Judiciary G.R. No.

123780 December 17, 1999 In Re: Petition Seeking for Clarification as to the Validity and Forceful Effect of Two (2) Final and Executory but Conflicting Decisions of the Honorable Supreme Court Group Commander, Intelligence and Security Group, Philippine Army, under the incumbency of COLONEL PEDRO R. CABUAY, JR., petitioner, vs. DR. POTENCIANO MALVAR, PRIMEX CORPORATION, MARCELINO LOPEZ, as representative of the Heirs of Hermogenes Lopez, respondents, HEIRS OF ELINO ADIA, represented by JULIANA ADIA, intervernors.

PURISIMA, J.: Originally filed on February 27, 1996 by Colonel Pedro R. Cabuay, Jr., Group Commander, Intelligence and Security Group of the Philippine Army, was the petition at bar "seeking for clarification as to the Validity and Forceful Effect of Two (2) Final and Executory but Conflicting Decisions of the Honorable Supreme Court" in G.R. No. 90380 and G.R. No. 110900. On January 20, 1997, the Court resolved to dismiss the petition for lack of any justiciable issue raised. Confident in the righteousness and merits of their cause, the petitioners and intervenors sent in a motion for reconsideration inviting this Court's attention to the injustice that may result from the two (2) conflicting decisions, especially due to the impending enforcement of a writ of execution issued by the Regional Trial Court in Antipolo, Rizal (now Antipolo City) in Civil Case No. 463-A, implementing the ruling of this Court in G.R. No. 90380. The said writ was directed against the buildings and structures of the Intelligence and Security Group (ISG) of the Philippine Army, the Group Commander of which initiated the present recourse. The ISG derived the right to occupy a portion of a subject parcel of land and to erect thereon extensive military structures, from the Heirs of Elino Adia, represented by Juliana Adia, the Intervenors, whose right to subject property was duly recognized in G.R. No. 110900. On the other hand, the respondents insist on the validity of Transfer Certificate of Title No. 196256, registered in the names of respondents' predecessors-in-interest (Lopezes), placing reliance on the pronouncements of this Court in G.R. No. 90380. Acting on the aforesaid motion for reconsideration, this Court reconsidered its Resolution of January 20, 1997, after finding the existence of a real and existing conflict

of interest between the respondents, whose claim to the title of subject property is anchored on the Decision of this Court in G.R. No. 90380, and the petitioner and intervenors, whose claim is based on the decision of the Court of Appeals in CA-G.R. SP No. 27602 and this Court's Resolution in G.R. No. 110900. Thus, in the interest of justice, this Court resolved to give due course to the motion for reconsideration of the petitioner and intervenors and ordered the parties to submit their respective Memoranda within thirty (30) days from notice. G.R. No. 90380 Records on hand disclose that, on April 15, 1981 in Civil Case No. 24873, entitled "Ambrosio Aguilar vs. Heirs of Fernando Gorospe, et al.", the Regional Trial Court in Pasig, Rizal, Branch 161, rendered judgment in favor of plaintiff Ambrosio Aguilar, disposing as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants: 1. Declaring the plaintiff as the true and rightful owner of the land in question; 2. Declaring null and void ab initio Original Certificate of Title No. 637 and all subsequent transfer certificates of title emanating therefrom; 3. Dismissing the intervention of the Director of Lands; and 4. Ordering defendants to pay to plaintiff, jointly and severally: (a) P20,000.00 as moral damages; (b) P10,000.00 as and for attorney's fees, and (c) the costs of suit. The counterclaims are hereby dismissed.

The said decision was appealed to the Court of Appeals, the appeal docketed as CAG.R. CV No. 07475, but on August 1, 1989, the Court of Appeals 1 affirmed in its entirety the said decision in Civil Case 24873. After the motion for reconsideration of Eduardo V. Santos' (one of the defendants) was denied in the Order dated October 5, 1989, he elevated the case to this Court on a petition for review, under G.R. No. 90380, entitled "Eduardo V. Santos, petitioner versus The Hon. Court of Appeals and Ambrocio Aguilar, Respondents." On September 13, 1990, this Court affirmed the decision of the Court of Appeals, which decision became final and executory per entry of judgment dated November 29, 1990. In the said Decision, the Court 2 resolved the conflicting claims between the petitioner, Eduardo V. Santos, and the private respondent, Ambrocio Aguilar, thus:
Petitioner's arguments hinge on whether or not the parcel of land in dispute was brought within the operation of the Land Registration Act. We rule that to never did. Accordingly, finding the assigned errors to be without merit, the petition must fail.

In reaffirming the declaration of nullity of OCT No. 537 we rely on the Director of Lands vs. Basilio Abache, et al. where it was ruled that land is not affected by operations under the torrens system unless there has been an application to register it, and registration has been made pursuant to such application. In that case, while the lot in question was awarded in a cadastral proceeding to movant therein, it was registered and a certificate of title was issued in the names of persons who never established their right over the same, i.e., they neither claimed the lot nor appeared at the trial. We affirmed the lower court's declaration of nullity of the certificate of title and the order for the issuance of a new certificate of title in the name of movant. In the case at bar, not only do the records indicate that Gorospe, petitioner's predecessor-in-interest, had not filed any application for the parcel of land in question; also, no evidence was submitted that the registration in Gorospe's name was made pursuant to a satisfactory showing of his compliance with the application requirements for homestead under the Public Land Act, i.e., that he introduced improvements thereon and cultivated the same, etc. Compare Gorospe's record with the mountain of evidence in favor of private respondent. To support his predecessor-in-interest's claim of ownership, private respondent presented the following documents: 1) The original tracing cloth of Plan H-138612 [Exhibits "A-3"] which was surveyed for Hermogenes Lopez; 2) The microfilm of Plan H-138612 also bearing the corresponding Accession No. 103378 [Exhibit "D-1"]; 3) The Whiteprint of Plan H-138612 also bearing the same Accession No. 103378 [Exhibit "D"1]; 4) The inventory Book prepared in the year 1951 by the Bureau of Lands [Exhibit "XX"] containing a list of salvaged plans [among] which [was] . . . Plan H-138612 as surveyed by Hermogenes Lopez; 5) The Index Card of the Bureau of Lands [Exhibit "XX-2"] showing the Plan H-138612 is one of the salvaged plans and the same is in the name of Hermogenes Lopez; 6) The consolidated Plan AP-6450 [Exhibit "X"] prepared by the Bureau of Lands which shows that Hermogenes Lopez is the owner of the parcel of land covered by Plan H-138612; 7) Plans H-147383, Psu-146727 and F-1543 which all show that Hermogenes Lopez is one of the boundary owners. In addition to the foregoing public documents, also presented were persons connected with the Bureau of Lands whose testimonies proved that Hermogenes Lopez filed a homestead application bearing No. H-138612 covering the land in question and that the same was duly processed by the Bureau of Lands after he had complied with all the requirements of the law. Said patent was duly approved and a corresponding homestead patent was issued in his favor.

What irretrievably turns the tide against the petitioner is the finding that there exist in the records of the Register of Deeds of Pasig two original certificates of title bearing No. 537 based on a free patent and covering two different lots situated in two different municipalities of Rizal, and registered in the names of two different persons. The first was for a parcel of land in Pililla, Rizal, registered in the name of a certain Simeon Alejar on December 23, 1993, the validity and regularity of which has never been questioned. The second is the questionable document registered on August 31, 1944 in the name of Fernando Gorospe. The petition is silent on this aspect; petitioner does not even attempt to refute this. On the contrary, while petitioner avers that OCT No. 537 proceeds from a homestead application, the spurious title on its face indicates that it was based on a free patent. It is thus only proper, based on the foregoing, that We reaffirm the declaration that OCT No. 537 is null and void ab initio and the land covered thereby has never having been brought under the operation of the torrens system. This being the case, Sec. 38 of the Land Registration Act cannot be invoked in this instance. Parenthetically, it may be stated that Our rulings in Baranda v. Baranda and Albienda v. Court of Appeals cited by petitioner to support his contention do not apply to the facts of the case at bar because both involve situations where the original registration was valid and Sec. 38 of the Land Registration Act was squarely applicable.

G.R. No. 110900 It appears that during the pendency of the case aforementioned, or on September 10, 1985, to be exact, the Heirs of Elino Adia (herein intervenors) lodged a protest against Plan H-138612 of Hermogenes Lopez involving the same property in dispute, before the Lands Management Bureau (LMB), which land protest was decided by the LMB in favor of the protestants, Heirs of Elino Adia. In its Decision of December 10, 1990, the LMB summarized the antecedents facts and circumstances leading to the institution of the present case as follows:
The Heirs of Elino Adia filed a protest against Plan H-138162 of Hermogenes Lopez covering a piece of land (equivalent to Lot 7546, Cad. 29, Extension, Antipolo Cadastre), situated at Barrio dela Paz, Antipolo, Rizal. On the September 10 and October 28, 1985 hearing in the case, only protestants appeared. Upon request of counsel, an ex-parte investigation was conducted with protestants submitting testimonial and documentary evidence. After protestants rested their case, one Francisco R. Cruz filed an intervention alleging that he has been deprived of his chance to be heard and present his evidence. In the interest of justice, another investigation was conducted on April 10 and September 29, 1989. This time, Francisco Cruz was required to present the original or certified copy of the Quitclaim or Transfer of Rights dated May 18, 1981, allegedly executed by Hermogenes Lopez in his favor. To obviate lengthy investigation, the parties agreed to submit their respective memorandum in support of their claims. Apart from testimonial and documentary evidence presented during the hearing of October 28, 1985, the Heirs of Elino Adia submitted their memorandum contending that from 1929 up to July 1943, Elino Adia occupied and cultivated continuously, adversely, publicly and peacefully the disputed land; that he introduced considerable improvements thereon; that after Elino's death, possession of the land was taken over by Emiliano and Juliana Adia; that the land was declared for taxation purposes and the taxes thereon

paid; and that they therefore prayed for the approval of the final proof on the homestead application of the Heirs of Elino Adia. In support thereof, they submitted Exhibits "A", "B", "C", "C-1", "H-1", "N", "O" and "Q". Upon the other hand, applicants-respondents Heirs of Hermogenes Lopez averred that ownership of the land contested by protestant had been the subject of exhaustive judicial proceedings in the Court of First Instance of Rizal; that ownership of the land in question by deceased Hermogenes Lopez had already been duly established and hence, protestants claim has no legal and factual bases, as it had been finally settled judicially; and that the assignment of rights in favor of Francisco Cruz is only a simulation, because at the time of the alleged sale Hermogenes Lopez was no longer the owner of the disputed land having been previously conveyed to Ambrocio Aguilar in 1959. Respondent prayed that the protest be denied and the intervention, dismissed. Intervenor Francisco Cruz, for his part, asserted that on May 18, 1991, the land in question and all its improvements were transferred to him in "Quitclaim and assignment of Rights"; that he tried to locate the records of the homestead application of Hermogenes Lopez but to no avail; that after a fruitless search for the said application, he finally requested on November 27, 1982 for inclusion of Hermogenes Lopez, now Francisco Cruz in the list of survey claimants in the Antipolo Cadastre; that as successorin-interest of the deceased Hermogenes Lopez, he has a valid and better claim to the land in controversy; that all the unpleasant incidents attendant to the case hindered him in constructing his house on the land; and, that he prayed for the award to him of the land in question. On July 7, 1989, the Overlooking Storeowners and Planters Association, Inc. also intervened and interposed their protest against the Plan H-138612 of Hermogenes Lopez. It averred that respondent Hermogenes Lopez is not entitled to a homestead patent because neither he nor his legal heirs resided or occupied that land in question. As things are, there are four (4) parties claiming to be entitled to acquire the land in question. The issue, therefore, here is who among them deserves to be given the preference rights to apply for the controverted land.

After examining and evaluating the respective position and evidence of the parties, the LMB found for and decided in favor of the Adias, in its Order dated December 10, 1990, the decretal portion of which ratiocinated and ruled:
WHEREFORE, Plan H-138612 appearing in the records of this Office in the name of the heirs of Hermogenes Lopez is hereby as it is, corrected and amended, in that it shall thereafter be considered to be recorded in the name of Elino Adia, now his heirs represented by Emiliano and Juliana Adia. The claims of Hermogenes Lopez and all those claiming under him, Francisco R. Cruz and the Overlooking Storeowners and Planters Association, Inc., are hereby dismissed and this case dropped from the records. The homestead application of Elino Adia, covering plan H-138612 shall be reconstituted or in lieu thereof, a new application may be filed by the Heirs of Elino Adia, which shall thereafter be given due course. Within a period of sixty (60) days from the receipt of this order, the O.S. & P.A. shall vacate and remove whatever improvements they have in the premises.

What is decisively clear and of utmost significance to note, is that in its said decision, the LMB found that subject land was still a public land, at the time; concluding and ruling thus:

The land in dispute is definitely a PUBLIC LAND and as such, the authority to administer and dispose of it is entrusted to Department of Environment and Natural Resources. The authority to administer public land carries with it such powers as GRANTING, APPROVING, REJECTING and REINSTATING public land applications, which are all administrative and executive in nature.

Their motion of reconsideration having been denied by the LMB on January 29, 1992, the Lopezes brought a petition for certiorari and prohibition before the Court of Appeals, docketed as CA-G.R. SP No. 27602; which petition was, however, dismissed in the Decision, dated February 26, 1993, of the Court of Appeals, with the following findings of facts, disquisition and conclusion, to wit:
In the investigation, the Heirs of Elino Adia presented six (6) witnesses, namely, Bartolome Sierra, Maria Sierra, Francisco Tandoc, Fortunato Suarez, Juliana Adia and Emiliano Adia. Their testimony substantially consist of the following: Bartolome Sierra declared that he was among the first settlers in Barrio Macatubang in 1922 followed by Elino Adia; his house was more or less 200 meters away from Adia's house; he is a son of Luciana Sierra whose land adjoins the land of Elino Adia, which was (Sierras) (sic) surveyed under Plan F-46231; Adia's (sic) planted palay and fruit trees on his land and used portions thereof for carabao fattening; some of the trees planted by Adia are still existing; Juliana and Emiliano are the children of spouses Elino Adia and Lucia San Gabriel; and no other person claimed Adia" land and he does not know Hermogenes Lopez. Mariano Suarez declared that he was born in barangay dela Paz and was the Barangay Captain thereof in 1972 and 1981; he knows Emiliano and Juliana whose father (Elino) died during the Japanese occupation; after Elino's death, Emiliano and Juliana continued with the occupation and cultivation of the land; he does not know Hermogenes Lopez; and different kinds of trees, such as mango, duhat and bamboo, some of which are still visible, were planted by them but most of the trees were used for firewood by the people. Juliana Adia said that her parents Elino Adia and Lucia Adia are now both dead; they occupied the land in question, cleared the same and planted fruit trees thereon; her father Elino Adia applied for homestead and the survey of the land was approved in 1939; after the death of her parents, her uncle Ambrocio Narvasa helped in the cultivation of the land; and her possession up to the present has been peaceful, unmolested by anybody, including Fermin Lopez and Hermogenes Lopez. This testimony was corroborated by Francisco Tandoc, Fortunata Suarez and Emiliano Adia. In support of their claim, protestants submitted Exhibits "A" to "Q" inclusive; Among these is a certified Tracing Cloth of Plan-H-138612 SURVEYED FOR ELINO ADIA with accession No. 103378 issued by Engineer Felipe R. Valenzuela, Chief Technical Services Section, Bureau of Lands dated July 31, 1981, containing an area of 19.48888 (sic) hectares situated at de la Paz, Antipolo, Rizal, with the certification stating, to wit: This is to certify that this tracing cloth plan is true copy of Homestead Application No. 138612 which was approved on February 7, 1939, as verified from the microfilm on file in this office. This certified plan is issued upon request of Engr. Ricardo O. Vasquez who paid the verification fee of P5.00 under O.R. No. 9915364 dated July 31, 1981. (Exhibit A)

Plan H-138612 was subject of Civil Case No. 5957 in the then Court of First Instance of Rizal entitled, "Hermogenes Lopez versus Fernando Gorospe" wherein former Director of Lands Nicanor Jorge testified in court. The Heirs of Hermogenes Lopez maintain that the ownership of the land in question had already been settled in judicial proceedings before the Court of First Instance of Rizal in Civil Case No. 24873 entitled "Ambrosio Aguilar versus Beatriz de Zuzuarregui, et al., for declaration of inexistence and/or nullity of Free Patent, Original Certificate of Title and Transfer Certificate of Title. Here, Ambrosio Aguilar, plaintiff, was declared as the true and rightful owner of the land in question and OCT No. 573 it the name of Fernando Gorospe was declared null and void ab-initio. The land was also in (sic) the subject of a protest filed with the Bureau of Lands which was dismissed. Further, the land was involved in Tanodbayan Case No. 830220 entitled "Juliana Adia versus Rodolfo Paelmo", which was resolved in favor of Paelmo, the Regional Land Director in region IV of the defunct Bureau of Lands, as follows: The document presented by respondent Rodolfo Paelmo consisting of the approved plan in the name of Hermogenes Lopez, predecessor-ininterest of Ambrocio Aguilar, plaintiff in Civil Case No. 24873, strongly belies complainants father in the amended survey plan. All the foregoing considered, there exists no probable cause to justify further inquiring into the charge. WHEREFORE, let this complaint be as the same hereby DISMISSED. The ownership of the land in question appears also to have been clearly established in Civil Case No. 463-3 filed by Hermogenes Lopez and the title and possession over the said parcel of land were ordered reconveyed to the heirs of Hermogenes Lopez in the February 3, 1985 decision whose dispositove portions reads: In view of the foregoing consideration Judgment is hereby rendered: 1. Declaring the Deed of Absolute Sale Exhibit "C" in favor of defendants (Aguilar) dated July 31, 1959 null and void. 2. Ordering the defendants to vacate the land in question or described in the claim. 3. Declaring the plaintiff the true and absolute owners of said parcel of land. Pending appeal of the aforementioned decision, a writ of demolition was issued against the squatters on the land. The Heirs of Elino Adia in behalf of all squatters filed a petition for certiorari with the appellate court to nullify the judgment and the order of demolition and a restraining order was issued. The Heirs of Hermogenes Lopez filed their comment and on July 15, 1985 the petition for certiorari was denied and the restraining order was dissolved. For said reason, the Heirs of Hermogenes Lopez pray for the dismissal of the protest and the intervention. It will be noted that except for the instant investigation, the case has never been formally investigated by this Office in order to determine the issue of who has the right to the land in dispute. The protest filed by the Heirs of Elino Adia with the Region IV was never formally investigated The case ended in a Tanodbayan case filed against Director

Paelmo, who in his answer to the complaint of Adia solely relied on the decision of the court in Civil Case No. 24873, portion of which is quoted hereunder. The document presented by the respondent Rodolfo Paelmo consisting of the approved plan in the name of Hermogenes Lopez, predecessor-ininterest of Ambrocio Aguilar, plaintiff in Civil Case No. 24873, strongly belies complainants ascertion that respondent Rodolfo Paelmo used the approved plan of complainant's father in the amended survey. It is worth mentioning also that Plan H-13812 (sic) was also involved in Civil Case No. 5957, entitled "Hermogenes Lopez versus Fernando Gorospe" wherein Director of Lands Nicanor Jorge testified to the effect that the applicant in the application covering Plan H138612 was Elino Adia for whom it was surveyed. Portions of his direct testimony are quoted as follows: DIRECT EXAMINATION: Q Mr. Jorge, I see that this particular area involved is bounded on the East by Elino Adia with a reading underneath which may be quoted as Homestead Application No. 13812 (sic). Will you please tell us, Mr. Director what that mean? A It shows that Elino Adia is a homesteader and his homestead is numbered as Homestead Application No. 13812 (sic). Q As far as your office is concerned, who is the homestead applicant per Homestead Application No. 13812 (sic) as appearing in the eastern boundary of the document Exhibit "8". A On the basis of this plan it shows that Elino Adia is a homesteader whose homestead is Homestead Application No. 13812 (sic). . . . Q Exhibit "39" what would you say? Would you say that Hermogenes Lopez is the person for whom this survey Plan H-13812 (sic) was made? A It appears that when this plan Exhibit "39" was certified to, the name appearing on the original plan was not HERMOGENES LOPEZ that is why there appeared here AS PREPARED FOR. Q Now, you would like to convey to the effect that per document Exhibit "39", Hermogenes Lopez was NOT THE PERSON for whom it was originally survey. A That is true. Q You said that is true, what do you mean? A I mean that when this was certified by our Chief Records Division that plan appearing here was not surveyed in the name of Hermogenes Lopez. On July 24, 1990, the Chief of Surveys Division issued a memorandum involving Plan H13816 (sic) addressed to the Chief, Legal Division which read:

Please be informed that the only records that we have of the Plan H13812 (sic) in the name of Hermogenes Lopez containing an area of 19.4888 hectares situated in Dela Paz, Antipolo as surveyed on November 10, 1938 by surveyor Benito Guevarra under the supervision of Public Lands Surveyor Conrado Santillan. The then Chief of Technical Services of the National Capital Region Engr. Felipe R. Venezuela issued a certified copy of H-13812 (sic) allegedly as verified in the microfilm. We had however changed the survey, claimant from Hermogenes Lopez as appearing in our record of survey plan to Elino Adia.. . . . As records are now three responsible Bureau of Lands Officials certified and testified in court in connection with Plan H-13812 (sic). Nicanor Jorge, in Civil Case No. 5957, declared that Elino Adia is a Homesteader and his homestead is numbered as Homestead Application No. 13812 (sic). On the other hand, the Chief, Technical Services Section, Surveys Division, Region IV, certified that the tracing cloth plan marked as Exhibit "A" was a Plan H-13812 (sic) surveyed for Elino Adia with Accession No. 103378. This was contradicted by Engr. Privadi Dalire, Chief, Bureau who certified that Plan H13812 (sic) is in the name of Hermogenes Lopez and that Engr. Felipe Venezuela changed the survey claimant from Hermogenes Lopez as appearing in our records of survey plan to Elino Adia. From all the foregoing, it is obvious that crucial and vital point to be established is the real and true owner of Plan H-13812 (sic). Portions of the testimony of Director Nicanor Jorge is quoted hereunder: Q Now, there seems to be an incompatibility between Exhibit "D" and "39" with the original plan pertaining to Psu-106705, which was surveyed for Pablo and Luz Ventura claim who appears to be in the western boundary of the area involved under Exhibit "39" and "D". In this document it shows that Elino Adia Homestead Application No. 13812 (sic). So there are three seemingly incompatible sheets. Will you please tell us, if you know how can this happened? A Well, I could not advance any opinion why they have such incompatibility in the preparation of this plan. Unless, there has been some maneuvering, well could not tell what had happened. Clearly, the authenticity of the survey records of this Office is at issue as to the real owner of Plan H-13812 (sic) that is, whether it is Elino Adia or Hermogenes Lopez. The Heirs of Elino Adia submitted Exhibit "B", copy of Psu-106705 in the name of Pablo and Luz Ventura involving parcels of land in Barrio dela Paz, Antipolo, Rizal, surveyed on October 26, 1938 and approved on May 10, 1939 showing that Elino Adia is the boundary owner at the eastern portion of the land covered thereby, Exhibit "G" is a copy of TCT No. 44541 of Robert Philipps issued by the Register of Deeds of Rizal on May 26, 1956 and originally registered on August 2, 1939 as OCT No. 1254 in the name of Pablo Ventura showing that Elino Adia is the boundary owner at the eastern portion thereof as of August 2, 1939. Exhibit "E" is a copy of TCT No. 8362 of the La Colina Development Corporation issued by the Register of Deeds of Rizal and originally registered on August 2, 1939 as OCT No. 1254 in the name of Pablo Ventura showing that the property

covered thereby is bounded on the eastern portion by H-13812 (sic) of Elino Adia as of August 2, 1939. Of all the parties thereto, only the heirs of Elino Adia was able to submit substantial and material testimonial and documentary evidence in substantiation of their claims. Instead of availing of a formal proceedings, the Heirs of Hermogenes Lopez and Intervenors Francisco Cruz and the Overlooking Storeowners and Planters Association, Inc. opted to submit their respective memorandum or position paper in support of their respective claims.

On July 22, 1993, the Lopezes filed with this Court a petition for review on certiorari, docketed as G.R. No. 110900. The Court resolved to "DENY" the petition for failure to comply with legal requirements. In the pertinent Resolution, dated August 11, 1993, this Court further stated:
Besides, even if the petitioners complied with the aforesaid requirement, the petition would still be denied as no reversible error was committed by the appellate court. (emphasis supplied)

Petitioner's motion for reconsideration in G.R. No. 110900 was denied with finality on November 3, 1993. On December 6, 1993, the denial became final and executory. On November 25, 1994 and in accordance with the LMB decision dated 10 December 1990 (as affirmed by this Court) which, among others, directed that "the homestead application of Elino Adia, covering plan H-138612 shall be reconstituted or in lieu thereof a new application may be filed by the Heirs of Elino Adia," the heirs of Elino Adia filed eight (8) new applications covering the 19.4888 hectares earlier declared as public land. On December 14, 1994, eight (8) land patents in the name of "Heirs of Elino Adia", represented by Juliana Adia, were issued by the DENR's OIC-Provincial Environment and Natural Resources Officer of Rizal (under the authority of the President) and on January 26, 1995, Original Certificates of Title Nos. P-819 to P-826 were issued in the name of the Heirs of Elino Adia, represented by Juliana Adia. Other incidents/cases During the pendency of both cases, several incidents/cases were initiated by the Heirs of Hermogenes Lopez, tending to further muddle the situation. While Civil Case No. 24873 (Aguilar vs. Gorospe, et al. for annulment of OCT No. 536 which was later elevated as G.R. No. 90380) was pending before the Court of Appeals, the Lopezes brought an action for cancellation executed by Hermogenes Lopez in favor of Ambrosio Aguilar. The case was docketed as Civil Case No. 463-A before Branch 71 of the Rizal Regional Trial Court in Antipolo, Rizal (now Antipolo City). 3 On February 5, 1985, the said Regional Trial Court came out with a decision declaring the deed of absolute sale in litigation null and void, and disposing thus:

In view of the foregoing considerations Judgment is hereby rendered: 1. Declaring the Deed of Absolute Sale Exhibit "C" in favor of defendants dated July 31, 1959 null and void ab-initio; 2. Ordering defendants to vacate the land in question or described in the complaint (par. 4 thereof) and immediately restore the possession thereof to the plaintiffs; 3. Declaring the plaintiffs the true and Absolute owners of the said parcel of land; and 4. To pay the attorney's fees to plaintiffs in the sum of P5,000.00 and the costs of this action.

Aguilar's motion for reconsideration was denied by the trial court on March 14, 1985 and the decision of the Regional Trial Court was subsequently affirmed by the Court of Appeals on August 18, 1987 in CA G.R. No. 06242. 4 In view of the aforecited judgment of Branch 71 of the Regional Trial Court in Antipolo, Rizal (now Antipolo City), the Lopezes presented an "Urgent Ex-Parte Motion" before the same court, praying for the cancellation of TCT No. 72439 (in the name of Eduardo V. Santos) and for the issuance of a new certificate of title in their favor. The said motion was granted by the same Regional Trial Court on April 19, 1985 and TCT No. N-104422 was then issued in favor of the Lopezes. On May 8, 1995, Eduardo V. Santos filed with the Court of Appeals, docketed as CAG.R. SP No. 06096, a petition for nullification of the portion of the aforesaid decision of the Regional Trial Court in Civil Case No. 463-A adjudging the Lopezes as "true and absolute" owners of the land in question. Santos also sought the nullification of TCT No. N-104422 issued in the name of the Lopezes. On December 23, 1985, the Court of Appeals rendered its decision in CA G.R. SP No. 06096, 5 disposing as follows:
WHEREFORE, judgment is hereby rendered: 1. Declaring that portion of the decision of 5 February 1985 adjudging defendants Lopezes as the true and absolute owners of the land in question as null and void; 2. Declaring the order of 19 April 1985 to be null and void; 3. Ordering the Register of Deeds of Rizal, Marikina Branch, to cancel TCT No. N-10442 issued in the names of defendants Lopezes and restoring TCT No. 72439 in the name of plaintiff and the notice of lis pendens thereon; 4. Ordering defendants Lopezes to surrender to the Register of Deeds of Rizal, Marikina Branch, within five (5) days from entry of judgment, TCT

No. N-10442 for cancellation. Should they fail to do so, the Register of Deeds, Marikina Branch, may proceed to cancel the original and owner's duplicate of the title without further notice; 5. Denying plaintiff's prayer to be placed in possession of the property in question; and, 6. Dismissing the complaint as against defendants spouses Aguilar.

Their set-back notwithstanding, the Lopezes once again filed with the Regional Trial Court, Branch 71, Antipolo, Rizal 6 (now Antipolo City) a Motion to Order Cancellation of Transfer Certificate of Title No. 72439 (in the name of Eduardo Santos) and Issuance of New Certificate of Title, in lieu thereof. On January 28, 1991, the said Regional Trial Court issued an order granting subject motion and, on February 8, 1991 the Register of Deeds in Marikina issued TCT No. 196256 in the name of the Lopezes. On June 18, 1991, the Lopezes filed another petition purportedly under Section 108, PD 1529, with Branch 71 of the Regional Trial Court in Antipolo, Rizal (now Antipolo City). This time, they (Lopezes) prayed for, among others, for the cancellation of OCT No. 537 7 "and all Transfer Certificates of Title originating therefrom" and that TCT No. 196256, which was previously issued to them, be "indicated as an Original Certificate of Title with a corresponding number assigned therefor." On June 24, 1991, Branch 71 of the Regional Trial Court of Antipolo, Rizal, (now Antipolo City) granted the said petition and ordered the Register of Deeds in Marikina, Rizal to cancel OCT No. 537 and to indicate TCT No. 196256 as OCT and to further:
. . . indicate that it was, as herein quoted: "issued by virtue of the Decision of the Supreme Court in G.R. No. 90380 on September 13, 1990 (in relation to the Decision in Civil Case No. 463-A as affirmed by the Court of Appeals in CA-G.R. CV No. 06242 and the Supreme Court in G.R. No. 81092) which declared that Hermogenes Lopez, now his heirs, as the true and rightful owner by virtue of Homestead Patent Application No. 138612 and the corresponding homestead patent issued in his favor in June, 1939, after complying with the requirements of Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act.

On July 31, 1991, the same Register of Deeds inscribed the said Order on TCT No. 196256 and on October 10, 1991, it cancelled TCT No. 196256 and in its place, issued thirteen (13) transfer certificates of title, TCT No. 207990 208000, 208002 and 208358, all in the names of Marcelino Lopez, Felisa Lopez, Zoilo Lopez and Leonardo Lopez. On September 10, 1992, the Lopezes and Primex Corporation, which firm had bought a portion of the property in dispute, 8 filed anew with Branch 71 of the Regional Trial Court in Antipolo, Rizal (now Antipolo City) a "Petition for Entry/Amendment of Certificate of Title", praying that the same Register of Deeds be ordered, among others, to "transcribe Homestead Patent No. 54072 and issue the corresponding Original Certificate of Title in the name of Hermogenes Lopez, assigning to it the certification number, volume, page

and such other numbers as he may deem appropriate, and to consider the same registered as of August 31, 1944, the date when Free Patent No. 54072 covering the same property was originally registered." The said petition was granted by the same Regional Trial Court in its Order dated October 8, 1992. Then on January 4, 1994, even after the Resolution in G.R. No. 110900 (upholding the LMB decision in favor of the Adias) had become final and executory, the Lopezes interposed an appeal from the same LMB decision to the Secretary of Environment and Natural Resources but their appeal was dismissed on January 5, 1995. Their (Lopezes) motion for reconsideration was denied in the Order, dated December 4, 1995, but at the same time, the parties were advised "to pursue their respective claims before the courts and under pertinent laws." On February 21, 1995, Branch 71 of the Regional Trial Court in Antipolo, Rizal (now Antipolo City) issued a writ of execution against the structures/properties of the ISG, Philippine Army, represented by the group commander, the herein petitioner, standing on a portion of the land in question. In the meantime, or on April 20, 1995, Marcelino Lopez sold a portion of the land under controversy to the herein co-respondent, Dr. Potenciano Malvar. On October 6, 1995, the Lopezes presented a motion for the issuance of an alias writ of execution to demolish the structures belonging to the Philippine Army. The said incident prompted the Group Commander of the ISG to file a Comment with the same Regional Trial Court, drawing the attention of the Presiding Judge of the said court to the ruling of this Court in G.R. No. 110900. Despite such step taken by the Group Commander of ISG, however, an alias writ of execution issued on December 11, 1995, just the same. It was the persistent threat of demolition of their communications facilities which prompted the Group Commander of the Intelligence and Security Group, Philippine Army, purchaser of a portion of 1,650 square meters, more or less, of subject tract of land, from the heirs of Elino Adia, to bring the present petition which, as heretofore mentioned, the Court resolved to consider and treat as a petition for certiorari under Rule 65. In resolving the petition under consideration, this Court is thus, called upon to resolve the respective claims of the parties, over subject parcel of land, in light of the decision and disposition of this Court in G.R. Nos. 90380 and 110900. It is beyond cavil that subject property was a disposable and alienable public land at the time the principal parties asserted their respective claim thereover. In the initial determination of who has a better and superior right to acquire the said public land, Commonwealth Act No. 141 otherwise known as the Public Land Act, governs. Thereunder, the Director of Lands, subject to the authority of the Secretary of Natural Resources (now Secretary of Environment and Natural Resources) is vested with direct

control of the survey, classification, lease, sale or any other form of concession or disposition and management of lands of the public domain, and his decision as to questions of fact is conclusive, when approved by the Secretary of Agriculture and Natural Resources (now Secretary of Environment and Natural Resources) (Section 4, C.A. 141; De los Santos vs. Rodriguez, 22 SCRA 451). It is decisively not proper for the courts to interfere with the administration of public lands by the Director of Lands (now the Lands Management Bureau (LMB). In De Buyser vs. Director of Lands, 121 SCRA 13 (1983), this Court held:
Since the land is admittedly property of public dominions, its disposition falls under the exclusive supervision and control of the Bureau of Lands.

And in Francisco vs. Secretary of Agriculture and Natural Resources, 121 SCRA 380, it was reiterated that the law has vested in the Director of Lands primarily, and ultimately in the Secretary of Agriculture and Natural Resources (now Secretary of Environment and Natural Resources) the administration and disposition of public lands. Consequently, the decision of finding by the Director of Lands, as approved by the now Secretary of Environment and Natural Resources, upon a question of fact is conclusive and not subject to review by the courts in the absence of any showing that such decision or finding is tainted with fraud or mistake. In the case at bar, the Court of Appeals and this Court, in G.R. No. 110900, had passed upon the nature of subject parcel of land and upheld the disposition by the Lands Management Bureau (LMB) in favor of the Adias; ratiocinating and finding as follows:
To begin with, there is the presumption juris tantum that all the lands form part of the public domain. The land subject of H-138612 is public land not only because no certificate of title has yet been issued to petitioners but also because they have presented no positive and convincing evidence of private ownership over the same except the claim that they are the heirs of Hermogenes Lopez. Now, while it is true that Hermogenes Lopez had filed an application for a Homestead Patent over the subject land, and his application was determined as superior to the claims of other persons by the court, such determination in the cases that finally reached the Supreme Court did not bind the government, particularly the Lands Management Bureau. (sic) The cases cited by petitioners as having declared the subject land as private property because the homestead patent thereon was confirmed by the Supreme Court did not LMB for two reasons: (1) it was not, and was not impleaded as, a party to said cases, and (2) the cases were in personam in nature, in which while the subject thereof was a right over a piece of land, the controversy was in essence between different persons asserting conflicting claims. The subject property being part of the public domain is within the exclusive jurisdiction of the Lands Management Bureau. (sic) It is not only mandated by the Public Land Act but the Supreme Court itself has declared it to be so in Cerdon vs. Court of Appeals, 184 SCRA 198, 200, to wit: The function of administering and disposing of lands of the public domain in the manner authorized by law, is not entrusted to the courts but to executive officials. Originally, it was the Director of the Bureau of Lands primarily, and ultimately, the Secretary of Agriculture and Natural

Resources, who had this function. Section 4 of the Public Land Act (Commonwealth Act No. 141) declared that subject to the control of the Secretary of Agriculture and Commerce, the Director of Lands shall have direct executive control of the survey, classification, lease, sale or any other form of concession or disposition and management of the lands of the public domain, and his decisions as to questions of fact shall be conclusive when approved by the Secretary of Agriculture and Commerce. Thus, initially within the exclusive jurisdiction of the Director of Lands were such questions as the adjudication of the conflicting claims of rival claimants to public land, or cases involving disposition and alienation of public lands. (184 SCRA, pp. 200-201)

As above adverted to, in its decision of January 5, 1995, the Department of Environment and Natural Resources (DENR), found that the actual occupants of the land under controversy were the spouses Elino and Lucia Adia, who possessed the same from 1929 to 1943. Thereafter, their heirs took over and continued possession thereof. Such a factual finding arrived at by the DENR is conclusive upon the courts. Conformably, in G.R. No. 110900 (Marcelino Lopez, et al., vs. Court of Appeals, et al.) this Court affirmed the ruling of the Lands Management Bureau in favor of the Adias. In Pindangan Agricultural Co., Inc. vs. Dans, 4 SCRA 1035 (1962), the Court held:
It should be remembered that the disposition of public lands is lodged exclusively in the Director of Lands subject only to the control of the Secretary of Agriculture and Natural Resources. . . . Consequent to the power and discretion granted the Director of Lands as set forth above, the courts have no power to review, reverse or modify his decisions, as approved by the Secretary of Agriculture and Natural Resources . . .

So also, in Vda. De Calibo vs. Ballesteros, 15 SCRA 37, it was ruled that the Director of Lands, who is the officer charged with carrying out the provisions of the Public Land Law, has control over the survey, classification, lease, sale or any other form of concession or disposition and management of the public lands, and his finding and decision as to questions of fact, when approved by the Secretary of Agriculture and Natural Resources (now Secretary of Environment and Natural Resources), is conclusive. In view of the foregoing ratiocination, disquisition and findings, this Court is of the irresistible conclusion, and so holds, that the ruling in G.R. No. 110900 prevails over the disposition in G.R. No. 90380. It bears stressing that under Public Land Act, the disposition of public lands is exclusively vested in the Lands Management Bureau (LMB) subject only to the control of the Secretary of Environment and Natural Resources (DENR). Since what has been litigated upon is a disposable public land, under the power of administration and disposition of the Bureau of Lands (now the Lands Management Bureau), subject only to the control of the Secretary of the Department of Environment and Natural Resources; it is not proper to deprive the Lands Management Bureau which "absorbed the functions and powers of the Bureau of Lands, abolished by Executive Order No. 131, except those line functions and powers thereof which are transmitted to the regional field offices", of its direct executive control

over the disposition and management of the public domain, any more that it can divest the State of its title and confer it to another (Espinosa vs. Makalintal, 79 Phil 134). In Benguet Exploration, Inc. vs. DAT, G.R. No. L-29534, February 28, 1977, this Court, citing Pinero vs. Director of Lands [57 SCRA 386], ruled:
. . . even a torrens title is not a bar to the power of the Director of Lands to investigate an allegation of fraud that could have led to the issuance of a free patent. As stated by him: "It is to the public interest that one who succeeds in fraudulently acquiring a title to a public land should not be allowed to benefit therefrom, and the State should, therefore, have an ever existing authority, thru its duly authorized officers, to inquire into the circumstances surrounding the issuance of any such title . . ..

Although G.R. No. 90380 (Eduardo Santos vs. CA, et al.) was decided ahead of G.R. No 110900, the Court holds that the latter case was not barred by the doctrine of "law of the case." The doctrine of "law of the case" means that whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case so long as the facts on which such decision was predicated continue to be the facts of the case before the Court [Mangoma vs. CA, 241 SCRA 21]. In short, the doctrine applies only when a case is before a Court a second time after a ruling by an appellate court (Kilosbayan, Inc., vs. Morato, 246 SCRA 540). In the two cases (G.R. No. 90380 and G.R. No. 110900) under consideration, the subject matter is the same but there a no identity of parties and causes of action. As found by the Court of Appeals in CA G.R. No. SP 27602, the Adias and the Lands Management Bureau were not parties in what eventually became G.R. No. 90380. What is more, the said case merely involved the issue of possession, on which the claim of the Lopezes was anchored or based on their alleged homestead application over subject public land. On the other hand, the case of the Lands Management Bureau (LMB) which became G.R. 110900, squarely put in issue the validity of the alleged homestead patent of the Lopezes, on the ground that its issuance was tainted with fraud. It is thus succinctly clear that the ruling in G.R. No. 90380 cannot be the "law of the case" as to bar G.R. No. 110900. The Orders issued on June 24, 1991 and October 8, 1992, respectively, by Branch 71 of the Regional Trial Court in Antipolo, Rizal (now Antipolo City) are void for lack of any legal basis. All things studiedly considered and viewed in proper perspective, the Court upholds the disposition of subject public land, now covered by Original Certificates of Title Nos. P819, P-820, P-821, P-822, P-823, P-824, P-825 and P-826, in favor of the Heirs of Elino Adia, represented by Juliana Adia, by the Lands Management Bureau and approved by the Department of Environment and Natural Resources and the President. WHEREFORE,

1. The validity of Original Certificates of Title Nos. P-819, P-820, P-821, P-822, P-823, P-824, P-825 and P-826, registered in the name of Heirs of Elino Adia, represented by Juliana Adia, is UPHELD; 2. All certificates of title issued to the Heirs of Hermogenes Lopez and succesors-ininterest, and all titles originating from any of the certificates of title so issued to the Heirs of Hermogenes Lopez, including Transfer Certificates of Title Nos. 207990, 207991, 207992, 207993, 207994, 207995, 207996, 207997, 207998, 207999, 208000, 208001, 208002, 208358, over subject tract of land, as well as TCT No. 216876 issued to Primex Corporation, and any other title derived therefrom are declared null and void. 3. The Heirs of Hermogenes Lopez and all persons claiming any right under them, including but not limited to Primex Corporation, and Dr. Potenciano Malvar, as well as all members of the Overlooking Storeowners and Planters' Association, Inc., their assignees and successors-in-interest, are ordered to remove all their improvements on the areas covered by the Original Certificates of Titles Nos. P-819 to P-826 aforementioned and to surrender possession thereof to their Heirs of Elino Adia, represented by Juliana Adia; and 5. The writ of demolition, issued by Branch 71 of the Regional Trial Court, Antipolo City, in Civil Case No. 463-A, is SET ASIDE. No pronouncement as to costs.
SO ORDERED.

Melo, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.

Administrative organization NATIONAL AMNESTY COMMISSION, petitioner, vs. COMMISSION ON AUDIT, JUANITO G. ESPINO, Director IV, NCR, Commission on Audit, and ERNESTO C. EULALIA, Resident Auditor, National Amnesty Commission. respondents. DECISION CORONA, J.: This petition for review1[1] seeks to annul the two decisions of respondent Commission on Audit (COA)2[2] dated July 26, 20013[3] and January 30, 2003,4[4] affirming the September 21, 1998

ruling5[5] of the National Government Audit Office (NGAO). The latter in turn upheld Auditor Ernesto C. Eulalias order disallowing the payment of honoraria to the representatives of petitioners ex officio members, per COA Memorandum No. 97-038. Petitioner National Amnesty Commission (NAC) is a government agency created on March 25, 1994 by then President Fidel V. Ramos through Proclamation No. 347. The NAC is tasked to receive, process and review amnesty applications. It is composed of seven members: a Chairperson, three regular members appointed by the President, and the Secretaries of Justice, National Defense and Interior and Local Government as ex officio members.6[6] It appears that after personally attending the initial NAC meetings, the three ex officio members turned over said responsibility to their representatives who were paid honoraria beginning December 12, 1994. However, on October 15, 1997, NAC resident auditor Eulalia disallowed on audit the payment of honoraria to these representatives amounting to P255,750 for the period December 12, 1994 to June 27, 1997, pursuant to COA Memorandum No. 97-038. On September 1, 1998, the NGAO upheld the auditors order and notices of disallowance were subsequently issued to the following:7[7] REPRESENTATIVES 1. Cesar Averilla Department of National Defense 2. Ramon Martinez Department of National Defense AMOUNT P 2,500.00 73,750.00 18,750.00 62,000.00

3. Cielito Mindaro, Department of Justice 4. Purita Deynata Department of Justice 5. Alberto Bernardo Department of the Interior And Local Government

71,250.00

6. Stephen Villaflor Department of the Interior and Local Government

26,250.00

7. Artemio Aspiras Department of Justice

1,250.00 P255,750.00

Meanwhile, on April 28, 1999, the NAC passed Administrative Order No. 2 (the new Implementing Rules and Regulations of Proclamation No. 347), which was approved by then President Joseph Estrada on October 19, 1999. Section 1, Rule II thereof provides: Section 1, Composition The NAC shall be composed of seven (7) members: a) A Chairperson who shall be appointed by the President; b) Three (3) Commissioners who shall be appointed by the President; c) Three (3) Ex-officio Members 1. Secretary of Justice 2. Secretary of National Defense 3. Secretary of the Interior and Local Government The ex officio members may designate their representatives to the Commission. Said Representatives shall be entitled to per diems, allowances, bonuses and other benefits as may be authorized by law. (Emphasis supplied) Petitioner invoked Administrative Order No. 2 in assailing before the COA the rulings of the resident auditor and the NGAO disallowing payment of honoraria to the ex officio members representatives, to no avail. Hence, on March 14, 2003, the NAC filed the present petition, contending that the COA committed grave abuse of discretion in: (1) implementing COA Memorandum No. 97-038 without the required notice and publication under Article 2 of the Civil Code; (2) invoking paragraph 2, Section 7, Article IX-B of the 1987 Constitution to sustain the disallowance of honoraria under said Memorandum; (3) applying the Memorandum to the NAC ex officio members representatives who were all appointive officials with ranks below that of an Assistant Secretary; (4) interpreting laws and rules outside of its mandate and declaring Section 1, Rule II of Administrative Order No. 2 null and void, and (5) disallowing the payment of honoraria on the ground of lack of authority of representatives to attend the NAC meetings in behalf of the ex officio members.8[8] We hold that the position of petitioner NAC is against the law and jurisprudence. The COA is correct that there is no legal basis to grant per diem, honoraria or any allowance whatsoever to the NAC ex officio members official representatives.

