 RTC Order, and ultimately, the
reinstatement of the writ of preliminary injunction.31
For its part, PPA argued, among others, that NIASSI was not entitled to the
issuance of the injunctive writ because it had no legal right to continue
providing cargo-handling services at Nasipit Port, considering that PP A has
no existing cargo-handling contract with NIASSI.32
In a Decision33 dated August 8, 2006, the CA granted the petition observing
that Presiding Judge Godofredo B. Abul, Jr. (Judge Abul) of the RTC
committed several procedural errors when he issued the April 2005 RTC
Order. According to the CA, Judge Abul did not conduct a hearing on PPA's
Motion for Reconsideration nor did he direct PP A to file a counter-bond
before quashing the writ of preliminary mandatory injunction, in violation of
Section 6, Rule 58 of the Rules of Court.34 The CA concluded that these
lapses, taken together with Judge Abul's sudden and inexplicable change of
mind, gave rise to suspicions that the issuance of the April 2005 RTC Order
was tainted with irregularity and grave abuse of discretion.35 Thus, the CA
directed the reinstatement of the writ of preliminary mandatory
injunction.36 This decision was later affirmed by this Court in the case
of Philippine Ports Authority v. Nasipit Integrated Arrastre and Stevedoring
Services, Inc.37
Notably, in the process of resolving NIASSI's CA petition, it became
necessary for the CA to determine whether NIASSI had any legal right to
continue its operations at Nasipit Port. In this connection, the CA found that
a perfected contract between NIASSI and PP A in respect of the
cargohandling operations in fact existed, albeit unwritten.38 The CA held:
Under Article 1318 of the Civil Code, there can be no contract unless the
following requisites concur: (a) consent of the contracting parties; (b) object
certain which is the subject matter of the contract; and (c) cause of the
obligation which is established.
Under Article 1315 of the same Code, contracts are perfected by mere
consent, upon the acceptance by the offeree of the offer made by the
offeror. From that moment, the parties are bound not only to the fulfillment of
what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law.
In the case at bar, there is no dispute as to the subject matter of the contract
and the cause of the obligation. The controversy lies in the consent -
whether the Notice of Award constitutes as a counter-offer and, as a
consequence, did not give rise to a perfected contract.
A perusal of the records shows that PPA conducted a public bidding for a
ten-year contract to operate as sole cargo handler at Nasipit Port, and
among the bidders, only two (2) pre-qualified, one of which is the petitioner.
In its Resolution No. 005-2000, the Pre-qualification, Bids and Awards
Committee (PBAC) declared the petitioner as the winning bidder, and,
consequently, a Notice of Award was given to the latter. x x x
xxxx
Since respondent PP A started the process of entering into the contract by
conducting a bidding, Article 1326 of the Civil Code shall apply, to wit:
Advertisements to bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the highest or lowest bidder, unless the
contrary appears.
Accordingly, the rules and regulations issued by the PPA for the public
bidding constituted the advertisement to bid on the contract, while the bid
proposals submitted by the bidders constituted the offer. The reply of
respondent PPA shows its acceptance or rejection of the respective offers.
x x x PPA categorically awarded the contract to the petitioner in accordance
with the terms and conditions of the latter's bid proposal. This is the
acceptance of petitioner's offer as contemplated by the law. A thorough
reading of the required documents clearly shows that they had no material
or significant bearing to the perfection of the contract. These were mere
formal requirements that will not affect the award of the contract to the
petitioner. If at all, the need to submit the documents in question pertains to
the issuance of the written evidence of the contract.
xxxx
Verily, the Holdover Authority (HOA) granted by the private respondent and
the series of extensions allowing the petitioner to operate provisionally the
arrastre service confirm the perfection of their contract despite the delay in
its consummation due to acts attributable to the private respondents. But it
cannot be gainsaid that the series of extensions constitute partial fulfillment
and execution of the contract of cargo handling services.
xxxx
It is therefore Our submission that a perfected contract of cargo handling
services existed when the petitioner won the bidding, given the Notice of
Award and conformed (sic) to the conditions set forth in the Notice of Award
because the requirements prescribed in the Notice of Award have no
bearing on the perfection of the contract. On the contrary, it amounted to a
qualified acceptance of petitioner's offer, a clear legal right to continue its
operations in the port. Since the respondent is bound by the contract, the act
of taking over the cargo handling service from the petitioner is violative of its
right.39(Emphasis supplied)
In view of the foregoing CA decision, and this Court's decision in G.R. No.
174136 affirming the same, the RTC directed the parties to submit their
simultaneous memoranda on the issue of whether the Amended Petition had
been rendered moot and academic.40 On the basis of such memoranda,
Judge Abul issued a Resolution41 dated June 1, 2011 (June 2011 RTC
Resolution) dismissing the Amended Petition for being moot and academic.
The June 2011 RTC Resolution observed that since the CA had already
made a definitive ruling that a contract had been perfected between the
parties, the RTC had "nothing left to do" in respect of the Amended
Petition.42
However, on NIASSI's Motion for Reconsideration, the RTC issued a
Resolution43 dated September 20, 2011 (September 2011 RTC Resolution)
reversing the June 2011 RTC Resolution. The dispositive portion of the
September 2011 RTC Resolution reads:
WHEREFORE, premises considered, the Motion for Reconsideration is
granted.
The defendant is hereby ordered to execute a formal ten (10) years contract
in favor of the plaintiff, upon the finality of this order. The writ of preliminary
injunction issued by the Court dated August 8, 2006, will be considered
dissolved upon perfection of the formal arrastre service contract.
SO ORDERED.44
PPA moved for the reconsideration of the September 2011 RTC Resolution.
However, the RTC denied PPA's motion in an Order dated December 20,
2011(December2011 RTC Order).45
Proceedings before the CA
Aggrieved, PP A filed an appeal before the CA, docketed as CA-G.R. SP
No. 04828. In said appeal, PPA faulted the RTC for reversing the June 2011
RTC Order, insisting that the Amended Petition had already become moot
and academic. The PP A also alleged that the CA erred in directing it to
execute a written 10-year contract with NIASSI reckoned from the finality of
the September 2011 RTC Resolution, as this was tantamount to extending
the original term of the contract between the parties that was perfected on
January 3, 2001, the date when PPA received notice of NIASSI's conformity
to the Notice of Award.46
PPA thus prayed that the September 2011 RTC Resolution and December
2011 R TC Order be set aside, and a new order be issued dismissing the
Amended Petition for being moot and academic.47
On December 11, 2013, the CA rendered a Decision48 granting PPA's
appeal in part (CA Decision) by annulling the September 2011 RTC
Resolution and December 2011 RTC Order in so far as they failed to
consider that the 10-year cargo-handling contract had been partially fulfilled.
The CA ruled:
There is already a perfected contract of ten years, albeit it is not written. In
fact, NIASSI is already exercising the subject matter of that unwritten
contract. To compel PP A to execute a new written ten-year contract without
deducting the periods mentioned above is to create another contract for the
parties and to unjustly enrich NIASSI. Consequently, the written contract
should only cover the remaining period of the original ten-year contract. In
the event that the total period is already more than ten (10) years, then the
petition should be dismissed for being moot and academic.
WHEREFORE, the instant appeal is partly GRANTED. The case is
remanded to the Regional Trial Court to determine the total period of time
during which NIASSI was in operation of the cargo handling services of
Nasipit port, which period covers the following:
(1) The several hold-over permits granted to NIASSI since 2001, the year
the contract was perfected;
(2) The operation of NIASSI as a consequence of Our decision in 2006; and
(3) The operation of NIASSI as a consequence of the granting of its motion
for reconsideration in 2011 until the finality of this case.
The total period shall then be deducted, as partial fulfillment, to the ten-year
contract in favor of NIASSI. The written contract should only cover the
balance of the ten-year period awarded to NIASSI in the Notice of Award.
Otherwise, the petition should be dismissed for being moot and academic.
SO ORDERED.49 (Emphasis and underscoring supplied)
On NIASSI's Motion for Reconsideration, however, the CA issued its
Amended Decision dated September 15, 2014.50 As stated earlier, the
Amended Decision affirmed the September 2011 R TC Resolution and
December 2011 RTC Order directing PPA to execute the cargo-handling
contract in favor of NIASSI for a full 10-year term from the finality of the
September 2011 RTC Resolution,51 on the ground that NIASSI's operations
for the period covered by the HOA and its extensions should not be
deducted therefrom:
Having a Notice of Award in its favor and having complied with the
requirements, NIASSI has established that it has a right for (sic) the ten-year
cargohandling contract; yet no written contract embodying the terms of the
agreement was signed between the parties. "A contract is perfected by mere
consent and from that moment the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good
faith, usage and law." What remains then is just the execution of the written
contract embodying the terms of the agreement so that both parties can
comply. And "there is no unjust enrichment where the one receiving the
benefit has a legal right or entitlement thereto." Thus, pursuant to the Notice
of Award, the PPA is now directed to execute the 10-year written contract in
favor of NIASSI. Based on the language of the last hold-over authority, the
PPA does not consider the hold-over permits as partial fulfillment of the
unwritten cargo handling contract. The HOA is a separate agreement
between the parties pending the issuance of the cargo-handling services
contract.52 (Italics in the original; emphasis supplied)
PP A received a copy of the Amended Decision on October 20, 2014.53
On November 4, 2014, PPA filed a motion with the Court asking for an
additional period of 30 days within which to file a Petition for Review
on Certiorari.54 PPA's motion was granted by the Court in its Resolution
dated November 17, 2014.55
Finally, on December 3, 2014, PPA filed the instant Petition.
Issue
The sole issue for resolution of this Court is whether the CA erred when it
issued the Amended Decision affirming the September 2011 RTC
Resolution and December 2011 RTC Order, and directing PPA to execute a
cargo-handling contract in favor of NIASSI for a full 10-year term without
deducting the period covered by the HOA.
The Court's Ruling
In the instant Petition, PPA contends that the Amended Petition before the
RTC had been rendered moot and academic by virtue of the CA's decision
in CA-G.R. SP No. 00214.56 On this basis, PPA concludes that it can no
longer be compelled to formally execute a contract with NIASSI upon finality
of the Amended Decision, since the term of the perfected contract already
expired on January 3, 2011, 10 years after PPA received notice of NIASSI's
conformity to the Notice of Award.57
The Petition is impressed with merit.
The CA 's findings in CA-G.R. SP No.
00214 constitute the law of the case
between the parties, and are thus
binding herein.
In its decision in CA-G.R. SP No. 00214, the CA held that (i) the 10- year
cargo-handling contract had already been perfected, and (ii) the HOA and its
subsequent extensions constituted partial fulfillment thereof. For emphasis,
the relevant portions are reproduced:
Verily, the Holdover Authority (HOA) granted by the private respondent and
the series of extensions allowing the petitioner to operate provisionally the
arrastre service confirm the perfection of their contract despite the delay in
its consummation due to acts attributable to the private respondents. But it
cannot be gainsaid that the series of extensions constitute partial fulfillment
and execution of the contract of cargo handling services.
xxxx
It is therefore Our submission that a perfected contract of cargo handling
services existed when the petitioner won the bidding, given the Notice of
Award and conformed to the conditions set forth in the Notice of Award
because the requirements prescribed in the Notice of Award have no
bearing on the perfection of the contract. On the contrary, it amounted to a
qualified acceptance of petitioner's offer, a clear legal right to continue its
operations in the port. Since the respondent is bound by the contract, the act
of taking over the cargo handling service from the petitioner is violative of its
right.58
This decision was affirmed by the Court in toto in G.R. No. 174136, thus:
WHEREFORE, the petition is DENIED and the appealed Decision of the
Court of Appeals isAFFIRMED.59
In tum, the Court's decision became final and executory after the lapse of 15
days from notice thereof to the parties. From such time, the Court's decision
became immutable and unalterable.60
The Court notes that CA-G.R. SP No. 00214 and the instant Petition both
stem from the Amended Petition, and seek the same relief - the execution of
a written contract in accordance with the Notice of Award. Moreover, both
cases involve the same facts, parties and arguments. For these reasons, the
Court believes that the doctrine of the law of the case is applicable.
The doctrine of the law of the case precludes departure from a rule
