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IN RE: BERMUDEZ (SUPRA)
BELTRAN VS. MAKASIAR [Nov. 14, 1988]
This is a consolidation of 3 cases:
1. GR No. 82585
Petitioners: Maximo Soliven, Antonio Roces, Frederick Agcaoili & Godofredo Manzanas
Respondents: Hon. Ramon Makasiar, Presiding Judge RTC Manila Br. 35, Usec. Silvestre Bello of the Dept
of Justice, Luis Victor, City Fiscal Manila & Pres. Corazon C. Aquino
2. GR No. 82827
Petitioner: Luis D. Beltran
Respondents: Hon. Ramon Makasiar, Hon. Luis Victor, People of the Philippines, Supt. Of the Western
Police District & Members of the Process Serving Unit at the RTC Manila
3. GR No. 83979
Petitioner: Luis Beltran
Respondents: Exec. Sec. Catalino Macaraig, DOJ Sec. Sedfrey Ordoñez, Usec. Silvestre Bello III, City
Fiscal of Manila Jesus Guerrero & Judge Ramon Makasiar
Background: This is a case regarding the libel suit filed by then Pres. Cory Aquino
against Louie Beltran. Beltran reported in one of his columns that Aquino hid under
her bed in Malacañang during one of the many coup attempts that plagued the
Aquino administration. I believe this resolution was promulgated while the case was
pending in the RTC.
Issues & Ratio:
1. WON petitioners were denied due process when informations for libel
were filed against them even if the DOJ Sec & then the Pres were still
reviewing the existence of a prima facie case. – MOOT & ACADEMIC
 The Undersecretary of Justice sustained City Fiscal’s finding of a prima facie
case against the petitioners. Such decision was upheld by the Sec. of Justice
who likewise denied petitioners’ MFR. The Pres., through the Exec. Sec.
affirmed the DOJ Secretary’s decision. Petitioners were not denied the
administrative remedies available under the law.
 Beltran can’t claim that he was denied due process during the preliminary
investigation. He was accorded the right to submit counter-affidavits, yet he
chose to file a “Motion to Declare Proceedings Closed” w/c in effect waived his
right. He is not required to exercise this right. What matters is that he was
given the opportunity to exercise such.
2. WON Beltran’s constitutional rights were violated when Makasiar
issued a warrant of arrest w/o personally examining the complaint &
witnesses to determine probable cause. – NO
 Beltran invokes Art. III, Sec. 2 of the Constitution1. He claims that w/this
provision & the deletion of the 1973 Constitutional grant to issue warrants to
other responsible officers as may be authorized by law, a judge has to
personally examine the complainant & his witnesses in order to determine
probable cause to issue warrants of arrest.
 Beltran’s interpretation is inaccurate. The law contemplates that the judge
should have exclusive & personal responsibility to satisfy himself that a
1
Art. III, Sec. 2. The right of the people to be secure in their persons, houses, papers and effects against unreasonable
searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest
shall issue except upon probable cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and
the persons or things to be seized.
probable cause exists before he issues a warrant of arrest. He should follow the
ff procedures (pursuant to SC Circular No. 12, June 30, 1987):
a. personally evaluate the report & supporting documents presented by the
fiscal regarding the existence of a probable cause.
b. If probable cause exists he should issue a warrant of arrest, otherwise, he
may disregard the fiscal’s report & require witnesses to submit supporting
affidavits to aid him in arriving at a conclusion that probable cause exists.
Such procedure is dictated by sound policy so that the judge won’t be unduly
burdened by the preliminary examination & investigation of crim’l complaints,
giving him more time to concentrate on hearing & deciding cases. No proof that
judge deviated from the prescribed procedure.
3. WON the Pres of the Phil under the Consti may initiate crim’l
proceedings against the petitioners thru the filing of a complaint-
affidavit. – YES
 Beltran claims that since the Pres enjoys presidential immunity, she is likewise
barred from filing suit since by filing her complaint-affidavit, she may have to
be a prosecution witness, bringing her to the trial court’s jurisdiction w/c would
indirectly defeat her privilege of immunity from suit. By testifying, she’d be
exposing herself to possible contempt of court or perjury.
 Ratio of the President’s privilege of immunity from suit: assure the
exercise of Presidential duties & functions free from any hindrance/distraction
considering that being the Chief Exec of the Gov’t requires all of the office
holder’s time & demands undivided attention.
 The Pres has this privilege by virtue of her office & only the holder of the
office may invoke such. No other person in the President’s behalf can raise
this as a defense to prevent the case from proceeding against the accused.
 Nothing in our laws prevents the Pres from waiving this privilege. The choice of
WON to exercise or waive this privilege is solely the President’s prerogative. It
can’t be assumed & imposed by any other person.
4. Other contentions of Beltran:
 Privileged character of the publication: best left w/the Trial Court, SC is not a
trier of facts.
 “Chilling Effect” of the libel case on press freedom: Court has no basis to decide
on this matter
Held: There being no proof of grave abuse of discretion amounting to lack of
jurisdiction, all 3 petitions are DISMISSED. Order to maintain status quo as per SC
Resolution on April 7, 1988 & April 26, 1988 is LIFTED.
NIXON V. FITZGERALD
457 U.S. 731 (1982)
In January 1970, during the Presidency of Richard Nixon, Ernest Fitzgerald, a
management analyst with the Department of the Air Force, was dismissed from his
job. This was in the context of a departmental reorganization and reduction in force
where his job was eliminated. Such was taken to promote economy and efficiency.
Fearing that his dismissal was in retaliation to his testifying about cost-overruns
and unexpected technical difficulties concerning the development of the C-5A
transport plane sometime in 1968 before the Subcommitee on Economy in
Government of the Joint Economic Committee of the U.S. Congress, the
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Subcommittee on Economy in Government convened public hearings on Fitzgerald’s
dismissal.
Pres. Nixon was queried about Fitzgerald’s impending dismissal. In response, he
asked White House Chief of Staff to arrange for Fitzgerald’s reaasignment to another
job within the administration. However, no offers of alternative federal employment
were made.
He thus complained to the Civil Service Commission, claiming that his dismissal
was indeed in retaliation for his testifying. (1970)
The Commission, after finding that the departmental reorganization was in fact
motivated by “reasons purely personal to” Fitzgerald, held that Fitzgerald’s dismissal
had offended applicable civil service regulations and thus ordered for Fitzgerald’s
reappointment to original or new position. However, the Commission rejected
Fitzgerald’s claim that it was in retaliation to his testifying.
Fitzgerald filed a suit for damages in the U.S. District Court against 8 officials of the
Defense Dept, White House Aide Alexander Butterfield and one or more unnamed
White House Aides. (1974)
After being dismissed by the District Court and CA, he filed an amended complaint
where he impleaded Pres. Nixon.
The District Court held that Fitzgerald had stated triable causes of action and that
Pres. Nixon was not entitled to claim absolute Presidential immunity.
Pres. Nixon appealed to the CA but was dismissed, hence this petition to the US SC
Issue: WON the President is shielded by absolute immunity from civil damages
liability
YES. It was held that petitioner, as former president of the U.S., is entitled to
absolute immunity from damages liability predicated on his official acts.
Furthermore, that absolute presidential immunity from damages liability extends to
all acts within the outer perimeter of the presidents official responsibility.
The US SC has consistently recognized that government officials are entitled to
some form of immunity from suits for civil damages (Spalding v. Vila, Tenney v.
Bardhove, Pierson v. Ray, Scheuer v. Rhodes). The decisions on these cases were
guided by the Constitution, federal statutes, history and, if in the absence of
constitutional or congressional guidance, common law.
The President’s absolute immunity is a functionally mandated incident of his unique
office, rooted in the constitutional tradition of the separation of powers and
supported by the Nation’s history.
He is distinguished from other executive officials by virtue of his unique status
under the Constitution
Because of the singular importance of the President’s duties, diversion of his
energies by concern with private lawsuits would raise unique risks to the effective
functioning of the government.
While the separation of powers doctrine does not bar every exercise of jurisdiction
over the President, a court, before exercising jurisdiction, must balance the
constitutional weight of the interest to be served against the dangers of intrusion on
the authority and functions of the Executive Branch. When judicial action is needed
to serve broad public interests, the exercise of jurisdiction has been held warranted.
In the case of this merely private suit for damages based on a President’s official
acts, the US SC held it is not (warranted).
The President’s absolute immunity extends to all acts within the outer perimeter of
his duties of office. Since it is within the President’s constitutional and statutory
authority to prescribe the manner in which the Secretary will conduct the business
of the Air Force and this mandate must include the authority to prescribe
reorganizations and reductions in force, the SC concluded that petitioner’s alleged
wrongful acts lay well within the outer perimeter of his authority.
A rule of absolute immunity for the President does not leave the Nation without
sufficient protection against his misconduct. There remains the constitutional
remedy of impeachment, as well as the deterrent effects of constant scrutiny by the
press and vigilant oversight by the Congress. Other incentives to avoid misconduct
are desire to earn re-election, need to maintain prestige as an element of
Presidential influence and a President’s traditional concern for his historical stature.
Held: Reversed and remanded
Clinton v. Jones
Facts:
 On the afternoon of May 8, 1991, Governor William Jefferson Clinton of
Arkansas, who was then running for US Presidency, was at the Excelsior Hotel
in Little Rock, Arkansas for an official conference, where he was to deliver a
speech
 Paula Corbin Jones, an employee of the Arkansas Industrial Development
Commission (a state government agency), staffed the registration desk for the
conference
 Danny Ferguson, a former Arkansas State Police officer, persuaded Jones to
leave her desk and go to the business suite of the Governor at the hotel, where
Clinton then made “abhorrent” sexual advances, which she vehemently
rejected.
 After the incident, Jones claims that the attitude of her superiors at work
became hostile and rude, and that her duties were changed to punish her for
rejecting those advances.
 When Clinton as elected President, Jones said that he defamed her by making a
statement to a reporter implying that she accepted his overtures. Afterwards,
she also claims that various persons authorized to speak for the President
branded her as a liar by denying that the incident occurred. For this she seeks
actual and punitive damages.
 In response, Clinton informed the District Court that he will be invoking
Presidential immunity and, in relation to this, he requested that resolution of
other pleadings and motions be deferred until after the issue of immunity has
been settled
 District Court granted based on:
1. Holding in other cases that “immunity questions should be decided at the
earliest possible state of the litigation; and
2. the “singular importance of the President’s duties”
 Eventually, District Court denied the motion to dismiss on immunity grounds,
but ordered that trial be stayed until the end of Clinton’s presidency. District
Judge said:
1. The President has absolute immunity from civil damage actions arising out
of the execution of official duties (Nixon v. Fitzgerald)
2. But she is not convinced that he has the same immunity for actions
committed before he assumed office
3. However, considering in part the fact that Jones failed to filed her complain
until 2 days before the 3-year period limitation expired, she (the District
Judge) is convinced that public interest in avoiding litigation that might
hamper the President in conducting the duties of his office outweighed any
demonstrated need for an immediate trial
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 Both parties appealed to the Court of Appeals, which affirmed the decision,
saying:
1. The President, like all other government officials, is subject to the same
laws that apply to all other members of our society
2. There is no case where a public official was ever granted immunity from
suit for unofficial acts
3. The rationale for official immunity is “inapposite where only personal,
private conduct by a President is at issue
 But the Court of Appeals reversed the lower court’s decision to stay the trial
until end of Clinton’s term because it sees this as the equivalent of granting the
immunity sought. It said that “judicial case management sensitive to the
burdens of the presidency and the demands of the President’s schedule would
avoid the perceived danger of interference into the Executive branch.
 A dissent by Judge Ross pointed out that the logic for the doctrine of immunity
“placed primary reliance on the prospect that the President’s discharge of his
constitutional powers and duties would be impaired if he were subject to suits
for damages.” Thus, since this is the primary consideration, immunity should
just as equally be enforced in the present case
 A separate concurring opinion addressed Judge Ross’s dissent by saying that
the concern about judicial interference with the function of the Presidency was
overstated. If further said that there is also a public interest in seeing to it that
an ordinary citizen’s fundamental rights be vindicated against abuse of power
by government officials, considering that delay may create irreparable harm
such as loss of evidence or possible death of a party.
 In light of the Court of Appeals’ decision, the President Clinton filed a petition
for certiorari with the Supreme Court of the US, arguing that the decision is
fundamentally mistaken and that it created serious risks for the institution of
the Presidency.
 Jones, of course, opposed this by alleging that there is neither such a risk nor a
precedent supporting his contention.
Issues:
I. W/N the Constitution affords the President temporary immunity from civil
damages litigation arising out of events that occurred prior to his election as
President.
NO. Immunity is granted based on the official nature of the functions performed
that gave rise to the controversy, and not based on the identity of the person.
II. W/N the District Court’s discretionary decision to stay the trial is the functional
equivalent of a grant of temporary immunity.
NO, but it still could not be upheld because it still constitutes grave abuse of
discretion by not considering the interests of the respondent (Jones) that would
be prejudiced by delay.
Reasoning:
I. W/N the Constitution affords the President temporary immunity from civil
damages litigation arising out of events that occurred prior to his election
as President
1. The purpose or rationale for the doctrine does not support extending
the scope of immunity to unofficial acts
 Immunity serves the public interest in enabling officials (such as
prosecutors, legislators, and judges) to perform their designated functions
effectively without fear that a particular decision may give rise to personal
liability. The point of immunity is to forestall an atmosphere of intimidation
that would conflict with their resolve to perform their designated functions
in a principled fashion. (Ferri v. Ackerman).
 The central concern was to avoid rendering the President “unduly cautious
in rendering his official duties.” This was the principal basis for holding
Nixon as being entitled to immunity for liabilities predicated on his official
acts. (Nixon v. Fitzgerald)
 The sphere of protected action must be related closely to the immunity’s
justifying purpose.
 Apparently, then, such immunity is inapplicable where what the acts in
question are the official’s unofficial and personal conduct.
 In determining the scope of immunity, the Court has applied a functional
approach or the nature of the function performed, and not the identity of
the actor who performed it (e.g. a judge was held liable for purely
administrative acts).
2. Neither is such a proposition supported by precedent
3. Evidence from “historical record” do not shed light on the question
since those offered by the petitioner are cancelled out by those offered
by the respondent
Clinton’s evidence
 Thomas Jefferson’s claim (upon being served a subpoena for the Burr trial),
that the subpoena jeopardized the separation of powers by subjecting the
Executive to judicial command, was denied to Jefferson by the CJ in the
very decision he was protesting, and such decision has been affirmed by
the Court.
 In the diaries kept by Sen. Maclay of the first Senate debates, VP Adams
and Sen. Ellsworth are recorded to have said that “the President personally
is not subject to any process whatever lest it be put in the power of a
common Justice to exercise any authority over the President and to stop
the whole machine of government.”
Such statements are inconclusive and hardly material proof of the
unequivocal common understanding at the time of the founding, especially in
light of the fact that, right after recording said comment, Maclay went on to
say that he disagreed with the two.
 Justice Story’s Commentaries on the Constitution, which states that the
President possesses “incidental powers” such as the power to perform his
duties without any obstruction. Therefore, he cannot be liable to arrest,
imprisonment or detention while he is in the discharge of the duties of his
office and his person must be deemed, in civil cases at least, to possess an
official inviolability.
Here, Story only said that an “official inviolability” was necessary.
Jones’ evidence
 James Wilson, who participated in the Philadelphia Convention at which the
Constitution was drafted, explained that “although the President is placed
on high, not a single privilege is annexed to his character; far from being
above the laws, he is amenable to them in his private character as a citizen
and in his public character by impeachment.
4. Doctrine of separation of powers does not bar every exercise of
jurisdiction over the President of the US
 Clinton says that:
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i. he occupies a unique office with powers and responsibilities so cast and
important that public interest demands that he devote his undivided time
and attention to his public duties
ii. given the doctrine of separation of powers, there are limits on the
authority of the Federal Judiciary to interfere with the Executive Branch
that would be transgressed by allowing this action to proceed
 Court says that they accept the first premise, but they do not believe that
separation of powers will be violated.
 In this case, there is no suggestion that the Federal Judiciary is being asked
to perform any function that might in some way be described as “executive.”
 Court is merely being asked to exercise the functions that the Constitution
ordained it with
5. Clinton’s prediction (that burdens will be placed on the President that
will hamper the performance of his official duties) has little support.
 If properly managed by the District Court, it is highly unlikely to occupy any
substantial amount of petitioner’s time
 Our system imposes upon the Branches a degree of overlapping responsibility
(a duty of interdependence as well as independence, the absence of which
would preclude the establishment of a Nation capable of governing itself
effectively). Therefore, possible burden on the time and attention of the
Chief Executive is not sufficient grounds to establish a violation of the
Constitution as supported by two propositions:
i. When the President takes official action, the Court has the authority to
determine whether he has acted within the law (Youngstown Sheet &
Tube Co. v. Sawyer; Marbury v. Madison)
ii. The president is subject to judicial process in appropriate circumstances
(e.g. Jefferson in US v. Burr; Nixon in US v. Nixon)
II. W/N the District Court’s discretionary decision to stay the trial is the
functional equivalent of a grant of temporary immunity.
 Decision to stay is not the functional equivalent of a grant of immunity because
DC allowed discovery to proceed
 Even so, stay may be justified by considerations that do not necessitate the
recognition of immunity
 DC has broad discretion to stay proceedings as an incident to its power to
control its own docket
 However, the stay still constitutes grave abuse of discretion because it did not
take into account the respondent’s interest.
 Although the filing of the complaint took a long time, it was still filed within the
statutory limit, and further delay would increase the danger of prejudice from
the loss of evidence
Final Comments of the Court:
1. On the risks that (1) political harassment and frivolous litigation might result,
and (2) national security might prevent the President from explaining a
legitimate need for continuance, the Court is not persuaded.
Frivolous and vexatious litigation is terminated at the pleading stage or on
summary judgment with little if any personal involvement by the defendant.
Availability of sanctions provides a significant deterrent to litigation directed at the
President in his unofficial capacity for purposes of political gain or harassment.
Several Presidents have given testimony without jeopardizing the Nation’s
security
2. If Congress deems it appropriate to afford the President stronger protection, it
may respond with appropriate legislation
US v. NIXON
On Writs of Certiorari to the US Supreme Court of Appeals for the District of
Columbia Circuit before judgment. 1974.
PRECIS: This case presents for review the denial of a motion, filed on US President’s
behalf, to quash a 3rd party subpoena duces tecum issued by the US District Court
for the District of Columbia pursuant to Federal Rule Criminal Procedure 17. The
subpoena directed the Pres to produce certain tape recordings and documents
relating to his conversations w/ aides and advisers. The court rejected the
President’s claims of absolute executive privilege, of lack of jurisdiction, and of
failure to satisfy the requirements of Rule 17 (c). The Pres appealed to CA. Petition
for certiorari before judgement was granted due to the public importance of the
issues presented and the need for their prompt resolution.
FACTS (Burger, CJ):
On March 1, 1974, a grand jury of the US District Court for the District of Columbia
returned an indictment charging 7 named individuals, who either occupied a position
in the White House or in the Committee for the Re-Election of the Pres, w/ various
offenses, including conspiracy to defraud the US and to obstruct justice. Although
he wasn’t designated as such in the indictment, Pres Richard M Nixon was named as
an unindicted co-conspirator.
On April 18, 1974, a subpoena duces tecum was issued pursuant to Rule 17 to the
Pres by the US District Court and made returnable on May 2 ’74. This subpoena
required in advance of the Sept 9 trial date, the production of certain tapes,
memoranda, papers, transcripts, or other writings relating to certain precisely
identified meetings between the Pres and others. The Special Prosecutor was able
to fix the time, place and persons present at these discussions because the White
House daily logs and appointment records had been delivered to him.
In April 30, the Pres publicly released edited transcripts of 43 conversations,
portions of 20 conversations subject to subpoena in this case.
On May 1 ’74, the Pres’s counsel filed a “special appearance” and a motion to quash
the subpoena under Rule 17 (c) accompanied by a formal claim of privilege.
On May 20 ’74, the District Court denied the motion to quash and the motions to
expunge and for protective orders. It further ordered the Pres or any subordinate
officer, official or employee w/ custody or control of the documents or objects
subpoenaed to deliver to the District Court on/before May 31, 1974 the originals of
all subpoenaed items w/ their index and analysis, together w/ tape copies of those
portions of the subpoenaed recordings for w/c transcripts had been released to the
public by the Pres previously in April.
District Court also held that although the issue was intra-executive in character
(because it was between the Special Prosecutor and the Chief Executive) it was
justiciable because it was based on the authority and powers vested in the Special
Prosecutor by the regulation promulgated by the Atty Gen. The judiciary not the
President is the final arbiter of a claim of executive privilege. And in this case, the
presumptive privilege was overcome by the Special Prosecutor’s prima facie
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“demonstration of need sufficiently compelling to warrant judicial examination in Prosecutor will not be removed from his duties except for his own extraordinary
chambers”. Hence, the requirements of Rule 17 were met. improprieties and w/o the consensus of 8 designated leaders of Congress.

On May 24 ’74, the Pres filed a notice of appeal from the District Court order as well 3. WON the subpoena duces tecum was unreasonable or oppressive and may be
as a petition for writ of mandamus in the Court of Appeals seeking review of the quashed - NO
District Order.
 A subpoena may command the person to whom it is directed to produce the
books, papers, documents or other objects designated therein. The court may
ISSUES and RATIO:
promptly quash or modify the subpoena if compliance would be unreasonable
1. WON May 20 ’74 order of the District Court was an appealable order or oppressive. The production of the items mentioned may also be produced
before the court at a time prior to the trial or prior to the time when they are to
 As a general rule, an order that was not yet final is not appealable. However,
be offered in evidence.
as in Perlman v. US, where a subpoena had been directed to a 3rd party
 In order to require production prior to trial, the moving party must show:
requesting certain exhibits and the owner of the exhibits sought the claim of
i. that the documents are evidentiary and relevant
privilege, the Court held that an order compelling production was appealable
ii. that they are not otherwise procurable reasonably in advance of trial
because it was unlikely that the 3rd party would risk a contempt citation in order
by exercise of due diligence
to allow immediate review of the appellant’s claim of privilege.
iii. that the party cannot properly prepare for trial w/o such production
 In the case at bar, to require the US Pres to place himself in the posture of
and inspection in advance of trial, and that the failure to obtain such
disobeying an order of a court merely to trigger the procedural mechanism for
inspection may tend unreasonably to delay trial
review of the ruling would be unseemly, and it would present an unnecessary
iv. that the application is made in good faith and is not intended as a
occasion for consti’l confrontation between 3 branches of the govt. Similarly, a
general “fishing expedition.”
federal judge should not be placed in the posture of issuing a citation to a Pres
 Against the 4 requirements, the Special Prosecutor must clear three hurdles
simply to invoke review.
namely (a) relevancy, (b) admissibility, and (c) specificity.
