1. Maceda vs. ERB Senator Maceda and Atty.
Lozano, in
192 SCRA 363
Sarmiento
Facts:
 Petroleum companies Caltex,Shell
and Petron filed separate
applications with the Energy
Regulatory Board for permission to
increase the wholesale prices of
petroleum products, and
meanwhile, for provisional
authority to increase temporarily
such prices pending further
proceedings.
 The Energy Regulatory Board, in a
joint order granted provisional
relief and authorizes said applicants
a provisional increase.
 The petitioners, Senator Ernesto
Maceda and Atty. Oliver Lozano
submits that the same was issued
without proper notice and hearing
in violation of Section 3, paragraph
(e), of Executive Order No. 172, and
has been issued with grave abuse of
discretion, tantamount to lack of
jurisdiction.
 Hence, this petition praying for
injunctive relief, to stop the Energy
Regulatory Board from
implementing its order mandating a
provisional increase in the prices of
petroleum and petroleum products.
Issue: Whether or not the Order of the
Energy Regulatory Board is valid?
Held:
YES.
questioning the lack of a hearing, have
overlooked the provisions of Section 8 of
Executive Order No. 172 which authorizes
the Board to grant provisional relief on
motion of a party in the case or on its own
initiative, without prejudice to a final
decision after hearing, should the Board
find that the documentary evidences
substantially support the provisional
order. Provided, That the Board shall
immediately schedule and conduct a
hearing thereon within thirty (30) days
thereafter, upon publication and notice to
all affected parties.: na
Section 3, paragraph (e) and Section 8 do
not negate each other, or otherwise,
operate exclusively of the other, in that the
Board may resort to one but not to both at
the same time. Section 3(e) outlines the
jurisdiction of the Board and the grounds
for which it may decree a price adjustment,
subject to the requirements of notice and
hearing. Pending that, however, it may
order, under Section 8, an authority to
increase provisionally, without need of a
hearing, subject to the final outcome of the
proceeding.
NOTES
NOTES:
Executive Order No. 172,
Section 8:
Authority to Grant Provisional Relief . —
The Board may, upon the filing of an
application, petition or complaint or at any
stage thereafter and without prior hearing,
on the basis of supporting papers duly
verified or authenticated, grant provisional
relief on motion of a party in the case or on
its own initiative, without prejudice to a
final decision after hearing, should the
Board find that the pleadings, together
with such affidavits, documents and other
evidence which may be submitted in
support of the motion, substantially
support the provisional order: Provided,
That the Board shall immediately schedule
and conduct a hearing thereon within
thirty (30) days thereafter, upon
publication and notice to all affected
parties.: nad
Section 37,par. E
(e) Whenever the Board has determined
that there is a shortage of any petroleum
product, or when public interest so
requires, it may take such steps as it may
consider necessary, including the
temporary adjustment of the levels of
prices of petroleum products and the
payment to the Oil Price Stabilization Fund
created under Presidential Decree No.
1956 by persons or entities engaged in the
petroleum industry of such amounts as
may be determined by the Board, which
will enable the importer to recover its cost
of importation.
RULING:
The Board Order authorizing the proceeds
generated by the increase to be deposited
to the OPSF is not an act of taxation. It is
authorized by Presidential Decree No.
1956, as amended by Executive Order No.
137, as follows:
SECTION 8. There is hereby created a Trust
Account in the books of accounts of the
Ministry of Energy to be designated as Oil
Price Stabilization Fund (OPSF) for the
purpose of minimizing frequent price
changes brought about by exchange rate
adjustments and/or changes in world
market prices of crude oil and imported
petroleum products. xxx
Evidently, authorities have been unable to
collect enough taxes necessary to replenish
the OPSF as provided by Presidential
Decree No. 1956, and hence, there was no
available alternative but to hike existing
prices.
The OPSF, as the Court held in the
aforecited CACP cases, must not be
understood to be a funding designed to
guarantee oil firms' profits although as a
subsidy, or a trust account, the Court has
no doubt that oil firms make money from
it. As we held there, however, the OPSF was
established precisely to protect the
consuming public from the erratic
movement of oil prices and to preclude oil
companies from taking advantage of
fluctuations occurring every so often. As a
buffer mechanism, it stabilizes domestic
prices by bringing about a uniform rate
rather than leaving pricing to the caprices
of the market.
In all likelihood, therefore, an oil hike
would have probably been imminent, with
or without trouble in the Gulf, although
trouble would have probably aggravated
it.:
2. ANAK MINDANAO PARTY-LIST
GROUP v. EXECUTIVE
SECRETARY, GR NO. 166052,
2007-08-29
Facts:
Petitioners Anak Mindanao Party-List
Group (AMIN) and Mamalo Descendants
Organization, Inc. (MDOI) assail the
constitutionality of Executive Order (E.O.)
Nos. 364 and 379, both issued in 2004, via
the present Petition for Certiorari and
Prohibition... with prayer for injunctive
relief.
E.O. No. 379, which amended E.O. No. 364 a
month later or on October 26, 2004... he
Court is thus left with the sole issue of the
legality of placing the Presidential
Commission[3] for the Urban Poor (PCUP)
under the supervision and control of the
DAR, and the National Commission on
Indigenous Peoples (NCIP) under the DAR
as an... attached agency.
placing the Presidential Commission[3] for
the Urban Poor (PCUP) under the
supervision and control of the DAR, and the
National Commission on Indigenous
Peoples (NCIP) under the DAR as an...
attached agency.
Petitioners find it impermissible for the
Executive to intrude into the domain of the
Legislature. They posit that an act of the
Executive which injures the institution of
Congress causes a derivative but
nonetheless substantial injury, which can
be questioned by a member of
Congress.[7] They add that to the extent
that the powers of Congress are impaired,
so is the power of each member thereof,
since his office confers a right to
participate in the exercise of the powers of
that institution.[8]
Indeed, a member of the House of
Representatives has standing to maintain
inviolate the prerogatives, powers and
privileges vested by the Constitution in his
office.[9]
As co-petitioner, MDOI alleges that it is
concerned with the negative impact of
NCIP's becoming an attached agency of the
DAR on the processing of ancestral domain
claims. It fears that transferring the NCIP to
the DAR would affect the processing of
ancestral domain claims filed... by its
members.
Locus standi or legal standing has been
defined as a personal and substantial
interest in a case such that the party has
sustained or will sustain direct injury as a
result of the governmental act that is being
challenged. The gist of the question of
standing is whether a... party alleges such
personal stake in the outcome of the
controversy as to assure that concrete
adverseness which sharpens the
presentation of issues upon which the
court depends for illumination of difficult
constitutional questions.
Moreover, MDOI raises no issue of
transcendental importance to justify a
relaxation of the rule on legal standing. To
be accorded standing on the ground of
transcendental importance, Senate of the
Philippines v. Ermita[17] requires that the
following... elements must be established:
(1) the public character of the funds or
other assets involved in the case, (2) the
presence of a clear case of disregard of a
constitutional or statutory prohibition by
the public respondent agency or
instrumentality of government, and (3) the
lack... of any other party with a more direct
and specific interest in raising the
questions being raised. The presence of
these elements MDOI failed to establish,
much less allege.
AMIN contends that since the DAR, PCUP
and NCIP were created by statutes,[20]
they can only be transformed, merged or
attached by statutes, not by mere executive
orders.
Issues:
placing the Presidential Commission[3] for
the Urban Poor (PCUP) under the
supervision and control of the DAR, and the
National Commission on Indigenous
Peoples (NCIP) under the DAR as an...
attached agency.
Ruling:
placing the Presidential Commission[3] for
the Urban Poor (PCUP) under the
supervision and control of the DAR, and the
National Commission on Indigenous
Peoples (NCIP) under the DAR as an...
attached agency.
The Constitution confers, by express
provision, the power of control over
executive departments, bureaus and offices
in the President alone. And it lays down a
limitation on the legislative power.
The Constitution's express grant of the
power of control in the President justifies
an executive action to carry out
reorganization measures under a broad
authority of law.[26]
T... he Administrative Code of 1987 is one
such law:[30]
SEC. 31. Continuing Authority of the
President to Reorganize his Office.- The
President, subject to the policy in the
Executive Office and in order to achieve
simplicity, economy and efficiency, shall
have continuing authority to reorganize
the... administrative structure of the Office
of the President. For this purpose, he may
take any of the following actions:
(1) Restructure the internal organization of
the Office of the President Proper,
including the immediate Offices, the
Presidential Special Assistants/Advisers
System and the Common Staff Support
System, by abolishing, consolidating, or
merging units thereof or transferring...
functions from one unit to another;
(2) Transfer any function under the Office
of the President to any other Department
or Agency as well as transfer functions to
the Office of the President from other
Departments and Agencies; and
(3) Transfer any agency under the Office of
the President to any other department or
agency as well as transfer agencies to the
Office of the President from other
departments or agencies. [31]
A law has in its favor the presumption of
constitutionality. For it to be nullified, it
must be shown that there is a clear and
unequivocal breach of the Constitution.
The ground for nullity must be clear and
beyond reasonable doubt.[52] Any
reasonable... doubt should, following the
universal rule of legal hermeneutics, be
resolved in favor of the constitutionality of
a law.[53]
In the present case, AMIN glaringly failed
to show how the reorganization by
executive fiat would hamper the exercise of
citizen's rights and privileges.
Finally, a word on the last ground
proffered for declaring the
unconstitutionality of the assailed
issuances â "€ that they violate Section 16,
Article XIII of the Constitution[57] on the
people's right to participate in decision-
making through adequate... consultation
mechanisms.