previously made by an appellate court in a subsequent proceeding
essentially involving the same case.61 Pursuant to this doctrine, the Court,
in De La Salle University v. De La Salle University Employees Association
(DLSUEANAFTEU),62 (DLSU) denied therein petitioner's prayer for review,
since the petition involved a single issue which had been resolved with
finality by the CA in a previous case involving the same facts, arguments
and relief.
We note that both G.R. No. 168477 and this petition are offshoots of
petitioner's purported temporary measures to preserve its neutrality with
regard to the perceived void in the union leadership. While these two cases
arose out of different notices to strike filed on April 3, 2003 and August 27,
2003, it is undeniable that the facts cited and the arguments raised by
petitioner are almost identical. Inevitably, G.R. No. 168477 and this petition
seek only one relief, that is, to absolve petitioner from respondent's charge
of committing an unfair labor practice, or specifically, a violation of Article
248(g) in relation to Article 252 of the Labor Code.
For this reason, we are constrained to apply the law of the case doctrine in
light of the finality of our July 20, 2005 and September 21, 2005 resolutions
in G.R. No. 168477. In other words, our previous affirmance of the Court of
Appeals' finding - that petitioner erred in suspending collective bargaining
negotiations with the union and in placing the union funds in escrow
considering that the intra-union dispute between the Aliazas and Bafiez
factions was not a justification therefor - is binding herein. Moreover, we
note that entry of judgment in G.R. No. 168477 was made on November 3,
2005, and that put to an end to the litigation of said issues once and for all.
The law of the case has been defined as the opinion delivered on a former
appeal. It means that whatever is once irrevocably established as the
controlling legal rule or decision between the same parties in the same case
continues to be the law of the case, whether correct on general principles or
not, so long as the facts on which such decision was predicated continue to
be the facts of the case before the court.63 (Italics in the original; emphasis
supplied; citations omitted)
In Heirs of Felino M Timbol, Jr. v. Philippine National Bank64 (Heirs of
Timbol), the Court was confronted with procedural antecedents similar to
those attendant in this case. Therein, the Court affirmed the CA's decision
declaring as valid the extrajudicial foreclosure assailed by petitioners on the
basis of factual findings which were affirmed by the Court in a previous
decision that dealt with the dissolution of a writ of preliminary injunction
issued in the same case. Thus, in Heirs of Timbol, the Court ruled that the
CA correctly applied the doctrine of the law of the case.
The Court of Appeals correctly applied the law of the case doctrine.
In PNB v. Timbol, PNB brought a petition for certiorari to set aside the order
of Judge Zeus L. Abrogar that issued a writ of preliminary injunction in Civil
Case No. 00-946. The Court struck down this order, holding that the order
"was attended with grave abuse of discretion."
The Court found that the Spouses Timbol "never denied that they defaulted
in the payment of the obligation." In fact, they even acknowledged that they
had an outstanding obligation with PNB, and simply requested for more time
to pay.
The Court also held that the extrajudicial foreclosure of the mortgage was
proper, since it was done in accordance with the terms of the Real Estate
Mortgage, which was also the Court's basis in finding that Supreme Court
Administrative Order No. 3 does not apply in that case.
The Court also found that the Spouses Timbol's claim that PNB bloated the
amount of their obligation was "grossly misleading and a gross
misinterpretation" by the Spouses Timbol. The Court noted the Spouses
Timbol's letter to PNB that acknowledged they had an outstanding obligation
to PNB, as well as affirmed that they received the demand letter directing
them to pay, contrary to their claim. Thus, the Court in PNB v.
Timbol concluded that the R TC committed grave abuse of discretion when it
issued a writ of preliminary injunction.
No doubt, this Court is bound by its earlier pronouncements in PNB v.
Timbol.
The term law of the case has been held to mean that "whatever is once
irrevocably established as the controlling legal rule or decision between the
same parties in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case before the
court. As a general rule, a decision on a prior appeal of the same case is
held to be the law of the case whether that question is right or wrong, the
remedy of the party deeming himself aggrieved being to seek a rehearing."
xxxx
The Court is bound by its earlier ruling in PNB v. Timbol finding the
extrajudicial foreclosure to be proper. The Court therein thoroughly and
thoughtfully examined the validity of the extrajudicial foreclosure in order to
determine whether the writ of preliminary injunction was proper. To allow a
reexamination of this conclusion will disturb what has already been settled
and only create confusion if the Court now makes a contrary finding.
Thus, "[q]uestions necessarily involved in the decision on a former appeal
will be regarded as the law of the case on a subsequent appeal, although
the questions are not expressly treated in the opinion of the court, as the
presumption is that all the facts in the case bearing on the point decided
have received due consideration whether all or none of them are mentioned
in the opinion."65 (Italics in the original; emphasis supplied; citations omitted)
The Court's discussions in DLSU and Heirs of Timbol are in point here
where the allegations and reliefs prayed for in NIASSI' s Amended Petition
show that their disposition required the RTC to resolve a single issue -
whether PP A is bound to formally execute the 10-year cargo-handling
contract pursuant to the Notice of Award. The relevant portions of the
Amended Petition state:
14. Petitioner won the bidding to operate cargo-handling services in the port
of Nasipit, Agusan del Norte, for ten (10) years. Notwithstanding due
compliance by petitioner of (sic) all the requirements as indicated in the
Notice of Award x x x petitioner was surprised to receive a communication
from respondent CECILIO for public respondent to takeover instead the
management and operations of cargo-handling services in the port of
Nasipit, Agusan del Norte.
xxxx
19. The act of public respondent in taking-over the management and
operations of cargo-handling services of petitioner utilizing the existing
facilities and manpower constitutes not only a blatant disregard to the
existing permit to operate, it likewise demonstrates a notorious abuse of
power reminiscent of the dark days of martial rule. The same act is
oppressive, capricious, whimsical, arbitrary and despotic as it denied
petitioner of (sic) its right to be heard and dispute the malicious allegations
against it. Essentially, the act is a calculated move to snatch away the award
of the ten-year contract of petitioner to operate the Cargo Handling Services.
xxx
24. WHEREFORE, FOR ALL THE FOREGOING, it is most respectfully
prayed of (sic) this Honorable Court that upon filing of this Petition, a
Temporary Restraining Order (TRO) and/or the Writ of Preliminary
Mandatory Injunction be issued commanding or enjoining the respondents
and all persons acting in their behalf or direction, to refrain, cease and desist
from further implementing the take-over of the management and operations
of the cargo-handling services in Nasipit Port, Agusan del Norte, as
contained in the letter dated 6 December 2004 x x x, and to refrain from
issuing similar orders pending resolution of the instant case and to restore to
the herein petitioner the management and operation of the cargo handling
services at the Port of Nasipit and until after the Honorable Court shall have
heard and resolved the application for the issuance of the Writ of Preliminary
Mandatory Injunction.
25. Petitioner further prays that after due notice and hearing, the Writ of
Mandamus be issued commanding the respondents to execute or cause the
final execution of a Cargo-Handling contract between petitioner and the
Philippine Ports Authority as represented by herein
respondents.66(Underscoring omitted; emphasis supplied)
In CA-G.R. SP No. 00214, the CA determined the existence of a perfected
contract between PP A and NIASSI in order to ascertain whether the
issuance of a writ of preliminary injunction in favor of NIASSI was proper.
Thus, the sole issue for the RTC's determination had been resolved in CAG.
R. SP No. 00214, when the CA made the following findings:
1. The 10-year cargo-handling contract had been perfected on January 3,
2001, the date when PP A received notice of NIASSI's conformity to the
Notice of Award;
2. The parties are bound to formally execute the perfected cargo-handling
contract in accordance with the Notice of Award; and
3. NIASSI's operations during the period covered by the HOA constitute
partial fulfillment of the perfected cargo-handling contract.
A preliminary injunction is in the nature of an ancillary remedy to preserve
the status quo during the pendency of the main case. As a necessary
consequence, matters resolved in injunction proceedings do not, as a
general rule, conclusively determine the merits of the main case or decide
controverted facts therein.67 Generally, findings made in injunction
proceedings are subject to the outcome of the main case which is usually
tried subsequent to the injunction proceedings.
In this case, however, no further proceedings were conducted after the
Decision of the Supreme Court relative to the injunction proceedings had
become final. To be sure, the RTC directed the parties to submit their
respective memoranda on the issue of whether or not the main case had
become moot and academic because of the finality of said Decision and, on
the basis of the memoranda, the R TC resolved to dismiss the Amended
Petition, as it had nothing left to determine.68 As such, no evidence to
controvert the findings of the CA in CA-G.R. SP No. 00214 were presented
in the main case. This being the case, the factual findings of the CA in
respect of the perfected cargo-handling contract in the injunction
proceedings became conclusive upon finality of this Court's decision
affirming the same. These circumstances thus render the application of the
law of the case doctrine proper.
In any case, it is worth noting that NIASSI recognized the perfection of the
cargo-handling contract in its Comment to the instant Petition, thus:
x x x When NIASSI received and signed the "conforme" portion [of the
Notice of Award], there [was] already [a] meeting of minds between the
parties as to the object and cause of the cargo handling contract, including
the terms and duration thereof.69
To NIASSI, the cargo-handling contract was a valid and binding agreement,
and it was thus bound by the concomitant rights and obligations arising
therefrom.
The term of the perfected contract has already expired.
PP A avers that its 10-year cargo-handling contract with NIASSI already
expired on January 3, 2011, after the lapse of 10 years from the date when
said contract was perfected.70 In turn, PP A concludes that it can no longer
be directed to formally execute another contract with NIASSI, since such a
directive would unduly lengthen the term of the cargo-handling contract
contrary to the intention of the parties.71
While the Court agrees with PPA's submission that the perfected contract
has already expired, the Court clarifies that such expiration is not because of
the mere lapse of 10 years reckoned from the date when the same was
perfected. To hold as such would be to feign ignorance of the events that
transpired thereafter, which led to the institution of this very Petition.
It bears emphasizing that PPA assumed the management and operations of
the cargo-handling services at Nasipit Port on two separate instances- first,
by virtue of its letter dated December 6, 2004 revoking the last extension of
the HOA, and second, by virtue of the April 2005 RTC Order lifting the
preliminary mandatory injunction granted in NIASSI's favor. The IO-year
term of the perfected contract must be deemed interrupted during the
periods when PPA assumed management and control over NIASSI's cargo-
handling operations.
The relevant periods are summarized, thus:
Period Duration Operator Basis
August 8, 2006 to December 3, 8 years, 3 months and 26 days Reinstatement of Preliminary
2014 Injunction
January 3, 2001 to 3 years, 11 months and 6 NIASSI Notice of Award
December 9, 2004 days Total 12 years, 3 months and 15 days
December 10, 2004 3 months and 17 days PPA Letter dated December 6,
to March 27, 2005 2004 Clearly, the 10-year term of the perfected contract had already expired,
leaving the R TC with nothing to enforce.72
March 28, 2005 to 14 days NIASSI Issuance of Preliminary
April 11, 2005 Mandatory Injunction
Finally, it bears stressing that PPA issued the Notice of Award on December
April 12, 2005 to 1 year, 3 months and 26 PPA 21, 2000. To compel PPA to formally execute a 10-year cargo-handling
Dissolution of Preliminary
August 7, 2006 days Injunction contract at this time on the basis of conditions prevailing nearly two decades
ago would certainly be unreasonable and iniquitous.
August 8, 2006 to 8 years, 3 months and 26 NIASSI Reinstatement of
December 3, 2014 days Preliminary For the foregoing reasons, the Court resolves to grant the instant Petition.
Injunction
December 3, 2014 - NIASSI WHEREFORE, premises considered, the Petition for Review on Certiorari is
Institution of the Petition
GRANTED. The Amended Decision dated September 15, 2014 of the Court
of Appeals in CA-G.R. SP No. 04828-MIN is SET ASIDE. Consequently, SP.
Civil Case No. 1242 pending before the Regional Trial Court of Butuan City,
Based on the table above, NIASSI conducted the cargo-handling operations Branch 4, is hereby DISMISSED.
at Nasipit Port for a total period of 3 years, 11 months and 20 days. Notably,
NIASSI does not dispute that it has been conducting such operations since
SO ORDERED.
the reinstatement of the preliminary mandatory injunction.