 The Court found that at least parts of the conversations that are the subject of
2. WON the District Court lacked jurisdiction to issue subpoena (as the matter was
the subpoenaed items relate to the offenses charged in the indictment and that
an intra-branch dispute between a subordinate and a superior officer of the
each of the subpoenaed tapes would contain evidence admissible w/ respect to
Exec Branch and hence not subject to judicial resolution)
the offenses.
 NO. The mere assertion of a claim of an “intra-branch dispute” has never
 Moreover, the Spec Prosecutor made a sufficient showing to justify a subpoena
defeated federal jurisdiction. Justiciability does not depend on such a surface
for production before trial as the subpoenaed materials are not available from
inquiry.
any other source, and their examination and processing should not await trial.
 Here, the proceeding is a pending criminal prosecution. It is a judicial
proceeding in a federal court alleging violation of federal laws and is brought in
4. WON the subpoena should be quashed because it would defeat executive
the name of US as sovereign. Under authority of Art 2 Sec 2, the Congress has
privilege
vested in the Atty Gen the power to conduct the criminal litigation of the US
Govt. It has also vested in him the power to appoint subordinate officers to  NO. In the performance of assigned consti’l duties, each branch of the govt
assist him in the discharge of his duties. must initially interpret the Consti and such interpretation of it and its powers
 Acting pursuant to those statutes, the Atty Gen has delegated the authority to must be given great respect from the other branches. However, it is
represent the US in such matters to a Special Prosecutor w/ unique authority emphatically the province and duty of the judicial dept to say what the law is.
and tenure. The Special Prosecutor is given plenary authority to control the (Marbury v Madison)
course of investigations and litigation related to “all offenses arising out of the
1972 Pres’l Election, allegations involving the Pres, members of the White
 As the ultimate interpreter of the Consti, the Court must strike down the
(mis)interpretation of the President’s counsel. The Consti does not provide an
House staff, or Pres’l appointees and any other matters w/c he consents to have
absolute privilege of confidentiality for all pres’l communications. Absent a
assigned to him by the Atty Gen.” So long as this regulation is extant, it has
claim of need to protect military, diplomatic or sensitive natl security secrets,
the force of law.
the claim of broad public interest in the confidentiality of such conversations is
 Moreover, the Special Prosecutor was given full authority to contest the
insufficient reason.
assertion of “Executive Privilege”. In exercising this authority, he shall have the
 Neither does the doctrine of separation of powers can sustain an absolute,
greatest degree of independence that is consistent w/ the Atty Gen’s statutory
unqualified pres’l privilege of immunity from judicial process under all
accountability for all matters falling w/in the jurisdiction of the DOJ. The Atty
circumstances. The framers of the Consti intended to provide a comprehensive
Gen will not reverse or interfere w/ the Spec Prosecutor’s decisions or actions.
system of a workable govt but the separate powers were not intended to
 And in accordance w/ assurances given by the Pres to the Atty Gen that the
operate w/ absolute independence. It did not sought separateness but
former will not exercise his constitutional powers to effect the discharge of the
interdependence, not autonomy but reciprocity.
Spec Prosecutor’s duties or to limit the independence he is given, the Spec
 Moreover, the legitimate needs of the judicial process (i.e. full disclosure of
facts) outweigh presidential privilege absent any finding that it is regarding
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military or diplomatic secrets. It is when the Pres, both as Commander-in-Chief
and as the Nation’s organ for foreign affairs, has reports from intelligence
services when such should and ought not to be published to the world.
 As dictated by the fundamental demands of due process of law, fair
administration of justice and the specific and central consti’l need for relevant
evidence in criminal trials prevails over the President’s assertion of a
generalized privilege of confidentiality.
HELD: Decision affirmed. Order issued so long as there is scrupulous protection
against any release or publication of material found by the court not admissible in
evidence or relevant to the issues of the trial. Presidential records should be
accorded w/ a high degree of deference.
ESTRADA V. ARROYO
THE CASE: Petitioner Estrada (ERAP) alleges he is the President on leave while
Respondent Gloria (GMA) claims she is the President.
FACTS:
• Erap’s sharp descent from power started on Oct 4, 2000 when Chavit
accused him of receiving millions from jueteng lords.
• Oct 5, 2000: Guingona delivered his “I Accuse” privilege speech, accusing
Erap of receiving some P220M in jueteng money from Chavit. He also
charged that Erap took from Chavit P70M on excise tax on cigarettes
intended for Ilocos Sur
• Drilon referred the speech to the Blue Ribbon Committee & Committee on
Justice for joint investigation
• Reps Alvarez, Herrera & Michael Defensor spearheaded the move to
impeach petitioner.
• Calls for Erap’s resignation filled the air.
• Oct 12, 2000: GMA resigned as DSWD Sec & asked for Erap’s resignation.
• Nov 13: Spkr Villar transmitted Articles of Impeachment signed by more
than 1/3 of all the members of the House of Rep (HR) to the Senate.
• Drilon was replaced by Pimentel as Sen Pres; Villar was unseated by Rep.
Fuentebella
• Nov 20: impeachment trial was opened; Dec 7: trial started
• Dramatic point was the Clarissa Ocampo testimony (as Sr. VP of Equitable
PCI-Bank) on Erap’s alleged signing as “Jose Velarde” on docus involving
P500M investment agreement w/ their bank on Feb 4, 2000.
• Jan 16: By a vote of 11-10, Senate ruled against the opening of the 2nd
envelope w/c allegedly contained evidence showing that Erap held P3.3B
in a secret bank account under the name Jose Velarde…Thus, the EDSA
Dos…
• After the prosecutors collectively resigned, Roco moved for the indefinite
postponement of the impeachment proceedings.
• Jan 19: Gen. Reyes, AFP Chief of Staff defected who later on went to EDSA
along w/ the chiefs of the armed services. Later, Lacson also defected,
followed by other resignations by Cabinet secs, usecs, etc.
• Negotiations were made bet’n the parties but GMA nevertheless took her
oath as President, as administered by Davide (Jan 20, 12:00 noon)
• Jan 20 STATEMENT OF ERAP: Basically states that he is leaving Malacanang
for the sake of peace & to start the healing process though he has serious
doubts about the legality & constitutionality of GMA’s proclamation as Pres.
• Jan 20 LETTER signed by ERAP: “By virtue of Sec. 11, Art VII, I am
hereby transmitting this declaration that I am unable to exercise
the powers & duties of my office. By operation of law & the Consti,
the VP shall by the Acting President.”
• Jan 22: GMA discharged the powers & duties of the Presidency.
• Jan 22 SC A.M. Resolution: Court resolves to confirm the authority given by
the 12 justices then present to Davide on Jan 20 to administer GMA’s oath.
• GMA then appointed Cabinet members, ambassadors, etc. Recognition by
foreign govts followed.
• House Resolution 175 & 176: HR’s expression of support to GMA as
President
• Feb 6: GMA nominated Guingona as her VP
• Senate Resolution 82: nomination of Guingona confirmed.
• HR also approved Gingona’s nomination. He then took his oath.
• Senate Reso 83: declares impeachment court as functus officio &
terminated.
• A survey conducted by Pulse Asia revealed approval of Erap’s replacement
by GMA.
• After his fall from power, cases previously filed against Erap were set in
motion, w/c consists of 6 cases filed w/ the OMB for graft & corruption,
bribery, plunder, forfeiture, perjury, serious misconduct, violation of the
code of Conduct for Govt employees, malversation of public funds, illegal
use of public funds, indirect bribery, violation of PD 1602, 1829, 46, & RA
7080 (These are all the charges in the 6 cases)
• Now we come to the SC cases filed by PETITIONER ERAP…(Note: the 2
cases are consolidated)
• G.R. 14610-15: Petition for prohibition w/ a prayer for a writ of prelim
injunction seeking to enjoin respondent OMB from conducting any further
proceedings in the 6 cases or in any other criminal complaint that may be
filed in his office, until after the term of Erap as Pres is over & only if
legally warranted.
• G.R. 146738: Petition for Quo Warranto. Prayed for judgment confirming
Erap to be the lawful & incumbent Pres of RP temporarily unable to
discharge the duties of his office & declaring GMA to be merely an acting
President pursuant to the Constitution.
• Davide & Panganiban recused themselves.
• Feb 20 SC Resolution (On the urgent motion for copies of resolution &
press statement for “Gag Order” on respondent OMB) COURT RESOLVED:
1) to inform parties that SC didn’t issue a resolution on Jan 20 ’01
declaring of OP vacant & that neither did the CH issue a press statement
justifying the alleged resolution; 2) to order the parties to refrain from
making any comment or discussing in public the merits of the cases at bar
while pending; 3) to issue a 30-day status quo order enjoining the
respondent OMB from resolving/deciding the criminal cases pending
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investigation in his office against Erap as it will make the cases at bar moot
& academic.
ISSUES:
1. WON issue is justiciable.
2. WON Erap has resigned as president
3. WON Erap is only temporarily unable to act as President
4. WON he is immune from criminal prosecution
5. WON prosecution of Erap should be enjoined on the ground of prejudicial
publicity
HELD/RATIO:
1. YES.
• RESPONDENT: cases at bar assail the legitimacy of GMA govt. They stress
that GMA has already taken her oath; exercised the powers of the
Presidency; has been recognized by foreign govts – That these constitute
political questions. They invoked Lawyers league v. Aquino.
• Court stressed expanded power of judicial review under 1987 Consti (the
GADALEJ thing )
• SC ruled that Lawyers League case is inapplicable. THE DIFFERENCE: Court
held in that case that the Aquino govt was the result of a successful
revolution by the sovereign Filipino people “in defiance of the ’73 Consti”.
The legitimacy of a govt by a successful revolution by people power is
beyond judicial scrutiny for that govt automatically orbits OUT of the const’l
loop. IN CONTRAST, the GMA govt is NOT REVOLUTIONARY in character.
The oath she took at EDSA is the oath under the 1987 Consti. She is
discharging her powers under the same consti.
• EDSA I involves the exercise of people power revolution w/c overthrew the
whole govt. EDSA II is an exercise of people power of freedom of speech &
assembly to petition the govt for redress of grievances w/c only affected
the OP. EDSA I is extra constitutional; EDSA II is intra constitutional
• THUS EDSA I PRESENTED A POL QUESTION; EDSA II INVOLVES LEGAL
QUESTIONS
• The principal issues require the proper interpretation of Const’l provisions,
notably, Sec. 1, Art II, Sec. 8, Art VII, & the allocation of govt’l powers
under Sec. 11 of Art VII. Issues also call for a ruling on the scope of pres’l
immunity from suit & the correct calibration of the petitioner’s right against
prejudicial publicity.
2. NO. Erap is deemed to have resigned.
• Petitioner denies he resigned or that he suffers from permanent disability,
thus, the OP was not vacant when GMA took her oath.
• ISSUE BOILS DOWN TO THE MEANING OF SEC. 8 ART VII: “In case of
death, permanent disability, removal from office or resignation of
the Pres, the VP shall become the Pres to serve the unexpired term.
In case of death, permanent disability, removal from office, or
resignation of both the Pres & VP, the Pres of the Senate or, in case
of his inability, the Spkr, shall then act as Pres ‘til the Pres or VP
shall have been elected & qualified.”
• Resignation must be coupled by acts of relinquishment. Its validity is not
governed by any formal requirement as to form. It can be express/implied.
• Since petitioner did not write any formal resignation letter, the question of
WON he resigned must be determined from the totality of prior,
contemporaneous & posterior facts & circumstantial evidence bearing a
material relevance on the issue.
• UNDER the totality test, SC held that PETITIONER RESIGNED AS PRES
• Entries in the Angara Diary “The Final Days of Erap” & other pertinent
events show that he intended & indeed resigned. THESE ARE: Erap’s
proposal for a snap election where he will not be a candidate; the lines “Ed,
Angie (Reyes), guaranteed that I would have 5 days to a week in the
palace” – thus the problem was already about a peaceful & orderly transfer
of power, implying resignation; the 1st round of negotiations wherein Erap’s
concern was on the transition, the safety of his family, etc; the lines “Pagod
na pagod na ako…Ayoko na..”, w/c are words of resignation; the 2 nd round
of negotiations wherein his resignation was treated as a given fact & the
only unsettled points were the measures to be undertaken by the parties
during & after transition.
• His resignation was also confirmed by his leaving Malacanang.
• His invocation of Sec 11, VII of Consti is untenable as his pleadings in the
cases at bar did not discuss the circumstances that led to its preparation.
The mysterious letter can’t negate the resignation of Erap.
• Erap also argues he can’t resign as a matter of law. He relies on
Sec. 12, RA 3019 (Anti-Graft & Corrupt Practices Act) “No public
officer shall be allowed to resign/retire pending an investigation, criminal
or administrative, pending a prosecution against him, for any offense under
this Act under the provisions of the RPC on bribery.”
• (Case went on to discuss the history of said provision). POINT IS, the
intent of the law is to prevent the act of resignation or retirement from
being used by apublic officeial as a protective shield to stop the
investigation of a pending criminal or administrative cases against him * to
prevent his prosecution under the Anti-Graft Law or prosecution for bribery
under RPC.
• ANOTHER REASON WHY THIS CONTENTION SHOULD BE REJECTED: When
the 6 cases were filed against Erap, the OMB refrained from conducting
prelim investigation bec Erap was then sitting as Pres & thus immune from
suit. Technically then, said cases can’t be considered pending.
• Sec. 12, RA 3019 can’t be invoked for it contemplates of cases whose
investigation do not suffer from any insuperable legal obstacle like the
immunity from suit of a Pres. The Impeachment proceeding can’t be
considered as pending bec the process broke down when upon the
opposition to open the 2nd envelope, the proceedings were postponed
indefinitely. Thus, there was no impeachment case pending vs Erap when
he resigned.
3. THIS IS A POLITICAL QUESTION
• Petitioner claims that GMA as VP has no power to adjudge the inability of
Erap to discharge his powers & fxns; that it is the CONG which can declare
the same under Sec 11, VII.
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• The operative facts settle the issue. Both houses of Congress have
recognized GMA as the Pres. Implicitly clear in that recognition is the
premise that the inability of petitioner is no longer temporary.
Congress has clearly rejected his claim of inability.
• THE QUESTION IS whether SC has jurisdiction to review the claim of
temporary inability of petitioner & thereafter revise the decision of Senate
& HR recognizing GMA as Pres
• Tanada v. Cuenco: Court can’t exercise its judicial power fore this is an
issue in regard to w/c full discretionary authority has been delegated to the
Legislative…branch…
• Clearly, Court CANNOT pass upon Erap’s claim of inability to discharge the
powers & duties of the presidency. The question is POLITICAL in nature &
addressed solely to Cong by const’l fiat.
• That claim has been laid to rest by Congress & the decisiont hat GMA is the
de jure Pres made by a co-equal branch cannot be reviewed by this court.
4. NO
• Erap’s contentions: 1) cases before OMB should be prohibited bec he has
not been convicted in the impeachment proceedings; 2) he enjoys
immunity from all kinds of suit, crim/civil
• Forbes v. Tiaco & Crossfield: The principle of non-liability does not mean
that the judiciary has no authority to touch the acts of the Gov Gen…The
judiciary has full power to, & will, when the matter is properly presented to
it & the occasion justly warrants it, declare an act of the Gov Gen illegal &
void & place as nearly as possible in status quo any person who has been
deprived his liberty or his property by such act.
• Also, the 1987 Consti did not reenact the executive immunity provision of
the 1973 Consti (Sec 17, VII: “The Pres shall be immune from suit during
his tenure. Thereafter, no suit whatsoever shall lie for official acts done by
him or by others pursuant to his specific orders during his tenure.
Immunities herein provided shall apply to the incumbent Pres..”)
• SC rejects Erap’s 1st argument bec the debates in the Con Com make it
clear that when impeachment proceedings have become moot due to the
resignation of the President, the proper crim & civil cases may already be
filed against him. (Incumbent Pres is immune during incumbency but not
beyond)
• As to scope of immunity: Nixon v. Fitzgerald; Clinton v. Jones: Basically,
that immunity from suits covers only official acts.
• FURTHER REASON to limit executive immunity: Public office is a public
trust. This principle, along with other const’l policies on public
accountability will be devalued if Erap’s contention that a non-sitting Pres
enjoys immunity from suit for crim acts commited during incumbency is
sustained.
5. NO
• People v. Teehankee, Larranaga v. CA: The right of an accused to a fair
trial is not incompatible to a free press. Pervasive publicity per se is not
prejudicial to the right of an accused to fair trial. For one, it is impossible to
seal the minds of the members of the bench from pre-trial & other off-court
publicity of sensational criminal cases. At best, appellant can only conjure
possibility of prejudice on the part of the trial judge due to the barrage of
publicity that characterized the investigation. In this case, totality of
circumstances does not prove that the judge acquired a fixed opinion as a
result of prejudicial publicity w/c is incapable of change even by evidence
presented during the trial. Appellant has the burden to prove this actual
bias.”
• Martellino v. Alejandro: To warrant a finding of prejudicial publicity, there
must be allegation & proof that the judges have been unduly influenced,
not simply that they might be, by the barrage of publicity.
• In the case at bar, Court held that there is not enough evidence to warrant
Court to enjoin the prelim investigation of Erap by OMB based on
prejudicial publicity.
HELD: Petitions challenging GMA as de jure 14th Pres of RP DISMISSED.
EPILOGUE: “If democracy has proved to be the best form of government, it is
because it has respected the right of the minority to convince the majority that it is
wrong” 
JORGE B. VARGAS, petitioner, vs. EMILIO RILLORAZA, JOSE BERNABE,
MANUEL ESCUDERO, Judges of People's Court, and THE SOLICITOR
GENERAL OF THE PHILIPPINES, respondents.
Facts
The unconstitutionality of Section 14 of the People's Court Act (Commonwealth Act
No. 682) is being assailed. It reads:
"SEC. 14. Any Justice of the Supreme Court who held any office or position under
the Philippine Executive Commission or under the government called Philippine
Republic may not sit and vote in any case brought to that Court under section
thirteen hereof in which the accused is a person who held any office or position
under either or both the Philippine Executive Commission and the Philippine
Republic or any branch, instrumentality and/or agency thereof.
"If, on account of such disqualification, or because of any of the grounds of
disqualification of judges, in Rule 126, section I of the Rules of Court, or on account
of illness, absence or temporary disability the requisite number of Justices
necessary to constitute a quorum or to render judgment in any case is not present,
the President may designate such number of Judges of First Instance,Judges-at-
large of First Instance, or Cadastral Judges, having none of the disqualifications set
forth in said section one hereof, as may be necessary to sit temporarily as Justices
of said Court, in order to form a quorum or until a judgment in said case is
reached."
Objection is made upon the following grounds:
It adds the pre-existing ground of not having held any office or
position under the Philippine Executive Commission or under the
government called Philippine Republic as a requirement to being a
Justice of the Supreme Court, as provided for in said section 14
It allows for a person may act as a Justice of the Supreme Court who
has not been duly appointed by the President and confirmed by the
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Commission on Appointments pursuant to the constitution, even only
as a "designee"
By the method of "designation" created by the aforecited section 14 a
Judge of First Instance, Judge-at-large of First Instance, or Cadastral
Judge, designated by the President under the same section can
constitutionally "sit temporarily as Justice" of the Supreme Court by
virtue thereof
(For actual list of contentions and defense of OSG see p. 309)
Such provisions of the said law are claimed to be repugnant to the
constitution. Particularly, article VIII:
section 41 of the Constitution ordains that the Supreme Court shall be
composed of a Chief Justice and ten Associate Justices and may sit either
in banc or in two divisions unless otherwise provided by law.
Section 5 of the same Article provides, inter alia, that the members of the
Supreme Court shall be appointed by the President with the consent of the
Commission on Appointments.
Section 6 of the same Article stipulates that no person may be appointed
member of the Supreme Court unless he has been five years a citizen of
the Philippines, is at least 40 years of age, and has for 10 years or more
been a judge of a court of record or engaged in the practice of law in the
Philippines.
Section 9 of said Article, the members of the Supreme Court, among other
judicial officials, shall hold office during good behavior, until they reach the
age of 70 years, or become incapacitated to discharge the duties of their
office.
Section 13 of the same Article VIII, inter alia, enunciates that the then
existing laws on pleading, practice, and procedure are thereby repealed as
statutes, and are declared rules of court, subject to the power of the
Supreme Court to alter and modify the same, and to the power of the
Congress to repeal, alter, or supplement them.
Issues:
1. WON section 14 of the People's Court Act (Commonwealth Act No. 682) is
constitutional.
a. WON Congress had power to add to the pre-existing grounds of
disqualification of a Justice of the Supreme Court, that provided
for in said section 14;
b. WON a person may act as a Justice of the Supreme Court who has
not been duly appointed by the President and confirmed by the
Commission on Appointments pursuant to the constitution, even
only as a "designee";
c. WON by the method of "designation" created by the aforecited
section 14 a Judge of First Instance, Judge-at-large of First
Instance, or Cadastral Judge, designated by the President under
the same section can constitutionally "sit temporarily as Justice"
of the Supreme Court.
Ratio/ Holding: Section 14 of the People's Court Act is unconstitutional; and this
case be dealt with henceforward in pursuance of and in harmony with this
resolution.
a. No
No act of the legislature repugnant to the constitution can become a law (Marbury
vs. Madison). To discover whether the above quoted section 14 of the People's Court
Act is repugnant to the constitution, one of the best tests would be to compare
the operation of the pertinent constitutional provisions without said
section, with their operation with the same section if the latter were to be
allowed to produce its effects.