The framers of the Constitution recognized
that the consultation mechanisms were
already operating without the State's
action by law, such that the role of the State
would be mere facilitation, not necessarily
creation of these consultation mechanisms.
The State provides the... support, but
eventually it is the people, properly
organized in their associations, who can
assert the right and pursue the objective.
Penalty for failure on the part of the
government to consult could only be
reflected in the ballot box and would not
nullify government... action.[58]
Principles:
placing the Presidential Commission[3] for
the Urban Poor (PCUP) under the
supervision and control of the DAR, and the
National Commission on Indigenous
Peoples (NCIP) under the DAR as an...
attached agency.
3. UP vs DIZON (G.R. No. 171182;
August 23, 2012)
FACTS: University of the Philippines (UP)
entered into a General Construction
Agreement with respondent Stern Builders
Corporation (Stern Builders) for the
construction and renovation of the
buildings in the campus of the UP in
Los Bas. UP was able to pay its first and
second billing. However, the third billing
worth P273,729.47 was not paid due to its
disallowance by the Commission on Audit
(COA). Thus, Stern Builders sued the UP to
collect the unpaid balance.
On November 28, 2001, the RTC rendered
its decision ordering UP to pay Stern
Builders. Then on January 16, 2002, the UP
filed its motion for reconsideration. The
RTC denied the motion. The denial of the
said motion was served upon
Atty. Felimon Nolasco (Atty.Nolasco) of the
UPLB Legal Office on May 17, 2002.
Notably, Atty. Nolasco was not the counsel
of record of the UP but the OLS inDiliman,
Quezon City.
Thereafter, the UP filed a notice of appeal
on June 3, 2002. However, the RTC denied
due course to the notice of appeal for
having been filed out of time. On October 4,
2002, upon motion of Stern Builders, the
RTC issued the writ of execution.
On appeal, both the CA and the High Court
denied UPs petition. The denial became
final and executory. Hence, Stern Builders
filed in the RTC its motion for execution
despite their previous motion having
already been granted and despite the writ
of execution having already issued. On June
11, 2003, the RTC granted another motion
for execution filed on May 9, 2003
(although the RTC had already issued the
writ of execution on October 4, 2002).
Consequently, the sheriff served notices of
garnishment to the UPs depositary banks
and the RTC ordered the release of the
funds.
Aggrieved, UP elevated the matter to the
CA. The CA sustained the RTC. Hence, this
petition.
ISSUES:
I.  Was UP's funds validly garnished?
II. Has the UP's appeal dated June 3,
2002 been filed out of time?
HELD: UP's funds, being government
funds, are not subject to garnishment.
(Garnishment of public funds; suability
vs. liability of the State)
Despite its establishment as a body
corporate, the UP remains to be a
"chartered institution" performing a
legitimate government function.
Irrefragably, the UP is a government
instrumentality, performing the States
constitutional mandate of promoting
quality and accessible education. As a
government instrumentality, the UP
administers special funds sourced from the
fees and income enumerated under Act No.
1870 and Section 1 of Executive Order No.
714, and from the yearly appropriations, to
achieve the purposes laid down by Section
2 of Act 1870, as expanded in Republic Act
No. 9500. All the funds going into the
possession of the UP, including any interest
accruing from the deposit of such funds in
any banking institution, constitute a
"special trust fund," the disbursement of
which should always be aligned with the
UPs mission and purpose, and should
always be subject to auditing by the COA.
The funds of the UP are government funds
that are public in character. They include
the income accruing from the use of real
property ceded to the UP that may be spent
only for the attainment of its institutional
objectives.
A marked distinction exists between
suability of the State and its liability. As the
Court succinctly stated in Municipality of
San Fernando, La Union v. Firme: A
distinction should first be made between
suability and liability. "Suability depends
on the consent of the state to be sued,
liability on the applicable law and the
established facts. The circumstance that a
state is suable does not necessarily mean
that it is liable; on the other hand, it can
never be held liable if it does not first
consent to be sued. Liability is not
conceded by the mere fact that the state
has allowed itself to be sued. When the
state does waive its sovereign immunity, it
is only giving the plaintiff the chance to
prove, if it can, that the defendant is liable.
The Constitution strictly mandated that "no
money shall be paid out of the Treasury
except in pursuance of an appropriation
made by law." The execution of the
monetary judgment against the UP was
within the primary jurisdiction of the COA.
It was of no moment that a final and
executory decision already validated the
claim against the UP.
HELD: The period of appeal did not start
without effective service of decision
upon counsel of record. (The doctrine of
immutability of a final judgment;
service of judgments; fresh-period rule;
computation of time)
At stake in the UPs plea for equity was the
return of the amount of P16,370,191.74
illegally garnished from its trust funds.
Obstructing the plea is the finality of the
judgment based on the supposed tardiness
of UPs appeal, which the RTC declared on
September 26, 2002. It is true that a
decision that has attained finality becomes
immutable and unalterable, and cannot be
modified in any respect, even if the
modification is meant to correct erroneous
conclusions of fact and law, and whether
the modification is made by the court that
rendered it or by this Court as the highest
court of the land. But the doctrine of
immutability of a final judgment has not
been absolute, and has admitted several
exceptions, among them: (a) the correction
of clerical errors; (b) the so-called nunc pro
tunc entries that cause no prejudice to any
party; (c) void judgments; and (d)
whenever circumstances transpire after
the finality of the decision that render its
execution unjust and inequitable. We rule
that the UPs plea for equity warrants the
Courts exercise of the exceptional power to
disregard the declaration of finality of the
judgment of the RTC for being in clear
violation of the UPs right to due process.
Firstly, the service of the denial of the
motion for reconsideration upon Atty.
Nolasco of the UPLB Legal Office was
invalid and ineffectual because he was
admittedly not the counsel of record of the
UP. Verily, the service of the denial of the
motion for reconsideration could only be
validly made upon the OLS in Diliman, and
no other. It is settled that where a party
has appeared by counsel, service must be
made upon such counsel. This is clear
enough from Section 2, second paragraph,
of Rule 13, Rules of Court, which explicitly
states that: "If any party has appeared by
counsel, service upon him shall be made
upon his counsel or one of them, unless
service upon the party himself is ordered
by the court. Where one counsel appears
for several parties, he shall only be entitled
to one copy of any paper served upon him
by the opposite side."
Secondly, even assuming that the service
upon Atty. Nolasco was valid and effective,
such that the remaining period for the UP
to take a timely appeal would end by May
23, 2002, it would still not be correct to
find that the judgment of the RTC became
final and immutable thereafter due to the
notice of appeal being filed too late on June
3, 2002. In so declaring the judgment of the
RTC as final against the UP, the CA and the
RTC applied the rule contained in the
second paragraph of Section 3, Rule 41 of
the Rules of Court to the effect that the
filing of a motion for reconsideration
interrupted the running of the period for
filing the appeal; and that the period
resumed upon notice of the denial of the
motion for reconsideration. For that
reason, the CA and the RTC might not be
taken to task for strictly adhering to the
rule then prevailing.
However, equity calls for the retroactive
application in the UPs favor of the fresh-
period rule that the Court first announced
in mid-September of 2005 through its
ruling in Neypes v. Court of Appeals, viz:
"to standardize the appeal periods
provided in the Rules and to afford litigants
fair opportunity to appeal their cases, the
Court deems it practical to allow a fresh
period of 15 days within which to file the
notice of appeal in the Regional Trial Court,
counted from receipt of the order
dismissing a motion for a new trial or
motion for reconsideration." The
retroactive application of the fresh-period
rule, a procedural law that aims "to
regiment or make the appeal period
uniform, to be counted from receipt of the
order denying the motion for new trial,
motion for reconsideration (whether full or
partial) or any final order or resolution," is
impervious to any serious challenge. This is
because there are no vested rights in rules
of procedure.
Consequently, even if the reckoning started
from May 17, 2002, when
Atty. Nolasco received the denial, the UPs
filing on June 3, 2002 of the notice of
appeal was not tardy within the context of
the fresh-period rule. For the UP, the fresh
period of 15-days counted from service of
the denial of the motion for
reconsideration would end on June 1,
2002, which was a Saturday. Hence, the UP
had until the next working day, or June 3,
2002, a Monday, within which to appeal,
conformably with Section 1 of Rule 22,
Rules of Court, which holds that: "If the last
day of the period, as thus computed, falls
on a Saturday, a Sunday, or a legal holiday
in the place where the court sits, the time
shall not run until the next working
day. GRANTED.
4. REPUBLIC v. CITY OF
PARAÑAQUE, GR No. 191109,
2012-07-18
Facts:
The Public Estates Authority (PEA) is a
government corporation created by virtue
of Presidential Decree (P.D.) No. 1084
(Creating the Public Estates Authority,
Defining its Powers and Functions,
Providing Funds Therefor and For Other
Purposes) which took... effect on February
4, 1977 to provide a coordinated,
economical and efficient reclamation of
lands, and the administration and
operation of lands belonging to, managed
and/or operated by, the government with
the object of maximizing their utilization
and hastening their... development
consistent with public interest.
On February 14, 1979, by virtue of
Executive Order (E.O.) No. 525 issued by
then President Ferdinand Marcos, PEA was
designated as the agency primarily
responsible for integrating, directing and
coordinating all reclamation projects for
and on behalf of the National
Government.
On October 26, 2004, then President Gloria
Macapagal-Arroyo issued E.O. No. 380
transforming PEA into PRA, which shall
perform all the powers and functions of the
PEA relating to reclamation activities.