Thus, even if the Court assumes a conservative stance for purposes of

illustration and sets the cut-off date for NIASSI's current operations on the
date when this Petition was filed, NIASSI's total period of operation would be
pegged at 12 years, 3 months and 15 days, computed as follows:

Period Duration Basis

January 3, 2001 to December 9, 3 years, 11 months and 6 days Notice of Award
2004
March 28, 2005 to April 11, 2005 14 days Issuance of Preliminary Mandatory
Injunction
 SECOND DIVISION
[G.R. No. 142947. March 19, 2002]
FRANCISCO N. VILLANUEVA, JR., petitioner, vs. THE HON. COURT OF
APPEALS and ROQUE VILLADORES, respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision[1] of the
Court of Appeals dated April 12, 2000 in CA-G.R. SP No. 50235 reversing the
two (2) Orders dated August 27, 1998[2] and December 4, 1998[3] of the
Regional Trial Court of Manila, Branch 41, in Criminal Cases Nos. 94-138744-
45 which denied respondent Roque Villadoress motion for disqualification of
Rico and Associates as private prosecutor for petitioner Francisco N.
Villanueva, Jr., and the motion for reconsideration thereof, respectively.
Respondent Villadores is one of the accused in the amended
informations in Criminal Cases Nos. 94-138744 and 94-138745 entitled,
People of the Philippines v. Atty. Tomas Bernardo, Roque Villadores, Alberto
Adriano and Rolando Advincula, for Falsification of Public Document before
the Regional Trial Court of Manila, Branch 41.
It appears that petitioner Villanueva, Jr. filed a complaint for illegal
dismissal against several parties, among them, IBC 13. When the labor
arbiter[4] ruled in favor of petitioner Villanueva, Jr., IBC 13 appealed to the
National Labor Relations Commission (NLRC).[5] As an appeal bond, IBC 13
filed Surety Bond No. G (16) 00136 issued by BF General Insurance
Company, Inc. (BF) with the Confirmation Letter dated September 20, 1993
supposedly issued by BFs Vice-President. However, both documents were
subsequently found to be falsified.
Thus, the two (2) complaints for falsification of public document were
filed before the Manila City Prosecutors Office. The charges against
respondent Villadores and Atty. Eulalio Diaz III were dismissed by the City
Prosecutors Office which, however, found probable cause against the other
respondents. Nonetheless, on a petition for review before the Department of
Justice (DOJ), the latter affirmed the dismissal against Diaz but ordered the
inclusion of respondent Villadores as an accused in the two (2) criminal cases.
Accordingly, the original informations were amended to include respondent
Villadores among those charged.
Following the arraignment of respondent Villadores, the private
prosecutor, Rico and Associates, filed anew a Motion to Admit Amended
Informations alleging damages sustained by private complainant, herein
petitioner Villanueva, Jr., as a result of the crimes committed by the accused.
The incident was referred to the City Prosecutors Office by the trial court. In
compliance, the fiscals office submitted a Motion to Admit Amended
Informations with the following amendment: to the prejudice of Francisco N.
Villanueva, Jr., and of public interest and in violation of public faith and
destruction of truth as therein proclaimed.
The Motion was granted by the trial court and the amended informations
were admitted in an Order dated October 10, 1997. Respondent Villadores
subsequently filed a Manifestation and/or Motion for Reconsideration but the
same was denied in an Order dated October 24, 1997.
Thus, respondent Villadores interposed on November 26, 1997 a
petition for certiorari with the Court of Appeals. Said petition, which was
docketed as CA-G.R. SP No. 46103, sought to annul the Order of the trial
court dated October 10, 1997 which admitted the second amended
informations, as well as the Order dated October 24, 1997 denying his motion
for reconsideration thereof.[6]
In a Decision dated June 22, 1998, the appellate court, acting thru its
Eleventh Division, found that the trial court committed no grave abuse of
discretion in admitting the amended informations and dismissed the petition
of respondent Villadores.[7] The decision in CA-G.R. SP No. 46103 became
final and executory on July 18, 1998.[8]
 Subsequently, before Branch 41 of the Regional Trial Court of Manila,
respondent Villadores moved for the disqualification of Rico and Associates
as private prosecutor for petitioner Villanueva, Jr.,[9] in line with the following
pronouncement of the appellate court in CA-G.R. SP No. 46103, to wit:[10]
Incidentally, We are one with the petitioner when it argued that Francisco N.
Villanueva, Jr. is not the offended party in these cases. It must be
underscored that it was IBC 13 who secured the falsified surety bond for the
purpose of the appeal it had taken from an adverse judgment of the labor
case filed by Francisco N. Villanueva, Jr. himself and wherein the latter
prevailed. We see no reason how Villanueva could have sustained damages
as a result of the falsification of the surety appeal bond and its confirmation
letter when it could have even redounded to his own benefit if the appeal
would be dismissed as a result of the forgery. If there be anyone who was
prejudiced, it was IBC 13 when it purchased a fake surety bond.
Rico and Associates opposed said motion on the ground that the above-
quoted pronouncement of the appellate court is a mere obiter dictum.[11]
In an Order[12] dated August 27, 1998 the trial court denied the motion
for disqualification ratiocinating, thus:
A reading of the aforecited decision of the Court of Appeals clearly shows
that the aforecited reason for the motion is a mere obiter dictum. As held by
the Supreme Court, an obiter dictum lacks force of adjudication. It is merely
an expression of an opinion with no binding force for purposes of res
judicata (City of Manila vs. Entote, June 28, 1974, 57 SCRA, 508-509). What
is controlling is the dispositive portion of the subject decision of the Court of
Appeals which denied due course and ordered dismissed the petition of the
movant questioning the Order of this Court granting the Motion to Admit
Informations and admitting the Amended Informations that include the name
of Francisco N. Villanueva, Jr. as the private offended party, which in effect
upheld and/or affirmed the questioned Order of this Court admitting the
amended informations.
Reconsideration[13] was sought by respondent Villadores but the same was
denied by the trial court in its Order dated December 4, 1998.[14]
Thus, on January 7, 1999, respondent Villadores filed a petition
for certiorari with the Court of Appeals, docketed therein as CA-G.R. SP No.
50235, seeking the annulment of the trial courts Order dated August 27, 1998
denying the Motion for Disqualification as well as its subsequent Order dated
December 4, 1998 denying reconsideration.[15]
On April 12, 2000, the appellate court rendered its now challenged
decision which reversed and set aside the two (2) Orders of the trial court
dated August 27, 1998 and December 4, 1998. The appellate court directed
that the name of petitioner Villanueva, Jr., appearing as the offended party in
Criminal Cases Nos. 94-138744-45 be stricken out from the records.[16]
Hence, this petition anchored on the following grounds:[17]
THE HON. COURT OF APPEALS SERIOUSLY ERRED IN ENJOINING
RICO & ASSOCIATES FROM APPEARING AS PRIVATE PROSECUTOR
AND/OR AS COUNSEL FOR FRANCISCO N. VILLANUEVA, JR., IN
CRIMINAL CASE NOS. 94-138744-45.
THE HON. COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO
APPRECIATE THAT THE MATTER OF WHETHER OR NOT FRANCISCO
N. VILLANUEVA, JR. IS AN OFFENDED PARTY IN CRIMINAL CASE NOS.
94-138744-45 HAD BEEN RESOLVED WITH FINALITY IN THE
AFFIRMATIVE IN CA-G.R. SP NO. 46103 WHERE THE HON. COURT OF
APPEALS UPHELD THE AMENDMENT OF THE INFORMATIONS IN SAID
CASES TO STATE THAT THE CRIMES WERE COMMITTED TO THE
PREJUDICE OF FRANCISCO N. VILLANUEVA, JR., AND PURSUANT TO
THE DOCTRINE OF RES JUDICATA, THE SAME COULD NO LONGER
BE RELITIGATED IN CA-G.R. SP NO. 50235.
THE HON. COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO
CONSIDER THE PRONOUNCEMENT IN CA-G.R. SP NO. 46103 THAT
FRANCISCO N. VILLANUEVA, JR. IS NOT AN OFFENDED PARTY, AS A
MERE OBITER DICTUM.
THE HON. COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO
APPRECIATE THAT FRANCISCO N. VILLANUEVA, JR., WAS IN FACT AN
AGGRIEVED PARTY.
THE HON. COURT OF APPEALS SERIOUSLY ERRED IN ORDERING
THE NAME OF FRANCISCO N. VILLANUVEVA, JR., APPEARING AS THE
OFFENDED PARTY BE STRICKEN FROM THE RECORDS, DESPITE
THE FACT THAT IN CA-G.R. SP NO. 46103, IT UPHELD THE
AMENDMENT OF THE INFORMATIONS SO AS TO STATE THAT THE
CRIMES CHARGED WERE COMMITTED TO THE PREJUDICE OF
FRANCISCO N. VILLANUEVA, JR.
All the foregoing issues boil down to the issue of whether or not the
pronouncement of the appellate court in CA-G.R. SP No. 46103 to the effect
that petitioner Villanueva, Jr. is not an offended party in Criminal Cases Nos.
94-138744-45 is obiter dictum.
An obiter dictum has been defined as an opinion expressed by a court
upon some question of law which is not necessary to the decision of the case
before it. It is a remark made, or opinion expressed, by a judge, in his decision
upon a cause, by the way, that is, incidentally or collaterally, and not directly
upon the question before him, or upon a point not necessarily involved in the
determination of the cause, or introduced by way of illustration, or analogy or
argument. Such are not binding as precedent.[18]
Based on the foregoing, the pronouncement of the appellate court in CA-
G.R. SP No. 46103 is not an obiter dictum as it touched upon a matter clearly
raised by respondent Villadores in his petition assailing the admission of the
Amended Informations. Among the issues upon which the petition
for certiorari in CA-G.R. SP No. 46103 was anchored, was whether Francisco
N. Villanueva, Jr. is the offended party.[19] Argument on whether petitioner
Villanueva, Jr. was the offended party was, thus, clearly raised by respondent
Villadores. The body of the decision contains discussion on that point and it
clearly mentioned certain principles of law.
It has been held that an adjudication on any point within the issues
presented by the case cannot be considered as obiter dictum, and this rule
applies to all pertinent questions, although only incidentally involved, which
are presented and decided in the regular course of the consideration of the
case, and led up to the final conclusion, and to any statement as to matter on
which the decision is predicated. Accordingly, a point expressly decided does
not lose its value as a precedent because the disposition of the case is, or
might have been, made on some other ground, or even though, by reason of
other points in the case, the result reached might have been the same if the
court had held, on the particular point, otherwise than it did. A decision which
the case could have turned on is not regarded as obiter dictum merely
because, owing to the disposal of the contention, it was necessary to consider
another question, nor can an additional reason in a decision, brought forward
after the case has been disposed of on one ground, be regarded as dicta. So,
also, where a case presents two (2) or more points, any one of which is
sufficient to determine the ultimate issue, but the court actually decides all
such points, the case as an authoritative precedent as to every point decided,
and none of such points can be regarded as having the status of a dictum,
and one point should not be denied authority merely because another point
was more dwelt on and more fully argued and considered, nor does a decision
on one proposition make statements of the court regarding other
propositions dicta.[20]
The decision of the appellate court in CA-G.R. SP No. 46103 allegedly
show a conflict between the pronouncements in the body of the decision and
the dispositive portion thereof. However, when that decision is carefully and
thoroughly read, such conflict is revealed to be more illusory than real. In
denying the petition for certiorari in CA-G.R. SP No. 46103, the appellate
court had this to say:
At the centerfold of this controversy is Section 14 of Rule 110, 1st
paragraph, which is quoted hereunder:
SEC. 14. Amendment. - The information or complaint may be amended, in
substance or form, without leave of court, at any time before the accused
pleads, and thereafter and during the trial as to all matters of form, by leave
and at the discretion of the court, when the same can be done without
prejudice to the rights of the accused.
Needless to state, amendment of a criminal charge sheet depends much on
the time when the change is requested. If before arraignment it is a matter of
right, no leave of court is necessary and the prosecution is free to do so
even in matters of substance and in form. On the other hand, the more
complicated situation involves an amendment sought after the accused had
already been arraigned. This time amendment can only be made by a prior
leave and at the discretion of the court, only as to matters of form when the
same can be done without prejudice to the rights of the accused [Draculan
vs. Donato; 140 SCRA 425 (1985); Teehankee vs. Madayag, 207 SCRA 134
(1992)].
Relative to the second instance, the primary consideration is whether the
intended amendment is only as to matter of form and same could be done
without prejudice to the rights of the accused. Substantial amendment as a
consequence is proscribed. In essence, substantial matters in the complaint
or information is the recital of facts constituting the offense charged and
determinative of the jurisdiction of the court. All other matters are merely of
form [Almeda vs. Villaluz, 66 SCRA 38 (1975); Teehankee vs.
Madayag, supra].
In other words, even if the amendment is only as to matter of form, one other
criteria must accompany it for its admission, which is, that it should not be
prejudicial to the accused. Conformably, the test as to when the rights of an
accused are prejudiced by the amendment of a complaint or information is,
when a defense under the complaint or information, as it originally stood,
would no longer be available after the amendment is made, and when any
evidence the accused might have, would no longer be available after the
amendment is made, and when any evidence the accused might have,
would be inapplicable to the complaint or information as amended [People
vs. Montenegro, 159 SCRA 236 (1988); Teehankee vs. Madayag, supra].
Given the above aphorisms, the inclusion of the name of Francisco N.
Villanueva, Jr. as the prejudiced complainant in the cases appears to be not
substantial. It did not change, alter or modify the crime charged nor any
possible defense. Likewise, any evidence the accused might have under his
defense in the original informations is still very much available to him and
applicable to the amended informations. In sum, accused petitioner is not in
any way prejudiced in his rights with such amendment which, in Our
considered opinion, is only a matter of form under the standards laid down in
the cases above-cited.
What seems to be more crucial here is the fact that the crime charged in the
two informations is falsification of public document committed by a private
individual defined and penalized under Article 172, paragraph 1, of the
Revised Penal Code. Accordingly, the evil sought to be punished and
sanctioned by the offense of falsification of public document is the violation
of the public faith and the destruction of the trust as therein solemnly
proclaimed [People vs. Pacana, 47 Phil 48, citing Decisions of the Supreme
Court of Spain of December 23, 1886; People vs. Mateo, 25 Phil. 324, Po
Giok To, 96 Phil. 913; see Revised Penal Code, Luis B. Reyes, 13th
Division, p. 211 and Aquino, 1976 ed., Vol. 2, p. 984]. Apropos, the crime of
falsification of public document does not require for its essential elements
damage or intent to cause damage. In the final analysis. the inclusion of the
name of Francisco N. Villanueva. Jr. would then be merely a superfluity in
the information, a meaningless surplusage therein. In fact. it is even highly
doubted if civil damages may be awarded in such transgression of the law.
Viewed from the above ratiocinations, We find no grave abuse of discretion
on the part of the lower court in admitting the second amended informations
albeit such amendment is totally irrelevant and unnecessary to the crime
charged. The mere fact that the court decides the question wrongly is utterly
immaterial to the question of jurisdiction [Estrada vs. Sto Domingo, 28 SCRA
891 (1969)]. And writs of certiorari are issued only for the correction of errors
of jurisdiction or grave abuse of discretion amounting to lack or in excess of
jurisdiction. It cannot be legally used for any other purpose [Silverio vs.
Court of Appeals, 141 SCRA 527 (1986)].
Incidentally, We are in one with the petitioner when it argued that Francisco
N. Villanueva, Jr. is not the offended party in these cases. It must be
underscored that it was IBC 13 who secured the falsified surety bond for the
purpose of the appeal it had taken from an adverse judgment of the labor
case filed by Francisco N. Villanueva, Jr. himself and wherein the latter
prevailed. We see no reason how Villanueva could have sustained damages WHEREFORE, the instant petition is hereby DENIED, and the Decision
as a result of the falsification of the surety appeal bond and its confirmation of the Court of Appeals dated April 12, 2000 in CA-G.R. SP No. 50235 is
letter when it could have even redounded to his own benefit if the appeal AFFIRMED. No costs.
would be dismissed as a result of the forgery. If there be anyone who was
prejudiced, it was IBC 13 when it purchased a fake surety bond.[21] SO ORDERED.