Concretely referring to the instant case, if section 14 of the People's Court Act had
not been inserted therein, there can be no question that each and every member of
this Court would have to sit in judgment in said case. But if said section 14 were to
be effective, such members of the Court "who held any office or position under the
Philippine Executive Commission or under the government called Philippine
Republic" would be disqualified from sitting and voting in the instant case, because
the accused herein is a person who likewise held an office or position at least under
the Philippine Executive Commission. In other words, what the constitution in
this respect ordained as a power and a duty to be exercised and fulfilled by
said members of the Court, the quoted section of the People's Court Act
would prohibit them from exercising and fulfilling. What the constitution
directs the section prohibits. A clearer case of repugnancy to the
fundamental law can hardly be imagined.
What matters here is not only that the Justice affected continue to be a
member of the Court and to enjoy the emoluments as well as to exercise
the other powers and fulfill the other duties of his office, but that he be left
unhampered to exercise all the powers and fulfill all the responsibilities of
said office in all cases properly coming before his Court under the
constitution, again without prejudice to proper cases of disqualification
under Rule 126. Any statute enacted by the legislature which would impede
him in this regard,in the words of this Court in In re Guariña, supra, citing
Marbury vs. Madison, supra, simply "can not become law."
It goes without saying that, whether the matter of disqualification of judicial officers
belongs to the realm of adjective, or to that of substantive law, whatever
modification, change or innovation the legislature may propose to introduce therein,
must not in any way contravene the provisions of the constitution, nor be repugnant
to the genius of the governmental system established thereby. The tripartite
system, the mutual independence of the three departments-in particular,
the independence of the judiciary-, the scheme of checks and balances, are
commonplaces in democratic governments like this Republic. No legislation
may be allowed which would destroy or tend to destroy any of them.
If, according to section 4 of said Article VIII, "the Supreme Court shall be
composed" of the Chief Justice and Associate Justices therein referred to,
its jurisdiction can only be exercised by it as thus composed. To disqualify
any of these constitutional component members of the Court-particularly,
as in the instant case, a majority of them-in a treason case, is nothing short
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of pro tanto depriving the Court itself of its jurisdiction as established by
the fundamental law. Disqualification of a judge is a deprivation of his judicial
power. (Diehl vs. Crumb). And if that judge is the one designated by the constitution
to exercise the jurisdiction of his court, as is the case with the Justices of this Court,
the deprivation of his or their judicial power is equivalent to the deprivation of the
judicial power of the court itself. It would seem evident that if the Congress could
disqualify members of this Court to take part in the hearing and determination of
certain collaboration cases it could extend the disqualification to other cases. The
question is not one of degree or reasonableness. It affects the very heart of judicial
independence.
Precedence
Willoughby's United States under the topic of separation of powers, Volume 3, pages
1622-1624, says:
" The extent of their jurisdiction, they argue, may be more or less within legislative
control, but the possession of powers for the efficient exercise of that jurisdiction,
whether statutory or constitutional, which they do possess, they cannot be deprived
of.
In State vs. Morrill (16 Ark., 384), the Supreme Court of Arkansas declared:
"The legislature may regulate the exercise of, but cannot abridge, the express or
necessarily implied powers granted to this court by the Constitution.
Also, let it not be argued that the Court is the same, only the membership
being different. Because Article VIII, sections 4 and 5, of the Constitution
do not admit any composition of the Supreme Court other than by the Chief
Justice and Associate Justices therein mentioned appointed as therein
provided. And the infringement is enhanced and aggravated where a
majority of the members of the Court-as in this case-are replaced by judges
of first instance. It is distinctly another Supreme Court in addition to this.
And the constitution provides for only one Supreme Court.
b. No
In the face of the constitutional requirement (Art. VIII, section 5) that the members
of the Supreme Court should be appointed by the President with the consent of the
Commission on Appointments, we are of opinion that no person not so appointed
may act as Justice of the Supreme Court and that the "designation" authorized in
section 14 of the People's Court Act to be made by the President of any Judge of
First Instance, Judge-at-large of First Instance or Cadastral Judge can not possibly
be a compliance with the provision requiring that appointment.
So that it may happen that a "designee" under section 14 of the People's
Court Act, sitting as a substitute Justice of the Supreme Court in particular
collaboration cases, and participating therein in the deliberations and
functions of the Supreme Court, like any regular Justice thereof, does not
possess the required constitutional qualifications of a regular member of
said Court. Here again is another point of repugnancy between the
challenged section and the constitution. And if we consider the actual fact that
only four of the present ten Justices of this Court are not adversely affected by the
disqualification established in section 14 of the People's Court Act, we see that the
"designees" constitute a majority when sitting with said four Justices, giving rise to
the result that, if the body composed by them all should be considered as the
Supreme Court, it would be composed by four members appointed and confirmed
pursuant to sections 4 and 5 of Article VIII of the Constitution and six who have not
been so appointed and confirmed.
The situation would not be helped any by saying that such composition of the Court
is only temporary, for no temporary composition of the Supreme Court is authorized
by the constitution. This Tribunal, as established under the organic law, is one of the
permanent institutions of the government. The clause "unless otherwise provided by
law" found in said section 4 can not be construed to authorize any legislation which
would alter the composition of the Supreme Court, as determined by the
constitution, for however brief a time as may be imagined. In principle, what really
matters is not the length or shortness of the alteration of the constitutional
composition of the Court, but the very permanence and unalterability of that
composition so long as the constitution which ordains it remains permanent and
unaltered.
The Legislature, when providing for the initial organization of the Supreme Court
under the Commonwealth was authorized to fix a different number of Justices than
eleven, and determine the manner of the Court's sitting differently from that
established in section 4 of Article VIII of the Constitution, but it was and is not
empowered to alter the qualifications of the Justices and the mode of their
appointment, which are matters governed by sections 5 and 6 of said
Article VIII wherein the clause "unless otherwise provided by law" does
not even exist, nor the provision on who shall be the component members
of the Court. Such a legislation was enacted in the form of Commonwealth Acts
Nos. 3 and 259, the pertinent provisions of which amended sections 133 and 134 of
the Revised Administrative Code
c. No.
However temporary or brief may be the action or participation of a judge designated
under section 14 of the People's Court Act in a collaboration case of the class
therein defined, there is no escaping the fact that he would be participating
in the deliberations and acts of the Supreme Court, as the appellate
tribunal in such a case, and if allowed to do so, his vote would count as
much as that of any regular Justice of the Court. There can be no doubt
that the Chief Justice and Associate Justices required by section 4 of Article
VIII of the Constitution to compose the Supreme Court are the regular
members of the Court-indeed, a "temporary member" thereof would be a
misnomer, implying a position not contemplated by the constitution.
Section 5 of the same Article VIII, in requiring the members of the
Supreme Court to be appointed by the President with the consent of the
Commission on Appointments, makes it plainly indubitable that the Chief
Justice and Associate Justices who are to compose the Court and sit therein
under section 4, have to be thus appointed and confirmed.
As already adverted to, a mere designation under section 14 of the People's Court
Act does not satisfy the constitutional requirement of appointment, with the
additional circumstance that as to such designation the Commission on
Appointments is entirely dispensed with. We find absolutely nothing in the context
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which may soundly be construed as authorizing, merely by legislation, any change
in the constitutional composition of the Supreme Court, or the performance of its
functions by any but its constitutional members. On the other hand, we have to go
by the cardinal rule that "usually provisions of a constitution are mandatory rather
than directory, and mandatory provisions are binding on all departments of the
government." (16 C. J. S., 120).
DE LA LLANA vs. ALBA
Ponente: J. Fernando
Petitioners are assailing the constitutionality of Batas Pambansa Blg. 129, An Act
Reorganizing the Judiciary, Appropriating Funds Therefor, and for Other Purposes.
• Affects the independence of the Judiciary, which is upheld as sacred in the
Consti
• SECURITY OF TENURE provision (Sec 7, Art X, 1973 Consti) has been
ignored and disregarded
o Lack of good faith in the enactment
o Undue delegation of legislative power to the President (to fix
compensation and allowances)
Solicitor General: no valid justification for the attack – it was a legitimate exercise of
the power of the Batasang Pambansa to reorganize the judiciary; the issue re:
absence of good faith is unwarranted and without any support of law
HOLDING: The Court is of the opinion that
unconstitutional.
ISSUES:
1. Legal Standing: petitioners, being members of the bench and of the bar,
have legal standing as they have personal and substantial interest
2. WON arbitrariness attended the enactment of BP Blg. 129  NO
• Aug 7, 1980: Presidential Committee on Judicial Reorganization
(PCJR) was created, pursuant to EO 611 (as amended by EO 619-
A), with the task of planning for the judiciary’s reorganization
• Report of the PCJR: THERE IS A NEED FOR MAJOR REFORM IN
THE JUDICIAL SYSTEM – greater efficiency in the disposition of
cases; thrust of development; democratization of social and
economic opportunities, substantiation of the true meaning of
social justice; problem of clogged dockets; with accelerated
economic dev’t, growth of the population, increasing urbanization,
etc., the Judiciary is called upon much oftener to resolve
controversies
• In light of the Report, the BP did not hesitate to be duly mindful;
hence, they enacted BP Blg. 129. They can be said to have acted
in good faith since it took considerable time and effort as well as
exhaustive study before the act was signed by the President.
• Another point: The abolition of an office within the competence of
a legitimate body, if done in good faith, suffers from no infirmity.
• Still another point: The legislature may abolish courts inferior to
the SC and may reorganize them territorially or otherwise,
thereby necessitating new appointments and commissions. (Sec 2,
Art VII, 1973 Consti vests in the BP the power to define,
prescribe, and apportion the jurisdiction of the various courts,
subject to certain limitations…)
3. WON the Security of Tenure provision was disregarded  NO
• Petitioners argue that the abolition of their offices, as a result of the
reorganization, disregarded their security of tenure, which is
constitutionally upheld.
• REMOVAL is to be distinguished from TERMINATION by virtue of the
abolition of the office. There can be no tenure to a non-existent office.
After the abolition, there is legally no occupant. In case of removal,
there is an office with an occupant who would lose his position.
• BP Blg. 129 sought to abolish the offices in order to reorganize the system
– this abolition results in the termination of the offices, and NOT removal of
the officers. Theoretically, there is no position to be cut short, for it was
terminated by the BP. (sorry, malabo…)
• There is no intrusion into who shall be appointed to the vacant positions
created by the reorganization. That remains in the hands of the Executive
to whom it properly belongs.
• There is nothing new in the concept that the SC is called upon to reconcile
or harmonize constitutional provisions. The BP is expressly vested with
the authority to reorganize inferior courts and in the process, to
abolish existing ones. The termination of office of their occupants,
as necessary consequence of such abolition, is hardly
distinguishable from the practical standpoint from removal, a
BP Blg. 129 is NOT
power that is now vested in this Tribunal. In short, the job of
REMOVAL is for the Judiciary, while the job of ABOLITION is for the
Legislative, although there are some gray areas in between.
4. WON there was undue delegation of legislative power to the Pres in the
allocation for compensation and allowances of the members of the Judiciary
 there was NONE
• Doctrine of Non-Delegation: it is the legislative body which is entrusted
with the competence to make laws and to alter and repeal them, the test
being the completeness of the statute in all its terms and provisions when
enacted.
• There must be a standard, which defines legislative policy, marks its limits,
maps out its boundaries and specifies the public agency to apply it. It
indicates circumstances under which the legislative command is to be
effected. It is the criterion by which legislative purpose may be carried out.
• In the case, there exists a clear standard.
• Chapter IV, Sec 41 of BP Blg. 129: “Intermediate Appelate Justices,
Regional Trial Judges, etc… shall receive such compensation and allowances
as may be authorized by the President along the guidelines set forth in LOI
No. 93, pursuant to PD 985, as amended by PD 1597.”
DUMLAO vs. COMELEC
Facts:
• Petitioners are Dumalao (as a candidate), Igot and Salapantan (as
taxpayers)
• Dumlao questions constitutionality of BP blg 52 alleging it is discriminatory
and contrary to equal protection and due process insofar as Sec 4 provides
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for a special disqualification (“any retired elective provincial, city, or
municipal official who has received payment of retirement benefits to which
he is entitled under the law and who shall have been 65 years of age at the
commencement of the term of office to which he seeks to be elected, shall
not be qualified to run for the same elective local office from which he has
retired”)
• Igot and Salapantan on the other hand assail the validity of second
paragraph of sec 4 providing for disqualifications of certain candidates who
have cases against them which are filed but have not yet been decided (“a
judgment of conviction for any of the aforementioned crimes shall be
conclusive evidence of such fact”)
Held: (yup, held agad. Walang issues!!! Kidding! Non justiciable kasi siya in a way
except sa isa… yun huli)
• This case is unacceptable for judicial resolution
• For one, there is a misjoinder of parties (dumlao not related to the latter 2)
• Next, there standards to be followed in the exercise of function:
o Existence of appropriate case
o Personal and substantial interest in raising the constitutional
question
o Plea that the function be exercised at the earliest opportunity (this
has been met by petitioners)
o Necessity that the constitutional question be passed upon to
decide the case
• Explained further…
1. Actual Case and Controversy- judicial review is limited to the determination
of actual cases and controversies. Dumlao has not been adversely affected
by the application of the assailed provisions. There is no petition seeking
for his disqualification (so WTF is his problem?). He’s raising a hypothetical
issue and his case is within the jurisdiction of respondent COMELEC.
2. Proper Party- person who impugns the validity of a statute must have a
personal and substantial interest in the case such that he has sustained, or
will sustain, direct injury as a result of its enforcement. Neither Igot nor
Salapantan has been alleged to have been adversely affected by the
operation of the statutory provisions they assail as unconstitutional. Theirs
is a general grievance. There is no personal or substantial interest.
Provisions can’t be assailed by taxpayers bec they do not involve
expenditure of public moneys. Petitioners do not seek to restrain
respondent from wasting public funds. Court has discretion as to WON a
taxpayer’s suit should be entertained
3. Unavoidability of constitutional questions- the issue of constitutionality
must be the very lis mota presented. Petitioners are actually without cause
of action.
• In the case of a 65-year old elective local official, who has retired from a
provincial, city, or municipal office, there is reason to disqualify him from
running for the same office from which he had retired. He ha already
declared himself tired and unavailable for the same govt work. Equal
protection clause does not forbid all legal classification. What is proscribed
is a classification which is arbitrary and unreasonable.
• Absent herein is a showing of the clear invalidity of the questioned
provision. There must be a clear unequivocal breach of the constitution.
Unless the conflict with the constitution is clear beyond reasonable doubt, it
is within the competence of he legislature to prescribe qualifications
• HOWEVER!!! Accdg to Igot and Salapantan, second par of sec 4 “a
judgment of conviction for any of the aforementioned crimes shall be
conclusive evidence of such fact” contravenes the constitutional
presumption of innocence. The court agrees with them.
WHEREFORE, 1st par of sec 4 BP blg52= valid, the portion of the 2nd par of sec 4
providing that “the filing of charges for the commission of such crimes before a civil
court or military tribunal after preliminary investigation shall be prima facie
evidence of such fact”=null and void
Ynot vs Intermediate Appellate Court [March 20, 1987]
Petition for certiorari to review the decision of the Intermediate Appellate
Court
Facts:
♦ Restituto Ynot challenges the constitutionality of EO no. 626-A.2
♦ January 13, 1984 – Ynot had transported six carabaos in a pump boat from
Masbate to Iloilo. The carabaos were confiscated by the police station
commander of Barotac Nuevo, Iloilo for violating EO no. 626-A.
♦ Ynot sued for recover and the RTC of Iloilo issued a writ of replevin upon
filing a supersedeas of P12,000.
♦ RTC sustained the confiscation of the carabaos and since they could no
longer be produced ordered the confiscation of the bond.
♦ The IAC upheld the decision of the trial court.
♦ Ynot contends that the EO is unconstitutional insofar as it authorizes the
outright confiscation of the carabaos or carabeef being transported across
provincial boundaries. Claims that the penalty is invalid because it is
imposed without according the owner a right to be heard before a
competent and impartial court as guaranteed by due process. He also
contends that it is an improper exercise of the legislative power by
President Marcos under Amendment No. 6 of the 1973 constitution.
♦ Trial Court declined to rule on the validity of the law on the ground that it
lacked authority to do so.
Issues:
1. WON the lower court can pass upon the validity of a statute in the first
instance. YES
♦ SC have jurisdiction under the constitution to review, revise, reverse,
modify or affirm on appeal or certiorari as the law or rules of court may
provide, final judgments and orders of lower courts in, among others, all
cases involving the constitutionality of certain measures. This simply
2
SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no carabao regardless of age, sex, physical
condition or purpose and no carabeef shall be transported from one province to another. The carabao or carabeef transported in
violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government, to be distributed
to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may ay see
fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case
of carabaos.
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means that the resolution of such cases may be made in the first instance
by these lower courts.
♦ Laws are presumed to be constitutional , that presumption is not by any
means conclusive and in fact may be rebutted. Courts should not follow
the path of least resistance by simply presuming the constitutionality of a
law when it is questioned. They should probe the issue more deeply, to
relieve the abscess and so heal the wound or excise the affliction.
2. WON the executive order violated the provision for due process. YES
♦ Due process clause was kept intentionally vague so it would remain also
conveniently resilient. Flexibility must be the best virtue of the guaranty.
♦ Courts have also hesitated to adopt their own specific description of due
process. They have preferred to leave the import of the protection open-
ended to be gradually ascertained by the process of inclusion and exclusion
in the course of the decision of cases as they arise.
♦ Minimum requirements of due process are notice and hearing. These may
not be dispensed with because they are intended as safeguards against
official arbitrariness. BUT this is not imperative in every case.
♦ Judicial hearing may be omitted without violation of due process in view of
the nature of the property involved or the urgency of the need to protect
the general welfare from a clear and present danger.
♦ Protection of the general welfare is a function of police power. Police power
– power in every inherent state to regulate liberty and property for the
promotion of the general welfare. It extends to all the great public needs
and is described as the most pervasive, the least limitable and the most
demanding of the three inherent powers of the State.
♦ EO 626 prohibits the slaughter of carabaos except under certain conditions.
Purpose: present conditions demand that the carabaos and the buffaloes
be conserved for the benefit of the small farmers who rely on them for
energy needs. US vs. Toribio – EO 626 valid exercise of police power
♦ EO 626-A imposes an absolute ban not on the slaughter of the carabaos
but on their movement, providing that "no carabao regardless of age, sex,
physical condition or purpose (sic) and no carabeef shall be transported
from one province to another." The reasonable connection between the
means employed and the purpose sought to be achieved by the questioned
measure is missing.
♦ Retaining the carabaos in one province will not prevent their slaughter
there, any more than moving them to another province will make it easier
to kill them there. As for the carabeef, the prohibition is made to apply to it
as otherwise, so says executive order, it could be easily circumvented by
simply killing the animal.
♦ Penalty is outright confiscation. There is notice and hearing. For notice
and hearing to be dispensed with there must be a justification for the
omission of the right to a previous hearing. Immediacy of the problem
sought to be corrected and the urgency of the need to correct it. Present
case no such pressure of time. The violation should have been pronounced
not by the police but by a court of justice, which alone would have the
authority to impose the prescribed penalty, and only after trial and
conviction of the accused.
♦ Questionable manner of the disposition of the confiscated property: be
distributed to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commission may see fit, in the
case of carabeef, and to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of carabaos." The
phrase "may see fit" is laden with perilous opportunities for partiality and
abuse, and even corruption. There is no fixed standard and reasonable
guidelines or limitations that the officers must observe.  Invalid
delegation of legislative powers.
MANTRUSTE SYSTEMS INC (MSI) v. COURT OF APPEALS
Petition for review from the decision and resolution of CA. 1989
FACTS (Griño-Aquino, J):
MSI entered into an interim lease agreement on Aug 26 ’86 w/ the Devt Bank of the
Phils, owner of Bayview Plaza Hotel, wherein MSI would operate the hotel for a
minimum of 3 mos or until such time that the property is sold to MSI or other third
parties by DBP.
On Dec 8 ’86, Pres Aquino issued Proc No 50 “Launching a Program for the
Expeditious Disposition or Privatization of Certain Govt Corps and/or the (acquired)
Assets thereof, creating a Committee on Privatization and the Asset Privatization
Trust (APT).” Bayview Hotel was among the govt assets identified for privatization
and was consequently transferred from DBP to APT for disposition.
MSI was then informed by DBP that their interim lease agreement would be
terminated 30 days from Sept 18 ’87. The certification, signed by APT Pres &
Chairman Ernesto Salgado, also indicated that Bayview Hotel will be made available
for inspection at all times by other bidders and that it will be ready for delivery to
any new owners w/in 30 days from then. To ease the turn-over of the property, APT
granted an extension of 30 days to MSI also to ensure that the hotel’s regular
operation will go uninterrupted.
However, 15 days later, MSI, through its Exec VP Cipriano, opined that as the lease
status has been for more than 1 yr, it has taken the character of a long term one
and that MSI, as lessee, has acquired certain rights and privileges under law and
equity. To add, it asserts that it has acquired a priority right to the purchase of
Bayview Hotel over and above other interested parties.
In response, APT negated such claims of MSI and noted that such request would not
be in consonance w/ law, equity and fair play.
MSI again insisted that it be considered a “very preferred” bidder and brought up
the legal lien over the hotel amounting to PhP12K. It also asked for clarification on
whether APT had a clean title over the property, whether the Trust knew the hotel
had back taxes, who should pay the tax arrears and whether MSI’s advances made
in behalf of DBP would be treated as part of the bid offer.
From there, MSI believed that because of the questions raised, the Bayview
property was immediately disqualified from public bidding. APT, on the other hand,
deemed that from the questions, MSI voluntarily desisted from participating in the
bidding. It thus awarded the property to petitioners Makati-Agro Trading and La
Filipina Uy Gongco Corp w/c submitted a bid for PhP85M.
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MSI then filed a complaint in the lower court (a)to enjoin APT from approving the
winning bid and awarding it to the petitioners, and restraining AFT from ejecting
MSI from the property; and (b) to award the property to MSI as highest bidder.
Lower court ruled in MSI’s favor and granted writ of prelim injunction.