By virtue of its mandate, PRA reclaimed
several portions of the foreshore and
offshore areas of Manila Bay, including
those located in Parañ aque City, and was
issued Original Certificates of Title (OCT
Nos. 180, 202, 206, 207, 289, 557, and 559)
and Transfer Certificates of
Title (TCT Nos. 104628, 7312, 7309, 7311,
9685, and 9686) over the reclaimed lands.
On February 19, 2003, then Parañ aque City
Treasurer Liberato M. Carabeo (Carabeo)
issued Warrants of Levy on PRA's
reclaimed properties (Central Business
Park and Barangay San Dionisio) located in
Parañ aque City based on the assessment
for delinquent real property... taxes made
by then Parañ aque City Assessor Soledad
Medina Cue for tax years 2001 and 2002.
On January 8, 2010, the RTC rendered its
decision dismissing PRA's petition. In
ruling that PRA was not exempt from
payment of real property taxes, the RTC
reasoned out that it was a GOCC under
Section 3 of P.D. No. 1084. It was organized
as a stock corporation because it had an...
authorized capital stock divided into no par
value shares. In fact, PRA admitted its
corporate personality and that said
properties were registered in its name as
shown by the certificates of title. Therefore,
as a GOCC, local tax exemption is
withdrawn by virtue of Section 193... of
Republic Act (R.A.) No. 7160 [Local
Government Code (LGC)] which was the
prevailing law in 2001 and 2002 with
respect to real property taxation. The RTC
also ruled that the tax exemption claimed
by PRA under E.O. No. 654 had already
been expressly repealed by R.A. No.
7160 and that PRA failed to comply with
the procedural requirements in Section
206 thereof.
PRA asserts that it is not a GOCC under
Section 2(13) of the Introductory
Provisions of the Administrative Code.
Neither is it a GOCC under Section 16,
Article XII of the 1987 Constitution because
it is not required to meet the test of
economic viability. Instead, PRA is a...
government instrumentality vested with
corporate powers and performing an
essential public service pursuant to Section
2(10) of the Introductory Provisions of the
Administrative Code. Although it has a
capital stock divided into shares, it is not
authorized to distribute... dividends and
allotment of surplus and profits to its
stockholders. Therefore, it may not be
classified as a stock corporation because it
lacks the second requisite of a stock
corporation which is the distribution of
dividends and allotment of surplus and
profits to the... stockholders.
It insists that it may not be classified as a
non-stock corporation because it has no
members and it is not organized for
charitable, religious, educational,
professional, cultural, recreational,
fraternal, literary, scientific, social, civil
service, or similar purposes, like... trade,
industry, agriculture and like chambers as
provided in Section 88 of the Corporation
Code.
Moreover, PRA points out that it was not
created to compete in the market place as
there was no competing reclamation
company operated by the private sector.
Also, while PRA is vested with corporate
powers under P.D. No. 1084, such
circumstance does not make it a
corporation but... merely an incorporated
instrumentality and that the mere fact that
an incorporated instrumentality of the
National Government holds title to real
property does not make said
instrumentality a GOCC. Section 48,
Chapter 12, Book I of the Administrative
Code of 1987 recognizes a... scenario where
a piece of land owned by the Republic is
titled in the name of a department, agency
or instrumentality.
Thus, PRA insists that, as an incorporated
instrumentality of the National
Government, it is exempt from payment of
real property tax except when the
beneficial use of the real property is
granted to a taxable person. PRA claims
that based on Section 133(o) of the LGC,
local... governments cannot tax the national
government which delegate to local
governments the power to tax.
It explains that reclaimed lands are part of
the public domain, owned by the State,
thus, exempt from the payment of real
estate taxes. Reclaimed lands retain their
inherent potential as areas for public use
or public service. While the subject
reclaimed lands are still in its... hands,
these lands remain public lands and form
part of the public domain. Hence, the
assessment of real property taxes made on
said lands, as well as the levy thereon, and
the public sale thereof on April 7, 2003,
including the issuance of the certificates of
sale in favor of... the respondent Parañ aque
City, are invalid and of no force and effect.
Issues:
Whether the Trial Court erred when it
failed to consider that reclaimed lands are
part of the public domain.
THE TRIAL COURT GRAVELY ERRED IN
FAILING TO CONSIDER THAT RECLAIMED
LANDS ARE PART OF THE PUBLIC
DOMAIN AND, HENCE, EXEMPT FROM
REAL PROPERTY TAX.
Ruling:
The Court finds merit in the petition.
In the case at bench, PRA is not a GOCC
because it is neither a stock nor a non-
stock corporation. It cannot be considered
as a stock corporation because although it
has a capital stock divided into no par
value shares as provided in Section 7... of
P.D.
No. 1084, it is not authorized to distribute
dividends, surplus allotments or profits to
stockholders. There is no provision
whatsoever in P.D. No. 1084 or in any of
the subsequent executive issuances
pertaining to PRA, particularly, E.O. No.
525,... E.O.
No. 654... and EO No. 798... that authorizes
PRA to distribute dividends, surplus
allotments or profits to its stockholders.
PRA cannot be considered a non-stock
corporation either because it does not have
members. A non-stock corporation must
have members.
Moreover, it was not organized for any of
the purposes mentioned in Section 88 of
the Corporation Code. Specifically, it... was
created to manage all government
reclamation projects.
Likewise, it is worthy to mention Section
14, Chapter 4, Title I, Book III of the
Administrative Code of 1987, thus:
SEC 14. Power to Reserve Lands of the
Public and Private Dominion of the
Government.-
(1) The President shall have the power to
reserve for settlement or public use, and
for specific public purposes, any of the
lands of the public domain, the use of
which is not otherwise directed by law. The
reserved land shall thereafter remain
subject to the specific public... purpose
indicated until otherwise provided by law
or proclamation.
Reclaimed lands such as the subject lands
in issue are reserved lands for public use.
They are properties of public dominion.
The ownership of such lands remains with
the State unless they are withdrawn by law
or presidential proclamation from public
use.
Under Section 2, Article XII of the 1987
Constitution, the foreshore and submerged
areas of Manila Bay are part of the "lands of
the public domain, waters x x x and other
natural resources" and consequently
"owned by the State." As such, foreshore
and submerged areas
"shall not be alienated," unless they are
classified as "agricultural lands" of the
public domain. The mere reclamation of
these areas by PEA does not convert these
inalienable natural resources of the State
into alienable or disposable lands of the
public domain. There must be... a law or
presidential proclamation officially
classifying these reclaimed lands as
alienable or disposable and open to
disposition or concession. Moreover, these
reclaimed lands cannot be classified as
alienable or disposable if the law has
reserved them for some public or... quasi-
public use.
As the Court has repeatedly ruled,
properties of public dominion are not
subject to execution or foreclosure sale.
Thus, the assessment, levy and foreclosure
made on the subject reclaimed lands by
respondent, as well as the issuances of
certificates of... title in favor of respondent,
are without basis.
Principles:
Two requisites must concur before one
may be classified as a stock corporation,
namely: (1) that it has capital stock divided
into shares; and (2) that it is authorized to
distribute dividends and allotments of
surplus and profits to its stockholders. If
only one... requisite is present, it cannot be
properly classified as a stock corporation.
As for non-stock corporations, they must
have members and must not distribute any
part of their income to said members.

5. PROSPERO A. PICHAY v. OFFICE
OF DEPUTY EXECUTIVE
SECRETARY FOR LEGAL AFFAIRS
INVESTIGATIVE, GR No. 196425,
2012-07-24
Facts:
On April 16, 2001, then President Gloria
Macapagal-Arroyo issued Executive Order
No. 12 (E.O. 12) creating the Presidential
Anti-Graft Commission (PAGC) and vesting
it with the power to investigate or hear
administrative cases or complaints for
possible graft and corruption,... among
others, against presidential appointees and
to submit its report and recommendations
to the President.
On November 15, 2010, President Benigno
Simeon Aquino III issued Executive Order
No. 13 (E.O. 13), abolishing the PAGC and
transferring its functions to the Office of
the Deputy Executive Secretary for Legal
Affairs (ODESLA), more particularly to its
newly-established
Investigative and Adjudicatory Division
(IAD).
On April 6, 2011, respondent Finance
Secretary Cesar V. Purisima filed before the
IAD-ODESLA a complaint affidavit[2] for
grave misconduct against petitioner
Prospero A. Pichay, Jr., Chairman of the
Board of Trustees of the Local Water
Utilities
Administration (LWUA), as well as the
incumbent members of the LWUA Board of
Trustees, namely, Renato Velasco, Susana
Dumlao Vargas, Bonifacio Mario M. Pena,
Sr. and Daniel Landingin, which arose from
the purchase by the LWUA of Four
Hundred Forty-Five Thousand Three
Hundred
Seventy Seven (445,377) shares of stock of
Express Savings Bank, Inc.
On April 14, 2011, petitioner received an
Order[3] signed by Executive Secretary
Paquito N. Ochoa, Jr. requiring him and his
co-respondents to submit their respective
written explanations under oath. In
compliance therewith, petitioner filed a
Motion to
Dismiss Ex Abundante Ad Cautelam
manifesting that a case involving the same
transaction and charge of grave
misconduct entitled, "Rustico B. Tutol, et al.
v. Prospero Pichay, et al.", and docketed as
OMB-C-A-10-0426-I, is already pending
before the Office of the
Ombudsman.
Now alleging that no other plain, speedy
and adequate remedy is available to him in
the ordinary course of law, petitioner has
resorted to the instant petition for
certiorari and prohibition
Issues:
I. E.O. 13 IS UNCONSTITUTIONAL FOR
USURPING THE POWER OF THE
LEGISLATURE TO CREATE A PUBLIC
OFFICE.
II. E.O. 13 IS UNCONSTITUTIONAL FOR
USURPING THE POWER OF THE
LEGISLATURE TO APPROPRIATE FUNDS.