The Constitution mandates the Commission on Audit to ensure that the funds and properties of the government are validly, efficiently and conscientiously used. Thus, Article IX-D of the Constitution ordains the COA to exercise exclusive and broad auditing powers over all government entities or trustees, without any exception: Section 2. (1) The Commission on Audit shall have the power, authority and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned and controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the government, which are required by law of the granting institution to submit to such audit as a condition of subsidy or equity. However, where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the Government and, for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto. (2) The Commission shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, inexpensive, extravagant, or unconscionable expenditures, or uses of government funds and properties. Section 3. No law shall be passed exempting any entity of the Government or its subsidiary in any guise whatever, or any investment of public funds, from the jurisdiction of the Commission on Audit. (Emphasis supplied). It is in accordance with this constitutional mandate that the COA issued Memorandum No. 97038 on September 19, 1997: COMMISSION ON AUDIT MEMORANDUM NO. 97-038 SUBJECT: Implementation of Senate Committee Report No. 509, Committee on Accountability of Public Officers and Investigations and Committee on Civil Service and Government Reorganization. The Commission received a copy of Senate Committee Report No. 509 urging the Commission on Audit to immediately cause the disallowance of any payment of any form of additional compensation or remuneration to cabinet secretaries, their deputies and assistants, or their representatives, in violation of the rule on multiple positions, and to effect the refund of any and all such additional compensation given to and received by the officials concerned, or their representatives, from the time of the finality of the Supreme Court ruling in Civil

Liberties Union v. Executive Secretary to the present. In the Civil Liberties Union case, the Supreme Court ruled that Cabinet Secretaries, their deputies and assistants may not hold any other office or employment. It declared Executive Order 284 unconstitutional insofar as it allows Cabinet members, their deputies and assistants to hold other offices in addition to their primary office and to receive compensation therefor. The said decision became final and executory on August 19, 1991. In view thereof, all unit heads/auditors/team leaders of the national government agencies and government owned or controlled corporations which have effected payment of subject allowances, are directed to implement the recommendation contained in the subject Senate Committee Report by undertaking the following audit action: 1. On accounts that have not been audited and settled under certificate of settlements and balances on record from August 19, 1991 to present to immediately issue the Notices of disallowance and corresponding certificate of settlements and balances. 2. On accounts that have been audited and settled under certificate of settlements and balances on record to review and re-open said accounts, issue the corresponding notices of disallowance, and certify a new balance thereon. It is understood that the re-opening of accounts shall be limited to those that were settled within the prescriptive period of three (3) years prescribed in Section 52 of P.D. 1445. 3. On disallowances previously made on these accounts to submit a report on the status of the disallowances indicating whether those have been refunded/settled or have become final and executory and the latest action taken by the Auditor thereon. All auditors concerned shall ensure that all documents evidencing the disallowed payments are kept intact on file in their respective offices. Any problem/issue arising from the implementation of this Memorandum shall be brought promptly to the attention of the Committee created under COA Officer Order No. 97-698 thru the Director concerned, for immediate resolution. An initial report on the implementation of this Memorandum shall be submitted to the Directors concerned not later than October 31, 1997. Thereafter, a quarterly progress report on the status of disallowances made shall be submitted, until all the disallowances shall have been enforced. The Committee created under COA Office Order No. 97-698, dated September 10, 1997, shall supervise the implementation of this Memorandum which shall take effect immediately and shall submit a consolidated report thereon in response to the recommendation of the Senate Committee on Accountability of Public Officers and Investigation and Committee on Civil Service and Government Reorganization.9[9] (Emphasis supplied)

Contrary to petitioners claim, COA Memorandum No. 97-038 does not need, for validity and effectivity, the publication required by Article 2 of the Civil Code: Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication. We clarified this publication requirement in Taada vs. Tuvera:10[10] [A]ll statutes, including those of local application and private laws, shall be published as a condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity date is fixed by the legislature. Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. (Emphasis supplied.) COA Memorandum No. 97-038 is merely an internal and interpretative regulation or letter of instruction which does not need publication to be effective and valid. It is not an implementing rule or regulation of a statute but a directive issued by the COA to its auditors to enforce the selfexecuting prohibition imposed by Section 13, Article VII of the Constitution on the President and his official family, their deputies and assistants, or their representatives from holding multiple offices and receiving double compensation. Six years prior to the issuance of COA Memorandum No. 97-038, the Court had the occasion to categorically explain this constitutional prohibition in Civil Liberties Union vs. The Executive Secretary:11[11] Petitioners maintain that this Executive Order which, in effect, allows members of the Cabinet, their undersecretaries and assistant secretaries to hold other government offices or positions in addition to their primary positions, albeit subject to the limitation therein imposed, runs counter to Section 13, Article VII of the 1987 Constitution, which provides as follows:

Sec. 13. The President, Vice-President, the Members of the Cabinet, and their deputies or assistants shall not, unless otherwise provided in this Constitution, hold any other office or employment during their tenure. They shall not, during said tenure, directly or indirectly practice any other profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office. xxx xxx xxx

[D]oes the prohibition in Section 13, Article VII of the 1987 Constitution insofar as Cabinet members, their deputies or assistants are concerned admit of the broad exceptions made for appointive officials in general under Section 7, par. (2), Article IX-B which, for easy reference is quoted anew, thus: "Unless otherwise allowed by law or by the primary functions of his position, no appointive official shall hold any other office or employment in the Government or any subdivision, agency or instrumentality thereof, including government-owned or controlled corporation or their subsidiaries." We rule in the negative. xxx xxx xxx

But what is indeed significant is the fact that although Section 7, Article IX-B already contains a blanket prohibition against the holding of multiple offices or employment in the government subsuming both elective and appointive public officials, the Constitutional Commission should see it fit to formulate another provision, Sec. 13, Article VII, specifically prohibiting the President, Vice-President, members of the Cabinet, their deputies and assistants from holding any other office or employment during their tenure, unless otherwise provided in the Constitution itself. xxx xxx xxx

Thus, while all other appointive officials in the civil service are allowed to hold other office or employment in the government during their tenure when such is allowed by law or by the primary functions of their positions, members of the Cabinet, their deputies and assistants may do so only when expressly authorized by the Constitution itself. In other words, Section 7, Article IX-B is meant to lay down the general rule applicable to all elective and appointive public officials and employees, while Section 13, Article VII is meant to be the exception applicable only to the President, the Vice-President, Members of the Cabinet, their deputies and assistants. This being the case, the qualifying phrase "unless otherwise provided in this Constitution" in Section 13, Article VII cannot possibly refer to the broad exceptions provided under Section 7, Article IX-B of the 1987 Constitution. . . . xxx xxx xxx

The prohibition against holding dual or multiple offices or employment under Section 13, Article VII of the Constitution must not, however, be construed as applying to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary functions of said officials' office. The reason is that these posts do no comprise "any other office" within the contemplation of the constitutional prohibition but are properly an imposition of additional duties and functions on said officials. xxx xxx xxx

[T]he prohibition under Section 13, Article VII is not to be interpreted as covering positions held without additional compensation in ex-officio capacities as provided by law and as required by the primary functions of the concerned official's office. The term exofficio means "from office; by virtue of office." It refers to an "authority derived from official character merely, not expressly conferred upon the individual character, but rather annexed to the official position." Ex-officio likewise denotes an "act done in an official character, or as a consequence of office, and without any other appointment or authority than that conferred by the office." An ex-officio member of a board is one who is a member by virtue of his title to a certain office, and without further warrant or appointment. To illustrate, by express provision of law, the Secretary of Transportation and Communications is the ex-officio Chairman of the Board of the Philippine Ports Authority, and the Light Rail Transit Authority. xxx xxx xxx

The ex-officio position being actually and in legal contemplation part of the principal office, it follows that the official concerned has no right to receive additional compensation for his services in the said position. The reason is that these services are already paid for and covered by the compensation attached to his principal office. x x x xxx xxx xxx

[E]x-officio posts held by the executive official concerned without additional compensation as provided by law and as required by the primary functions of his office do not fall under the definition of "any other office" within the contemplation of the constitutional prohibition... (Emphasis supplied). Judicial decisions applying or interpreting the laws or the Constitution, such as the Civil Liberties Union doctrine, form part of our legal system.12[12] Supreme Court decisions assume the same authority as valid statutes.13[13] The Courts interpretation of the law is part of that law as of

the date of enactment because its interpretation merely establishes the contemporary legislative intent that the construed law purports to carry into effect.14[14] COA Memorandum No. 97-038 does not, in any manner or on its own, rule against or affect the right of any individual, except those provided for under the Constitution. Hence, publication of said Memorandum is not required for it to be valid, effective and enforceable. In Civil Liberties Union, we elucidated on the two constitutional prohibitions against holding multiple positions in the government and receiving double compensation: (1) the blanket prohibition of paragraph 2, Section 7, Article IX-B on all government employees against holding multiple government offices, unless otherwise allowed by law or the primary functions of their positions, and (2) the stricter prohibition under Section 13, Article VII on the President and his official family from holding any other office, profession, business or financial interest, whether government or private, unless allowed by the Constitution. The NAC ex officio members representatives who were all appointive officials with ranks below Assistant Secretary are covered by the two constitutional prohibitions. First, the NAC ex officio members representatives are not exempt from the general prohibition because there is no law or administrative order creating a new office or position and authorizing additional compensation therefor. Sections 54 and 56 of the Administrative Code of 1987 reiterate the constitutional prohibition against multiple positions in the government and receiving additional or double compensation: SEC. 54. Limitation on Appointment. (1) No elective official shall be eligible for appointment or designation in any capacity to any public office or position during his tenure. xxx xxx xxx

(3) Unless otherwise allowed by law or by the primary functions of his position, no appointive official shall hold any other office or employment in the Government or any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries. xxx xxx xxx

SEC. 56. Additional or Double Compensation. -- No elective or appointive public officer or employee shall receive additional or double compensation unless specifically authorized by law nor accept without the consent of the President, any present, emolument, office, or title of any kind form any foreign state. Pensions and gratuities shall not be considered as additional, double or indirect compensation.

RA 6758, the Salary Standardization Law, also bars the receipt of such additional emolument. The representatives in fact assumed their responsibilities not by virtue of a new appointment but by mere designation from the ex officio members who were themselves also designated as such. There is a considerable difference between an appointment and designation. An appointment is the selection by the proper authority of an individual who is to exercise the powers and functions of a given office; a designation merely connotes an imposition of additional duties, usually by law, upon a person already in the public service by virtue of an earlier appointment.15[15] Designation does not entail payment of additional benefits or grant upon the person so designated the right to claim the salary attached to the position. Without an appointment, a designation does not entitle the officer to receive the salary of the position. The legal basis of an employees right to claim the salary attached thereto is a duly issued and approved appointment to the position,16[16] and not a mere designation. Second, the ex officio members representatives are also covered by the strict constitutional prohibition imposed on the President and his official family. Again, in Civil Liberties Union, we held that cabinet secretaries, including their deputies and assistants, who hold positions in ex officio capacities, are proscribed from receiving additional compensation because their services are already paid for and covered by the compensation attached to their principal offices. Thus, in the attendance of the NAC meetings, the ex officio members were not entitled to, and were in fact prohibited from, collecting extra compensation, whether it was called per diem, honorarium, allowance or some other euphemism. Such additional compensation is prohibited by the Constitution. Furthermore, in de la Cruz vs. COA17[17] and Bitonio vs. COA,18[18] we upheld COAs disallowance of the payment of honoraria and per diems to the officers concerned who sat as ex officio members or alternates. The agent, alternate or representative cannot have a better right than his principal, the ex officio member. The laws, rules, prohibitions or restrictions that cover the ex officio member apply with equal force to his representative. In short, since the ex officio member is prohibited from receiving additional compensation for a position held in an ex officio capacity, so is his representative likewise restricted. The Court also finds that the re-opening of the NAC accounts within three years after its settlement is within COAs jurisdiction under Section 52 of Presidential Decree No. 1445, promulgated on June 11, 1978:

SECTION 52. Opening and revision of settled accounts. (1) At any time before the expiration of three years after the settlement of any account by an auditor, the Commission may motu propio review and revise the account or settlement and certify a new balance. More importantly, the Government is never estopped by the mistake or error on the part of its agents.19[19] Erroneous application and enforcement of the law by public officers do not preclude subsequent corrective application of the statute. In declaring Section 1, Rule II of Administrative Order No. 2 s. 1999 null and void, the COA ruled that: Petitioner further contends that with the new IRR issued by the NAC authorizing the ex-officio members to designate representatives to attend commission meetings and entitling them to receive per diems, honoraria and other allowances, there is now no legal impediment since it was approved by the President. This Commission begs to disagree. Said provision in the new IRR is null and void for having been promulgated in excess of its rule-making authority. Proclamation No. 347, the presidential issuance creating the NAC, makes no mention that representatives of ex-officio members can take the place of said ex-officio members during its meetings and can receive per diems and allowances. This being the case, the NAC, in the exercise of its quasilegislative powers, cannot add, expand or enlarge the provisions of the issuance it seeks to implement without committing an ultra vires act.20[20] We find that, on its face, Section 1, Rule II of Administrative Order No. 2 is valid, as it merely provides that: The ex officio members may designate their representatives to the Commission. Said Representatives shall be entitled to per diems, allowances, bonuses and other benefits as may be authorized by law. (Emphasis supplied). The problem lies not in the administrative order but how the NAC and the COA interpreted it. First, the administrative order itself acknowledges that payment of allowances to the representatives must be authorized by the law, that is, the Constitution, statutes and judicial decisions. However, as already discussed, the payment of such allowances is not allowed, prohibited even. Second, the administrative order merely allows the ex officio members to designate their representatives to NAC meetings but not to decide for them while attending such meetings. Section 4 of the administrative order categorically states: Decisions of the NAC shall be arrived at by a majority vote in a meeting where there is a quorum consisting of at least four members.

Thus, although the administrative order does not preclude the representatives from attending the NAC meetings, they may do so only as guests or witnesses to the proceedings. They cannot substitute for the ex officio members for purposes of determining quorum, participating in deliberations and making decisions. Lastly, we disagree with NACs position that the representatives are de facto officers and as such are entitled to allowances, pursuant to our pronouncement in Civil Liberties Union: where there is no de jure officer, a de facto officer, who in good faith has had possession of the office and has discharged the duties pertaining thereto, is legally entitled to the emoluments of the office, and may in appropriate action recover the salary, fees and other compensation attached to the office. A de facto officer derives his appointment from one having colorable authority to appoint, if the office is an appointive office, and whose appointment is valid on its face. (He is) one who is in possession of an office and is discharging its duties under color of authority, by which is meant authority derived from an appointment, however irregular or informal, so that the incumbent be not a mere volunteer.21[21] The representatives cannot be considered de facto officers because they were not appointed but were merely designated to act as such. Furthermore, they are not entitled to something their own principals are prohibited from receiving. Neither can they claim good faith, given the express prohibition of the Constitution and the finality of our decision in Civil Liberties Union prior to their receipt of such allowances. WHEREFORE the petition is hereby DISMISSED for lack of merit. SO ORDERED. Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Callejo, Sr., Azcuna, Tinga and Chico-Nazario, JJ., concur. Austria-Martinez and Carpio Morales JJ., on official leave. Administrative adjudication G.R. No. 162784 June 22, 2007

NATIONAL HOUSING AUTHORITY, petitioner, vs. SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31, respondents.

DECISION PUNO, C.J.: This is a Petition for Review on Certiorari under Rule 45 filed by the National Housing Authority (NHA) against the Court of Appeals, the Regional Trial Court of San Pedro Laguna, Branch 31, and private respondent Segunda Almeida. On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera several portions of land which are part of the Tunasan Estate in San Pedro, Laguna. The award is evidenced by an Agreement to Sell No. 3787.1 By virtue of Republic Act No. 3488, the LTA was succeeded by the Department of Agrarian Reform (DAR). On July 31, 1975, the DAR was succeeded by the NHA by virtue of Presidential Decree No. 757.2 NHA as the successor agency of LTA is the petitioner in this case. The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of private respondent) and Francisca Herrera. Beatriz Herrera-Mercado predeceased her mother and left heirs. Margarita Herrera passed away on October 27, 1971.3 On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a Deed of Self-Adjudication claiming that she is the only remaining relative, being the sole surviving daughter of the deceased. She also claimed to be the exclusive legal heir of the late Margarita Herrera. The Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960, allegedly executed by Margarita Herrera. The pertinent portions of which are as follows: SINUMPAANG SALAYSAY SA SINO MAN KINAUUKULAN; Akong si MARGARITA HERRERA, Filipina, may 83 taong gulang, balo, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim ng panunumpa ay malaya at kusang loob kong isinasaysay at pinagtitibay itong mga sumusunod: 1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG (771) METRONG PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at pag-aari ng Land Tenure Administration; 2. Na ang nasabing lote ay aking binibile, sa pamamagitan ng paghuhulog sa Land Tenure Administration, at noong ika 30 ng Julio, 1959, ang Kasunduang sa Pagbibile (AGREEMENT TO SELL No. 3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa

harap ng Notario Publico na si G. Jose C. Tolosa, at lumalabas sa kaniyang Libro Notarial bilang Documento No. 13, Pagina No. 4; Libro No. IV, Serie ng 1959; 3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at pinagsisilbihan nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na nasasabi sa unahan ay binabayaran ng kaniyang sariling cuarta sa Land Tenure Administration; 4. Na alang-alang sa nasasaysay sa unahan nito, sakaling ako'y bawian na ng Dios ng aking buhay, ang lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong anak na FRANCISCA HERRERA, Filipina, nasa katamtamang gulang, kasal kay Macario Berroya, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang mga tagapagmana at; 5. Na HINIHILING KO sa sino man kinauukulan, na sakaling ako nga ay bawian na ng Dios ng aking buhay ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa pangalan ng aking anak na si Francisca Herrera ang loteng nasasabi sa unahan. SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki ng kanan kong kamay sa ibaba nito at sa kaliwang gilid ng unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng Octubre, 1960.4 The said document was signed by two witnesses and notarized. The witnesses signed at the lefthand side of both pages of the document with the said document having 2 pages in total. Margarita Herrera placed her thumbmark5 above her name in the second page and at the lefthand margin of the first page of the document. The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of SelfAdjudication before the then Court of First Instance of Laguna, Branch 1 in Binan, Laguna (now, Regional Trial Court Branch 25). The case for annulment was docketed as Civil Case No. B1263.6 On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of SelfAdjudication) was rendered and the deed was declared null and void.7 During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed an application with the NHA to purchase the same lots submitting therewith a copy of the "Sinumpaang Salaysay" executed by her mother. Private respondent Almeida, as heir of Beatriz Herrera-Mercado, protested the application. In a Resolution8 dated February 5, 1986, the NHA granted the application made by Francisca Herrera, holding that: From the evidence of the parties and the records of the lots in question, we gathered the following facts: the lots in question are portions of the lot awarded and sold to the late Margarita Herrera on July 28, 1959 by the defunct Land Tenure Administration;

protestant is the daughter of the late Beatriz Herrera Mercado who was the sister of the protestee; protestee and Beatriz are children of the late Margarita Herrera; Beatriz was the transferee from Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots transferred to Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name of the protestant; protestant occupied the lots in question with the permission of the protestee; protestee is a resident of the Tunasan Homesite since birth; protestee was born on the lots in question; protestee left the place only after marriage but resided in a lot situated in the same Tunasan Homesite; her (protestee) son Roberto Herrera has been occupying the lots in question; he has been there even before the death of the late Margarita Herrera; on October 7, 1960, Margarita Herrera executed a "Sinumpaang Salaysay" whereby she waived or transferred all her rights and interest over the lots in question in favor of the protestee; and protestee had paid the lots in question in full on March 8, 1966 with the defunct Land Tenure Administration. This Office finds that protestee has a better preferential right to purchase the lots in question.9 Private respondent Almeida appealed to the Office of the President.10 The NHA Resolution was affirmed by the Office of the President in a Decision dated January 23, 1987.11 On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her estate which they submitted to the NHA. Said transfer of rights was approved by the NHA.12 The NHA executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued in their favor.13 Thereafter, the heirs of Francisca Herrera directed Segunda MercadoAlmeida to leave the premises that she was occupying. Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA, private respondent Segunda Mercado-Almeida sought the cancellation of the titles issued in favor of the heirs of Francisca. She filed a Complaint on February 8, 1988, for "Nullification of Government Lot's Award," with the Regional Trial Court of San Pedro, Laguna, Branch 31. In her complaint, private respondent Almeida invoked her forty-year occupation of the disputed properties, and re-raised the fact that Francisca Herrera's declaration of self-adjudication has been adjudged as a nullity because the other heirs were disregarded. The defendant heirs of Francisca Herrera alleged that the complaint was barred by laches and that the decision of the Office of the President was already final and executory.14 They also contended that the transfer of purchase of the subject lots is perfectly valid as the same was supported by a consideration and that Francisca Herrera paid for the property with the use of her own money.15 Further, they argued that plaintiff's occupation of the property was by mere tolerance and that they had been paying taxes thereon.16 The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of jurisdiction.17 The Court of Appeals in a Decision dated June 26, 1989 reversed and held that the Regional Trial Court had jurisdiction to hear and decide the case involving "title and possession to real property within its jurisdiction."18 The case was then remanded for further proceedings on the merits.

A pre-trial was set after which trial ensued. On March 9, 1998, the Regional Trial Court rendered a Decision setting aside the resolution of the NHA and the decision of the Office of the President awarding the subject lots in favor of Francisca Herrera. It declared the deeds of sale executed by NHA in favor of Herrera's heirs null and void. The Register of Deeds of Laguna, Calamba Branch was ordered to cancel the Transfer Certificate of Title issued. Attorney's fees were also awarded to private respondent. The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a disposition of property which shall take effect upon death. It then held that the said document must first be submitted to probate before it can transfer property. Both the NHA and the heirs of Francisca Herrera filed their respective motions for reconsideration which were both denied on July 21, 1998 for lack of merit. They both appealed to the Court of Appeals. The brief for the heirs of Francisca Herrera was denied admission by the appellate court in a Resolution dated June 14, 2002 for being a "carbon copy" of the brief submitted by the NHA and for being filed seventy-nine (79) days late. On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz: There is no dispute that the right to repurchase the subject lots was awarded to Margarita Herrera in 1959. There is also no dispute that Margarita executed a "Sinumpaang Salaysay" on October 7, 1960. Defendant NHA claims that the "Sinumpaang Salaysay" is, in effect, a waiver or transfer of rights and interest over the subject lots in favor of Francisca Herrera. This Court is disposed to believe otherwise. After a perusal of the "Sinumpaang Salaysay" of Margarita Herrera, it can be ascertained from its wordings taken in their ordinary and grammatical sense that the document is a simple disposition of her estate to take effect after her death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of Margarita Herrera. Evidently, if the intention of Margarita Herrera was to merely assign her right over the lots to her daughter Francisca Herrera, she should have given her "Sinumpaang Salaysay" to the defendant NHA or to Francisca Herrera for submission to the defendant NHA after the full payment of the purchase price of the lots or even prior thereto but she did not. Hence it is apparent that she intended the "Sinumpaang Salaysay" to be her last will and not an assignment of rights as what the NHA in its resolution would want to make it appear. The intention of Margarita Herrera was shared no less by Francisca Herrera who after the former's demise executed on August 22, 1974 a Deed of Self-Adjudication claiming that she is her sole and legal heir. It was only when said deed was questioned in court by the surviving heirs of Margarita Herrera's other daughter, Beatriz Mercado, that Francisca Herrera filed an application to purchase the subject lots and presented the "Sinumpaang Salaysay" stating that it is a deed of assignment of rights.19 The Court of Appeals ruled that the NHA acted arbitrarily in awarding the lots to the heirs of Francisca Herrera. It upheld the trial court ruling that the "Sinumpaang Salaysay" was not an assignment of rights but one that involved disposition of property which shall take effect upon death. The issue of whether it was a valid will must first be determined by probate.

Petitioner NHA elevated the case to this Court. Petitioner NHA raised the following issues: A. WHETHER OR NOT THE RESOLUTION OF THE NHA AND THE DECISION OF THE OFFICE OF THE PRESIDENT HAVE ATTAINED FINALITY, AND IF SO, WHETHER OR NOT THE PRINCIPLE OF ADMINISTRATIVE RES JUDICATA BARS THE COURT FROM FURTHER DETERMINING WHO BETWEEN THE PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD OVER THE SUBJECT LOTS; B. WHETHER OR NOT THE COURT HAS JURISDICTION TO MAKE THE AWARD ON THE SUBJECT LOTS; AND C. WHETHER OR NOT THE AWARD OF THE SUBJECT LOTS BY THE NHA IS ARBITRARY. We rule for the respondents. Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of courts. But jurisprudence has also recognized the rule of administrative res judicata: "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers . . . It has been declared that whenever final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata."20 To be sure, early jurisprudence were already mindful that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what are usually understood as courts without unreasonably circumscribing the scope thereof and that the more equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have been conferred. In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,21 the Court held that the rule prescribing that "administrative orders cannot be enforced in the courts in the absence of an express statutory provision for that purpose" was relaxed in favor of quasi-judicial agencies. In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial powerthat which is held by the courts. Quasi-judicial power is defined as that power of adjudication of an administrative agency for the "formulation of a final order."22 This function applies to the actions, discretion and similar acts of public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature.23 However, administrative agencies are not considered courts, in their strict sense. The doctrine of separation of powers reposes the three great powers into its three (3) branchesthe legislative, the executive, and the judiciary. Each department is co-equal and coordinate, and

supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government."24 Courts have an expanded role under the 1987 Constitution in the resolution of societal conflicts under the grave abuse clause of Article VIII which includes that duty to check whether the other branches of government committed an act that falls under the category of grave abuse of discretion amounting to lack or excess of jurisdiction.25 Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 198026 where it is therein provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of the Regional Trial Courts and Quasi-Judicial agencies, instrumentalities, boards or commissions, except those falling within the jurisdiction of the Supreme Court in accordance with the Constitution"27 and contends that the Regional Trial Court has no jurisdiction to rule over awards made by the NHA. Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that the issue of the trial court's authority to hear and decide the instant case has already been settled in the decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on August 20, 1989 as per entry of judgment dated October 10, 1989).28 We find no reason to disturb this ruling. Courts are duty-bound to put an end to controversies. The system of judicial review should not be misused and abused to evade the operation of a final and executory judgment.29 The appellate court's decision becomes the law of the case which must be adhered to by the parties by reason of policy.30 Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it considered the application for the purchase of lots. Petitioner argues that it was the daughter Francisca Herrera who filed her application on the subject lot; that it considered the respective application and inquired whether she had all the qualifications and none of the disqualifications of a possible awardee. It is the position of the petitioner that private respondent possessed all the qualifications and none of the disqualifications for lot award and hence the award was not done arbitrarily. The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not bind the NHA.31 That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then applying to purchase the same before it."32 We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should have noted that the effectivity of the said document commences at the time of death of the author of the instrument; in her words "sakaling ako'y bawian na ng Dios ng aking buhay" Hence, in such period, all the interests of the person should cease to be hers and shall be in the possession of her estate until they are transferred to her heirs by virtue of Article 774 of the Civil Code which provides that:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.33 By considering the document, petitioner NHA should have noted that the original applicant has already passed away. Margarita Herrera passed away on October 27, 1971.34 The NHA issued its resolution35 on February 5, 1986. The NHA gave due course to the application made by Francisca Herrera without considering that the initial applicant's death would transfer all her property, rights and obligations to the estate including whatever interest she has or may have had over the disputed properties. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita Herrera had an interest in the property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirsin accordance with a will or by operation of law. The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera had an existing Contract to Sell36 with NHA as the seller. Upon Margarita Herrera's demise, this Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both partiesMargarita Herrera and NHA. Obligations are transmissible.37 Margarita Herrera's obligation to pay became transmissible at the time of her death either by will or by operation of law. If we sustain the position of the NHA that this document is not a will, then the interests of the decedent should transfer by virtue of an operation of law and not by virtue of a resolution by the NHA. For as it stands, NHA cannot make another contract to sell to other parties of a property already initially paid for by the decedent. Such would be an act contrary to the law on succession and the law on sales and obligations.38 When the original buyer died, the NHA should have considered the estate of the decedent as the next "person"39 likely to stand in to fulfill the obligation to pay the rest of the purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) which rendered the deed therein null and void40 should have alerted the NHA that there are other heirs to the interests and properties of the decedent who may claim the property after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the lots. We need not delve into the validity of the will. The issue is for the probate court to determine. We affirm the Court of Appeals and the Regional Trial Court which noted that it has an element of testamentary disposition where (1) it devolved and transferred property; (2) the effect of which shall transpire upon the death of the instrument maker.41 IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the Court of Appeals in CA-G.R. No. 68370 dated August 28, 2003, affirming the decision of the Regional Trial Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby AFFIRMED.

No cost. SO ORDERED. Sandoval-Gutierrez, Corona, Azcuna, Garcia, JJ., concur. G.R. No. 140656 September 13, 2007

MAYOR FELIPE K. CONSTANTINO, petitioner, vs. HON. SANDIGANBAYAN (FIRST DIVISION) and THE PEOPLE OF THE PHILIPPINES, respondents. x-----------------------------------------------------------------------------x G.R. No. 154482 September 13, 2007

NORBERTO N. LINDONG, petitioner, vs. PEOPLE OF THE PHILIPPINES and SANDIGANBAYAN, respondents. DECISION TINGA, J.: Before us are two (2) consolidated petitions, the determination of both rests ultimately on whether Felipe K. Constantino (Constantino), mayor of Malungon, Sarangani Province, was indeed guilty beyond reasonable doubt of violating Section 3(e) of Republic Act No. 3019 (R.A. No. 3019), otherwise known as The Anti-Graft and Corrupt Practices Act. In G.R. No. 140656, Constantino filed a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, assailing the 15 November 1999 decision1 and the 15 March 2000 resolution2 of the Sandiganbayan (First Division) in Criminal Case No. 23433 finding him and his co-accused, petitioner Norberto N. Lindong (Lindong) guilty beyond reasonable doubt of violating Section 3(e) of R.A. No. 3019. On the other hand, G.R. No. 154482 is a petition for certiorari with prayer for preliminary injunction under Rule 65 of the 1997 Rules of Civil Procedure, filed by Lindong questioning three (3) orders3 of the Sandiganbayan (First Division) relative to the execution of judgment against him also in Criminal Case No. 23433. The Antecedents In an Information dated 31 July 1996, Constantino, in his capacity as mayor of Malungon, Sarangani Province, together with his co-accused Lindong, was charged with violation of Section 3 (e) of R.A. No. 3019 before the Sandiganbayan, to wit:

That on or about February 28, 1996, in Davao City, Philippines, and within the jurisdiction of this Honorable Court, accused Felipe K. Constantino, a public officer, being then the Mayor of the Municipality of Malungon, Sarangani Province, committing the crime herein-charged in relation to, while in the performance and taking advantage of his official functions, with evident bad faith, manifest partiality or through gross inexcusable negligence, and conspiring and confederating with accused Norberto N. Lindong, President and Chairman of the Board of the Norlovanian Corporation, Davao City, did then and there wil[l]fully, unlawfully and criminally enter into a Lease Agreement for the rental of various heavy equipments (sic) for a period of six (6) years for and in consideration of the sum of PESOS: TWO HUNDRED FIFTY-SEVEN THOUSAND ONE HUNDRED ELEVEN and 11/100 (P257,111.11) per month or a total consideration of PESOS: EIGHTEEN MILLION FIVE HUNDRED ELEVEN THOUSAND NINE HUNDRED NINETY-NINE and 92/100 (P18,511,999.92) and a guaranty deposit of PESOS: ONE MILLION SEVEN HUNDRED EIGHTY THOUSAND (P1,780,000.00) contrary to the express mandate of Resolution No. 2, series of 1995, of the Municipal Planning and Development Council implementing Sangguniang Bayan Resolution No. 198, series of 1995 and Sangguniang Bayan Resolution No. 21 dated February 22, 1996 authorizing the Municipal Mayor of Malungon to enter into an agreement for the purchase of heavy equipments (sic) on a five-year term basis for and in consideration of the amount of PESOS: TWO MILLION TWO HUNDRED THOUSAND (P2,200,000.00) per year or a total consideration of only PESOS: ELEVEN MILLION (P11,000,000.00), thus, giving said Norlovanian Corporation, which was fully paid for the Guaranty Deposit and was actually paid heavy equipment rentals for the period March 5 to May 6, 1996 in the aggregate sum of PESOS: TWO MILLION ONE HUNDRED SEVENTYSEVEN THOUSAND NINETY and 91/100 (P2,177,090.91), unwarranted benefits and advantage and causing undue injury to the government. CONTRARY TO LAW.4 Both accused pleaded not guilty to the charge. In the ensuing trial, the prosecution presented Nazario B. Tomanan (Tomanan), Commission on Audit (COA) Auditor III of the COA Regional Office No. XI. In rebuttal, it presented Benjamin C. Asgapo (Asgapo), councilor of Malungon, Sarangani Province and one of the complainants below. The prosecution sought to establish the facts as follows: The Municipality of Malungon listed as one of its priority programs, the acquisition of a fleet of heavy equipment needed by the municipality in its development projects.5 For this purpose, it appropriated an amount of P2.2 Million per annum for a period of five (5) years beginning in 1996 for the amortization of such purchase.6 Pursuant thereto, the municipality conducted two (2) public biddings for suppliers of the required fleet of heavy equipment. Both attempts, however, failed. Hence, the Sangguniang Bayan instead passed Resolution No. 21 on 22 February 1996, authorizing petitioner Constantino to enter into a negotiated contract for the lease/purchase of the needed fleet of heavy equipment.7

On 28 February 1996, Constantino entered into a Lease Agreement8 with Norlovanian Corporation, represented by Lindong. The agreement required, among others, the municipality to provide Norlovanian Corporation with a guaranty deposit. The following day, Lindong appeared before the Sangguniang Bayan to discuss the Lease Agreement. Not one of the members of the Sanggunian questioned the legality of the agreement.9 The seven (7) units of heavy equipment subject of the agreement were thus delivered to the municipality on 4 March 1996.10 On 6 March 1996, the Municipality of Malungon paid Norlovanian Corporation a total amount of P2,177,090.91 representing the guaranty deposit as well as the rental for the period of 5 March 1996 to 5 April 1996 and partial rental for the period of 5 April 1996 to 6 May 1996.11 Thereafter, on 18 April 1996, the Sangguniang Bayan unanimously passed Resolution No. 3812 requesting petitioner to operate the newly acquired fleet of heavy equipment. The municipality subsequently utilized the fleet.13 However, only five (5) days later, or on 23 April 1996, Sanggunian members Benjamin C. Asgapo, Rafael J. Suson, Sr. (Suson), Leo G. Ingay (Ingay), Pablo V. Octavio (Octavio) and Wilfredo P. Espinosa (Espinosa), and Vice Mayor Primitiva L. Espinosa (Vice Mayor Espinosa) filed a formal complaint against petitioners Constantino and Lindong for violation of R.A. No. 3019. On 6 June 1996, the Sangguniang Bayan passed Resolution No. 47, urging the municipality to "stop all forms of unauthorized payment/expenditure relative to the illegally acquired pool of heavy equipment by the Municipality of Malungon."14 In particular, Tomanan testified that he was directed by the COA Regional Office XI to conduct a special and comprehensive audit of the municipality of Malungon for the period of 1 May 1995 to 31 May 199615 in view of a complaint filed by certain officials therein. In January 1997, Tomanan submitted his report detailing the following adverse findings relative to the purchase of the subject fleet of heavy equipment: (a) the lease/purchase contract was disadvantageous to the municipal government because of the rigid terms and conditions therein required of the municipality before the latter could acquire ownership over the pool of heavy equipment; (b) Norlovanian Corporation had no proof of ownership of the fleet of equipment as the audit revealed that title to the equipment was in the name of Lindong; (c) the lease/purchase procedure violated Sections 27 and 28 of the Rules and Regulations on Supply and Property Management in Local Governments;16 and (d) the lease/purchase procedure utilized by the municipality was uneconomical and resulted to a wastage of P9,658,000.00 of government funds.17 Asgapo, on the other hand, testified that he was present during the 29 February 1996 meeting where Lindong appeared before the Sanggunian. The witness asserted that the lease contract was never concurred in by the municipal council as required by Resolution No. 21. He admitted, however, that neither was there any resolution passed opposing, objecting to or rejecting the lease contract. Moreover, Asgapo alleged that at the time he first obtained a copy of the lease contract from the municipal treasurer on 6 March 1996, he did not see the Undertaking dated 28 February 199618 attached or annexed thereto. He was only able to get a copy of the latter

document about three (3) or four (4) days thereafter, following an inquiry with the provincial auditor.19 The defense presented Lindong as its sole witness. According to Lindong, after negotiations between himself and petitioner Constantino, together with some members of the Sanggunian, the parties agreed to a lease/purchase scheme in accordance with the mandate of Resolution No. 21. They agreed that since the municipality did not have sufficient funds to buy the fleet of heavy equipment outright at P8.9 Million, the latter would purchase the subject equipment on installment basis but with allowance for Norlovanian Corporation to recover some incremental cost. Thus, on the very same day, 28 February 1996, Lindong as representative of Norlovanian Corporation and Constantino as representative of the municipality entered into the lease/purchase agreement. They contemporaneously executed the Lease Agreement and Undertaking in the presence of the members of the Sanggunian who accompanied the mayor.20 Lindong further testified that he attended the municipal council meeting on 29 February 1996 to provide the members thereof with a copy of the lease contract and to explain the transaction. Moreover, he explained that notwithstanding the fact that the main agreement was captioned only as a "Lease Agreement," the same being a standard pre-printed form of his corporation, the intent of the parties was to enter into a lease/purchase agreement. Hence, he clarified that the Undertaking he executed bound him to convey ownership over the fleet of heavy equipment to the municipality upon the full payment thereof.21 Finally, Lindong averred that more than two (2) months after he delivered the fleet of equipment to the municipality, he received a Certificate of Concurrence dated 9 May 1996 issued by Nemesio Liray, Chairman of the Committee of Finance of the Sangguniang Bayan, certifying that the Lease Agreement was concurred in by the members of the Committee on 29 February 1996. Likewise, he received a Certification dated 17 May 1996 from the Pre-Qualification, Bids and Awards Committee of the Municipality of Malungon, that the members thereof approved, concurred in and signed the contract of lease between the municipality and Norlovanian Corporation.22 Finding that the prosecution had proven beyond reasonable doubt the guilt of Constantino and Lindong of the offense as charged, the Sandiganbayan rendered the assailed decision sentencing them both, thus: WHEREFORE, judgment is hereby rendered finding accused FELIPE K. CONSTANTINO and NORBERTO N. LINDONG GUILTY beyond reasonable doubt of the crime of violation of Section 3 (e) of R.A. No. 3019, otherwise known as "The AntiGraft and Corrupt Practices Act," and said accused are hereby sentenced, as follows: (a) to suffer an indeterminate sentence of imprisonment for a period of six (6) years and one (1) month as minimum to twelve (12) years and one (1) month as maximum; (b) to suffer perpetual disqualification from public office;

(c) to jointly and severally indemnify the Municipality of Malungon, Province of Sarangani the sum of Two Million One Hundred Seventy-Seven Thousand [sic] and 91/1000 [sic] Pesos (P2,177,090.91), representing the amount actually paid to Norlovanian Corporation, with interest at the legal rate computed from March 6, 1996 until fully paid; and (d) to pay the costs of suit. SO ORDERED.23 The Sandiganbayan held that neither manifest partiality nor evident bad faith attended the commission of the offense. However, it found that petitioner Constantino caused undue injury to the Municipality of Malungon through his gross inexcusable negligence in executing only a lease agreement over the fleet of heavy equipment. Anent Lindong, the graft court upheld his culpability as co-conspirator of Constantino despite its finding that the latter violated the antigraft law through negligence only. The Sandiganbayan ratiocinated that since the law violated is a special law, proof that he intended to commit the particular offense was not essential, as it otherwise would have been for a felony punishable by the Revised Penal Code. The Sandiganbayan ruled that it was sufficient for the prosecution to have proven, as it did, that Lindong allowed or failed to prevent Constantino from entering into an agreement which was clearly contrary to law. Thus, even if petitioner was found guilty of causing undue injury to the municipality through gross inexcusable negligence, the anti-graft court concluded that his coconspirator could likewise be held liable.24 It appears that during trial, both accused were represented by the same counsel. However, after judgment was rendered against them, Constantino and Lindong filed separate appeals to the Supreme Court which have taken disparate routes. On 25 April 2006, during the pendency of his present appeal, Constantino passed away.25 Lindong himself likewise filed a petition for review on certiorari, docketed as G.R. No. 142379, to seek a reversal of the Sandiganbayan decision finding him guilty as Constantinos coconspirator. On 10 July 2000, this Court denied Lindongs petition for failure to state the material date of receipt of the assailed decision of the Sandiganbayan. His subsequent attempts for reconsideration proved futile. On 25 July 2001, the Court issued the Entry of Judgment in the case. Thereafter, the Sandiganbayan (First Division) issued three (3) orders relative to the execution of judgment against Lindong, all of which are assailed by the latter, in his petition for certiorari in G.R. No. 154482, for having been issued with grave abuse of discretion. The Sandiganbayan issued on 16 May 2002 the first challenged order which directed petitioner Lindong to appear before it in person for the execution of judgment. On 6 June 2002, the respondent court issued a resolution, the second assailed order herein, denying Lindongs urgent motion to defer execution of judgment. The third assailed order, a resolution issued on 3 July 2002, directed the issuance of a bench warrant against petitioner Lindong and the confiscation of his cash bond for provisional liberty pending appeal, and required him to surrender his person to the court and explain why judgment should not be rendered against the cash bond.