Clearly then, while the appellate court in CA-G.R. SP No. 46103

admitted that the addition of petitioner Villanueva, Jr. as an offended party is
not necessary, it held that the admission of the amended informations due to
the amendment to include petitioner Villanueva, Jr. did not by itself amount to
grave abuse of discretion amounting to lack or excess of jurisdiction.
Otherwise stated, there is an error of judgment but such did not amount to an
error of jurisdiction.
The special civil action for certiorari, which was availed of respondent
Villadores, is a remedy designed for the correction of errors of jurisdiction and
not errors of judgment. When a court exercised its jurisdiction an error
committed while so engaged does not deprive it of the jurisdiction being
exercised when the error is committed. If it did, every error committed by a
court would deprive it of its jurisdiction and every erroneous judgment would
be a void judgment. Thus, an error of judgment that the court may commit in
the exercise of its jurisdiction is not correctible through the original special civil
action of certiorari.[22] In effect, the appellate court in CA-G.R. SP No. 46103
merely held that respondent Villadores chose the wrong remedy.
It is significant to mention that the intervention of petitioner Villanueva,
Jr. in the criminal cases as an offended party is apparently predicated[23] on
the reduction by the NLRC, in IBCs appeal of the illegal dismissal case, of the
monetary award to which he is entitled, despite finding the appeal as not
perfected due to the posting of the spurious appeal bond.[24] However, such
alleged error should have been brought by petitioner Villanueva, Jr. to the
appropriate forum,[25] and not raised in criminal cases before the trial court as
a ground for his inclusion as a prejudiced party.
In view of all the foregoing, the instant petition, being devoid of merit,
must fail.
 SECOND DIVISION
[G.R. No. 146486. March 4, 2005]
OFFICE OF THE OMBUDSMAN, petitioner, vs. HONORABLE COURT OF
APPEALS AND FORMER DEPUTY OMBUDSMAN FOR THE
VISAYAS ARTURO C. MOJICA, respondents.
DECISION
CHICO-NAZARIO, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules
of Civil Procedure, and alternatively, an original special civil action
for certiorari under Sec. 1, Rule 65 of the Decision[1] of the Court of Appeals
of 18 December 2000 in CA-G.R. SP No. 58460 entitled, Arturo C. Mojica,
Deputy Ombudsman for the Visayas v. Ombudsman Aniano Desierto, Over-
all Deputy Ombudsman Margarito Gervacio, Jr. and the Committee of Peers
composed of Deputy Ombudsman Jesus F. Guerrero, Deputy Ombudsman
Rolando Casimiro and Special Prosecutor Leonardo P. Tamayo.
The case had its inception on 29 December 1999, when twenty-two
officials and employees of the Office of the Deputy Ombudsman (OMB) for
the Visayas, led by its two directors, filed a formal complaint[2] with the Office
of the Ombudsman requesting an investigation on the basis of allegations that
then Deputy Ombudsman for the Visayas, herein private respondent Arturo
Mojica, committed the following:
1. Sexual harassment against Rayvi Padua-Varona;
2. Mulcting money from confidential employees James
Alueta and Eden Kiamco; and
3. Oppression against all employees in not releasing
the P7,200.00 benefits of OMB-Visayas employees on the
date the said amount was due for release.
The complainants further requested that an officer-in-charge from the
OMB-Manila be appointed to manage their office to prevent the Deputy
Ombudsman from harassing witnesses and wielding his influence over them.
To underscore the seriousness of their intentions, they threatened to go on a
mass leave of absence, and in fact took their cause to the media.[3]
The subsequent events, as stated by the Ombudsman and adopted by
the Court of Appeals,[4] are as follows:
The Ombudsman immediately proceeded to the OMB-Visayas office in Cebu
City to personally deal with the office rebellion. Reaching Cebu, the
Ombudsman was informed by Petitioner that Petitioner wanted to proceed to
Manila, apparently because of his alienation and the fear for reprisal from his
alleged lady victims husbands. Petitioner in fact already had a ticket for the
plane leaving two hours later that day. The Ombudsman assented to the quick
movement to Manila for Petitioners safety and the interest of the Offices
operations. Subsequently, the Ombudsman installed Assistant Ombudsman
Nicanor J. Cruz as the Officer-in-Charge of OMB-Visayas.
Acting on the formal complaint against petitioner, the Ombudsman directed
his Fact-Finding and Intelligence Bureau (FFIB) to conduct a verification and
fact-finding investigation on the matter. The FFIB, later in its Report, found the
evidence against Petitioner strong on the charges of acts of extortion, sexual
harassment and oppression. The FFIB report was referred by the
Ombudsman to a constituted Committee of Peers composed of the Deputy
Ombudsman for Luzon, The Special Prosecutor and the Deputy Ombudsman
for the Military.
The Committee of Peers initially recommended that the investigation be
converted into one solely for purposes of impeachment. However, this
recommendation was denied by the Ombudsman after careful study, and
following the established stand of the Office of the Ombudsman that the
Deputy Ombudsmen and The Special Prosecutor are not removable through
impeachment. As succintly (sic) stated by the Ombudsman in his administrative adjudication against Deputy Ombudsman Arturo C. Mojica for
Memorandum dated March 27, 2000 (in reiteration of the March 13, 2000 the following criminal and administrative offenses, namely:
Order of Overall Deputy Ombudsman) -
I. CRIMINAL
Acting on your query as to whether or not the Ombudsman confirms or affirms
the disapproval by Overall Deputy Ombudsman Margarito P. Gervacio, Jr., of Violation of Section 3, paragraph[s] (b) and (e) of
your recommendation to conduct instead an investigation of the complaint R.A. 3019 (Anti-Graft and Corrupt Practices Act);
against Deputy Ombudsman Arturo C. Mojica solely for the purpose of
impeachment, I hereby confirm the action of disapproval. Violation of R.A. 7877 (Anti-Sexual Harassment Act of
1995),
xxx
II. ADMINISTRATIVE
Moreover, as demonstrated in many previous cases against Deputy
Ombudsman Arturo C. Mojica, Deputy Ombudsman Manuel B. Casaclang, a. Dishonesty
Deputy Ombudsman Jesus F. Guerrero, Special Prosecutor Leonardo P.
Tamayo and former Overall Deputy Ombudsman Francisco A. Villa, the b. Grave Misconduct
official position of the Office is that the Constitution, R.A. 6770 and the
Supreme Court in Zaldivar vs. Gonzales, G.R. No. 80578, 19 May 1988, c. Oppression
exclude the Deputy Ombudsman and the Special Prosecutor from the list of
impeachable officials and the Jarque case involves Ombudsman Aniano A.
d. Conduct grossly prejudicial to the
Desierto as respondent, hence, the mention therein of the Deputy
best interest of the service
Ombudsmen is merely an obiter dictum. Two of your present members in fact
participated in the investigation of the previous Mojica cases and thereafter
recommended the dismissal thereof for lack of merit. e. Directly or indirectly having financial
and material interest in any transaction
requiring the approval of his Office;
In the same Memorandum, the Ombudsman directed the Committee of Peers
(Section 22, paragraphs (A), (C), (N), (T)
to evaluate the merits of the case and if warranted by evidence, to conduct
and (U), Rule XIV of Executive Order No.
administrative and criminal investigation(s) immediately thereafter. Upon
292, otherwise known as the
evaluation, the Committee recommended the docketing of the complaint as
Administrative Code of 1987.)
criminal and administrative cases. The Committee of Peers Evaluation dated
30 March 2000, stated as follows:
Accordingly, let the instant case be docketed separately, one for the criminal
case and another for the administrative case covering all the offenses
On the basis of the foregoing facts, duly supported with sworn-statements
specified above and, thereafter, a formal investigation be simultaneously and
executed by all concerned parties, the undersigned members of the COP find
jointly conducted by the Committee of Peers, pursuant to Administrative Order
sufficient cause to warrant the conduct of preliminary investigation and
No. 7.
 Accordingly, on 6 April 2000, the Committee of Peers (COP) directed
the herein private respondent Mojica in OMB-0-00-0615 entitled, Padua-
Varona v. Mojica, for violation of Republic Act No. 7877 (Anti-Sexual
Harassment Act of 1995) and Sec. 3, par. (b) and (c) of Rep. Act No.
3019 (Anti-Graft and Corrupt Practices Act) to submit his controverting
evidence.
On 10 April 2000, the complainants in OMB-0-00-0615 filed a Motion to
Place Respondent Under Preventive Suspension,[5] claiming that the offenses
for which private respondent Mojica was charged warranted removal from
office, the evidence against him was strong, and that Mojicas continued stay
in office would prejudice the case, as he was harassing some witnesses and
complainants to recant or otherwise desist from pursuing the case.
On the same date, the Ombudsman issued a Memorandum[6] to the
COP, directing them to conduct administrative proceedings in OMB-ADM-0-
00-0316 entitled, OMB Visayas Employees v. Mojica (for dishonesty, grave
misconduct, oppression, conduct grossly prejudicial to the best interest of the
service, and directly or indirectly having financial and material interest in any
transaction requiring the approval of his office), and submit a recommendation
on the propriety of putting Mojica under preventive suspension.
Subsequently, the COP issued an Order[7] in OMB-ADM-0-00-0316
finding prima facie evidence against Mojica and requiring him to submit an
answer to the above-mentioned offenses within ten days, as well as his
counter-affidavit and supporting evidence.[8]
Aggrieved, the private respondent filed a petition[9] for Certiorari before
the Court of Appeals praying that a resolution be issued:
1. . . . issuing a Temporary Restraining Order (TRO) upon the filing of the
petition to enjoin and restrain the respondents, (the Ombudsman, the
Over-all Deputy Ombudsman, the Committee of Peers, and the
Special Prosecutor) their agents and representatives, from
suspending the petitioner (herein private respondent Mojica);
2. thereafter, converting said TRO into a Writ of Preliminary Injunction;
3. after hearing, a decision be rendered declaring the following acts of
the Ombudsman null and void ab initio:
a. detailing and assigning indefinitely the petitioner to OMB-Manila
in a [special] capacity, thus effectively demoting/suspending
petitioner, and preventing him from preparing his defense;
b. authorizing or directing the docketing of the complaints against
the petitioner, which is equivalent to authorizing the filing of
the administrative and/or criminal cases against the petitioner,
who is an impeachable official;
c. denying the request of petitioner for leave of absence, which
acts were done without lawful authority, in a malevolent and
oppressive manner and without jurisdiction.
On 04 May 2000, the Court of Appeals resolved to grant the prayer for
Temporary Restraining Order and required the Ombudsman to comment and
show cause why no writ of preliminary injunction should be issued, which
reads in part:
Meanwhile, to maintain the status quo and in order to forestall the petition at
bench from becoming moot and academic, and considering that upon
examination of the records we believe that there is an urgent need for the
issuance of a temporary restraining order to prevent great and irreparable
injury that would result to herein petitioner before the matter could be heard
on notice, the herein respondents, their agents and representatives acting for
and in their behalf or under their authority, are hereby enjoined and restrained
from proceeding with the hearing of the Motion to Place Respondent Under
Preventive Suspension dated April 10, 2000, which hearing is set on May 9,
2000 at 2:00 oclock in the afternoon and/or from conducting any further
proceedings relative to the suspension from (o)ffice of the herein petitioner
until further order and/or notice from this Court.[10]
Nevertheless, on 6 June 2000, the COP issued an Order[11] in both
OMB-0-00-0615 and OMB-ADM-0-00-0316 to the effect that having failed to
submit the required counter-affidavits despite the lapse of seventeen days
from the expiration of the extended reglementary period for filing the same,
respondent Mojica was deemed to have waived his right to present his
evidence. The COP thus deemed both criminal and administrative cases
submitted for resolution on the basis of the evidence on record.
Thus, on 13 June 2000, the private respondent thus filed an urgent
motion[12] before the Court of Appeals to enjoin the Ombudsman from taking
any action whatsoever in the criminal and administrative cases
aforementioned. The following day, the private respondent filed another
urgent motion, this time praying that the Court of Appeals issue an order
requiring the Ombudsman to show cause why it should not be cited for
contempt for failing to conform with the 4 May 2000 Resolution of the Court of
Appeals. On 20 June 2000, the Court of Appeals directed[13] the Ombudsman
to comment on the above pleadings, and to comply with the formers
Temporary Restraining Order of 4 May 2000.
The parties subsequently exchanged various pleadings that culminated
in a Resolution[14] by the Court of Appeals on 5 July 2000 that, among other
things, directed the issuance of a writ of preliminary injunction enjoining all
therein respondents from taking any action whatsoever in cases No. OMB-0-
00-0615 (criminal) and No. OMB-ADM-0-00-0316 (administrative) against
Mojica, and deemed the instant petition submitted for resolution on the merits
upon the submission of the comment or explanation on the appellate courts
show cause Resolution of 20 June 2000.
Meanwhile, on 19 June 2000, the Office of the Deputy Ombudsman for
the Military directed the private respondent Mojica ostensibly to answer a
different set of charges for violation of Art. 266 and Sec. 3(e) of Rep. Act No.
3019 (OMB-00-0-1050) and for grave misconduct, gross neglect of duty, and
conduct prejudicial to the best interest of the service[15] (OMB-ADM-0-00-
0506). Feeling that this was merely an attempt at circumventing the directives
of the Court of Appeals, Mojica filed an urgent motion before the Court of
Appeals for respondents to show cause again why they should not be cited
for contempt.
By way of opposition, the Ombudsman pointed out that the writ of
preliminary injunction issued by the appellate court was against any action
taken in cases No. OMB-0-00-0615 and No. OMB-ADM-0-00-0316, and not
against any new cases filed against the private respondent thereafter. The
Ombudsman further pointed out that since Mojicas term of office had already
expired as of 6 July 2000, the private respondent could no longer invoke his
alleged immunity from suit.
On 14 August 2000, the Office of the Deputy Ombudsman for the Military
issued an order deeming that cases No. OMB-0-00-1050 and No. OMB-ADM-
0-00-0506 had been deemed submitted for resolution on the basis of the
evidence at hand. On 17 August 2000, the private respondent filed an urgent
motion for the immediate issuance of an order enjoining the Ombudsman from
taking any further action whatsoever in OMB-ADM-0-00-0506 and OMB-0-00-
1050.[16]
On 18 December 2000, despite the expiration of private respondent
Mojicas term of office, the Court of Appeals nevertheless rendered the
assailed Decision[17] on the grounds of public interest.
In essence, the appellate court held that although the 1987 Constitution,
the deliberations thereon, and the commentaries of noted jurists, all indicate
that a Deputy Ombudsman is not an impeachable official, it was nevertheless
constrained to hold otherwise on the basis of this Courts past rulings. Thus,
the dispositive portion thereof reads:
WHEREFORE, in view of the foregoing, the order of the Committee of Peers
in its Evaluation dated March 30, 2000 directing the docketing separately of
the criminal case as well as the administrative case against the petitioner is
hereby SET ASIDE and DECLARED NULL AND VOID. Accordingly, the
complaints in Criminal Case No. OMB-0-00-0615 and Administrative Case
No. OMB-ADM-0-00-0316, respectively, filed against the petitioner are
hereby DISMISSED. All acts or orders of the Ombudsman, the Overall Deputy
Ombudsman and the Committee of Peers, subjecting the petitioner [herein
private respondent] to criminal and administrative investigations, or pursuant
to such investigations, are likewise hereby DECLARED INVALID.[18]
Thereupon, on 15 January 2001, the Office of the Ombudsman filed
before this Court a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, and alternatively, an original special civil action
for certiorari under Sec. 1, Rule 65 of the same rules, of the above decision, At the outset, it bears noting that instead of assailing the Court of
on the following grounds: Appeals Decision solely by petition for review on certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, petitioner lodged the present petition
I alternatively as an original special civil action for certiorari under Sec. 1, Rule
65 of the same rules.
THE HONORABLE COURT OF APPEALS It is settled that the appeal from a final disposition of the Court of Appeals
GRAVELY ABUSED ITS DISCRETION IN is a petition for review under Rule 45 and not a special civil action under Rule
ERRONEOUSLY RULING THAT PRIVATE 65 of the 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions,
RESPONDENT, AS THEN DEPUTY final orders or resolutions of the Court of Appeals in any case, i.e., regardless
OMBUDSMAN FOR THE VISAYAS, IS AN of the nature of the action or proceeding involved, may be appealed to this
IMPEACHABLE OFFICIAL, CONSIDERING Court by filing a petition for review, which would be but a continuation of the
THAT THE PLAIN TEXT OF SEC. 2, ART. XI appellate process over the original case. Under Rule 45, the reglementary
OF THE 1987 CONSTITUTION, AS WELL period to appeal is fifteen (15) days from notice of judgment or denial of motion
AS THE INTENT OF THE FRAMERS for reconsideration.[20]
THEREOF, EXCLUDES A DEPUTY
OMBUDSMAN FROM THE LIST OF The records show that following the petitioners receipt on 5 January
IMPEACHABLE OFFICIALS. 2001 of a copy the Court of Appeals Decision, it filed the present petition on
16 January 2001, well within the reglementary period so indicated.
II We go now into the substantive aspect of this case, where we are
presented an attack upon a prior interpretation of Article XI, Sec. 2 in relation
THE PRINCIPLE OF STARE DECISIS ET to Article XI, Sec. 8 of our Constitution.
NON QUIETA MOVERE MAY NOT BE
INVOKED TO PERPETUATE AN The interpretation in question first appears in Cuenco v. Fernan,[21] a
ERRONEOUS OBITER DICTUM. disbarment case against then Associate Justice Marcelo Fernan filed by Atty.
Miguel Cuenco, a former member of the House of Representatives, where we
III held in part:

THE HONORABLE COURT OF APPEALS There is another reason why the complaint for disbarment here must
HAS NO JURISDICTION TO ORDER THE be dismissed. Members of the Supreme Court must, under Article
DISMISSAL OF A CRIMINAL CASE VIII (7)(1) of the Constitution, be members of the Philippine Bar and
AGAINST A RETIRED DEPUTY may be removed from office only by impeachment (Article XI [2],
OMBUDSMAN, WHICH IS STILL PENDING Constitution). To grant a complaint for disbarment of a Member of
PRELIMINARY INVESTIGATION BEFORE the Court during the Members incumbency, would in effect be to
PETITIONER OMBUDSMAN.[19] circumvent and hence to run afoul of the constitutional mandate that
Members of the Court may be removed from office only by
impeachment for and conviction of certain offenses listed in Article
 XI (2) of the Constitution. Precisely the same situation exists in
respect of the Ombudsman and his deputies (Article XI [8] in relation
to Article XI [2], id.), a majority of the members of the Commission
on Elections (Article IX [C] [1] [1] in relation to Article XI [2], id.), and
the members of the Commission on Audit who are not certified public
accountants (Article XI [D] [1] [1], id.), all of whom are constitutionally
required to be members of the Philippine Bar. (Emphasis supplied.)
Barely two months later, we issued another Resolution in In Re: Raul M.
Gonzales,[22] concerning the same charges for disbarment brought against
Justice Fernan, wherein we cited the above ruling to underscore the principle
involved in the case, that [a] public officer who under the Constitution is
required to be a member of the Philippine Bar as a qualification for the office
held by him and who may be removed from office only by impeachment,
cannot be charged with disbarment during the incumbency of such public
officer.[23]
In 1995, we subsequently anchored our Resolution in Jarque v.
Desierto,[24] a disbarment case against then Ombudsman Aniano Desierto, on
the above ruling, adding that:
. . . [T]he court is not here saying that the Ombudsman and other constitutional
officers who are required by the Constitution to be members of the Philippine
Bar and are remova[ble] only by impeachment, are immunized from liability
possibly for criminal acts or for violation of the Code of Professional
Responsibility or other claimed misbehavior. What the Court is saying is that
there is here a fundamental procedural requirement which must be observed
before such liability may be determined and enforced. The Ombudsman or his
deputies must first be removed from office via the constitutional route of
impeachment under Sections 2 and 3 of Article XI of the 1987
Constitution. Should the tenure of the Ombudsman be thus terminated by
impeachment, he may then be held to answer either criminally or
administratively e.g., in disbarment proceedings for any wrong or misbehavior
which may be proven against him in appropriate proceedings. (Emphasis
supplied)
Finally, in Lastimosa-Dalawampu v. Deputy Ombudsman Mojica and
Graft Investigator Labella,[25] the Court, citing its Resolution in Jarque v.
Desierto,[26] dismissed, in a minute resolution, the complaint for disbarment
against the herein private respondent Mojica in his capacity as Deputy
Ombudsman for the Visayas, stating that:
Anent the complaint for disbarment against respondent Arturo C. Mojica in his
capacity as Deputy Ombudsman for Visayas, suffice it to state that a public
officer whose membership in the Philippine Bar is a qualification for the office
held by him and removable only by impeachment cannot be charged with
disbarment during his membership (In Re: Raul M. Gonzales, 160 SCRA 771,
774 [1988]; Cuenco vs. Fernan, 158 SCRA 29, 40 [1988]). And we have held
in the case of Jarque vs. Desierto (A.C. No. 4509, En Banc Resolution
December 5, 1995), that the Ombudsman or his deputies must first be
removed from office via impeachment before they may be held to answer for
any wrong or misbehavior which may be proven against them in disbarment
proceedings.
The above Resolution was subsequently made the basis of the appellate
courts assailed Decision of 18 December 2000. Thus, in holding that a Deputy
Ombudsman is an impeachable officer, the appellate court stated that it had
to defer to the loftier principle of adherence to judicial precedents, otherwise
known as the doctrine of Stare Decisis.... necessary for the uniformity and
continuity of the law and also to give stability to society.[27]
Nevertheless, the court a quo took pains to point out that the 1987
Constitution, the deliberations thereon, and the opinions of constitutional law
experts all indicate that the Deputy Ombudsman is not an impeachable
officer.
Is the Deputy Ombudsman, then, an impeachable officer? Section 2,
Article XI of the 1987 Constitution, states that:
Sec. 2. The President, the Vice-President, the members of the Supreme
Court, the members of the Constitutional Commissions, and the Ombudsman
may be removed from office, on impeachment for, and conviction of, culpable
violation of the Constitution, treason, bribery, graft and corruption, other high
crimes, or betrayal of public trust. All other public officers and employees may
be removed from office as provided by law, but not by impeachment.
To determine whether or not the Ombudsman therein mentioned refers
to a person or to an office, reference was made by the appellate court to the
Records of the Constitutional Commission, as well as to the opinions of
leading commentators in constitutional law. Thus:
. . . It appears that the members of the Constitutional Commission have made
reference only to the Ombudsman as impeachable, excluding his deputies.
The pertinent portions of the record read, to wit:
...
MR. REGALADO. Yes, thank you.
On Section 10, regarding the Ombudsman, there has been
concern aired by Commissioner Rodrigo about who will see to it that
the Ombudsman will perform his duties because he is something like
a guardian of the government. This recalls the statement of Juvenal
that while the Ombudsman is the guardian of the people, Quis
custodiet ipsos custodies, who will guard the guardians? I
understand here that the Ombudsman who has the rank of a
chairman of a constitutional commission is also removable only by
impeachment.
MR. ROMULO. That is the intention, Madam President.
MR. REGALADO. Only the Ombudsman?
MR. MONSOD. Only the Ombudsman.
MR. REGALADO. So not his deputies, because I am
concerned with the phrase have the rank of. We know, for instance,
that the City Fiscal of Manila has the rank of a justice of the
Intermediate Appellate Court, and yet he is not a part of the judiciary.
So I think we should clarify that also and read our discussions into
the Record for purposes of the Commission and the Committee.
MR. ROMULO. Yes. If I may just comment: the
Ombudsman in this provision is a rank in itself really. That is how we
look at it. But for purposes of government classification and salary,
we thought we have to give him a recognizable or an existing rank
as a point of reference more than anything else.
MR. REGALADO. Yes, but my concern is whether or not he
is removable only by impeachment, because Section 2 enumerates
the impeachable officials, and it does not mention public officers with
the rank of constitutional commissioners.
MR. ROMULO. But we do mention them as the
Ombudsman is mentioned in that enumeration. We used the word
Ombudsman because we would like it to be his title; we do not want
him called Chairman or Justice. We want him called Ombudsman.
...
(Records of the 1986 Constitutional Commission, Vol. II, July 26,
1986, pp. 273-274)
MR. DAVIDE. I will not insist.
On lines 13 and 14, I move for the deletion of the words and the
Ombudsman. The Ombudsman should not be placed on the level of
the President and the Vice-President, the members of the judiciary
and the members of the Constitutional Commissions in the matter of
removal from office.
MR. MONSOD. Madam President.
THE PRESIDENT. Commissioner Monsod is recognized.
 MR. MONSOD. We regret we cannot accept the
amendment because we feel that the Ombudsman is at least on the
same level as the Constitutional Commissioners and this is one way
of insulating it from politics.
MR. DAVIDE. Madam President, to make the members of
the Ombudsman removable only by impeachment would be to
enshrine and install an officer whose functions are not as delicate as
the others whom we wanted to protect from immediate removal by
way of an impeachment.
MR. MONSOD. We feel that an officer in the Ombudsman,
if he does his work well, could be stepping on a lot of toes. We would
really prefer to keep him there but we would like the body to vote on
it, although I would like to ask if we still have a quorum, Madam
President.
THE PRESIDENT. Yes, the Gentleman may proceed.
MR. DAVIDE. The proposed amendment of Commissioner
Rodrigo was the total deletion of the Office of the Ombudsman and
all sections relating to it. It was rejected by the body and, therefore,
we can have individual amendments now on the particular sections.
THE PRESIDENT. The purpose of the amendment of
Commissioner Davide is not just to include the Ombudsman among
those officials who have to be removed from office only on
impeachment. Is that right?
MR. DAVIDE. Yes, Madam President.
MR. RODRIGO. Before we vote on the amendment, may I
ask a question?

THE PRESIDENT. Do we have a quorum? There are THE PRESIDENT. Commissioner Rodrigo is recognized.
members who are in the lounge.
MR. RODRIGO. The Ombudsman, is this only one man?
The Secretary-General and the pages conduct an actual
count of the Commissioners present. MR. DAVIDE. Only one man.

THE PRESIDENT. We have a quorum. MR. RODRIGO. Not including his deputies.