III. E.O. 13 IS UNCONSTITUTIONAL FOR
USURPING THE POWER OF CONGRESS TO
DELEGATE QUASI-JUDICIAL POWERS TO
ADMINISTRATIVE AGENCIES.
IV. E.O. 13 IS UNCONSTITUTIONAL FOR
ENCROACHING UPON THE POWERS OF
THE OMBUDSMAN.
V. E.O. 13 IS UNCONSTITUTIONAL FOR
VIOLATING THE GUARANTEE OF DUE
PROCESS.
VI. E.O. 13 IS UNCONSTITUTIONAL FOR
VIOLATING THE EQUAL PROTECTION
CLAUSE.
In assailing the constitutionality of E.O. 13,
petitioner asseverates that the President is
not authorized under any existing law to
create the Investigative and Adjudicatory
Division, Office of the Deputy Executive
Secretary for Legal Affairs (IAD-ODESLA)
and that by creating a... new, additional and
distinct office tasked with quasi-judicial
functions, the President has not only
usurped the powers of congress to create a
public office, appropriate funds and
delegate quasi-judicial functions to
administrative agencies but has also
encroached upon the... powers of the
Ombudsman.
Petitioner, however, goes on to assert that
the President went beyond the authority
granted by E.O. 292 for him to reorganize
the executive department since his
issuance of E.O. 13 did not merely involve
the abolition of an office but the creation of
one as well.
Petitioner next avers that the IAD-ODESLA
was illegally vested with judicial power
which is reserved to the Judicial
Department and, by way of exception
through an express grant by the legislature,
to administrative agencies. He points out
that the name Investigative and
Adjudicatory Division is proof itself that
the IAD-ODESLA wields quasi-judicial
power.
Ruling:
The President has Continuing Authority...
to Reorganize the Executive Department...
under E.O. 292.
Section 31 of Executive Order No. 292 (E.O.
292), otherwise known as the
Administrative Code of 1987, vests in the
President the continuing authority to
reorganize the offices under him in order
to achieve simplicity, economy and
efficiency. E.O. 292 sanctions the
following... actions undertaken for such
purpose:
(1) Restructure the internal organization of
the Office of the President Proper,
including the immediate Offices, the
Presidential Special Assistants/Advisers
System and the Common Staff Support
System, by abolishing, consolidating, or
merging units thereof or... transferring
functions from one unit to another;
(2) Transfer any function under the Office
of the President to any other Department
or Agency as well as transfer functions to
the Office of the President from other
Departments and Agencies; and
(3) Transfer any agency under the Office of
the President to any other Department or
Agency as well as transfer agencies to the
Office of the President from other
departments or agencies.[4]
Clearly, the abolition of the PAGC and the
transfer of its functions to a division
specially created within the ODESLA is
properly within the prerogative of the
President under his continuing "delegated
legislative authority to reorganize" his own
office pursuant to E.O.
292.
Generally, this authority to implement
organizational changes is limited to
transferring either an office or a function
from the Office of the President to another
Department or Agency, and the other way
around.[7] Only Section 31(1) gives the
President a... virtual freehand in dealing
with the internal structure of the Office of
the President Proper by allowing him to
take actions as extreme as abolition,
consolidation or merger of units, apart
from the less drastic move of transferring
functions and offices from one unit to...
another.
The Reorganization Did not Entail... the
Creation of a New, Separate and
Distinct Office.
The abolition of the PAGC did not require
the creation of a new, additional and
distinct office as the duties and functions
that pertained to the defunct anti-graft
body were simply transferred to the
ODESLA, which is an existing office within
the Office of the President
Proper. The reorganization required no
more than a mere alteration of the
administrative structure of the ODESLA
through the establishment of a third
division the Investigative and Adjudicatory
Division through which ODESLA could take
on the additional functions it has... been
tasked to discharge under E.O. 13.
The Reorganization was
Pursued in Good Faith. 
A valid reorganization must not only be
exercised through legitimate authority but
must also be pursued in good faith. A
reorganization is said to be carried out in
good faith if it is done for purposes of
economy and efficiency.[13] It appears in
this case... that the streamlining of
functions within the Office of the President
Proper was pursued with such purposes in
mind.  In its Whereas clauses, E.O. 13 cites
as bases for the reorganization the policy
dictates of eradicating corruption in the
government and... promoting economy and
efficiency in the bureaucracy. Indeed, the
economical effects of the reorganization is
shown by the fact that while Congress had
initially appropriated P22 Million for the
PAGC's operation in the 2010 annual
budget,[14] no separate... or added funding
of such a considerable amount was ever
required after the transfer of the PAGC
functions to the IAD-ODESLA.
Apparently, the budgetary requirements
that the IAD-ODESLA needed to discharge
its functions and maintain its personnel
would be sourced from the following year's
appropriation for the President's Offices
under the General Appropriations Act of
2011.[15]
Petitioner asseverates, however, that since
Congress did not indicate the manner by
which the appropriation for the Office of
the President was to be distributed, taking
therefrom the operational funds of the IAD-
ODESLA would amount to an illegal
appropriation by the President.
The contention is without legal basis.
There is no usurpation of the legislative...
power to appropriate public funds.
In the chief executive dwell the powers to
run government. Placed upon him is the
power to recommend the budget necessary
for the operation of the Government,[16]
which implies that he has the necessary
authority to evaluate and determine the
structure that... each government agency in
the executive department would need to
operate in the most economical and
efficient manner.[17] Hence, the express
recognition under Section 78 of R.A. 9970
or the General Appropriations Act of 2010
of the President's authority to
"direct changes in the organizational units
or key positions in any department or
agency." The aforecited provision, often
and consistently included in the general
appropriations laws, recognizes the extent
of the President's power to reorganize the
executive offices and... agencies under him,
which is, "even to the extent of modifying
and realigning appropriations for that
purpose."[18]
And to further enable the President to run
the affairs of the executive department, he
is likewise given constitutional authority to
augment any item in the General
Appropriations Law using the savings in
other items of the appropriation for his
office.[19]
In fact, he is explicitly allowed by law to
transfer any fund appropriated for the
different departments, bureaus, offices and
agencies of the Executive Department
which is included in the General
Appropriations Act, to any program,
project or activity of any department,
bureau... or office included in the General
Appropriations Act or approved  after its
enactment.[20]
Thus, while there may be no specific
amount earmarked for the IADODESLA
from the total amount appropriated by
Congress in the annual budget for the
Office of the President, the necessary funds
for the IADODESLA may be properly
sourced from the President's own office
budget... without committing any illegal
appropriation.  After all, there is no
usurpation of the legislature's power to
appropriate funds when the President
simply allocates the existing funds
previously appropriated by Congress for
his office.
The IAD-ODESLA is a fact- finding... and
recommendatory body not vested... with
quasi- judicial powers.
while the term "adjudicatory" appears part
of its appellation, the IAD-ODESLA cannot
try and resolve cases, its authority being
limited to the conduct of investigations,
preparation of... reports and submission of
recommendations. E.O. 13 explicitly states
that the IAD-ODESLA shall "perform
powers, functions and duties xxx, of
PAGC."[22]
Under E.O. 12, the PAGC was given the
authority to "investigate or hear
administrative cases or complaints against
all presidential appointees in the
government"[23] and to "submit its report
and recommendations to the
President."[24]  The IAD-ODESLA is a fact-
finding and recommendatory body to the
President, not having the power to settle
controversies and adjudicate cases.
The President's authority to issue E.O. 13
and constitute the IAD ODESLA as his fact-
finding investigator cannot be doubted.
After all, as Chief Executive, he is granted
full control over the Executive Department
to ensure the enforcement of the laws.
Section 17, Article VII of... the Constitution
provides:
Section 17. The President shall have
control of all the executive departments,
bureaus and offices. He shall ensure that
the laws be faithfully executed.
The obligation to see to it that laws are
faithfully executed necessitates the
corresponding power in the President to
conduct investigations into the conduct of
officials and employees in the executive
department.[27]
The IAD-ODESLA does not encroach... upon
the powers and duties of the
Ombudsman.
The primary jurisdiction of the
Ombudsman to investigate and prosecute
cases refers to criminal cases cognizable by
the Sandiganbayan and not to
administrative cases. It is only in the
exercise of its primary jurisdiction that...
the Ombudsman may, at any time, take
over the investigation being conducted by
another investigatory agency. Section 15
(1) of R.A. No. 6770 or the Ombudsman Act
of 1989, empowers the Ombudsman to
(1) Investigate and prosecute on its own or
on complaint by any person, any act or
omission of any public officer or employee,
office or agency, when such act or omission
appears to be illegal, unjust, improper or
inefficient. It has primary jurisdiction
over... cases cognizable by the
Sandiganbayan and, in the exercise of its
primary jurisdiction, it may take over, at
any stage, from any investigatory agency of
government, the investigation of such
cases. (Emphasis supplied)
Since the case filed before the IAD-ODESLA
is an administrative disciplinary case for
grave misconduct, petitioner may not
invoke the primary jurisdiction of the
Ombudsman to prevent the IAD-ODESLA
from proceeding with its investigation. In
any event, the Ombudsman's authority... to
investigate both elective and appointive
officials in the government, extensive as it
may be, is by no means exclusive. It is
shared with other similarly authorized
government agencies.[28]
While the Ombudsman's function goes into
the determination of the existence of
probable cause and the adjudication of the
merits of a criminal accusation, the
investigative authority of the IAD-ODESLA
is limited to that of a fact-finding
investigator whose determinations and...
recommendations remain so until acted
upon by the President. As such, it commits
no usurpation of the Ombudsman's
constitutional duties.