With the demise of Constantino during the pendency of his appeal, the same should normally be regarded as moot and academic following the norm that the death of the accused marks the extinction of his criminal liability.26 However, the present two petitions are so intertwined that the absolution of Constantino is ultimately determinative of the absolution of Lindong. Indeed, the exoneration of Constantino will necessarily signify the injustice of carrying out the penalty imposed on Lindong. Thus, the Court in this instance has to ascertain the merits of Constantinos appeal to prevent a developing miscarriage of justice against Lindong. The "moot and academic" principle is not a magical formula that can automatically dissuade the courts in resolving a case. Courts will decide cases, otherwise moot and academic, if: First, there is a grave violation of the Constitution;27 Second, the exceptional character of the situation and the paramount public interest is involved;28 Third, when constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public;29 and Fourth, the case is capable of repetition yet evading review.30 In the instant case, the exceptional character of the appeals of Constantino and Lindong in relation to each other, as well as the higher interest of justice, requires that the Court determine the merits of the petition and not dismiss the same outright on the ground of mootness. The Ruling of the Court G.R. No. 140656 Petitioner Constantino impugned his conviction and asserted that the Sandiganbayan erred in convicting him based on its finding that he violated Resolution No. 21 by entering into a "Lease Agreement" with the Norlovanian Corporation and for his failure to sign the accompanying "Undertaking." Likewise, he argued that the evidence adduced by the prosecution was insufficient to overcome the constitutional presumption of innocence in his favor. Finally, Constantino contended that it was error for the Sandiganbayan to disregard the findings of the Supreme Court en banc in the earlier case of Constantino v. Hon. Ombudsman Desierto.31 Constantinos petition would have been granted and he would have been absolved of criminal liability had he been still alive today. This is why it is so. Section 3(e) of R.A. No. 3019 provides: SEC. 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: xxxx (e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage, or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of

offices or government corporations charged with the grant of licenses or permits or other concessions. In order to be liable for violating the law, the following elements must concur: (1) the accused is a public officer or a private person charged in conspiracy with the former; (2) he or she causes undue injury to any party, whether the government or a private party; (3) the said public officer commits the prohibited acts during the performance of his or her official duties or in relation to his or her public positions; (4) such undue injury is caused by giving unwarranted benefits, advantage or preference to such parties; and (5) the public officer has acted with manifest partiality, evident bad faith or gross inexcusable negligence.32 There are two (2) modes of committing the offense, thus: (1) the public officer caused any undue injury to any party, including the government; or (2) the public officer gave any private party unwarranted benefits, advantage or preference in the discharge of his functions.33 An accused may be charged under either mode34 or under both should both modes concur.35 Additionally, Section 3(e) poses the standard of manifest partiality, evident bad faith or gross inexcusable negligence before liability can be had under the provision. Manifest partiality is characterized by a clear, notorious or plain inclination or predilection to favor one side rather than the other.36 Evident bad faith connotes a manifest deliberate intent on the part of the accused to do wrong or cause damage.37 Gross inexcusable negligence is defined as negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to consequences insofar as other persons may be affected.38 Mere bad faith or partiality and negligence per se are not enough for one to be held liable under the law since the act of bad faith or partiality must in the first place be evident or manifest, respectively, while the negligent deed should both be gross and inexcusable.39 As discussed previously, the Sandiganbayan held that manifest partiality could not be rightfully imputed to Constantino.40 The prosecution did not present proof that he was actuated with malice or fraud sufficient to meet the requirement of proof beyond reasonable doubt.41 However, the respondent court found that Constantinos act of entering into a purportedly pure lease agreement instead of a lease/purchase agreement was a flagrant violation of Resolution No. 21. In view of the rigid terms of the subject contract to which Constantino assented, coupled by his failure to secure the concurrence of the Sangguniang Bayan before entering into the agreement, the Sandiganbayan found that his conduct constituted gross inexcusable negligence.42 Likewise, the anti-graft court ruled that Constantinos acts resulted in undue injury to the Municipality of Malungon.43 Notably, in the course of trial, the prosecution admitted that it had no proof that unwarranted benefits and advantage had been given to Norlovanian Corporation.44 Undoubtedly, the standard of culpability imposed by Section 3 of R.A. No. 3019 is quite high which, in this case, was not hurdled by the evidence presented against Constantino. Verily, the prosecution failed to satisfy the requisite proof to demonstrate Constantinos guilt beyond reasonable doubt. While Constantino should have exercised more prudence when he transacted with Norlovanian Corporation, he could not however be held liable for "gross inexcusable negligence" as contemplated in R.A. No. 3019. Indeed, in the earlier case of Constantino v.

Desierto,45 the Court had already made an express finding that petitioner Constantino did not violate the mandate of Resolution No. 21 but instead merely carried out its directive. That case was a special civil action for certiorari filed by Constantino to seek the invalidation of the resolution of the Ombudsman finding him guilty of grave misconduct prejudicial to the best interest of the service and/or gross neglect of duty, and on that account, dismissing him from service. The controversy arose from the same transaction entered into between Constantino and Norlovanian Corporation and involved the same subject matter as in the case at bar. The administrative complaint was initiated through a letter-complaint and joint affidavit signed by Vice Mayor Espinosa and to it was appended a certification signed by the Vice Mayor and Councilors Suson, Ingay, Asgapo, Espinosa and Octavio. In exonerating Constantino from the administrative charges, the Court found that the evidence against him was inadequate to warrant his dismissal from service on the grounds of grave misconduct, conduct prejudicial to the best interest of the service and gross neglect of duty. More particularly, we made the following pronouncements: The explicit terms of Resolution No. 21, Series of 1996 clearly authorized Mayor Constantino to "lease/purchase one (1) fleet of heavy equipment" composed of seven (7) generally described units, through a "negotiated contract." That resolution, as observed at the outset, contained no parameters as of rate of rental, period of lease, purchase price. Pursuant thereto, Mayor Constantino, representing the Municipality of Malungon, and Norberto Lindong, representing the Norlovanian Corporation, executed two written instruments of the same date and occasion, viz.: One an agreement(on a standard printed form) dated Febr[ua]ry 28, 1996 for the lease by the corporation to the municipality of heavy equipment of the number and description required by Resolution no. 21, and Two an undertaking for the subsequent conveyance and transfer of ownership of the equipment to the municipality at the end of the term of the lease. That the Members of the Sangguniang Bayan knew of this "lease/purchase" is evident from Resolution No. 38, Series of 1996 unanimously enacted by them shortly after delivery of the equipment. In that resolution they (1) declared that "the Municipal Government ** has just acquired its fleet of heavy equipment leased/purchased from the Norlovanian Corporation," and (2) requested Mayor Constantino "to operate the newly acquired heavy equipment ** leased/purchase from the Norlovanian Corporation." The Resolution is consistent with the allegations of Mayor Constantino which in any event are not denied by the Councilors or Vice-Mayor Espinosa that: 1) the equipment was delivered to the Municipality by Norlovanian Corporation on February 28, 1996 and duly inspected by Councilors Guilley, Ruez, Nallos and Liray, as well as the Municipal Engineer and the Municipal Treasurer;

2) prior to the delivery of the units, the Vice Mayor and other Members of the Sanguniang Bayan had opportunity to read the "Lease Agreement" as well as the "Undertaking" but then raised no objections thereto; 3) neither did they raise any objections (a) at the session of the Municipal Council on February 29, 1996, when Norberto Lindong explained the terms of the "negotiated contract" of "lease/purchase," or (b) at the time that the units were delivered and inspected by designated minicipal officials. Now, it is germane to advert to the deplorable inaccuracies in the Joint Affidavit of private respondents (P.L. Espinosa, Suson, Sr., Ingay, W. P. Espinosa, Octavio, Asgapo) submitted as part of their complaint in the Ombudsmans Office. The affidavit contains a clearly distorted version of Resolution No. 21 of February 22, 1996. In that document of the affiants described Resolution No. 21 as authorizing Mayor Constantino "to purchase and acquire ** heavy equipments (sic) to be paid within five (5) years at the yearly amortization of P2.2 million **." This is a misleading reading of Resolution No. 21. As the most cursory perusal of that resolution at once discloses, what the Mayor was thereby empowered to do was "to enter into a negotiated contract" in the Municipalitys behalf with "interested parties," in line with the expressed wish of the Municipality to "lease/purchase one (1) fleet of heavy equipment **" not simply to "purchase and acquire" said equipment (as complainant Councilors aver). Neither does Resolution No. 21 state (contrary to complainants description of it) that the price shall be "paid within five (5) years at the yearly amortization of P2.2 million **;" indeed, as already above stressed, the resolution is completely silent as regards any terms and conditions of the "negotiated contract" that the Mayor was assigned to execute in the towns behalf. Such obvious distortions cannot but erode the complainant councilors credibility and bona fides. It is also relevant to draw attention to the flagrantly inaccurate statements and inferences about the Mayors "negotiated contract" regarding the heavy equipment, contained in Resolution No. 47 approved only by four (4) Members of the Municipal Council at its session of June 6, 1996 (the four (4) being Councilors Octavio, Espinosa, Asgapo and Ingay). That Resolution No. 47, it will be recalled, stopped all "rental payment/expenditures relative to the pool of heavy equipment of the Norlovanian Company." The stoppage was based on prior resolutions of the Council allegedly setting down the terms under which the heavy equipment should be acquired, and which terms were supposedly violated by the Mayor. but unaccountably and again indicative of bad faith, if not malice, on the part of private respondents Resolution No. 47 made absolutely no reference to two (2) resolution which on their face justify the Mayors contract with Norlovanian Corporation, to wit: (1) Resolution No. 21 which, having been enacted after the cited resolutions, must be deemed to have superseded them, and which, to repeat, motivated and constitutes the justification for the lease-purchase agreement entered into by the Mayor and Norlovanian Corporation, and (2) Resolution No. 38 in which the Councilors not only expressly aknowledged that "the municipal government ** (had) just acquired its fleet of heavy equipment leased/purchased from the Norlovanian

Corporation," but also "requested ** (the) Mayor ** to operate the newly acquired heavy equipment of the municipality leased/purchased from the Norlovanian Corporation." In light of the forego[i]ng facts, which appear to the Court to be quite apparent on the record, it is difficult to perceive how the Office of the Ombudsman could have arrived at a conclusion of any wrongdoing by the Mayor in relation to the transaction in question. It is difficult to see how the transaction between the Mayor and Norlovanian Corporation entered into pursuant to Resolution No. 21 and tacitly accepted and approved by the town Council through its Resolution No. 38 could be deemed an infringement of the same Resolution No. 21. In truth, an examination of the pertinent writings (the resolution, the two (2) instruments constituting the negotiated contract, and the certificate of delivery) unavoidably confirms their integrity and congruity. It is in fine, difficult to see how those pertinent written instrument, could establish a prima facie case to warrant the preventive suspension of Mayor Constantino. A person with the most elementary grasp of the English language would, from merely scanning those material documents, at once realize that the Mayor had done nothing but carry out the expressed wishes of the Sangguniang Bayan. xxxx The investigator also opined that Resolution No. 21 should be interpreted in light of other official documents, executed a year earlier. He [Graft Prosecutor Buena] does not explain why he did not adopt the more obvious construction of Resolution No. 21 indicated by the elementary doctrine that it is within the power and prerogative of the town council to repeal its prior acts, either expressly, or by the passage of essentially inconsistent resolutions. When the town council passed Resolution No. 21 without any mention whatever of those prior official documents respecting the acquisition to heavy equipment, the evident intention was to supersede them and to have such acquisition governed solely by Resolution No. 21. This conclusion is strongly supported by the fact that the Sanggunian expressly admitted in the Second Whereas Clause of its Resolution No. 21 that there had been a "failure of bidders to submit bids despite of two biddings ... public announcement" [sic] the two biddings being obviously related to said earlier official acts of the town council. The conclusion is further bolstered by the fact that the Council (with full awareness of said "negotiated contract,") and of the delivery of equipment thereunder, had requested the Mayor to put the equipment into operation for the town projects. The Court is thus satisfied that it was in fact the Councils intention, which it expressed in clear language, to confer on the Mayor ample discretion to execute a "negotiated contract" with any interested party, without regard to any official acts of the Council prior to Resolution No. 21. It is also difficult to see why the patent inaccuracies in the affidavit-complaint and Resolution No. 47 were ignored as difficult to understand how the execution of two writings to embody one contract of "lease/purchase" could be regarded as fatally defective, and even indicative of a criminal conspiracy, or why said two writings should

be interpreted in such a way as to magnify their seeming inconsistencies. The fundamental and familiar legal principle which the Office of the Ombudsman ignored is that it is perfectly legitimate for a bilateral contract to be embodied in two or more separate writings, and that in such an event the writings should be read and interpreted together in such a way as to eliminate seeming inconsistencies and render the parties intention effectual. The statement in the appealed Resolution as to the absence of prior consent of the Council to the "negotiated contract" executed by Mayor Constantino and Norlovanian Corporation flies in the teeth of the evidence; there is unrebutted proof that the heavy equipment delivered to the Municipality pursuant to the contract, was inspected by designated councilors and municipal officers; that shortly thereafter, the negotiated contract composed of two documents was explained and discussed at the session of the town Council of February 29, 1996; and that afterwards the Council requested Mayor Constantino to put the equipment into operation. (Emphasis supplied)46 Although the instant case involves a criminal charge whereas Constantino involved an administrative charge, still the findings in the latter case are binding herein because the same set of facts are the subject of both cases. What is decisive is that the issues already litigated in a final and executory judgment preclude by the principle of bar by prior judgment, an aspect of the doctrine of res judicata, and even under the doctrine of "law of the case," the re-litigation of the same issue in another action.47 It is well established that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them.48 The dictum therein laid down became the law of the case and what was once irrevocably established as the controlling legal rule or decision continues to be binding between the same parties as long as the facts on which the decision was predicated continue to be the facts of the case before the court. Hence, the binding effect and enforceability of that dictum can no longer be resurrected anew since such issue had already been resolved and finally laid to rest, if not by the principle of res judicata, at least by conclusiveness of judgment.49 It may be true that the basis of administrative liability differs from criminal liability as the purpose of administrative proceedings on the one hand is mainly to protect the public service, based on the time-honored principle that a public office is a public trust. On the other hand, the purpose of the criminal prosecution is the punishment of crime.50 However, the dismissal by the Court of the administrative case against Constantino based on the same subject matter and after examining the same crucial evidence operates to dismiss the criminal case because of the precise finding that the act from which liability is anchored does not exist. It is likewise clear from the decision of the Court in Constantino that the level of proof required in administrative cases which is substantial evidence was not mustered therein. The same evidence is again before the Court in connection with the appeal in the criminal case. Ineluctably, the same evidence cannot with greater reason satisfy the higher standard in criminal cases such as the present case which is evidence beyond reasonable doubt.

The elementary principle is that it is perfectly legitimate for a bilateral contract to be embodied in two or more separate writings, and that in such an event the writings should be read and interpreted together in such a way as to eliminate seeming inconsistencies and render the intention of the parties effectual.51 In construing a written contract, the reason behind and the circumstances surrounding its execution are of paramount importance to place the interpreter in the situation occupied by the parties concerned at the time the writing was executed.52 Construction of the terms of a contract, which would amount to impairment or loss of right, is not favored. Conservation and preservation, not waiver, abandonment or forfeiture of a right, is the rule.53 In case of doubts in contracts, the same should be settled in favor of the greatest reciprocity of interests.54 G.R. No. 154482 Lindong ascribes grave abuse of discretion on the part of respondent court in issuing the challenged orders. He argues that the Sandiganbayan erred in not holding in abeyance the execution of judgment against him in light of the pending petition for review by his co-accused before this Court of the same decision for which he was convicted. Should the decision be set aside by the Supreme Court, petitioner Lindong contends, he will be benefited to the extent that there can no longer be any judgment to legally execute against both himself and Constantino. The virtual acquittal of Constantino inevitably puts a welcome end to the tribulations of Lindong. Thus, we grant the petition. One of the essential elements for violating Section 3(e) of R.A. No. 3019 is that the respondent is a public officer discharging administrative, judicial or official functions, or that he or she is a private individual in conspiracy with such public officer. In the instant case, the essential acquittal of Constantino, as presaged in G.R. No. 140656 and presented in the disquisition, renders an absence in the critical requisite of a public officer with whom Lindong, the private individual, allegedly conspired to commit the crime charged. Hence, we now have before us an incongruous situation where execution of judgment has been entered against a private person accused with conspiring with a public officer for violation of the anti-graft law, but at the same time said public officer would unequivocably be entitled to exoneration had he not died in the meantime. Yet, it is utterly illogical to absolve Constantino who entered into the contract on behalf of the government and send the private person to prison. The case of Marcos v. Sandiganbayan (1st Division)55 is instructive. Here, the Court granted the motion for reconsideration filed by former First Lady Imelda Marcos and acquitted her of the charge of violating Section 3(g) of R.A. No. 3019. Her acquittal was based on the finding that she signed the subject lease agreement not as a public officer, but as a private person. Thus, the Court found that the first element of the offense, i.e., that the accused is a public officer, was lacking. However, the acquittal of the former First Lady was taken in conjunction with the acquittal of the public officer with whom she was accused.56 The case of Go v. The Fifth Division, Sandiganbayan, et al.57 further elucidates the matter as illustrated in Marcos, to wit:

x x x [T]he acquittal of the former First Lady should be taken in the context of the Courts Decision dated January 29, 1198, in Dans, Jr. v. People, which the former First Lady sought to reconsider and, finding merit in her motion, gave rise to the Courts Resolution in Marcos. In Dans, the Information filed against the former First Lady and Jose P. Dans, Jr., then Minister of Transportation and Communications, for violation of Section 3(g) of R[.]A[.] [No.] 3019, alleged that they were both public officers and, conspiring with each other, entered into the subject lease agreement covering the LRTA property with the PGHFI, a private entity, under terms and conditions manifestly and grossly disadvantageous to the government. The Court in its original decision affirmed the former First Ladys conviction for violation of Section 3(g) of R[.]A[.] [No.] 3019 but acquitted her co-accused, Dans, Jr., of the said offense. As stated earlier, upon the former First Ladys motion for reconsideration, the Court reversed her conviction in its Resolution in Marcos. It can be gleaned from the entire context of Marcos and Dans that the reversal of the former First Ladys conviction was based on the fact that it was later held that she signed the subject lease agreement as a private person, not a public officer. However, this acquittal should also be taken in conjunction with the fact that the public officer with whom she had supposedly conspired, her co-accused Dans, had earlier been acquitted. In other words, the element that the accused is a public officer, was totally wanting in the former First Ladys case because Dans, the public officer with whom she had allegedly conspired in committing Section 3(g) of R[.]A[.] [No.] 3019, had already been acquitted. Obviously, the former First Lady could not be convicted, on her own as a private person, of the same offense. (Emphasis supplied) It is therefore apparent that in light of the prevailing milieu in the instant case, we cannot sustain the execution of judgment against Lindong. The reversal of the decision of the Sandiganbayan in Criminal Case No. 23433 makes it legally absurd to execute any such judgment against him. Moreover, Rule 122, Section 11(a) of the Revised Rules of Criminal Procedure operates in his favor. The Rule provides: SEC. 11. Effect of appeal by any of several accused. (a) An appeal taken by one or more of several accused shall not affect those who did not appeal, except insofar as the judgment of the appellate court is favorable and applicable to the latter. Although the rule states that a favorable judgment shall benefit those who did not appeal, we have held that a literal interpretation of the phrase "did not appeal" will not give justice to the purpose of the provision. It should be read in its entirety and should not be myopically construed so as to defeat its reason, i.e., to benefit an accused who did not join in the appeal of his coaccused in case where the appellate judgment is favorable.58

In fact, the Court has at various times applied the foregoing provision without regard to the filing or non-filing of an appeal by a co-accused, so long as the judgment was favorable to him. In such cases, the co-accused already withdrew his appeal,59 failed to file an appellants brief,60 or filed a notice of appeal with the trial court but eventually withdrew the same.61 Even more, in these cases, all the accused appealed from the judgment of conviction but for one reason or another, their conviction had already become final and executory. Nevertheless, the Court still applied to them the favorable judgment in favor of their co-accused.62 Therefore, we cannot find a reason to treat Lindong differently, especially so in this case where the public officer accused of violating the anti-graft law has been acquitted, and the appeal by Lindong was dismissed on a technicality. WHEREFORE, the petition in G.R. No. 140656, although meritorious, is DENIED on the ground of mootness. The petition in G.R. No. 154482 is GRANTED. The challenged orders of the Sandiganbayan in Criminal Case No. 23433 are NULLIFIED and SET ASIDE. The Sandiganbayan is permanently enjoined from executing said orders. SO ORDERED. Quisumbing,Chairperson Carpio, Carpio-Morales, Velasco, Jr., JJ., concur.

FIRST DIVISION

AZUCENA MAGALLANES, EVELYN BACOLOD and HEIRS OF JUDITH COTECSON, Petitioners,

G.R. No. 160876

Present:

PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ, versus CORONA, AZCUNA, and

SUN YAT SEN ELEMENTARY SCHOOL, PAZ GO, ELENA CUBILLAN, WILLY ANG GAN TENG, BENITO ANG, and TEOTIMO TAN, Respondents.

LEONARDO-DE CASTRO, JJ.

Promulgated:

January 18, 2008 x ------------------------------------------------------------------------------------------- x

DECISION SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari seeking to reverse the Resolution of the Court of Appeals (Seventh Division) dated October 29, 2001 in CA-G.R. SP No. 67068; its Resolution of May 8, 2003 denying the motion for reconsideration; and its Resolution of October 10, 2003, denying the motion for reconsideration of the Resolution of May 8, 2003.

The facts of the case are:

Azucena Magallanes, Evelyn Bacolod, Judith Cotecson (represented by her heirs), petitioners, Grace Gonzales, and Bella Gonzales were all employed as teachers in the Sun Yat Sen Elementary School in Surigao City.

Paz Go and Elena Cubillan are principals of the said school. Willy Ang Gan Teng and Benito Ang are its directors, while Teotimo Tan is the school treasurer. They are all respondents herein.

On May 22, 1994, respondents terminated the services of petitioners. Thus, on August 3, 1994, they filed with the Sub-Regional Arbitration Branch No. X, National Labor Relations Commission (NLRC), Butuan City, complaints against respondents for illegal dismissal, underpayment of wages, payment of backwages, 13th month pay, ECOLA, separation pay, moral damages, and attorneys fees. Likewise, on August 22, 1994, petitioner Cotecson filed a separate complaint praying for the same reliefs.

On June 3, 1995, Labor Arbiter Rogelio P. Legaspi rendered a Decision declaring that petitioners were illegally dismissed from the service and ordering respondents to reinstate them to their former or equivalent positions without loss of seniority rights, and to pay them their backwages, salary differential, 13th month pay differential, and service incentive leave benefits as of June 20, 1995. Respondents were likewise directed to pay petitioners moral and exemplary damages.

On appeal by respondents, the NLRC, in its Decision dated February 20, 1996, reversed the Arbiters judgment, holding that petitioners are contractual employees and that respondents merely allowed their contracts to lapse.

Petitioners timely filed a motion for reconsideration, but it was denied by the NLRC in its Resolution dated April 17, 1996.

Petitioners then filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 50531.

On October 28, 1999, the Court of Appeals (Special Sixteenth Division) rendered its Decision,22[1] the dispositive portion of which reads:

WHEREFORE, the instant petition is GRANTED with respect to petitioners Cotecson, Bacolod, and Magallanes, the questioned Resolutions of the NLRC dated February 20 and April 1996 are hereby REVERSED and SET ASIDE as to them. The Decision dated July 3, 1995 of the Labor Arbiter is hereby REINSTATED as to the said petitioners except as to the award of moral and exemplary damages which is hereby DELETED. SO ORDERED.

The Court of Appeals (Special Sixteenth Division) ruled that in lieu of reinstatement, petitioners Cotecson, Bacolod, and Magallanes shall be entitled to separation pay equivalent to one month salary and backwages computed from the time of their illegal dismissal up to the time of the promulgation of its Decision. With respect to Bella Gonzales and Grace Gonzales, the Court of Appeals found that that they have not acquired the status of regular employees having rendered only two years of service. Consequently, their dismissal from the service is valid. Under the Manual of Regulations for Private Schools, only full-time teachers who have rendered three (3) years of consecutive service shall be considered permanent.

Respondents filed a motion for reconsideration but it was denied by the appellate court in its Resolution dated January 13, 2000.

Respondents then filed with this Court a petition for certiorari, docketed as G.R. No. 142270. However, it was dismissed for lack of merit in a Minute Resolution dated April 12, 2000. Their motion for reconsideration was denied with finality by this Court on July 19, 2000.

Meanwhile, on October 4, 2000, petitioners filed with the Labor Arbiter a motion for execution of his Decision as modified by the Court of Appeals.

In an Order dated January 8, 2001, the Labor Arbiter computed the petitioners monetary awards reckoned from the time of their illegal dismissal in June 1994 up to October 29, 1999, pursuant to the Decision of the Court of Appeals (Special Sixteenth Division) in CA-G.R. SP No. 50531. Respondents interposed an appeal to the NLRC (docketed as NLRC Case No. M006176-2001), contending that the computation should only be up to June 20, 1995 (the date indicated in the Labor Arbiters Decision).

In an Order dated March 30, 2001, the NLRC modified the Labor Arbiters computation and ruled that the monetary awards due to petitioners should be computed from June 1994 up to June 20, 1995.

Petitioners then filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 67068, raffled off to the Seventh Division. However, in its Resolution of October 29, 2001, the petition was dismissed outright for their failure to attach to their petition copies of the pleadings filed with the Labor Arbiter, thus:

No copies of the pleadings filed before the Labor Arbiter appear to have been attached to the petition in violation of the provisions of Section 1, Rule 65

and Section 3, Rule 46 of the 1997 Rules of Civil Procedure, as amended, which requires that the petition:
x x x shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution or ruling subject thereof, such material portions of the record as are referred to therein and other documents relevant or pertinent thereto x x x

WHEREFORE, the instant petition is DISMISSED OUTRIGHT pursuant to Section 3, Rule 46 of the 1997 Rules of Civil Procedure. SO ORDERED.

Petitioners filed a motion for reconsideration, but they erroneously indicated therein the case number as CA-G.R. SP No. 50531, instead of CA-G.R. SP No. 67068. Their error was compounded by stating that the petition was with the Special Sixteenth Division, instead of the Seventh Division. merely noted the motion, thus: As a result, the Special Sixteenth Division issued a Minute Resolution dated April 22, 2002 which

The petitioners motion for reconsideration dated November 22, 2001 and filed by registered mail on November 26, 2001 is merely noted since there was no October 29, 2001 resolution that was issued in this case which the motion for reconsideration seeks to be reconsidered.

On realizing their mistake, petitioners then filed with the Seventh Division a Motion to Transfer The Case to it.

In a Resolution promulgated on May 8, 2003, the Seventh Division denied petitioners Motion To Transfer The Case on the ground, among others, that the motion is non-existent since it does not bear the correct case number, hence, could not be attached to the records of CA-G.R. SP No. 67068.

Unfazed, petitioners filed a motion for reconsideration, but it was denied by the Seventh Division in its Resolution of October 10, 2003.

At first glance, the petition before us appears to be a futile attempt to revive an extinct motion denied by the appellate court (Seventh Division) by reason of technicality. But in the interest of speedy administration of justice, we should not only delve in technicalities. We shall then address these two issues: (1) whether the Court of Appeals (Seventh Division) erred in holding that affixing a wrong docket number on a motion renders it non-existent; and (2) whether the issuance by the NLRC of the Order dated March 30, 2001, amending the amounts of separation pay and backwages, awarded by the Court of Appeals (Sixteenth Division) to petitioners and computed by the Labor Arbiter, is tantamount to grave abuse of discretion amounting to lack or excess of jurisdiction.

On the first issue, the Court of Appeals (Seventh Division) is correct when it ruled that petitioners motion for reconsideration of its Resolution dated October 29, 2001 in CA-G.R. SP No. 67068 is non-existent. Petitioners counsel placed a wrong case number in their motion, indicating CA-G.R. SP No. 50531 (Special

Sixteenth Division) instead of CA-G.R. SP

No. 50531 (Seventh Division), the

correct case number. In Llantero v. Court of Appeals,23[2] we ruled that where a pleading bears an erroneous docket number and thus could not be attached to the correct case, the said pleading is, for all intents and purposes, non-existent. As aptly stated by the Special Sixteenth Division, it has neither the duty nor the obligation to correct the error or to transfer the case to the Seventh Division. In

Mega Land Resources and Development Corporation v. C-E Construction Corporation,24[3] which likewise involves a wrong docket number in a motion, we ruled that the duty to correct the mistake falls solely on the party litigant whose fault caused the anomaly. To hold otherwise would be to impose upon appellate courts the burden of being nannies to appellants, ensuring the absence of pitfalls that hinder the perfection of petitions and appeals. Strictly speaking, it is a dogma that the mistake or negligence of counsel binds the clients25[4] and appellate courts have no share in that burden.

However, we opt for liberality in the application of the rules to the instant case in light of the following considerations. First, the rule that negligence of counsel binds the client may be relaxed where adherence thereto would result in outright deprivation of the clients liberty or property or where the interests of justice so require.26[5] Second, this Court is not a slave of technical rules, shorn of judicial discretion in rendering justice, it is guided by the norm that on the

balance, technicalities take a backseat against substantive rights. Thus, if the application of the rules would tend to frustrate rather than promote justice, it is always within this Courts power to suspend the rules or except a particular case from its application.27[6]

This case involving a labor dispute has dragged on for over a decade now. Petitioners have waited too long for what is due them under the law. One of the original petitioners, Judith Cotecson, died last September 28, 2003 and has been substituted by her heirs. It is time to write finis to this controversy. The Labor Code was promulgated to promote the welfare and well-being of the working man. Its spirit and intent mandate the speedy administration of justice, with least attention to technicalities but without sacrificing the fundamental requisites of due process.28[7]

We recall that in CA-G.R. SP No. 50531, the Court of Appeals (Special Sixteenth Division) held that petitioners Cotecson, Bacolod, and Magallanes shall be entitled to separation pay equivalent to one month salary and backwages computed from the time of their illegal dismissal up to the time of the promulgation of this decision. This Decision was promulgated on October 28, 1999. The respondents motion for reconsideration was denied by the Court of Appeals (Former Special Sixteenth Division) on January 13, 2000. On April 12, 2000, this Court dismissed respondents petition for certiorari, docketed as G.R.

No. 142270, and denied their motion for reconsideration with finality as early as July 19, 2000.

Clearly, the Decision in CA-G.R. SP No. 50531 had long become final and executory. The Labor Arbiter computed the monetary awards due to petitioners corresponding to the period from June 1994 to October 28, 1999, in accordance with the Decision of the Court of Appeals (Special Sixteenth Division). The award for backwages and money claims is in the total sum of P912,086.15.

It does not escape our attention that upon respondents appeal from the Labor Arbiters Order computing the benefits due to petitioners, the NLRC modified the final and executory Decision of the Court of Appeals (Special Sixteenth Division) when it decreed that the monetary award due to petitioners should be computed up to June 20, 1995 only (not October 28, 1999), thus, amounting to a lesser amount of P147,673.16.

We sustain petitioners contention that the NLRC, in modifying the award of the Court of Appeals, committed grave abuse of discretion amounting to lack or excess of jurisdiction. Quasi-judicial agencies have neither business nor power to modify or amend the final and executory Decisions of the appellate courts. Under the principle of immutability of judgments, any alteration or amendment which substantially affects a final and executory judgment is void for lack of

jurisdiction.29[8] We thus rule that the Order dated March 30, 2001 of the NLRC directing that the monetary award should be computed from June 1994, the date petitioners were dismissed from the service, up to June 20, 1995 only, is void.

WHEREFORE, we GRANT the petition. The challenged Resolutions dated October 29, 2001, May 8, 2003, and October 10, 2003 in CA-G.R. SP No. 67068 are REVERSED. The Order of the NLRC dated March 30, 2001 in NLRC Case No. M-006176-2001 is SET ASIDE. The Order of the Labor Arbiter dated January 8, 2001 is REINSTATED.

EN BANC

HOLY SPIRIT HOMEOWNERS ASSOCIATION, INC. and NESTORIO F. APOLINARIO, in his personal capacity and as President of Holy Spirit Homeowners Association, Inc., Petitioners,

G.R. No. 163980

Present:

PANGANIBAN, C.J., - versus PUNO, QUISUMBING, YNARES-SANTIAGO, SECRETARY MICHAEL DEFENSOR, in his capacity as Chairman of the Housing and Urban Development Coordinating Council (HUDCC), ATTY. EDGARDO PAMINTUAN, in his capacity as General Manager of the National Housing Authority (NHA), MR. PERCIVAL CHAVEZ, in his capacity as Chairman of the Presidential Commission for the Urban Poor (PCUP), MAYOR FELICIANO BELMONTE, in his capacity as Mayor of Quezon City, SECRETARY ELISEA GOZUN, in her capacity as Secretary of the Department of Environment and Natural Resources SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, and VELASCO, JR., JJ.

(DENR) and SECRETARY FLORENTE SORIQUEZ, in his capacity as Secretary of the Department of Public Works and

Promulgated:

Highways (DPWH) as ex-officio members of the NATIONAL GOVERNMENT CENTER ADMINISTRATION COMMITTEE, Respondents. August 3, 2006

x ---------------------------------------------------------------------------------- x

DECISION

TINGA, J.:

The instant petition for prohibition under Rule 65 of the 1997 Rules of Civil Procedure, with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction, seeks to prevent respondents from enforcing the implementing rules and regulations (IRR) of Republic Act No. 9207, otherwise known as the National Government Center (NGC) Housing and Land Utilization Act of 2003.

Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a homeowners association from the West Side of the NGC. It is represented by its president, Nestorio F. Apolinario, Jr., who is a co-petitioner in his own personal capacity and on behalf of the association.

Named respondents are the ex-officio members of the National Government Center Administration Committee (Committee). At the filing of the instant petition, the Committee was composed of Secretary Michael Defensor, Chairman of the Housing and Urban Development Coordinating Council (HUDCC), Atty. Edgardo Pamintuan, General Manager of the National Housing Authority (NHA), Mr. Percival Chavez, Chairman of the Presidential Commission for Urban Poor (PCUP), Mayor Feliciano Belmonte of Quezon City, Secretary Elisea Gozun of the Department of Environment and Natural Resources (DENR), and Secretary Florante Soriquez of the Department of Public Works and Highways (DPWH).

Prior to the passage of R.A. No. 9207, a number of presidential issuances authorized the creation and development of what is now known as the National Government Center (NGC).

On March 5, 1972, former President Ferdinand Marcos issued Proclamation No. 1826, reserving a parcel of land in Constitution Hills, Quezon City, covering a little over 440 hectares as a national government site to be known as the NGC.30[1]

On August 11, 1987, then President Corazon Aquino issued Proclamation No. 137, excluding 150 of the 440 hectares of the reserved site from the coverage of Proclamation No. 1826 and authorizing instead the disposition of the excluded portion by direct sale to the bona fide residents therein.31[2]

In view of the rapid increase in population density in the portion excluded by Proclamation No. 137 from the coverage of Proclamation No. 1826, former President Fidel Ramos issued Proclamation No. 248 on September 7, 1993, authorizing the vertical development of the excluded portion to maximize the

number of families who can effectively become beneficiaries of the government s socialized housing program.32[3]

On May 14, 2003, President Gloria Macapagal-Arroyo signed into law R.A. No. 9207. Among the salient provisions of the law are the following:

SEC. 2. Declaration of Policy. It is hereby declared the policy of the State to secure the land tenure of the urban poor. Toward this end, lands located in the NGC, Quezon City shall be utilized for housing, socioeconomic, civic, educational, religious and other purposes.

SEC. 3. Disposition of Certain Portions of the National Government Center Site to Bona Fide Residents. Proclamation No. 1826, Series of 1979, is hereby amended by excluding from the coverage thereof, 184 hectares on the west side and 238 hectares on the east side of Commonwealth Avenue, and declaring the same open for disposition to bona fide residents therein: Provided, That the determination of the bona fide residents on the west side shall be based on the census survey conducted in 1994 and the determination of the bona fide residents on the east side shall be based on the census survey conducted in 1994 and occupancy verification survey conducted in 2000: Provided, further, That all existing legal agreements, programs and plans signed, drawn up or implemented and actions taken, consistent with the provisions of this Act are hereby adopted.

SEC. 4. Disposition of Certain Portions of the National Government Center Site for Local Government or Community Facilities, Socioeconomic, Charitable, Educational and Religious Purposes. Certain portions of land within the aforesaid area for local government or community facilities, socioeconomic, charitable, educational and religious institutions are hereby reserved for disposition for such purposes: Provided, That only those institutions already operating and with existing facilities or structures, or those occupying the land may avail of the disposition program established under the provisions this Act; Provided, further, That in ascertaining the specific areas that may be disposed of in favor of these institutions, the existing site allocation shall be used as basis therefore: Provided, finally. That in determining the reasonable lot allocation of such institutions without specific lot allocations, the land area that may be allocated to them shall be based on the area actually used by said institutions at the time of effectivity of this Act. (Emphasis supplied.)

In accordance with Section 5 of R.A. No. 9207,33[4] the Committee formulated the Implementing Rules and Regulations (IRR) of R.A. No. 9207 on June 29, 2004. Petitioners subsequently filed the instant petition, raising the following issues:

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS NATIONAL GOVERNMENT CENTER (NGC) HOUSING AND LAND UTILIZATION ACT OF 2003 SHOULD BE DECLARED NULL AND VOID FOR BEING INCONSISTENT WITH THE LAW IT SEEKS TO IMPLEMENT.

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND REGULATIONS OF REPUBLIC ACT NO. 9207, OTHERWISE KNOWN AS NATIONAL GOVERNMENT CENTER (NGC) HOUSING AND LAND UTILIZATION ACT OF

2003 SHOULD BE DECLARED NULL AND VOID FOR BEING ARBITRARY, CAPRICIOUS AND WHIMSICAL.34[5]

First, the procedural matters.

The Office of the Solicitor General (OSG) argues that petitioner Association cannot question the implementation of Section 3.1 (b.2) and Section 3.2 (c.1) since it does not claim any right over the NGC East Side. Section 3.1 (b.2) provides for the maximum lot area that may be awarded to a resident-beneficiary of the NGC East Side, while Section 3.2 (c.1) imposes a lot price escalation penalty to a qualified beneficiary who fails to execute a contract to sell within the prescribed period.35[6] Also, the OSG contends that since petitioner association is not the duly recognized people s organization in the NGC and since petitioners not qualify as beneficiaries, they cannot question the manner of disposition of lots in the NGC.36[7]

Legal standing or locus standi has been defined as a personal and substantial interest in the 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. 37[8]

Petitioner association has the legal standing to institute the instant petition, whether or not it is the duly recognized association of homeowners in the NGC. There is no dispute that the individual members of petitioner association are residents of the NGC. As such they are covered and stand to be either benefited or injured by the enforcement of the IRR, particularly as regards the selection process of beneficiaries and lot allocation to qualified beneficiaries. Thus, petitioner association may assail those provisions in the IRR which it believes to be unfavorable to the rights of its members. Contrary to the OSG s allegation that the failure of petitioner association and its members to qualify as beneficiaries effectively bars them from questioning the provisions of the IRR, such circumstance precisely operates to confer on them the legal personality to assail the IRR. Certainly, petitioner and its members have sustained direct injury arising from the enforcement of the IRR in that they have been disqualified and eliminated from the selection process. While it is true that petitioners claim rights over the NGC West Side only and thus cannot be affected by the implementation of Section 3.1 (b.2), which refers to the NGC East Side, the rest of the assailed provisions of the IRR, namely, Sections 3.1 (a.4), 3.2 (a.1) and 3.2 (c.1), govern the disposition of lots in the West Side itself or all the lots in the NGC.

We cannot, therefore, agree with the OSG on the issue of locus standi. The petition does not merit dismissal on that ground.

There are, however, other procedural impediments to the granting of the instant petition. The OSG claims that the instant petition for prohibition is an improper remedy because the writ of prohibition does not lie against the exercise of a quasi-legislative function.38[9] Since in issuing the questioned IRR of R.A. No. 9207, the Committee was not exercising judicial, quasi-judicial or ministerial function, which is the scope of a petition for prohibition under Section 2, Rule 65 of the 1997 Rules of Civil Procedure, the instant prohibition should be dismissed outright, the OSG contends. For their part, respondent Mayor of Quezon City39[10] and respondent NHA40[11] contend that petitioners violated the

doctrine of hierarchy of courts in filing the instant petition with this Court and not with the Court of Appeals, which has concurrent jurisdiction over a petition for prohibition.

The cited breaches are mortal. The petition deserves to be spurned as a consequence.

Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rulemaking power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers.41[12]

In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust administrative remedies before going to court. This principle, however, applies only where the act of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasilegislative power.42[13]

The assailed IRR was issued pursuant to the quasi-legislative power of the Committee expressly authorized by R.A. No. 9207. The petition rests mainly on the theory that the assailed IRR issued by the Committee is invalid on the ground that it is not germane to the object and purpose of the statute it seeks to implement. Where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasilegislative function, the regular courts have jurisdiction to pass upon the same.43[14]

Since the regular courts have jurisdiction to pass upon the validity of the assailed IRR issued by the Committee in the exercise of its quasi-legislative power, the judicial course to assail its validity must follow the doctrine of hierarchy of courts. Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum.44[15]

True, this Court has the full discretionary power to take cognizance of the petition filed directly with it if compelling reasons, or the nature and importance

of the issues raised, so warrant.45[16] A direct invocation of the Court s original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition.46[17]

In Heirs of Bertuldo Hinog v. Melicor,47[18] the Court said that it will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.48[19] A perusal, however, of the petition for prohibition shows no compelling, special or important reasons to warrant the Court s taking cognizance of the petition in the first instance. Petitioner also failed to state any reason that precludes the lower courts from passing upon the validity of the questioned IRR. Moreover, as provided in Section 5, Article VIII of the

Constitution,49[20] the Court s power to evaluate the validity of an implementing rule or regulation is generally appellate in nature. Thus, following the doctrine of hierarchy of courts, the instant petition should have been initially filed with the Regional Trial Court.

A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-legislative function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, ordering said entity or person to desist from further proceedings when said proceedings are without or in excess of said entity s or person s jurisdiction, or are accompanied with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law.50[21] Prohibition lies against judicial or ministerial functions, but not against legislative or quasi-legislative functions. Generally, the purpose of a writ of prohibition is to keep a lower court within the limits of its jurisdiction in order to maintain the administration of justice in orderly channels.51[22] Prohibition is the proper remedy to afford relief against usurpation of jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in handling matters clearly within its cognizance the inferior court transgresses the bounds prescribed to it by the law, or where there is no adequate remedy available in the ordinary course of law by

which such relief can be obtained.52[23] Where the principal relief sought is to invalidate an IRR, petitioners remedy is an ordinary action for its nullification, an action which properly falls under the jurisdiction of the Regional Trial Court. In any case, petitioners allegation that respondents are performing or threatening to perform functions without or in excess of their jurisdiction may appropriately be enjoined by the trial court through a writ of injunction or a temporary restraining order.

In a number of petitions,53[24] the Court adequately resolved them on other grounds without adjudicating on the constitutionality issue when there were no compelling reasons to pass upon the same. In like manner, the instant petition may be dismissed based on the foregoing procedural grounds. Yet, the Court will not shirk from its duty to rule on the merits of this petition to facilitate the speedy resolution of this case. In proper cases, procedural rules may be relaxed or suspended in the interest of substantial justice. And the power of the Court to except a particular case from its rules whenever the purposes of justice require it cannot be questioned.54[25]

Now, we turn to the substantive aspects of the petition. The outcome, however, is just as dismal for petitioners.

Petitioners assail the following provisions of the IRR:

Section 3. Disposition of Certain portions of the NGC Site to the bonafide residents

3.1. Period for Qualification of Beneficiaries

xxxx

(a.4) Processing and evaluation of qualifications shall be based on the Code of Policies and subject to the condition that a beneficiary is qualified to acquire only one (1) lot with a minimum of 36 sq. m. and maximum of 54 sq. m. and subject further to the availability of lots.

xxxx

(b.2) Applications for qualification as beneficiary shall be processed and evaluated based on the Code of Policies including the minimum and maximum lot allocation of 35 sq. m. and 60 sq. m.

xxxx

3.2. Execution of the Contract to Sell

(a) Westside

(a.1) All qualified beneficiaries shall execute Contract to Sell (CTS) within sixty (60) days from the effectivity of the IRR in order to avail of the lot at P700.00 per sq. m.

xxxx

(c) for both eastside and westside

(c.1) Qualified beneficiaries who failed to execute CTS on the deadline set in item a.1 above in case of westside and in case of eastside six (6) months after approval of the subdivision plan shall be subjected to lot price escalation.

The rate shall be based on the formula to be set by the National Housing Authority factoring therein the affordability criteria. The new rate shall be approved by the NGC-Administration Committee (NGC-AC).

Petitioners contend that the aforequoted provisions of the IRR are constitutionally infirm as they are not germane to and/or are in conflict with the object and purpose of the law sought to be implemented.

First. According to petitioners, the limitation on the areas to be awarded to qualified beneficiaries under Sec. 3.1 (a.4) and (b.2) of the IRR is not in harmony

with the provisions of R.A. No. 9207, which mandates that the lot allocation to qualified beneficiaries shall be based on the area actually used or occupied by bona fide residents without limitation to area. The argument is utterly baseless.