MSI now seeks the annulment of the CA decision setting aside the lower court’s
grant of writ of preliminary injunction, through a TRO.
ISSUES and RATIO:
1. WON Proc No 50-A3 is unconstitutional - NO
 Said proclamation continued to be operative even after the effectivity of the
1987 Consti by virtue of Sec 3, Art XVIII (Transitory Provisions)4.
 Nor does it constitute a deprivation of property because MSI’s alleged property
rights are non-existent and its belief that it is a preferred buyer is illusory. Its
only property rights were its reimbursable advances allegedly amounting to
PhP12M (though denied by DBP) w/c it may sue (DBP or its successor-in-
interest: APT) to collect in a separate action.
 Moreover, the Pres issued such Proclamation to prevent courts from interfering
in the discharge of its task of carrying out the expeditious disposition and
privatization of certain govt corps and/or assets thereof by APT, an
instrumentality of the exec branch of the govt.
 Under the system of sep of powers, the power of the courts over the other
branches and instrumentalities of the govt is limited only to the determination
of WON there has been a grave abuse of discretion (by them) amounting to
lack or excess of jurisdiction in the exercise of their authority and in the
performance of their assigned tasks. Courts may not substitute their
judgment for that of the APT nor block, by an injunction, the discharge of its
functions and the implementation of its decisions in connection w/ the
acquisition, sale or disposition of assets transferred to it.
2. WON CA gravely abused its discretion in substituting its own for that of the trial
court as regards issuing the writ of prelim injunction to preserve the status quo
- NO
 The CA correctly found that under the lease agreement between DBP and MSI,
the latter’s claim to a patent contractual right to retain possession of the
Bayview Hotel until all its advances are paid is non-existent. As the right of
retention does not exist, neither does the right to the relief demanded
(injunction).
 A mere lessee is not a builder in good faith, hence, the right of retention
pending reimbursement of his advances for repairs or useful improvements on
another’s property is not available to him whose possession is not that of an
owner. The lessee knew that his right to occupy the premises was temporary,
therefore, he built his “house” at his own risk.
 In any event, assuming that MSI did have a preferred status, it lost that right
by failing to participate in the bidding for the property. Its allegation that it
3 not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5 hereof.
Proc No 50-A dated Dec 15, 1986: No court or administrative agency shall issue any
restraining order or injunction against the Trust in connection w/ the acquisition, sale or
disposition of assets transferred to it….
4
Section 3. All existing laws, decrees, executive orders, proclamations, letters of instructions,
and other executive issuances not inconsistent with this Constitution shall remain operative until
amended, repealed, or revoked.
would have submitted a higher bid (PhP95M in cash or PhP120M in
installment) is futile for it did not submit a bid.
HELD: Petition dismissed. No reversible error in CA’s decision.
FIRST LEPANTO CERAMICS, INC., petitioner vs. THE COURT OF APPEALS
and Mariwasa Manufacturing, Inc., respondents [Oct. 7, 1994]
MFR of a decision of the SC 2nd Division
Facts: In dispute in this case is the proper body to handle appeals from the
decisions of the Board of Investments (BOI). Petitioner claims that Circular no. 1-91
(provided the procedure for BP Blg. 1295) cannot be deemed to have superseded
Art. 82 of the Omnibus Investments Code of 1987 (E.O. No. 226)6 making the latter
the applicable law. It claims that the Code promulgated by the President in the
exercise of her legislative authority, is a substantive act of Congress defining the
jurisdiction of courts pursuant to Art. VIII, Sec. 2 of the Constitution7 while the
Circular is a rule of procedure w/c the Court promulgated pursuant to its rule-
making power under Art. VIII, Sec. 5 (5) of the Constitution 8. Petitioner likewise
questions the SC holding that although the rt to appeal granted by Art. 82 of the
Code is substantive w/c can’t be modified by a rule of procedure, questions
concerning where & in what manner the appeal can be brought are matter
of procedure w/c the Court has power to regulate.
Issue: WON the CA has jurisdiction over appeals from BOI decisions.
Held: YES. MFR denied.
Ratio:
1. History of appeals from decisions/judicial review of decisions & final orders of
the BOI:
a. Jan. 16, 1981: Omnibus Investment Code of 1981 (PD No. 1789), Art. 78
provides that all appeals shall be filed directly w/the Supreme Court.
b. Aug. 14, 1981: BP Blg. 129 amended Art. 78 granting exclusive appellate
jurisdiction to the then Intermediate Appellate Court (now CA) over
decisions & final orders of quasi-judicial agencies except those issued
under the Labor Code & those rendered by the Central Assessment
Appeals. This was enacted to provide uniform appeals to the CA regarding
these matters.
c. July 17, 1987 – Omnibus Investment Code of 1987 took effect reverting
back to the SC the jurisdiction over appeals from BOI decisions.
5
Sec. 9 granted exclusive appellate jurisdiction to the Intermediate Appellate Court (now the CA) over decisions & final orders of
quasi-judicial agencies.
6
Art. 82 Judicial Relief – All orders or decisions of the Board in cases involving the provisions of this Code shall immediately be
executory. No appeal from the order/decision of the Board by the party adversely affected shall stay such order/decision;
Provided, that all appeals shall be filed directly w/the SUPREME COURT w/in 30 days from receipt of the order/decision. TOOK
EFFECT ON: July 17, 1987.
7
Section 2. The Congress shall have the power to define, prescribe, and apportion the jurisdiction of the various courts but may
No law shall be passed reorganizing the Judiciary when it undermines the security of tenure of its Members.
8
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure in all
courts, the admission to the practice of law, the integrated bar, and legal assistance to the under-privileged. Such rules shall
provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same
grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial
bodies shall remain effective unless disapproved by the Supreme Court.
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BUT…take note that the Constitution was already in effect by then (effective
Feb. 2, 1987) wherein Art. VI, Sec. 30 9 intended to allow the SC to have control
over cases placed under its appellate jurisdiction. Ratio: the arbitrary
enactment of legislation enlarging its jurisdiction would unnecessarily burden
the Court & undermine its essential function of expounding the law in its most
profound national aspects.
2. Art. 82 of the 1987 Code by providing for direct appeals to the SC from the BOI
decisions & final orders, increased the SC’s appellate jurisdiction w/o the
advice & the concurrence of the SC. It never became effective & thus, it
could have not repealed/amended BP Blg 129. CA authority to decide cases
appealed from the BOI conferred by BP Blg. 129 in accordance w/the
procedures prescribed by Circular No. 1-91 remains.
MACEDA v. VASQUEZ
221 SCRA 464 (1993)
April 1991: Napoleon Abiera of the Public Attorney’s Office filed a complaint before
the Office of the Ombudsman alleging that Judge Bonifacio Sanz Maceda had
falsified his Certificate of Service by certifying that all civil and criminal cases
submitted for decision for a period of 90 days have been determined and decided on
or before Jan. 31, 1898 when in fact no decision had been rendered in 15 cases
submitted for decision. Furthermore, Maceda’s certificate of service for months of
Feb, Apr, May, June, July and Aug. 1989 and Jan. to Sept. 1990 have also been
falsified.
On the other hand, Maceda contends that:
oHe was granted by the SC a 90-day extension to decide the aforementioned
cases.
oThe Ombudsman has no jurisdiction despite the Court’s ruling in Orap v.
Sandiganbayan since the offense charged arose from the judge’s performance of
his official duties, which is under the control and supervision of Supreme Court
oInvestigation by Ombudsman constitutes an encroachment into the SC’s
constitutional duty of supervision over all inferior courts
September 1991: Maceda filed an ex-parte motion to refer to the SC which the
Office of the Ombudsman denied.
November 1991: Then he filed an MFR which was also denied, hence this petition.
Issues:
1. WON a judge cannot be held liable from offenses charged that arose
from the judge’s performance of his official duties
NO. A judge who falsifies his certificate of service is administratively liable to
the SC for serious misconduct and inefficiency under Sec. 1, Rule 140 of the
ROC, and criminally liable to the State under the RPC for his felonious act.
2. WON investigation by Ombudsman constitutes an encroachment into
the SC’s constitutional duty of supervision over all inferior courts
YES. Art. VIII, Sec. 6 of the Constitution exclusively vests in the SC
administrative supervision (including taking proper administrative action should
there be a violation thereof) over all courts and court personel. No other branch
9
Art. VI, Sec. 30. No law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided in the
Constitution w/o its advice & concurrence.
may intrude into this power without running afoul of the doctrine of separation
of powers and undermining the independence of the judiciary
The Ombudsman should first refer the matter of petitioner’s certificate of
service to the SC for determination of whether said certificates reflected the true
status of his pending case load, as the Court has the necessary records to make
such determination.
In fine, where a criminal complaint against a judge or other court employee
arises from their administrative duties, the Ombudsman must defer action on
said complaint and refer the same to this Court for determination whether said
judge or court employee had acted within the scope of their administrative
duties.
In Re Justice Demetrio Demetria
Facts/Circumstances surrounding the controversy:
 The case of Yu Yuk Lai (and her nephew Kenneth Monceda) for drug trafficking,
which was filed by State Prosecutor (SP) Formaran III on 9 December 1998,
was originally handled by Judge Laguio
 Acting on information that Yu Yuk Lai, who was supposed to be in the custody
of the PNP Narcotics Group at Camp Crame, was regularly seen playing casino
at the Heritage Hotel and Holiday Inn, Formaran filed a motion to have the
accused transferred to the Manila City Jail
 Judge Laguio granted said motion and, on 18 January 2000, he concluded that
the evidence is strong and sufficient to warrant conviction
 Both the accused filed a motion for inhibition, arguing that the actuations of the
court “do not inspire the belief that its decision would be just and impartial”
 Although Judge Laguio did not believe in the merits of the motion, he still
granted it considering the gravity of the offense and the “peace of mind of the
accused”
 When the case was re-raffled to Branch 53, which was presided by Judge Colet,
the accused filed a motion for hospitalization
 However, before the presiding judge could resolve the motion, the case was
taken by the Branch’s Pairing Judge, Judge Muro
 Judge Muro granted the motion for hospitalization for seven days at the Manila
Doctors Hospital (contrary to the recommendation of the Chief of the Health
Services of the Manila City Jail that the accused be taken to PGH), as well as a
motion to extend it “until such time that she is fit to be discharged from said
hospital,” and another motion for leave to file demurrer to evidence
 Because of such decisions favorable to the accused, rumors started circulating
in the Manila City Jail that Judge Muro was partial to the accused
 Soon, a group of unidentified employees of the Manila RTC, who called
themselves “Concerned Court Employees,” sent a letter to the Secretary of
Justice alleging that Judge Muro granted motions for hospitalization even
though Yu was not sick, and that the notorious Judge is prepared to grant the
motion to quash, which the counsel for the accused will file upon the Judge’s
signal, in exchange for millions of pesos to be delivered to the Judge’s daughter
who is also an employee of Branch 53
 Accordingly, SP Formaran III filed a motion for inhibition
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 Meanwhile, Yu Yuk Lai was arrested inside the VIP room of the Casino Filipino at
the Holiday Inn Pavilion, while playing baccarat, and was unescorted at the time
of her arrest
 In the morning of 18 July 2000, the motion for inhibition was heard and
submitted for resolution
 Later that same morning, SP Formaran III was informed by his secretary that
the staff of Court of Appeals Justice Demetrio Demetria had called earlier saying
that Justice Demetria wanted to speak with Formaran. However, by the time
Formaran returned call, Demetria was already “out for lunch”
 In the afternoon, same day, Justice Demetria, Go Teng Kok (PATAFA President)
and Atty. Paas, lawyer of Go Teng Kok and close friend of Justice Demetria,
went to the office of SP Formaran, which he shared with SP Fonacier
 Apparently, the Justice wasn’t acquainted with either SPs for he initially
addressed Fonacier as Formaran
 Go Teng Kok immediately pleaded with Formaran to withdraw motion for
inhibition because Go feared that it would delay the resolution of the case and,
if another judge is assigned, his friend Yu Yuk Lai might be convicted. When Go
became more persistent, Justice Demetria told him to “keep his cool” and asked
Formaran about the status of the case and if he could do something to help Go
 At first Formaran politely declined, but “just to put an end to the conversation”
told them that he would bring the matter to Chief State Prosecutor (CSP) Zuño,
which he immediately did after the three left
 CSP Zuño also received a phone call from Justice Demetria saying, “Pakisabi
mo nga kay State Prosecutor Formaran na iwithdraw na iyong kanyang Motion
to Inhibit para naman makagawa na ng Order si Judge Muro,” to which Zuño
replied, “Titingnan kop o kung ano ang magagawa ko”
 Two days later, The Philippine Daily Inquirier reported that a Supreme Court
Justice had been exerting undue pressure on the DOJ to go slow in prosecuting
drug queen Yu Yuk Lai
 That same day, the DOJ received a copy of an Order dated the day before, 19
July 2000, of Judge Muro inhibiting himself
 The next day, 21 July 2000, the names of Justice Demetria and Go Teng Kok
were disclosed to clear the Supreme Court Justices
 Chief Justice Davide issued a memorandum ordering Justice Demetria to
comment, and the Court en banc ordered the investigation and designated
Mme. Justice Carolina Griño-Aquino as Investigator and Court Administrator
Alfredo Benipayo as Prosecutor
 Demetria denied the accusation saying:
1. He went to the DOJ to visit old friends
2. his meeting with Go Teng Kok, whom he did not know, was purely
accidental
3. he merely asked Formaran “to do something to help Go Teng Kok
about a case” without specifying the kind of help. The “help” he
was referring to could well be “within legal bounds or line of duty.”
If he ever said anything, it was not a form of intervention
4. his asking about the case demonstrated his lack of knowledge and
bolstered his claim that he could not have possibly interceded for
Yu Yuk Lai
5. that all evidence against him were hearsay (e.g. newspaper
account, Zuño’s secretary who informed Zuño that Justice
Demetria was on the other end of the line, SP Formaran)
6. that it was inconceivable for him to ask Formaran to do something
for Go Teng Kok, both of who he just met for the first time that
day
7. neither did he know Yu Yuk Lai
 These were corroborated by Atty. Paas, who claimed that it was he who called
Zuño and not Justice Demetria
 The Investigating Justice found respondent judge guilty for violating Rule 2.04
of the Code of Judicial Conduct, “which mandates a judge to refrain from
influencing in any manner the outcome of litigation or dispute pending before
another court or administrative agency”
 And recommended that appropriate disciplinary action be taken against him by
the Supreme Court
Issue: W/N respondent Justice Demetria interceded in behalf of drug queen Yu Yuk
Lai
Held: YES. Testimonies of the prosecution witnesses are more convincing than
those of the defense, which do not only defy natural human
experience but are also riddled with major inconsistencies which
create well-founded and overriding doubts.
Reasoning:
 Evidence is clear, if not overwhelming
 Denial cannot stand against the positive assertions of CSP Zuño and SP
Formaran III, which are unambiguous and indubitably consistent with natural
human experience and with the other facts and circumstances of the case
 No one could have made the call to Zuño except Justice Demetria since it is not
uncommon for anyone to believe that CSP Zuño would recognize the voice of
respondent Justice who was his former superior in the DOJ
 The confident utterance “Pakisabi mo nga kay State Prosecutor Formaran na
iwithdraw na iyong kanyang Motion to Inhibit para naman makagawa na ng
Order si Judge Muro” could not have come from anyone else but from
respondent who had moral ascendancy over CSP Zuño
 The requested “help” could not have mean any other assistance but the
withdrawal of the motion for inhibition because at the precise moment Justice
Demetria asked state prosecutor “to do something to help” Go Teng Kok, the
latter was pleading for the withdrawal and nothing else
 The claim that his primary purpose for going to the DOJ is to visit old friends is
difficult to accept because Asst. Chief State Prosecutor Gaña, Jr. testified that
the Justice only said “hi” and it was really in the office of SP Formaran III,
whom he did not know, that he decided to stay a while
 Also, it is not necessary that Justice Demetria was not acquainted with Go Teng
Kok, Yu Yuk Lai or SP Formaran for him to intercede in behalf of the accused. It
was enough that Atty. Paas, lawyer of Go Teng Kok, was a very close friend of
his, and that he wields influence as former DOJ Undersecretary and later, Acting
Secretary, and not, Justice of the Court of Appeals
Action taken:
 Dismissed Justice Demetria from service
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 With Forfeiture of all benefits
 And with prejudice to his appointment or reappointment to any government
office, agency or instrumentality, including any government-owned or controlled
corporation or institution
Commentaries of the Court:
 Men and women of the courts must conduct themselves with honor, probity,
fairness, prudence and discretion. They must always be fair and impartial.
They should avoid not only acts of impropriety, but all appearances of
impropriety for theirs is the assigned role of preserving independence,
impartiality and integrity of the Judiciary.
 Although every office in the government is a public trust, no position exacts a
greater demand on moral righteousness and uprightness than a seat in the
Judiciary, which is so indispensable that, without it, orderly society cannot be
preserved
Manila Electric Company vs. Pasay Transportation Co. [November 25, 1932]
Original Action in the SC. Petition under the provisions of section11 of Act.
No. 1446
Facts:
♦ Petition of the Manila Electric Company requesting the members of the SC,
sitting as a board of arbitrators, to fix the terms upon which certain
transportation companies shall be permitted to use the Pasig bridge of the
Manila Electric Company and the compensation to be paid to the Manila Electric
Company by such transportation companies. Relates to the validity of Section
11 of act.1446.
♦ Act No. 1446 - An Act granting a franchise to Charles M. Swift to construct,
maintain, and operate an electric railway, and to construct, maintain, and
operate an electric light, heat, and power system from a point in the City of
Manila in an easterly direction to the town of Pasig, in the Province of Rizal.
♦ Section 11 - Whenever any franchise or right of way is granted to any other
person or corporation, now or hereafter in existence, over portions of the lines
and tracks of the grantee herein, the terms on which said other person or
corporation shall use such right of way, and the compensation to be paid to the
grantee herein by such other person or corporation for said use, shall be fixed
by the members of the Supreme Court, sitting as a board of arbitrators, the
decision of a majority of whom shall be final.
♦ Section 11 attempts to grant to the members of the SC the power to sit as a
board of arbitrators and not as the Supreme Court as an entity. Decision of the
majority of the members of the SC is made final.
♦ The franchise granted the Manila Electric Company by the Government of the
Philippine Islands, although only a contract between the parties to it, is now
made to effect the rights of persons not signatories to the covenant.
Issue: WON the Supreme Court and its members can be required to exercise any
power or to perform any trust or to assume any duty not pertaining to or connected
with the administering of judicial function. NO
Ratio:
♦ Two options:
o Sitting as a board of arbitrators, exercise judicial functions – not within
the jurisdiction granted the Supreme Court. Even if it does it would
presuppose the right to bring the matter in dispute before the courts, for
any other construction would tend to oust the courts of jurisdiction and
render the award a nullity. Supreme Court would review the decision of its
members acting as arbitrators
o Sitting as board of arbitrators, exercise administrative or quasi judicial
functions - would result in the performance of duties which the members of
the Supreme Court could not lawfully take it upon themselves to perform
♦ Present Case: The Supreme Court as a court is asked to determine if the
members of the court may be constituted a board of arbitrators, which is not a
court at all.lawphil.net
♦ Supreme Court of the Philippine Islands represents one of the three divisions of
power in our government. It is judicial power and judicial power only which is
exercised by the Supreme Court. Just as the Supreme Court, as the guardian of
constitutional rights, should not sanction usurpations by any other department
of the government, so should it as strictly confine its own sphere of influence to
the powers expressly or by implication conferred on it by the Organic Act. The
Supreme Court and its members should not and cannot be required to exercise
any power or to perform any trust or to assume any duty not pertaining to or
connected with the administering of judicial functions.
♦ A board of arbitrators is not a "court" in any proper sense of the term, and
possesses none of the jurisdiction which the Organic Act contemplates shall be
exercised by the Supreme Court.lawph!l.net
♦ CJ Taney - power conferred on this court is exclusively judicial, and it cannot be
required or authorized to exercise any other. . . . Its jurisdiction and powers
and duties being defined in the organic law of the government, and being all
strictly judicial, Congress cannot require or authorize the court to exercise any
other jurisdiction or power, or perform any other duty
♦ Section 11 of Act No. 1446 contravenes the maxims which guide the operation
of a democratic government constitutionally established, and that it would be
improper and illegal for the members of the Supreme Court, sitting as a board
of arbitrators, the decision of a majority of whom shall be final, to act on the
petition of the Manila Electric Company. As a result, the members of the
Supreme Court decline to proceed further in the matter.
IN RE: RODOLFO MANZANO
FACTS:
• Petitioner: Judge Rodolfo Manzano, Executive Judge, RTC, Bangui, Ilocos
Norte, Branch 19.
• On July 4, 1988, petitioner sent a letter to the SC saying that he was
designated as a member of the Ilocos Norte Provincial Committee on
Justice created pursuant to EO 856 as amended by EO 326. He is
requesting that before he may accept the appointment & discharge his
duties, an issuance be made by the SC of a Resolution that: 1) authorizes
him to accept the appointment & assume & discharge the powers & duties
attached to the said position; 2) considers his membership in the
Committee as neither violative of the Independence of the Judiciary nor a
violation of Sec 12, Art VIII, of the 2nd par. of Sec 7, IX-B, of the Consti &
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will not in any way amount to an abandonment of his present position as
Exec Judge; and 3) considers his membership in the said Committee as
part of the primary functions of an Executive Judge.
ISSUE:
WON petitioner’s membership in the Ilocos Norte Provincial Committee on Justice
violates the Constitution. YES
RATIO:
• EO 856 reveals that the Provincial/City Committees on Justice are created
to insure the speedy disposition of cases of detainees, particularly those
involving the poor & indigent ones, thus alleviating jail congestion &
improving local jail conditions.
• Committee’s functions are : 3.3 (EO 856): “Receive complaints against any
apprehending officer, jail warden, fiscal or judge who may be found to have
committed abuses in the discharge of his duties & refer the same to proper
authority for appropriate action”; 3.5: “Recommend revision of any law or
regulation w/c is believed prejudicial to the proper administration of crim
justice.”