Executive Order No. 13 Does Not
Violate Petitioner's Right to Due
Process and the Equal Protection... of the
Laws.
Presidential appointees come under the
direct disciplining authority of the
President. This proceeds from the well
settled principle that, in the absence of a
contrary law, the power to remove or to
discipline is lodged in the same authority
on which the power to appoint is... vested.
[32] Having the power to remove and/or
discipline presidential appointees, the
President has the corollary authority to
investigate such public officials and look
into their conduct in office.[33] Petitioner
is a presidential... appointee occupying the
high-level position of Chairman of the
LWUA. Necessarily, he comes under the
disciplinary jurisdiction of the President,
who is well within his right to order an
investigation into matters that require his
informed decision.
Also, contrary to petitioner's assertions, his
right to due process was not violated when
the IAD-ODESLA took cognizance of the
administrative complaint against him since
he was given sufficient opportunity to
oppose the formal complaint filed by
Secretary Purisima. In... administrative
proceedings, the filing of charges and
giving reasonable opportunity for the
person so charged to answer the
accusations against him constitute the
minimum requirements of due process,
[35] which simply means having the
opportunity to explain... one's side.[36]
Hence, as long as petitioner was given the
opportunity to explain his side and present
evidence, the requirements of due process
are satisfactorily complied with because
what the law abhors is  an absolute lack of
opportunity to be... heard.[37] The records
show that petitioner was issued an Order
requiring him to submit his written
explanation under oath with respect to the
charge of grave misconduct filed against
him. His own failure to submit his
explanation despite notice defeats his...
subsequent claim of denial of due process.
Finally, petitioner doubts that the IAD-
ODESLA can lawfully perform its duties as
an impartial tribunal, contending that both
the IAD-ODESLA and respondent Secretary
Purisima are connected to the President.
The mere suspicion of partiality will not
suffice to invalidate the... actions of the
IADODESLA. Mere allegation is not
equivalent to proof. Bias and partiality
cannot be presumed.[38] Petitioner must
present substantial proof to show that the
lAD-ODES LA had unjustifiably sided
against him in the conduct of the
investigation.
No such evidence has been presented as to
defeat the presumption of regularity m the
perfonnance of the fact-finding
investigator's duties. The assertion,
therefore, deserves scant consideration.
Every law has in its favor the presumption
of constitutionality, and to justify its
nullification, there must be a clear and
unequivocal breach of the Constitution, not
a doubtful and argumentative one.[39]
Petitioner has failed to discharge the
burden of... proving the illegality of E.O. 13,
which IS indubitably a valid exercise of the
President's continuing authority to
reorganize the Office of the President.
WHEREFORE, premises considered, the
petition is hereby DISMISSED.
Principles:
The equal protection of the laws is a...
guaranty against any form of undue
favoritism or hostility from the
government.[29] It is embraced under the
due process concept and simply requires
that, in the application of the law, "all
persons or things similarly situated should
be treated alike, both... as to rights
conferred and responsibilities
imposed."[30] The equal protection clause,
however, is not absolute but subject to
reasonable classification so that
aggrupations bearing substantial
distinctions may be treated differently
from each other.
The equal protection of the law clause is
against undue favor and individual or class
privilege, as well as hostile discrimination
or the oppression of inequality. It is not
intended to prohibit legislation which is
limited either in the object to which it is...
directed or by territory within which it is
to operate. It does not demand absolute
equality among residents; it merely
requires that all persons shall be treated
alike, under like circumstances and
conditions both as to privileges conferred
and liabilities enforced. The... equal
protection clause is not infringed by
legislation which applies only to those
persons falling within a specified class, if it
applies alike to all persons within such
class, and reasonable grounds exist for
making a distinction between those who
fall within such class and... those who do
not. (Emphasis supplied)
Substantial distinctions clearly exist
between elective officials and appointive
officials. The former occupy their office by
virtue of the mandate of the electorate.
They are elected to an office for a definite
term and may be removed therefrom only
upon... stringent conditions. On the other
hand, appointive officials hold their office
by virtue of their designation thereto by an
appointing authority. Some appointive
officials hold their office in a permanent
capacity and are entitled to security of
tenure while others serve... at the pleasure
of the appointing authority.
x       x      x      x
An election is the embodiment of the
popular will, perhaps the purest
expression of the sovereign power of the
people. It involves the choice or selection
of candidates to public office by popular
vote. Considering that elected officials are
put in office by their constituents... for a
definite term, x x x complete deference is
accorded to the will of the electorate that
they be served by such officials until the
end of the term for which they were
elected. In contrast, there is no such
expectation insofar as appointed officials
are concerned.
(Emphasis supplied)
6. SECURITIES v. INTERPORT
RESOURCES CORPORATION, GR
No. 135808, 2008-10-06
Facts:
This is a Petition for Review on Certiorari
under Rule 45 of the Rules of Court,
assailing the Decision,[1] dated 20 August
1998, rendered by the Court of Appeals in
C.A.-G.R. SP No. 37036, enjoining petitioner
Securities and
Exchange Commission (SEC) from taking
cognizance of or initiating any action
against the respondent corporation
Interport Resources Corporation (IRC) and
members of its board of directors,
respondents Manuel S. Recto, Rene S.
Villarica, Pelagio Ricalde, Antonio Reina,
Francisco
Anonuevo, Joseph Sy and Santiago
Tanchan, Jr., with respect to Sections 8, 30
and 36 of the Revised Securities Act.  In the
same Decision of the appellate court, all the
proceedings taken against the respondents,
including the assailed SEC Omnibus Orders
of 25 January 1995... and 30 March 1995,
were declared void.
On 6 August 1994, the Board of Directors
of IRC approved a Memorandum of
Agreement with Ganda Holdings Berhad
(GHB).  Under the Memorandum of
Agreement, IRC acquired 100% or the
entire capital stock of Ganda Energy
Holdings, Inc. (GEHI),[2] which would...
own and operate a 102 megawatt (MW)
gas turbine power-generating barge.  The
agreement also stipulates that GEHI would
assume a five-year power purchase
contract with National Power Corporation.  issued an Order finding that IRC violated
At that time, GEHI's power-generating
barge was 97% complete and would go...
on-line by mid-September of 1994.  In
exchange, IRC will issue to GHB 55% of the
expanded capital stock of IRC amounting to
40.88 billion shares which had a total par
value of P488.44 million.[3]
IRC alleged that on 8 August 1994, a press
release announcing the approval of the
agreement was sent through facsimile
transmission to the Philippine Stock
Exchange and the SEC, but that the
facsimile machine of the SEC could not
receive it.  Upon the advice of the SEC, the
IRC sent the press release on the morning
of 9 August 1994
The SEC averred that it received reports
that IRC failed to make timely public
disclosures of its negotiations with GHB
and that some of its directors, respondents
herein, heavily traded IRC shares utilizing
this material insider information.  On 16
August 1994, the SEC
Chairman issued a directive requiring IRC
to submit to the SEC a copy of its aforesaid
Memorandum of Agreement with GHB. The
SEC Chairman further directed all principal
officers of IRC to appear at a hearing before
the Brokers and Exchanges Department
(BED) of the SEC to explain
IRC's failure to immediately disclose the
information as required by the Rules on
Disclosure of Material Facts.[6
In compliance with the SEC Chairman's
directive, the IRC sent a letter dated 16
August 1994 to the SEC, attaching thereto
copies of the Memorandum of Agreement.
Its directors, Manuel Recto, Rene Villarica
and Pelagio Ricalde, also appeared before
the SEC on 22 August 1994 to... explain
IRC's alleged failure to immediately
disclose material information as required
under the Rules on Disclosure of Material
Facts.[7]
On 19 September 1994, the SEC Chairman
the Rules on Disclosure of Material Facts, in
connection with the Old Securities Act of
1936, when it failed to make timely
disclosure of its negotiations with GHB. In
addition, the SEC pronounced... that some
of the officers and directors of IRC entered
into transactions involving IRC shares in
violation of Section 30, in relation to
Section 36, of the Revised Securities Act.[8]
Respondents filed an Omnibus Motion,
dated 21 September 1994, which was
superseded by an Amended Omnibus
Motion, filed on 18 October 1994, alleging
that the SEC had no authority to investigate
the subject matter, since under Section 8 of
Presidential Decree No. 902-A,[9] as
amended by Presidential Decree No. 1758,
jurisdiction was conferred upon the
Prosecution and Enforcement Department
(PED) of the SEC.  Respondents also
claimed that the SEC violated their right to
due process when it ordered that the
respondents appear... before the SEC and
"show cause why no administrative, civil or
criminal sanctions should be imposed on
them," and, thus, shifted the burden of
proof to the respondents.  Lastly, they
sought to have their cases tried jointly
given the identical factual situations
surrounding... the alleged violation
committed by the respondents.[10]
Respondents also filed a Motion for
Continuance of Proceedings on 24 October
1994, wherein they moved for
discontinuance of the investigations and
the proceedings before the SEC until the
undue publicity had abated and the
investigating officials had become
reasonably free from... prejudice and public
pressure.
No formal hearings were conducted in
connection with the aforementioned
motions, but on 25 January 1995, the SEC
issued an Omnibus Order which thus
disposed of the same in this wise:[12]
WHEREFORE, premised on the foregoing
considerations, the Commission resolves
and hereby rules:
To create a special investigating panel to
hear and decide the instant case in
accordance with the Rules of Practice and
Procedure Before the Prosecution and
Enforcement Department (PED), Securities
and Exchange Commission, to be composed
of Attys. James K. Abugan, Medardo
Devera (Prosecution and Enforcement
Department), and Jose Aquino (Brokers
and Exchanges Department), which is
hereby directed to expeditiously resolve
the case by conducting continuous
hearings, if possible.