The beneficiaries of lot allocations in the NGC may be classified into two groups, namely, the urban poor or the bona fide residents within the NGC site and certain government institutions including the local government. Section 3, R.A. No. 9207 mandates the allocation of additional property within the NGC for disposition to its bona fide residents and the manner by which this area may be distributed to qualified beneficiaries. Section 4, R.A. No. 9207, on the other hand, governs the lot disposition to government institutions. While it is true that Section 4 of R.A. No. 9207 has a proviso mandating that the lot allocation shall be based on the land area actually used or occupied at the time of the law s effectivity, this proviso applies only to institutional beneficiaries consisting of the local government, socioeconomic, charitable, educational and religious institutions which do not have specific lot allocations, and not to the bona fide residents of NGC. There is no proviso which even hints that a bona fide resident of the NGC is likewise entitled to the lot area actually occupied by him.

Petitioners interpretation is also not supported by the policy of R.A. No. 9207 and the prior proclamations establishing the NGC. The government s policy to set aside public property aims to benefit not only the urban poor but also

the local government and various government institutions socioeconomic, charitable, educational and

devoted

to

religious purposes.55[26] Thus, although Proclamation No. 137 authorized the sale of lots to bona fide residents in the NGC, only a third of the entire area of the NGC was declared open for disposition subject to the condition that those portions being used or earmarked for public or quasi-public purposes would be excluded from the housing program for NGC residents. The same policy of rational and optimal land use can be read in Proclamation No. 248 issued by then President Ramos. Although the proclamation recognized the rapid increase in the population density in the NGC, it did not allocate additional property within the NGC for urban poor housing but instead authorized the vertical development of the same 150 hectares identified previously by Proclamation No. 137 since the distribution of individual lots would not adequately provide for the housing needs of all the bona fide residents in the NGC.

In addition, as provided in Section 4 of R.A. No. 9207, the institutional beneficiaries shall be allocated the areas actually occupied by them; hence, the portions intended for the institutional beneficiaries is fixed and cannot be allocated for other non-institutional beneficiaries. Thus, the areas not intended for institutional beneficiaries would have to be equitably distributed among the bona fide residents of the NGC. In order to accommodate all qualified residents, a limitation on the area to be awarded to each beneficiary must be fixed as a necessary consequence.

Second. Petitioners note that while Sec. 3.2 (a.1) of the IRR fixes the selling rate of a lot at P700.00 per sq. m., R.A. No. 9207 does not provide for the price. They add Sec. 3.2 (c.1) penalizes a beneficiary who fails to execute a contract to sell within six (6) months from the approval of the subdivision plan by imposing a price escalation, while there is no such penalty imposed by R.A. No. 9207. Thus, they conclude that the assailed provisions conflict with R.A. No. 9207 and should be nullified. The argument deserves scant consideration.

Where a rule or regulation has a provision not expressly stated or contained in the statute being implemented, that provision does not necessarily contradict the statute. A legislative rule is in the nature of subordinate legislation, designed to implement a primary legislation by providing the details thereof.56[27] All that is required is that the regulation should be germane to the objects and purposes of the law; that the regulation be not in contradiction to but in conformity with the standards prescribed by the law.57[28]

In Section 5 of R.A. No. 9207, the Committee is granted the power to administer, formulate guidelines and policies, and implement the disposition of the areas covered by the law. Implicit in this authority and the statute s objective of urban poor housing is the power of the Committee to formulate the manner by

which the reserved property may be allocated to the beneficiaries. Under this broad power, the Committee is mandated to fill in the details such as the qualifications of beneficiaries, the selling price of the lots, the terms and conditions governing the sale and other key particulars necessary to implement the objective of the law. These details are purposely omitted from the statute and their determination is left to the discretion of the Committee because the latter possesses special knowledge and technical expertise over these matters.

The Committee s authority to fix the selling price of the lots may be likened to the rate-fixing power of administrative agencies. In case of a delegation of ratefixing power, the only standard which the legislature is required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just. However, it has been held that even in the absence of an express requirement as to reasonableness, this standard may be implied.58[29] In this regard, petitioners do not even claim that the selling price of the lots is unreasonable.

The provision on the price escalation clause as a penalty imposed to a beneficiary who fails to execute a contract to sell within the prescribed period is also within the Committee s authority to formulate guidelines and policies to implement R.A. No. 9207. The Committee has the power to lay down the terms and conditions governing the disposition of said lots, provided that these are

reasonable and just. There is nothing objectionable about prescribing a period within which the parties must execute the contract to sell. This condition can ordinarily be found in a contract to sell and is not contrary to law, morals, good customs, public order, or public policy.

Third. Petitioners also suggest that the adoption of the assailed IRR suffers from a procedural flaw. According to them the IRR was adopted and concurred in by several representatives of people s organizations contrary to the express mandate of R.A. No. 9207 that only two representatives from duly recognized peoples organizations must compose the NGCAC which promulgated the assailed IRR. It is worth noting that petitioner association is not a duly recognized people s organization.

In subordinate legislation, as long as the passage of the rule or regulation had the benefit of a hearing, the procedural due process requirement is deemed complied with. That there is observance of more than the minimum requirements of due process in the adoption of the questioned IRR is not a ground to invalidate the same.

In sum, the petition lacks merit and suffers from procedural deficiencies.

WHEREFORE, the instant petition for prohibition is DISMISSED. Costs against petitioners.

SO ORDERED. SECOND DIVISION

RACHEL BEATRIZ RUIVIVAR, G.R. No. 165012 Petitioner, Present:

QUISUMBING, J., Chairperson, CARPIO-MORALES, - versus TINGA, VELASCO, JR., and BRION, JJ. OFFICE OF THE OMBUDSMAN

and DR. CONNIE BERNARDO, Respondents. Promulgated:

September 16, 2008

x-----------------------------------------------------------------------------------------------------------------------------------x

DECISION

BRION, J.:

Before us is the petition for review on certiorari under Rule 45 of the Rules of Court commenced by Rachel Beatriz Ruivivar (petitioner). It seeks to set aside:

(a)

the Decision of the Court of Appeals (CA)59[1] dated May 26, 200460[2] dismissing the petition for certiorari filed by the petitioner and affirming the Decision dated November 4,

200261[3] (November 4, 2002 Decision) and the Order dated February 12, 200362[4] (February 12, 2003 Order) of the Office of the Ombudsman (Ombudsman); the Ombudsman's Decision and Order found the petitioner administratively liable for discourtesy in the course of official duties as Chairperson of the Land Transportation Office (LTO) Accreditation Committee on Drug Testing, and imposed on her the penalty of reprimand; and

(b)

the CA Resolution dated August 20, 200463[5] which denied the petitioner's subsequent motion for reconsideration.

THE ANTECEDENTS

On May 24, 2002, the private respondent filed an Affidavit-Complaint charging the petitioner before the Ombudsman of serious misconduct, conduct unbecoming of a public official, abuse of authority, and violations of the Revised Penal Code and of the Graft and Corrupt Practices Act.64[6] The private

respondent stated in her complaint that she is the President of the Association of Drug Testing Centers (Association) that conducts drug testing and medical examination of applicants for driver s license. In this capacity, she went to the Land Transportation Office (LTO) on May 17, 2002 to meet with representatives from the Department of Transportation and Communication (DOTC) and to file a copy of the Association s request to lift the moratorium imposed by the LTO on the accreditation of drug testing clinics. Before proceeding to the office of the LTO Commissioner for these purposes, she passed by the office of the petitioner to conduct a follow up on the status of her company s application for accreditation. While there, the petitioner -- without provocation or any justifiable reason and in the presence of other LTO employees and visitors -- shouted at her in a very arrogant and insulting manner, hurled invectives upon her person, and prevented her from entering the office of the LTO Commissioner. The petitioner also accused the private respondent of causing intrigues against her at the DOTC. To prove her allegations, the private respondent presented the affidavits of three witnesses.65[7]

The Ombudsman furnished the petitioner a copy of the Complaint-Affidavit and required her to file her counter-affidavit. In her Counter-Affidavit, the petitioner denied the private respondent's allegations and claimed that she merely told the private respondent to bring her request to the LTO Assistant Secretary who has the authority to act on the matter, not to the DOTC.66[8] The

petitioner also claimed that the private respondent also asked her to lift the moratorium and pressured her to favorably act on the private respondent s application for accreditation. To prove these claims, petitioner presented the affidavits of her two witnesses.67[9]

The Ombudsman called for a preliminary conference that the parties attended. The petitioner manifested her intent to submit the case for resolution. The Ombudsman then directed the parties to submit their respective memoranda. Only the petitioner filed a Memorandum where she stressed that the complaint is not properly substantiated for lack of supporting affidavits and other evidence.68[10]

The Office of the Ombudsman

The Ombudsman rendered the November 4, 2002 Decision based on the pleadings and the submitted affidavits. It found the petitioner administratively liable for discourtesy in the course of her official functions and imposed on her the penalty of reprimand.

The Ombudsman ruled that the petitioner's verbal assault on the private respondent was sufficiently established by the affidavits of the private respondent s witnesses who had not been shown by evidence to have any motive to falsely testify against petitioner. In contrast, the petitioner s witnesses, as her officemates, were likely to testify in her favor. Given that the incident happened at the LTO and that the petitioner had authority to act on the private respondent s application for accreditation, the Ombudsman also found that the petitioner's ascendancy over the private respondent made the petitioner s verbal assault more likely. The Ombudsman concluded that such verbal assault might have been caused by the private respondent s decision to air the LTO moratorium issue (on accreditation for drug testing centers) before the DOTC; this decision also negated the petitioner s defense that the case was filed to exert pressure on her to act favorably on private respondent s application for accreditation.

The petitioner filed a Motion for Reconsideration arguing that she was deprived of due process because she was not furnished copies of the affidavits of the private respondent s witnesses.69[11] In the same motion, petitioner

questioned the Ombudsman s disregard of the evidence she had presented, and disagreed with the Ombudsman s statement that she has ascendancy over the private respondent.

The Ombudsman responded to the petitioner s motion for reconsideration by ordering that the petitioner be furnished with copies of the affidavits of the private respondent s witnesses. 70[12] The Ombudsman s order also contained the directive to file, within ten (10) days from receipt of this Order, such pleading which she may deem fit under the circumstances.

Records show that the petitioner received copies of the private respondent s witnesses affidavits but she did not choose to controvert these affidavits or to file a supplement to her motion for reconsideration. She simply maintained in her Manifestation that her receipt of the affidavits did not alter the fact the she was deprived of due process nor cure the irregularity in the November 4, 2002 Decision.

Under these developments, the Ombudsman ruled that the petitioner was not denied due process. It also maintained the findings and conclusions in its November 4, 2002 Decision, declaring them supported by substantial evidence.71[13]

The Court of Appeals

The petitioner s chosen remedy, in light of the Ombudsman ruling, was to file a petition for certiorari (docketed as CA-GR SP No. 77029) with the CA. In its Decision dated May 26, 2004, the CA dismissed the petition on the ground that the petitioner used the wrong legal remedy and failed to exhaust administrative remedies before the Ombudsman.72[14] The CA said:

as held in Fabian v. Desierto, a party aggrieved by the decision of the Office of the Ombudsman may appeal to this Court by way of a petition for review under Rule 43. As succinctly held by the Supreme Court:

As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as unconstitutional, and in line with regulatory philosophy adopted in appeals from quasi-judicial agencies in the 1997 Revised Rules of Civil Procedure, appeals from decision of the Office of the Ombudsman in administrative disciplinary cases should be taken to the CA under the provisions of Rule 43.

Even assuming, argumentatis, that public respondent committed grave abuse of discretion, such fact is not sufficient to warrant the issuance of the extraordinary writ of certiorari, as was held in Union of Nestle Workers Cagayan de Oro Factory vs. Nestle Philippines, Inc.:

x x x .For certiorari to prosper, it is not enough that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction, as alleged by petitioners. The requirement that there is no appeal nor any plain, speedy and adequate remedy in the ordinary course of law must likewise be satisfied. x x x

Petitioner was given the opportunity by public respondent to rebut the affidavits submitted by private respondent, in its Order dated January 17, 2003. Petitioner, therefore, had a speedy and adequate remedy, but she failed to avail thereof for reasons only known to her.

Moreover, instead of filing a petition for review under Rule 43, she filed the present petition for certiorari under Rule 65. In view of our above disquisition, We find no further reason to discuss the merits of the case. Petitioner having resorted to the wrong remedy, the dismissal of the present petition is in order.73[15]

After the CA s negative ruling on the motion for reconsideration, the petitioner filed the present petition for review on certiorari with this Court, raising the following issues:

THE ISSUES

I.

WHETHER OR NOT A PETITION FOR CERTIORARI UNDER RULE 65 IS THE PROPER AND ONLY AVAILABLE REMEDY WHEN THE PENALTY IMPOSED IN AN ADMINISTRATIVE COMPLAINT WITH

THE OFFICE OF THE OMBUDSMAN IS CONSIDERED FINAL AND UNAPPEALABLE.

II.

WHETHER OR NOT PETITIONER WAS DENIED OF (sic) THE CONSTITUTIONAL GUARANTEE TO DUE PROCESS WHEN SHE WAS DEPRIVED OF HER RIGHT TO CONFRONT THE EVIDENCE SUBMITTED AGAINST HER BEFORE THE DECISION OF THE OFFICE OF THE OMBUDSMAN WAS RENDERED.

On the first issue, the petitioner argued that the ruling in Fabian v. Desierto74[16] can only be applied when the decision of the Ombudsman is appealable. The ruling in Fabian is not applicable to the Ombudsman rulings under the express provisions of Section 27 of Republic Act (R.A.) No. 677075[17] and Section 7, Rule III of Administrative Order (A.O.) No. 776[18] since the penalty of reprimand imposed is final and unappealable. The appropriate remedy, under the circumstances, is not the appellate remedy provided by Rule 43 of the Rules of Court but a petition for certiorari under Rule 65 of these Rules.

On the second issue, the petitioner maintained that she was denied due process because no competent evidence was presented to prove the charge against her. While she was belatedly furnished copies of the affidavits of the private respondent s witnesses, this was done after the Ombudsman had rendered a decision. She posited that her belated receipt of the affidavits and the subsequent proceedings before the Ombudsman did not cure the irregularity of the November 4, 2002 Decision as she was not given the opportunity to refute the private respondent s evidence before the Ombudsman s decision was rendered. The petitioner advanced the view that on this ground alone, she should be allowed to question the arbitrary exercise of the Ombudsman s discretion.

The Ombudsman s Comment,77[19] filed through the Office of the Solicitor General, maintained that the proper remedy to assail the November 4, 2002 Decision and February 12, 2003 Order was to file a petition for review under Rule 43 as laid down in Fabian,78[20] and not the petition for certiorari that the petitioner filed. The Ombudsman argues further that since no petition for review was filed within the prescribed period (as provided under Section 4, Rule 43),79[21] the November 4, 2002 Decision and February 12, 2003 Order had become final and executory. The Ombudsman maintained, too, that its decision holding the petitioner administratively liable is supported by substantial evidence; the petitioner s denial of the verbal assault cannot prevail over the submitted

positive testimony. The Ombudsman also asserted that the petitioner was not denied due process as she was given the opportunity to be heard on the affidavits that were belatedly furnished her when she was directed to file any pleading as she may consider fit.

The private respondent shared the positions of the Ombudsman in her Comment.80[22] Both the Office of the Solicitor General and the private

respondent also asserted the doctrine that factual findings of administrative agencies should be given great respect when supported by substantial evidence.

We initially denied the petition in our Resolution dated December 12, 2005 for the petitioner s failure to comply with our Resolutions dated March 30, 2005 and April 25, 2005. However, we reconsidered the denial in a subsequent Resolution (dated February 27, 2006)81[23] and reinstated the petition on the petitioner s motion for reconsideration after she complied with our directives. We required the parties to submit their respective memoranda where they reiterated the positions presented in their previous submissions.

THE COURT S RULING

We deny the Petition.

While we find that the Court of Appeals erred in its ruling on the appropriate mode of review the petitioner should take, we also find that the appellate court effectively ruled on the due process issue raised the failure to

provide the petitioner the affidavits of witnesses - although its ruling was not directly expressed in due process terms. The CA s finding that the petitioner failed to exhaust administrative remedies (when she failed to act on the affidavits that were belatedly furnished her) effectively embodied a ruling on the due process issue at the same time that it determined the propriety of the petition for certiorari that the CA assumed arguendo to be the correct remedy.

Under this situation, the error in the appellate court s ruling relates to a technical matter the mode of review that the petitioner correctly took but

which the CA thought was erroneous. Despite this erroneous conclusion, the CA nevertheless fully reviewed the petition and, assuming it arguendo to be the correct mode of review, also ruled on its merits. Thus, while it erred on the mode of review aspect, it correctly ruled on the exhaustion of administrative remedy issue and on the due process issue that the exhaustion issue implicitly carried. In these lights, the present petition essentially has no merit so that its denial is in order.

The Mode of Review Issue

The case of Fabian v. Desierto82[24] arose from the doubt created in the application of Section 27 of R.A. No. 6770 (The Ombudsman s Act) and Section 7, Rule III of A.O. No. 7 (Rules of Procedure of the Office of the Ombudsman) on the availability of appeal before the Supreme Court to assail a decision or order of the Ombudsman in administrative cases. In Fabian, we invalidated Section 27 of R.A. No. 6770 (and Section 7, Rule III of A.O. No. 7 and the other rules implementing the Act) insofar as it provided for appeal by certiorari under Rule 45 from the decisions or orders of the Ombudsman in administrative cases. We held that Section 27 of R.A. No. 6770 had the effect, not only of increasing the appellate jurisdiction of this Court without its advice and concurrence in violation of Section 30, Article VI of the Constitution; it was also inconsistent with Section 1, Rule 45 of the Rules of Court which provides that a petition for review on certiorari shall apply only to a review of judgments or final orders of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court, or other courts authorized by law. 83[25] We pointedly said:
As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as unconstitutional, and in line with the regulatory philosophy adopted in appeals from quasi-judicial agencies in the 1997 Revised Rules of Civil Procedure, appeals from decisions of the Office of the Ombudsman

in administrative disciplinary cases should be taken to the CA under the provisions of Rule 43.84[26]

We restated this doctrine in several cases85[27] and further elaborated on the recourses from Ombudsman actions in other cases we have decided since then. In Lapid v. CA, we explained that an appeal under Rule 43 to the CA only applies to administrative cases where the right to appeal is granted under Section 27 of R.A. No. 6770.86[28] In Lopez v. CA87[29] and Herrera v. Bohol,88[30] we recognized that no appeal is allowed in administrative cases where the penalty of public censure, reprimand, suspension of not more than one month, or a fine equivalent to one month salary, is imposed. We pointed out that decisions of administrative agencies that are declared by law to be final and unappealable are still subject to judicial review if they fail the test of arbitrariness or upon proof of gross abuse of discretion;89[31] the complainants legal recourse is to file a petition for certiorari under Rule 65 of the Rules of Court, applied as rules suppletory to the Rules of Procedure of the Office of the Ombudsman.90[32] The use of this recourse should take into account the last paragraph of Section 4, Rule 65 of the Rules of Court i.e., the petition shall be filed in and be cognizable only

by the CA if it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or by the Rules.91[33] In the present case, the Ombudsmans decision and order imposing the penalty of reprimand on the petitioner are final and unappealable. Thus, the petitioner availed of the correct remedy when she filed a petition for certiorari before the CA to question the Ombudsmans decision to reprimand her.

The Due Process Issue The CA Decision dismissed the petition for certiorari on the ground that the petitioner failed to exhaust all the administrative remedies available to her before the Ombudsman. This ruling is legally correct as exhaustion of administrative remedies is a requisite for the filing of a petition for certiorari.92[34] Other than this legal significance, however, the ruling necessarily carries the direct and immediate implication that the petitioner has been granted the opportunity to be heard and has refused to avail of this opportunity; hence, she cannot claim denial of due process. In the words of the CA ruling itself: Petitioner was given the opportunity by public respondent to rebut the affidavits submitted by private respondent. . . and had a speedy and adequate administrative remedy but she failed to avail thereof for reasons only known to her. For a fuller appreciation of our above conclusion, we clarify that although they are separate and distinct concepts, exhaustion of administrative remedies and due process embody linked and related principles. The exhaustion principle

applies when the ruling court or tribunal is not given the opportunity to reexamine its findings and conclusions because of an available opportunity that a party seeking recourse against the court or the tribunals ruling omitted to take.93[35] Under the concept of due process, on the other hand, a violation occurs when a court or tribunal rules against a party without giving him or her the opportunity to be heard.94[36] Thus, the exhaustion principle is based on the perspective of the ruling court or tribunal, while due process is considered from the point of view of the litigating party against whom a ruling was made. The commonality they share is in the same opportunity that underlies both. In the context of the present case, the available opportunity to consider and appreciate the petitioners counter-statement of facts was denied the Ombudsman; hence, the petitioner is barred from seeking recourse at the CA because the ground she would invoke was not considered at all at the Ombudsman level. At the same time, the petitioner who had the same opportunity to rebut the belatedly-furnished affidavits of the private respondents witnesses was not denied and cannot now claim denial of due process because she did not take advantage of the opportunity opened to her at the Ombudsman level. The records show that the petitioner duly filed a motion for reconsideration on due process grounds (i.e., for the private respondents failure to furnish her copies of the affidavits of witnesses) and on questions relating to the appreciation of the evidence on record.95[37] The Ombudsman acted on this motion by issuing its Order of January 17, 2003 belatedly furnishing her with copies of the private

respondents witnesses, together with the directive to file, within ten (10) days from receipt of this Order, such pleading which she may deem fit under the circumstances.96[38] Given this opportunity to act on the belatedly-furnished affidavits, the petitioner simply chose to file a Manifestation where she took the position that The order of the Ombudsman dated 17 January 2003 supplying her with the affidavits of the complainant does not cure the 04 November 2002 order, and on this basis prayed that the Ombudsmans decision be reconsidered and the complaint dismissed for lack of merit.97[39] For her part, the private respondent filed a Comment/Opposition to Motion for Reconsideration dated 27 January 2003 and prayed for the denial of the petitioners motion. In the February 12, 2003 Order, the Ombudsman denied the petitioners motion for reconsideration after finding no basis to alter or modify its ruling.98[40] Significantly, the Ombudsman fully discussed in this Order the due process significance of the petitioners failure to adequately respond to the belatedlyfurnished affidavits. The Ombudsman said:
Undoubtedly, the respondent herein has been furnished by this Office with copies of the affidavits, which she claims she has not received. Furthermore, the respondent has been given the opportunity to present her side relative thereto, however, she chose not to submit countervailing evidence or argument. The

respondent, therefore (sic), cannot claim denial of due process for purposes of assailing the Decision issued in the present case. On this score, the Supreme Court held in the case of People v. Acot, 232 SCRA 406, that a party cannot feign denial of due process where he had the opportunity to present his side. This becomes all the more important since, as correctly pointed out by the complainant, the decision issued in the present case is deemed final and unappealable pursuant to Section 27 of Republic Act 6770, and Section 7, Rule III of Administrative Order No. 07. Despite the clear provisions of the law and the rules, the respondent herein was given the opportunity not normally accorded, to present her side, but she opted not to do so which is evidently fatal to her cause. [emphasis supplied].

Under these circumstances, we cannot help but recognize that the petitioners cause is a lost one, not only for her failure to exhaust her available administrative remedy, but also on due process grounds. The law can no longer help one who had been given ample opportunity to be heard but who did not take full advantage of the proffered chance.

WHEREFORE, premises considered, we hereby DENY the petition. This denial has the effect of confirming the finality of the Decision of the Ombudsman dated November 4, 2002 and of its Order dated February 12, 2003. SO ORDERED. Miscellany LAW ON PUBLIC OFFICERS
G.R. Nos. 178831-32 July 30, 2009

JOCELYN SY LIMKAICHONG, Petitioner, vs. COMMISSION ON ELECTIONS, NAPOLEON N. CAMERO and RENALD F. VILLANDO, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 179120

July 30, 2009

LOUIS C. BIRAOGO, Petitioner, vs. HON. PROSPERO NOGRALES, Speaker of the House of Representatives of the Congress of the Philippines, and JOCELYN SY LIMKAICHONG, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. Nos. 179132-33 July 30, 2009

OLIVIA P. PARAS, Petitioner, vs. HON. PROSPERO NOGRALES, in his capacity as Speaker of the House of Representatives; HON. ROBERTO NAZARENO, in his capacity as Secretary General of the House of Representatives; HON. RHODORA SEVILLA, in her capacity as Deputy Secretary General for Finance of the House of Representatives; THE COMMISSION ON ELECTIONS and JOCELYN SY LIMKAICHONG, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. Nos. 179240-41 July 30, 2009

RENALD F. VILLANDO, Petitioner, vs. COMMISSION ON ELECTIONS and JOCELYN SY LIMKAICHONG, Respondents. RESOLUTION PERALTA, J.: The instant motion with prayer for oral argument filed by Louis C. Biraogo, petitioner in G.R. No. 179120, seeks a reconsideration of the Courts April 1, 2009 Decision, which granted Jocelyn D. Sy Limkaichongs petition for certiorari in G.R. Nos. 178831-32. The Court dismissed all the other petitions, including Biraogos petition, and reversed the Joint Resolution of the Commission on Elections (COMELEC) Second Division dated May 17, 2007 in SPA Nos. 07-247 and 07-248 disqualifying Limkaichong from running as a congressional candidate in the First District of Negros Oriental due to lack of citizenship requirement. Biraogo prefaced his motion by stating that justice and constitutionalism must remain entrenched in Philippine case law. To achieve this end, he maintained that the Court should reconsider its April 1, 2009 Decision. He also prayed for an oral argument, which he posited, would help the Court in the just and proper disposition of the pending incident. After an assiduous review of the motion for reconsideration, we resolve that the same should be denied for lack of merit.

Most of the arguments advanced by Biraogo are a mere rehash of his previous arguments, which we have all considered and found without merit in the Decision dated April 1, 2009. Nonetheless, in order to lay to rest once and for all Biraogo's misgivings, we shall discuss only the relevant issues and revalidate our Decision by ruling on his motion as follows: The core issue in the consolidated petitions is the qualification of Limkaichong to run for, be elected to, and assume and discharge, the position of Representative for the First District of Negros Oriental. The contention of the parties who sought her disqualification is that she is not a natural-born citizen, hence, she lacks the citizenship requirement in Section 6,1 Article VI of the 1987 Constitution. In the election that ensued, she was voted for by the constituents of Negros Oriental and garnered the highest votes. She was eventually proclaimed as the winner and has since performed her duties and responsibilities as Member of the House of Representatives. Indeed, the citizenship requirement was enshrined in our Constitution in order to ensure that our people and country do not end up being governed by aliens.2 With this principle in mind, we have said in Aquino v. COMELEC3 that if one of the essential qualifications for running for membership in the House of Representatives is lacking, then not even the will of a majority or plurality of the voters would substitute for a requirement mandated by the fundamental law itself. Hence assuming, time constraints notwithstanding, and after proper proceedings before the proper tribunal be had, that Limkaichong would prove to be an alien, the court of justice would tilt against her favor and would not sanction such an imperfection in her qualification to hold office. But, first things first. The proponents against Limkaichong's qualification stated that she is not a natural-born citizen because her parents were Chinese citizens at the time of her birth. They went on to claim that the proceedings for the naturalization of Julio Ong Sy, her father, never attained finality due to procedural and substantial defects. In our Decision, We held that: However, in assailing the citizenship of the father, the proper proceeding should be in accordance with Section 18 of Commonwealth Act No. 473 which provides that: Sec. 18. Cancellation of Naturalization Certificate Issued. - Upon motion made in the proper proceedings by the Solicitor General or his representative, or by the proper provincial fiscal, the competent judge may cancel the naturalization certificate issued and its registration in the Civil Register: 1. If it is shown that said naturalization certificate was obtained fraudulently or illegally; 2. If the person naturalized shall, within five years next following the issuance of said naturalization certificate, return to his native country or to some foreign country and establish his permanent residence there: Provided, That the fact of the person naturalized remaining more than one year in his native country or the country of his former nationality, or two years in any other foreign country, shall be considered as prima facie evidence of his intention of taking up his permanent residence in the same:

3. If the petition was made on an invalid declaration of intention; 4. If it is shown that the minor children of the person naturalized failed to graduate from a public or private high school recognized by the Office of Private Education [now Bureau of Private Schools] of the Philippines, where Philippine history, government or civics are taught as part of the school curriculum, through the fault of their parents either by neglecting to support them or by transferring them to another school or schools. A certified copy of the decree canceling the naturalization certificate shall be forwarded by the Clerk of Court of the Department of Interior [now Office of the President] and the Bureau of Justice [now Office of the Solicitor General]; 5. If it is shown that the naturalized citizen has allowed himself to be used as a dummy in violation of the constitutional or legal provisions requiring Philippine citizenship as a requisite for the exercise, use or enjoyment of a right, franchise or privilege. (Emphasis supplied) As early as the case of Queto v. Catolico, where the Court of First Instance judge motu propio and not in the proper denaturalization proceedings called to court various grantees of certificates of naturalization (who had already taken their oaths of allegiance) and cancelled their certificates of naturalization due to procedural infirmities, the Court held that: x x x It may be true that, as alleged by said respondents, that the proceedings for naturalization were tainted with certain infirmities, fatal or otherwise, but that is beside the point in this case. The jurisdiction of the court to inquire into and rule upon such infirmities must be properly invoked in accordance with the procedure laid down by law. Such procedure is the cancellation of the naturalization certificate. [Section 1(5), Commonwealth Act No. 63], in the manner fixed in Section 18 of Commonwealth Act No. 473, hereinbefore quoted, namely, "upon motion made in the proper proceedings by the Solicitor General or his representatives, or by the proper provincial fiscal." In other words, the initiative must come from these officers, presumably after previous investigation in each particular case. (Emphasis supplied) Clearly, under law and jurisprudence, it is the State, through its representatives designated by statute, that may question the illegally or invalidly procured certificate of naturalization in the appropriate denaturalization proceedings. It is plainly not a matter that may be raised by private persons in an election case involving the naturalized citizens descendant. Accordingly, it is not enough that one's qualification, or lack of it, to hold an office requiring one to be a natural-born citizen, be attacked and questioned before any tribunal or government institution. Proper proceedings must be strictly followed by the proper officers under the law. Hence, in seeking Limkaichong's disqualification on account of her citizenship, the rudiments of fair play and due process must be observed, for in doing so, she is not only deprived of the right to hold office as a Member of the House of Representative but her constituents would also be deprived of a leader in whom they have put their trust on through their votes. The obvious rationale behind the foregoing ruling is that in voting for a candidate who has not been disqualified by final judgment during the election day, the people voted for her bona fide, without any intention to misapply their franchise, and in the honest belief that the candidate was

then qualified to be the person to whom they would entrust the exercise of the powers of government.4lavvphil These precepts, notwithstanding, Biraogo remained firm in his belief that this Court erred in its Decision and that the COMELEC Joint Resolution dated May 17, 2007 disqualifying Limkaichong should have been affirmed. He even went to a great extent of giving a dichotomy of the said Joint Resolution by stating that it was composed of two parts, the first part of which is the substantive part, and the second, pertains to the injunctive part. For this purpose, the dispositive portion of the said COMELEC Joint Resolution is reproduced below: WHEREFORE, the Petitions are GRANTED and Jocelyn D. Sy-Limkaichong is declared as DISQUALIFIED from her candidacy for Representative of the First District of Negros Oriental. The Provincial Supervisor of the Commission on Elections of Negros Oriental is hereby directed to strike out the name JOCELYN SY-LIMKAICHONG from the list of eligible candidates for the said position, and the concerned Board of Canvassers is hereby directed to hold and/or suspend the proclamation of JOCELYN SY-LIMKAICHONG as winning candidate, if any, until this decision has become final. SO ORDERED.5 Biraogo maintained that the Motion for Reconsideration filed by Limkaichong suspended only the execution of the substantive relief or the first part of the above-quoted COMELEC Joint Resolution. However, it did not suspend the execution of the injunctive part and, accordingly, the Provincial Supervisor of the COMELEC should not have proceeded with Limkaichong's proclamation as the winning candidate in the elections. His argument has no leg to stand on. We cannot take a decision or resolution on a piece-meal basis and apply only that part which is seemingly beneficial to one's cause and discard the prejudicial part which, obviously, would just be a hindrance in advancing one's stance or interests. Besides, the COMELEC Joint Resolution which Biraogo dichotomized was effectively suspended when Limkaichong timely filed her Motion for Reconsideration pursuant to Section 13(c),6 Rule 18 and Section 2,7 Rule 19 of the COMELEC Rules of Procedure. Hence, it cannot as yet be implemented for not having attained its finality. Nevertheless, events have already transpired after the COMELEC has rendered its Joint Resolution. Limkaichong was proclaimed by the Provincial Board of Canvassers, she had taken her oath of office, and she was allowed to officially assume the office on July 23, 2007. Accordingly, we ruled in our April 1, 2009 Decision that the House of Representatives Electoral Tribunal (HRET), and no longer the COMELEC, should now assume jurisdiction over the disqualification cases. Pertinently, we held: x x x The Court has invariably held that once a winning candidate has been proclaimed, taken his oath, and assumed office as a Member of the House of Representatives, the COMELEC's jurisdiction over election contests relating to his election, returns, and qualifications ends, and the HRET's own jurisdiction begins.8 It follows then that the proclamation of a winning

candidate divests the COMELEC of its jurisdiction over matters pending before it at the time of the proclamation. The party questioning his qualification should now present his case in a proper proceeding before the HRET, the constitutionally mandated tribunal to hear and decide a case involving a Member of the House of Representatives with respect to the latter's election, returns and qualifications. The use of the word "sole" in Section 17, Article VI of the Constitution and in Section 2509 of the OEC underscores the exclusivity of the Electoral Tribunals' jurisdiction over election contests relating to its members.10 Section 17, Article VI of the 1987 Constitution provides: Sec. 17. The Senate and the House of Representatives shall each have an Electoral Tribunal which shall be the sole judge of all contests relating to the election, returns, and qualifications of their respective Members. Each Electoral Tribunal shall be composed of nine Members, three of whom shall be Justices of the Supreme Court to be designated by the Chief Justice, and the remaining six shall be Members of the Senate or the House of Representatives, as the case may be, who shall be chosen on the basis of proportional representation from the political parties and the parties or organizations registered under the party-list system represented therein. The senior Justice in the Electoral Tribunal shall be its Chairman. xxxx Petitioners (in G.R. Nos. 179120, 179132-33, and 179240-41) steadfastly maintained that Limkaichongs proclamation was tainted with irregularity, which will effectively prevent the HRET from acquiring jurisdiction. The fact that the proclamation of the winning candidate, as in this case, was alleged to have been tainted with irregularity does not divest the HRET of its jurisdiction.11 The Court has shed light on this in the case of Vinzons-Chato,12 to the effect that: In the present case, it is not disputed that respondent Unico has already been proclaimed and taken his oath of office as a Member of the House of Representatives (Thirteenth Congress); hence, the COMELEC correctly ruled that it had already lost jurisdiction over petitioner Chato's petition. The issues raised by petitioner Chato essentially relate to the canvassing of returns and alleged invalidity of respondent Unico's proclamation. These are matters that are best addressed to the sound judgment and discretion of the HRET. Significantly, the allegation that respondent Unico's proclamation is null and void does not divest the HRET of its jurisdiction: x x x [I]n an electoral contest where the validity of the proclamation of a winning candidate who has taken his oath of office and assumed his post as congressman is raised, that issue is best addressed to the HRET. The reason for this ruling is self-evident, for it avoids duplicity of proceedings and a clash of jurisdiction between constitutional bodies, with due regard to the people's mandate. Further, for the Court to take cognizance of petitioner Chato's election protest against respondent Unico would be to usurp the constitutionally mandated functions of the HRET.

In fine, any allegations as to the invalidity of the proclamation will not prevent the HRET from assuming jurisdiction over all matters essential to a members qualification to sit in the House of Representatives. The 1998 HRET Rules, as amended, provide for the manner of filing either an election protest or a petition for quo warranto against a Member of the House of Representatives. In our Decision, we ruled that the ten-day prescriptive period under the 1998 HRET Rules does not apply to disqualification based on citizenship, because qualifications for public office are continuing requirements and must be possessed not only at the time of appointment or election or assumption of office but during the officer's entire tenure. Once any of the required qualifications is lost, his title may be seasonably challenged.13 Accordingly, the 1987 Constitution requires that Members of the House of Representatives must be natural-born citizens not only at the time of their election but during their entire tenure. Being a continuing requirement, one who assails a member's citizenship or lack of it may still question the same at any time, the ten-day prescriptive period notwithstanding.lavvphi1 In fine, we hold that Biraogo had not successfully convinced us to reconsider our Decision and grant his motion for reconsideration. In a last-ditched attempt to muddle the issues, Biraogo observed that the Decision dated April 1, 2009 is a complete turn-around from the ruling embodied in the Decision written by Justice Ruben T. Reyes which, although unpromulgated, was nonetheless signed by fourteen (14) Associate Justices and approved by the Court en banc on July 15, 2008. He decried the absence of an explanation in the Decision dated April 1, 2009 for the said departure or turn-around. Such a position deserves scant consideration. The Court in Belac v. Commision on Elections,14 held that a decision must not only be signed by the Justices who took part in the deliberation, but must also be promulgated to be considered a Decision, to wit: [A] true decision of the Court is the decision signed by the Justices and duly promulgated. Before that decision is so signed and promulgated, there is no decision of the Court to speak of. The vote cast by a member of the Court after the deliberation is always understood to be subject to confirmation at the time he has to sign the decision that is to be promulgated. The vote is of no value if it is not thus confirmed by the Justice casting it. The purpose of this practice is apparent. Members of this Court, even after they have cast their votes, wish to preserve their freedom of action till the last moment when they have to sign the decision, so that they may take full advantage of what they may believe to be the best fruit of their most mature reflection and deliberation. In consonance with this practice, before a decision is signed and promulgated, all opinions and conclusions stated during and after the deliberation of the Court, remain in the breasts of the Justices, binding upon no one, not even upon the Justices themselves. Of course, they may serve for determining what the opinion of the majority provisionally is and for designating a member to prepare the decision of the Court, but in no way is that decision binding unless and until signed and promulgated.

We add that at any time before promulgation, the ponencia may be changed by the ponente. Indeed, if any member of the court who may have already signed it so desires, he may still withdraw his concurrence and register a qualification or dissent as long as the decision has not yet been promulgated. A promulgation signifies that on the date it was made the judge or judges who signed the decision continued to support it. Thus, an unpromulgated decision is no decision at all. At the very least, they are part of the confidential internal deliberations of the Court which must not be released to the public. A decision becomes binding only after it is validly promulgated.15 Until such operative act occurs, there is really no decision to speak of, even if some or all of the Justices have already affixed their signatures thereto. During the intervening period from the time of signing until the promulgation of the decision, any one who took part in the deliberation and had signed the decision may, for a reason, validly withdraw one's vote, thereby preserving one's freedom of action. In sum, we hold that Biraogos Motion for Reconsideration with Prayer for Oral Argument must be denied. This Court did not err in ruling that the proper remedy of those who may assail Limkaichong's disqualification based on citizenship is to file before the HRET the proper petition at any time during her incumbency. WHEREFORE, the Motion for Reconsideration with Prayer for Oral Argument filed by petitioner Louis C. Biraogo in G.R. No. 179120 is DENIED with FINALITY. SO ORDERED. DIOSDADO M. PERALTA Associate Justice .R. No. 155620. August 9, 2005 PRUDENCIO QUIMBO, Petitioners, vs. ACTING OMBUDSMAN MARGARITO GERVACIO and DIRECTRESS MARY SUSAN S. GUILLERMO OF THE OMBUDSMAN OFFICE, Respondent. DECISION CARPIO-MORALES, J.: Culled from the records of the case are the following facts: Petitioner, Prudencio C. Quimbo, Provincial Engineer of Samar, was on May 21, 1995 administratively charged for harassment and oppression by Elmo V. Padaon (Padaon), a general foreman who was detailed to the Motor Pool Division, Provincial Engineering, Barangay Payao, Catbalogan, Samar by then Provincial Governor Jose Roo.

During the pendency of the administrative case before the Office of the Deputy Ombudsman, petitioner, on motion of the complainant Padaon, was by November 28, 1997 Order of the Ombudsman1 placed under preventive suspension without pay to commence upon receipt of the order and until such time that it is lifted but in no case beyond Six (6) Months. Petitioner began serving his preventive suspension on March 18, 1998. After petitioner had presented on direct examination his last two witnesses, the Office of the Ombudsman, by Order of April 27, 1998,2 lifted petitioners preventive suspension. He was thus thereupon ordered, by Memorandum of June 3, 1998 issued by the OIC Provincial Governor, to resume performing his duties as Provincial Engineer.3 By Decision of April 5, 2000,4 the Office of the Deputy Ombudsman found petitioner guilty of oppression and recommended that he be "suspended from office for a period of eight (8) months without pay, this case being the second commission by him of the same offense."5 The Deputy Ombudsmans recommendation was approved by the Ombudsman on April 28, 2000. Petitioners motion for reconsideration of the Ombudsmans decision having been denied, he elevated the case to the Court of Appeals. The appellate court, by Decision of March 1, 2001,6 modifying the decision of the Ombudsman, found petitioner guilty of simple misconduct only and penalized him with suspension from office for a period of Two (2) Months without pay. Following the finality of the appellate courts decision, the Office of the Ombudsman, by Order dated June 24, 2002,7 directed the Provincial Governor to implement its decision, as modified by the appellate court. Petitioner filed, however, before the Office of the Ombudsman a Motion for Modification/Reconsideration8 of its June 24, 2002 Order, calling attention to the fact that he had been on preventive suspension from March 18, 1998 to June 1, 1998 and praying that the order under reconsideration be modified "to take into account the period of [his] PREVENTIVE SUSPENSION of TWO (2) MONTHS and SEVENTEEN (17) [DAYS] WITHOUT PAY as part of the final penalty imposed."9 In a similar move, Provincial Governor Milagrosa Tan sent a letter10 also dated July 23, 2002 to the Ombudsman seeking clarification on the merits of petitioners contention that he should no longer be required to serve the penalty of Two (2) Months suspension without pay, he having priorly served preventive suspension for more than Two (2) Months. By letter dated August 21, 200211 addressed to the Provincial Governor, the Office of the Ombudsman clarified that "preventive suspension is not a penalty but a preliminary step in an investigation; [and that] [i]f after such investigation, the charge is established and the person investigated upon is found guilty . . . warranting the imposition of penalty, then he shall accordingly be penalized." The order for the implementation of its decision, as modified by the appellate court, was thus reiterated in the letter.