MR. MONSOD. May we restate the proposed amendment MR. MONSOD. No.
for the benefit of those who were not here a few minutes ago.
...
MR. DE LOS REYES. Madam President, parliamentary
inquiry. I thought that amendment was already covered in the (Ibid., p. 305, emphasis supplied)
amendment of Commissioner Rodrigo. One of those amendments
proposed by Commissioner Rodrigo was to delete the word
Ombudsman and, therefore, we have already voted on it.
Moreover, this Court has likewise taken into account the commentaries of the
MR. DAVIDE. Madam President, may I comment on that.
leading legal luminaries on the Constitution as to their opinion on whether or
not the Deputy Ombudsman is impeachable. All of them agree in unison that
the impeachable officers enumerated in Section 2, Article XI of the 1986
Constitution is exclusive. In their belief, only the Ombudsman, not his
deputies, is impeachable. Foremost among them is the erudite Justice Isagani
A. Cruz (ret.), who opined:
The impeachable officers are the President of the Philippines, the Vice-
President, the members of the Supreme Court, the members of the
Constitutional Commissions, and the Ombudsman. (see Art. XI, Sec. 2) The
list is exclusive and may not be increased or reduced by legislative enactment.
The power to impeach is essentially a non-legislative prerogative and can be
exercised by the Congress only within the limits of the authority conferred
upon it by the Constitution. This authority may not be expanded by the grantee
itself even if motivated by the desire to strengthen the security of tenure of
other officials of the government.
It is now provided by decree (see P.D. No. 1606) that justices of the
Sandiganbayan may be removed only through process of impeachment, the
purpose evidently being to withdraw them from the removal power of the
Supreme Court. This prohibition is of dubious constitutionality. In the first
place, the list of impeachable officers is covered by the maxim expressio
unius est exclusio alterius.Secondly, Article VIII, Section 11, of the
Constitution states that all judges of inferior courts and this would include the
Sandiganbayan are under the disciplinary power of the Supreme Court and
may be removed by it. This view is bolstered by the last sentence of Article
XI, Section 2, which runs in full as follows:
Sec. 2. The President, the Vice-President, the members of the Supreme
Court, the members of the Constitutional Commissions, and the Ombudsman
may be removed from office, on impeachment for and conviction of, culpable
violation of the Constitution, treason, bribery, graft and corruption, other high
crimes, or betrayal of public trust. All other public officers and employees may
be removed from office as provided by law, but not by impeachment. (Cruz,
Isagani A., Philippine Political Law, 1996 ed., pp. 333-334)
Equally worth noting is the opinion of no less than Rev. Fr. Joaquin G. Bernas,
S.J., himself who was a member of the Constitutional Commission which
drafted the 1987 Constitution, (who) asserted:
Q. Is the list of officers subject to impeachment found in
Section 2 exclusive?
A. As presently worded, yes.
(Bernas, Joaquin G., S.J., The 1987 Philippine
Constitution, A Reviewer-Primer, 1997 ed., p. 401)
Last but certainly not the least is the equally erudite Representative Antonio
B. Nachura himself, who, as a professor of law, commented that the
enumeration of impeachable officers in Section 2, Article XI of the 1987
Constitution, is exclusive. (Nachura, Antonio B., Outline/Reviewer in Political
Law, 1998 ed., p. 192)[28]
From the foregoing, it is immediately apparent that, as enumerated in
Sec. 2 of Article XI of the 1987 Constitution, only the following are
impeachable officers: the President, the Vice President, the members of the
Supreme Court, the members of the Constitutional Commissions, and the
Ombudsman.[29]
How then to explain our earlier pronouncement in Cuenco v. Fernan, as
later cited in In Re: Raul M. Gonzales, Jarque v. Desierto and Lastimosa-
Dalawampu v. Dep. Ombudsman Mojica and Graft Investigator Labella? By
way of reiteration, said Resolution reads in part:
. . . To grant a complaint for disbarment of a Member of the Court during the
Members incumbency, would in effect be to circumvent and hence to run afoul
of the constitutional mandate that Members of the Court may be removed from
office only by impeachment for and conviction of certain offenses listed in
Article XI [2] of the Constitution. Precisely the same situation exists in respect
of the Ombudsman and his deputies (Article XI [8] in relation to Article XI [2]),
. . . all of whom are constitutionally required to be members of the Philippine because of his removal, resignation, or permanent disability, there can be no
Bar.[30] (Emphasis supplied) bar to his criminal prosecution in the courts.[35]
Nor does retirement bar an administrative investigation from proceeding
In cross-referencing Sec. 2, which is an enumeration of impeachable
against the private respondent, given that, as pointed out by the petitioner,
officers, with Sec. 8, which lists the qualifications of the Ombudsman and his
the formers retirement benefits have been placed on hold in view of the
deputies, the intention was to indicate, by way of obiter dictum, that as with
provisions of Sections 12[36] and 13[37] of the Anti-Graft and Corrupt Practices
members of this Court, the officers so enumerated were also constitutionally
Act.
required to be members of the bar.
WHEREFORE, the Order of the Court of Appeals dated 18 December
A dictum is an opinion that does not embody the resolution or
2000 is hereby REVERSED and SET ASIDE. The complaints in Criminal
determination of the court, and made without argument, or full consideration
Case No. OMB-0-00-0615 and Administrative Case No. OMB-ADM-0-00-
of the point. Mere dicta are not binding under the doctrine of stare decisis.[31]
0316 are hereby REINSTATED and the Office of the Ombudsman is ordered
The legal maxim "stare decisis et non quieta movere" (follow past to proceed with the investigation relative to the above cases.
precedents and do not disturb what has been settled) states that where the
SO ORDERED.
same questions relating to the same event have been put forward by parties
similarly situated as in a previous case litigated and decided by a competent Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
court, the rule of stare decisis is a bar to any attempt to relitigate the same
issue.[32]
The succeeding cases of In Re: Raul M. Gonzales and Jarque v.
Desierto do not tackle the impeachability of a Deputy Ombudsman either. Nor,
for that matter, does Lastimosa-Dalawampu v. Deputy Ombudsman Mojica
and Graft Investigator Labella, which, as previously mentioned, is a minute
resolution dismissing a complaint for disbarment against the herein private
respondent on the basis of the questioned obiter in Cuenco v. Fernan and the
succeeding cases without going into the merits.
Thus, where the issue involved was not raised nor presented to the court
and not passed upon by the court in the previous case, the decision in the
previous case is not stare decisis of the question presented.[33]
As to whether or not the private respondent, then Deputy Ombudsman
for the Visayas, may be held criminally and/or administratively liable, we
likewise resolve the issue in favor of the petitioner.
The rule that an impeachable officer cannot be criminally prosecuted for
the same offenses which constitute grounds for impeachment presupposes
his continuance in office.[34] Hence, the moment he is no longer in office
 SECOND DIVISION
[G.R. No. 134284. December 1, 2000]
AYALA CORPORATION, petitioner, vs. ROSA-DIANA REALTY AND
DEVELOPMENT CORPORATION, respondent.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari seeking the reversal of a
decision rendered by the Court of Appeals in C.A. G.R. C.V. No. 4598 entitled,
Ayala Corporation vs. Rosa-Diana Realty and Development Corporation,
dismissing Ayala Corporations petition for lack of merit.
The facts of the case are not in dispute:
Petitioner Ayala Corporation (hereinafter referred to as Ayala) was the
registered owner of a parcel of land located in Alfaro Street, Salcedo Village,
Makati City with an area of 840 square meters, more or less and covered by
Transfer Certificate of Title (TCT) No. 233435 of the Register of Deeds of
Rizal.
On April 20, 1976, Ayala sold the lot to Manuel Sy married to Vilma Po
and Sy Ka Kieng married to Rosa Chan. The Deed of Sale executed between
Ayala and the buyers contained Special Conditions of Sale and Deed
Restrictions. Among the Special Conditions of Sale were:
a) the vendees shall build on the lot and submit the building plans
to the vendor before September 30, 1976 for the latters
approval
b) the construction of the building shall start on or before March 30,
1977 and completed before 1979. Before such completion,
neither the deed of sale shall be registered nor the title released
even if the purchase price shall have been fully paid
c) there shall be no resale of the property
The Deed Restrictions, on the other hand, contained the stipulation that
the gross floor area of the building to be constructed shall not be more than
five (5) times the lot area and the total height shall not exceed forty two (42)
meters. The restrictions were to expire in the year 2025.
Manuel Sy and Sy Ka Kieng failed to construct the building in violation
of the Special Conditions of Sale. Notwithstanding the violation, Manuel Sy
and Sy Ka Kieng, in April 1989, were able to sell the lot to respondent Rosa-
Diana Realty and Development Corporation (hereinafter referred to as Rosa-
Diana) with Ayalas approval. As a consideration for Ayala to release the
Certificate of Title of the subject property, Rosa-Diana, on July 27, 1989
executed an Undertaking promising to abide by said special conditions of sale
executed between Ayala and the original vendees. Upon the submission of
the Undertaking, together with the building plans for a condominium project,
known as The Peak, Ayala released title to the lot, thereby enabling Rosa-
Diana to register the deed of sale in its favor and obtain Certificate of Title No.
165720 in its name. The title carried as encumbrances the special conditions
of sale and the deed restrictions. Rosa-Dianas building plans as approved by
Ayala were subject to strict compliance of cautionary notices appearing on the
building plans and to the restrictions encumbering the Lot regarding the use
and occupancy of the same.
Thereafter, Rosa-Diana submitted to the building official of Makati
another set of building plans for The Peak which were substantially different
from those that it earlier submitted to Ayala for approval. While the building
plans which Rosa-Diana submitted to Ayala for approval envisioned a 24-
meter high, seven (7) storey condominium project with a gross floor area of
3,968.56 square meters, the building plans which Rosa-Diana submitted to
the building official of Makati, contemplated a 91.65 meter high, 38 storey
condominium building with a gross floor area of 23,305.09 square
meters.[1] Needless to say, while the first set of building plans complied with
the deed restrictions, the latter set exceeded the same.
 During the construction of Rosa-Dianas condominium project, Ayala
filed an action with the Regional Trial Court (RTC) of Makati, Branch 139 for
specific performance, with application for a writ of preliminary
injunction/temporary restraining order against Rosa-Diana Realty seeking to
compel the latter to comply with the contractual obligations under the deed of
restrictions annotated on its title as well as with the building plans it submitted
to the latter. In the alternative, Ayala prayed for rescission of the sale of the
subject lot to Rosa- Diana Realty.
The lower court denied Ayalas prayer for injunctive relief, thus enabling
Rosa-Diana to complete the construction of the building. Undeterred, Ayala
tried to cause the annotation of a notice of lis pendens on Rosa-Dianas
title. The Register of Deeds of Makati, however, refused registration of the
notice of lis pendens on the ground that the case pending before the trial
court, being an action for specific performance and/or rescission, is an
action in personam which does not involve the title, use or possession of the
property.[2] The Land Registration Authority (LRA) reversed the ruling of the
Register of Deeds saying that an action for specific performance or rescission
may be classified as a proceeding of any kind in court directly affecting title to
the land or the use or occupation thereof for which a notice of lis pendens may
be held proper.[3] The decision of the LRA, however, was overturned by the
Court of Appeals in C.A. G.R. S.P. No. 29157. In G.R. No. 112774, We
affirmed the ruling of the CA on February 16, 1994 saying
We agree with respondent court that the notice of lis pendens is not proper
in this instance. The case before the trial court is a personal action since the
cause of action thereof arises primarily from the alleged violation of the
Deed of Restrictions.
In the meantime, Ayala completed its presentation of evidence before
the trial court. Rosa-Diana filed a Demurrer to Evidence averring that Ayala
failed to establish its right to the relief sought inasmuch as (a) Ayala admittedly
does not enforce the deed restrictions uniformly and strictly (b) Ayala has lost
its right/power to enforce the restrictions due to its own acts and omissions;
and (c) the deed restrictions are no longer valid and effective against lot
buyers in Ayalas controlled subdivision.
The trial court sustained Rosa-Dianas Demurrer to Evidence saying that
Ayala was guilty of abandonment and/or estoppel due to its failure to enforce
the terms of deed of restrictions and special conditions of sale against Manuel
Sy and Sy Ka Kieng. The trial court noted that notwithstanding the violation of
the special conditions of sale, Manuel Sy and Sy Ka Kieng were able to
transfer the title to Rosa-Diana with the approval of Ayala. The trial court
added that Ayalas failure to enforce the restrictions with respect to Trafalgar,
Shellhouse, Eurovilla, LPL Plaza, Parc Regent, LPL Mansion and Leronville
which are located within Salcedo Village, shows that Ayala discriminated
against those which it wants to have the obligation enforced. The trial court
then concluded that for Ayala to discriminately choose which obligor would be
made to follow certain conditions and which should not, did not seem fair and
legal.
The Court of Appeals affirmed the ruling of the trial court saying that the
appeal is sealed by the doctrine of the law of the case in C.A. G.R. S.P. No.
29157 where it was stated that
]x x x Ayala is barred from enforcing the Deed of Restrictions in question
pursuant to the doctrine of waiver and estoppel. Under the terms of the deed
of sale, the vendee Sy Ka Kieng assumed faithful compliance with the
special conditions of sale and with the Salcedo Village Deed of Restrictions.
One of the conditions was that a building would be constructed within one
year. However, Sy Ka Kieng failed to construct the building as required
under the Deed of Sale. Ayala did nothing to enforce the terms of the
contract. In fact, it even agreed to the sale of the lot by Sy Ka Kieng in favor
of petitioner Realty in 1989 or thirteen (13) years later. We, therefore, see no
justifiable reason for Ayala to attempt to enforce the terms of the conditions
of sale against the petitioner.
xxx
The Court of Appeals also cited C.A. G.R. C.V. No. 46488 entitled, Ayala
Corporation vs. Ray Burton Development Corporation which relied on C.A.
G.R. S.P. No. 29157 in ruling that Ayala is barred from enforcing the deed
restrictions in dispute. Upon a motion for reconsideration filed by herein
petitioner, the Court of Appeals clarified that the citation of the decision in
Ayala Corporation vs. Ray Burton Development Corporation, C.A. G.R. C.V.
No. 46488, February 27, 1996, was made not because said decision is res
judicata to the case at bar but rather because it is precedential under the
doctrine of stare decisis.
Upon denial of said motion for reconsideration, Ayala filed the present
appeal.
Ayala contends that the pronouncement of the Court of Appeals in C.A.
G.R. S.P. No. 29157 that it is estopped from enforcing the deed restrictions is
merely obiter dicta inasmuch as the only issue raised in the aforesaid case
was the propriety of a lis pendens annotation on Rosa-Dianas certificate of
title.
Ayala avers that Rosa-Diana presented no evidence whatsoever on
Ayalas supposed waiver or estoppel in C.A. G.R. S.P. No. 29157. Ayala
likewise pointed out that at the time C.A. G.R. S.P. No. 29157 was on appeal,
the issues of the validity and continued viability of the deed of restrictions and
their enforceability by Ayala were joined and then being tried before the trial
court.
Petitioners assignment of errors in the present appeal may essentially
be summarized as follows:
I. The Court of Appeals acted in a manner not in accord with law
and the applicable decisions of the Supreme Court in holding
that the doctrine of the law of the case, or stare decisis,
operated to dismiss Ayalas appeal.
II. The Court of Appeals erred as a matter of law and departed from
the accepted and usual course of judicial proceedings when it
failed to expressly pass upon the specific errors assigned in
Ayalas appeal.
A discussion on the distinctions between law of the case, stare
decisis and obiter dicta is in order.
The doctrine of the law of the case has certain affinities with, but is
clearly distinguishable from, the doctrines of res judicata and stare decisis,
principally on the ground that the rule of the law of the case operates only in
the particular case and only as a rule of policy and not as one of law.[4] At
variance with the doctrine of stare decisis, the ruling adhered to in the
particular case under the doctrine of the law of the case need not be followed
as a precedent in subsequent litigation between other parties, neither by the
appellate court which made the decision followed on a subsequent appeal in
the same case, nor by any other court. The ruling covered by the doctrine of
the law of the case is adhered to in the single case where it arises, but is not
carried into other cases as a precedent.[5] On the other hand, under the
doctrine of stare decisis, once a point of law has been established by the
court, that point of law will, generally, be followed by the same court and by
all courts of lower rank in subsequent cases where the same legal issue is
raised.[6] Stare decisis proceeds from the first principle of justice that, absent
powerful countervailing considerations, like cases ought to be decided alike.[7]
The Court of Appeals, in ruling against petitioner Ayala Corporation
stated that the appeal is sealed by the doctrine of the law of the case, referring
to G.R. No. 112774 entitled Ayala Corporation, petitioner vs. Court of
Appeals, et al., respondents. The Court of Appeals likewise made reference
to C.A. G.R. C.V. No. 46488 entitled, Ayala Corporation vs. Ray Burton
Development Corporation, Inc. in ruling against petitioner saying that it is
jurisprudential under the doctrine of stare decisis.
It must be pointed out that the only issue that was raised before the Court
of Appeals in C.A. G.R. S.P. No. 29157 was whether or not the annotation
of lis pendens is proper. The Court of Appeals, in its decision, in fact stated
the principal issue to be resolved is: whether or not an action for specific
performance, or in the alternative, rescission of deed of sale to enforce the
deed of restrictions governing the use of property, is a real or personal action,
or one that affects title thereto and its use or occupation thereof."[8]
In the aforesaid decision, the Court of Appeals even justified the
cancellation of the notice of lis pendens on the ground that Ayala had ample
protection should it succeed in proving its allegations regarding the violation
of the deed of restrictions, without unduly curtailing the right of the petitioner
to fully enjoy its property in the meantime that there is as yet no decision by
the trial court.[9]
 From the foregoing, it is clear that the Court of Appeals was aware that
the issue as to whether petitioner is estopped from enforcing the deed of
restrictions has yet to be resolved by the trial court. Though it did make a
pronouncement that the petitioner is estopped from enforcing the deed of
restrictions, it also mentioned at the same time that this particular issue has