To recall the show cause orders dated
September 19, 1994 requiring the
respondents to appear and show cause
why no administrative, civil or criminal
sanctions should be imposed on them.
To deny the Motion for Continuance for
lack of merit.
he SEC filed a Motion for Leave to Quash
SEC Omnibus Orders so that the case may
be investigated by the PED in accordance
with the SEC Rules and Presidential Decree
No. 902-A, and not by the special body
whose creation the SEC had earlier
ordered.[18]
Additionally, the SEC may still impose the
appropriate administrative sanctions
under Section 54 of the aforementioned
law.[71]
Under Section 45 of the Revised Securities
Act, which is entitled Investigations,
Injunctions and Prosecution of Offenses,
the Securities Exchange Commission (SEC)
has the authority to "make such
investigations as it deems necessary to
determine whether any person has...
violated or is about to violate any provision
of this Act XXX."  After a finding that a
person has violated the Revised Securities
Act, the SEC may refer the case to the DOJ
for preliminary investigation and
prosecution.
Issues:
The Court of Appeals promulgated a
Decision[19] on 20 August 1998.  It
determined that there were no
implementing rules and regulations
regarding disclosure, insider trading, or
any of the provisions of the Revised
Securities Acts which the respondents...
allegedly violated.  The Court of Appeals
likewise noted that it found no statutory
authority for the SEC to initiate and file any
suit for civil liability under Sections 8, 30
and 36 of the Revised Securities Act.  Thus,
it ruled that no civil, criminal or...
administrative proceedings may possibly
be held against the respondents without
violating their rights to due process and
equal protection.  It further resolved that
absent any implementing rules, the SEC
cannot be allowed to quash the assailed
Omnibus Orders for the sole... purpose of
re-filing the same case against the
respondents.[20]
THE COURT OF APPEALS ERRED WHEN IT
RULED THAT THERE IS NO STATUTORY
AUTHORITY WHATSOEVER FOR
PETITIONER SEC TO INITIATE AND FILE
ANY SUIT BE THEY CIVIL, CRIMINAL OR
ADMINISTRATIVE AGAINST RESPONDENT
CORPORATION AND ITS DIRECTORS WITH
RESPECT TO SECTION 30 (INSIDER'S
DUTY TO
DISCOLSED [sic] WHEN TRADING) AND 36
(DIRECTORS OFFICERS AND PRINCIPAL
STOCKHOLDERS) OF  THE REVISED
SECURITIES ACT; AND
THE COURT OF APPEALS ERRED WHEN IT
RULED THAT RULES OF PRACTICE AND
PROSECUTION BEFORE THE PED AND THE
SICD RULES OF PROCEDURE ON
ADMINISTRATIVE
ACTIONS/PROCEEDINGS[25] ARE
INVALID AS THEY FAIL TO COMPLY WITH
THE STATUTORY REQUIREMENTS
CONTAINED IN THE
ADMINISTRATIVE CODE OF 1987.
I. Sections 8, 30 and 36 of the Revised
Securities Act do not require the enactment
of
   implementing rules to make them
binding and effective.
Ruling:
respondents filed a
Supplemental Motion[16] dated 16 May
1995, wherein they prayed for the issuance
of a writ of preliminary injunction
enjoining the SEC and its agents from
investigating and proceeding with the
hearing of the case against respondents
herein.  On 5 May
1995, the Court of Appeals granted their
motion and issued a writ of preliminary
injunction, which effectively enjoined the
SEC from filing any criminal, civil or
administrative case against the
respondents herein.[17]
It is well... established that administrative
authorities have the power to promulgate
rules and regulations to implement a given
statute and to effectuate its policies,
provided such rules and regulations
conform to the terms and standards
prescribed by the statute as well as purport
to... carry into effect its general policies.
Nevertheless, it is undisputable that the
rules and regulations cannot assert for
themselves a more extensive prerogative
or deviate from the mandate of the statute.
[32]  Moreover, where the statute
contains... sufficient standards and an
unmistakable intent, as in the case of
Sections 30 and 36 of the Revised
Securities Act, there should be no
impediment to its implementation.
Principles:
As a consequence, in proceedings before
administrative or quasi-judicial bodies,
such as the National Labor Relations
Commission and the Philippine Overseas
Employment Agency, created under laws
which authorize summary proceedings,
decisions may be reached on the basis of...
position papers or other documentary
evidence only.  They are not bound by
technical rules of procedure and evidence.
[59]  In fact, the hearings before such
agencies do not connote full adversarial
proceedings.[60] 
Thus, it is not necessary for the rules to
require affiants to appear and testify and to
be cross-examined by the counsel of the
adverse party.  To require otherwise would
negate the summary nature of the
administrative or quasi-judicial
proceedings.
II. The Securities Regulations Code did not
repeal Sections 8, 30 and 36 of the Revised
      Securities Act since said provisions
were reenacted in the new law.
The SEC retained the jurisdiction to
investigate violations of the Revised
Securities Act,...      reenacted in the
Securities Regulations Code, despite the
abolition of the PED.
G.R. No. 144109
February 17, 2003
7. ASSOCIATED COMMUNICATIONS
& WIRELESS SERVICES – UNITED
BROADCASTING NETWORKS,
petitioner, vs.
NATIONAL TELECOMMUNICATIONS
COMMISSION, respondent.
(The question that has taken a long life is
whether the operation of a radio or
television station requires a congressional
franchise.)
Facts:
On November 11, 1931, Act No. 3846,
entitled "An Act Providing for the
Regulation of Radio Stations and Radio
Communications in the Philippines and for
Other Purposes," was enacted. Sec. 1 of the
law reads, viz:
"Sec. 1. No person, firm, company,
association, or corporation shall construct,
install, establish, or operate a radio
transmitting station, or a radio receiving
station used for commercial purposes, or a
radio broadcasting station, without having
first obtained a franchise therefor from the
Congress of the Philippines..."
Pursuant to the above provision, Congress
enacted in 1965 R.A. No. 4551, entitled "An
Act Granting Marcos J. Villaverde, Jr. and
Winfred E. Villaverde a Franchise to
Construct, Install, Maintain and Operate
Public Radiotelephone and Radiotelegraph
Coastal Stations, and Public Fixed and
Public Based and Land Mobile Stations
within the Philippines… It gave the
grantees a 50-year franchise. In 1969, the
franchise was transferred to petitioner
Associated Communications & Wireless
Services – United Broadcasting Network,
Inc. (ACWS for brevity) through Congress’
Concurrent Resolution No. 58. Petitioner
ACWS then engaged in the installation and
operation of several radio stations around
the country.
In 1974, P.D. No. 576-A, "Regulating the
Ownership and Operation of Radio and
Television Stations and for other Purposes"
was issued, with the following pertinent
provisions on franchise of radio and
television broadcasting systems:
Sec. 1. No radio station or television
channel may obtain a franchise unless it
has sufficient capital on the basis of equity
for its operation for at least one year,
including purchase of equipment.
Sec. 6. All franchises, grants, licenses,
permits, certificates or other forms of
authority to operate radio or television
broadcasting systems shall terminate on
December 31, 1981. Thereafter,
irrespective of any franchise, grant, license,
permit, certificate or other forms of
authority to operate granted by any office,
agency or person, no radio or television
station shall be authorized to operate
without the authority of the Board of
Communications and the Secretary of
Public Works and Communications or their
successors who have the right and
authority to assign to qualified parties
frequencies, channels or other means of
identifying broadcasting system.
A few years later or in 1979, E.O. No. 5464
was issued. It integrated the Board of
Communications and the
Telecommunications Control Bureau under
the Integrated Reorganization Plan of 1972
into the NTC.
Among the powers vested in the NTC
under Sec. 15 of E.O. No. 546 are the
following:
a. Issue Certificate of Public Convenience
for the operation of communication
utilities and services…
mc. Grant permits for the use of radio
frequencies for wireless telephone and
telegraph systems and radio
communication systems…
Upon termination of petitioner’s franchise
on December 31, 1981 pursuant to P.D. No.
576-A, it continued operating its radio
stations under permits granted by the NTC.
Issue:
Has E.O. No 546 modified the franchising
and licensing arrangement for radio and
television broadcasting systems under Act
No. 3846 and P.D. No. 576-A; consequently,
the requirement of obtaining a
congressional/legislative franchise can
already be dispensed with?
Ruling:
E.O. No. 546 integrated the Board of
Communications and the
Telecommunications Bureau into a single
entity known as the NTC, and vested the
new body with broad powers, among them,
the power to issue Certificates of Public
Convenience for the operation of
communications utilities, including radio
and televisions broadcasting systems and
the power to grant permits for the use of
radio frequencies. Additionally, NTC was
vested with broad rule making authority
‘to encourage a larger and more effective
use of communications, radio and
television broadcasting facilities, and to
maintain effective competition among
private entities in these activities
whenever the Commission finds it
reasonably feasible.
In the recent case of Albano vs. Reyes (175
SCRA 264), the Supreme Court held that
‘franchises issued by Congress are not
required before each and every public
utility may operate.’ Administrative
agencies may be empowered by law ‘to
grant licenses for or to authorize the
operation of certain public utilities.’ The
Supreme Court stated that the provision in
the Constitution (Art. XII, Sec. 11) ‘that the
issuance of a franchise, certificate or other
form of authorization for the operation of a
public utility shall be subject to
amendment, alteration or repeal by
Congress, does not necessarily imply . . .
that only Congress has the power to grant
such authorization. Our statute books are
replete with laws granting specified
agencies in the Executive Branch the power
to issue such authorization for certain
classes of public utilities.’