Unperturbed, petitioner, via certiorari, assailed before the Court of Appeals the Office of the Ombudsmans denial of his plea to be considered having served the modified penalty. By Resolution dated October 2, 2002,12 the Court of Appeals dismissed petitioners petition for certiorari, it affirming the Ombudsmans ruling that preventive suspension pending investigation is not a penalty. Hence, the present petition for review on certiorari raising as sole issue whether the appellate court committed reversible error when it dismissed his petition. Petitioner contends in the affirmative, he arguing that the dismissal of his petition is "in violation of the doctrine enunciated in Gloria v. Court of Appeals13 and the rule on equity that a person should not be punished twice nor be made to suffer the suspension penalty after [he] had [served] the same (although in a preventive suspension)."14 The petition fails. Jurisprudential law15 establishes a clear-cut distinction between suspension as preventive measure and suspension as penalty. The distinction, by considering the purpose aspect of the suspensions, is readily cognizable as they have different ends sought to be achieved. Preventive suspension is merely a preventive measure, a preliminary step in an administrative investigation. The purpose of the suspension order is to prevent the accused from using his position and the powers and prerogatives of his office to influence potential witnesses or tamper with records which may be vital in the prosecution of the case against him.16 If after such investigation, the charge is established and the person investigated is found guilty of acts warranting his suspension or removal, then he is suspended, removed or dismissed. This is the penalty.17 That preventive suspension is not a penalty is in fact explicitly provided by Section 24 of Rule XIV of the Omnibus Rules Implementing Book V of the Administrative Code of 1987 (Executive Order No. 292) and other Pertinent Civil Service Laws. SEC. 24. Preventive suspension is not a punishment or penalty for misconduct in office but is considered to be a preventive measure. (Emphasis supplied). Not being a penalty, the period within which one is under preventive suspension is not considered part of the actual penalty of suspension. So Section 25 of the same Rule XIV provides: SEC. 25. The period within which a public officer or employee charged is placed under preventive suspension shall not be considered part of the actual penalty of suspension imposed upon the employee found guilty. (Emphasis supplied). Clearly, service of the preventive suspension cannot be credited as service of penalty. To rule otherwise is to disregard above-quoted Sections 24 and 25 of the Administrative Code of 1987

and render nugatory the substantial distinction between, and purposes of imposing preventive suspension and suspension as penalty. Petitioners reliance on Gloria fails. In said case, this Court recognized two kinds of preventive suspension of civil service employees who are charged with offenses punishable by removal or suspension, to wit: (1) preventive suspension pending investigation (Section 51 of the Civil Service Law [Book V, Title I, Subtitle A of the Administrative Code of 1987]), and (2) preventive suspension pending appeal if the penalty imposed by the disciplining authority is suspension or dismissal and, after review, the respondent is exonerated (Section 47(4) of The Civil Service Law).18 The foregoing classification has significant implications in determining the entitlement of the employee to compensation during the period of suspension, and to credit the preventive suspension to the final penalty of suspension. Thus, in Gloria, this Court held: Preventive suspension pending investigation, as already discussed, is not a penalty but only a means of enabling the disciplining authority to conduct an unhampered investigation. On the other hand, preventive suspension pending appeal is actually punitive although it is in effect subsequently considered illegal if respondent is exonerated and the administrative decision finding him guilty is reversed. Hence, he should be reinstated with full pay for the period of the suspension. Thus, 47(4) states that respondent "shall be considered as under preventive suspension during the pendency of the appeal in the event he wins." On the other hand, if his conviction is affirmed, i.e., if he is not exonerated, the period of his suspension becomes part of the final penalty of suspension or dismissal. 19 (Emphasis and underscoring supplied). In fine, as petitioners preventive suspension was carried out pending his investigation, not while his appeal from his conviction was pending, the same cannot be credited to form part of the final penalty of suspension. En passant, neither may the concept of crediting, in criminal law, preventive imprisonment in the service of a convicts term of imprisonment20 be applied to preventive suspension during investigation in administrative law in the service of a respondents final penalty of suspension. For not only are they distinct in the objective or purpose, or in their nature as preventive imprisonment involves restriction of personal liberties which is not the case with preventive suspension; the respective laws covering them are explicit. Finally, as shown above, since the law explicitly prescribes the rules on crediting of preventive suspension to the final penalty of suspension, petitioners invocation of equity may not lie. WHEREFORE, the petition is hereby DENIED. Costs against petitioner. SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, and Garcia, JJ., concur. Corona, J., on leave. PEOPLE OF THE PHILIPPINES, petitioner, vs. THE HONORABLE SANDIGANBAYAN (Fifth Division) and EFREN L. ALAS, respondents. DECISION CORONA, J.: Does the Sandiganbayan have jurisdiction over presidents, directors or trustees, or managers of government-owned or controlled corporations organized and incorporated under the Corporation Code for purposes of the provisions of RA 3019, otherwise known as the Anti-Graft and Corrupt Practices Act? The petitioner, represented by the Office of the Special Prosecutor (OSP), takes the affirmative position in this petition for certiorari under Rule 65 of the Rules of Court. Respondent Efren L. Alas contends otherwise, together with the respondent court. Pursuant to a resolution dated September 30, 1999 of the Office of the Ombudsman, two separate informations[1] for violation of Section 3(e) of RA 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, were filed with the Sandiganbayan on November 17, 1999 against Efren L. Alas. The charges emanated from the alleged anomalous advertising contracts entered into by Alas, in his capacity as President and Chief Operating Officer of the Philippine Postal Savings Bank (PPSB), with Bagong Buhay Publishing Company which purportedly caused damage and prejudice to the government. On October 30, 2002, Alas filed a motion to quash the informations for lack of jurisdiction, which motion was vehemently opposed by the prosecution. After considering the arguments of both parties, the respondent court ruled that PPSB was a private corporation and that its officers, particularly herein respondent Alas, did not fall under Sandiganbayan jurisdiction. According to the Sandiganbayan: After a careful consideration of the arguments of the accused-movant as well as of that of the prosecution, we are of the considered opinion that the instant motion of the accused is well taken. Indeed, it is the basic thrust of Republic Act as well as (sic) Presidential Decree No. 1606 as amended by President Decree No. 1486 and Republic Act No. 7975 and Republic Act No. 8249 that the Sandiganbayan has jurisdiction only over public officers unless private persons are charged with them in the commission of the offenses. The records disclosed that while Philippine Postal Savings Bank is a subsidiary of the Philippine Postal Corporation which is a government owned corporation, the same is not created by a special law. It was organized and incorporated under the Corporation Code which is Batas Pambansa Blg. 68. It was registered with the Securities and Exchange Commission under SEC No. AS094-005593 on June 22, 1994 with a lifetime of fifty (50) years. Under its Articles of Incorporation the purpose for which said entity is formed was primarily for business, xxx

Likewise, a scrutiny of the seven (7) secondary purposes of the corporation points to the conclusion that it exists for business. Obviously, it is not involved in the performance of a particular function in the exercise of government power. Thus, its officers and employees are not covered by the GSIS and are under the SSS law, and actions for reinstatement and backwages are not within the jurisdiction of the Civil Service Commission but by the National Labor Relations Commission (NLRC). The Supreme Court, in the case of Trade Unions of the Philippines and Allied Services vs. National Housing Corp., 173 SCRA 33, held that the Civil Service now covers only government owned or controlled corporations with original or legislative charters, those created by an act of Congress or by special law, and not those incorporated under and pursuant to a general legislation. The Highest Court categorically ruled that the Civil Service does not include government-owned or controlled corporation which are organized as subsidiaries of governmentowned or controlled corporation under the general corporation law. In Philippine National Oil Company Energy Development Corporation vs. Leogardo, 175 SCRA 26, the Supreme Court emphasized that: The test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporation created by special charter are subject to its provision while those incorporated under the general corporation law are not within its coverage. Likewise in Davao City Water District vs. Civil Service Commission, 201 SCRA 601 it was held that by government-owned or controlled corporation with original charter we mean government-owned or controlled corporation created by a special law and not under the Corporation Code of the Philippines while in Llenes vs. Dicdican, et al., 260 SCRA 207, a public officer has been ruled, as a person whose duties involve the exercise of discretion in the performance of the function of government. Clearly, on the basis of the foregoing pronouncements of the Supreme Court, the accused herein cannot be considered a public officer. Thus, this Court may not exercise jurisdiction over his act.[2] Dissatisfied, the People, through the Office of the Special Prosecutor (OSP), filed this petition[3] arguing, in essence, that the PPSB was a government-owned or controlled corporation as the term was defined under Section 2(13) of the Administrative Code of 1987.[4] Likewise, in further defining the jurisdiction of the Sandiganbayan, RA 8249 did not make a distinction as to the manner of creation of the government-owned or controlled corporations for their officers to fall under its jurisdiction. Hence, being President and Chief Operating Officer of the PPSB at the time of commission of the crimes charged, respondent Alas came under the jurisdiction of the Sandiganbayan. Quoting at length from the assailed resolution dated February 15, 2001, respondent Alas, on the other hand, practically reiterated the pronouncements made by the respondent court in support of

his conclusion that the PPSB was not created by special law, hence, its officers did not fall within the jurisdiction of the Sandiganbayan.[5] We find merit in the petition. Section 2(13) of EO 292[6] defines government-owned or controlled corporations as follows: Sec. 2. General Terms Defined Unless the specific words of the text or the context as a whole or a particular statute, shall require a different meaning: xxx xxx xxx

(13) government owned or controlled corporations refer to any agency organized as a stock or non-stock corporation vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the government directly or indirectly or through its instrumentalities either wholly, or where applicable as in the case of stock corporations to the extent of at least 51% of its capital stock: provided, that government owned or controlled corporations maybe further categorized by the department of the budget, the civil service commission and the commission on audit for the purpose of the exercise and discharge of their respective powers, functions and responsibilities with respect to such corporations. From the foregoing, PPSB fits the bill as a government-owned or controlled corporation, and organized and incorporated under the Corporation Code as a subsidiary of the Philippine Postal Corporation (PHILPOST). More than 99% of the authorized capital stock of PPSB belongs to the government while the rest is nominally held by its incorporators who are/were themselves officers of PHILPOST. The creation of PPSB was expressly sanctioned by Section 32 of RA 7354, otherwise known as the Postal Service Act of 1992, for purposes of, among others, to encourage and promote the virtue of thrift and the habit of savings among the general public, especially the youth and the marginalized sector in the countryside xxx and to facilitate postal service by receiving collections and making payments, including postal money orders.[7] It is not disputed that the Sandiganbayan has jurisdiction over presidents, directors or trustees, or managers of government-owned or controlled corporations with original charters whenever charges of graft and corruption are involved. However, a question arises whether the Sandiganbayan has jurisdiction over the same officers in government-owned or controlled corporations organized and incorporated under the Corporation Code in view of the delimitation provided for in Article IX-B Section 2(1) of the 1987 Constitution which states that: SEC. 2. (1) The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the government, including government-owned or controlled corporations with original charters. It should be pointed out however, that the jurisdiction of the Sandiganbayan is separate and distinct from the Civil Service Commission. The same is governed by Article XI, Section 4 of the 1987 Constitution which provides that the present anti-graft court known as the Sandiganbayan shall continue to function and exercise its jurisdiction as now or hereafter may

be provided by law. This provision, in effect, retained the jurisdiction of the anti-graft court as defined under Article XIII, Section 5 of the 1973 Constitution which mandated its creation, thus: Sec. 5. The Batasang Pambansa shall create a special court, to be known as Sandiganbayan, which shall have jurisdiction over criminal and civil cases involving graft and corrupt practices and such other offense committed by public officers and employees, including those in government-owned or controlled corporations, in relation to their office as may be determined by law. (Italics ours) On March 30, 1995, Congress, pursuant to its authority vested under the 1987 Constitution, enacted RA 7975[8] maintaining the jurisdiction of the Sandiganbayan over presidents, directors or trustees, or managers of government-owned or controlled corporations without any distinction whatsoever. Thereafter, on February 5, 1997, Congress enacted RA 8249[9] which preserved the subject provision: Section 4, Jurisdiction. The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving: a. Violations of Republic Act No. 3019, as amended, otherwise known as the AntiGraft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section, Title VII, Book II of the Revised Penal Code, where one or more of the accused are officials occupying the following positions in the government, whether in a permanent, acting or interim capacity, at the time of the commission of the offense, (1) Officials of the executive branch occupying the positions of regional director, and higher, otherwise classified as grade 27 and higher, of the Compensation and Position Classification Act of 1989 (Republic Act No. 6758) specifically including: xxx xxx xxx

(g) Presidents, directors or trustees, or managers of governmentowned or controlled corporations, state universities or educational institutions or foundations. (Italics ours) The legislature, in mandating the inclusion of presidents, directors or trustees, or managers of government-owned or controlled corporations within the jurisdiction of the Sandiganbayan, has consistently refrained from making any distinction with respect to the manner of their creation. The deliberate omission, in our view, clearly reveals the intention of the legislature to include the presidents, directors or trustees, or managers of both types of corporations within the jurisdiction of the Sandiganbayan whenever they are involved in graft and corruption. Had it been otherwise, it could have simply made the necessary distinction. But it did not.

It is a basic principle of statutory construction that when the law does not distinguish, we should not distinguish. Ubi lex non distinguit nec nos distinguere debemos. Corollarily, Article XI Section 12 of the 1987 Constitution, on the jurisdiction of the Ombudsman (the governments prosecutory arm against persons charged with graft and corruption), includes officers and employees of government-owned or controlled corporations, likewise without any distinction. In Quimpo v. Tanodbayan,[10] this Court, already mindful of the pertinent provisions of the 1987 Constitution, ruled that the concerned officers of government-owned or controlled corporations, whether created by special law or formed under the Corporation Code, come under the jurisdiction of the Sandiganbayan for purposes of the provisions of the Anti-Graft and Corrupt Practices Act. Otherwise, as we emphasized therein, a major policy of Government, which is to eradicate, or at the very least minimize, the graft and corruption that has permeated the fabric of the public service like a malignant social cancer, would be seriously undermined. In fact, Section 1 of the Anti-Graft and Corrupt Practices Act embodies this policy of the government, that is, to repress certain acts not only of public officers but also of private persons constituting graft or corrupt practices or which may lead thereto. The foregoing pronouncement has not outlived its usefulness. On the contrary, it has become even more relevant today due to the rampant cases of graft and corruption that erode the peoples faith in government. For indeed, a government-owned or controlled corporation can conceivably create as many subsidiary corporations under the Corporation Code as it might wish, use public funds, disclaim public accountability and escape the liabilities and responsibilities provided by law. By including the concerned officers of government-owned or controlled corporations organized and incorporated under the Corporation Code within the jurisdiction of the Sandiganbayan, the legislature evidently seeks to avoid just that. WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the assailed resolution dated February 15, 2001 of the respondent court is hereby REVERSED and SET ASIDE. SO ORDERED. Panganiban, (Chairman), Sandoval-Gutierrez, Carpio-Morales, and Garcia, JJ., concur. [G.R. No. 159940. February 16, 2005] OFFICE OF THE OMBUDSMAN, petitioner, vs. CIVIL SERVICE COMMISSION, respondent. DECISION CARPIO-MORALES, J.: Before this Court is a petition for certiorari under Rule 65 of the 1997 Revised Rules of Court seeking to set aside and nullify Resolution No. 030919 of the Civil Service Commission (CSC) dated August 28, 2003.

The antecedents of the case are as follows: By letter[1] dated March 7, 1994 addressed to then Ombudsman Conrado M. Vasquez, the CSC approved the Qualification Standards for several positions in the Office of the Ombudsman (petitioner) including that for Graft Investigation Officer III. The Qualification Standards for said position are: EDUCATION: Bachelor of Laws EXPERIENCE: 5 years of experience in the practice of law, counseling, investigation/ prosecution of cases, hearings of administrative/ criminal cases, legal research or other related work. TRAINING: 24 hours of relevant training ELIGIBILITY: RA 1080 (Bar) The Career Executive Service Board (CESB) subsequently advised the Ombudsman, by letter of May 29, 1996,[2] that pursuant to CSC Memorandum Circular No. 21, s.1994, the position of Graft Investigation Officer III, among other positions in petitioner therein mentioned, was classified as a Career Executive Service (CES) position, hence, governed by the rules of the CES pertaining to eligibility, appointment to CES ranks, and performance evaluation, among other things. On September 29, 1999, the members of the Constitutional Fiscal Autonomy Group (CFAG), namely: the Commission on Elections (COMELEC), CSC, Commission on Audit (COA), Commission on Human Rights (CHR), petitioner and this Court adopted Joint Resolution No. 62[3] reading: JOINT RESOLUTION NO. 62 WHEREAS, the independence of the members of the Constitutional Fiscal Autonomy Group (CFAG) is guaranteed by the Constitution; WHEREAS, the Constitution has several provisions that guarantee and protect such independence, among which are Sections 4 and 5 of Article IX, A thereof, which respectively grant them Fiscal Autonomy and authorize them to appoint their own officials and employees in accordance with law; WHEREAS, Section 7(3), Title I, Book V of the Administrative Code of 1987 enumerates exclusively and restrictively the specific positions under the Career Executive Service, all the holders of which are appointed by the President and are required to have CES eligibility; WHEREAS, in case of Home Insurance Guaranty Corporation vs. Civil Service Commission and Daniel Cruz, G.R. No. 95450, dated 19 March 1993, the Supreme Court nullified the

classification by the CSC of the position of Corporate Vice President as belonging to the third level of the Career Executive Services; WHEREAS, the Court declared in the above cited case that said position is not among those enumerated by law as falling under the third level, nor one of those identified by the CES Board as equivalent rank to those listed by law, nor was the incumbent appointed by the President; WHEREAS, in the case of Sixto Brillantes, Jr. vs. Haydee T. Yorac, G.R. No. 93867, dated 18 December 1990, the Supreme Court ruled that Article IX-A, Sec. 1 of the Constitution expressly describes all Constitutional Commissions as Independent. Although essentially executive in nature, they are not under the control of the President of the Philippines in the discharge of their respective functions. WHEREAS, only the Chairmen and Commissioners of the Constitutional Commissions, the Commission on Human Rights, Justices and Judges, as well as the Ombudsman and his Deputies, are appointed by the President; WHEREAS, the Constitutional Commissions, the Supreme Court, the Commission on Human Rights, and the Office of the Ombudsman are empowered to appoint officials and employees to positions belonging to first level up to third level of their respective agencies, and that they are not presidential appointees; WHEREAS, Section 22 par. 1, Chapter 5, Subtitle A, Title I, Book V, of the Administrative Code of 1987, provides in part that [t]he degree of qualifications of an officer or employee shall be determined by the appointing authority on the basis of the qualification standard for the particular positions[,] and par. 2 thereof provides that [t]he establishment, administration and maintenance of qualification standards shall be the responsibility of the department or agency, with the assistance and approval of the Civil Service Commission; NOW, THEREFORE, the CFAG jointly resolves: 1. That all third level positions under each member agency are career positions; 2. That, where appropriate and proper, taking into consideration the organizational setup of the agency concerned, the overall screening and selection process for these positions shall be a collegial undertaking, provided that the appointment paper shall be signed only by the Head of the member agency; 3. That all career third level positions identified and classified by each of the member agency are not embraced within the Career Executive Service (CES) and as such shall not require Career Service Executive Eligibility (CSEE) or Career Executive Service (CES) Eligibility for purposes of permanent appointment; 4. That should CFAG member agencies develop their respective eligibility requirements for the third level positions, the test of fitness shall be jointly undertaken by the CFAG member agencies in coordination with the CSC;

5. That in case the test of fitness shall be in written form, the CSC shall prepare the questionnaires and conduct the examinations designed to ascertain the general aptitude of the examinees while the member agency shall likewise prepare the questionnaires and conduct in conjunction with the CSC, the examinations to determine the technical capabilities and expertise of the examinees suited to its functions; 6. That the resulting eligibility acquired after passing the aforementioned examination shall appropriate for permanent appointment only to third level positions in the CFAG member agencies; 7. That the member agencies shall regularly coordinate with the CSC for the conferment of the desired eligibility in accordance with this Resolution; However this is without prejudice to those incumbents who wish to take the Career Service Executive Examination given by the Civil Service Commission or the Management Aptitude Test Battery given by the Career Executive Service Board. (Underscoring in the original omitted; emphasis, italics and underscoring supplied) On July 31, 2002, Melchor Arthur H. Carandang, Paul Elmer M. Clemente and Jose Tereso U. de Jesus, Jr. were appointed Graft Investigation Officers III of petitioner by the Ombudsman. The CSC approved the appointments on the condition that for the appointees to acquire security of tenure, they must obtain CES or Civil Service Executive (CSE) eligibility which is governed by the CESB. By January 2, 2003 letter to the CSC, the Ombudsman requested for the change of status, from temporary to permanent, of the appointments of Carandang, Clemente and De Jesus effective December 18, 2002. Invoking the Court of Appeals ruling in Khem N. Inok v. Hon. Corazon Alma de Leon, et al. (CA-G.R. SP No. 49699), as affirmed by the Supreme Court, the Ombudsman wrote: xxx In the Decision of the Court of Appeals dated January 28, 2001 on CA G.R. SP No. 49699 as affirmed by the Supreme Court with finality on July 2, 2002 in G.R. No. 148782 entitled Khem N. Inok vs. Civil Service Commission, it stated in said Decision that the letter and intent of the law is to circumscribe the Career Executive Service (CES) to CES positions in the Executive Branch of Government, and that the Judiciary, the Constitutional Commissions, the Office of the Ombudsman and the Commission on Human Rights are not covered by the CES governed by the Career Executive Service Board. Said Decision thereby effectively granted the petition of Mr. Inok for security of tenure as Director II of the Commission on Audit despite the absence of a CES eligibility.[4] (Emphasis and italics supplied) The relevant portions of the cited CA decision read:

Presidential Decree No. 807, otherwise known as the Civil Service Decree of the Philippines, provides the following levels of position in the career service, viz: SEC. 7. Classes of Positions in the Career Service. (a) Classes of positions in the career service appointment to which requires examinations shall be grouped into three major levels as follows: (1) The first level shall include clerical, trades, crafts, and custodial service positions which involve non-professional or subprofessional work in a non-supervisory or supervisory capacity requiring less than four years of collegiate studies; (2) The second level shall include professional, technical, and scientific positions which involve professional; technical, or scientific work in a non-supervisory or supervisory capacity requiring at least four years of college work up to Division Chief level; and (3) The third level shall cover positions in the Career Executive Service. (b) Except as herein otherwise provided, entrance to the first two levels shall be through competitive examinations, which shall be open to those inside and outside the service who meet the minimum qualification requirements. Entrance to a higher level does not require previous qualification in a lower level. Entrance to the third level shall be prescribed by the Career Executive Service Board. (c) Within the same level, no civil service examination shall be required for promotion to a higher position in one or more related occupational groups. A candidate for promotion should however, have previously passed the examination for that level. The last sentence of Section 7(b) of P.D. No. 807 is similar to the provision of P.D. No. 1, Article IV, par. IV, par. 5(a), to wit: (a) Membership. A person who meets such managerial experience and other requirements and passes such examinations as may be prescribed by the Board shall be included in the register of career service eligibles and, upon appointment to an appropriate class in the Career Executive Service, become an active member in the Service. In exceptional cases, the Board may give unassembled examinations for eligibility. The area of recruitment shall be government-wide, with provisions to allow qualified or outstanding men from outside the government to enter the service. Thus, it could be gleaned from P.D. No. 1 of the Career Executive Service (CES), which has been [d]rafted into Executive Order No. 292, that the letter and intent of the law is to circumscribe the Career Executive Service to CES positions in the Executive Branch of government. Verily, consistent with the principle of the ejusdem generis in legal hermeneutics, the phrase other officers of equivalent rank could encompass only such persons occupying positions in the Executive Department. In the contemporaneous case of the The Secretary of

Justice Serafin R. Cuevas, et. al. vs. Atty. Josefina G. Bacal, the Supreme Court lent credence to this postulate, viz: Security of tenure in the career executive service is acquired with respect to rank and not to position. The guarantee of security of tenure to members of the CES does not extend to the particular positions to which they may be appointed a concept which is applicable only to frst and second level employees in the civil service but to the rank to which they are appointed by the President. x x x Prescinding from the foregoing disquisition, We are loathe to stamp our imprimatur to the Commissions stance that the positions of Director III, including that of the COA, belong to the third level. Hence, appointees thereto should possess the x x x Career Executive Service (CES) Eligibility in accordance with the Qualification Standard of the said position. Ineluctably, the judiciary, the Constitutional Commissions, the Office of the Ombudsman, and the Commission on Human Rights are not covered by the CES governed by the CESB. The power of these constitutional offices to appoint their own officers and employees is mainly intended to safeguard their independence, which is the same power of appointment of all officials and employees of the judiciary granted to the Supreme Court. As commented by a noted constitutionalist: The authority of the Supreme Court to appoint its own officials and employees is another measure intended to safeguard the independence of the judiciary. However, the Courts appointing authority must be exercised in accordance with the Civil Service Law. Irrefragrably, inherent in the power to appoint is the power to administratively supervise the officials and employees in the constitutional offices in the same manner that the express power to appoint carries with it the implied power to remove the personnel appointed in said offices. x x x xxx Parenthetically, the power to administratively supervise is designed to strengthen the independence of the constitutional offices. A respected authority on political law underscored the multifarious factors that are integral to the independence of the constitutional offices, scilicet: There are several factors that preserve the independence of the three Commissions: xxx (3) Their appointment must be in a permanent capacity. (4) The Commissions enjoy their own fiscal autonomy. The independence of these constitutional offices serves to exempt their respective officials and employees from the coverage of the CES under the administrative authority of the CESB. to be

sure, they are embraced by the civil service system. However, the administrative functions belong to the constitutional offices, instead of the CESB in the same manner that the Supreme Court administers the judiciarys civil service. x x x[5] (Italics and emphasis in the original; underscoring partly in the original and partly supplied; citations omitted) It appears that Carandang and Clemente were in the meantime conferred with CSE Eligibility pursuant to CSC Resolution No. 03-0665 dated June 6, 2003.[6] Petitioner subsequently reclassified several positions by Resolution No. 02-03 dated August 18, 2003 including Graft Investigation Officer III which was reclassified to Graft Investigation and Prosecution Officer III. The Ombudsman thereupon requested the approval of the proposed Qualification Standards for the reclassified positions. With respect to the reclassified Graft Investigation and Prosecution Officer III position, the Qualification Standards were the same as those for Graft Investigation Officer III. Subsequently, the CSC, by the challenged Resolution of August 28, 2003, changed the status of Carandangs and Clementes appointments to permanent effective June 6, 2003, but not with respect to De Jesus on the ground that he has not met the eligibility requirements. The pertinent portion of the questioned Resolution reads: Relevant to the matter are Sections 4 and 6, Rule III and Rule VI, respectively, of the Omnibus Rules on Appointments and Other Personnel Action, which state: SEC. 4. Nature of Appointment. The nature of appointment shall be as follows: xxx i. Change of status: 1. temporary to permanent the appointment issued to a temporary employee when he acquires the appropriate eligibility or becomes fully qualified for the position to which he is appointed. xxx SEC. 6. In cases where the appointee fully qualifies for the position to which he is temporarily appointed, the appointing authority shall no longer issue an appointment for change of status from temporary to permanent. Upon the appointees presentation of the required document/s, such change may be effected as a footnote on the temporary appointment issued, copy furnished the Commission. It is explicitly provided therein that the change of status from temporary to permanent can be effected only once the appointee becomes fully qualified to the position to which he is appointed.

xxx The pronouncement of the Court of Appeals in the Inok case cannot be made the basis for changing the employment status of De Jesus. Let it be stressed that nowhere in the aforesaid decision states that the Office of the Ombudsman or the other constitutional agencies mentioned therein are exempt or are not covered by the Civil Service Law and Rules. On the contrary, the same decision declares that these bodies are covered by the civil service system. Basic is the rule that all appointments in the government service, particularly the career service, must be in accordance with the qualification requirements as laid down under existing civil service rules and regulations. Such policy is in line with the Commissions mandate to professionalize the civil service. The requirements spelled out in the Qualification Standards (QS) Manual are designed to determine the fitness of the appointee in a certain position. These requirements are indispensable in order to satisfy the Constitutional mandate that appointment in the civil service shall be made according to merit and fitness. While it is true that constitutional agencies such as the Office of the Ombudsman has the authority to appoint its officials in accordance with law, such law does not necessarily imply that their appointment will not be subject to Civil Service Law and Rules; otherwise, these independent bodies will arrogate upon themselves a power that properly belongs to the Civil Service Commission. Had the intention of the framers of the Constitution been to isolate and grant full independence to Constitutional Commissions in the matter of appointments, it would have been so provided. But that is not the case. the Philippine Constitution provides: The Constitutional Commissions shall appoint their officials and employees in accordance with law (Article IX-A, Section 4). Specifically, Section 6, Article XI of the Constitution states that The officials, shall be appointed by the Ombudsman according to the Civil Service Law. And since all matters pertaining to appointments are within the realm of expertise to the CSC, all laws, rules and regulations it issues on appointments must be complied with. The Constitution speaks of only one civil service, to encompass the first, second, and third levels. It is subject to the same set of laws, rules and regulations in the manner of observing and ensuring that the merit and fitness principle, unless otherwise exempted therefrom by the Constitution or law, is the guiding factor in issuing appointments. Hence, until and unless there is a law or rule exempting one category of public officials from the test in determining merit and fitness, all levels in the government are deemed subject to it. Simply put, the third level eligibility requirement for third level officials in all agencies is mandatory. Further, let it be clarified that the ruling enunciated in Inok case was with regard to the authority of the Career Executive Service Board to prescribe and to administer the Career Executive Service Eligibility and it did not specifically nor particularly take away the functions of the Civil Service Commission. This is evident from the aforequoted decision in the Inok case, to wit: The independence of these constitutional offices serves to exempt their respective officials and employees from the coverage of the CES under the administrative authority of the CESB. To be sure, they are embraced by the civil service system. However, the administrative functions belong to the constitutional offices, instead of the CESB in the manner that the Supreme Court administers the judiciarys civil service.

Pursuant to the QS Manual, a Graft Investigation Officer III position is a career service position requiring a Career Service Eligibility or Career Service Executive Eligibility. Considering that De Jesus has not met the eligibility requirement, the change of status of his appointment from temporary to permanent cannot be effected. As held in Achacoso vs. Macaraig, 195 SCRA 235: It is settled that a permanent appointment can be issued only to a person who meets all the requirements for the position to which he is appointed, including the appropriate eligibility prescribed. Achacoso did not. At best, therefore, his appointment could be regarded only as temporary. x x x (Underscoring partly in the original and partly supplied; emphasis supplied) Hence, the present petition anchored on the following ground: THE GENERAL POWER OF RESPONDENT CIVIL SERVICE COMMISSION (CSC) TO ADMINISTER THE CIVIL SERVICE CANNOT CONSTITUTIONALLY AND VALIDLY CURTAIL THE SPECIFIC DISCRETIONARY POWER OF APPOINTMENT, INCLUDING THE GRANT OF SECURITY OF TENURE, BY THE OMBUDSMAN AS AN INDEPENDENT CONSTITUTIONAL BODY IN FAVOR OF THE LATTERS OWN OFFICIALS, AND ANY SUCH CURTAILMENT BY THE RESPONDENT CSC, AS IN ITS IMPUGNED RESOLUTION NO. 030919 DATED 26 AUGUST 2003, IS CONSTITUTIONALLY AND LEGALLY INFIRM. Petitioner contends that the CSC misreads the ratio of the appellate court decision in Inok. It contends that the Ombudsman, as an appointing authority, is specifically tasked by the Constitution to choose his own qualified personnel, which includes the lesser power of granting security of tenure to his appointees once the basic qualification requirements are satisfied.[7] Petitioner likewise contends that its constitutional discretion as an independent appointing authority cannot be curtailed by the CSC which has no authority to review the appointments made by other offices except only to ascertain if the appointee possesses the required qualifications.[8] Petitioner further contends that the CES Eligibility, as administered by the respondent CESB, cannot be validly made a requisite for the attainment of security of tenure on qualified career officials of petitioner who are not legally part of the CES. Finally, petitioner argues that its officials which are appointed by the Ombudsman are technically classified as belonging to the Closed Career Service, the positions being unique and highly technical as they involve investigatorial, quasi-judicial and prosecutorial functions, in much the same way as judges are involved in judicial functions. Hence, petitioner concludes, appointment to such positions is likewise characterized by security of tenure. During the pendency of the case before this Court, the CSC, by Resolution[9] No. 040738 dated July 6, 2004, approved the proposed Qualification Standards for Graft Investigation and

Prosecution Officer I, II and III. As proposed, the following Qualification Standards for Graft Investigation and Prosecution Officer III were approved: Education : Bachelor of Laws Experience : Five (5) years of experience in the practice of law, counseling, investigation/ prosecution of cases, hearings of administrative/criminal cases, legal research or other related works Training : 24 hours of relevant training Eligibility : RA 1080 (BAR) The petition is impressed with merit. That the positions subject of the present case are unique and highly technical in nature, as are those of the Judiciary, is recognized by the constitutional offices under the earlier quoted Joint Resolution No. 62 of the CFAG of which CSC is a member.[10] Inok cannot be invoked as precedent in arriving at the question raised in this petition. This Court dismissed the petition of the CSC in the Inok case on a technicality therein petitioner CSCs failure to file a reply within the required period and not on the merits. Book V, Title I, Subtitle A of the Administrative Code of 1987 provides: SECTION 7. Career Service. The Career Service shall be characterized by (1) entrance based on merit and fitness to be determined as far as practicable by competitive examination, or based on highly technical qualifications; (2) opportunity for advancement to higher career positions; and (3) security of tenure. The Career Service shall include: 1) Open Career positions for appointment to which prior qualification in an appropriate examination is required; (2) Closed Career positions which are scientific, or highly technical in nature; these include the faculty and academic staff of state colleges and universities, and scientific and technical positions in scientific or research institutions which shall establish and maintain their own merit systems; (3) Positions in the Career Executive Service; namely, Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service and other officers of equivalent rank as may be identified by the Career Executive Service Board, all of whom are appointed by the President; x x x (Emphasis and underscoring supplied)

From the above-quoted provision of the Administrative Code, persons occupying positions in the CES are presidential appointees. A person occupying the position of Graft Investigation Officer III is not, however, appointed by the President but by the Ombudsman as provided in Article IX of the Constitution, to wit: SECTION 6. THE OFFICIALS AND EMPLOYEES OF THE OMBUDSMAN, OTHER THAN THE DEPUTIES, SHALL BE APPOINTED BY THE OMBUDSMAN ACCORDING TO THE CIVIL SERVICE LAW. To classify the position of Graft Investigation Officer III as belonging to the CES and require an appointee thereto to acquire CES or CSE eligibility before acquiring security of tenure would be absurd as it would result either in 1) vesting the appointing power for said position in the President, in violation of the Constitution; or 2) including in the CES a position not occupied by a presidential appointee, contrary to the Administrative Code. It bears emphasis that that under P.D. No 807, Sec. 9(h) which authorizes the CSC to approve appointments to positions in the civil service, except those specified therein, its authority is limited only to [determine] whether or not the appointees possess the legal qualifications and the appropriate eligibility, nothing else.[11] It is not disputed that, except for his lack of CES or CSE eligibility, De Jesus possesses the basic qualifications of a Graft Investigation Officer III, as provided in the earlier quoted Qualification Standards. Such being the case, the CSC has the ministerial duty to grant the request of the Ombudsman that appointment be made permanent effective December 18, 2002. To refuse to heed the request is a clear encroachment on the discretion vested solely on the Ombudsman as appointing authority.[12] It goes without saying that the status of the appointments of Carandang and Clemente, who were conferred CSE eligibility pursuant to CSC Resolution No. 03-0665 dated June 6, 2003, should be changed to permanent effective December 18, 2002 too. In a Supplemental Memorandum[13] received by this Court on January 5, 2005, the CSC alleged that, inter alia: . . . the reclassified G[raft] I[nvestigation and] P[rosecution] O[fficer] III position is the same position which is the subject of the herein case. Suffice it to state that the eligibility requirement under the new QS is no longer third level eligibility but RA 1080 (BAR) instead. However, notwithstanding the said approval of the new QS for GIPO III, CSC prays that the issues raised by the Office of Ombudsman relative to the authority of the CSC to administer the Civil Service Executive Examination for third level positions and to prescribe third level eligibility to third level positions in the Office of the Ombudsman be resolved. As the Court takes note of the information of the CSC in its Supplemental Memorandum, it holds that third level eligibility is not required for third level officials of petitioner appointed by the Ombudsman in light of the provisions of the Constitution vis a vis the Administrative Code of 1987 as discussed above.

WHEREFORE, the petition is hereby GRANTED. Resolution No. 030919 of the Civil Service Commission dated August 28, 2003 is hereby SET ASIDE. The appointment of Jose Tereso U. de Jesus, Jr., as well as those of Melchor Arthur H. Carandang, Paul Elmer M. Clemente, is hereby ordered made permanent effective December 18, 2002. SO ORDERED. SECOND DIVISION [G.R. No. 147227. November 19, 2004] MARIA REMEDIOS ARGANA, DONATA ALMENDRALA VDA. DE ARGANA, LUIS ARGANA, JR., PEREGRINO ARGANA, ESTATE OF GELACIO ARGANA, EUFROCINIO NOFUENTE, AMPARO ARGANA NOFUENTE, JUANITO ROGELIO, MILAGROS ARGANA ROGELIO, MARIA FELICIDAD ARGANA, MARIA DOROTEA ARGANA, REFEDOR SOUTH GOLD PROPERTY MANAGEMENT & DEVELOPMENT CORPORATION, petitioners, vs. REPUBLIC OF THE PHILIPPINES, respondent. DECISION TINGA, J.: Before the Court is a Petition for Certiorari assailing the Resolution dated April 11, 2000 and the Order dated February 22, 2001 of the Sandiganbayan, Third Division, in Civil Case No. 0026.[1] On July 29, 1987, respondent Republic of the Philippines filed with the Sandiganbayan a Petition for Forfeiture of alleged ill-gotten assets and properties of the late Maximino A. Argana, who served as Mayor of the Municipality of Muntinlupa[2] from 1964 to 1967 and from 1972 until his death in 1985. On October 28, 1998, the Sandiganbayan remanded the case to the Presidential Commission on Good Government (PCGG) for the conduct of an inquiry. In 1990, the case was reactivated in the Sandiganbayan. Petitioners Maria Remedios Argana, Donata Almendrala Vda. De Argana, Luis Argana, Jr., Peregrino Argana, Estate of Gelacio Argana, Eufrocinio Nofuente, Amparo Argana Nofuente, Juanito Rogelio, Milagros Argana Rogelio, Maria Felicidad Argana, Maria Dorotea Argana, and Refedor South Gold Property Management & Development Corporation filed a series of motions, including a Motion to Dismiss on the ground of the lack of authority of the PCGG to institute the case on behalf of respondent. This issue eventually reached this Court and was decided in favor of respondent on September 29, 1994.[3] Petitioners, in their Answer, denied that the properties sought to be forfeited by respondent were unlawfully acquired by the deceased Mayor and/or by petitioners. Still, to avoid a protracted litigation, petitioners exerted efforts to settle the case amicably with respondent through the PCGG.

After a series of motions were again filed by petitioners, the Sandiganbayan finally set the case for pre-trial on November 26, 1997, but the pre-trial was reset several times in view of the manifestation of the parties that they were in the process of negotiating a compromise. On August 7, 1997, petitioners offer of compromise was accepted by the PCGG in its Resolution No. 97-180-A.[4] Thereafter, the PCGG conducted an evaluation of the properties offered for settlement by petitioners. In a Memorandum dated August 18, 1997, Mauro J. Estrada, Director of the PCGG Research and Development Program, recommended the inclusion of another tract of land[5] belonging to petitioners among the properties which would be subject of the compromise. On September 18, 1997, respondent, represented by PCGG Commissioners Reynaldo S. Guiao and Herminio A. Mendoza entered into a Compromise Agreement with petitioners, represented by petitioner Maria Felicidad Argana. Petitioners conveyed, ceded and released in favor of respondent a total of 361.9203 hectares of agricultural land in Pangil and Famy, Laguna, or 75.12% of the properties subject of litigation, in consideration of the dismissal or withdrawal of all pending civil, criminal and administrative cases filed, litigated or investigated by respondent against them. The remainder was distributed as follows: To be retained by the late Mayor Arganas heirs Owned by the Mayors Brothers and Sisters Foreclosed by Los Baos Rural Bank Owned by Other Persons 9.88% 47.78787 hectares 26.6318 hectares 5.9856 hectares 39.64865 hectares

5.53% 1.24% 8.23%

____________________________ 24.88% 120.05392 hectares[6]

In a letter dated October 7, 1997,[7] the PCGG informed the Office of the Solicitor General (OSG) of the signing of the Compromise Agreement and requested the OSG to file the appropriate motion for approval thereof with the Sandiganbayan. Subsequently, the OSG requested for clarification from the PCGG if the compromise agreement included all the sequestered assets of petitioners subject of litigation. In response to the request, PCGG informed the OSG in a letter dated February 4, 1998[8] that the properties mentioned in the Compromise Agreement comprise all the sequestered assets subject of litigation, and

reiterated that it entered into a compromise agreement with petitioners because it believed that the evidence might not be sufficient to warrant continuing the prosecution of Civil Case No. 0026 and that it is to the best interest of the government to accept the offer of petitioners.[9] On May 27, 1998, then President of the Republic of the Philippines Fidel V. Ramos approved the Compromise Agreement between petitioners and respondent.[10] On June 4, 1998,[11] the OSG filed with the Sandiganbayan a Motion to Approve Compromise Agreement. Petitioners expressed their conformity to the motion on June 15, 1998. After conducting hearings on the motion, the Sandiganbayan promulgated its Decision on July 31, 1998 approving the Compromise Agreement and rendering judgment in accordance with the terms thereof.[12] However, on October 5, 1998, respondent, through the OSG and the PCGG, filed with the Sandiganbayan a Motion to Rescind Compromise Agreement and to Set Aside Judgment by Compromise (Motion to Rescind). Respondent prayed for the rescission of the Compromise Agreement or reformation thereof after a renegotiation with petitioners. Respondent contended that the partition of the properties in the Compromise Agreement was grossly disadvantageous to the government and that there was fraud and insidious misrepresentation by petitioners in the distribution and partition of properties, to the damage and prejudice of the government. According to respondent, there was fraud and insidious misrepresentation because petitioners proposed to divide the propertieswith 75% accruing to the government and the remaining 25% going to petitioners and their other creditorsbased on the total land area of the properties instead of on their value. As a result, the government obtained only Three Million Six Hundred Twenty Thousand Pesos (P3,620,000.00) worth of land, while petitioners received almost Four Billion Pesos (P4,000,000,000.00) worth. Petitioners filed an Answer to the Motion to Rescind and contended that the July 31, 1998 Decision of the Sandiganbayan could no longer be annulled because it had already become final and executory; that respondents counsel had no authority to file the motion; and that the motion was defective because it did not include a Certification against Forum-Shopping. They also argued that there was no agreement to divide the properties by a 75% to 25% ratio in favor of the government. What they proposed to cede to the government by way of compromise were their properties in Pangil covered by Transfer Certificate of Title (TCT) Nos. T-4044 and T-4009 and those in Famy, Laguna covered by TCT Nos. T-3813 to T-3817 and T-4104, 4106 and 4108, not a specific percentage of the properties subject of litigation.[13] In its Resolution dated September 22, 1999, the Sandiganbayan treated the Motion to Rescind as a petition for relief from judgment under Rule 38 of the 1997 Rules on Civil Procedure and set the motion for hearing. On April 11, 2000, the Sandiganbayan issued a Resolution granting respondents motion to rescind and setting aside the Decision dated July 31, 1998. The Sandiganbayan held that the Motion to Rescind was filed on time on October 5, 1998, the working day immediately following October 4, 1998, which was a Sunday and the 60th day after respondent received the July 31,

1998 Decision on August 5, 1998. It also ruled that the presumption that the OSG had authority to file the Motion to Rescind was not overcome by petitioners. Under Republic Act No. 1379,[14] the filing and prosecution of cases for forfeiture of unlawfully acquired property is a function of the OSG. Petitioners failed to show proof that pleadings or motions filed by lawyers of the government or the PCGG must first be approved by the PCGG En Banc and by the President of the Republic. The Sandiganbayan likewise held that respondent was not required to file a certification against forum-shopping because the motion to rescind was not an initiatory pleading.[15] With respect to the issue of fraud, it held that there was extrinsic fraud in the execution of the Compromise Agreement. The Sandiganbayan stated: The values were deliberately omitted to make it appear that the Compromise Agreement adheres to the 75%-25% ratio broadly adopted by the PCGG in compromising cases of ill-gotten wealth. It was this 75%-25% mode of compromise, with the greater share of 75% going to the government that misled the Court to believe, as We did believe, that the Compromise Agreement was fair, reasonable and advantageous to the Government. What was projected to be a 75%-25% ratio was in reality a 00.15%-99.85% ratio, with 99.85% going to the Arganas. This is unconscionable and immoral. And since it results in a transaction grossly disadvantageous and immoral to the government, it is against the law as being violative of Section 3(g) of Republic Act 3019. In the instant case, fraud of an extrinsic character exists because the representatives of plaintiff Republic in the PCGG connived with defendants in hiding the assessed or market values of the properties involved, so as to make it appear that the Compromise Agreement adhered to the 75%-25% ratio adopted by the PCGG in entering into compromise of cases involving the recovery of ill-gotten wealth. Through their infidelity, those in the PCGG who handled or were closely involved with the case during the last days of the previous administration fraudulently gave the Compromise Agreement a semblance of fairness and official acceptability. They sold plaintiff Republic down the river by entering into an agreement grossly disadvantageous to the government. For while plaintiff Republic got 00.15% (00.15074) of the estimated value of all the properties involved in this case, defendants almost ran away with 99.85% (99.84526) of their value. This is patently unfair. It is no compromise but a virtual sell-out. It could not have been pulled off without the connivance or collusion of those responsible for the case in the PCGG. Instead of protecting the interest of the government, they connived at its defeatalmost.[16] Petitioners filed a Motion for Reconsideration dated May 9, 2000 and a Supplement to said motion dated May 30, 2000. Petitioners also filed an Urgent Motion for Voluntary Inhibition dated May 18, 2000 praying that the members of the Third Division of the Sandiganbayan voluntarily inhibit themselves from hearing and resolving the petitioners pending motions. On February 22, 2001, the Sandiganbayan issued two Orders, one denying petitioners motion for reconsideration,[17] and the other, denying the motion for voluntary inhibition.[18]

Hence, petitioners filed the present petition on April 27, 2001. Respondent filed its Comment on October 22, 2001. On November 12, 2001, the Court issued a Resolution giving due course to the petition and requiring the parties to submit their respective memoranda.[19] Respondent filed its Memorandum on January 29, 2002. Petitioners filed theirs on February 26, 2002. In their respective memoranda, the parties reiterated the arguments in their earlier pleadings. Specifically, petitioners raise the following arguments: (A) The Sandiganbayan (Third Division) denied Petitioners their right to substantive and procedural due process when it refused to voluntarily inhibit itself from further hearing the instant case. The PCGG lawyers had no authority to ask for the rescission of the subject Compromise Agreement without the consent of the PCGG En Banc and the President of the Republic of the Philippines. The Motion to Rescind, which was treated by the Sandiganbayan (Third Division) as a Petition for Relief under Rule 38 of the Rules of Court, is fatally defective because 1. It was not filed by a party to the case, i.e., it was filed by counsel without the clients authority. 2. It was filed out of time. 3. It was filed sans any supporting Affidavit of Merit. 4. It lacked the required Certification on Non-Forum Shopping. (D) (E) There is no factual or legal basis for the finding of fraud by the Sandiganbayan (Third Division). Upon approval of the Compromise Agreement, the Sandiganbayan (Third Division) lost jurisdiction over the case, including the authority to rescind said Compromise Agreement and to set aside the judgment based thereon. The Sandiganbayan (Third Division) lacked authority to alter a contract by construction or to make a new contract for the parties. Since the Compromise Agreement had already been implemented, rescission cannot be availed of.[20]

(B)

(C)

(F) (G)

Petitioners contend that the members of the Third Division of the Sandiganbayan should have inhibited themselves from resolving petitioners motion for reconsideration because from the tenor of the April 11, 2000 Order of the court granting respondents motion to rescind, it was evident that the Sandiganbayan had already prejudged the properties subject of litigation as having been unlawfully acquired.[21] Petitioners likewise assert that the property value of a property offered for the amicable settlement of a case is not always material in determining the validity of a compromise agreement. They point out that what impelled the PCGG to enter into a compromise agreement with them was PCGGs perception that its evidence against petitioners was weak and might not be sufficient to justify maintaining the case against them.[22] In addition, petitioners insist that the Motion to Rescind which was treated by the Sandiganbayan as a petition for relief from judgment under Rule 38 is fatally defective for (i) lack of authority of respondents lawyers to file the same; (ii) having been filed out of time; (iii) non-submission of an Affidavit of Merit; and (iv) non-submission of a Certification against Forum-Shopping.[23] It is argued by petitioners that the Sandiganbayan should have denied respondents Motion to Rescind outright for having been filed without authority from the PCGG En Banc and the President of the Republic, both of whom earlier approved and authorized the execution of the Compromise Agreement. According to petitioners, after final judgment has been rendered in a case, an attorney has no implied authority from his client to seek material or substantial alterations or modifications in such judgment.[24] Petitioners claim that the Motion to Rescind was filed only on October 5, 1998, or beyond sixty (60) days from the time the Sandiganbayan promulgated its July 31, 1998 Decision approving the Compromise Agreement.[25] In support of their petition, petitioners cite Section 3 of Rule 38 which requires that the petition for relief be filed within sixty (60) days after the party seeking the relief learns of the judgment or final order to be set aside, and not more than six (6) months after such judgment or final order was entered. They also invoke the case of Samonte v. Samonte[26] where the Court held that a judgment upon compromise is deemed to have come to the knowledge of the parties on the very day it is entered.[27] It is further argued by petitioners that the Sandiganbayans finding that the settlement between petitioners and respondent was attended by fraud has no factual or legal basis. Petitioners point out that the property values cited by respondent in its Motion to Rescind were based solely on the estimates of the PCGG lawyers and no evidence of the valuation of the properties were presented before the Sandiganbayan to establish fraud. They also contend that the Sandiganbayan had no legal basis for taking judicial notice of the fact that agricultural land in rural areas such as Famy and Pangil, Laguna is much cheaper and is usually sold by the hectare, while land in Metro Manila and in nearby municipalities such as Muntinlupa is more valuable and sold per square meter. Petitioners insist that knowledge of the valuation of property is not a condition sine qua non for the validity of a compromise agreement.[28] Petitioners also assert that the Sandiganbayan did not have jurisdiction to annul the Compromise Agreement because its July 31, 1998 Decision had already become final and executory.