• It is evident that such Committee perform administrative functions, defined
as “Those w/c involve the regulation & control over the conduct & affairs of
individuals for their own welfare & the promulgation of rules & regulations
to better carry out the policy of the legislature or such as are devolved
upon the administrative agency by the organic law of its existence.
• EO 326 (amending EO 856): Sec 6: “Supervision. The Prov’l/City
Committees on Justice shall be under the supervision of the Sec of Justice.
Quarterly accomplishment reports shall be submitted to the Office of the
Sec of Justice.”
• Under the Consti, members of the SC & other courts established by
law shall not be designated to any agency performing quasi-judicial
or administrative functions (Sec 12, VIII, Consti)
• Petitioner’s membership in the Ilocos Norte Prov’l Committee on Justice,
w/c discharges administrative functions, will be in violation of the Consti.
• Garcia v. Macaraig: While the doctrine of sep of powers is a relative theory
not to be enforced w/ pedantic rigor, the practical demands of govt
precluding its doctrinaire application, it can’t justify a member of the
judiciary being required to assume a position or perform a duty non-judicial
in character. The essence of the trust reposed in him is to decide. He is not
a subordinate of an executive or legislative official, however eminent. It is
indispensable that there be no exception to the rigidity of such a norm if he
is, s expected, to be confined to the task of adjudication.
MMDA v JANCO
Facts:
In 1994, President Fidel V. Ramos issued Presidential Memorandum Order No. 202
creating the Executive Committee (EXECOM) to oversee the BOT implementation of
solid waste management projects, headed by the Chairman of the MMDA and the
Cabinet Officer for Regional Development-National Capital Region (CORD-NCR). The
EXECOM was to oversee and develop waste-to-energy projects for the waste
disposal sites in San Mateo, Rizal and Carmona, Cavite under the build-operate-
transfer (BOT) scheme.
JANCOM entered into a partnership with Asea Brown Boveri (ABB) to form JANCOM
Environmental Corporation while First Philippines formed a partnership with OGDEN.
JANCOM and First Philippines were declared the winning bidders, respectively, for
the San Mateo and the Carmona projects.
After a series of meetings and consultations between the negotiating teams of
EXECOM and JANCOM, a draft BOT contract was prepared and presented to the
Presidential Task Force on Solid Waste Management.
On December 19, 1997, the BOT Contract for the waste-to-energy project was
signed between JANCOM and the Philippine Government, represented by the
Presidential Task Force on Solid Waste Management through DENR Secretary Victor
Ramos, CORD-NCR Chairman Dionisio dela Serna, and MMDA Chairman Prospero
Oreta. The BOT contract was submitted to President Ramos for approval but this
was too close to the end of his term which expired without him signing the contract.
President Ramos, however, endorsed the contract to incoming President Joseph E.
Estrada.
With the change of administration, the composition of the EXECOM also changed.
And due to the clamor of residents of Rizal province, President Estrada had, in the
interim, also ordered the closure of the San Mateo landfill.
Due to these circumstances, the Greater Manila Solid Waste Management
Committee adopted a resolution not to pursue the BOT contract with
JANCOM. JANCOM appealed to President Joseph Estrada the position taken
by the EXECOM not to pursue the BOT Contract executed and signed
between JANCOM and the Philippine Government, refuting the cited
reasons for non-implementation. Despite the pendency of the appeal, MMDA,
on February 22, 2000, caused the publication in a newspaper of an invitation to pre-
qualify and to submit proposals for solid waste management projects for Metro
Manila.
JANCOM thus filed with the Regional Trial Court of Pasig a petition for certiorari to
declare i) the resolution of the Greater Metropolitan Manila Solid Waste Management
Committee disregarding the BOT Contract and ii) the acts of MMDA calling for bids
and authorizing a new contract for Metro Manila waste management, as illegal,
unconstitutional, and void; and for prohibition to enjoin the Greater Metropolitan
Manila Solid Waste Management Committee and MMDA from implementing the
assailed resolution and disregarding the Award to, and the BOT contract with,
JANCOM, and from making another award in its place. On May 29, 2000, the trial
court rendered a decision, the dispositive portion of which reads:
JANCOM wins in CFI. Instead of appealing the decision, MMDA filed a special civil
action for certiorari with prayer for a temporary restraining order with the Court of
Appeals which was later docketed therein as CA-G.R. SP No. 59021.
MMDA’s motion for reconsideration of said decision having been denied, MMDA filed
the instant petition, alleging that the Court of Appeals gravely erred in finding that:
1) There is a valid and binding contract between the Republic of the
Philippines and JANCOM given that: a) the contract does not bear the signature of
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the President of the Philippines; b) the conditions precedent specified in the contract
were not complied with; and c) there was no valid notice of award.
2) The MMDA had not seasonably appealed the Decision of the lower court via
a petition for certiorari. (Hence this case)
Issues:
WON Certiorari should have been pursued when there was an option for an
appeal
WON CA erred in finding that there is a valid and binding contract between RP
and JANCOM
Holding/ Ratio: The petition is hereby DISMISSED for lack of merit.
1. No.
There can be no dispute that the trial court’s May 29, 2000 decision was a final
order or judgment which MMDA should have appealed, had it been so minded. In
its decision, the trial court disposed of the main controversy by “declaring the
Resolution of respondent Greater Metropolitan Manila Solid Waste Management
Committee disregarding petitioner’s BOT Award Contract and calling for bids for and
authorizing a new contract for the Metro Manila waste management ILLEGAL and
VOID.”
However, instead of appealing the decision, MMDA resorted to the
extraordinary remedy of certiorari, as a mode of obtaining reversal of the
judgment. This cannot be done. The judgment was not in any sense null
and void ab initio, incapable of producing any legal effects whatever, which
could be resisted at any time and in any court it was attempted.
The RTC decision is not immediately executory. Only judgments in actions for
injunction, receivership, accounting and support and such other judgments as are
now or may hereafter be declared to be immediately executory shall be enforced
after their rendition and shall not be stayed by an appeal therefrom, unless
otherwise ordered by the trial court (Sec. 4, rule 39, id.).
Since the RTC decision is not immediately executory, appeal would have stayed its
execution. Consequently, the adverse effects of said decision will not visit upon
petitioners during the appeal. In other words, appeal is a plain, speedy and
adequate remedy in the ordinary course of the law.
But as no appeal was taken within the reglementary period, the RTC
decision had become final and executory. Well-settled is the rule that the
special civil action for certiorari may not be invoked as a substitute for the
remedy of appeal (BF Corporation vs. Court of Appeals, 288 SCRA 267).
Therefore, the extraordinary remedy of certiorari does not lie.
Admittedly, there are instances where the extraordinary remedy of certiorari may be
resorted to despite the availability of an appeal. The few significant exceptions
were: when public welfare and the advancement of public policy dictate; or when
the broader interests of justice so require, or when the writs issued are null . . . or
when the questioned order amounts to an oppressive exercise of judicial authority.
In the instant case, however, MMDA has not sufficiently established the existence of
any fact or reason to justify its resort to the extraordinary remedy of certiorari.
Neither does the record show that the instant case, indeed, falls under any of the
exceptions aforementioned.
The Court thus holds that the Court of Appeals did not err in declaring that
the trial court’s decision has become final due to the failure of MMDA to
perfect an appeal within the reglementary period. As such, the Court now
deems it judicious to take cognizance of the substantive question, if only to put
petitioner’s mind to rest.
2. No.
Meeting of the Minds
Article 1315 of the Civil Code, provides that a contract is perfected by mere
consent. Consent, on the other hand, is manifested by the meeting of the offer and
the acceptance upon the thing and the cause which are to constitute the contract
(See Article 1319, Civil Code). In the case at bar, the signing and execution of
the contract by the parties clearly show that, as between the parties, there
was a concurrence of offer and acceptance with respect to the material
details of the contract, thereby giving rise to the perfection of the contract.
The execution and signing of the contract is not disputed by the parties.
Admittedly, when petitioners accepted private respondents’ bid proposal (offer),
there was, in effect, a meeting of the minds upon the object (waste management
project) and the cause (BOT scheme). Hence, the perfection of the contract. In
City of Cebu vs. Heirs of Candido Rubi (306 SCRA 108), the Supreme Court held
that “the effect of an unqualified acceptance of the offer or proposal of the bidder is
to perfect a contract, upon notice of the award to the bidder.
Admittedly, the notice of award has not complied with these requirements.
However, the defect was cured by the subsequent execution of the contract
entered into and signed by authorized representatives of the parties;
hence, it may not be gainsaid that there is a perfected contract existing
between the parties giving to them certain rights and obligations
(conditions precedents) in accordance with the terms and conditions
thereof. The fact that Chairman Oreta’s letter informed JANCOM EC that it was the
“sole complying (winning) bidder for the San Mateo project leads to no other
conclusion than that the project was being awarded to it. But assuming that said
notice of award did not comply with the legal requirements, private respondents
cannot be faulted therefore as it was the government representatives’ duty to issue
the proper notice.
In any event, petitioners, as successors of those who previously acted for
the government (Chairman Oreta, et al), are estopped from assailing the
validity of the notice of award issued by the latter. As private respondents
correctly observed, in negotiating on the terms and conditions of the BOT
contract and eventually signing said contract, the government had led
private respondents to believe that the notice of award given to them
satisfied all the requirement of the law.
Absence of Signature
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MMDA also points to the absence of the President’s signature as proof that the same
has not yet been perfected. It is concluded that the signatories, CORD-NCR
Chairman Dionisio dela Serna and MMDA Chairman Prospero Oreta, had no
authority to enter into any waste management project for and in behalf of
the Government. Secondly, Section 59 of Executive Order No. 292 is relied upon
as authority for the proposition that presidential approval is necessary for the
validity of the contract.
The first argument conveniently overlooks the fact that then Secretary of
Environment and Natural Resources Victor Ramos was likewise a signatory
to the contract. The Secretary of Environment and Natural Resources has such an
authority. In truth, the argument raised by MMDA does not focus on the lack
of authority of the signatories, but on the amount involved as placing the
contract beyond the authority of the signatories to approve. Section 59 of
Executive Order No. 292 reads:
Section 59. Contracts for Approval by the President. Contracts for
infrastructure projects, including contracts for the supply of materials and
equipment to be used in said projects, which involve amounts above the
ceilings provided in the preceding section shall be approved by the
President: Provided, That the President may, when conditions so warrant,
and upon recommendation of the National Economic and Development
Authority, revise the aforesaid ceilings of approving authority.
However, the Court of Appeals trenchantly observed in this connection:
As regards the President’s approval of infrastructure projects required
under Section 59 of Executive Order No. 292, said section does not apply to
the BOT contract in question. Sec. 59 should be correlated with Sec. 58 of
Exec. Order No. 292.
Consequently, MMDA may not claim that the BOT contract is not valid and
binding due to the lack of presidential approval. Significantly, the contract
itself provides that the signature of the President is necessary only for its effectivity
(not perfection), pursuant to Article 19 of the contract. Stated differently, while the
twenty-five year effectivity period of the contract has not yet started to run because
of the absence of the President’s signature, the contract has, nonetheless, already
been perfected.
We, therefore, hold that the Court of Appeals did not err when it declared the
existence of a valid and perfected contract between the Republic of the Philippines
and JANCOM. There being a perfected contract, MMDA cannot revoke or
renounce the same without the consent of the other. From the moment of
perfection, 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 (Article
1315, Civil Code). The contract has the force of law between the parties
and they are expected to abide in good faith by their respective contractual
commitments, not weasel out of them.
Just as nobody can be forced to enter into a contract, in the same manner, once a
contract is entered into, no party can renounce it unilaterally or without the consent
of the other. It is a general principle of law that no one may be permitted to change
his mind or disavow and go back upon his own acts, or to proceed contrary thereto,
to the prejudice of the other party. Nonetheless, it has to be repeated that although
the contract is a perfected one, it is still ineffective or unimplementable until and
unless it is approved by the President.
Moreover, if after a perfected and binding contract has been executed between the
parties, it occurs to one of them to allege some defect therein as reason for
annulling it, the alleged defect must be conclusively proven, since the validity and
the fulfillment of contracts cannot be left to the will of one of the contracting
parties.
OIL & GAS NATURE CORP vs. CA
Facts:
• Oil and Natural Gas Commission [ONGC] is a foreign corporation owned
and controlled by the government of India.
• Pacific Cement Company [PCC] is a private Philippine corporation.
• ONGC and PCC entered into a contract where PCC will supply ONGC with
4,300 metric tons of oil well cement. ONGC will pay PCC 477,300 USD.
• Due to a dispute between the shipowner and PCC, the cargo was held up in
Bangkok and failed to be delivered. PCC has already received payment.
• ONGC and PCC agreed that PCC will replace the items to be delivered with
class G cement but it did not conform to ONGC’s specifications.
• Pursuant to Clause 16 of their contract, ONGC appointed and arbitrator to
settle their dispute.
• The chosen arbitrator resolved the dispute in favor of ONGC.
• ONGC filed a petition to the Court of the Civil Judge of Dehra Dun, India for
the execution of the decision of the arbitrator.
• The foreign court issued notices to PCC for filing of objections. PCC
complied.
• Foreign court directed PCC to pay filing fees but failed to state how much.
• PCC sent communication with the Civil Judge asking how much the filing
fees were and that they be given 25 days to comply upon receipt of the
Judge’s reply.
• Foreign court granted the petition for execution on the ground that PCC
was unable to comply with the payment of the fees.
• ONGC filed a complaint with the RTC of Surigao City for the enforcement of
the judgment of the foreign court. PCC moved to dismiss. ONGC filed
opposition on the motion to dismiss.
• RTC denied motion to dismiss but held that the referral of the dispute to
the arbitrator under Clause 16 amounted to a mistake of law or fact
amounting to want of jurisdiction. Hence, ONGC acquired no enforceable
right under the foreign court’s judgment.
• CA affirmed RTC and also ruled that:
1. The foreign court’s judgment contravened the Constitution because it
did not contain any findings of fact and law and only contained the
dispositive portion.
2. The dismissal of PCC objections, with regards to the amount of fees to
be paid, constituted violation of due process.
3. Arbitration proceedings was defective because the arbitrator was
appointed by the ONGC who was also a former employer.
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Issues:
1. WON the dispute was within the jurisdiction of the arbitrator pursuant to
Clause 16.
2. WON the foreign court’s judgment is enforceable in this jurisdiction despite
failing to contain a statement of the facts and the law.
Ratio/held:
1. NO. Jurisdiction of the arbitrator, under Clause 16, should be confined to
claims arising from or relating to the design, drawing, instructions,
specifications or quality of the materials of the supply order/contract
(technical aspects). Redress of all other claims is covered by Clause 15.
Clause 15 covers nondelivery of the materials and grants exclusive
jurisdiction to the local courts of the place from which the supply order is
situated.
2. NO. Although the foreign court’s order may be categorized as a
memorandum decision, which does not transgress the requirements in Art.
VIII, Sec. 14 on clearly stating the facts and the law, a decision of a foreign
court should include statements of fact and law. If they don’t, the
enforcement of such decisions would be based on presumptions that laws
in other jurisdictions are similar to our laws, at the expense of justice
based on the merits.
The guideline set forth in Art. VIII Sec. 14 cannot prevail over the
fundamental elements of due process.
Case is REMANDED to the RTC for a full ventilation of the facts and issues and the
presentation of arguments in support and in rebuttal of the claims
ZAGADA v. CIVIL SERVICE COMMISSION (CSC)
Petition for certiorari to review the resolution of the CSC. 1992
FACTS (Campos, Jr., J):
In September 1984, a letter-complaint was filed by private resp Vedasto R. Oreta
with the Regional Director, Civil Service Commission, Region V, Legaspi City, against
petitioner German P. Zagada and Nestor Valdez for acts prejudicial to public interest
consisting in falsification of entry in the district plantilla of personnel for calendar
year 1981.
In the "Affidavit" of key witness Cesario Guinoo, the clerk responsible for the
preparation of the plantilla of personnel in the district, it was alleged that he was
the one who prepared the plantilla in question. This plantilla, was prepared under
the supervision of then OIC Eleanor Osea and was duly certified correct by her.
Before this could be submitted to the Division Office of the then Ministry of
Education Culture and Sports, petitioner Zagada took over as the new District
Supervisor. While Guinoo was yet in the process of finalizing the draft of the plantilla
of personnel for the year 1981, Zagada, together with Valdez, who was then District
clerk and Property Custodian for the District, came and asked Guinoo to make
adjustments in said plantilla so that Valdez would be listed down as EGT 10 -5,
instead of EGT-3. They did this without presenting any proof that said Valdez was
qualified for the position of EGT-5.
10
EGT- Elem Grade Teacher
Valdez admitted that he was not qualified to the position of EGT-5 and that although
he appeared to have such position in the plantilla of personnel, he was actually
receiving only the salary of his real position, EGT-3, plus a two-step merit increase,
the total of which incidentally added up to the salary of EGT-5.
Zagada, on the other hand, denied any participation in the anomaly, claiming that at
the time he assumed the position of District Supervisor, the plantilla in question had
already been certified correct and submitted by his predecessor, Osea.
Zagada was adjudged guilty of misconduct and was made to pay a fine in an
amount equivalent to 1 mo and 1 day of his salary. As for Valdez, the case was
considered terminated as of the date of his retirement which intervened during the
pendency of the case.
Upon elevation to the Merit Systems Protection Board, this decision was affirmed
but the Board imposed upon him the penalty of 6mos fine w/o pay.
The Commission found Zagada committed acts of misconduct in requesting for the
inclusion of Valdez in the list of teachers who are EGT-5 knowing fully well that at
that time, Valdez did not meet the requirements for classification to EGT-5. The
Commission resolved to find Zagada guilty of grave misconduct and imposed upon
him a penalty of 1yr suspension without pay.
ISSUE and RATIO:
WON CSC ERRED IN GIVING MUCH CREDENCE TO TESTIMONY OF GUINOO AND THAT IT IMPOSED A PENALTY MUCH
TOO HARSH AND IMPROPER UPON THE PETITIONER
At the outset, it was mentioned that the instant petition was brought to his Court
pursuant to Article IX-A, Section 7 of the 1987 Constitution, and this is in the nature
of a petition for certiorari under Rule 65 of the Rules of Court.
Under Rule 65 of the Rules of Court, the writ of certiorari is available where any
tribunal, board or officer exercising judicial functions has acted w/o or in excess of
its or his jurisdiction, or with grave abuse of discretion and there is no appeal, or
any plain, speedy, and adequate remedy in the ordinary course of law. A person
aggrieved thereby may file a verified petition in the proper court alleging the facts
with certainty and praying that judgment be rendered annulling or modifying the
proceedings, as the law requires, of such tribunal, board or officer.
In order for this Court to sustain the findings of an administrative body exercising
quasi-judicial functions, such body must abide by elementary rules of due process.
When there is denial of due process, there is grave abuse of discretion and the writ
of certiorari is in order.
One of the cardinal rights which constitute the administrative due process is that not
only must there be some evidence to support a finding or conclusion but the
evidence must be "substantial."(Ang Tibay, et al. vs. Court of Industrial Relations).
"Substantial evidence is more than a mere scintilla. It means such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion." The
obvious purpose of this and similar provisions is to free administrative boards from
the compulsion of technical rules so that the mere admission of matter which would
be deemed incompetent in judicial proceedings would not invalidate the
administrative order.
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In this light, a mere affidavit of the clerk in charge of the preparation of the
plantilla of personnel for calendar year 1981 is insufficient to constitute substantial
evidence to sustain the finding of grave misconduct. The affidavit of Guinoo, which
was the sole basis of the Commission in its ruling that the petitioner committed
grave misconduct, is self-serving. Guinoo, the clerk, admitted responsibility for
altering the plantilla by inserting the name of Valdez with the corresponding item of
EGT-5. Should he not point to someone else as the culprit, the fault would
necessarily fall heavily on him.
Moreover, the plantilla in question had allegedly been signed and certified as correct
by Osea, the OIC as of the time the said plantilla was prepared, and the same
submitted to the Division Officer prior to the assumption of office of the petitioner.
With the presumption of regularity in the performance of official duties, Osea affixed
her signature certifying as to its correctness with the knowledge that she was
signing the final and official form for submission to the Division Officer.
It appears that the petitioner's participation in the execution and preparation of the
plantilla in question is not reflected thereon. Guinoo alleged that the plantilla was
certified by Osea, as OIC, and not by the petitioner. Had there really been the
alleged falsification or alteration, the most logical procedure would be for Guinoo to
have insisted that it be countersigned by the present District Supervisor, who is the
petitioner herein. The petitioner's signature or initials never appeared in said
document. Thus, there is no basis for the falsification.
Hence, the respondent Commission erred in finding the petitioner guilty of grave
misconduct on the basis of the evidence presented, the same not being substantial
evidence. This constitutes a denial of administrative due process, amounting to
grave abuse of discretion.
HELD: Petition granted. Petitioner exonerated of the charges against him
MANCITA vs. BARCINAS [Dec. 22, 1992]
Petition for Certiorari to review the orders of the RTC of Pili, Camarines Sur
Petitioner: Filomena Mancita
Respondents: Hon. Ceferino Barcinas, Presiding Judge RTC Br. 31 of Camarines Sur;
Prescilla Nacario; Hon. Delfin Divinagracia, Municipal Mayor of Pili, Camarines Sur;
Hon. Patricia Sto. Tomas, Civil Service Commission Chairman
Facts:
 Aug. 1, 1980: Mancita was appointed as Municipal Development Coordinator
(MDC) of Pili, Camarines Sur on a permanent status.
 March 14, 1983: BP Blg. 337/Local Government Code took effect enumerating
officials & offices common to all municipalities including a Municipal Planning &
Development Coordinator (MPDC).
 March 28, 1983: Sangguniang Bayan of Pili created & organized such office thru
Resolution No. 38. The Reorganization Plan was later approved by the Joint
Commission on Local Gov’t Personnel Administration (JELGPA).
 June 17, 1985: then Mayor Prila informed Mancita thru a letter that her position
was abolished & her services will be terminated on June 30, 1985.
 June 30, 1985: respondent Nacario was appointed MPDC.
 Mancita appealed w/the Merit Systems Protection Board (MSPB) w/c decided in
favor of Mancita. MSPB issued an order directing that she be reinstated to her
former/equivalent position w/payment of back salaries from the date of her
illegal separation from the service.