yet to be resolved by the trial court. Notably, upon appeal to this Court, We
have affirmed the ruling of the Court of Appeals only as regards the particular
issue of the propriety of the cancellation of the notice of lis pendens.
We see no reason then, how the law of the case or stare decisis can be
held to be applicable in the case at bench. If at all, the pronouncement made
by the Court of Appeals that petitioner Ayala is barred from enforcing the deed
of restrictions can only be considered as obiter dicta. As earlier mentioned,
the only issue before the Court of Appeals at the time was the propriety of the
annotation of the lis pendens. The additional pronouncement of the Court of
Appeals that Ayala is estopped from enforcing the deed of restrictions even
as it recognized that this said issue is being tried before the trial court was not
necessary to dispose of the issue as to the propriety of the annotation of the lis
pendens. A dictum is an opinion of a judge which does not embody the
resolution or determination of the court, and made without argument, or full
consideration of the point, not the proffered deliberate opinion of the judge
himself.[10] It is not necessarily limited to issues essential to the decision but
may also include expressions of opinion which are not necessary to support
the decision reached by the court. Mere dicta are not binding under the
doctrine of stare decisis.[11]
While the Court of Appeals did not err in ruling that the present petition
is not barred by C.A. G.R. C.V. No. 46488 entitled Ayala Corporation vs. Ray
Burton Development Inc. under the doctrine ofres judicata, neither, however,
can the latter case be cited as precedential under the doctrine of stare
decisis. It must be pointed out that at the time the assailed decision was
rendered, C.A. G.R. C.V. No. 46488 was on appeal with this
Court. Significantly, in the decision We have rendered in Ayala Corporation
vs. Ray Burton Development Corporation[12] which became final and
executory on July 5, 1999 we have clearly stated that An examination of the
decision in the said Rosa-Diana case reveals that the sole issue raised before
the appellate court was the propriety of the lis pendensannotation. However,
the appellate court went beyond the sole issue and made factual findings
bereft of any basis in the record to inappropriately rule that AYALA is in
estoppel and has waived its right to enforce the subject restrictions. Such
ruling was immaterial to the resolution of the issue of the propriety of the
annotation of the lis pendens. The finding of estoppel was thus improper and
made in excess of jurisdiction.
Coming now to the merits of the case, petitioner avers that the Court of
Appeals departed from the usual course of judicial proceedings when it failed
to expressly pass upon the specific errors assigned in its appeal. Petitioner
reiterates its contention that the trial courts findings that Ayala has waived its
right to enforce the deed of restrictions is not supported by law and evidence.
We find merit in the petition.
It is basic that findings of fact of the trial court and the Court of Appeals
are conclusive upon the Supreme Court when supported by substantial
evidence.[13] We are constrained, however, to review the trial courts findings
of fact, which the Court of Appeals chose not to pass upon, inasmuch as there
is ample evidence on record to show that certain facts were overlooked which
would affect the disposition of the case.
In its assailed decision of February 4, 1994, the trial court, ruled in favor
of respondent Rosa-Diana Realty on the ground that Ayala had not acted fairly
when it did not institute an action against the original vendees despite the
latters violation of the Special Conditions of Sale but chose instead to file an
action against herein respondent Rosa-Diana. The trial court added that
although the 38 storey building of Rosa-Diana is beyond the total height
restriction, it was not violative of the National Building Code. According to the
trial court the construction of the 38 storey building known as The Peak has
not been shown to have been prohibited by law and neither is it against public
policy.
It bears emphasis that as complainant, Ayala had the prerogative to
initiate an action against violators of the deed restrictions. That Rosa-Diana
had acted in bad faith is manifested by the fact that it submitted two sets of
building plans, one which was in conformity with the deed restrictions
submitted to Ayala and MACEA, and the other, which exceeded the height
requirement in the deed restrictions to the Makati building official for the
purpose of procuring a building permit from the latter. Moreover, the violation
of the deed restrictions committed by respondent can hardly be denominated
as a minor violation. It should be pointed out that the original building plan
which was submitted to and approved by petitioner Ayala Corporation,
envisioned a twenty four (24) meter high, seven (7) storey condominium
whereas the respondents building plan which was submitted to and approved
by the building official of Makati is that of a thirty eight (38) storey, 91.65
meters high, building. At present, the Peak building of respondent which
actually stands at 133.65 meters with a total gross floor area of 23,305.09
square meters, seriously violates the dimensions indicated in the building
plans submitted by Rosa-Diana to petitioner Ayala for approval inasmuch as
the Peak building exceeds the approved height limit by about 109 meters and
the allowable gross floor area under the applicable deed restrictions by about
19,105 square meters. Clearly, there was a gross violation of the deed
restrictions and evident bad faith by the respondent.
It may not be amiss to mention that the deed restrictions were revised in
a general membership meeting of the association of lot owners in Makati
Central Business District the Makati Commercial Estate Association, Inc.
(MACEA) whereby direct height restrictions were abolished in lieu of floor area
limits. Respondent, however, did not vote for the approval of this revision
during the General Membership meeting which was held on July 11, 1990 at
the Manila Polo Club Pavilion, Makati, Metro Manila and again on July 12,
1990 at the Hotel Mandarin Oriental, Makati, Metro Manila. Hence,
respondent continues to be bound by the original deed restrictions applicable
to Lot 7, Block 1 and annotated on its title to said lot. In any event,
assuming arguendo that respondent voted for the approval of direct height
restrictions in lieu of floor area limits, the total floor area of its Peak building
would still be violative of the floor area limits to the extent of about 9,865
square meters of allowable floor area under the MACEA revised restrictions.
Respondent Rosa-Diana avers that there is nothing illegal or unlawful in
the building plans which it used in the construction of the Peak condominium
inasmuch as it bears the imprimatur of the building official of Makati, who is
tasked to determine whether building and construction plans are in
accordance with the law, notably, the National Building Code.
Respondent Rosa-Diana, however, misses the point inasmuch as it has
freely consented to be bound by the deed restrictions when it entered into a
contract of sale with spouses Manuel Sy and Sy Ka Kieng. While respondent
claims that it was under the impression that the deed restrictions were no
longer being enforced by Ayala, the Undertaking[14] it executed belies this
same claim. In said Undertaking, respondent agreed to construct and
complete the construction of the house on said lot as required under the
special condition of sale. Respondent likewise bound itself to abide and
comply with x x x the condition of the rescission of the sale by Ayala Land,
Inc. on the grounds therein stated x x x.
Contractual obligations between parties have the force of law between
them and absent any allegation that the same are contrary to law, morals,
good customs, public order or public policy, they must be complied with in
good faith. Hence, Article 1159 of the New Civil Code provides
Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith.
Respondent Rosa-Diana insists that the trial court had already ruled that
the Undertaking executed by its Chairman and President cannot validly bind
Rosa-Diana and hence, it should not be held bound by the deed restrictions.
We agree with petitioner Ayalas observation that respondent Rosa-
Dianas special and affirmative defenses before the trial court never mentioned
any allegation that its president and chairman were not authorized to execute
the Undertaking. It was inappropriate therefore for the trial court to rule that in
the absence of any authority or confirmation from the Board of Directors of
respondent Rosa-Diana, its Chairman and the President cannot validly enter
into an undertaking relative to the construction of the building on the lot within
one year from July 27, 1989 and in accordance with the deed
restrictions. Curiously, while the trial court stated that it cannot be presumed
that the Chairman and the President can validly bind respondent Rosa-
Diana to enter into the aforesaid Undertaking in the absence of any authority
or confirmation from the Board of Directors, the trial court held that the
ordinary presumption of regularity of business transactions is applicable as
regards the Deed of Sale which was executed by Manuel Sy and Sy Ka Kieng
and respondent Rosa-Diana. In the light of the fact that respondent Rosa-
Diana never alleged in its Answer that its president and chairman were not
authorized to execute the Undertaking, the aforesaid ruling of the trial court is
without factual and legal basis and surprising to say the least.
The fact alone that respondent Rosa-Diana conveniently prepared two
sets of building plans - with one set which fully conformed to the Deed
Restrictions and another in gross violation of the same - should have
cautioned the trial court to conclude that respondent Rosa-Diana was under
the erroneous impression that the Deed Restrictions were no longer
enforceable and that it never intended to be bound by the Undertaking signed
by its President and Chairman. We reiterate that contractual obligations have
the force of law between parties and unless the same are contrary to public
policy morals and good customs, they must be complied by the parties in good
faith.
Petitioner, in its Petition, prays that judgment be rendered:
a) ordering Rosa-Diana Realty and Development Corporation to
comply with its contractual obligations in the construction of the
Peak by removing, or closing down and prohibiting Rosa-Diana
from using, selling, leasing or otherwise disposing of, the
portions of areas thereof constructed beyond or in excess of
the approved height, as shown by the building plans submitted
to, and approved by, Ayala, including any other portion of the
building constructed not in accordance with the said building
plans, during the effectivity of the Deed Restrictions;
b) Alternatively, in the event specific performance has become
impossible:
(1)Ordering the cancellation and rescission of the April
20, 1976 Deed of Sale by Ayala in favor of the
original vendees thereof as well as the subsequent
Deed of Sale executed by such original vendees in
favor of Rosa-Diana, and ordering Rosa-Diana to
return to Ayala Lot 7, Block 1 of Salcedo Village;
(2)ordering the cancellation of Transfer Certificate of
Title No. 165720 (in the name of Rosa-Diana) and
directing the office of the Register of Deeds of Makati
to issue a new title over the lot in the name of Ayala;
and
(3)ordering Rosa-Diana to pay Ayala attorneys fees in
the amount of P500,000.00, exemplary damages in
the amount of P5,000,000.00 and the costs of suit.
It must be noted that during the trial respondent Rosa-Diana was able to
complete the construction of The Peak as a building with a height of thirty
eight (38) floors or 133.65 meters and with a total gross floor area of 23,305.09
square meters. Having been completed for a number of years already, it
would be reasonable to assume that it is now fully tenanted. Consequently,
the remedy of specific performance by respondent is no longer
feasible. However, neither can we grant petitioners prayer for the cancellation
and rescission of the April 20, 1976 Deed of Sale by petitioner Ayala in favor
of the original vendees thereof as well as the subsequent Deed of Sale
executed by the original vendees in favor of respondent Rosa-Diana
inasmuch as the original vendees were not even made parties in the case at
bar. Moreover, petitioner Ayala, having agreed to the resale of the property
by the original vendees, spouses Manuel Sy and Sy Ka Kieng, to respondent
Rosa-Diana despite the failure of Manuel Sy and Sy Ka Kieng to comply with
their obligation to construct a building within one year from April 20, 1976, has
effectively waived its right to rescind the sale of the subject lot to the original
vendees.
Faced with the same question as to the proper remedy available to
petitioner in the case of Ayala Corporation vs. Ray Burton Development Inc.,
a case which is on all fours with the case at bench, we ruled therein that the
party guilty of violating the deed restrictions may only be held alternatively
liable for substitute performance of its obligation, that is, for the payment of
damages. In the aforesaid case it was observed that the Consolidated and
Revised Deed Restrictions (CRDR) imposed development charges on
constructions which exceed the estimated Gross Limits permitted under the
original Deed Restrictions but which are within the limits of the CRDRs.
 The pertinent portion of the Deed of Restrictions reads:
3. DEVELOPMENT CHARGE
For any building construction within the Gross Floor Area limits defined
under Paragraphs C-2.1 to C-2.4 above, but which will result in a Gross
Floor Area exceeding certain standards defined in Paragraphs C-3.1-C
below, the OWNER shall pay MACEA, prior to the construction of any new
building, a DEVELOPMENT CHARGE as a contribution to a trust fund to be
administered by MACEA. This trust fund shall be used to improve facilities
and utilities in Makati Central District.
3.1. The amount of the development charge that shall be due from the
OWNER shall be computed as follows:
DEVELOPMENT CHARGE = A x (B-C-D)
where:
A is equal to the Area Assessment which shall be set at Five Hundred Pesos
(P500.00) until December 31,1990. Each January 1st thereafter, such
amount shall increase by ten percent (10%) over the Area Assessment
charged in the immediately preceding year; provided that beginning 1995
and at the end of every successive five-year period thereafter, the increase
in the Area Assessment shall be reviewed and adjusted by the VENDOR to
correspond to the accumulated increase in the construction cost index
during the immediately preceding five years as based on the weighted
average of wholesale price and wage indices of the National Census and
Statistics Office and the Bureau of Labor Statistics.
B - is equal to the Gross Floor Area of the completed or expanded building
in square meters.
C - is equal to the estimated Gross Floor Area permitted under the original
deed restrictions, derived by multiplying the lot area by the effective original
FAR shown below for each location.
We then ruled in the aforesaid case that the development charges are a
fair measure of compensatory damages which therein respondent Ray Burton
Development Inc. is liable to Ayala Corporation. The dispositive portion of the
decision in the said case which is squarely applicable to the case at bar, reads
as follows:
WHEREFORE, premises considered, the assailed Decision of the Court of
Appeals dated February 27, 1996, in CA-G.R. C.V. No. 46488, and its
Resolution dated October 7, 1996 are hereby REVERSED and SET ASIDE,
and in lieu thereof, judgment is hereby rendered finding that:
(1) The Deed Restrictions are valid and petitioner AYALA is not
estopped from enforcing them against lot owners who
have not yet adopted the Consolidated and Revised Deed
Restrictions.
(2) Having admitted that the Consolidated and Revised Deed
Restrictions are the applicable Deed Restrictions to Ray
Burton Development Corporation, RBDC should be, and is
bound by the same.
(3) Considering that Ray Burton Development Corporations
Trafalgar plaza exceeds the floor area limits of the Deed
Restrictions, RBDC is hereby ordered to pay development
charges as computed under the provisions of the
consolidated and Revised Deed Restrictions currently in
force.
(4) Ray Burton Development corporation is further ordered to pay
AYALA exemplary damages in the amount of
P2,500,000.00 attorneys fees in the amount of
P250,000.00.
SO ORDERED.
 There is no reason why the same rule should not be followed in the case
at bar, the remedies of specific performance and/or rescission prayed for by
petitioner no longer being feasible. In accordance with the peculiar
circumstances of the case at bar, the development charges would certainly
be a fair measure of compensatory damages to petitioner Ayala.
Exemplary damages in the sum of P2,500,000.00 as prayed for by
petitioner are also in order inasmuch as respondent Rosa-Diana was in
evident bad faith when it submitted a set of building plans in conformity with
the deed restrictions to petitioner Ayala for the sole purpose of obtaining title
to the property, but only to prepare and later on submit another set of building
plans which are in gross violation of the Deed Restrictions. Petitioner Ayala is
likewise entitled to an award of attorneys fees in the sum of P250,000.00.
WHEREFORE, the assailed Decision of the Court of Appeals dated
December 4, 1997 and its Resolution dated June 19, 1998 , C.A. G.R. C.V.
No. 4598, are REVERSED and SET ASIDE. In lieu thereof, judgment is
rendered
a) ordering respondent Rosa-Diana Realty and Development
Corporation to pay development charges as computed under
the provisions of the consolidated and Revised Deed
Restrictions currently in force; and
b) ordering respondent Rosa-Diana Realty and Development
Corporation to pay petitioner Ayala Corporation exemplary
damages in the sum of P2,500,000.00, attorneys fees in the
sum of P250,000.00 and the costs of the suit.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.
 FIRST DIVISION
March 15, 2017
G.R. No. 224834
JONATHAN Y. DEE, Petitioner
vs
HARVEST ALL INVESTMENT LIMITED, VICTORY FUND LIMITED, BOND
EAST PRIVATE LIMITED, and ALBERT HONG HIN KAY, as Minority
Shareholders of ALLIANCE SELECT FOODS INTERNATIONAL, INC.,
and HEDY S.C. YAP-CHUA, as Director and Shareholder of ALLIANCE
SELECT FOODS INTERNATIONAL, INC., Respondents
x-----------------------x
G.R. No. 224871
HARVEST ALL INVESTMENT LIMITED, VICTORY FUND LIMITED, BOND
EAST PRIVATE LIMITED, ALBERT HONG HIN KAY, as Minority
Shareholders of Alliance Select Foods International, Inc., and HEDY
S.C. YAP-CHUA, as a Director and Shareholder of Alliance Select
Foods International, Inc., Petitioners,
vs.
ALLIANCE SELECT FOODS INTERNATIONAL, INC., GEORGE E. SYCIP,
JONATHAN Y. DEE, RAYMUND K.H. SEE, MARY GRACE T. VERA-
CRUZ, ANTONIO C. PACIS, ERWIN M. ELECHICON, and BARBARA
ANNE C. MIGALLOS, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in these consolidated petitions1 for review on certiorari are the
Decision2 dated February 15, 2016 and the Resolution3 dated May 25, 2016
of the Court of Appeals (CA) in CA-G.R. SP No. 142213, which reversed the
Resolution4 dated August 24, 2015 of the Regional Trial Court of Pasig City,
Branch 159 (RTC) in COMM'L. CASE NO. 15-234 and, accordingly,
reinstated the case and remanded the same to the court a quo for further
proceedings after payment of the proper legal fees.
The Facts
Harvest All Investment Limited, Victory Fund Limited, Bondeast Private
Limited, Albert Hong Hin Kay, and Hedy S.C. Yap Chua (Harvest All, et
al.) are, in their own capacities, minority stockholders of Alliance Select
Foods International, Inc. (Alliance), with Hedy S.C. Yap Chua acting as a
member of Alliance's Board of Directors.5 As per Alliance's by-laws, its
Annual Stockholders' Meeting (ASM) is held every June 15.6 However, in a
Special Board of Directors Meeting held at three (3) o'clock in the afternoon
of May 29, 2015, the Board of Directors, over Hedy S.C. Yap Chua's
objections, passed a Board Resolution indefinitely postponing Alliance's
2015 ASM pending complete subscription to its Stock Rights Offering (SRO)
consisting of shares with total value of ₱l Billion which was earlier approved