Moreover, as a contract validly entered into by the parties, the Compromise Agreement had binding effect and authority on the parties thereto even if it were not judicially approved.[29] Petitioners likewise contend that the Sandiganbayan cannot alter the Compromise Agreement which is a valid and binding contract between themselves and respondent and impose the additional requirement that the moneys, properties or assets involved in the compromise must be fully disclosed and described not only as to the number or area (in case of real properties) but also as to their exact location, classification, appraised and fair market value, liens and encumbrances, whether titled or not, etc., so as to leave no room for doubt that all the parties, the Court and the public know exactly what each party is giving or taking away, and under what specific terms and conditions.[30] According to them, the imposition of this requirement would be beyond the scope of the Sandiganbayans authority.[31] Lastly, petitioners argue that the Compromise Agreement can no longer be rescinded because it had already been implemented. In support of this argument, petitioners claim that on September 22, 1997, or four days after the signing of the agreement, they delivered to the PCGG the original TCTs of the properties ceded to respondent under the agreement.[32] Respondent, through the OSG, contends that the Sandiganbayans April 11, 2000 Resolution which granted the motion to rescind the Compromise Agreement and set aside its July 31, 1998 Decision cannot be the proper subject of a Petition for Certiorari. According to respondent, petitioners were not without any other remedy from the adverse ruling of the Sandiganbayan, and they should have gone to trial and reiterated their special defenses.[33] Respondent also maintains that the Sandiganbayan did not err in denying petitioners motion for voluntary inhibition of its members because petitioners allegations of partiality and bias were not supported by clear and convincing evidence.[34] It is also argued by respondent that there is no rule or law requiring that pleadings or motions filed by lawyers of the government or the PCGG must first be approved by the PCGG En Banc and by the President of the Republic.[35] Anent the alleged procedural infirmities in the filing of the Motion to Rescind, respondent asserts that it complied with the reglementary period for the filing of a petition for relief from judgment under Rule 38 and that it is not an initiatory pleading which is required to be accompanied by a Certification against Forum-Shopping.[36] Respondent disagrees with the contention of petitioners that the Sandiganbayan already lost jurisdiction over the case when it rendered its Decision on the Compromise Agreement on July 31, 1998 considering that the decision is immediately executory since there is no appeal from such judgment. According to respondent, the Rules of Court does recognize the jurisdiction of the court which rendered a decision over a petition for relief from the same decision, and does not distinguish whether the judgment is based on the evidence presented or on a compromise agreement. Moreover, as an exception to the general rule that the court which rendered judgment on the compromise cannot modify such compromise, the court may order

modifications thereon when the parties consent to such modification or when there is a hearing to determine the presence or absence of vitiated consent.[37] Respondent adds that the Sandiganbayan did not make a new contract for the parties but simply declared their Compromise Agreement null and void with the net effect of continuing the case from where it left off.[38] Respondent insists that a compromise agreement which is unconscionable, shocking to the mind and contrary to law and public policy, such as that entered into by it with petitioners, is null and void. A void compromise agreement vests no rights and creates no obligations. Considering that the compromise agreement sought to be declared void in this case is one which is prejudicial to the government, it is the Courts duty to strike it down as null and void.[39] It is argued by respondent that while it did not present additional evidence after it filed the Motion to Rescind, it submitted the motion on the basis of all the verified pleadings and papers on record. Respondent likewise claims that the Sandiganbayan did not err in taking judicial notice of the fact that agricultural lands in the provinces, such as the lands titled in petitioners names in Famy and Pangil, Laguna, are much cheaper than lands in urban areas such as those in Muntinlupa City. Respondent insists that such fact is a matter of public knowledge and may be taken judicial notice of under Section 1, Rule 129 of the Revised Rules of Court.[40] Respondent also points out that petitioners expressly admitted in their Answer to the Motion to Rescind that the value of the properties which they ceded to respondent under the Compromise Agreement is less than the value of the properties retained by them.[41] Respondent claims that there was fraud of an extrinsic character because its representatives in the PCGG connived with petitioners in concealing the assessed or market values of the properties subject of the Compromise Agreement to make it appear that the latter adhered to the 75%-25% ratio adopted by the PCGG in entering into compromise of cases involving the recovery of illgotten wealth. It is pointed out by respondent that the OSG was in fact initially reluctant to file the motion for approval of the compromise agreement with the Sandiganbayan because the Compromise Agreement only mentioned the areas of the properties but conspicuously failed to mention the property values thereof. Respondent explained: On October 7, 1997, the PCGG forwarded to the OSG a copy of the Compromise Agreement between the Republic and the Arganas in SB Civil Case No. 0026, with a request that the OSG file a motion with the Sandiganbayan for the approval of the said Compromise Agreement. On November 7, 1997, in reply to the letter of PCGG, the OSG with then Solicitor General Silvestre H. Bello III as signatory, wrote the PCGG requesting it to submit to the OSG clarification on the provision in the compromise agreement that the properties mentioned therein comprise all the sequestered assets subject of the litigation considering that in the petition filed by the Republic, it is alleged that the late mayor Argana acquired no less than 251 OCTs/TCTs in Muntinlupa and the neighboring towns plus some other ill-gotten properties. The OSG likewise opined that the Compromise Agreement must first be submitted to the President for his approval before submitting it to the Sandiganbayan.

On February 10, 1998, the OSG received a reply from the PCGG, through Commissioner Herminio Mendoza, reiterating that the PCGG has decided to enter into the compromise agreement because it believes that the evidence may not be sufficient to warrant continuing prosecution of Civil Case No. 0026 against the Arganas. With respect to OSGs request for clarification, the PCGG furnished the OSG a copy of the report conducted by the PCGG Research and Development Department whereby it is stated that there are 324 OCTs/TCTs evaluated representing real properties of the late Mayor Argana with a total land area of 481.77422 hectares out of which the Republic will get 361.9203 hectares or 75.12% of the total land area under the Compromise Agreement. No mention, however, was made as to the value of the properties to be ceded to the Republic and the properties to be retained by the Arganas. On March 2, 1998, the OSG, through then Solicitor General Romeo C. dela Cruz, again wrote the PCGG reiterating its previous position that before submitting the compromise agreement to the Sandiganbayan for approval, it must first be submitted to the President of the Philippines for his approval as required in par. 6 of the Compromise Agreement. The OSG also reiterated its request for clarification regarding the properties covered by the compromise agreement as the Report submitted to it made mention of 361.9203 hectares or 75.12% out of the total land area of 481.71422 hectares to be ceded to the Republic, and 24.88% to be retained by the Arganas, no mention whatsoever was made of the kind of land, location and value of the respective areas. On June 2, 1998, the OSG received a letter dated May 29,1998 from then Commissioner Herminio A. Mendoza forwarding it copy of the approval by then President Fidel Ramos of the Compromise Agreement. With respect to its query, it was stated therein that the PCGG is unable to determine the value of the land to be ceded to the Republic and those to be retained by the Arganas because of the big number of the parcels of the land located mainly in Muntinlupa, Metro Manila and Laguna and/or the lack of available records showing their respective values for tax purposes. The PCGG reiterated their request that the OSG file with the Sandiganbayan in SB Civil Case No. 0026 a motion for the approval of the compromise agreement. Obviously, through such a scheme, those in the PCGG then who handled or were involved with the case fraudulently gave the Compromise Agreement a semblance of fairness and official acceptability, but in truth, it was grossly disadvantageous to the government. The motion to approve compromise agreement was filed by the OSG out of courtesy as the PCGG was able to get the approval of then Pres. Fidel V. Ramos but not because it (OSG) totally approved the same after an independent evaluation of the report. [42] (Emphasis in the original.) Finally, respondent argues that the Compromise Agreement had not yet been implemented. Although petitioners delivered the TCTs covering the lots ceded to respondent under the terms of the compromise on September 22, 1997, such delivery could not have the effect of implementation of the Compromise Agreement because the contract was submitted to the Sandiganbayan for approval only on June 15, 1998. The Compromise Agreement expressly required that in order for it to be effective, it must be approved by the President of the Republic and of the Sandiganbayan.[43]

The issues for the Courts resolution are as follows: 1) Whether a petition for certiorari is the proper remedy; 2) Whether the OSG and the PCGG lawyers have authority to file the Motion to Rescind on behalf of respondent; 3) Whether the Motion to Rescind, which was treated by the Sandiganbayan as a petition for relief, complied with the requirements of Rule 38 of the 1997 Rules of Civil Procedure; 4) Whether the Sandiganbayan acted with grave abuse of discretion in granting the Motion to Rescind and in setting aside its Decision dated July 31, 1998; and 5) Whether the members of the Sandiganbayans Third Division should have inhibited themselves from resolving petitioners Motion for Reconsideration. The Court shall first tackle the first, second, third and fifth issues since these involve procedural matters. The Court does not agree with respondents contention that a petition for certiorari is not the proper remedy to assail the February 22, 2001 Order of the Sandiganbayan which affirmed its earlier directive to set the case against petitioners for pre-trial following the annulment of its judgment by compromise agreement. A special civil action for certiorari may be instituted when any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law.[44] The Court has previously held that an order setting the case for further proceedings, issued after the original judgment rendered pursuant to a compromise agreement is set aside, is an interlocutory order and is therefore not appealable.[45] Since no appeal is available against such an order, the proper remedy to assail it is a special civil action for certiorari. The remedy taken by petitioners is therefore proper. Petitioners contention that the Motion to Rescind filed by the lawyers of the PCGG and of the OSG should have been treated by the Sandiganbayan as a mere scrap of paper because the motion was filed without the authority of the PCGG En Banc and of the President of the Republic has no legal basis. There is no requirement under the law that pleadings and motions filed by lawyers of the government or the PCGG must first be approved by the PCGG En Banc and by the President of the Philippines. More importantly, R.A. No. 1379 expressly authorizes the OSG to prosecute cases of forfeiture of property unlawfully acquired by any public officer or employee.[46] It must be remembered that it was the OSG which filed Civil Case No. 0026 for the forfeiture of petitioners allegedly ill-gotten wealth, and that the Compromise Agreement between petitioners and respondent was an amicable settlement of that case. By filing an action for rescission of the Compromise Agreement based on extrinsic fraud, the OSG was merely performing its legal duty to recover the wealth purportedly amassed unlawfully by the late Mayor Argana during his terms as Mayor of Muntinlupa. The Motion to Rescind was filed precisely because the PCGG, as respondents authorized representative in the compromise,

discovered that the execution of the Compromise Agreement was attended by fraud and sought the help of the OSG which in turn is the duly authorized government agency to represent respondent in forfeiture cases under R.A. No. 1379. Hence, the Sandiganbayan correctly upheld the authority of the OSG, assisted by the PCGG, in filing the Motion to Rescind. The Court also finds that there was no grave abuse of discretion on the part of the Sandiganbayan in granting the Motion to Rescind, which it treated as a petition for relief from judgment under Rule 38 of the 1997 Rules on Civil Procedure. Section 3 thereof prescribes the periods within which the petition for relief must be filed: Time for filing petition; contents and verification. A petition provided for in either of the preceding sections of this Rule must be verified, filed within sixty (60) days after the petitioner learns of the judgment, final order or other proceeding to be set aside, and not more than six (6) months after such judgment or final order was entered, or such proceeding was taken, and must be accompanied with affidavits showing the fraud, accident, mistake or excusable negligence relied upon, and the facts constituting the petitioners good and substantial cause of action or defense, as the case may be. The Court has previously held that as applied to a judgment based on compromise, both the sixty (60)-day and six (6)-month reglementary periods within which to file a petition for relief should be reckoned from the date when the decision approving the compromise agreement was rendered because such judgment is considered immediately executory and entered on the date that it was approved by the court.[47] Applying the foregoing rule to the present case, the sixty (60)-day period should be counted from July 31, 1998, the date of the Sandiganbayan Decision granting the Motion to Approve Compromise Agreement. The sixtieth day from July 31, 1998 is September 29, 1998. The Motion to Rescind was filed by the OSG only on October 5, 1998, clearly several days after the sixtieth day from the rendition of the July 31, 1998 Decision. This notwithstanding, the Court finds that no grave abuse can be ascribed to the Sandiganbayan in admitting the Motion to Rescind as a petition for relief was timely filed. Although as a general rule, the party filing a petition for relief must strictly comply with the sixty (60)-day and six (6)-month reglementary periods under Section 3, Rule 38,[48] it is not without exceptions. The Court relaxed the rule in several cases[49] and held that the filing of a petition for relief beyond the sixty 60-day period is not fatal so long as it is filed within the six (6)-month period from entry of judgment.[50] The Court notes that the filing of the Motion to Rescind on October 5, 1998 was indeed seven days beyond the sixty 60-day period but still well within the six (6)-month period from entry of judgment. Moreover, the case involves an alleged fraud committed against the Republic, and thus justifies the liberal interpretation of procedural laws by the Sandiganbayan. Petitioners claim that respondent failed to attach an affidavit of merit to its Motion to Rescind is belied by the record of the case. Petitioners in fact attached, as Annex N of their Petition for

Certiorari, a copy of the respondents Motion to Rescind. The Affidavit of Merit signed by Dennis M. Taningco, the counsel of the PCGG in Civil Case No. 0026, was attached to the Motion to Rescind. In any case, the Court in Mago v. Court of Appeals[51] held that the absence of an affidavit of merit does not always result in the denial of the petition for relief, so long as the facts required to be set out in the affidavit appear in the verified petition. The oath which forms part of the petition elevates it to the same category as an affidavit.[52] Neither was it necessary for respondent to attach a Certification against Forum-Shopping to the Motion to Rescind. As correctly held by the Sandiganbayan, the Motion to Rescind, which in effect was a petition for relief, is not an initiatory pleading which requires the inclusion of a Certification against Forum-Shopping. Section 2, Rule 38 requires that a petition for relief must be filed with the court which rendered the judgment or order sought to be set aside, and in the same case wherein the judgment or order was rendered. If the court finds that the allegations in the petition for relief are true, it shall set aside the judgment and try the principal case upon the merits as if a timely motion for new trial had been granted.[53] Clearly, then, a petition for relief is not an initiatory pleading in a new case which would require the filing by the petitioner therein of a Certification of Non- Forum Shopping. The Court also finds no abuse of discretion by the Sandiganbayan in denying petitioners Urgent Motion for Voluntary Inhibition. As explained in Gutang v. Court of Appeals,[54] the import of the rule on voluntary inhibition is that the decision of a judge on whether or not to inhibit is left to his or her sound discretion and conscience, based on his or her rational and logical assessment of the case where the motion for inhibition is filed. It implies that in addition to pecuniary interest, relationship, or previous participation in the matter under litigationwhich are grounds for mandatory inhibition under the first paragraph of Section 1, Rule 137 of the Revised Rules of Courtthere might be other causes that could diminish the objectivity of the judge, thus warranting his or her inhibition. Petitioners claim of bias and partiality on the part of the Sandiganbayan justices who issued the April 11, 2000 Resolution, evaluated in light of the resolution itself, is evidently more imagined than real. To say, as is petitioners wont, that a judge who throws out a partys motion in the language employed by the Sandiganbayan in the questioned Resolution is necessarily prejudiced, is to be indiscriminate and precipitate. Petitioners assertion that the April 11, 2000 Resolution was harshly worded and evinced prejudgment of the case in respondents favor is easily disproved by a reading of the Resolution in its entirety. As will be discussed hereafter, the Sandiganbayans pronouncement that the Compromise Agreement was grossly disadvantageous and prejudicial to the government is supported by the facts on record. In charging the Sandiganbayan with forejudgment when it said that all it takes to prove the case is evidence that the properties are manifestly out of proportion to the late Mayor Maximino A. Arganas salary and to his other lawful income and other legitimately acquired income,[55] petitioners have taken the statement out of context. The Sandiganbayan made the statement in relation to its bewilderment as to why the PCGG expressed difficulty in prosecuting the case against the late Mayor Argana in spite of the presumption regarding unexplained wealth in Section 8 of R.A. No. 3019 (the Anti-Graft and Corrupt Practices Act). The Sandiganbayan therefore had legal and factual grounds to deny petitioners motion for inhibition.

Anent the propriety of the Sandiganbayans nullification of the Compromise Agreement on the ground of extrinsic fraud, the Court holds that no error nor grave abuse of discretion can be ascribed to the Sandiganbayan for ruling that the execution of the Compromise Agreement was tainted with fraud on the part of petitioners and in connivance with some PCGG officials. A circumspect review of the record of the case reveals that fraud, indeed, was perpetuated upon respondent in the execution of the Compromise Agreement, the assessed or market values of the properties offered for settlement having been concealed from the reviewing authorities such as the PCGG En Banc and even the President of the Republic. The discussion of the Sandiganbayan on the nature and extent of the fraud perpetuated upon respondent in the execution of the Compromise Agreement is clear and convincing: Noticeable from the documents submitted to the court after the decision approving the Compromise Agreement was promulgated is the fact that only the percentage of sharing based on area was mentioned and brought to the attention of the PCGG en banc and the Solicitor General. The value of the properties was never, and not even once, mentioned. Thus, in the Memorandum of Director Mauro J. Estrada of the PCGG Research and Development Department to the PCGG Chairman, dated August 18, 1997, the following exposition appears: 12. On July 10, 1996, the Arganas submitted a proposal for Compromise Agreement (copy attached, per Annex J) that would cede by donation about 231 hectares of agricultural lands to the government, Xerox copies of nine (9) TCTs attached therewith, enumerated as follows: TCT No. T-3813 T-8314 T-8315 T-8316 T-8317 T-4104 T-4106 T-4108 T-4044 Area in Square Meters 47,908 47,461 30,000 40,000 30,000 20,000 38,550 31,618 1,137,361 883,355 2,306,253 Sq. Meters 230,6253 Hectares Another big tract of land located at Matikiw, Pangil, Laguna, consisting of 131,2950 hectares covered by TCT No. T-4009, per Annex K may be considered for inclusion in the proposed compromise settlement. The reason for this is that this land is being eyed by the DAR for distribution under the CARP. As a whole, the government may be able to acquire about 361.9203 hectares of land equivalent to 75.12% of the 481.7742 hectares of land of sequestered real estate property belonging to the Arganas and other owners. Location Famy, Laguna -do-do-do-do-do-do-doSan Isidro & Banilan, Pangil, Laguna

However, of the 481.7742 hectares covered by a sequestration order, the late Mayor Argana owns about 409.50817 hectares and possibly the heirs are willing to cede 361.9203 hectares which is equivalent to 88.38%, retaining 47.5887 hectares or 11.62% of what they owned. E. EVALUATION 1) As presented in Annex L, page 13, the total area of real estate property sequestered aggregated to 481.7742 hectares accounted as follows: 100.00% 481.77422

Total Area Sequestered Accounted as Follows: a) owned by Mayor Maximino Argana

75.12% b) Owned by his Brothers & Sisters 9.88% c) Foreclosed by Los Baos Rural Bank 1.24% d) Owned by Other Persons 8.23% TOTAL 100.00%

409.50817 has.

26.6318 has.

5.9856 has.

39.64865 has. 481.77422 has.

2)

Out of the total area of 481.77422 hectares covered by a sequestration order, about 409.50817 hectares are owned by the late Mayor Argana. The other lots are owned by his brothers and sisters (26.6318 hectares), foreclosed by Los Baos Rural Bank (5.9856 hectares), and registered and/or acquired by other persons (39.64865 hectares). In the event that the other big area consisting of 131.2950 hectares of land is included in the compromise settlement in favor of the government, a total of 361-50817 (sic) hectares of land would comprise about 88.38 % of the 409.50817 hectares registered in the name of the late Mayor Argana. However, as a whole the 361.9203 hectares to be ceded to the government is equivalent to 75.12% of the 481.77422 hectares sequestered by PCGG as presented above. Since the late mayor owns 409.50817 hectares to the government, the percentage share of the government would be 88.38 % and the

3)

remaining 11.62 % may be retained by the heirs of the late Mayor Argana, equivalent to 47.58787 hectares. F. SUMMARY

The family of the late Mayor Maximino A. Argana offered to cede to the government a total of 230.62553 hectares of land covered by nine (9) TCTs. Another property, however, consisting of 131.2950 hectares may be considered for inclusion which would increase to 361.9203 hectares of land that may be ceded to the government. In the event that the 361.9203 hectares are finally considered and acceptable by both parties, the PCGG and the Arganas, the 481.77422 hectares of sequestered property would be accounted as follows: Total Area Sequestered Accounted as follows: a) To be ceded the Government b) To be retained by the late Mayor Arganas Heirs 9.88% c) Owned by his Brothers & Sisters 5.53% d) Foreclosed by Los Baos Rural Bank 1.24% e) Owned by Other Persons Total 8.23% 100.00% 5.9856 has. 39.64865 has. 481.77422 has. 26.6318 has. 47.78787 has. 75.12% 361.9203 has. 100.00% 481.77422 has.

However, since the late Mayor Argana owns 409.50817 hectares sequestered and may possibly cede 361.9203 hectares, the percentage share of the government would be 88.38% of the 409.50817 hectares actually registered in his name and his children. G. RECOMMENDATION

The PCGG wanted to recover as much as it could and as fast as possible, while the Arganas wanted to buy peace without admitting guilt. In order to avoid further lengthy litigation and to put an end to an almost ten-year unresolved sequestration issue, and to expedite recovery so that the remaining assets may be used to contribute to the national recovery, the 230.6253 hectares of

land covered by nine (9) TCTs (Nos. T-3813, T-3814, T-3815, T-3816, T-3817, T-4104, T-4106, T-4108 and T-4044) offered by the Arganas be favorably considered, on condition that another real estate property covered by TCT No. T-4009, located at Matikiw, Pangil, Laguna, consisting of 131.2950 hectares, be included and to be ceded to the government. All other lots sequestered should be freed from the sequestration order. As a whole, the government stands to acquire about 361.9203 hectares out of the 409.50817 hectares registered in the name of Sps. Maximino A. Argana, REFEDOR, and their children, equivalent to 88.38%. The remaining 11.62% or 47.58787 hectares will be retained by the latter. For the consideration of the Commission. Signed MAURO J. ESTRADA (Record, v. 6, pp. 776-78) (Underlining supplied) .... The value of the properties must have been raised or even discussed during the several years that the properties were held under sequestration. Yet, not even the PCGG bothered to produce any tax declaration, assessment or appraisal to show the assessed or fair market value of the properties. . . . . Again in another Memorandum of Director Mauro J. Estrada to PCGG Counsel Edgardo L. Kilayko, dated February 2, 1988, the properties were listed according to the name of the owner, certificate of title, area in square meters, location and percentages in relation to the whole. Obvious from the listing is the absence of a column to indicate the value of the properties or their classification. . . . The percentage based solely on area, was clearly emphasized, as shown by the following portions of said Memorandum: Out of the 409.50817 hectares registered in the name of Spouses Maximo A. Argana and Donata A. Argana as presented above, 361.9203 hectares covering eleven (11) TCTs are to be ceded to the government under the compromise agreement signed by Argana and the Commission in the latter part of 1997. The 361.9203 hectares to be ceded to the government is equivalent to 75.12 % of the total area of 481.77422 hectares, as presented below: x x x (Record, v. 6, p. 1739) (underlining supplied) As a whole, there are 324 TCTs/OCTs covering a total area of 481.77422 hectares, out of which the heirs of the late Mayor agreed to cede 361.9203 hectares equivalent to 75.12 % of the total area. Sometime. In August 1997, the Commission agreed to accept the offer by concluding a compromise agreement with the heirs of the late Mayor. (Record, v. 6, p. 1739) (underlining supplied)

.... . . . The values were deliberately omitted to make it appear that the Compromise Agreement adheres to the 75%-25% ratio broadly adopted by the PCGG in compromising cases of ill-gotten wealth. It was this 75%-25% mode of compromise, with the greater share of 75% going to the government that misled the Court to believe, as We did believe, that the Compromise Agreement was fair, reasonable and advantageous to the Government. . . . . . . What was projected to be a 75%-25% ratio was in reality a 00.15%-99.85% ratio, with 99.85% going to the Arganas. This is unconscionable and immoral. And since it results in a transaction grossly disadvantageous and immoral to the government, it is against the law as being violative of Section 3(g) of Republic Act 3019. ... In the instant case, fraud of an extrinsic character exists because the representatives of plaintiff Republic in the PCGG connived with defendants in hiding the assessed or market values of the properties involved, so as to make it appear that the Compromise Agreement adhered to the 75%-25% ratio adopted by the PCGG in entering into compromise of cases involving the recovery of ill-gotten wealth. Through their infidelity, those in the PCGG who handled or were closely involved with the case during the last days of the previous administration fraudulently gave the Compromise Agreement a semblance of fairness and official acceptability. They sold plaintiff Republic down the river by entering into an agreement grossly disadvantageous to the government. For while plaintiff Republic got 00.15% (00.15074) of the estimated value of all the properties involved in this case, defendants almost ran away with 99.85% (99.84526) of their value. This is patently unfair. It is no compromise but a virtual sell-out. It could not have been pulled off without the connivance or collusion of those responsible for the case in the PCGG. Instead of protecting the interest of the government, they connived at its defeatalmost.[56] (Emphasis in the original.) It is evident from the foregoing that the ruling of the Sandiganbayan is grounded on facts and on the law. The Court sees no reason to depart from the conclusions drawn by the Sandiganbayan on the basis of its findings, especially considering that the three justices comprising the Sandiganbayans Third Division conducted a thorough examination of the documents submitted by the parties to this case, heard the testimonies of the parties witnesses and observed their deportment during the hearing on the Motion to Rescind. Moreover, it is an established rule that the State cannot be estopped by the mistakes of its agents.[57] Respondent cannot be bound by a manifestly unjust compromise agreement reviewed on its behalf and entered into by its representatives from the PCGG who apparently were not looking after respondents best interests. WHEREFORE, the petition is DISMISSED for lack of merit. The Resolution dated April 11, 2000 of the Sandiganbayan granting the Motion to Rescind Compromise Agreement and to Set Aside Judgment by Compromise and setting the case for pre-trial, as well as the Order dated February 22, 2001 denying petitioners motion for reconsideration, are hereby AFFIRMED.

Costs against petitioners. SO ORDERED. Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

ELECTION LAW

EN BANC

JOSELITO R. MENDOZA, Petitioner,

G.R. No. 188308

Present:

*PUNO, C.J., **QUISUMBING, CARPIO, CORONA, CARPIO MORALES, CHICO-NAZARIO, - versus ***VELASCO, JR.,

NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, ****DEL CASTILLO, and ABAD, JJ.

COMMISSION ON ELECTIONS and ROBERTO M. PAGDANGANAN, Respondents.

Promulgated:

October 15, 2009

x ---------------------------------------------------------------------------------------- x

DECISION

BRION, J.:

The present case involves a clash between the power under the Philippine Constitution of the respondent Commission on Elections (COMELEC) in the

handling of a provincial election contest, and the claimed due process rights of a party to the contest. The petitioner Joselito R. Mendoza (the petitioner) essentially asserts in his petition for certiorari99[1] that the COMELEC conducted proceedings in the election contest for the gubernatorial position of the Province of Bulacan, between him and the respondent Roberto M. Pagdanganan (the respondent), without due regard to his fundamental due process rights. The COMELEC, on the other hand, claims that its decision-making deliberations are internal, confidential and do not require notice to and the participation of the contending parties.

THE ANTECEDENTS

The petitioner and the respondent vied for the position of Governor of the Province of Bulacan in the May 14, 2007 elections. The petitioner was proclaimed winning candidate and assumed the office of Governor.

The respondent seasonably filed an election protest with the COMELEC, which was raffled to the Second Division and docketed as EPC No. 2007-44. Revision of ballots involving the protested and counter-protested precincts in Angat, Bocaue, Calumpit, Doa Remedios Trinidad, Guiginto, Malolos, Meycauayan, Norzagaray, Pandi, Paombong, Plaridel, Pulilan, San Rafael and San Jose del Monte soon followed. The revision was conducted at the COMELECs

office in Intramuros. After revision, the parties presented their other evidence, leading to the parties formal offer of their respective evidence.

The COMELEC approved the parties formal offer of evidence and then required the parties to submit their respective memoranda. The parties complied with the COMELECs order. The case was thereafter submitted for resolution.

On March 2, 2009 the COMELEC transferred the Bulacan ballot boxes, including those involved in the provincial election contest, to the Senate Electoral Tribunal (SET) in connection with the protest filed by Aquilino Pimentel III against Juan Miguel Zubiri. In light of this development, the petitioner moved to suspend further proceedings. .

The COMELECs Second Division denied the petitioners motion in its Order of April 29, 2009, ruling that the COMELEC has plenary powers to find alternative methods to facilitate the resolution of the election protest; thus, it concluded that it would continue the proceedings after proper coordination with the SET. The petitioner moved to reconsider this Order, but the COMELECs Second Division denied the motion in its Order of May 26, 2009. These inter-related Resolutions led to the COMELECs continued action specifically, the appreciation of ballots on the provincial election contest at the SET offices.

Allegedly alarmed by information on COMELEC action on the provincial election contest within the SET premises without notice to him and without his participation, the petitioners counsel wrote the SET Secretary, Atty. Irene Guevarra, a letter dated June 10, 2009 to confirm the veracity of the reported conduct of proceedings.100[2] The SET Secretary responded on June 17, 2009 as follows:

x x x please be informed that the conduct of proceedings in COMELEC EPC No. 2007-44 (Pagdanganan vs. Mendoza) within the Tribunal Premises was authorized by then Acting Chairman of the Tribunal, Justice Antonio T. Carpio, upon formal request of the Office of Commissioner Lucenito N. Tagle. Basis of such grant is Section 3, Comelec Resolution No. 2812 dated 17 October 1995, stating that (t)he Tribunals, the Commission and the Courts shall coordinate and make arrangement with each other so as not to delay or interrupt the revision of ballots being conducted. The synchronization of revision of ballots shall be such that the expeditious disposition of the respective protest case shall be the primary concern. While the said provision speaks only of revision, it has been the practice of the Tribunal to allow the conduct of other proceedings in local election protest cases within its premises as may be requested. [emphasis supplied]101[3]

THE PETITION

The SET Secretarys response triggered the filing of the present petition raising the following ISSUES

A. WHETHER OR NOT THE COMELEC VIOLATED DUE PROCESS BY CONDUCTING PROCEEDINGS WITHOUT GIVING DUE NOTICE TO THE PETITIONER. B. WHETHER OR NOT THE COMELEC GRAVELY ABUSED ITS DISCRETION TANTAMOUNT TO AN EXCESS OF JURISDICTION IN APPRECIATING BALLOTS WHICH ARE NOT IN ITS OFFICIAL CUSTODY AND ARE OUTSIDE ITS OWN PREMISES, AUTHORITY AND CONTROL.

The petitioner argues that the election protest involves his election as Governor; thus, its subject matter involves him and the people of the Province of Bulacan who elected him. On this basis, he claims entitlement to notice and participation in all matters that involve or are related to the election protest. He further asserts that he had the legitimate expectation that no further proceedings would be held or conducted in the case after its submission for decision.

Citing the commentaries of Father Joaquin Bernas,102[4] the petitioner argues that the proceedings before the COMELEC in election protests are judicial in nature and character. Thus, the strictures of judicial due process specifically, (a) opportunity to be heard and (b) that judgment be rendered only after lawful hearing apply. Notices in judicial dispute, he claims, are not really just a matter of courtesy; they are elementary fundamental element of due process, they are part

and parcel of a right of a party to be heard. He further cites Justice Isagani A. Cruz,103[5] who wrote:
x x x Every litigant is entitled to his day in court. He has a right to be notified of every incident of the proceeding and to be present at every stage thereof so that he may be heard by himself and counsel for the protection of his interest.

The petitioner claims that without notice to him of the proceedings, the due process element of the right to have judgment only after lawful hearing is absent. There is no way, he claims, that a judicial proceeding held without notice to the parties could be described as a lawful hearing, especially a proceeding which has as its subject matter the sovereign will of an entire province.

He was therefore denied his day in court, he claims, when the COMELEC conducted the examination and appreciation of ballots. The proceedings should be stopped and declared null and void; its future results, too, should be nullified, as nothing derived from the anomalous and unconstitutional clandestine and unilateral proceedings should ever be part of any decision that the COMELEC may subsequently render. The poisonous fruits (derived from the proceedings) should have no part and should not be admitted for any purpose and/or in any judicial proceeding.

Other than his due process concern, the petitioner takes issue with the COMELECs appreciation of ballots even when the ballots and other election materials were no longer in its official custody and were outside its premises, authority and control. He asserts that an important element of due process is that the judicial body should have jurisdiction over the property that is the subject matter of the proceedings. In this case, the COMELEC has transferred possession, custody and jurisdiction over the ballots to the SET, a tribunal separate and independent from the COMELEC and over which the COMELEC exercises no authority or jurisdiction. separation of powers. For the COMELEC to still conduct proceedings on property, materials and evidence no longer in its custody violates the principle of

The petitioner also points out that the COMELECs unilateral appreciation of the ballots in the SET premises deviates from the Commissions usual and time honored practice and procedure of conducting proceedings within its premises and while it has custody over the ballots. There is no precedent, according to the petitioner, for this deviation, nor is there any compelling reason to make the present case an exception. Citing Cabagnot v. Commission on Elections (G.R. No. 124383, August 9, 1996) which involves a transfer or change of venue of the revision of ballots, the petitioner alleges that this Court has been very emphatic in denouncing the COMELEC for its departure from its own rules and usual practice; while Cabagnot involves the issue of change of venue, the petitioner finds parallel applicability in the present case which also involves a deviation from COMELEC rules and usual practice. The petitioner adds that the act of the Second Division is effectively an arrogation of the authority to promulgate rules of procedure a power that solely belongs to the COMELEC en banc.

After a preliminary finding of a genuine due process issue, we issued a Status Quo Order on July 14, 2009.

THE RESPONDENTS COMMENTS

In his Comment to the Petition with Extremely Urgent Motion to Lift/Dissolve Status Quo Ante Order, the private respondent asserts that the petition contains deliberate falsehoods and misleading allegations that led the Court to grant the injunctive relief the petitioner had asked. He asserts that the proceeding the petitioner stated in his petition was actually the COMELECs decision-making process, i.e., the appreciation of ballots, which is a procedure internal to the Members of the Second Division of the COMELEC and their staff members; no revision of ballots took place as revision had long been finished. What was therefore undertaken within the SETs premises was unilateral COMELEC action that is exclusive to the COMELEC and an internal matter that is confidential in nature. In this light, no due process violation ever arose.

The private respondent also asserts that the petitioner cannot claim that he was not notified of and denied participation in the revision proceedings, as the petitioner himself is fully aware that the revision of the ballots was completed as early as July 28, 2008 and the petitioner was present and actively participated in

the entire proceedings, all the way to the filing of the required memoranda. Thus, the petitioners right to due process was duly satisfied.

The private respondent implores us to commence contempt proceedings against the petitioner who, the respondent claims, has not been forthright in his submissions and was not guided by the highest standards of truthfulness, fair play and nobility in his conduct as a party and in his relations with the opposing party, the other counsel and the Court.

Lastly, the private respondent posits that the present petition was filed out of time i.e., beyond the reglementary period provided under Rule 64. All these

reasons, the private respondent argues, constitute sufficient basis for the lifting of the status quo order and the dismissal of the petition.

Public respondent COMELEC, for its part, claims that the petition is without basis in fact and in law and ought to be dismissed outright. Given the possibility of simultaneous election contests involving national and local officials, it has institutionalized an order of preference in the custody and revision of ballots in contested ballot boxes. The established order of preference is not without exception, as the expeditious disposition of protest cases is a primary concern. Additionally, the order of preference does not prevent the COMELEC from proceeding with pending protest cases, particularly those already submitted for

decision. It claims that it has wide latitude to employ means to effectively perform its duty in safeguarding the sanctity of the elections and the integrity of the ballot.

The COMELEC further argues that in the absence of a specific rule on whether it can conduct appreciation of ballots outside its premises or official custody, the issue boils down to one of discretion the authority of the COMELEC to control as it deems fit the processes or incidents of a pending election protest. Under Section 4 of the COMELEC Rules of Procedure, the COMELEC may use all auxiliary writs, processes and other means to carry into effect its powers or jurisdiction; if the procedure to be followed in the exercise of such power or jurisdiction is not specifically provided for by law or the Rules of Procedure, any suitable process or proceeding not prohibited by law or by its rules may be adopted.

The COMELEC lastly submits that while due process requires giving the parties an opportunity to intervene in all stages of the proceedings, the COMELEC in the present case is not actually conducting further proceedings requiring notice to the parties; there is no revision or correction of the ballots, as the election protest had already been submitted for resolution. When the COMELEC coordinated with the SET, it was simply for purposes of resolving the submitted provincial election contest before it; the parties do not take part in this aspect of the case which necessarily requires utmost secrecy. On the whole, the petitioner was afforded every opportunity to present his case. To now hold the election protest hostage

until the conclusion of the protest pending before the SET defeats the COMELECs mandate of ensuring free, orderly and honest election.

THE COURTS RULING

We review the present petition on the basis of the combined application of Rules 64 and 65 of the Rules of Court. While COMELEC jurisdiction over the Bulacan election contest is not disputed, the legality of subsequent COMELEC action is assailed for having been undertaken with grave abuse of discretion amounting to lack or excess of jurisdiction. Thus, our standard of review is grave abuse of discretion, a term that defies exact definition, but generally refers to capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility.104[6] Mere abuse of discretion is not enough; the abuse must be grave to merit our positive action.105[7]

After due consideration, we find the petition devoid of merit.

The petition is anchored on the alleged conduct of proceedings in the election protest following the completed revision of ballots at the SET premises without notice to and without the participation of the petitioner. Significantly, the conduct of proceedings is confirmed by the SET Secretary in the letter we quoted above.106[8] As the issues raised show the petitioners focus is not really on the COMELEC Orders denying the suspension of proceedings when the ballot boxes and other election materials pertinent to the election contest were transferred to the SET; the focus is on what the COMELEC did after to the issuance of the Resolutions. We read the petition in this context as these COMELEC Orders are now unassailable as the period to challenge them has long passed.107[9]

The substantive issue we are primarily called upon to resolve is whether there were proceedings within the SET premises, entitling the petitioner to notice and participation, which were denied to him; in other words, the issue is whether the petitioners right to due process has been violated. A finding of due process violation, because of the inherent arbitrariness it carries, necessarily amounts to grave abuse of discretion.

As a preliminary matter, we note that the petitioner has claimed that COMELEC exercises judicial power in its action over provincial election contests

and has argued its due process position from this view. We take this opportunity to clarify that judicial power in our country is vested in one Supreme Court and in such lower courts as may be established by law.108[10] This exclusive grant of authority to the Judiciary is reinforced under the second paragraph of Section 1, Article VIII of the Constitution which further states that Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable.. ., thus constitutionally locating the situs of the exercise of judicial power in the courts.

In contrast with the above definitions, Section 2, Article IX(C) of the Constitution lists the COMELECs powers and functions, among others, as follows:
(1) Enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall. (2) Exercise exclusive original jurisdiction over all contests relating to the elections, returns and qualifications of all elective regional, provincial, and city officials, and appellate jurisdiction over all contests involving elective municipal officials decided by trial courts of general jurisdiction, or involving elective barangay officials by trial courts of limited jurisdiction. Decisions, final orders, or rulings of the Commission on election contests involving elective municipal and barangay officials shall be final, executory, and not appealable. (3) Decide, except those involving the right to vote, all questions affecting elections, including determination of the number and location of polling places, appointment of election officials and inspectors, and registration of voters.

Under these terms, the COMELEC under our governmental structure is a constitutional administrative agency and its powers are essentially executive in nature (i.e., to enforce and administer election laws),109[11] quasi-judicial (to exercise original jurisdiction over election contests of regional, provincial and city officials and appellate jurisdiction over election contests of other lower ranking officials), and quasi-legislative (rulemaking on all questions affecting elections and the promulgation of its rules of procedure).