We believe that E.O. No. 546 is one law
which authorizes an administrative agency,
the NTC, to issue authorizations for the
operation of radio and television
broadcasting systems without need of a
prior franchise issued by Congress.
However, on May 3, 1994, the NTC, the
Committee on Legislative Franchises of
Congress, and the Kapisanan ng mga
Brodkaster sa Pilipinas of which petitioner
is a member of good standing, entered into
a Memorandum of Understanding (MOU)
that requires a congressional franchise to
operate radio and television stations. The
MOU states in part:
‘The NTC shall continue to issue and grant
permits or authorizations to operate radio
and television broadcast stations within
their mandate under Section 15 of
Executive Order No. 546, provided that
such temporary permits or authorization
to operate shall be valid for two (2) years
within which the permittee shall be
required to file an application for
legislative franchise with Congress not
later than December 31, 1994; provided
finally, that if the permittee of the
temporary permit or authorization to
operate fails to secure the legislative
franchise with Congress within this period,
the NTC shall not extend or renew its
permit or authorization to operate any
further.’
Petitioner stresses that Act. No. 3846
covers only the operation of radio and not
television stations. the Court of Appeals
held that a congressional franchise is
required for the operation of radio and
television broadcasting stations as this
requirement under Act No. 3846 was not
expressly repealed by P.D. No. 576-A nor
E.O. No. 546.
The appellate court correctly ruled that a
congressional franchise is necessary for
petitioner to operate television Channel.
Even assuming that Act No. 3846 applies
only to radio stations and not to television
stations as petitioner adamantly insists, the
subsequent P.D. No. 576-A clearly shows in
Section 1 that a franchise is required to
operate radio as well as television stations.
There is nothing in P.D. No. 576-A which
reveals any intention to do away with the
requirement of a franchise for the
operation of radio and television stations.
Section 6 of P.D. No. 576-A merely
identifies the regulatory agencies from
whom authorizations, in addition to the
required congressional franchise, must be
secured after December 31, 1981.
Thus, while it is correct to say that
specified agencies in the Executive Branch
have the power to issue authorization for
certain classes of public utilities, this does
not mean that the authorization or CPC
issued by the NTC dispenses with the
requirement of a franchise as this is clearly
required under P.D. No. 576-A.
The petitioner however insists that the
Constitution provides in Art. XII, Sec. 11
that the issuance of a franchise, certificate
or other form of authorization for the
operation of a public utility shall be subject
to amendment, alteration or repeal by
Congress does not necessarily imply, as
petitioner posits, that only Congress has
the power to grant such authorization. Our
statute books are replete with laws
granting specified agencies in the
Executive Branch the power to issue such
authorization for certain classes of public
utilities.
Where there is a law such as P.D. No. 576-A
which requires a franchise for the
operation of radio and television stations,
that law must be followed until
subsequently repealed. There is nothing in
the subsequent E.O. No. 546 which evinces
an intent to dispense with the franchise
requirement. Thus, while it is correct to say
that specified agencies in the Executive
Branch have the power to issue
authorization for certain classes of public
utilities, this does not mean that the
authorization or CPC issued by the NTC
dispenses with the requirement of a
franchise as this is clearly required under
P.D. No. 576-A.
And whether or not the benefits of the
Memorandum Circular extend to
petitioner, the fact is, as correctly pointed
out by the appellate court, petitioner failed
to secure a legislative franchise by
December 31, 1999.
Therefore, as long as the law remains
unchanged, the requirement of a franchise
to operate a television station must be
upheld. The call to dispense with the
requisite legislative franchise must,
however, be addressed to Congress as the
lawmaker of the land for the Court’s G.R. No. 208493 – SJS filed a Petition for
function is to interpret and not to rewrite Prohibition seeking that the "Pork Barrel
the law. System" be declared unconstitutional, and
a writ of prohibition be issued
permanently
8. GRECO ANTONIOUS BEDA B. G.R. No. 208566 - Belgica, et al filed an
BELGICA JOSE M. VILLEGAS JR. Urgent Petition For Certiorari and
JOSE L. GONZALEZ REUBEN M. Prohibition With Prayer For The
ABANTE and QUINTIN PAREDES Immediate Issuance of Temporary
SAN DIEGO, Petitioners, Restraining Order and/or Writ of
vs. Preliminary Injunction seeking that the
HONORABLE EXECUTIVE annual "Pork Barrel System," presently
SECRETARY PAQUITO N. OCHOA embodied in the provisions of the GAA of
JR, et al, Respondents 2013 which provided for the 2013 PDAF,
PERLAS-BERNABE, J.: and the Executive‘s lump-sum,
discretionary funds, such as the
NATURE: Malampaya Funds and the Presidential
These are consolidated petitions taken Social Fund, be declared unconstitutional
under Rule 65 of the Rules of Court, all of and null and void for being acts
which assail the constitutionality of the constituting grave abuse of discretion. 
Pork Barrel System. Also, they pray that the Court issue a TRO
against respondents
FACTS:
The NBI Investigation was spawned by UDK-14951 – A Petition filed seeking that
sworn affidavits of six (6) whistle-blowers the PDAF be declared unconstitutional, and
who declared that JLN Corporation (Janet a cease and desist order be issued
Lim Napoles) had swindled billions of restraining President Benigno Simeon S.
pesos from the public coffers for "ghost Aquino III (President Aquino) and
projects" using dummy NGOs. Thus, Secretary Abad from releasing such funds
Criminal complaints were filed before the to Members of Congress
Office of the Ombudsman, charging five (5)
lawmakers for Plunder, and three (3) other ISSUES:
lawmakers for Malversation, Direct1.       Whether or not the 2013 PDAF Article
Bribery, and Violation of the Anti-Graft and and all other Congressional Pork Barrel
Corrupt Practices Act. Also recommended Laws similar thereto are unconstitutional
to be charged in the complaints are some of considering that they violate the principles
the lawmakers’ chiefs -of-staff or of/constitutional provisions on (a)
representatives, the heads and other separation of powers; (b) non-delegability
officials of three (3) implementing of legislative power; (c) checks and
agencies, and the several presidents of the balances; (d) accountability; (e) political
NGOs set up by Napoles. dynasties; and (f) local autonomy.
Whistle-blowers alleged that" at least P9002.       Whether or not the phrases (under
Million from royalties in the operation of Section 8 of PD 910,116 relating to the
the Malampaya gas project off Palawan Malampaya Funds, and under Section 12 of
province intended for agrarian reform PD 1869, as amended by PD 1993, relating
beneficiaries has gone into a dummy NGO. to the Presidential Social Fund, are
Several petitions were lodged before the unconstitutional insofar as they constitute
Court similarly seeking that the "Pork undue delegations of legislative power.
Barrel System" be declared
unconstitutional HELD:
1.       Yes, the PDAF article is unconstitutional.
The post-enactment measures which
govern the areas of project identification,
fund release and fund realignment are not
related to functions of congressional
oversight and, hence, allow legislators to
intervene and/or assume duties that
properly belong to the sphere of budget
execution. This violates the principle of
separation of powers. Congress‘role must
be confined to mere oversight that must be
confined to:  (1) scrutiny and (2)
investigation and monitoring of the
implementation of laws. Any action or step
beyond that will undermine the separation
of powers guaranteed by the constitution.
Thus, the court declares the 2013 pdaf
article as well as all other provisions of law
which similarly allow legislators to wield
any form of post-enactment authority in
the implementation or enforcement of the
budget, unrelated to congressional
oversight, as violative of the separation of
powers principle and thus
unconstitutional.
2.       Yes. Sec 8 of PD 910- the phrase “and for
such other purposes as may be hereafter
directed by the President”‖ constitutes an
undue delegation of legislative power
insofar as it does not lay down a sufficient
standard to adequately determine the
limits of the President‘s authority with
respect to the purpose for which the
Malampaya Funds may be used. It gives the
President wide latitude to use the
Malampaya Funds for any other purpose
he may direct and, in effect, allows him to
unilaterally appropriate public funds
beyond the purview of the law.”
Section 12 of PD 1869, as amended by PD
1993- the phrases:
(b) "to finance the priority infrastructure
development projects” was declared
constitutional. IT INDICATED PURPOSE
ADEQUATELY CURTAILS THE AUTHORITY
OF THE PRESIDENT TO SPEND THE
PRESIDENTIAL SOCIAL FUND ONLY FOR
RESTORATION PURPOSES WHICH ARISE
FROM CALAMITIES.
(b)” and to finance the restoration of
damaged or destroyed facilities due to
calamities, as may be directed and
authorized by the Office of the President of
the Philippines” was declared
unconstitutional.IT GIVES THE PRESIDENT
CARTE BLANCHE AUTHORITY TO USE THE
SAME FUND FOR ANY INFRASTRUCTURE
PROJECT HE MAY SO DETERMINE AS A
―PRIORITY‖. VERILY, THE LAW DOES NOT
SUPPLY A DEFINITION OF ―PRIORITY
INFRASTRUCTURE DEVELOPMENT
PROJECTS‖ AND HENCE, LEAVES THE
PRESIDENT WITHOUT ANY GUIDELINE TO
CONSTRUE THE SAME
9. BUREAU OF CUSTOMS EMPLOYEES
ASSOCIATION (BOCEA) v. HON.
MARGARITO B. TEVES
G.R. No. 181704, December 6, 2011
R.A. No. 9335, otherwise known as the
Attrition Act of 2005 and its IRR are
constitutional.