 Municipality of Pili appealed with the Civil Service Commission (CSC) w/c
affirmed the MSPB’s decision.
 Oct. 15, 1990: then Mayor Divinagracia informed Nacario that her services
would be terminated effective Nov. 16, 1990 to pave the way for Mancita’s
reinstatement. CSC promulgated an order directing the immediate
implementation of its resolution & the MSPB’s decision.
 Nov. 8, 1990: Nacario filed for a petition for declaratory relief & prohibition
w/preliminary injunction against the public respondents. She assailed the
Mayor’s reinstatement of Mancita & the CSC’s affirmation of the MSPB decision
for being null & void and contrary to her constitutional rt to security of tenure.
 Judge issued a TRO & set the case for hearing.
 Mancita & Mayor Divinagracia filed a motion to dismiss claiming that the RTC
has no jurisdiction to rule, pass upon or review a final judgment/order/decision
of a constitutional body like the CSC. Denied.
Issue: WON the RTC orders are null & void for having been issued w/o or in excess
of jurisdiction.
Held: YES. Petition granted. TRO annulled & set aside.
Ratio: Lopez vs. CSC: The CSC is the single arbiter of all contests relating to the
civil service & as such its judgments are unappealable & subject only to the SC’s
certiorari jurisdiction as provided for in Rule 65 of the Rules of Court pursuant to
Sec. 7, Art. IX of the Constitution w/c provides that:
“Unless otherwise provided by this Constitution or by law, any
decision, order or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party w/in 30 days from
receipt of a copy thereof.”
CSC decisions/orders/rulings are subject to review only by the SC on
certiorari. Thus, the RTC of Pili has no jurisdiction over this case w/c seeks a
review of a CSC decision.
CAYETANO v. MONSOD
201 SCRA 210 (1991)
Atty. Christian Monsod was nominated by Pres. Aquino to the position of Chairman
of the COMELEC in a letter received by the Secretariat of the Commission on
Appointments (CoA).
Renato Cayetano opposed the nomination because allegedly Monsod does not
possess the required qualification of having been engaged in the practice of law for
at least 10 yrs.
CoA confirmed the nomination. Monsod took his oath and assumed office
thereafter,
Cayetano thus filed this petition praying that the confirmation be declared null and
void.
Issue: WON Monsod can be considered as having been engaged in the practice of
law for at least 10 yrs
YES. Composition and qualifications of Commissioners in the COMELEC are given in
the ff provisions:
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oSec. 1(1), Art. IX-C: There shall be a Commission on Elections composed of a
Chairman and six Commissioners who shall be natural-born citizens of the
Philippines and, at the time of their appointment, at least thirty-five years of
age, holders of a college degree, and must not have been candidates for any
elective positions in the immediately preceding elections. However, a majority
thereof, including the Chairman, shall be members of the Philippine Bar who
have been engaged in the practice of law for at least ten years.
The SC regrets that there seems to be no jurisprudence as to what constitutes
practice of law as a legal qualification to an appointive office.
But jurisprudence, and other legal sources have defined practice of law in a rather
broad scope.
oIn general these sources state that: The practice of law is not limited to the
conduct of cases in court. It means any activity, in or out of court, which
requires the application of law, legal procedure, knowledge, training and
experience. (Black’s Law Dictionary, Land Title Abstract and Trust Co. v.
Dworken, Philippine Lawyers Association v. Agrava, U.P. Law Center [dimension
of practice of law are advocacy, counseling and public service], and Barr v.
Cardell)
oThe records of the 1986 Con-Com adopted a liberal interpretation of the term:
it does not necessarily refer or involve actual practice of law…as long as lawyers
who are employed in the CoA are using their legal knowledge or legal talent in
their respective work within CoA, then they are qualified to be considered for
appointment as members or commissioners…
oIronically, the appearance of a lawyer in litigation in behalf of a client is at once
the most publicly familiar role for lawyers as well as an uncommon role for the
average lawyer.
oIn several issues of the Business Star are emerging trends in corporate law
practice, a departure from the traditional concept of practice of law. The
corporate lawyer now has to be a stakeholder, involved in decision-making
within the corporation, adept in legal managerial capabilities vis-à-vis the
managerial mettle of corporations to address a crisis situation, skilled in new
programming techniques that make the systems dynamics principles more
accessible to manager—including corporate counsels, skilled in decision analysis
—which can be used to appraise the settlement value of litigation, and more
knowledgeable of financial law affecting each aspect of their work.
Atty. Monsod, on the other hand is:
oA UP graduate and member of the Philippine bar and has been a dues paying
member of the IBP.
oHe has also been paying his professional license fees as lawyer for more than
10 yrs
oHe worked in his fathers law office then worked as an operations officer in the
World Bank Group for about 2 yrs in Costa Rica and panama, which involved
getting acquainted with the laws of the member-countries, negotiating loans and
coordinating legal, economic and project work of the Bank
oHe returned to the Philippines and worked with the Meralco Group, served as
chief executive officer of an investment bank and subsequently of a business
conglomerate, and since 1986, has render services to various companies as a legal
and economic consultant or chief executive officer.
oAs former Secretary-General (1896) and National Chairman (1987) of
NAMFREL, Monsod’s work involved being knowledgeable in election law. He
appeared for NAMFREL in its accreditation hearings before the COMELEC.
oIn the field of advocacy, Monsod, in his personal capacity and as former Co-
Chiarman of the Bishops Businessmen’s Conference for Human Dev’t, has
worked with the under privileged sectors in initiating, lobbying for and engaging
in affirmative action for the agrarian reform law and lately the urban land reform
bill.
oHe also made use of his legal knowledge as member of the Davide Commission
and as a member of the Con-Com and Chairman of is Committee on
Accountability of Public Officers.
Interpreted in the light of the various definitions of the term “practice of law”,
particularly the modern concept of law practice, and taking into consideration the
liberal construction intended by the framers of the Constitution, Atty. Monsod’s past
work experiences as a lawyer-economist, a lawyer-manager, a lawyer-entrepreneur
of industry, a lawyer negotiator of contracts, and a lawyer-legislator of both rich and
the poor—verily more than satisfy the constitutional requirement—that he has been
engaged in the practice of law for at least 10 years.
Held: Petition dismissed
Brillantes, Jr. v. Yorac
Facts:
 COMELEC Chairman Hilario Davide was named Chairman of the fact-finding
commission to investigate the December 1989 coup d’ etat attempt
 In his place at the COMELEC, the Pres. Cory Aquino designated respondent
Associate Commissioner Haydee Yorac as Acting Chairman
 The qualifications of Yorac are not at issue
 What is at issue is the power of the President to make such designation
in view of the status of the COMELEC as an independent constitutional
body
 The petitioner bases his challenge on:
1. Article IX-C, §1(2) of the Constitution: In no case shall any member of the
COMELEC be appointed or designated in a temporary or acting capacity
2. Nacionalista Party v. Bautista: SC revoked the designation by Pres. Quirino
of the Solicitor General as acting member of the COMELEC as being
contrary to the Constitution
3. Respondent is not even the senior member of the COMELEC
4. Practice in the Supreme Court: The choice of the Acting Chairman of the
COMELEC is an internal matter that should be resolved by the members
themselves, and that the intrusion of the President violates their
independence (much like the practice in the Supreme Court where the
senior Associate Justice serves as Acting Chief Justice, without need of
designation by the President)
 Solicitor General argues:
1. The procedure for temporary succession in the Supreme Court is provided
for in Section 12 of the Judiciary Act of 1948. There is no such
arrangement in the case of the COMELEC
2. The designation made by the President should be sustained for reasons of
expediency to prevent disruptions of the functions of the COMELEC
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Issues:
I. W/N the designation by the President of the Acting Chairman of the COMELEC is
unconstitutional
Held: YES. The choice of Temporary Chairman, in the absence of the regular
chairman, comes under the discretion of the COMELEC as an independent
Constitutional Commission.
Reasoning:
 The argument of expediency is a dubious justification because it may be an
overstatement since there did not seem to be any problems of possible
disruptions of the functions of the COMELEC
 Article IX-A of the Constitution:
- Section 1 expressly describes all Constitutional Commissions
(ConCom) as “independent”
- although essentially executive in nature, they are not under the
control of the President of the Philippines
- Section 7 provides that its decisions, orders and rulings are
subject only to review on certiorari by the SC
- each ConCom conducts its own proceedings under the
applicable laws and its own rules and in the exercise of its own
discretion
 The choice of temporary chairman in the absence of the regular chairman
comes under that discretion, which cannot be exercised, even with its
consent, by the President of the Philippines.
 The lack of statutory rule is no justification for the President to fill the void.
The situation could have been handled by the members of the COMELEC
themselves, who would most likely have been guided by the seniority rule as
they themselves would have appreciated it. In any event, that choice and
the basis thereof were for them and not the President to make
II. W/N Acting Chairman Haydee Yorac is protected by the security of tenure
accorded to members of the COMELEC
Held: NO. That guaranty is not available to the respondent as Acting Chairman
of the COMELEC by designation of the President of the Philippines
Reasoning:
 Although it is true that Yorac cannot be removed at will from her permanent
position as Associate Commissioner, it is no less true that she can be replaced
as Acting Chairman with or without cause and, thus, be deprived of the powers
and prerequisites of that temporary position
 Designation as Acting Chairman is by its very terms essentially temporary and
therefore revocable at will
 No cause need be established to justify revocation
 Even assuming the validity of the President’s designation, it may still be
withdrawn by the President at any time and for whatever reason she sees fit
Disposition:
 Designation is declared UNCONSTITUTIONAL
 Yorac is ordered to desist from serving as Acting Chairman of the COMELEC
 But without prejudice to the incumbent Associate Commissioners of the
COMELEC restoring her to the same position if they so desire
Sanchez vs. Commission on Election [June 19, 1982]
Petitions for certiorari to review the resolution of the COMELEC
Facts:
♦ January 30, 1980 – Virgilio Sanchez was the official candidate of the Naciolista
Party for the Municipal Mayor of San Fernando, Pampanga, while Armando
Biliwang was the Kilusang Bagong Lipunan's (KBL) official candidate for the
same position
♦ Armando Biliwang was proclaimed the winner by the Board of Canvassers.
♦ February 1, 1980 - Sanchez filed with the Commission on elections a Petition
to declare null and void the local elections in San Fernando due to alleged
large scale terrorism. On the same day, the COMELEC denied the Petition for
lack of merit. Sanchez filed for a motion for reconsideration.
♦ February 8, 1980 - COMELEC recalled its Resolution and required Biliwang and
the Municipal Board of Canvassers to answer.
♦ May 15, 1980 – COMELEC annulled the election held on January 30, 1980.
The proclamation of Armando P. Biliwang and other municipal officials were
also set aside. Also included in the resolution was the instruction to certify to
the president or Prime Minister and the Batasang Pambansa the failure of
election.
♦ COMELEC based their decision on the threats and coercion or terrorism and
irregularities committed AFTER the elections or specifically the counting of the
votes and in the preparation of the election returns upon the teacher-
members of the Citizens Election Committees (CEC's) without regard to the
genuine ballots in the ballot boxes which were substituted with pre-prepared
ballots favoring respondent Biliwang.
Issues:
1. WON the COMELEC has the authority to annul an entire municipal election. YES
♦ Comelec is empowered motu proprio to suspend and annul any proclamation
o SEC. 175. Suspension and annulment of proclamation. — The Commission
shall be the sole judge of all pre-proclamation controversies and any of its
decisions, orders or rulings shall be final and executory. It may, motu
proprio or upon written petition, and after due notice and hearing order the
suspension of the proclamation of a candidate-elect or annul any
proclamation, if one has been made, on any of the grounds mentioned in
Sections 172, 173 and 174 hereof.
♦ Under the Constitution, the COMELEC is tasked with the function to "enforce
and administer all laws relative to the conduct of elections." The 1978 Election
Code (PD No. 1296) accords it exclusive charge of the enforcement and
administration of all laws relative to the conduct of elections for the purpose of
insuring free, orderly and honest elections (Sec. 185).
♦ COMELEC found that the local election in San Fernando Pampanga, was vitiated
by post-election widespread and pervasive terrorism and resulted in the
submission of "gunpoint or coerced" returns.
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♦ Abes vs. Comelec: Enforcement and administration of all election laws by
Comelec do not include the power to annul an election which may not have
been free, orderly and honest, as such power is merely preventive, and not
curative, and if it fails to accomplish that purpose, it is not for such body to
cure or remedy the resulting evil, but for some other agencies of the
Government – no longer applicable because it under the 1935 constitution and
the former revised election code. Since then, the powers of the COMELC has
been considerably expanded.
♦ Now, COMELEC is the sole judge of all contests relating to the elections,
returns, and qualifications of all Members of the Batasang Pambansa and
elective provincial and city officials
♦ COMELEC must be deemed possessed of authority to annul elections where the
will of the voters has been defeated and the purity of elections sullied. It would
be unreasonable to state that the COMELEC has a legal duty to perform and at
the same time deny it the wherewithal to fulfill that task
2. WON the COMELEC may call for a special election if the election results in a
failure to elect. YES
♦ COMELEC has been explicitly vested with the authority to "call for the holding or
continuation of the election." Section 5 of Batas Pambansa Blg. 52 provides:
Sec. 5. Failure of Election. — whenever for any serious cause such as violence,
terrorism, loss or destruction of election paraphernalia or records, force
majeure and other analogous cases of such nature that the holding of a free,
orderly and honest election should become impossible, the election for a local
office fails to take place on the date fixed by law, or is suspended, or such
election results in a failure to elect, the Commission on Elections shall, on the
basis of a verified petition and after due notice and hearing, call for the holding
or continuation of the election as soon as practicable.
♦ Section 7 of election code of 1978 - Sec. 7. Failure of election. — If on account
of force majeure, violence, terrorism, or fraud the election in any voting center
has not been held on the date fixed or has been suspended before the hour
fixed by law for the closing of the voting and such failure or suspension of
election in any voting center would affect the result of the election, the
Commission may on the basis of a verified petition and after due notice and
hearing, call for the holding or continuation of the election not held or
suspended.
♦ Section 8 of the election code - SEC. 8. Call of special election. — Special
elections shall be called by the Commission by proclamation on a date to be
fixed by it, which shall specify the offices to be voted for, that it is for the
purpose of filling a vacancy or a newly created elective position, as the case
may be.
♦ The SC held that Section 5 to include the calling of a special election in the
event of a failure to elect in order to make the COMELEC truly effective in the
discharge of its functions. Section specifically allows the COMELEC to call a
special election for the purpose of filling a vacancy or a newly created position.
Ruling: Commission on Elections hereby held empowered to call a special election
where there has been a failure to elect. That portion which certifies the failure of
election in San Fernando, Pampanga, to the President and the Batasang Pambansa
for the enactment of remedial measures, is hereby set aside.
Tan v. COMELEC
(Petition for review of an order of the COMELEC)
Facts:
 Petitioner Antonio Tan was the incumbent City Prosecutor of Davao City
 He was designated by the COMELEC as Vice Chairman of the City Board of
Canvassers (CBC) of Davao City for the May 11 synchronized elections of 1992
in accordance with provisions of Section 20(a) of RA 6646 and Section 221(b)
of the Omnibus Election Code
 After the elections, CBC declared Manuel Garcia as winner for a congressional
seat to represent the 2nd district of Davao City
 Private respondent Senforiano Alterado, also a candidate for the position,
filed a number of cases questioning the validity of said proclamation. He
accused members of the CBC of “unlawful, erroneous, incomplete and irregular
canvass.”
 He filed three complaints:
1. An Electoral Protest before the HRET – dismissed
2. A Criminal Complaint for “Falsification of Public Documents and Violation of
the Anti-Graft and Corrupt Practices Ac”t before the Ombudsman –
dismissed for lack of criminal intent
3. An Administrative Charge for “Misconduct, Neglect of Duty, Gross
Incompetence and Acts Inimical to the Services” before the COMELEC –
still pending
 Petitioner Tan moved to dismiss the administrative charge for lack of
jurisdiction of the COMELEC to try him since he is under the Executive

Department of the government
COMELEC denied petition to dismiss, so Tan brought the matter to the SC
 Petitioner alleges that:
i. As City Prosecutor of Davao City, his office belongs to the
executive branch of the government, particularly the DOJ.
Therefore, he is under the administrative jurisdiction of the DOJ
and not the COMELEC
ii. That the Section 47 of the Civil Service Law provides that
department heads “shall have jurisdiction to investigate and
decide matters involving disciplinary action against officers under
their jurisdiction
iii. Section 2, Article IX of the Constitution provides only for
deputizing public officers belonging to the executive department
for the purpose of insuring free, orderly and honest elections. It
does not include administrative disciplinary jurisdiction over
officials belonging to the executive branch of government.
Otherwise, it would allow encroachment into the domain of the
executive branch under the guise of administering laws relative to
elections
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iv. COMELEC bases its authority to investigate Tan on Section 38 of
PD807. Said provision merely lays down the procedure for
administrative cases against non-presidential appointees. Tan, as
city prosecutor of Davao, is a presidential appointee, does not fall
under the scope of said provision.
Issue: W/N COMELEC has jurisdiction over administrative cases filed
against its appointed Vice-Chairman of the CBC of Davao, even if
said appointee, as a City Prosecutor, is a public official under the
DOJ.
Held: YES. COMELEC’s authority under the Constitution is virtually all-
encompassing when it comes to election matters, particularly to
sanctions against election offenses.
Reasoning:
 The administrative case against petitioner relates to his performance of
duties as an election canvasser and not as a city prosecutor
 Under Section 2(#s 6-8), Article IX of the Constitution, the COMELEC shall
exercise the following powers and functions:
6. File, upon a verified complaint, or on its own initiative, petitions in court
for inclusion or exclusion of voters; investigate and, where appropriate,
prosecute cases of violations of election laws, including acts or
omissions constituting election frauds, offenses, and malpractices
7. ***
8. Recommend to the President the removal of any officer or employee it
has deputized or the imposition of any other disciplinary action, for
violation or disregard of, or disobedience to its directive, order, or
decision.
 Also, Section 52, Article VII of the Omnibus Election Code provides:
i. it can exercise direct and immediate supervision and control over
national and local officials or employees, including members of
any national or local law enforcement agency and instrumentality
of the government required by law to perform duties relative to
the conduct of elections
ii. The Commission may relieve any officer or employee referred to
in the preceding paragraph from the performance of his duties
relating to electoral processes who violates the election law or fails
to comply with its instructions, orders, decisions, rulings, and
appoint his substitute.
iii. Upon recommendation of the Commission, the corresponding
proper authority shall suspend or remove from office any or all of
such officers or employees who may, after due process, be found
guilty of such violation or failure.
 Given the authority of the COMELEC to exercise direct and immediate
supervision and control over its deputies, and its power to recommend the
suspension or removal from office of any official found to be guilty of violating
election laws, it must first satisfy itself that there indeed has been an
infraction of the law
 The COMELEC, being in the best position to assess how deputized officials
perform their duties, it should conduct the administrative inquiry
 To deny the COMELEC the jurisdiction to look into charges of election offenses
committed by officials and employees outside the regular employ of the
COMELEC would be to unduly deny to it the proper and sound exercise of such
recommendatory power and even a possible denial of due process to the official
or employee concerned
 ***Note, however, that the COMELEC may only issue a recommendation for
disciplinary action. It is still the executive department, to which the charged
official belongs, that has the ultimate authority to impose the disciplinary
penalty
 The law does not detract from, but is congruent with, the general
administrative authority of the department of government concerned over its
own personnel
Minor issue: W/N Private respondent Alterado can be held to have been forum-
shopping
Held: NO.
 Investigation by the Ombudsman on the criminal case and the administrative
charges inquired into by the COMELEC are entirely independent proceedings
 The conclusion of one will not affect the other
 An absolution from a criminal charge is not a bar to an administrative
prosecution, or vice versa
NUNEZ V. SANDIGANBAYAN
FACTS:
• PD 1486, amended by PD 1606 created the Sandiganbayan in 1978, w/ the
“jurisdiction over crim & civil cases involving graft & corrupt practices &
such other offenses committed by public officers & employees, including
those in GOCCs, in relation to their office as may be determined by law
(Art XIII, Sec 5, ’73 Consti)
• Petitioner Rufino Nunez in this certiorari & prohibition proceeding assails
the validity of this PD.
• He was accused before the Sandiganbayan of estafa through falsification of
public & commercial documents committed in connivance w/ his other co-
accused public officials in several cases.
• He filed a motion to quash on const’l & jurisdictional grounds, w/c was
denied. Motion for recon was likewise denied, hence this petition.
ISSUE: VALIDITY OF PD 1486
1. WON PD 1486 violates equal protection clause. NO
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2. WON PD 1486 violates due process clause. NO
3. WON PD 1486 violates ex post facto clause. NO
HELD/ RATIO:
*Note: Marcos’ power to create the Sandiganbayan in 1978 is not challenged here.
The 1976 amendments made clear that he as incumbent Pres “shall continue to
exercise legislative powers ‘til martial law shall have been lifted.”
1. NO
• J.M. Tuason v. LTA: The Const’l guarantee (of equal protection) is not to be
given meaning that disregards what does in fact exist. To assure that the
gen welfare be promoted, w/c is the end of law, a regulatory measure may
cut into the rights to liberty & property. Those adversely affected may
under such circumstances invoke the equal protection clause only if the can
show that the govt act assailed was prompted by the spirit of hostility, or at
the very least discrimination that finds no support in reason.”
• Classification is not ruled out. Tuason case states that it’s sufficient hat the
laws operate equally & uniformly on all persons under similar
circumstances; that those that fall within a class should be treated in the
same fashion, whatever restrictions cast on some in the group must be
equally binding on the rest.
• PETITIONER contends that the Sandiganbayan proceedings violates his
right to equal protection because: 1) appeal as a matter of right became
minimized into a mere matter of discretion; 2) appeal was limited to
questions of law, excluding a review of the facts & trial evidence; & 3)
there is only one chance to appeal conviction, by certiorari to the SC,
instead of the tradt’l 2 chances, while other estafa indictees are entitled to
appeal as a matter of right covering both law & facts to 2 appellate courts.