Historically, the COMELEC has always been an administrative agency whose powers have been increased from the 1935 Constitution to the present one, to reflect the countrys awareness of the need to provide greater regulation and protection to our electoral processes to ensure their integrity. In the 1935 Constitution, the powers and functions of the COMELEC were defined as follows:

SECTION 2. The Commission on Elections shall have exclusive charge of the enforcement and administration of all laws relative to the conduct of elections and shall exercise all other functions which may be conferred upon it by law. It shall decide, save those involving the right to vote, all administrative questions affecting elections, including the determination of the number and location of polling places, and the appointment of election inspectors and of other election officials. All law enforcement agencies and instrumentalities of the Government, when so required by the Commission, shall act as its deputies for the purpose of insuring free, orderly, and honest election. The decisions, orders, and rulings of the Commission shall be subject to review by the Supreme Court. [emphasis supplied]

These evolved into the following powers and functions under the 1973 Constitution:

(1) elections.

Enforce and administer all laws relative to the conduct of

(2) Be the sole judge of all contests relating to the elections, returns, and qualifications of all members of the National Assembly and elective provincial and city officials. (3) Decide, save those involving the right to vote, administrative questions affecting elections, including the determination of the number and location of polling places, the appointment of election officials and inspectors, and the registration of voters.

These powers have been enhanced in scope and details under the 1987 Constitution, but retained all the while the character of an administrative agency.

The COMELECs adjudicative function is quasi-judicial since it is a constitutional body, other than a court, vested with authority to decide election contests, and in the course of the exercise of its jurisdiction, to hold hearings and exercise discretion of a judicial nature;110[12] it receives evidence, ascertain the facts from these submissions, determine the law and the legal rights of the parties, and on the basis of all these decides on the merits of the case and renders judgment.111[13] Despite the exercise of discretion that is essentially judicial in character, particularly with respect to election contests, COMELEC is not a tribunal within the judicial branch of government and is not a court exercising judicial power in the constitutional sense;112[14] hence, its adjudicative function, exercised as it is in the course of administration and enforcement, is quasi-judicial.

As will be seen on close examination, the 1973 Constitution used the unique wording that the COMELEC shall be the sole judge of all contests, thus giving the appearance that judicial power had been conferred. This phraseology, however, was changed in the 1987 Constitution to give the COMELEC exclusive jurisdiction over all contests, thus removing any vestige of exercising its adjudicatory power as a court and correctly aligning it with what it is a quasijudicial body.113[15] Consistent with the characterization of its adjudicatory power as quasi-judicial, the judicial review of COMELEC en banc decisions (together with the review of Civil Service Commission decisions) is via the prerogative writ of certiorari, not through an appeal, as the traditional mode of review of quasi-judicial decisions of administrative tribunals in the exercise the Courts supervisory authority. This means that the Court will not supplant the decision of the COMELEC as a quasi-judicial body except where a grave abuse of discretion or any other jurisdictional error exists.

The appropriate due process standards that apply to the COMELEC, as an administrative or quasi-judicial tribunal, are those outlined in the seminal case of Ang Tibay v. Court of Industrial Relations,114[16] quoted below:

(1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. xxx

(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (3) While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity, a place when directly attached. (4) Not only must there be some evidence to support a finding or conclusion, but the evidence must be "substantial. "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." (5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. (7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it.

These are now commonly referred to as cardinal primary rights in administrative proceedings. The first of the enumerated rights pertain to the substantive rights of a party at hearing stage of the proceedings. The essence of this aspect of due process, we have consistently held, is simply the opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of.115[17] A formal

or trial-type hearing is not at all times and in all instances essential; in the case of COMELEC, Rule 17 of its Rules of Procedure defines the requirements for a hearing and these serve as the standards in the determination of the presence or denial of due process.

The second, third, fourth, fifth, and sixth aspects of the Ang Tibay requirements are reinforcements of the right to a hearing and are the inviolable rights applicable at the deliberative stage, as the decision-maker decides on the evidence presented during the hearing. These standards set forth the guiding considerations in deliberating on the case and are the material and substantial components of decision-making. Briefly, the tribunal must consider the totality of the evidence presented which must all be found in the records of the case (i.e., those presented or submitted by the parties); the conclusion, reached by the decision-maker himself and not by a subordinate, must be based on substantial evidence.116[18]

Finally, the last requirement, relating to the form and substance of the decision of a quasi-judicial body, further complements the hearing and decisionmaking due process rights and is similar in substance to the constitutional requirement that a decision of a court must state distinctly the facts and the law upon which it is based.117[19] As a component of the rule of fairness that underlies due process, this is the duty to give reason to enable the affected

person to understand how the rule of fairness has been administered in his case, to expose the reason to public scrutiny and criticism, and to ensure that the decision will be thought through by the decision-maker.

In the present case, the petitioner invokes both the due process component rights at the hearing and deliberative stages and alleges that these component rights have all been violated. We discuss all these allegations below.

The Right to Notice and to be Heard.

a. At the Hearing and Revision of Ballots.

Based on the pleadings filed, we see no factual and legal basis for the petitioner to complain of denial of his hearing stage rights. In the first place, he does not dispute that he fully participated in the proceedings of the election protest until the case was deemed submitted for resolution; he had representation at the revision of the ballots, duly presented his evidence, and summed up his case through a memorandum. These various phases of the proceedings constitute the hearing proper of the election contest and the COMELEC has more than satisfied the opportunity to be heard that the Ang Tibay hearing stage rights require. In these proceedings, the petitioner stood head-to-head with the respondent in an adversarial contest where both sides were given their respective rights to speak,

make their presentations, and controvert each others submission, subject only to established COMELEC rules of procedures. Under these undisputed facts, both parties had their day in court, so to speak, and neither one can complain of any denial of notice or of the right to be heard.

b. At the Proceedings at the SET.

A critical question to be answered in passing upon due process questions at this stage of the election contest is the nature of the so-called proceedings after the ballots and other materials pertinent to the provincial election contest were transferred to the SET.

In the petition, the petitioner alleged that there were strange proceedings118[20] which were unilateral, clandestine and surreptitious within the premises of the SET, on documents, ballots and election materials whose possession and custody have been transferred to the SET, and the petitioner was NEVER OFFICIALLY NOTIFIED of the strange on-goings at the SET.119[21]

Attached to the petition was the letter of the Secretary of the SET confirming the conduct of proceedings in the provincial election contest, and citing as basis the authority of Acting SET Chairman, Justice Antonio T. Carpio, upon the formal request of the Office of Commissioner Lucenito N. Tagle, and citing Section 3, COMELEC Resolution No. 2812 dated 17 October 1995 on the coordination envisioned among the COMELEC, the SET and the courts so as not to delay or interrupt the revision of ballots being conducted. While the SET letter made the reservation that While the said provision speaks only of revision, it has been the practice of the Tribunal to allow the conduct of other proceedings in local election protest cases within its premises as may be requested, no mention whatsoever was made of the kind of proceedings taking place.

It was at this point that this Court intervened, in response to the petitioners prayer for the issuance of temporary injunctive relief, through the issuance of a Status Quo Order with a non-extendible directive for the respondents to file their comments on the petition; for indeed, any further revision of ballots or other adversarial proceedings after the case has been submitted for resolution, would not only be strange and unusual but would indicate a gross violation of due process rights.

After consideration of the respondents Comments and the petitioners petition and Reply, we hold that the contested proceedings at the SET (contested proceedings) are no longer part of the adversarial aspects of the election contest that would require notice of hearing and the participation of the parties. As the

COMELEC stated in its Comment and without any contrary or disputing claim in the petitioners Reply:120[22]

appreciation of the contested ballots in EPC No. 2007-44 simultaneously with the SET in SET Case No. 001-07 is not conducting further proceedings requiring notice to the parties. There is no revision or correction of the ballots because EPC No. 2007-04 was already submitted for resolution. Public respondent, in coordinating with the SET, is simply resolving the submitted protest case before it. The parties necessarily take no part in said deliberation, which require utmost secrecy. Needless to state, the actual decision-making process is supposed to be conducted only by the designated members of the Second Division of the public respondent in strict confidentiality.

However, contrary to the claim of petitioner, public respondent in the

In other words, what took place at the SET were the internal deliberations of the COMELEC, as a quasi-judicial body, in the course of appreciating the evidence presented and deciding the provincial election contest on the merits. These deliberations are no different from judicial deliberations which are considered confidential and privileged.121[23] We find it significant that the private respondents Comment fully supported the COMELECs position and disavowed any participation in the contested proceeding the petitioner complained about. The petitioner, on the other hand, has not shown that the private respondent was ever present in any proceeding at the SET relating to the provincial election contest.

To conclude, the rights to notice and to be heard are not material considerations in the COMELECs handling of the Bulacan provincial election

contest after the transfer of the ballot boxes to the SET; no proceedings at the instance of one party or of COMELEC has been conducted at the SET that would require notice and hearing because of the possibility of prejudice to the other party. The COMELEC is under no legal obligation to notify either party of the steps it is taking in the course of deliberating on the merits of the provincial election contest. In the context of our standard of review for the petition, we see no grave abuse of discretion amounting to lack or excess of jurisdiction committed by the COMELEC in its deliberation on the Bulacan election contest and the appreciation of ballots this deliberation entailed.

Alleged Violations of Deliberation Stage Rights.

On the basis of the above conclusion, we see no point in discussing any alleged violation of the deliberative stage rights. First, no illegal proceeding ever took place that would bear the poisonous fruits that the petitioner fears. Secondly, in the absence of the results of the COMELEC deliberations through its decision on the election protest, no basis exists to apply the Ang Tibay deliberative stage rights; there is nothing for us to test under the standards of the due process deliberative stages rights before the COMELEC renders its decision. Expressed in terms of our standard of review, we have as yet no basis to determine the existence of any grave abuse of discretion.

Conduct of COMELEC Deliberations at the SET Premises

We turn to the issue of the propriety of the COMELECs consideration of the provincial election contest (specifically its appreciation of the contested ballots) at the SET premises and while the same ballots are also under consideration by the SET for another election contest legitimately within the SETs own jurisdiction.

We state at the outset that the COMELEC did not lose jurisdiction over the provincial election contest, as the petitioner seems to imply, because of the transmittal of the provincial ballot boxes and other election materials to the SET. The Constitution conferred upon the COMELEC jurisdiction over election protests involving provincial officials. The COMELEC in this case has lawfully acquired jurisdiction over the subject matter, i.e., the provincial election contest, as well as over the parties. After its jurisdiction attached, this jurisdiction cannot be ousted by subsequent events such as the temporary transfer of evidence and material records of the proceedings to another tribunal exercising its own jurisdiction over another election contest pursuant to the Constitution. This is the rule of adherence of jurisdiction.122[24]

Thus, the jurisdiction of the COMELEC over provincial election contest exists side by side with the jurisdiction of the Senate Electoral Tribunal, with each tribunal being supreme in their respective areas of concern (the Senate election contests for the SET, and the regional, provincial and city election contests for the COMELEC), and with neither one being higher than the other in terms of precedence so that the jurisdiction of one must yield to the other.

But while no precedence in jurisdiction exists, the COMELEC, vowing to the reality that only a single ballot exists in an election for national and local officials, saw it fit to lay down the rule on the order of preference in the custody and revision of ballots and other documents contained in the ballot boxes. The order, in terms of the adjudicatory tribunal and as provided in COMELEC Resolution No. 2812, runs:

1. Presidential Electoral Tribunal; 2. Senate Electoral Tribunal; 3. House of Representatives Electoral Tribunal; 4. Commission on Elections; and 5. Regional Trial Courts.

This order of preference dictated that the ballot boxes and other election materials in Bulacans provincial election contest, had to be transferred to the SET when the latter needed these materials for its revision of ballots. The transfer to the SET, however, did not mean that the Bulacan provincial election contest at that time already submitted for decision had to be suspended as the COMELEC held in its Orders of 29 April 2009 and 26 May 2009 in EPC No. 2007-44.123[25] This is particularly true in Bulacans case as no revision had to be undertaken, the revision having been already terminated.

With the COMELEC retaining its jurisdiction over the Bulacan provincial election contest, the legal effect of the physical transfer of the ballots and other election materials to the SET for purposes of its own revision becomes a non-issue, given the arrangement between the COMELEC and the SET, pursuant to COMELEC Resolution No. 2812, to coordinate and make arrangements with each other so as not to delay or interrupt the revision of ballots being conducted, all for the purpose of the expeditious disposition of their respective protest cases. The SET itself honored this arrangement as shown by the letter of the SET Secretary that the COMELEC could conduct proceedings within the Tribunal premises as authorized by the Acting Chairman of the Tribunal, Justice Antonio T. Carpio.124[26] This arrangement recognized the COMELECs effective authority over the Bulacan ballots and other election materials, although these were temporarily located at the SET premises. This arrangement, too, together with the side by side and non-conflicting existence of the COMELEC and SET

jurisdictions, negate the validity of the petitioners argument that the COMELEC transgressed the rule on separation of powers when it acted on the Bulacan provincial election contest while the ballot boxes were at the SET premises. Rather than negate, this arrangement reinforced the separate but co-existing nature of these tribunals respective jurisdictions.

As the petitioner argues and the COMELEC candidly admits, there is no specific rule which allows the COMELEC to conduct an appreciation of ballots outside its premises and of those which are outside its own custody.125[27] But while this is true, there is likewise nothing to prohibit the COMELEC from undertaking the appreciation of ballot side by side with the SETs own revision of ballots for the senatorial votes, in light especially of the COMELECs general authority to adopt means to effect its powers and jurisdiction under its Rules of Procedure. Section 4 of these Rules states:

Sec. 4. Means to Effect Jurisdiction. - All auxiliary writs, processes and other means necessary to carry into effect its powers or jurisdiction may be employed by the Commission; and if the procedure to be followed in the exercise of such power or jurisdiction is not specifically provided for by law or these rules, any suitable process or proceeding may be adopted.

This rule is by no means unusual and unique to the COMELEC as the courts have the benefit of this same type of rule under Section 6, Rule 136 of the Rules of Court. The courts own rule provides:

Means to Carry Jurisdiction into Effect. When by law jurisdiction is conferred o n a court or judicial officer, all auxiliary writs, writs, processes and other means necessary to carry it into effect may be employed by such court or officer; and if the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these rules, any suitable process or mode of proceeding may be adopted which appears conformable to the spirit of said law or rules.

Incidentally, the COMELEC authority to promulgate the above rule enjoys constitutional moorings; in the grant to the COMELEC of its jurisdiction, the Constitution provided it with the accompanying authority to promulgate its own rules concerning pleadings and practice before it or before any of its offices, provided that these rules shall not diminish, increase or modify substantive rights.126[28] The Constitution additionally requires that the rules of procedure that the COMELEC will promulgate must expedite the disposition of election cases, including pre-proclamation controversies.127[29] This constitutional standard is authority, no less, that the COMELEC can cite in defending its action. For ultimately, the appreciation of the Bulacan ballots that the COMELEC undertook side by side with the SETs own revision of ballots, constitutes an exercise of discretion made under the authority of the above-cited COMELEC rule of procedure.

On the basis of the standards set by Section 4 of the COMELEC Rules of Procedure, and of the Constitution itself in the handling of election cases, we rule that the COMELEC action is a valid exercise of discretion as it is a suitable and reasonable process within the exercise of its jurisdiction over provincial election contests, aimed at expediting the disposition of this case, and with no adverse, prejudicial or discriminatory effects on the parties to the contest that would render the rule unreasonable.

Since the COMELEC action, taken by its Second Division, is authorized under the COMELEC Rules of Procedure, the Second Division cannot in any sense be said to be intruding into the COMELEC en banc rule-making prerogative when the Second Division chose to undertake ballot appreciation within the SET premises side by side with the SET revision of ballots. To be exact, the Second Division never laid down any new rule; it merely acted pursuant to a rule that the COMELEC en banc itself had previously enacted.

In light of these conclusions, we need not discuss the other issues raised.

WHEREFORE, premises considered, we DISMISS the petition for certiorari for lack of merit. We accordingly LIFT the STATUS QUO ORDER we issued, effective immediately.

SO ORDERED. EN BANC

CARMELINDA C. BARRO, Petitioner,

G.R. No. 186201 Present: PUNO, C.J., * QUISUMBING,**

versus CARPIO, CORONA, CARPIO MORALES, CHICO-NAZARIO,** VELASCO, JR.,

THE COMMISSION ON ELECTIONS (FIRST DIVISION); HON. DELIA P. NOEL-BERTULFO, in her capacity as Presiding Judge of the Municipal Trial Court, Palompon, Leyte; and ELPEDIO P. CONTINEDAS, JR., Respondents.

NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, and

ABAD, JJ.

Promulgated:
October 9, 2009

x-------------------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

This is a petition for certiorari128[1] alleging that the First Division of the Commission on Elections (COMELEC) committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the Orders dated November 25, 2008 and January 9, 2009. The Order129[2] dated November 25, 2008

dismissed petitioner s appeal for failure to pay the appeal fee prescribed by the COMELEC Rules of Procedure within the reglementary period. The Order130[3] dated January 9, 2009 denied petitioner s motion for reconsideration.

The facts are as follows:

Petitioner Carmelinda C. Barro and private respondent Elpedio P. Continedas, Jr. were candidates for Punong Barangay of Barangay Plaridel, Palompon, Leyte during the October 29, 2007 synchronized Barangay and Sangguniang Kabataan Elections. Petitioner garnered 150 votes, while respondent garnered 149 votes. The Barangay Board of Canvassers proclaimed petitioner as the duly elected Punong Barangay, winning by a margin of only one vote.

On November 5, 2007, private respondent filed an election protest before the Municipal Trial Court of Palompon, Leyte (trial court), impugning the result of the canvass in two precincts of the barangay.

After the revision of ballots, the trial court found that petitioner and respondent both garnered 151 votes.

In its Decision131[4] dated May 5, 2008, the trial court held:

In sum, the Protestant is credited with three (3) votes and the Protestee with two (2) votes of the contested votes. The three (3) credited votes added to the 148 votes of the protestant equals 151 votes. The two (2) credited votes added to the 149 votes of the protestee equals 151 votes. The protestant and the protestee, therefore, received the same number of votes.

It appearing that the Protestant and the Protestee received the same number of votes for the position of Barangay Chairman of Brgy. Plaridel, Palompon, Leyte, there shall be a drawing of lots and the party favored by luck shall be proclaimed as the duly-elected Barangay Chairman of Barangay Plaridel, Palompon, Leyte.132[5]

On May 13, 2008, petitioner filed a Notice of Appeal133[6] with the trial court and she stated in her petition that she also paid the appeal fee required under Section 9, Rule 14 of the Rules of Procedure in Election Contests Before the Courts Involving Elective Municipal and Barangay Officials (A.M. No. 07-4-15SC).134[7] Thereafter, the records of the case were forwarded to the COMELEC. On November 25, 2008, the First Division of the COMELEC issued an Order dismissing petitioners appeal for failure to pay the appeal fee, thus:

Pursuant to Sections 3 and 4, Rule 40 of the COMELEC Rules of Procedure which provide for the payment of appeal fee in the amount of P3,000.00 within the period to file the notice of appeal, and Section 9 (a), Rule 22 of the same Rules, which provides that failure to pay the correct appeal fee is a ground for the dismissal of the appeal, the Commission (First Division) RESOLVED as it hereby RESOLVES to DISMISS the instant appeal for Protestee-AppeIlant's failure to pay the appeal fee as prescribed by the Comelec Rules of Procedure within the five (5)-day reglementary period.135[8]

On December 15, 2008, petitioner filed a Motion for Reconsideration136[9] of the Order dated November 25, 2008. On the same date, she also posted Postal Money Order Nos. A0820039317; B0810040373 and J1350301774 in the total sum of P3,200.00 payable to the Cash Division of the COMELEC to cover the appeal fee. Petitioners motion for reconsideration was denied by the First Division of the COMELEC in its Order dated January 9, 2009, thus:

Protestee-Appellant's "Motion for Reconsideration" filed thru registered mail on 15 December 2008 and received on 23 December 2008, seeking reconsideration of the Commission's (First Division) Order dated 25 November 2008, is hereby DENIED for failure of the movant to pay the necessary motion fees under Sec. 7 (f), Rule 40 of the Comelec Rules of Procedure as amended by Comelec Resolution No. 02-0130. The Judicial Records Division-ECAD, this Commission, is hereby directed to return to the protestee-appellant the Postal Money Order Nos. A0820039317 in the amount of two thousand pesos (P2,000.00); B0810040373 in the amount of one thousand pesos (P1,000.00) and J1350301774 in the amount of two hundred pesos (P200.00) representing his belated payment of appeal fee.137[10]

On February 19, 2009, petitioner filed this petition raising the following issues:

1.

WHETHER OR NOT THE [FIRST DIVISION OF THE COMELEC] COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DISMISSING THE APPEAL.

2.

WHETHER OR NOT THE [FIRST DIVISION OF THE COMELEC] COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING THE MOTION FOR RECONSIDERATION FILED BY PETITIONER. WHETHER OR NOT THE [FIRST DIVISION OF THE COMELEC] COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ACTING ON THE MOTION FOR RECONSIDERATION WITHOUT ELEVATING THE SAME TO THE COMELEC EN BANC.138[11]

3.

The first issue is whether or not the First Division of the COMELEC gravely abused its discretion in dismissing petitioners appeal.

Grave abuse of discretion implies a capricious and whimsical exercise of judgment amounting to lack of jurisdiction or an arbitrary and despotic exercise of power because of passion or personal hostility.139[12] perform a duty enjoined by law.140[13] The grave abuse of discretion must be so patent and gross as to amount to an evasion or refusal to

The Court notes that in petitioners Notice of Appeal,141[14] she manifested payment of the appeal fees and other lawful fees required for the appeal per Official Receipt Nos. 7719538 and 7719488. However, the receipts were not

attached to the record of the case. In her Petition, petitioner stated that when she filed her Notice of Appeal on May 13, 2008, she also paid the appeal fee required under Section 9, Rule 14 of A.M. No. 07-4-15-SC.142[15] In her Reply,143[16] petitioner also stated that she relied on the provision of Sections 8 and 9, Rule 14 of A.M. No. 07-4-15-SC,144[17] which took effect on May 15, 2007, and that she believed in good faith that the said COMELEC Rules. new Rules of Procedure repealed the

Based on petitioners pleadings and the fact that the trial court gave due course to petitioners appeal, it may be presumed that petitioner paid the appeal fee of P1,000.00 to the trial court simultaneously with the filing of the Notice of Appeal, despite absence of the receipt showing payment of the appeal fee of P1,000.00.

Petitioner contends in her Reply145[18] that the recent case of Jerry B. Aguilar v. Commission on Elections, et al.,146[19] applies to her case. The Court agrees with petitioner.

In Aguilar, petitioner Aguilar won as barangay chairman in the October 29, 2007 barangay elections. An election protest was filed against him with the municipal trial court. The municipal trial court found that Aguilar lost by a margin of one vote; hence, his proclamation was annulled. On April 21, 2008, Aguilar filed a Notice of Appeal and paid the appeal fee of P1,000.00 to the municipal trial court in accordance with A.M. No. 07-4-15-SC. The First Division of the COMELEC dismissed his appeal pursuant to Section 9 (a), Rule 22 of the COMELEC Rules of Procedure for non-payment of the appeal fee of P3,000.00 as required in Sections 3 and 4, Rule 40 of the same Rules. His first and second motions for reconsideration were denied by the First Division of the COMELEC. He filed a petition for certiorari with this Court, which held:

xxxx

With the promulgation of A.M. No. 07-4-15-SC, the previous rule that the appeal is perfected only upon the full payment of the appeal fee, now pegged at P3,200.00, to the COMELEC Cash Division within the period to appeal, as stated in the COMELEC Rules of Procedure, as amended, no longer applies.
It thus became necessary for the COMELEC to clarify the procedural rules on the payment of appeal fees. For this purpose, the COMELEC issued on July 15, 2008, Resolution No. 8486, which the Court takes judicial notice of. xxxx x x x The appeal to the COMELEC of the trial court's decision in election contests involving municipal and barangay officials is perfected upon the filing of the notice of appeal and the payment of the P1,000.00 appeal fee to the court that rendered the decision within the five-day reglementary period. The non-payment or the insufficient payment of the additional appeal fee of P3,200.00 to the COMELEC Cash Division, in accordance with Rule 40, Section 3 of the COMELEC Rules of Procedure, as amended, does not affect the perfection of the appeal and does not result in outright or ipso facto dismissal of the appeal. Following, Rule 22, Section 9 (a) of the COMELEC Rules, the

appeal may be dismissed. And pursuant to Rule 40, Section 18 of the same rules, if the fees are not paid, the COMELEC may refuse to take action thereon until they are paid and may dismiss the action or the proceeding. In such a situation, the COMELEC is merely given the discretion to dismiss the appeal or not. Accordingly, in the instant case, the COMELEC First Division, may dismiss petitioner's appeal, as it in fact did, for petitioner's failure to pay the P3,200.00 appeal fee. Be that as it may, the Court still finds that the COMELEC First Division gravely abused its discretion in issuing the order dismissing petitioner's appeal. The Court notes that the notice of appeal and the P1,000.00 appeal fee were, respectively, filed and paid with the MTC of Kapatagan, Lanao del Norte on April 21, 2008. On that date, the petitioner's appeal was deemed perfected. COMELEC issued Resolution No. 8486 clarifying the rule on the payment of appeal fees only on July 15, 2008, or almost three months after the appeal was perfected. Yet, on July 31, 2008, or barely two weeks after the issuance of Resolution No. 8486, the COMELEC First Division dismissed petitioner's appeal for non-payment to the COMELEC Cash Division of the additional P3,200.00 appeal fee. Considering that petitioner filed his appeal months before the clarificatory resolution on appeal fees, petitioner's appeal should not be unjustly prejudiced by COMELEC Resolution No. 8486. Fairness and prudence dictate that the COMELEC First Division should have first directed petitioner to pay the additional appeal fee in accordance with the clarificatory resolution, and if the latter should refuse to comply, then, and only then, dismiss the appeal. Instead, the COMELEC First Division hastily dismissed the appeal on the strength of the recently promulgated clarificatory resolution which had taken effect only a few days earlier. This unseemly haste is an invitation to outrage.

In this case, the appeal to the COMELEC was perfected when petitioner filed her Notice of Appeal and paid the appeal fee of P1,000.00 on May 13, 2008, which was two months before the COMELEC issued Resolution No. 8486,147[20] clarifying the rule on the payment of appeal fees. As stated in Aguilar, fairness and prudence dictate that the First Division of the COMELEC should have first

directed petitioner to pay the additional appeal fee of P3,200.00 in accordance with the clarificatory resolution; and if petitioner refused to comply, only then should the appeal be dismissed. The First Division of the COMELEC should have been more cautious in dismissing petitioner s appeal on the mere technicality of non-payment of the additional appeal fee of P3,200.00 given the public interest involved in election cases.148[21]

In view of the foregoing, the Court finds that the First Division of the COMELEC gravely abused its discretion in issuing the Order dated November 25, 2008, dismissing petitioner s appeal. The case is remanded to the First Division of the COMELEC for disposition of the appeal in accordance with this decision, subject to the presentation by petitioner of the receipt evidencing payment of the appeal fee of P1,000.00 as required under Section 9, Rule 14 of A. M. No. 07-415-SC. It must be stated, however, that for notices of appeal filed after the promulgation on July 27, 2009 of Divinagracia v. Commission on Elections,149[22] errors in the matter of non-payment or incomplete payment of the two appeal fees in election cases are no longer excusable.

The second and third issues shall be discussed jointly.

Petitioner contends that the First Division of the COMELEC committed grave abuse of discretion amounting to lack or excess of jurisdiction in acting on the motion for reconsideration without elevating the same to the COMELEC en banc, and in denying the motion for reconsideration.

The contention is meritorious.

It is settled that under Section 7, Article IX-A of the Constitution,150[23] what may be brought to this Court on certiorari is the decision, order or ruling of the COMELEC en banc. However, this rule should not apply when a division of the COMELEC arrogates unto itself and deprives the en banc of the authority to rule on a motion for reconsideration, like in this case.151[24]

Section 3, Article IX-C of the Constitution provides for the procedure for the resolution of election cases by the COMELEC, thus:

Sec. 3. The Commission on Elections may sit en banc or in two divisions, and shall promulgate its rules of procedure in order to expedite disposition of election cases,

including pre-proclamation controversies. All such election cases shall be heard and decided in division, provided that motions for reconsideration of decisions shall be decided by the Commission en banc.

The constitutional provision is reflected in Sections 5 and 6, Rule 19 of the COMELEC Rules of Procedure as follows:

Sec. 5. How Motion for Reconsideration Disposed of. Upon the filing of a motion to reconsider a decision, resolution, order or ruling of a Division, the Clerk of Court concerned shall, within twenty-four (24) hours from the filing thereof, notify the Presiding Commissioner. The latter shall within two (2) days thereafter certify the case to the Commission en banc.

Sec. 6. Duty of Clerk of Court of Commission to Calendar Motion for Reconsideration. The Clerk of Court concerned shall calendar the motion for reconsideration for the resolution of the Commission en banc within ten (10) days from the certification thereof.

In this case, the First Division of the COMELEC violated the cited provisions of the Constitution and the COMELEC Rules of Procedure when it resolved petitioner's motion for reconsideration of its final Order dated November 25, 2008, which dismissed petitioner s appeal. By arrogating unto itself a power constitutionally lodged in the Commission en banc, the First Division of the COMELEC exercised judgment in excess of, or without, jurisdiction.152[25] Hence, the Order issued by the First Division of the COMELEC dated January 9, 2009, denying petitioner s motion for reconsideration, is null and void.

Petitioner stated in her Reply153[26]

that on April 1, 2009, the First

Division of the COMELEC issued an Order declaring the Order dated November 25, 2008 as final and executory, and ordering the issuance of an Entry of Judgment. On April 1, 2009, an Entry of Judgment was issued by the Electoral Contests Adjudication Department.

WHEREFORE, the petition is GRANTED. The Orders dated November 25, 2008 and January 9, 2009 by the First Division of the COMELEC, and the Entry of Judgment issued on April 1, 2009 by the Electoral Contests Adjudication

Department are ANNULLED and SET ASIDE. The case is REMANDED to the First Division of the Commission on Elections for disposition in accordance with this Decision.

No costs.

SO ORDERED.

EN BANC

NELSON T. LLUZ and

G.R. No. 172840

CATALINO C. ALDEOSA, Present: Petitioners,

PUNO,* C.J., QUISUMBING,** YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, - versus CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, VELASCO, JR., and

NACHURA, JJ.

COMMISSION ON ELECTIONS and CAESAR O. VICENCIO, Respondents.

Promulgated:

June 7, 2007

x------------------------------------ --------------x

DECISION

CARPIO, J.:

The Case

This petition for certiorari154[1] seeks to annul the Resolutions of the Commission on Elections (COMELEC) En Banc dated 1 February 2006 and 25 May

2006 in E.O. Case No. 04-5. The 1 February 2006 resolution ruled that no probable cause exists to charge private respondent Caesar O. Vicencio with violation of Section 262 in relation to Section 74 of Batas Pambansa Blg. 881 (B.P. 881), otherwise known as the Omnibus Election Code. The 25 May 2006 resolution denied petitioners Nelson T. Lluz and Catalino C. Aldeosa s motion for reconsideration of the 1 February 2006 resolution.

The Facts

Private respondent was a candidate for the post of punong barangay of Barangay 2, Poblacion, Catubig, Samar in the 15 July 2002 Synchronized Barangay and Sangguniang Kabataan Elections. In his certificate of candidacy, private respondent stated his profession or occupation as a certified public accountant (CPA). Private respondent won in the elections.

Sometime after private respondent s proclamation, petitioners charged him before the Law Department of the COMELEC (Law Department) with violation of Section 262 in relation to Section 74 of B.P. 881. Petitioners claimed they had proof that private respondent misrepresented himself as a CPA. Attached to petitioners complaint was a Certification signed by Jose Ariola, Director II, Regulations Office of the Professional Regulation Commission (PRC), stating that

private respondent s name does not appear in the book of the Board of Accountancy. The book contains the names of those duly authorized to practice accountancy in the Philippines.

In his Answer, private respondent maintained that he was a CPA and alleged that he passed the CPA Board Examinations in 1993 with a rating of 76%. Private respondent argued that he could not be held liable for an election offense because his alleged misrepresentation of profession was not material to his eligibility as a candidate.

On 21 September 2004, the Law Department through its Director Alioden D. Dalaig issued a subpoena requiring the Chief of the PRC s Records Section to appear before it and settle the controversy on whether private respondent was indeed a CPA. On 6 October 2004, PRC Records Section Officer-in-Charge Emma T. Francisco appeared before the Law Department and produced a Certification showing that private respondent had taken the 3 October 1993 CPA Board Examinations and obtained a failing mark of 40.71%.

Nevertheless, the Law Department recommended the dismissal of petitioners complaint. Citing the rulings of this Court in Romualdez-Marcos v.

COMELEC155[2] and Salcedo II v. COMELEC,156[3] the Law Department held that the misrepresentation in private respondent s certificate of candidacy was not material to his eligibility as a candidate and could not be a ground for his prosecution.

However, upon motion of petitioners, the COMELEC En Banc by Resolution dated 5 October 2005 ordered the Law Department to file an information against private respondent for violation of Section 262 in relation to Section 74 of B.P. 881. In reversing the resolution of the Law Department, the COMELEC En Banc ruled that Romualdez-Marcos and Salcedo were disqualification cases not applicable to the case of private respondent who is sought to be prosecuted for an election offense. As such, the misrepresentation made by private respondent need not be material to his eligibility as a candidate in order to hold him liable under Section 262. The COMELEC En Banc further ruled that election offenses are mala prohibita, in which case no proof of criminal intent is required and good faith, ignorance, or lack of malice are not valid defenses.

On 18 October 2005, private respondent moved for reconsideration.

The Ruling of the COMELEC

On 1 February 2006, the COMELEC En Banc reconsidered its earlier Resolution, explaining thus:

After a careful evaluation x x x [w]e rule to grant the motion for reconsideration.

Criminal intent is not absolutely disregarded in election offense cases. A good example is the provision of Section 261(y)(17) of [B.P. 881], which requires malicious intent in order that a person may be charged for omitting, tampering, or transferring to another list the name of a registered voter from the official list of voters posted outside the polling place.

In relation thereto, the fact that an offense is malum prohibitum does not exempt the same from the coverage of the general principles of criminal law. In this case, the provisions of Section 261 of [B.P. 881] must not be taken independent of the concepts and theories of criminal law.

The offense allegedly committed by the respondent is for failure to disclose his true occupation as required under Section 74 of [B.P. 881]. Apparently, respondent misrepresented himself as a CPA when in fact he is not. The misrepresentation having been established, the next issue posited by the parties is whether or not the misrepresentation should be material before it can be considered as an election offense.

We answer in the affirmative. Violation of Section 74 is a species of perjury, which is the act of knowingly making untruthful statements under oath. Settled is the rule that for perjury to be committed, it must be made with regard to a material matter.

Clearly, the principle of materiality remains to be a crucial test in determining whether a person can be charged with violating Section 74 of [B.P. 881] in relation to Section 262 thereof.

The case of [Salcedo] sheds light as to what matters are deemed material with respect to the certificate of candidacy, to wit: citizenship, residency and other qualifications that may be imposed. The nature of a candidate s occupation is definitely not a material matter. To be sure, we do not elect a candidate on the basis of his occupation.157[4]

Petitioners filed a motion for reconsideration, which the COMELEC En Banc denied in the assailed Resolution dated 25 May 2006. The COMELEC declared that while it condemn[ed] in the strongest possible terms private respondent s morally appalling, devious, calculating, [and] deceitful act, it could not

prosecute private respondent for an election offense, but possibly only for an administrative or criminal offense.

Hence, this petition.

The Issues

Petitioners argue that:

1. The assailed resolutions failed to consider that a

violation of

Section 262 in relation to Section 74 of B.P. 881 is malum prohibitum;

2. The ruling in Salcedo is not applicable to petitioners complaint, that is, a fact misrepresented in a certificate of candidacy need not be material in order to constitute a violation of Section 262 in to Section 74 of B.P. 881; and relation

3. Assuming arguendo that materiality of a misrepresentation is required to constitute a violation of Section 262 in relation to Section 74 of B.P. 881, the assailed resolutions should have held material private respondent s misrepresentation because it increased his chances of winning in the elections. The Ruling of the Court

Petitioners come to us on a single question of law: is an alleged misrepresentation of profession or occupation on a certificate of candidacy punishable as an election offense under Section 262 in relation to Section 74 of B.P. 881?

We rule in the negative.

In urging the Court to order the COMELEC to file the necessary information against private respondent, petitioners invoke Sections 262 and 74 of B.P. 881, which we reproduce below:

Section 262. Other election offenses. Violation of the provisions, or pertinent portions, of the following sections of this Code shall constitute election offenses: Sections 9, 18, 74, 75, 76, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 122, 123, 127, 128, 129, 132, 134, 135, 145, 148, 150, 152, 172, 173, 174, 178, 180, 182, 184, 185, 186, 189, 190, 191, 192, 194, 195, 196, 197, 198, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 223, 229, 230, 231, 233, 234, 235, 236, 239 and 240. (Emphasis supplied)

Section 74. Contents of certificate of candidacy. The certificate of candidacy shall state that the person filing it is announcing his candidacy for the office stated therein and that he is eligible for said office; if for Member of the Batasang Pambansa, the province, including its component cities, highly urbanized city or district or sector which he seeks to represent; the political party to which he belongs; civil status; his date of birth; residence; his post office address for all election purposes; his profession or occupation; that he will support and defend the Constitution of the Philippines and will maintain true faith and allegiance thereto; that he will obey the laws, legal orders, and decrees promulgated by the duly constituted authorities; that he is not a permanent resident or immigrant to a foreign country; that the obligation imposed by his oath is assumed voluntarily, without mental reservation or purpose of evasion; and that the facts stated in the certificate of candidacy are true to the best of his knowledge.

Unless a candidate has officially changed his name through a court approved proceeding, a candidate shall use in a certificate of candidacy the name by which he has been baptized, or he has not been baptized in any church or

religion, the name registered in the office of the local civil registrar or any other name allowed under the provisions of existing law or, in the case [of] a Muslim, his Hadji name after performing the prescribed religious pilgrimage: Provided, That when there are two or more candidates for an office with the same name and surname, each candidate, upon being made aware or such fact, shall state his paternal and maternal surname, except the incumbent who may continue to use the name and surname stated in his certificate of candidacy when he was elected. He may also include one nickname or stage name by which he is generally or popularly known in the locality.
The person filing a certificate of candidacy shall also affix his latest photograph, passport size; a statement in duplicate containing his bio-data and program of government not exceeding one hundred words, if he so desires. (Emphasis supplied)

The penal coverage of Section 262 is limited.

From a cursory reading of Sections 262 and 74 of B.P. 881, one may possibly conclude that an act or omission in violation of any of the provisions of Section 74 ipso facto constitutes an election offense. Indeed, petitioners point out that private respondent s misrepresentation of profession having been proved before the COMELEC, the latter is compelled to prosecute him for violation of Section 262. Petitioners argue that such a violation being an election offense, it is malum prohibitum and immediately gives rise to criminal liability upon proof of commission.

Petitioners stance assumes that Section 262 penalizes without qualification the violation of the sections it enumerates. This assumption is uncalled for in view of the wording of Section 262.

The listing of sections in Section 262 is introduced by the clause: Violation of the provisions, or pertinent portions, of the following sections shall constitute election offenses: x x x. The phraseology of this introductory clause alerts us that Section 262 itself possibly limits its coverage to only pertinent portions of Section 74. That such a possibility exists must not be taken lightly for two reasons. First, were the phrase not necessary, the law s framers would have instead directly declared that violation of the provisions or any provision of the enumerated sections without any qualification would constitute an election offense. It is

a settled principle in statutory construction that whenever possible, a legal provision, phrase, or word must not be so construed as to be meaningless and a useless surplusage in the sense of adding nothing to the law or having no effect on it.158[5] Second, equally well-settled is the rule that a statute imposing criminal liability should be construed narrowly in its coverage such that only those offenses clearly included, beyond reasonable doubt, will be considered within the operation of the statute.159[6] A return to Section 74 is thus imperative.

Section 74 enumerates all information which a person running for public office must supply the COMELEC in a sworn certificate of candidacy. Section 74 specifies that a certificate of candidacy shall contain, among others, a statement that the person is announcing his or her candidacy for the office and is eligible for such office, the unit of government which the person seeks to represent, his or her political party, civil status, date of birth, residence, and profession or occupation. Section 74 further requires that the person make several declarations: that he will support and defend the Constitution of the Philippines and will maintain true faith and allegiance to it, that he will obey the laws, legal orders, and decrees promulgated by the duly constituted authorities, immigrant to a foreign country, that he is not a permanent resident or

that the obligation imposed by his oath is assumed voluntarily, and

that the facts stated in the certificate of candidacy are true to the best of his knowledge.

Section 74 does not expressly mention which portion in its provisions is pertinent to Section 262, or which among its provisions when violated is punishable as an election offense. Nothing in Section 74 partakes unmistakably of a penal clause or a positive prohibition comparable to those found in other sections160[7] also mentioned in Section 262 that use the words shall not. The Court is then left to interpret the meaning of Section 74 to determine which of its provisions are penalized under Section 262, and particularly if disclosure of profession or occupation is among such provisions.

Our rulings in Abella v. Larrazabal and Salcedo clarify the concept of misrepresentation under B.P. 881.

The issue in this case is novel, yet the facts and provisions of law now before us call to mind the cases of Abella v. Larrazabal161[8] and Salcedo, perhaps the closest this case has to a relevant precedent.

Abella dwelt on the issue of misrepresentation of residence in a certificate of candidacy. Petitioner Abella had filed a case against private respondent Larrazabal before the COMELEC on the ground that the latter falsely claimed to be a resident of Kananga, Leyte in her certificate of candidacy. In the course of the hearing, Larrazabal moved for clarification of the nature of the proceedings, asking the COMELEC to determine under what law her qualifications were being challenged. The COMELEC, by process of elimination, determined that the proceeding was not (1) intended against a nuisance candidate under Section 69 of B.P. 881, as Larrazabal was obviously a bona fide candidate; (2) a petition for quo warranto under Section 253 which could be filed only after Larrazabal s proclamation, as Larrazabal had not yet been proclaimed; (3) a petition to deny due course to Larrazabal s certificate of candidacy under Section 78, as Abella s

petition did not contain such prayer and was not filed in the manner required by the COMELEC Rules of Procedure; or (4) a petition for disqualification under Section 68, as Larrazabal was not being charged with the commission of any election offense mentioned under the section. The COMELEC concluded that the subject of the petition, to wit, misrepresentation in the certificate of candidacy, was actually a violation of Section 74 and must be prosecuted as an election offense under Section 262. The COMELEC dismissed the petition and referred the case to its Law Department for prosecution.

We held that the dismissal was improper. There we reasoned that the issue of residence having been squarely raised before the COMELEC

x x x it should not have been shunted aside to the Law Department for a roundabout investigation of [Larrazabal s] qualification through the filing of a criminal prosecution, if found to be warranted, with resultant disqualification of the accused in case of conviction. The COMELEC should have opted for a more direct and speedy process available under the law, considering the vital public interest involved and the necessity of resolving the question at the earliest possible time for the benefit of the inhabitants of Leyte.162[9]

By direct and speedy process, the Court referred to Section 78 of B.P. 881, which states:

Section 78. Petition to deny due course to or cancel a certificate of candidacy. A verified petition seeking to deny due course or to cancel a certificate of candidacy may be filed by the person exclusively on the ground that any material representation contained therein as required under Section 74 hereof is false. The petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days before the election. (Emphasis supplied)

Thus, upon considering the facts and seeing that Larrazabal s misrepresentation of her residence put her qualification as a candidate at issue,163[10] the Court found that the case fell squarely within the provisions of Section 78 and directed the COMELEC to determine the residence qualification of Larrazabal. Notably, the Court did not make a finding that Abella had no cause of action under Section 262, but only characterized the criminal case as involving a roundabout investigation seeking an end Larrazabal s disqualification that could be achieved more speedily through an administrative

proceeding under Section 78. The ruling in Abella recognized that Larrazabal s act of misrepresenting her residence, a fact required to be stated in her certificate of candidacy under Section 74 and which was also a qualification for all elective local officials, gave rise to two causes of action against her under B.P. 881: one, a criminal complaint under Section 262; and second, a petition to deny due course to or cancel a certificate of candidacy under Section 78.