in a Board Resolution passed on February 17, 2015. As per Alliance's
Disclosure dated May 29, 2015 filed before the Philippine Stock Exchange,
such postponement was made "to give the stockholders of [Alliance] better
representation in the annual meeting, after taking into consideration their
subscription to the [SRO] of [Alliance]."7 This prompted Harvest All, et al. to
file the instant Complaint (with Application for the Issuance of a Writ of
Preliminary Mandatory Injunction and Temporary Restraining Order/Writ of
Preliminary Injunction)8 involving an intra-corporate controversy against
Alliance, and its other Board members, namely, George E. Sycip, Jonathan
Y. Dee, Raymund K.H. See, Mary Grace T. Vera-Cruz, Antonio C. Pacis,
Erwin M. Elechicon, and Barbara Anne C. Migallos (Alliance Board). In said
complaint, Harvest All, et al. principally claimed that the subscription to the
new shares through the SRO cannot be made a condition precedent to the
exercise by the current stockholders of their right to vote in the 2015 ASM;
otherwise, they will be deprived of their full voting rights proportionate to
their existing shareholdings.9 Thus, Harvest All, et al., prayed for, inter
alia, the declaration of nullity of the Board Resolution dated May 29, 2015
indefinitely postponing the 2015 ASM, as well as the Board Resolution dated
February 17, 2015 approving the SR0.10 The Clerk of Court of the RTC
assessed Harvest All, et al. with filing fees amounting to ₱8,860.00 which
they paid accordingly.11 Later on, Harvest All, et al. filed an Amended
Complaint:12 (a) deleting its prayer to declare null and void the Board
Resolution dated February 17, 2015 approving the SRO; and (b) instead,
prayed that the Alliance Board be enjoined from implementing and carrying
out the SRO prior to and as a condition for the holding of the 2015 ASM.13
For its part, the Alliance Board raised the issue of lack of jurisdiction on the
ground of Harvest All, et al.'s failure to pay the correct filing fees. It argued
that the latter should have paid P20 Million, more or less, in filing fees based
on the SRO which was valued at Pl Billion. However, Harvest All, et al. did
not mention such capital infusion in their prayers and, as such, were only
made to pay the measly sum of ₱8,860.00. On the other hand, Harvest
All, et al. maintained that they paid the correct filing fees, considering that
the subject of their complaint is the holding of the 2015 ASM and not a claim
on the aforesaid value of the SRO. Harvest All, et al. likewise pointed out
that they simply relied on the assessment of the Clerk of Court and had no
intention to defraud the government.14
The RTC Ruling
In a Resolution15 dated August 24, 2015, the RTC dismissed the instant
complaint for lack of jurisdiction due to Harvest All, et al.'s failure to pay the
correct filing fees.16 Citing Rule 141 of the Rules of Court, as amended by
A.M. No. 04-2-04-SC,17 and the Court's pronouncement in Lu v. Lu Ym, Sr.
(Lu),18 the RTC found that the basis for the computation of filing fees should
have been the ₱l Billion value of the SRO, it being the property in litigation.
As such, Harvest All, et al. should have paid filing fees in the amount of
more or less ₱20 Million and not just ₱5,860.00. In this regard, the RTC
also found that Harvest All, et al.'s payment of incorrect filing fees was done
in bad faith and with clear intent to defraud the government, considering
that: (a) when the issue on correct filing fees was first raised during the
hearing on the application for TRO, Harvest All, et al. never manifested their
willingness to abide by the Rules by paying additional filing fees when so
required; (b) despite Harvest All, et al.'s admission in their complaint that the
SRO was valued at Pl Billion, they chose to keep mum on the meager
assessment made by the Clerk of Court; and (c) while Harvest All, et
al. made mention of the SRO in the body of their complaint, they failed to
indicate the same in their prayer, thus, preventing the Clerk of Court from
making the correct assessment of filing fees.19
Aggrieved, Harvest All, et al. appealed20 to the CA.
The CA Ruling
In a Decision21 dated February 15, 2016, the CA reversed the RTC's order of
dismissal and, accordingly, reinstated the case and remanded the same to
the court a quo for further proceedings after payment of the proper legal
fees.22Also citing Rule 141 of the Rules of Court, as amended by A.M. No.
04-2-04-SC, and Lu, the CA held that the prevailing rule is that all intra-
corporate controversies always involve a property in litigation. Consequently,
it agreed with the RTC's finding that the basis for the computation of filing
fees should have been the ₱l Billion value of the SRO and, thus, Harvest
All, et al. should have paid filing fees in the amount of more or less ₱20
Million and not just ₱5,860.00.23 However, in the absence of contrary
evidence, the CA held that Harvest All, et al. were not in bad faith and had
no intention of defrauding the government, as they merely relied in the
assessment of the Clerk of Court. Thus, in the interest of substantial justice,
the CA ordered the reinstatement of Harvest All, et al.' s complaint and the
remand of the same to the RTC for further proceedings, provided that they
pay the correct filing fees.24
The parties moved for reconsideration,25 which were, however, denied in a
Resolution26 dated May 25, 2016. Hence, these consolidated petitions.
The Issues Before the Court
The primordial issues raised for the Court's resolution are: (a) whether or not
Harvest All, et al. paid insufficient filing fees for their complaint, as the same
should have been based on the Pl Billion value of the SRO; and (b) if
Harvest All, et al. indeed paid insufficient filing fees, whether or not such act
was made in good faith and without any intent to defraud the government.
The Court's Ruling
The petition in G.R. No. 224834 is denied, while the petition
in G.R. No. 224871 is partly granted.
I.
At the outset, the Court notes that in ruling that the correct filing fees for
Harvest All, et al.'s complaint should be based on the Pl Billion value of the
SRO - and, thus, essentially holding that such complaint was capable of
pecuniary estimation - both the RTC and the CA heavily relied on the
Court's pronouncement in Lu. In Lu, the Court mentioned that in view of
A.M. No. 04-2-04-SC dated July 20, 2004 which introduced Section 21
(k)27 to Rule 141 of the Rules of Court, it seemed that "an intra-corporate
controversy always involves a property in litigation" and that "there can be
no case of intra-corporate controversy where the value of the subject matter
cannot be estimated."28
However, after a careful reading of Lu, it appears that Harvest All, et
al. correctly pointed out29 that the foregoing statements were in the nature of
an obiter dictum.
To recount, in Lu, the Court ruled, inter alia, that the case involving an intra-
corporate controversy instituted therein, i.e., declaration of nullity of share
issuance, is incapable of pecuniary estimation and, thus, the correct docket
fees were paid.30 Despite such pronouncement, the Court still went on to say
that had the complaint therein been filed during the effectivity of A.M. No.
04-2-04-SC, then it would have ruled otherwise because the amendments
brought about by the same "seem to imply that there can be no case of
intra-corporate controversy where the value of the subject matter cannot be
estimated,"31 viz.:
The new Section 21 (k) of Rule 141 of the Rules of Court, as amended by
A.M. No. 04-2-04-SC (July 20, 2004), expressly provides that "[f]or petitions
for insolvency or other cases involving intra-corporate controversies, the
fees prescribed under Section 7 (a) shall apply." Notatu dignum is that
paragraph (b) 1 & 3 of Section 7 thereof was omitted from the reference.
Said paragraph refers to docket fees for filing "[a]ctions where the value of
the subject matter cannot be estimated" and "all other actions not involving
property."
By referring the computation of such docket fees to paragraph (a) only, it
denotes that an intra-corporate controversy always involves a property in
litigation, the value of which is always the basis for computing the applicable
filing fees. The latest amendments seem to imply that there can be no case
of intra-corporate controversy where the value of the subject matter cannot
be estimated. Even one for a mere inspection of corporate books.
If the complaint were filed today, one could safely find refuge in the express
phraseology of Section 21 (k) of Rule 141 that paragraph (a) alone applies.
In the present case, however, the original Complaint was filed on August 14,
2000 during which time Section 7, without qualification, was the applicable
provision. Even the Amended Complaint was filed on March 31, 2003 during
which time the applicable rule expressed that paragraphs (a) and (b) 1 & 3
shall be the basis for computing the filing fees in intra-corporate cases,
recognizing that there could be an intra-corporate controversy where the
value of the subject matter cannot be estimated, such as an action for
inspection of corporate books. The immediate illustration shows that no
mistake can even be attributed to the RTC clerk of court in the assessment
of the docket fees.32 (Emphases and underscoring supplied)
Accordingly, the passages in Lu that "an intra-corporate controversy always
involves a property in litigation" and that "there can be no case of intra-
corporate controversy where the value of the subject matter cannot be
estimated" are clearly non-determinative of the antecedents involved in that
case and, hence, cannot be controlling jurisprudence to bind our courts
when it adjudicates similar cases upon the principle of stare decisis. As it is
evident, these passages in Lu only constitute an opinion delivered by the
Court as a "by the way" in relation to a hypothetical scenario (i.e., if the
complaint was filed during the effectivity of A.M. No. 04-2-04-SC, which it
was not) different from the actual case before it.
In Land Bank of the Philippines v. Santos,33 the Court had the opportunity to
define an obiter dictum and discuss its legal effects as follows:
[An obiter dictum] "x x x is a remark made, or opinion expressed, by a judge,
in his decision upon a cause by the way, that is, incidentally or collaterally,
and not directly upon the question before him, or upon a point not
necessarily involved in the determination of the cause, or introduced by way
of illustration, or analogy or argument. It does not embody the resolution or
determination of the court, and is made without argument, or full
consideration of the point. It lacks the force of an adjudication, being a mere
expression of an opinion with no binding force for purposes of res
judicata."34 (Emphasis and underscoring supplied)
For these reasons, therefore, the courts a quo erred in applying the case
of Lu.
II.
In any event, the Court finds that the obiter dictum stated in Lu was actually
incorrect. This is because depending on the nature of the principal action or
remedy sought, an intra-corporate controversy may involve a subject matter
which is either capable or incapable of pecuniary estimation.
In Cabrera v. Francisco,35 the Court laid down the parameters in determining
whether an action is considered capable of pecuniary estimation or not:
In determining whether an action is one the subject matter of which is not
capable of pecuniary estimation this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the claim is considered
capable of pecuniary estimation, and whether jurisdiction is in the municipal
courts or in the [C]ourts of [F]irst [I]nstance would depend on the amount of
the claim. However, where the basic issue is something other than the right
to recover a sum of money, where the money claim is purely incidental to, or
a consequence of, the principal relief sought, this Court has considered such
actions as cases where the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by [C]ourts of [F]irst
[I]nstance (now Regional Trial Courts).36 (Emphases and underscoring
supplied)
This case is a precise illustration as to how an intra-corporate controversy
may be classified as an action whose subject matter is incapable of
pecuniary estimation. A cursory perusal of Harvest All, et al.'s Complaint and
Amended Complaint reveals that its main purpose is to have Alliance hold its
2015 ASM on the date set in the corporation's bylaws, or at the time when
Alliance's SRO has yet to fully materialize, so that their voting interest with
the corporation would somehow be preserved. Thus, Harvest All, et
al. sought for the nullity of the Alliance Board Resolution passed on May 29,
2015 which indefinitely postponed the corporation's 2015 ASM pending
completion of subscription to the SR0.37 Certainly, Harvest All, et al.'s prayer
for nullity, as well as the concomitant relief of holding the 2015 ASM as
scheduled in the by-laws, do not involve the recovery of sum of money. The
mere mention of Alliance's impending SRO valued at ₱l Billion cannot
transform the nature of Harvest All, et al.'s action to one capable of
pecuniary estimation, considering that: (a) Harvest All, et al. do not claim
ownership of, or much less entitlement to, the shares subject of the SRO;
and (b) such mention was merely narrative or descriptive in order to
emphasize the severe dilution that their voting interest as minority
shareholders would suffer if the 2015 ASM were to be held after the SRO
was completed. If, in the end, a sum of money or anything capable of
pecuniary estimation would be recovered by virtue of Harvest All, et
al.'s complaint, then it would simply be the consequence of their principal
action.
Clearly therefore, Harvest All, et al.'s action was one incapable of pecuniary
estimation.
At this juncture, it should be mentioned that the Court passed A.M. No. 04-
02-04-SC38 dated October 5, 2016, which introduced amendments to the
schedule of legal fees to be collected in various commercial cases, including
those involving intra-corporate controversies. Pertinent portions of A.M. No.
04-02-04-SC read:
RESOLUTION
xxxx
Whereas, Rule 141 of the Revised Rules of Court, as amended by A.M. No.
04-2-04-SC effective 16 August 2004, incorporated the equitable schedule
of legal fees prescribed for petitions for rehabilitation under Section 21 (i)
thereof and, furthermore, provided under Section 21(k) thereof that the fees
prescribed under Section 7(a) of the said rule shall apply to petitions for
insolvency or other cases involving intra-corporate controversies;
xxxx
NOW, THEREFORE, the Court resolves to ADOPT a new schedule of filing
fees as follows:
xxxx
4. Section 21 (k) of Rule 141 of the Revised Rules of Court is hereby
DELETED as the fees covering petitions for insolvency are already provided
for in this Resolution. As for cases involving intra-corporate controversies,
the applicable fees shall be those provided under Section 7 (a), 7 (b) (1), or
7 (b) (3) of Rule 141 of the Revised Rules of Court depending on the nature
of the action.
xxxx
This Resolution shall take effect fifteen (15) days following its publication in
the Official Gazette or in two (2) newspapers of national circulation. The
Office of the Court Administrator (OCA) is directed to circularize the same
upon its effectivity. (Emphases and underscoring supplied)
Verily, the deletion of Section 21 (k) of Rule 141 and in lieu thereof, the
application of Section 7 (a) [fees for actions where the value of the subject
matter can be determined/estimated], 7 (b) (1) [fees for actions where the
value of the subject matter cannot be estimated], or 7 (b) (3) [fees for all
other actions not involving property] of the same Rule to cases involving
intra-corporate controversies for the determination of the correct filing fees,
as the case may be, serves a dual purpose: on the one hand, the
amendments concretize the Court's recognition that the subject matter of an
intra-corporate controversy may or may not be capable of pecuniary
estimation; and on the other hand, they were also made to correct the
anomaly created by A.M. No. 04-2-04-SC dated July 20, 2004 (as advanced
by the Lu obiter dictum) implying that all intra-corporate cases involved a
subject matter which is deemed capable of pecuniary estimation.
While the Court is not unaware that the amendments brought by A.M. No.
04-02-04-SC dated October 5, 2016 only came after the filing of the
complaint subject of this case, such amendments may nevertheless be
given retroactive effect so as to make them applicable to the resolution of
the instant consolidated petitions as they merely pertained to a procedural
rule, i.e., Rule 141, and not substantive law. In Tan, Jr. v. CA,39 the Court
thoroughly explained the retroactive effectivity of procedural rules, viz.:
The general rule that statutes are prospective and not retroactive does not
ordinarily apply to procedural laws. It has been held that "a retroactive law,
in a legal sense, is one which takes away or impairs vested rights acquired
under laws, or creates a new obligation and imposes a new duty, or attaches
a new disability, in respect of transactions or considerations already past.
Hence, remedial statutes or statutes relating to remedies or modes of
procedure, which do not create new or take away vested rights, but only
operate in furtherance of the remedy or confirmation of rights already
existing, do not come within the legal conception of a retroactive law, or the
general rule against the retroactive operation of statutes." The general rule
against giving statutes retroactive operation whose effect is to impair the
obligations of contract or to disturb vested rights does not prevent the (c) if Harvest All, et al.'s payment of ₱8,860.00 is already sufficient, proceed
application of statutes to proceedings pending at the time of their enactment with the regular proceedings of the case with dispatch.
where they neither create new nor take away vested rights. A new statute
which deals with procedure only is presumptively applicable to all actions - WHEREFORE, the petition in G.R. No. 224834 is DENIED, while the
those which have accrued or are pending. petition in G.R. No. 224871 is PARTLY GRANTED. The Decision dated
February 15, 2016 and the Resolution dated May 25, 2016 of the Court of
Statutes regulating the procedure of the courts will be construed as Appeals in CA-G.R. SP No. 142213 are
applicable to actions pending and undetermined at the time of their hereby AFFIRMED with MODIFICATION in that COMM'L. CASE NO. 15-
passage.1âwphi1 Procedural laws are retroactive in that sense and to that 234 is hereby REMANDED to the Regional Trial Court of Pasig City, Branch
extent. The fact that procedural statutes may somehow affect the litigants' 159 for further proceedings as stated in the final paragraph of this Decision.
rights may not preclude their retroactive application to pending actions. The
retroactive application of procedural laws is not violative of any right of a SO ORDERED.
person who may feel that he is adversely affected. Nor is the retroactive
application of procedural statutes constitutionally objectionable. The reason
is that as a general rule no vested right may attach to, nor arise from,
procedural laws. It has been held that "a person has no vested right in any
particular remedy, and a litigant cannot insist on the application to the trial of
his case, whether civil or criminal, of any other than the existing rules of
procedure."40 (Emphases and underscoring supplied)

In view of the foregoing, and having classified Harvest All, et al.'s action as
one incapable of pecuniary estimation, the Court finds that Harvest All, et
al. should be made to pay the appropriate docket fees in accordance with
the applicable fees provided under Section 7 (b) (3) of Rule 141 [fees for all
other actions not involving property] of the Revised Rules of Court, in
conformity with A.M. No. 04-02-04-SC dated October 5, 2016. The matter is
therefore remanded to the R TC in order:

(a) to FIRST Determine if Harvest, et al.'s payment of filing fees in the

amount of ₱8,860.00, as initially assessed by the Clerk of Court, constitutes
sufficient compliance with A.M. No. 04-02-04-SC;

(b) if Harvest All, et al.'s payment of ₱8,860.00 is insufficient, to require

Harvest, et al.' s payment of any discrepancy within a period of fifteen (15)
days from notice, and after such payment, proceed with the regular
proceedings of the case with dispatch; or