Former President Gloria Macapagal-
Arroyo enacted R.A. No. 9335, otherwise
known as the Attrition Act of 2005 to
optimize the revenue-generation capability
and collection of the Bureau of Internal
Revenue (BIR) and the Bureau of Customs
(BOC). The law intends to encourage BIR
and BOC officials and employees to exceed
their revenue targets by providing a
system of rewards and sanctions through
the creation of a Rewards and Incentives
Fund (Fund) and a Revenue Performance
Evaluation Board (Board). It covers all
officials and employees of the BIR and the
BOC with at least six months of service,
regardless of employment status.
Contending that the enactment and
implementation of R.A. No. 9335 are
tainted with constitutional infirmities in
violation of the fundamental rights of its
members, petitioner Bureau of Customs
Employees Association (BOCEA), directly
filed the present petition before this Court
against respondents.
In essence, BOCEA contends that
R.A. No. 9335 and its IRR (1) gives an
undue delegation of legislative power to
the Board; (2) violates the rights of
BOCEA’s members to: (a) equal protection
of laws, (b) security of tenure and (c) due
process because R.A. No. 9335 and its IRR
unduly discriminates against BIR and BOC
employees as compared to employees of
other revenue generating government
agencies which are not subject to attrition,
(2) that the assailed law because it inflicts
punishment upon a particular group or
class of officials and employees without
trial. This is evident from the fact that the
law confers upon the Board the power to
impose the penalty of removal upon
employees who do not meet their revenue
targets.
HELD:
Petition DISMISSED.
Delegation of Legislative power
        In Abakada, the Court held,
Two tests determine the
validity of delegation of
legislative power: (1) the
completeness test and (2)
the sufficient standard test. A
law is complete when it sets
forth therein the policy to be
executed, carried out or
implemented by the
delegate. It lays down a
sufficient standard when it
provides adequate guidelines
or limitations in the law to
map out the boundaries of
the delegate’s authority and
prevent the delegation from
running riot. To be sufficient,
the standard must specify
the limits of the delegate’s
authority, announce the
legislative policy and identify
the conditions under which it
is to be implemented.
RA [No.] 9335 adequately states the
policy and standards to guide the President
in fixing revenue targets and the
implementing agencies in carrying out the
provisions of the law. In sum, the Court
finds that R.A. No. 9335, read and
appreciated in its entirety, is complete in
all its essential terms and conditions, and
that it contains sufficient standards as to
negate BOCEA’s supposition of undue
delegation of legislative power to the
Board.
Equal protection of the laws
          Equal protection simply provides that
all persons or things similarly situated
should be treated in a similar manner, both
as to rights conferred and responsibilities
imposed.
Both the BIR and the BOC are
bureaus under the DOF. They principally
perform the special function of being the
instrumentalities through which the State
exercises one of its great inherent
functions — taxation. Indubitably, such
substantial distinction is germane and
intimately related to the purpose of the
law. Hence, the classification and treatment
accorded to the BIR and the BOC under RA
[No.] 9335 fully satisfy the demands of
equal protection.
Moreover, RA [No.] 9335 in no way
violates the security of tenure of officials
and employees of the BIR and the BOC.The
guarantee of security of tenure only means
that an employee cannot be dismissed from
the service for causes other than those
provided by law and only after due process
is accorded the employee. In the case of RA
[No.] 9335, it lays down a reasonable
yardstick for removal (when the revenue
collection falls short of the target by at
least 7.5%) with due consideration of all
relevant factors affecting the level of
collection. This standard is analogous to
inefficiency and incompetence in the
performance of official duties, a ground for
disciplinary action under civil service
laws. The action for removal is also subject
to civil service laws, rules and regulations
and compliance with substantive and
procedural due process.
R.A. No. 9335 is not a bill of attainder
A bill of attainder is a legislative act
which inflicts punishment on individuals or
members of a particular group without a
judicial trial. Essential to a bill of attainder
are a specification of certain individuals or
a group of individuals, the imposition of a
punishment, penal or otherwise, and the
lack of judicial trial
R.A. No. 9335 does not possess the
elements of a bill of attainder. It does not
seek to inflict punishment without a
judicial trial. R.A. No. 9335 merely lays
down the grounds for the termination of a
BIR or BOC official or employee and
provides for the consequences thereof. The
democratic processes are still followed and
the constitutional rights of the concerned
employee are amply protected.
10.Case: Eslao v. COA
Facts:
In 1988, Pangasinan State
University entered into a Memorandum of
Agreement (MOA) with the Department of
Environment and Natural Resources
(DENR) to evaluate government
reforestation programs in Pangasinan. The
evaluation project was being funded by the
government under an Asian Development
Bank loan to the Philippines.
In January 1989, the Board of
Regents (BOR) of PSU approved and
confirmed the rates of honoraria and per
diems for the PSU personnel involved in
the project. Subsequently, PSU issued
authority to pay P70, 375.00 representing
honoraria to PSU personnel engaged in the
project. This amount was reduced
pursuant to the National Compensation
Circular (NCC) #53 which was
promulgated by the Department of Budget
(DBM) in June 21, 1988.
In July 1989, the resident auditor of
PSU alleged that there were excesses in the
payment of honoraria based on the
provisions of the Compensation Policy
Guidelines (CPG) #80-4 which was
promulgated also by the DBM in August 7,
1980.
The resident auditor argues that
CPG #80-4 should be applied in this case
and not NCC #53.
Due to the request of PSU DBM
clarified the matter, thru a letter, saying
that the basis for the project's honoraria
should not be CPG No. 80-4 which pertains
to locally funded projects but rather NCC
No. 53 which pertains to foreign-assisted
projects”.
However, COA decided against the
reconsideration filed by PSU and it argued
the following:
since under the MOA a
Coordinating Committee shall be
created which shall be responsible
for the overall administration and
coordination of the evaluation to be
chaired by the DENR and co-chaired
by the PSU VP for Research and
Development this type of project
contemplated under the MOA fits
the description of a locally funded
project which is an “inter-agency
activity” between DENR and PSU
and therefore it also fits the
description of a “special project”.
And (2) COA argues that the DBM
ruling classifying the project as foreign-
assisted does not rest on solid ground since
loan proceeds, regardless of source,
eventually become public funds for which
the government is accountable. Hence any
project funded under the ADB loan
agreement is considered to be locally
funded.
Issue:
WON the NCC #53 should govern
the payment of honoraria and per diem to
the personnel of PSU involved in the DENR
and PSU project.
Decision:
The court granted the petition. NCC
should apply not CPG 80-4
First: Special project is defined
under Sec 2.1 of the CPG 80-4 as “an inter-
agency or inter-committee activity or an
undertaking by a composite group of
officials/employees from various agencies
which [activity or undertaking] is not
among the regular and primary functions of
the agencies involved.”
There are two components of a
special project (1) there should be an inter-
agency or inter-committee activity or
undertaking by a group of officials or
employees who are drawn from various
agencies and (2) the activity or
undertaking involved is not part of the
"regular or primary" functions of the
participating agencies. The first component
refers to the group of personnel from 2 or
more government agencies which will
actually carry out the project in the field
and not to the coordinating body. In this
case, the project team who will actually
carry out the work is composed of only PSU
personnel. Thus, the project team is not a
"composite group" as required by the
definition of CPG No. 80-4 of "special
projects.
CPG 80-4 was issued 8 years before
NCC#53 was promulgated. Examination of
the provisions of NCC No. 53 makes it
crystal clear that the circular is applicable
to foreign-assisted projects only. Pertinent
provision of NCC#53 states that :
prescribe/authorize the classification and
compensation rates of positions in foreign-
assisted projects (FAPs) including honoraria
rates for personnel detailed to FAPs and
guidelines in the implementation thereof
pursuant to Memorandum No. 173 dated 16
May 1988 19. Clearly, NCC No. 53 amended
the earlier CPG No. 80-4 by carving out
from the subject matter originally covered
by CPG No. 80-4 all "foreign-assisted
[special] projects."
The MOA between PSU and DENR
also state that the project is part of the
commitment with the ADB under the
Forestry Sector Program Loan and the
DERN certification which states that the
project being done by PSU and other state
universities are foreign funded under the
ADB/OECF Forestry Sector Program Loan
Second: Under the Administration
Code of 1987, the Compensation and
Position Classification Bureau of the DBM
"shall classify positions and determine
appropriate salaries for specific position
classes and review appropriate salaries for
specific position classes and review the
compensation benefits programs of
agencies and shall design job evaluation
programs."
COA is not authorized under its
constitutional mandate to substitute its
own judgement for any applicable law or
administrative regulation with the wisdom
or propriety of which, however, it does not
agree, at least before such law or
regulation is set aside b the authorized
agency of government or by the courts
Note: “COA post audit involves
doing the same kind of work under pre-
audit and looking at exactly the same
disbursement vouchers and supporting
documents already available even prior to
payment, except that it is intentionally
done later, or AFTER execution and
payment of transactions”
According to Eslao v COA the post-
audit authority is limited to determining
compliance to government laws and
regulations like checking if there is an
appropriation or budget, inquiring about
the legality of transactions, and checking if
proper approval and documentation was
followed not to determine which law is
more applicable.

Doctrine: Limitation to post-audit

authority

COA, under its constitutional mandate, is

not authorized to substitute its own
judgment for any applicable law or
administrative regulation with the wisdom
or propriety of which, however, it does not
agree, at least not before such law or
regulation is set aside by the authorized
agency of government – i.e., the courts – as
unconstitutional or illegal and void. The
COA, like all other government agencies,
must respect the presumption of legality
and constitutionality to which statutes and
administrative regulations are entitled
until such statute or regulation is repealed
or amended, or until set aside in
appropriate case by a competent court and
ultimately the Supreme Court.