• This is hardly convincing bec the classification satisfies the TEST in People
v. Vera: “classification must be based on substantial distinctions w/c make
real differences; it must not be limited to existing conditions only, & must
apply equally to each member of the class.”
• The Consti specifically makes mention of the creation of the Sandiganbayan
in response to a problem, the urgency of w/c cannot be denied, namely,
dishonesty in the public service. It follows that those who may be tried by
such court ought to have been aware as far back as the ’73 Consti came
into force, that a diff procedure for the accused therein is not necessarily
offensive to the equal protection clause.
2. NO
• In re Ka y Villegas Kami: An ex post facto law is one w/c: 1) makes
criminal an act done before the passage of a law & w/c was innocent when
done, & punishes the act; 2) aggravates a crime; 3) changes the
punishment than the law annexed to the crime when committed; 4) alters
the legal rules of evidences, & authorizes conviction upon less or different
testimony than the law required at the time of the commission; 5)
assuming to regulate civil rights & remedies only, in effect imposes penalty
or deprivation of a right, for something w/c when done was lawful; 6)
deprives a person accused of some lawful protection w/c he has become
entitled, such as the protection of a former conviction or acquittal, or a
proclamation of amnesty.
• The “Lawful protection” to w/c an accused “has become entitled” is
qualified & not given a broad scope. The mode of procedure provided for in
the statutory right to appeal is NOT EMBRACED by this “lawful protection.”
• In People v. Vilo for ex., Sec. 9 of the judiciary Act of 1948 doing away w/
the requirement of unanimity under w/ 8 votes sufficing for the imposition
of death penalty was upheld as not suffering from const’l infirmity. Court
held that its applicability to crimes committed before its enactment would
not make the law ex post facto.
• Even from the standpoint of the US decisions relied upon by petitioner
(namely, Thompson v. Utah), it can’t be argued that there is a dilution of
the right to appeal.
• Admittedly, there is no recourse to the CA, the review is by the SC.
• The test as to whether the ex post facto clause is disregarded, in the said
Thompson case decision taking “from an accused any right that was
regarded, at the time of the adoption of the consti as vital for the
protection of life & liberty, & w/c he enjoyed at the time of the
commission of the offense charged against him.”
• Court held that the omission of the CA as an intermediate tribunal DOES
NOT deprive petitioner of a right vital to the protection of his liberty.
• In the 1st place, his innocence or guilt is passed upon by the 3-judge court
of a division of Sandiganbayan. A unanimous vote is required, failing w/c, 2
other justices shall be designated to decide the case w/ them & the
concurrence of a majority of such division of 5 shall be necessary for
judgment. Further, if convicted, SC shall review the decision & see whether
any error of law was committed to justify a reversal of the judgment. SC,
in determining whether to give due course to the petition for review must
be convinced that the const’l presumption of innocence is overcome. The
standard is moral certainty; guilt must be beyond reasonable doubt.
3. NO
• Justice, though due to the accused is due to the accuser also.
• Arnault v. Pecson: In crim proceedings, due process is satisfied if the
accused is informed as to why he is proceeded against & what charge he
has to meet, w/ his conviction being made to rest on evidence that is not
tainted w/ falsity after full opportunity for him to rebut it & the sentence
being imposed in accordance w/ a valid law.
• Ong Chang Wing v. US: Requirements of due process in crim procedure:
That if an accused has been heard in a court of competent jurisdiction, &
proceeded against under the orderly processes of law, & only punished
after inquiry & investigation, upon notice to him, w/ an opportunity to be
heard, & a judgment awarded w/n the authority of a const’l law, then he
has had due process of law.
HELD: Petition is DISMISSED. PD 1486 not declared unconstitutional.
Quimpo vs. Tanodbayan
Tanodbayan has jurisdiction over all government owned firms regardless of how
organized.
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Facts:
Quimpo filed a complaint with the Tanodbayan (TB) charging the Greg Dimaano and
Danny Remo, manager and analyst of Petrophil, with violation of RA 3019 for their
refusal to pay Quimpo's fees as surveyor. The TB dismissed the complaint, however,
on the ground that his jurisdiction extended only to government owned corporations
organized under a special law. PETROPHIL is a corporation organized under the
General Corporation Code; it was acquired by the govt. to carry out its oil and
gasoline programs. Quimpo filed a petition for certiorari, questioning the decision of
the TB.
Held:
1. In NHA vs Juco, it was held that for purposes of coverage in the Civil
Service, employees of GOCC whether created by special law or formed as
subsidiaries are covered by the CS law, not the labor code, and the fact
that private corporation owned or controlled by the government may be
created by special charter does not mean that such corporations not
created by special laws are not covered by the CS.
2. The meaning thus given to the GOCC for the purposes of the CS [Art IX,
B, Sec. 2 (1)] provision should likewise apply for the purposes of the TB
and the SB provisions. [Art. XI, secs 4, 12], otherwise, incongruity would
result; and a govt. owned corp could create as many subsidiary corps.
Under the Corp. code as it wishes, which would then be free from strict
accountability and could escape the liabilities and responsibilities provided
for by the law. There can be no gainsaying that as of the date of its
acquisition by the government, utilizing public funds, PETROPHIL, while
retaining its own corporate existence, became a GOCC within the
constitutional precept. Its employees, therefore are public servants falling
within the investigatory and prosecutory jurisdiction of the TB for the
purposes of the RA 3019.
ZALDIVAR vs. SANDIGANBAYAN
FACTS:
• Petitioner Enrique A. Zaldivar, governor of the province of Antique, sought
to restrain the Sandiganbayan and Tanodbayan Raul Gonzalez from
proceeding with the prosecution and hearing of Criminal Cases Nos. 12159
to 12161 and 12163-12177 on the ground that said cases were filed by
said Tanodbayan without legal and constitutional authority, since under the
1987 Constitution which took effect on February 2,1987, it is only the
Ombudsman (not the present or incumbent Tanodbayan) who has the
authority to file cases with the Sandiganbayan.
ISSUE: WON Tanodbayan Raul Gonzalez has the authority to file cases with the
Sandiganbayan
HELD: NO
RATIO:
• Under the 1987 Constitution, Art XI sec.13, par.1
“the Ombudsman (as distinguished from the incumbent Tanodbayan) is
charged with the duty to:
"Investigate on its own, or on complaint by any person, any act or omission of any
public official, employee, office or agency, when such act or omission appears to be
illegal, unjust, improper, or inefficient."
The Constitution in Art. XI, Section 7 likewise provides that:
"The existing Tanodbayan shall hereafter be known as the Office of the Special
Prosecutor. It shall continue to function and exercise its powers as now or hereafter
may be provided by law, except thaw conferred on the Office of the Ombudsman
created under this Constitution."
• The Duty is given to the Ombudsman, the incumbent Tanodbayan (called
Special Prosecutor under the 1987 constitution and who is supposed to
retain powers and duties NOT GIVEN to the Ombudsman) is clearly without
authority to conduct preliminary investigations and to direct the filing of
criminal cases with the Sandiganbayan, except upon orders of the
Ombudsman. This right to do so was lost effective February 2, 1987. From
that time, he has been divested of such authority.
• Under the present Constitution, the Special Prosecutor (Raul Gonzalez) is a
mere subordinate of the Tanodbayan (Ombudsman) and can investigate
and prosecute cases only upon the latter's authority or orders. The Special
Prosecutor cannot initiate the prosecution of cases but can only conduct
the same if instructed to do so by the Ombudsman. Even his original power
to issue subpoena, which he still claims under Section 10(d) of PD 1630, is
now deemed transferred to the Ombudsman, who may, however, retain it
in the Special Prosecutor in connection with the cases he is ordered to
investigate.
It is not correct either to suppose that the Special Prosecutor remains the
Ombudsman as long as he has not been replaced, for the fact is that he has never
been the Ombudsman. The Office of the Ombudsman is a new creation under Article
XI of the Constitution different from the Office of the Tanodbayan created under PD
1607 although concededly some of the powers of the two offices are identical or
similar. The Special Prosecutor cannot plead that he has a right to hold over the
position of Ombudsman as he has never held it in the first place.
DADOLE VS. CA
TAN vs. COMELEC (1986)
Manila Prince Hotel v GSIS, 02/03/97]
Bellosillo, J.
Facts: respondent GSIS, pursuant to the privatization program under Proclamation
No. 50 dated December 8, 1986, decided to sell through a public bidding 30-51% of
the shares of respindent Manila Hotel Corporation (MHC). The winning bidder "is to
provide management expertise and/or an international marketing/reservation
system, and financial suppport to strengthen the profitability and performance of
the Manila Hotel.
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Sept 18, 1995- two bidders participated in the auction; one was petitioner Manila
Prince Hotel Corp, who wanted to buy 51% of the shares at Php41.85 each, and
Renong Berhad, a Malaysian firm, which bid for the same number of shares at
Php44 each
*pertinent provisions of bidding rules:
- if for any reason, the Highest Bidder cannot be awarded the Block of
shares, GSIS may offer this to other Qualified bidders
- the highest bidder will only be declared the winner after 1) execution of
the necessary contracts with GSIS/MHC and 2)securing the requisite
approvals of the GSIS/MHC, Committee on Privatization and Office of the
Govt Corporate Counsel
Sept 28, 1995-pending the declaration of Renong Berhad as the winning bidder,
petitioner matched the bid price of the Malaysian firm
Oct 10, 1995-petitioner sent a manager's check issued by Philtrust Bank as bid
security
Oct 17, 1995-petitioner, wishing to stop the alleged "hurried" sale to the foreign
firm, filed the case in the SC
Oct 18, 1995-Court issues TRO
Petitioner: (Manila Prince Hotel)
1. invokes Art12, Sec10, Par.2, and argues that the Manila Hotel was covered by
the phrase "national patrimony" and hence cannot be sold to foreigners;
selling 51% would be tantamount to owning the business of a hotel which
is owned by the GSIS, a GOCC, the hotel business of respondent GSIS
being a part of the tourism industry which undoubtedly is part of the
national economy.
2. petitioner should be preferred over its Malaysian counterpart after it has matched
the bid, since the bidding rules state 'if for any reason, the Highest Bidder
cannot be awarded the Block of shares, GSIS may offer this to other
Qualified bidders, namely them
Respondents:(Govt Service Insurance System, Manila Hotel Corp, COP,
OGCC)
1. Art12, Sec10, Par.2: merely a statement of policy/principle; requires enabling
legislation
2. Manila Hotel does not fall under the term national patrimony; prohibition is
against the State, not the GSIS as a separate entity
3. the constitutional provision is inapplicable as since what is being sold are
outstanding shares, not the place itself or the land; 50% of equity is not
part of national patrimony.
4. the reliance of the petitioners on the bidding rules is misplaced; the
condition/reason that will deprive the highest bidder of the award of
shares has not yet materialized hence the submission of a matching bid is
premature
5. prohibition should fail for respondent GSIS did not exercise its discretion in a
capricious manner, did not evade duty or refused to d a duty as enjoined
by law. Similarly mandamus should fail since they have no clear legal
right to demand anything
Issue:
1. Whether or not the constitutional provision is self-executory-YES
2. Whether or not the term "national patrimony" applies to the Manila Hotel-
YES
3. Whether or not the term "qualified Filipinos" applies to the MPH-YES
4. Whether or not the GSIS, being a chartered GOCC, is covered by the
constitutional prohibition-YES
Held:
1. admittedly, some constis are merely declarations of policies and principles.
But a provision which is complete in itself and becomes operative w/o the aid
of enabling legislation , or that which supplies sufficient rule by means of
which the right it grants may be enjoyed or protected is self-executing.
Modern constis are drafted upon a different principle and have often become
extensive codes of law intended to operate directly. If the consti provisions
are treated as requiring legislation instead of self-executing, the legislature
would have the power to ignore and practically nullify the mandate of the
fundamental law, which can be cataclysmic. In case of doubt, the Consti
should be considered self-executing rather than not. Though this presumption
is in place, the legislature is not precluded from enacting further laws to
enforce the consti provision so long as the contemplated statute squares with
the consti. Also a consti provision may be self executing on one part and not
on the other/s.
Respondents also rely on jurisprudence that are "simply not in point"-Basco v
PAGCOR, Tolentino v Sec of Finance, Kilosbayan v Morato. A reading of the
provisions involved in these cases clearly shows that they are not judicially
enforceable constitutional rights but guidelines of laws, manifested in the
very terms of the provisions. Res ipsa loquitur. As opposed to Art12, Sec10,
Par.2 which is a mandatory, positive command, complete in itself, needing no
further guidelines, creating a right where none existing before, that right
being that qualified Filipinos shall be preferred. And where there is a right,
there is a remedy.
2. in plain language, patrimony means heritage, referring not only to natural
resouces but to the cultural heritage of Filipinos as well. Manila Hotel has
become a landmark-a living testament of Philippine heritage.
3. "qualified" according to the Consti commission refers to 1)companies whose
capital or controlling stock is wholly owned by citizens of the Phil, 2) the fact
that the company can make viable contributions to the common good,
because of credible competency and efficiency. By giving preferrence to Phil
comapnies or entities it does not mean that they should be pampered; rather
they should indeed "qualify" first with the requirements that the law provides
before they can even be considered as having the preferential treatment of
the state accorded to them.In the 1st place, MPH was selected as one of the
qualified bidders, which meant that they possessed both requirements. "in
the granting of economic rights, privileges and concessions, when a choice is
between a "qualified foreigner " and a "qualified Filipino", the latter shall be
chosen"
4. the sale of the 51% of MHC could only be carried out with the prior approval
of the State through the COP.
"state action" refers to 1)when activity engaged in is a public function,
2)when govt is so significantly involved in the actor as to make the govt
responsible for his action 3)when govt has approved or authorized the action.
Act of GSIS selling the shares falls under the 2nd and 3rd categories. Also,
when the Consti refers to state it refers not only to the people but also to
govt as elements of the state. Hence, the GSIS, being part of govt, although
chartered, is still covered by the provision.
(the rest is obiter)
Petition dismissed.
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Agan v PIATCO
Facts: [PBAC = AEDC(bidder) v Paircargo(bidder)]
In August 1989, the DOTC engaged the services of Aeroport de Paris (ADP) to
conduct a comprehensive study of the Ninoy Aquino International Airport (NAIA)
and determine whether the present airport can cope with the traffic development up
to the year 2010.
Some time in 1993, six business leaders consisting of John Gokongwei, Andrew
Gotianun, Henry Sy, Sr., Lucio Tan, George Ty and Alfonso Yuchengco met with then
President Fidel V. Ramos to explore the possibility of investing in the construction
and operation of a new international airport terminal. They formed the Asia’s
Emerging Dragon Corp. (AEDC) AEDC submitted an unsolicited proposal to the
Government through the DOTC/MIAA for the development of NAIA International
Passenger Terminal III (NAIA IPT III) under a build-operate-and-transfer
arrangement pursuant to RA 6957 as amended by RA 7718 (BOT Law).
On December 2, 1994, the DOTC issued Dept. Order No. 94-832 constituting the
Prequalification Bids and Awards Committee (PBAC) for the implementation of the
NAIA IPT III project.
On July 23, 1996, the PBAC issued PBAC Bulletin No. 2 inviting all bidders to a pre-
bid conference on July 29, 1996.
On August 16, 1996, the PBAC issued PBAC Bulletin No. 3 amending the Bid
Documents.
On September 20, 1996, the consortium composed of People’s Air Cargo
and Warehousing Co., Inc. (Paircargo), Phil. Air and Grounds Services, Inc.
(PAGS) and Security Bank Corp. (Security Bank) (collectively, Paircargo
Consortium) submitted their competitive proposal to the PBAC.
On September 23, 1996, the PBAC opened the first envelope containing the
prequalification documents of the Paircargo Consortium. On the following
day, September 24, 1996, the PBAC prequalified the Paircargo Consortium.
On September 26, 1996, AEDC informed the PBAC in writing of its
reservations as regards the Paircargo Consortium, which include:
a. The lack of corporate approvals and financial capability of PAIRCARGO;
b. The lack of corporate approvals and financial capability of PAGS;
c. The prohibition imposed by RA 337, as amended (the General Banking
Act) on the amount that Security Bank could legally invest in the project;
d. The inclusion of Siemens as a contractor of the PAIRCARGO Joint
Venture, for prequalification purposes; and
e. The appointment of Lufthansa as the facility operator, in view of the
Philippine requirement in the operation of a public utility.
The PBAC gave its reply on October 2, 1996, informing AEDC that it had
considered the issues raised by the latter, and that based on the
documents submitted by Paircargo and the established prequalification
criteria, the PBAC had found that the challenger, Paircargo, had
prequalified to undertake the project. The Secretary of the DOTC approved
the finding of the PBAC.
The PBAC then proceeded with the opening of the second envelope of the Paircargo
Consortium which contained its Technical Proposal.
On October 7, 1996, AEDC again manifested its objections and requested that it be
furnished with excerpts of the PBAC meeting and the accompanying technical
evaluation report where each of the issues they raised were addressed.
On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and
the Paircargo Consortium containing their respective financial proposals.
Thus, the PBAC formally informed AEDC that it had accepted the price proposal
submitted by the Paircargo Consortium, and gave AEDC 30 working days or until
November 28, 1996 within which to match the said bid, otherwise, the project
would be awarded to Paircargo.
As AEDC failed to match the proposal within the 30-day period, then DOTC
Secretary Amado Lagdameo, on December 11, 1996, issued a notice to
Paircargo Consortium regarding AEDC’s failure to match the proposal.
On February 27, 1997, Paircargo Consortium incorporated into Philippine
International Airport Terminals Co., Inc. (PIATCO).
AEDC subsequently protested the alleged undue preference given to
PIATCO and reiterated its objections as regards the prequalification of
PIATCO.
On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a
Petition for Declaration of Nullity of the Proceedings, Mandamus and
Injunction against the Secretary of the DOTC, the Chairman of the PBAC,
the voting members of the PBAC and Pantaleon D. Alvarez, in his capacity
as Chairman of the PBAC Technical Committee.
On July 9, 1997, the DOTC issued the notice of award for the project to
PIATCO.
On July 12, 1997, the Government, granted PIATCO the franchise to
operate and maintain the Ninoy Aquino International Airport Passenger
Terminal III” (1997 Concession Agreement) during the concession period
and to collect the fees, rentals and other charges in accordance with the
rates or schedules stipulated in the 1997 Concession Agreement.
Concession period shall be for twenty-five (25) years commencing from the
in-service date, and may be renewed at the option of the Government for a
period not exceeding twenty-five (25) years. At the end of the concession
period, PIATCO shall transfer the development facility to MIAA.
On November 26, 1998, the Government and PIATCO signed an Amended
and Restated Concession Agreement (ARCA).
Subsequently, the Government and PIATCO signed three Supplements to the ARCA.
I and III.
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Meanwhile, the MIAA which is charged with the maintenance and operation of the
NAIA Terminals I and II, had existing concession contracts with various service
providers to offer international airline airport services, such as in-flight catering,
passenger handling, ramp and ground support, aircraft maintenance and provisions,
cargo handling and warehousing, and other services, to several international airlines
at the NAIA.
On September 17, 2002, the workers of the international airline service
providers, claiming that they stand to lose their employment upon the
implementation of the questioned agreements, filed before this Court a
petition for prohibition to enjoin the enforcement of said agreements.
On October 15, 2002, the service providers, joining the cause of the
petitioning workers, filed a motion for intervention and a petition-in-
intervention.
On October 24, 2002, Congressmen Salacnib Baterina, Clavel Martinez and
Constantino Jaraula filed a similar petition with this Court.
On November 6, 2002, several employees of the MIAA likewise filed a
petition assailing the legality of the various agreements.
On December 11, 2002. another group of Congressmen moved to intervene
in the case as Respondents-Intervenors.
During the pendency of the case before this Court, President Gloria
Macapagal Arroyo, on November 29, 2002, in her speech at the 2002
Golden Shell Export Awards at Malacañang Palace, stated that she will not
“honor (PIATCO) contracts which the Executive Branch’s legal offices have
concluded (as) null and void.”
Respondent PIATCO filed its Comments to the present petitions on
November 7 and 27, 2002.
In their consolidated Memorandum, the Office of the Solicitor General and
the Office of the Government Corporate Counsel prayed that the present
petitions be given due course and that judgment be rendered declaring the
1997 Concession Agreement, the ARCA and the Supplements thereto void
for being contrary to the Constitution, the BOT Law and its Implementing
Rules and Regulations.
On March 6, 2003, respondent PIATCO informed the Court that on March 4,
2003 PIATCO commenced arbitration proceedings before the International
Chamber of Commerce, International
Issues/Ratio:
I. Procedural Issue
A. WON Petitioners’ have legal standing to file the present Petitions
Yes.
a. G.R. Nos. 155001 and 155661
Individual petitioners are employees of various service providers having separate
concession contracts with MIAA and continuing service agreements with various
international airlines to provide in-flight catering, passenger handling, ramp and
ground support, aircraft maintenance and provisions, cargo handling and
warehousing and other services. Also included as petitioners are labor unions
MIASCOR Workers Union-National Labor Union and Philippine Airlines Employees
Association. These petitioners filed the instant action for prohibition as taxpayers
and as parties whose rights and interests stand to be violated by the
implementation of the PIATCO Contracts.
In G.R. No. 155661, petitioners constitute employees of MIAA and Samahang
Manggagawa sa Paliparan ng Pilipinas - a legitimate labor union and accredited as
the sole and exclusive bargaining agent of all the employees in MIAA. They filed the
petition as taxpayers and persons who have a legitimate interest to protect in the
implementation of the PIATCO Contracts.
We hold that petitioners have the requisite standing. In the above-
mentioned cases, petitioners have a direct and substantial interest to
protect by reason of the implementation of the PIATCO Contracts. They
stand to lose their source of livelihood, a property right which is zealously
protected by the Constitution. Moreover, subsisting concession agreements
between MIAA and petitioners-intervenors and service contracts between
international airlines and petitioners-intervenors stand to be nullified or
terminated by the operation of the NAIA IPT III under the PIATCO
Contracts.
b. G.R. No. 155547
In G.R. No. 155547, petitioners filed the petition for prohibition as members of the
House of Representatives, citizens and taxpayers. They allege that as members of
the House of Representatives, they are especially interested in the PIATCO
Contracts, because the contracts compel the Government and/or the House of
Representatives to appropriate funds necessary to comply with the provisions
therein
Although we are not unmindful of the cases of Imus Electric Co. v. Municipality of
Imus and Gonzales v. Raquiza, wherein this Court held that appropriation must
be made only on amounts immediately demandable, public interest
demands that we take a more liberal view in determining whether the
petitioners suing as legislators, taxpayers and citizens have locus standi to
file the instant petition. In Kilosbayan, Inc. v. Guingona, this Court held
“[i]n line with the liberal policy of this Court on locus standi, ordinary
taxpayers, members of Congress, and even association of planters, and
non-profit civic organizations were allowed to initiate and prosecute
actions before this Court to question the constitutionality or validity of
laws, acts, decisions, rulings, or orders of various government agencies or
instrumentalities.”
I. Procedural Issue
B. WON requirement of Hierarchy of Courts is a bar against SC jurisdiction
No.
After a thorough study and careful evaluation of the issues involved, this
Court is of the view that the crux of the instant controversy involves
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significant legal questions. The facts necessary to resolve these legal
questions are well established and, hence, need not be determined by a
trial court.
The rule on hierarchy of courts will not also prevent this Court from
assuming jurisdiction over the cases at bar. The said rule may be relaxed
when the redress desired cannot be obtained in the appropriate courts or
where exceptional and compelling circumstances justify availment of a
remedy within and calling for the exercise of this Court’s primary
jurisdiction It is easy to discern that exceptional circumstances exist in the cases
at bar that call for the relaxation of the rule. Both petitioners and respondents agree
that these cases are of transcendental importance as they involve the construction
and operation of the country’s premier international airport. Moreover, the crucial
issues submitted for resolution are of first impression and they entail the proper
legal interpretation of key provisions of the Constitution, the BOT Law and its
Implementing Rules and Regulations.
I Procedural Issue
C. WON the Commencement of Arbitration Proceedings by PIATCO is a bar
against SC Jurisdiction
No.
The Court is aware that arbitration proceedings pursuant to Section 10.02 of the
ARCA have been filed at the instance of respondent PIATCO. Again, we hold that the
arbitration step taken by PIATCO will not oust this Court of its jurisdiction over the
cases at bar.
In Del Monte Corporation-USA v. Court of Appeals, even after finding that
the arbitration clause in the Distributorship Agreement in question is valid
and the dispute between the parties is arbitrable, this Court affirmed the
trial court’s decision denying petitioner’s Motion to Suspend Proceedings
pursuant to the arbitration clause under the contract. In so ruling, this Court
held that as contracts produce legal effect between the parties, their assigns and
heirs, only the parties to the Distributorship Agreement are bound by its terms,
including the arbitration clause stipulated therein. This Court ruled that arbitration
proceedings could be called for but only with respect to the parties to the contract in
question. Considering that there are parties to the case who are neither parties to
the Distributorship Agreement nor heirs or assigns of the parties thereto, this Court,
citing its previous ruling in Salas, Jr. v. Laperal Realty Corporation, held that
to tolerate the splitting of proceedings by allowing arbitration as to some
of the parties on the one hand and trial for the others on the other hand
would, in effect, result in multiplicity of suits, duplicitous procedure and
unnecessary delay. Thus, we ruled that the interest of justice would best be
served if the trial court hears and adjudicates the case in a single and complete
proceeding.
It is established that petitioners in the present cases who have presented legitimate
interests in the resolution of the controversy are not parties to the PIATCO
Contracts. Accordingly, they cannot be bound by the arbitration clause
provided for in the ARCA and hence, cannot be compelled to submit to
arbitration proceedings.
II. Substantial Issue
A. WON PIATCO is a qualified bidder
No.
The Paircargo Consortium or any challenger to the unsolicited proposal of
AEDC has to show that it possesses the requisite financial capability to
undertake the project in the minimum amount of 30% of the project cost
through (i) proof of the ability to provide a minimum amount of equity to
the project, and (ii) a letter testimonial from reputable banks attesting that
the project proponent or members of the consortium are banking with
them, that they are in good financial standing, and that they have adequate
resources.
As the minimum project cost was estimated to be US$350,000,000.00 or roughly
P9,183,650,000.00, the Paircargo Consortium had to show to the satisfaction of the
PBAC that it had the ability to provide the minimum equity for the project in the
amount of at least P2,755,095,000.00.
The maximum amount that Security Bank could validly invest in the
Paircargo Consortium is only P528,525,656.55, representing 15% of its
entire net worth. The total net worth therefore of the Paircargo
Consortium, after considering the maximum amounts that may be validly
invested by each of its members is P558,384,871.55 or only 6.08% of the
project cost, an amount substantially less than the prescribed minimum
equity investment required for the project in the amount of
P2,755,095,000.00 or 30% of the project cost.
The purpose of pre-qualification in any public bidding is to determine, at
the earliest opportunity, the ability of the bidder to undertake the project.
Thus, with respect to the bidder’s financial capacity at the pre-qualification stage,
the law requires the government agency to examine and determine the ability of the
bidder to fund the entire cost of the project by considering the maximum amounts
that each bidder may invest in the project at the time of pre-qualification.
The PBAC should not be allowed to speculate on the future financial ability
of the bidder to undertake the project on the basis of documents
submitted. This would open doors to abuse and defeat the very purpose of
a public bidding. This is especially true in the case at bar which involves the
investment of billions of pesos by the project proponent. The relevant
government authority is duty-bound to ensure that the awardee of the
contract possesses the minimum required financial capability to complete
the project. To allow the PBAC to estimate the bidder’s future financial
capability would not secure the viability and integrity of the project.
Thus, if the maximum amount of equity that a bidder may invest in the project at
the time the bids are submitted falls short of the minimum amounts required to be
put up by the bidder, said bidder should be properly disqualified. Considering that at
the pre-qualification stage, the maximum amounts which the Paircargo Consortium
may invest in the project fell short of the minimum amounts prescribed by the
PBAC, we hold that Paircargo Consortium was not a qualified bidder. Thus the
award of the contract by the PBAC to the Paircargo Consortium, a
disqualified bidder, is null and void.
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While it would be proper at this juncture to end the resolution of the
instant controversy, as the legal effects of the disqualification of
respondent PIATCO’s predecessor would come into play and necessarily
result in the nullity of all the subsequent contracts entered by it in
pursuance of the project, the Court feels that it is necessary to discuss in
full the pressing issues of the present controversy for a complete resolution
thereof.
II Substantive Issue
B. Is the 1997 Concession Agreement valid?
No.
It is inherent in public biddings that there shall be a fair competition among the
bidders. The specifications in such biddings provide the common ground or basis for
the bidders. The specifications should, accordingly, operate equally or
indiscriminately upon all bidders.
The Court agrees with the contention of counsel for the plaintiffs that the
due execution of a contract after public bidding is a limitation upon the
right of the contracting parties to alter or amend it without another public
bidding, for otherwise what would a public bidding be good for if after the
execution of a contract after public bidding, the contracting parties may
alter or amend the contract, or even cancel it, at their will? Public biddings
are held for the protection of the public, and to give the public the best possible
advantages by means of open competition between the bidders. He who bids or
offers the best terms is awarded the contract subject of the bid, and it is obvious
that such protection and best possible advantages to the public will disappear if the
parties to a contract executed after public bidding may alter or amend it without
another previous public bidding.
 Modification on the Public Utility Revenues and Non-Public Utility Revenues
that may be collected by PIATCO
Under the 1997 Concession Agreement, with respect to (1) vehicular parking fee,
(2) porterage fee and (3) greeter/well wisher fee, all that MIAA can do is to require
PIATCO to explain and justify the fees set by PIATCO. In the draft Concession
Agreement, vehicular parking fee is subject to MIAA regulation and approval under
the second paragraph of Section 6.03 thereof while porterage fee is covered by the
first paragraph of the same provision. There is an obvious relaxation of the extent of
control and regulation by MIAA with respect to the particular fees that may be
charged by PIATCO.
Moreover, with respect to the third category of fees that may be imposed and
collected by PIATCO, i.e., new fees and charges that may be imposed by PIATCO
which have not been previously imposed or collected at the Ninoy Aquino
International Airport Passenger Terminal I, under Section 6.03 of the draft
Concession Agreement MIAA has reserved the right to regulate the same under the
same conditions that MIAA may regulate fees under the first category, i.e., periodic
adjustment of once every two years in accordance with a prescribed parametric
formula and effective only upon written approval by MIAA. However, under the 1997
Concession Agreement, adjustment of fees under the third category is not subject
to MIAA regulation.
With respect to terminal fees that may be charged by PIATCO, as shown earlier, this
was included within the category of “Public Utility Revenues” under the 1997
Concession Agreement. This classification is significant because under the 1997
Concession Agreement, “Public Utility Revenues” are subject to an “Interim
Adjustment” of fees upon the occurrence of certain extraordinary events specified in
the agreement. However, under the draft Concession Agreement, terminal fees are
not included in the types of fees that may be subject to “Interim Adjustment.”
Finally, under the 1997 Concession Agreement, “Public Utility Revenues,” except
terminal fees, are denominated in US Dollars while payments to the Government
are in Philippine Pesos. In the draft Concession Agreement, no such stipulation was
included. PIATCO is able to enjoy the benefits of depreciations of the Philippine
Peso, while being effectively insulated from the detrimental effects of exchange rate
fluctuations.
When taken as a whole, the changes under the 1997 Concession
Agreement with respect to reduction in the types of fees that are subject to
MIAA regulation and the relaxation of such regulation with respect to other
fees are significant amendments that substantially distinguish the draft
Concession Agreement from the 1997 Concession Agreement. The 1997
Concession Agreement, in this respect, clearly gives PIATCO more
favorable terms than what was available to other bidders at the time the
contract was bidded out. It is not very difficult to see that the changes in the
1997 Concession Agreement translate to direct and concrete financial
advantages for PIATCO which were not available at the time the contract
was offered for bidding. It cannot be denied that under the 1997
Concession Agreement only “Public Utility Revenues” are subject to MIAA
regulation. Adjustments of all other fees imposed and collected by PIATCO
are entirely within its control. Moreover, with respect to terminal fees,
under the 1997 Concession Agreement, the same is further subject to
“Interim Adjustments” not previously stipulated in the draft Concession
Agreement. Finally, the change in the currency stipulated for “Public Utility
Revenues” under the 1997 Concession Agreement, except terminal fees,
gives PIATCO an added benefit which was not available at the time of
bidding.
 Assumption by the Government of the liabilities of PIATCO in the event of
the latter’s
default
Under the portions of Section 4.04 in relation to the definition of
“Attendant Liabilities,” default by PIATCO of its loans used to finance the
NAIA IPT III project triggers the occurrence of certain events that leads to
the assumption by the Government of the liability for the loans. Only in one
instance may the Government escape the assumption of PIATCO’s liabilities, i.e.,
when the Government so elects and allows a qualified operator to take over as
Concessionaire. However, this circumstance is dependent on the existence and
availability of a qualified operator who is willing to take over the rights and
obligations of PIATCO under the contract, a circumstance that is not entirely within
the control of the Government.
Without going into the validity of this provision at this juncture, suffice it to state
that Section 4.04 of the 1997 Concession Agreement may be considered a form of
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security for the loans PIATCO has obtained to finance the project, an option that
was not made available in the draft Concession Agreement. Section 4.04 is an
important amendment to the 1997 Concession Agreement because it grants PIATCO
a financial advantage or benefit which was not previously made available during the
bidding process. This financial advantage is a significant modification that translates
to better terms and conditions for PIATCO.
We agree that it is not inconsistent with the rationale and purpose of the BOT Law
to allow the project proponent or the winning bidder to obtain financing for the
project, especially in this case which involves the construction, operation and
maintenance of the NAIA IPT III. Expectedly, compliance by the project proponent
of its undertakings therein would involve a substantial amount of investment. It is
therefore inevitable for the awardee of the contract to seek alternate sources of
funds to support the project. Be that as it may, this Court maintains that
amendments to the contract bidded upon should always conform to the
general policy on public bidding if such procedure is to be faithful to its real
nature and purpose. By its very nature and characteristic, competitive
public bidding aims to protect the public interest by giving the public the
best possible advantages through open competition. It has been held that
the three principles in public bidding are (1) the offer to the public; (2)
opportunity for competition; and (3) a basis for the exact comparison of
bids.
A regulation of the matter which excludes any of these factors destroys the
distinctive character of the system and thwarts the purpose of its
adoption.11[46] These are the basic parameters which every awardee of a
contract bidded out must conform to, requirements of financing and
borrowing notwithstanding. Thus, upon a concrete showing that, as in this
case, the contract signed by the government and the contract-awardee is
an entirely different contract from the contract bidded, courts should not
hesitate to strike down said contract in its entirety for violation of public
policy on public bidding. A strict adherence on the principles, rules and
regulations on public bidding must be sustained if only to preserve the
integrity and the faith of the general public on the procedure.
In view of the above discussion, the fact that the foregoing substantial
amendments were made on the 1997 Concession Agreement renders the
same null and void for being contrary to public policy. These amendments
convert the 1997 Concession Agreement to an entirely different agreement
from the contract bidded out or the draft Concession Agreement.
III WON there exists an illegal Direct Government Guarantee
Yes.
Article IV, Section 4.04(b) and (c), in relation to Article 1.06, of the 1997
Concession Agreement provides: Section 4.04 Assignment
….
(b) In the event Concessionaire should default in the payment of an
Attendant Liability, and the default resulted in the acceleration of the
payment due date of the Attendant Liability prior to its stated date of
11
maturity, the Unpaid Creditors and Concessionaire shall immediately inform
GRP in writing of such default. GRP shall within one hundred eighty (180)
days from receipt of the joint written notice of the Unpaid Creditors and
Concessionaire, either (i) take over the Development Facility and assume
the Attendant Liabilities, or (ii) allow the Unpaid Creditors, if qualified to be
substituted as concessionaire and operator of the Development facility in
accordance with the terms and conditions hereof, or designate a qualified operator
acceptable to GRP to operate the Development Facility, likewise under the terms and
conditions of this Agreement; Provided, that if at the end of the 180-day period GRP
shall not have served the Unpaid Creditors and Concessionaire written notice of its
choice, GRP shall be deemed to have elected to take over the Development Facility
with the concomitant assumption of Attendant Liabilities.….
It is clear from the above-quoted provisions that Government, in the event
that PIATCO defaults in its loan obligations, is obligated to pay “all
amounts recorded and from time to time outstanding from the books” of
PIATCO which the latter owes to its creditors, These amounts include “all
interests, penalties, associated fees, charges, surcharges, indemnities,
reimbursements and other related expenses.” This obligation of the
Government to pay PIATCO’s creditors upon PIATCO’s default would arise if
the Government opts to take over NAIA IPT III. It should be noted,
however, that even if the Government chooses the second option, which is
to allow PIATCO’s unpaid creditors operate NAIA IPT III, the Government
is still at a risk of being liable to PIATCO’s creditors should the latter be
unable to designate a qualified operator within the prescribed period. In
effect, whatever option the Government chooses to take in the event of
PIATCO’s failure to fulfill its loan obligations, the Government is still at a
risk of assuming PIATCO’s outstanding loans. This is due to the fact that the
Government would only be free from assuming PIATCO’s debts if the unpaid
creditors would be able to designate a qualified operator within the period provided
for in the contract. Thus, the Government’s assumption of liability is virtually
out of its control. The Government under the circumstances provided for in
the 1997 Concession Agreement is at the mercy of the existence,
availability and willingness of a qualified operator. The above contractual
provisions constitute a direct government guarantee which is prohibited by
law.
The ARCA also provides for a direct guarantee by the government to pay PIATCO’s
loans not only to its Senior Lenders but all other entities who provided PIATCO funds
or services upon PIATCO’s default in its loan obligation with its Senior Lenders. The
fact that the Government’s obligation to pay PIATCO’s lenders for the latter’s
obligation would only arise after the Senior Lenders fail to appoint a qualified
nominee or transferee does not detract from the fact that, should the conditions as
stated in the contract occur, the ARCA still obligates the Government to pay any and
all amounts owed by PIATCO to its lenders in connection with NAIA IPT III.
Worse, the conditions that would make the Government liable for PIATCO’s debts is
triggered by PIATCO’s own default of its loan obligations to its Senior Lenders to
which loan contracts the Government was never a party to. The Government was
not even given an option as to what course of action it should take in case PIATCO
defaulted in the payment of its senior loans. The Government, upon PIATCO’s
default, would be merely notified by the Senior Lenders of the same and it is the
Senior Lenders who are authorized to appoint a qualified nominee or transferee.
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The proscription against government guarantee in any form is one of the policy
considerations behind the BOT Law. Clearly, in the present case, the ARCA
obligates the Government to pay for all loans, advances and obligations arising out
of financial facilities extended to PIATCO for the implementation of the NAIA IPT III
project should PIATCO default in its loan obligations to its Senior Lenders and the
latter fails to appoint a qualified nominee or transferee. This in effect would
make the Government liable for PIATCO’s loans should the conditions as
set forth in the ARCA arise. This is a form of direct government guarantee.
IV. WON temporary takeover of business in circumstances of public
interest deserves compensation
No.
Article XII, Section 17 of the 1987 Constitution provides for the right of the State
in times of national emergency, and in the exercise of its police power, to
temporarily take over the operation of any business affected with public
interest.
Article V, Section 5.10 (c) of the 1997 Concession Agreement provides:
Section 5.10 Temporary Take-over of operations by GRP.
….
(c) In the event the development Facility or any part thereof and/or the
operations of Concessionaire or any part thereof, become the subject
matter of or be included in any notice, notification, or declaration
concerning or relating to acquisition, seizure or appropriation by GRP
in times of war or national emergency, GRP shall, by written
notice to Concessionaire, immediately take over the operations
of the Terminal and/or the Terminal Complex. During such
take over by GRP, the Concession Period shall be suspended;
provided, that upon termination of war, hostilities or national
emergency, the operations shall be returned to Concessionaire,
at which time, the Concession period shall commence to run
again. Concessionaire shall be entitled to reasonable
compensation for the duration of the temporary take over by
GRP …
PIATCO cannot, by mere contractual stipulation, contravene the
Constitutional provision on temporary government takeover and obligate
the government to pay “reasonable cost for the use of the Terminal and/or
Terminal Complex. Clearly, the State in effecting the temporary takeover is
exercising its police power. Police power is the “most essential, insistent, and
illimitable of powers.” Its exercise therefore must not be unreasonably hampered
nor its exercise be a source of obligation by the government in the absence of
damage due to arbitrariness of its exercise. Thus, requiring the government to
pay reasonable compensation for the reasonable use of the property
pursuant to the operation of the business contravenes the Constitution.
V WON there exists Monopolies that must be regulated
Yes.
Article XII, Section 19 of the 1987 Constitution states: The state shall regulate or
prohibit monopolies when the public interest so requires. No combinations in
restraint of trade or unfair competition shall be allowed. Clearly, monopolies are not
per se prohibited by the Constitution. Nonetheless, a determination must first be
made as to whether public interest requires a monopoly.
In the cases at bar, PIATCO, under the 1997 Concession Agreement and the
ARCA, is granted the “exclusive right to operate a commercial international
passenger terminal within the Island of Luzon” at the NAIA IPT III. This is
with the exception of already existing international airports in Luzon such as those
located in the Subic Bay Freeport Special Economic Zone (“SBFSEZ”), Clark Special
Economic Zone (“CSEZ”) and in Laoag City. As such, upon commencement of
PIATCO’s operation of NAIA IPT III, Terminals 1 and 2 of NAIA would cease to
function as international passenger terminals. This, however, does not prevent
MIAA to use Terminals 1 and 2 as domestic passenger terminals or in any other
manner as it may deem appropriate except those activities that would compete with
NAIA IPT III in the latter’s operation as an international passenger terminal. The
right granted to PIATCO to exclusively operate NAIA IPT III would be for a
period of twenty-five (25) years from the In-Service Date and renewable
for another twenty-five (25) years at the option of the government. Both
the 1997 Concession Agreement and the ARCA further provide that, in view
of the exclusive right granted to PIATCO, the concession contracts of the
service providers currently servicing Terminals 1 and 2 would no longer be
renewed and those concession contracts whose expiration are subsequent
to the In-Service Date would cease to be effective on the said date
The operation of an international passenger airport terminal is no doubt an
undertaking imbued with public interest. The constitution mandates that
monopoly which is not prohibited must be regulated. The right granted to the
public utility may be exclusive but the exercise of the right cannot run riot.
Thus, while PIATCO may be authorized to exclusively operate NAIA IPT III
as an international passenger terminal, the Government, through the MIAA,
has the right and the duty to ensure that it is done in accord with public
interest. PIATCO’s right to operate NAIA IPT III cannot also violate the
rights of third parties.
We hold that while the service providers presently operating at NAIA
Terminal 1 do not have an absolute right for the renewal or the extension
of their respective contracts, those contracts whose duration extends
beyond NAIA IPT III’s In-Service-Date should not be unduly prejudiced.
These contracts must be respected not just by the parties thereto but also
by third parties. PIATCO cannot, by law and certainly not by contract,
render a valid and binding contract nugatory.
Holding: The 1997 Concession Agreement, the Amended and Restated Concession
Agreement and the Supplements thereto are set aside for being null and void.
In sum, this Court rules that in view of the absence of the requisite
financial capacity of the Paircargo Consortium, predecessor of respondent
PIATCO, the award by the PBAC of the contract for the construction,
operation and maintenance of the NAIA IPT III is null and void.
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Further, considering that the 1997 Concession Agreement contains material

and substantial amendments, which amendments had the effect of
converting the 1997 Concession Agreement into an entirely different
agreement from the contract bidded upon, the 1997 Concession Agreement
is similarly null and void for being contrary to public policy.

The provisions under Sections 4.04(b) and (c) in relation to Section 1.06 of the
1997 Concession Agreement and Section 4.04(c) in relation to Section 1.06 of the
ARCA, which constitute a direct government guarantee expressly prohibited by,
among others, the BOT Law and its Implementing Rules and Regulations are also
null and void. The Supplements, being accessory contracts to the ARCA, are likewise
null and void.