The case of Salcedo six years after Abella tested the limits of Section 78 on the specific question of what constitutes a material misrepresentation. In Salcedo, petitioner Victorino Salcedo prayed for the disqualification of private respondent

Emelita Salcedo (Emelita) from the mayoralty race in Sara, Iloilo on the basis of the use of her surname. Petitioner alleged that Emelita s marriage to Neptali Salcedo (Neptali) was void and therefore Emelita s use of Neptali s surname constituted a material misrepresentation. The COMELEC ruled in favor of Emelita, finding that she committed no misrepresentation. On appeal by petitioner, the Court held:
In case there is a material misrepresentation in the certificate of candidacy, the Comelec is authorized to deny due course to or cancel such certificate upon the filing of a petition by any person pursuant to Section 78 x x x.

xxxx

As stated in the law, in order to justify the cancellation of the certificate of candidacy under Section 78, it is essential that the false representation mentioned therein pertain[s] to a material matter for the sanction imposed by this provision would affect the substantive rights of a candidate the right to run for the elective post for which he filed the certificate of candidacy. Although the law does not specify what would be considered as a material representation, the Court has interpreted this phrase in a line of decisions applying Section 78 of [B.P. 881].

xxxx

Therefore, it may be concluded that the material misrepresentation contemplated by Section 78 of the Code refer[s] to qualifications for elective office. This conclusion is strengthened by the fact that the consequences imposed upon a candidate guilty of having made a false representation in [the] certificate of candidacy are grave to prevent the candidate from running or, if elected, from serving, or to prosecute him for violation of the election laws. It could not have been the intention of the law to deprive a person of such a basic and substantive political right to be voted for a public office upon just any innocuous mistake.

xxxx

Aside from the requirement of materiality, a false representation under Section 78 must consist of a deliberate attempt to mislead, misinform, or hide a fact which would otherwise render a candidate ineligible. In other words, it must be made with an intention to deceive the electorate as to one s qualifications for public office. x x x164[11] (Emphasis supplied)

From these two cases several conclusions follow. First, a misrepresentation in a certificate of candidacy is material when it refers to a qualification for elective office and affects the candidate s eligibility. Second, when a candidate commits a material misrepresentation, he or she may be proceeded against through a petition to deny due course to or cancel a certificate of candidacy under Section 78, or through criminal prosecution under Section 262 for violation of Section 74. Third, a misrepresentation of a non-material fact, or a non-material misrepresentation, is not a ground to deny due course to or cancel a certificate of candidacy under Section 78. In other words, for a candidate s certificate of candidacy to be denied due course or canceled by the COMELEC, the fact misrepresented must pertain to a qualification for the office sought by the candidate.

Profession or occupation is not a qualification for elective office, and therefore not a material

fact in a certificate of candidacy.

No elective office, not even the office of the President of the Republic of the Philippines, requires a certain profession or occupation as a qualification. For local elective offices including that of punong barangay, Republic Act No. 7160 (R.A. 7160) or the Local Government Code of 1991 prescribes only qualifications pertaining to citizenship, registration as a voter, residence, and language. Section 39 of R.A. 7160 states:

Section 39. Qualifications. (a) An elective local official must be a citizen of the Philippines; a registered voter in the barangay, municipality, city, or province or, in the case of a member of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan, the district where he intends to be elected; a resident therein for at least one (1) year immediately preceding the day of the election; and able to read and write Filipino or any other local language or dialect.

xxxx

Profession or occupation not being a qualification for elective office, misrepresentation of such does not constitute a material misrepresentation. Certainly, in a situation where a candidate misrepresents his or her profession or occupation in the certificate of candidacy, the candidate may not be disqualified

from running for office under Section 78 as his or her certificate of candidacy cannot be denied due course or canceled on such ground.

In interpreting a law, the Court must avoid an unreasonable or unjust construction.

Were we to follow petitioners line of thought, for misrepresentation of a non-material fact, private respondent could be prosecuted for an election offense and, if found guilty, penalized with imprisonment and other accessory penalties. B.P. 881 prescribes a uniform penalty for all election offenses under it to cover those defined in Sections 262 and 261, to wit:

Section 264. Penalties. Any person found guilty of any election offense under this Code shall be punished with imprisonment of not less than one year but not more than six years and shall not be subject to probation. In addition, the guilty party shall be sentenced to suffer disqualification to hold public office and deprivation of the right of suffrage. If he is a foreigner, he shall be sentenced to deportation which shall be enforced after the prison term has been served. Any political party found guilty shall be sentenced to pay a fine of not less than ten thousand pesos, which shall be imposed upon such party after criminal action has been instituted in which their corresponding officials have been found guilty.

The position taken by petitioners merely highlights for us the absurdity of not applying here the reasons given by the Court in Salcedo, a mere disqualification case. In the present case, private respondent not only could be disqualified from holding public office and from voting but could also be deprived of his liberty were the COMELEC to pursue a criminal case against him. If in Salcedo the Court could not conceive the law to have intended that a person be deprived of such a basic and substantive political right to be voted for a public office upon just any innocuous mistake on the certificate of candidacy, weightier considerations here demand that materiality of the misrepresentation also be held an essential element of any violation of Section 74. Otherwise, every detail or piece of information within the four corners of the certificate of candidacy, even that which has no actual bearing upon the candidate s eligibility, could be used as basis for the candidate s criminal prosecution.

Further compelling us to dismiss this petition is the consideration that any complaint against private respondent for perjury under the Revised Penal Code would necessarily have to allege the element of materiality. The pertinent section of the Revised Penal Code states:

Art. 183. False testimony in other cases and perjury in solemn affirmation. The penalty of arresto mayor in its maximum period to prision correccional in its minimum period shall be imposed upon any person who, knowingly making untruthful statements and not being included in the provision of the next preceding articles, shall testify under oath, or make an affidavit, upon any material matter before a competent person authorized to administer an oath in cases in which the law so requires. (Emphasis supplied)

The basis of the crime of perjury is the willful assertion of a falsehood under oath upon a material matter. Although the term material matter under Article 183 takes on a fairly general meaning, that is, it refers to the main fact which is the subject of inquiry,165[12] in terms of being an element in the execution of a statement under oath it must be understood as referring to a fact which has an effect on the outcome of the proceeding for which the statement is being executed.166[13] Thus, in the case of a certificate of candidacy, a material matter is a fact relevant to the validity of the certificate and which could serve as basis to grant or deny due course to the certificate in case it is assailed under Section 78. Of course, such material matter would then refer only to the qualifications for elective office required to be stated in the certificate of candidacy.

Perjury under Article 183 of the Revised Penal Code carries the penalty of arresto mayor in its maximum period to prision correccional in its minimum period and translates to imprisonment for four months and one day up to two years and four months. The duration of this imprisonment is a far cry from that meted by Section 264 of B.P. 881, which is a minimum of one year up to a maximum of six years. With the gravity of the punishment provided by B.P. 881

for violation of election offenses, we glean the intention of the law to limit culpability under Section 262 for violation of Section 74 only to a material misrepresentation. We thus adhere to the more reasonable construction of the term pertinent portions found in Section 262, in particular reference to Section 74, to mean only those portions of Section 74 which prescribe qualification requirements of a candidate.

WHEREFORE, we DISMISS the petition. We AFFIRM the En Banc Resolutions of the Commission on Elections dated 1 February 2006 and 25 May 2006.

SO ORDERED. G.R. No. 181613

September 11, 2009

ROSALINDA A. PENERA, Petitioner, vs. COMMISSION ON ELECTIONS and EDGAR T. ANDANAR, Respondents. DECISION CHICO-NAZARIO, J.: This Petition for Certiorari with Prayer for the Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order 1 under Rule 65, in relation to Rule 64 of the Rules of Court, seeks the nullification of the Resolution2 dated 30 January 2008 of the Commission on Elections (COMELEC) en banc. Said Resolution denied the Motion for Reconsideration of the earlier Resolution3 dated 24 July 2007 of the COMELEC Second Division in SPA No. 07-224, ordering the disqualification of herein petitioner Rosalinda A. Penera (Penera) as a candidate for the position of mayor of the Municipality of Sta. Monica, Surigao del Norte (Sta. Monica) in the 2007 Synchronized National and Local Elections. The antecedents of the case, both factual and procedural, are set forth hereunder:

Penera and private respondent Edgar T. Andanar (Andanar) were mayoralty candidates in Sta. Monica during the 14 May 2007 elections. On 2 April 2007, Andanar filed before the Office of the Regional Election Director (ORED), Caraga Region (Region XIII), a Petition for Disqualification4 against Penera, as well as the candidates for Vice-Mayor and Sangguniang Bayan who belonged to her political party,5 for unlawfully engaging in election campaigning and partisan political activity prior to the commencement of the campaign period. The petition was docketed as SPA No. 07-224. Andanar claimed that on 29 March 2007 a day before the start of the authorized campaign period on 30 March 2007 Penera and her partymates went around the different barangays in Sta. Monica, announcing their candidacies and requesting the people to vote for them on the day of the elections. Attached to the Petition were the Affidavits of individuals6 who witnessed the said incident. Penera alone filed an Answer7 to the Petition on 19 April 2007, averring that the charge of premature campaigning was not true. Although Penera admitted that a motorcade did take place, she explained that it was simply in accordance with the usual practice in nearby cities and provinces, where the filing of certificates of candidacy (COCs) was preceded by a motorcade, which dispersed soon after the completion of such filing. In fact, Penera claimed, in the motorcade held by her political party, no person made any speech, not even any of the candidates. Instead, there was only marching music in the background and "a grand standing for the purpose of raising the hands of the candidates in the motorcade." Finally, Penera cited Barroso v. Ampig8 in her defense, wherein the Court supposedly ruled that a motorcade held by candidates during the filing of their COCs was not a form of political campaigning. Also on 19 April 2007, Andanar and Penera appeared with their counsels before the OREDRegion XIII, where they agreed to submit their position papers and other evidence in support of their allegations.9 After the parties filed their respective Position Papers, the records of the case were transmitted to the COMELEC main office in Manila for adjudication. It was subsequently raffled to the COMELEC Second Division.1avvphi1 While SPA No. 07-224 was pending before the COMELEC Second Division, the 14 May 2007 elections took place and, as a result thereof, Penera was proclaimed the duly elected Mayor of Sta. Monica. Penera soon assumed office on 2 July 2002. On 24 July 2007, the COMELEC Second Division issued its Resolution in SPA No. 07-224, penned by Commissioner Nicodemo T. Ferrer (Ferrer), which disqualified Penera from continuing as a mayoralty candidate in Sta. Monica, for engaging in premature campaigning, in violation of Sections 80 and 68 of the Omnibus Election Code. The COMELEC Second Division found that:

On the afternoon of 29 March 2007, the 1st [sic] day to file the certificates of candidacy for local elective positions and a day before the start of the campaign period for the May 14, 2007 elections [some of the members of the political party Partido Padajon Surigao], headed by their mayoralty candidate "Datty" Penera, filed their respective Certificates of Candidacy before the Municipal Election Officer of Sta. Monica, Surigao del Norte. Accompanied by a bevy of supporters, [Penera and her partymates] came to the municipal COMELEC office on board a convoy of two (2) trucks and an undetermined number of motorcycles, laden with balloons ad [sic] posters/banners containing names and pictures and the municipal positions for which they were seeking election. Installed with [sic] one of the trucks was a public speaker sound subsystem which broadcast [sic] the intent the [sic] run in the coming elections. The truck had the posters of Penera attached to it proclaiming his [sic] candidacy for mayor. The streamer of [Mar Longos, a candidate for the position of Board Member,] was proudly seen at the vehicles side. The group proceeded to motorcade until the barangays of Bailan, Libertad and as afar [sic] as Mabini almost nine (9) kilometers from Sta. Monica. [Penera and her partymates] were seen aboard the vehicles and throwing candies to the residents and onlookers. Various affidavits and pictures were submitted elucidating the above-mentioned facts. The above facts were also admitted in the Answer, the Position Paper and during the hearings conducted for this case, the only defense propounded by [Penera] is that such acts allegedly do not constitute campaigning and is therefore not proscribed by the pertinent election laws. xxxx What we however find disturbing is [Peneras] reference to the Ampig Case as the justification for the acts committed by [her]. There is really no reference to the acts or similar acts committed by [Penera] as having been considered as not constituting political campaign or partisan political activity. The issue in that case is whether or not the defect of the lack of a certification against non-forum [sic] shopping should result to the immediate dismissal of the election cases filed in that case. There is nothing in said case justifying a motorcade during the filing of certificates of candidacy. [Peneras] reliance thereon is therefore misplaced and of no potency at all. xxxx However, the photos submitted by [Andanar] only identified [Penera] and did not have any notation identifying or indicating any of the other [candidates from Peneras party]. It cannot be conclusively proven that the other [candidates from Peneras party] were indeed with Penera during the Motorcade. More importantly, the Answer and the Position Paper contain admissions referring only to [Penera]. There is therefore no justification for a whole sale [sic] disqualification of all the [candidates from Peneras party], as even the petition failed to mention particularly the participation of the other individual [party members].10 The afore-quoted findings of fact led the COMELEC Second Division to decree:

PREMISES CONSIDERED, this Commission resolves to disqualify [Penera] but absolves the other [candidates from Peneras party] from violation of section 80 and 68 of the Omnibus Elections [sic] Code.11 Commissioner Florentino A. Tuason, Jr. (Tuason) wrote a Separate Opinion12 on the 24 July 2007 Resolution. Although Commissioner Tuason concurred with the ponente, he stressed that, indeed, Penera should be made accountable for her actions after the filing of her COC on 29 March 2007. Prior thereto, there was no candidate yet whose candidacy would have been enhanced by the premature campaigning. It was the third member of the COMELEC Second Division, Commissioner Rene V. Sarmiento (Sarmiento) who put forth a Dissenting Opinion13 on the 24 July 2007 Resolution. Commissioner Sarmiento believed that the pieces of evidence submitted by Andanar did not sufficiently establish probable cause that Penera engaged in premature campaigning, in violation of Sections 80 and 68 of the Omnibus Election Code. The two photocopied pictures, purporting to be those of Penera, did not clearly reveal what was actually happening in the truck or who were the passengers thereof. Likewise, the Affidavits seemed to have been prepared and executed by one and the same person because they had similar sentence construction and form, and they were sworn to before the same attesting officer. Penera filed before the COMELEC en banc a Motion for Reconsideration14 of the 24 July 2007 Resolution of the COMELEC Second Division, maintaining that she did not make any admission on the factual matters stated in the appealed resolution. Penera also contended that the pictures and Affidavits submitted by Andanar should not have been given any credence. The pictures were mere photocopies of the originals and lacked the proper authentication, while the Affidavits were taken ex parte, which would almost always make them incomplete and inaccurate. Subsequently, Penera filed a Supplemental Motion for Reconsideration,15 explaining that supporters spontaneously accompanied Penera and her fellow candidates in filing their COCs, and the motorcade that took place after the filing was actually part of the dispersal of said supporters and their transportation back to their respective barangays. In the Resolution dated 30 January 2008, the COMELEC en banc denied Peneras Motion for Reconsideration, disposing thus: WHEREFORE, this Commission RESOLVES to DENY the instant Motion for Reconsideration filed by [Penera] for UTTER LACK OF MERIT.16 The COMELEC en banc ruled that Penera could no longer advance the arguments set forth in her Motion for Reconsideration and Supplemental Motion for Reconsideration, given that she failed to first express and elucidate on the same in her Answer and Position Paper. Penera did not specifically deny the material averments that the motorcade "went as far as Barangay Mabini, announcing their candidacy and requesting the people to vote for them on Election Day," despite the fact that the same were clearly propounded by Andanar in his Petition for Disqualification and Position Paper. Therefore, these material averments should be considered admitted. Although the COMELEC en banc agreed that no undue importance should be given to sworn statements or affidavits submitted as evidence, this did not mean that such affidavits should not

be given any evidentiary weight at all. Since Penera neither refuted the material averments in Andanars Petition and the Affidavits attached thereto nor submitted countervailing evidence, then said Affidavits, even if taken ex parte, deserve some degree of importance. The COMELEC en banc likewise conceded that the pictures submitted by Andanar as evidence would have been unreliable, but only if they were presented by their lonesome. However, said pictures, together with Peneras admissions and the Affidavits of Andanars witnesses, constituted sufficient evidence to establish Peneras violation of the rule against premature campaigning. Lastly, the COMELEC en banc accused Penera of deliberately trying to mislead the Commission by citing Barroso, given that the said case was not even remotely applicable to the case at bar. Consistent with his previous stand, Commissioner Sarmiento again dissented17 from the 30 January 2008 Resolution of the COMELEC en banc. He still believed that Andanar was not able to adduce substantial evidence that would support the claim of violation of election laws. Particularly, Commissioner Sarmiento accepted Peneras explanation that the motorcade conducted after the filing by Penera and the other candidates of their COCs was merely part of the dispersal of the spontaneous gathering of their supporters. The incident was only in accord with normal human social experience. Still undeterred, Penera filed the instant Petition before us, praying that the Resolutions dated 24 July 2007 and 30 January 2008 of the COMELEC Second Division and en banc, respectively, be declared null and void for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. In a Resolution18 dated 4 March 2008, we issued a Temporary Restraining Order (TRO), enjoining the COMELEC from implementing the assailed Resolutions, on the condition that Penera post a bond in the amount of P5,000.00. We also directed COMELEC and Andanar to comment on the instant Petition. After the COMELEC, through the Office of the Solicitor General (OSG), and Andanar filed their respective Comments19 on the Petition at bar, we required Penera, in a Resolution20 dated 17 June 2008, to file a Reply. However, as no Reply was filed in due time, we dismissed Peneras Petition in a Resolution21 dated 14 October 2008, in accordance with Rule 56, Section 5(e) of the Rules of Court.22 Penera subsequently filed an Ex Parte Motion to Admit Reply,23 which we treated as a Motion for Reconsideration of the Resolution dated 14 October 2008. On 11 November 2008, we issued another Resolution reinstating Peneras Petition.24 Penera presents the following issues for our consideration: I. Whether or not [Penera] has engaged in an election campaign or partisan political activity outside the campaign period. II.

Whether the contents of the complaint are deemed admitted for failure of [Penera] to specifically deny the same. III. Whether or not [Andanar] has presented competent and substantial evidence to justify a conclusion that [Penera] violated Section 80 and 68 of the Omnibus Election Code. IV. Whether or not [the COMELEC] committed grave abuse of discretion amounting to lack of or in excess of jurisdiction in finding that the act of [Penera] in conducting a motorcade before the filing of her certificate of candidacy constitutes premature campaigning. V. Whether or not [the COMELEC] committed grave abuse of discretion amounting to lack of or in excess of jurisdiction when it resolves [sic] to disqualify [Penera] despite the failure of [Andanar] to present competent, admissible and substantial evidence to prove [the] violation of Section 68 and 80 of the Omnibus Election Code. Penera claims that the COMELEC exercised its discretion despotically, arbitrarily and whimsically in disqualifying her as a mayoralty candidate in Sta. Monica on the ground that she engaged in premature campaigning. She asserts that the evidence adduced by Andanar was grossly insufficient to warrant the ruling of the COMELEC. Penera insists that the COMELEC Second Division erred in its findings of fact, basically adopting Andanars allegations which, contrary to the belief of the COMELEC Second Division, Penera never admitted. Penera maintains that the motorcade was spontaneous and unplanned, and the supporters merely joined Penera and the other candidates from her party along the way to, as well as within the premises of, the office of the COMELEC Municipal Election Officer. Andanars averments that after Penera and the other candidates from her party filed their COCs, they held a motorcade in the different barangays of Sta. Monica, waived their hands to the public and threw candies to the onlookers were not supported by competent substantial evidence. Echoing Commissioner Sarmientos dissent from the assailed COMELEC Resolutions, Penera argues that too much weight and credence were given to the pictures and Affidavits submitted by Andanar. The declaration by the COMELEC that it was Penera in the pictures is tenuous and erroneous, as the COMELEC has no personal knowledge of Peneras identity, and the said pictures do not clearly reveal the faces of the individuals and the contents of the posters therein. In the same vein, the Affidavits of Andanars known supporters, executed almost a month after Andanar filed his Petition for Disqualification before the ORED-Region XIII, were obviously prepared and executed by one and the same person, because they have a similar sentence construction, and computer font and form, and were even sworn to before the same attesting officer on the same date. We find no merit in the instant Petition.

The questions of fact Crystal clear from the above arguments is that Penera is raising only questions of fact in her Petition presently before us. We do not find any reason to pass upon the same, as this Court is not a trier of facts. It is not the function of the Court to review, examine and evaluate or weigh the probative value of the evidence presented. A question of fact would arise in such an event. The sole function of a writ of certiorari is to address issues of want of jurisdiction or grave abuse of discretion, and it does not include a review of the tribunals evaluation of the evidence.25 Because of its fact-finding facilities and its knowledge derived from actual experience, the COMELEC is in a peculiarly advantageous position to evaluate, appreciate and decide on factual questions before it. Factual findings of the COMELEC, based on its own assessments and duly supported by evidence, are conclusive on this Court, more so in the absence of a grave abuse of discretion, arbitrariness, fraud, or error of law in the questioned resolutions. Unless any of these causes are clearly substantiated, the Court will not interfere with the findings of fact of the COMELEC.26 Grave abuse of discretion is such capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave, as when it is exercised arbitrarily or despotically by reason of passion or personal hostility. The abuse must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.27 We find no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the COMELEC Second Division in disqualifying Penera as a mayoralty candidate in Sta. Monica in the Resolution dated 24 July 2007; and also on the part of the COMELEC en banc in denying Peneras Motion for Reconsideration on the Resolution dated 30 January 2008. Said Resolutions are sufficiently supported by substantial evidence, meaning, such evidence as a reasonable mind might accept as adequate to support a conclusion.28 The prohibited act of premature campaigning is defined under Section 80 of the Omnibus Election Code, to wit: SECTION 80. Election campaign or partisan political activity outside campaign period. It shall be unlawful for any person, whether or not a voter or candidate, or for any party, or association of persons, to engage in an election campaign or partisan political activity except during the campaign period: Provided, That political parties may hold political conventions or meetings to nominate their official candidates within thirty days before the commencement of the campaign period and forty-five days for Presidential and Vice-Presidential election. (Emphasis ours.) If the commission of the prohibited act of premature campaigning is duly proven, the consequence of the violation is clearly spelled out in Section 68 of the said Code, which reads: SECTION. 68. Disqualifications. - Any candidate who, in an action or protest in which he is a party is declared by final decision of a competent court guilty of, or found by the Commission of

having xxx (e) violated any of Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, subparagraph 6, shall be disqualified from continuing as a candidate, or if he has been elected, from holding the office. Any person who is a permanent resident of or an immigrant to a foreign country shall not be qualified to run for any elective office under this Code, unless said person has waived his status as permanent resident or immigrant of a foreign country in accordance with the residence requirement provided for in the election laws. (Emphases ours.) In the case at bar, it had been sufficiently established, not just by Andanars evidence, but also those of Penera herself, that Penera and her partymates, after filing their COCs on 29 March 2007, participated in a motorcade which passed through the different barangays of Sta. Monica, waived their hands to the public, and threw candies to the onlookers. Indeed, Penera expressly admitted in her Position Paper that: Respondents actually had a motorcade of only two (2) jeppneys [sic] and ten (10) motorcycles after filing their Certificate of Candidacy at 3:00 P.M., March 29, 2007 without any speeches made and only one streamer of a board member Candidate and multi-colored balloons attached to the jeppneys [sic] and motorcycles.29 (Emphasis ours.) Additionally, the Joint Affidavit of Marcial Dolar, Allan Llatona, and Renante Platil, attached to Peneras Position Paper, gave an even more straightforward account of the events, thus: 1. That on March 29, 2007 at 3:00 P.M. at Sta. Monica, Surigao del Norte, Mayoralty Candidates Rosalinda CA. Penera [sic] and her parties of four (4) kagawads filed their certificate of candidacy at the COMELEC Office; 2. That their [sic] was a motorcade consisting of two jeppneys [sic] and 10 motorcycles after actual registration with the COMELEC with jeeps decorated with balloons and a streamer of Margarito Longos, Board Member Candidate; 3. That the motorcade proceeded to three (3) barangays out of the 11 barangays while supporters were throwing sweet candies to the crowd; 4. That there was merriment and marching music without mention of any name of the candidates more particularly lead-candidate Rosalinda CA. Penera [sic]; 5. That we were in the motorcade on that afternoon only riding in one of the jeepneys.30 (Emphases ours.) In view of the foregoing admissions by Penera and her witnesses, Penera cannot now be allowed to adopt a conflicting position. More importantly, the conduct of a motorcade is a form of election campaign or partisan political activity, falling squarely within the ambit of Section 79(b)(2) of the Omnibus Election Code, on "[h]olding political caucuses, conferences, meetings, rallies, parades, or other similar assemblies, for the purpose of soliciting votes and/or undertaking any campaign or propaganda for or against

a candidate[.]" A motorcade is a procession or parade of automobiles or other motor vehicles.31 The conduct thereof during election periods by the candidates and their supporters is a fact that need not be belabored due to its widespread and pervasive practice. The obvious purpose of the conduct of motorcades is to introduce the candidates and the positions, to which they seek to be elected, to the voting public; or to make them more visible so as to facilitate the recognition and recollection of their names in the minds of the voters come election time. Unmistakably, motorcades are undertaken for no other purpose than to promote the election of a particular candidate or candidates. In the instant Petition, Penera never denied that she took part in the conduct of the motorcade after she filed her COC on the day before the start of the campaign period. She merely claimed that the same was not undertaken for campaign purposes. Penera proffered the excuse that the motorcade was already part of the dispersal of the supporters who spontaneously accompanied Penera and her partymates in filing their COCs. The said supporters were already being transported back to their respective barangays after the COC filing. Penera stressed that no speech was made by any person, and there was only background marching music and a "grand standing for the purpose of raising the hands of the candidates in the motorcade. We are not convinced. As we previously noted, Penera and her witnesses admitted that the vehicles, consisting of two jeepneys and ten motorcycles, were festooned with multi-colored balloons; the motorcade went around three barangays in Sta. Monica; and Penera and her partymates waved their hands and threw sweet candies to the crowd. With vehicles, balloons, and even candies on hand, Penera can hardly persuade us that the motorcade was spontaneous and unplanned. For violating Section 80 of the Omnibus Election Code, proscribing election campaign or partisan political activity outside the campaign period, Penera must be disqualified from holding the office of Mayor of Sta. Monica. The questions of law The dissenting opinion, however, raises the legal issue that Section 15 of Republic Act No. 8436, as amended by Republic Act No. 9369, provides a new definition of the term "candidate," as a result of which, premature campaigning may no longer be committed. Under Section 79(a) of the Omnibus Election Code, a candidate is "any person aspiring for or seeking an elective public office, who has filed a certificate of candidacy by himself or through an accredited political party, aggroupment, or coalition of parties." Republic Act No. 8436,32 enacted on 22 December 1997, authorized the COMELEC to use an automated election system for the process of voting, counting of votes, and canvassing/consolidating the results of the national and local elections. The statute also mandated the COMELEC to acquire automated counting machines, computer equipment, devices and materials; and to adopt new electoral forms and printing materials. In particular, Section 11 of Republic Act No. 8436 provided for the specifications of the official ballots to be

used in the automated election system and the guidelines for the printing thereof, the relevant portions of which state: SECTION 11. Official ballot. - The Commission shall prescribe the size and form of the official ballot which shall contain the titles of the positions to be filled and/or the propositions to be voted upon in an initiative, referendum or plebiscite. Under each position, the names of candidates shall be arranged alphabetically by surname and uniformly printed using the same type size. A fixed space where the chairman of the Board of Election inspectors shall affix his/her signature to authenticate the official ballot shall be provided. Both sides of the ballots may be used when necessary. For this purpose, the deadline for the filing of certificate of candidacy/petition for registration/manifestation to participate in the election shall not be later than one hundred twenty (120) days before the elections: Provided, That, any elective official, whether national or local, running for any office other than the one which he/she is holding in a permanent capacity, except for president and vice-president, shall be deemed resigned only upon the start of the campaign period corresponding to the position for which he/she is running: Provided, further, That, unlawful acts or omissions applicable to a candidate shall take effect upon the start of the aforesaid campaign period: Provided, finally, That, for purposes of the May 11, 1998 elections, the deadline for filing of the certificate of candidacy for the positions of President, Vice President, Senators and candidates under the Party-List System as well as petitions for registration and/or manifestation to participate in the Party-List System shall be on February 9, 1998 while the deadline for the filing of certificate of candidacy for other positions shall be on March 27, 1998. (Emphases ours.) On 10 February 2007, Republic Act No. 936933 took effect. Section 13 of Republic Act No. 9369 amended Section 11 of Republic Act No. 8436 and renumbered the same as the new Section 15 of Republic Act No. 8436. The pertinent portions of Section 15 of Republic Act No. 8436, as amended by Republic Act No. 9369, now read: SECTION.15. Official Ballot. - The Commission shall prescribe the format of the electronic display and/or the size and form of the official ballot, which shall contain the titles of the position to be filled and/or the proposition to be voted upon in an initiative, referendum or plebiscite. Where practicable, electronic displays must be constructed to present the names of all candidates for the same position in the same page or screen, otherwise, the electronic displays must be constructed to present the entire ballot to the voter, in a series of sequential pages, and to ensure that the voter sees all of the ballot options on all pages before completing his or her vote and to allow the voter to review and change all ballot choices prior to completing and casting his or her ballot. Under each position to be filled, the names of candidates shall be arranged alphabetically by surname and uniformly indicated using the same type size. The maiden or married name shall be listed in the official ballot, as preferred by the female candidate. Under each proposition to be vote upon, the choices should be uniformly indicated using the same font and size.

A fixed space where the chairman of the board of election inspector shall affix her/her signature to authenticate the official ballot shall be provided. For this purpose, the Commission shall set the deadline for the filing of certificate of candidacy/petition of registration/manifestation to participate in the election. Any person who files his certificate of candidacy within this period shall only be considered as a candidate at the start of the campaign period for which he filed his certificate of candidacy: Provided, That, unlawful acts or omissions applicable to a candidate shall effect only upon the start of the aforesaid campaign period: Provided, finally, That any person holding a public appointive office or position, including active members of the armed forces, and officers, and employees in government-owned or-controlled corporations, shall be considered ipso factor resigned from his/her office and must vacate the same at the start of the day of the filing of his/her certification of candidacy. (Emphases ours.) In view of the third paragraph of Section 15 of Republic Act No. 8436, as amended, the Dissenting Opinion argues that Section 80 of the Omnibus Election Code can not be applied to the present case since, as the Court held in Lanot v. Commission on Elections,34 the election campaign or partisan activity, which constitute the prohibited premature campaigning, should be designed to promote the election or defeat of a particular candidate or candidates. Under present election laws, while a person may have filed his/her COC within the prescribed period for doing so, said person shall not be considered a candidate until the start of the campaign period. Thus, prior to the start of the campaign period, there can be no election campaign or partisan political activity designed to promote the election or defeat of a particular candidate to public office because there is no candidate to speak of. According to the Dissenting Opinion, even if Peneras acts before the start of the campaign period constitute election campaigning or partisan political activities, these are not punishable under Section 80 of the Omnibus Election Code given that she was not yet a candidate at that time. On the other hand, Peneras acts, if committed within the campaign period, when she was already a candidate, are likewise not covered by Section 80 as this provision punishes only acts outside the campaign period. The Dissenting Opinion ultimately concludes that because of Section 15 of Republic Act No. 8436, as amended, the prohibited act of premature campaigning in Section 80 of the Omnibus Election Code, is practically impossible to commit at any time. We disagree. Section 80 of the Omnibus Election Code remains relevant and applicable despite Section 15 of Republic Act No. 8436, as amended. A close reading of the entire Republic Act No. 9369, which amended Republic Act No. 8436, would readily reveal that that it did not contain an express repeal of Section 80 of the Omnibus Election Code. An express repeal is one wherein a statute declares, usually in its repealing clause, that a particular and specific law, identified by its number or title, is repealed.35 Absent this specific requirement, an express repeal may not be presumed.

Although the title of Republic Act No. 9369 particularly mentioned the amendment of Batas Pambansa Blg. 881, or the Omnibus Election Code, to wit: An Act Amending Republic Act No. 8436, Entitled "An Act Authorizing the Commission on Elections to Use an Automated Election System x x x, Amending for the Purpose Batas Pambansa Blg. 881, As Amended x x x. (Emphasis ours.), said title explicitly mentions, not the repeal, but the amendment of Batas Pambansa Blg. 881. Such fact is indeed very material. Repeal of a law means its complete abrogation by the enactment of a subsequent statute, whereas the amendment of a statute means an alteration in the law already existing, leaving some part of the original still standing.36 Section 80 of the Omnibus Election Code is not even one of the specific provisions of the said code that were expressly amended by Republic Act No. 9369. Additionally, Section 46,37 the repealing clause of Republic Act No. 9369, states that: Sec. 46. Repealing Clause. All laws, presidential decrees, executive orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly. Section 46 of Republic Act No. 9369 is a general repealing clause. It is a clause which predicates the intended repeal under the condition that a substantial conflict must be found in existing and prior acts. The failure to add a specific repealing clause indicates that the intent was not to repeal any existing law, unless an irreconcilable inconsistency and repugnancy exist in the terms of the new and old laws. This latter situation falls under the category of an implied repeal.38 Well-settled is the rule in statutory construction that implied repeals are disfavored. In order to effect a repeal by implication, the later statute must be so irreconcilably inconsistent and repugnant with the existing law that they cannot be made to reconcile and stand together. The clearest case possible must be made before the inference of implied repeal may be drawn, for inconsistency is never presumed. There must be a showing of repugnance clear and convincing in character. The language used in the later statute must be such as to render it irreconcilable with what had been formerly enacted. An inconsistency that falls short of that standard does not suffice.39 Courts of justice, when confronted with apparently conflicting statutes, should endeavor to reconcile the same instead of declaring outright the invalidity of one as against the other. Such alacrity should be avoided. The wise policy is for the judge to harmonize them if this is possible, bearing in mind that they are equally the handiwork of the same legislature, and so give effect to both while at the same time also according due respect to a coordinate department of the government.40 To our mind, there is no absolute and irreconcilable incompatibility between Section 15 of Republic Act No. 8436, as amended, and Section 80 of the Omnibus Election Code, which defines the prohibited act of premature campaigning. It is possible to harmonize and reconcile these two provisions and, thus, give effect to both.

The following points are explanatory: First, Section 80 of the Omnibus Election Code, on premature campaigning, explicitly provides that "[i]t shall be unlawful for any person, whether or not a voter or candidate, or for any party, or association of persons, to engage in an election campaign or partisan political activity, except during the campaign period." Very simply, premature campaigning may be committed even by a person who is not a candidate. For this reason, the plain declaration in Lanot that "[w]hat Section 80 of the Omnibus Election Code prohibits is an election campaign or partisan political activity by a candidate outside of the campaign period,"41 is clearly erroneous. Second, Section 79(b) of the Omnibus Election Code defines election campaign or partisan political activity in the following manner: SECTION 79. Definitions. - As used in this Code: xxxx (b) The term "election campaign" or "partisan political activity" refers to an act designed to promote the election or defeat of a particular candidate or candidates to a public office which shall include: (1) Forming organizations, associations, clubs, committees or other groups of persons for the purpose of soliciting votes and/or undertaking any campaign for or against a candidate; (2) Holding political caucuses, conferences, meetings, rallies, parades, or other similar assemblies, for the purpose of soliciting votes and/or undertaking any campaign or propaganda for or against a candidate; (3) Making speeches, announcements or commentaries, or holding interviews for or against the election of any candidate for public office; (4) Publishing or distributing campaign literature or materials designed to support or oppose the election of any candidate; or (5) Directly or indirectly soliciting votes, pledges or support for or against a candidate. True, that pursuant to Section 15 of Republic Act No. 8436, as amended, even after the filing of the COC but before the start of the campaign period, a person is not yet officially considered a candidate. Nevertheless, a person, upon the filing of his/her COC, already explicitly declares his/her intention to run as a candidate in the coming elections. The commission by such a person of any of the acts enumerated under Section 79(b) of the Omnibus Election Code (i.e., holding rallies or parades, making speeches, etc.) can, thus, be logically and reasonably construed as for the purpose of promoting his/her intended candidacy.

When the campaign period starts and said person proceeds with his/her candidacy, his/her intent turning into actuality, we can already consider his/her acts, after the filing of his/her COC and prior to the campaign period, as the promotion of his/her election as a candidate, hence, constituting premature campaigning, for which he/she may be disqualified. Also, conversely, if said person, for any reason, withdraws his/her COC before the campaign period, then there is no point to view his/her acts prior to said period as acts for the promotion of his/her election as a candidate. In the latter case, there can be no premature campaigning as there is no candidate, whose disqualification may be sought, to begin with.42 Third, in connection with the preceding discussion, the line in Section 15 of Republic Act No. 8436, as amended, which provides that "any unlawful act or omission applicable to a candidate shall take effect only upon the start of the campaign period," does not mean that the acts constituting premature campaigning can only be committed, for which the offender may be disqualified, during the campaign period. Contrary to the pronouncement in the dissent, nowhere in the said proviso was it stated that campaigning before the start of the campaign period is lawful, such that the offender may freely carry out the same with impunity. As previously established, a person, after filing his/her COC but prior to his/her becoming a candidate (thus, prior to the start of the campaign period), can already commit the acts described under Section 79(b) of the Omnibus Election Code as election campaign or partisan political activity. However, only after said person officially becomes a candidate, at the beginning of the campaign period, can said acts be given effect as premature campaigning under Section 80 of the Omnibus Election Code. Only after said person officially becomes a candidate, at the start of the campaign period, can his/her disqualification be sought for acts constituting premature campaigning. Obviously, it is only at the start of the campaign period, when the person officially becomes a candidate, that the undue and iniquitous advantages of his/her prior acts, constituting premature campaigning, shall accrue to his/her benefit. Compared to the other candidates who are only about to begin their election campaign, a candidate who had previously engaged in premature campaigning already enjoys an unfair headstart in promoting his/her candidacy. As can be gleaned from the foregoing disquisition, harmony in the provisions of Sections 80 and 79 of the Omnibus Election Code, as well as Section 15 of Republic Act No. 8436, as amended, is not only very possible, but in fact desirable, necessary and consistent with the legislative intent and policy of the law. The laudable and exemplary intention behind the prohibition against premature campaigning, as declared in Chavez v. Commission on Elections,43 is to level the playing field for candidates of public office, to equalize the situation between the popular or rich candidates, on one hand, and lesser-known or poorer candidates, on the other, by preventing the former from enjoying undue advantage in exposure and publicity on account of their resources and popularity. The intention for prohibiting premature campaigning, as explained in Chavez, could not have been significantly altered or affected by Republic Act No. 8436, as amended by Republic Act No. 9369, the avowed purpose of which is to carry-on the automation of the election system. Whether the election would be held under the manual or the automated system, the need for prohibiting premature campaigning to level the playing field between the popular or rich

candidates, on one hand, and the lesser-known or poorer candidates, on the other, by allowing them to campaign only within the same limited period remains. We cannot stress strongly enough that premature campaigning is a pernicious act that is continuously threatening to undermine the conduct of fair and credible elections in our country, no matter how great or small the acts constituting the same are. The choice as to who among the candidates will the voting public bestow the privilege of holding public office should not be swayed by the shrewd conduct, verging on bad faith, of some individuals who are able to spend resources to promote their candidacies in advance of the period slated for campaign activities. Verily, the consequences provided for in Section 6844 of the Omnibus Election Code for the commission of the prohibited act of premature campaigning are severe: the candidate who is declared guilty of committing the offense shall be disqualified from continuing as a candidate, or, if he/she has been elected, from holding office. Not to mention that said candidate also faces criminal prosecution for an election offense under Section 262 of the same Code. The Dissenting Opinion, therefore, should not be too quick to pronounce the ineffectiveness or repeal of Section 80 of the Omnibus Election Code just because of a change in the meaning of candidate by Section 15 of Republic Act No. 8436, as amended, primarily, for administrative purposes. An interpretation should be avoided under which a statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative, or nugatory.45 Indeed, not only will the prohibited act of premature campaigning be officially decriminalized, the value and significance of having a campaign period before the conduct of elections would also be utterly negated. Any unscrupulous individual with the deepest of campaign war chests could then afford to spend his/her resources to promote his/her candidacy well ahead of everyone else. Such is the very evil that the law seeks to prevent. Our lawmakers could not have intended to cause such an absurd situation. The Dissenting Opinion attempts to brush aside our preceding arguments by contending that there is no room for statutory construction in the present case since Section 15 of Republic Act No. 8436,46 as amended by Section 13 of Republic Act No. 9369,47 is crystal clear in its meaning. We disagree. There would only be no need for statutory construction if there is a provision in Republic Act No. 8436 or Republic Act No. 9369 that explicitly states that there shall be no more premature campaigning. But absent the same, our position herein, as well as that of the Dissenting Opinion, necessarily rest on our respective construction of the legal provisions involved in this case. Notably, while faulting us for resorting to statutory construction to resolve the instant case, the Dissenting Opinion itself cites a rule of statutory construction, particularly, that penal laws should be liberally construed in favor of the offender. The Dissenting Opinion asserts that because of the third paragraph in Section 15 of Republic Act No. 8436, as amended, the election offense described in Section 80 of the Omnibus Election Code is practically impossible to commit at any time and that this flaw in the law, which defines a criminal act, must be construed in favor of Penera, the offender in the instant case.

The application of the above rule is uncalled for. It was acknowledged in Lanot that a disqualification case has two aspects: one, electoral;48 the other, criminal.49 The instant case concerns only the electoral aspect of the disqualification case. Any discussion herein on the matter of Peneras criminal liability for premature campaigning would be nothing more than obiter dictum. More importantly, as heretofore already elaborated upon, Section 15 of Republic Act No. 8436, as amended, did not expressly or even impliedly repeal Section 80 of the Omnibus Election Code, and these two provisions, based on legislative intent and policy, can be harmoniously interpreted and given effect. Thus, there is no flaw created in the law, arising from Section 15 of Republic Act No. 8436, as amended, which needed to be construed in Peneras favor. The Dissenting Opinion further expresses the fear that pursuant to our "theory," all the politicians with "infomercials" prior to the filing of their COCs would be subject to disqualification, and this would involve practically all the prospective presidential candidates who are now leading in the surveys. This fear is utterly unfounded. It is the filing by the person of his/her COC through which he/she explicitly declares his/her intention to run as a candidate in the coming elections. It is such declaration which would color the subsequent acts of said person to be election campaigning or partisan political activities as described under Section 79(b) of the Omnibus Election Code. It bears to point out that, at this point, no politician has yet submitted his/her COC. Also, the plain solution to this rather misplaced apprehension is for the politicians themselves to adhere to the letter and intent of the law and keep within the bounds of fair play in the pursuit of their candidacies. This would mean that after filing their COCs, the prudent and proper course for them to take is to wait for the designated start of the campaign period before they commence their election campaign or partisan political activities. Indeed, such is the only way for them to avoid disqualification on the ground of premature campaigning. It is not for us to carve out exceptions to the law, much more to decree away the repeal thereof, in order to accommodate any class of individuals, where no such exception or repeal is warranted. Lastly, as we have observed at the beginning, Peneras Petition is essentially grounded on questions of fact. Peneras defense against her disqualification, before the COMELEC and this Court, rests on the arguments that she and her partymates did not actually hold a motorcade; that their supporters spontaneously accompanied Penera and the other candidates from her political party when they filed their certificates of candidacy; that the alleged motorcade was actually the dispersal of the supporters of Penera and the other candidates from her party as said supporters were dropped off at their respective barangays; and that Andanar was not able to present competent, admissible, and substantial evidence to prove that Penera committed premature campaigning. Penera herself never raised the argument that she can no longer be disqualified for premature campaigning under Section 80, in relation to Section 68, of the Omnibus Election Code, since the said provisions have already been, in the words of the Dissenting Opinion, rendered "inapplicable," "repealed," and "done away with" by Section 15 of Republic Act No. 8436, as amended. This legal argument was wholly raised by the Dissenting Opinion. As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court will not be permitted to change theory on appeal. Points of law,

theories, issues, and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage. Basic considerations of due process underlie this rule.50 If we do not allow and consider the change in theory of a case by a party on appeal, should we not also refrain from motu proprio adopting a theory which none of the parties even raised before us? Nonetheless, the questions of fact raised by Penera and questions of law raised by the Dissenting Opinion must all be resolved against Penera. Penera should be disqualified from holding office as Mayor of Sta. Monica for having committed premature campaigning when, right after she filed her COC, but still a day before the start of the campaign period, she took part in a motorcade, which consisted of two jeepneys and ten motorcycles laden with multi-colored balloons that went around several barangays of Sta. Monica, and gave away candies to the crowd. Succession Despite the disqualification of Penera, we cannot grant Andanars prayer to be allowed to assume the position of Mayor of Sta. Monica. The well-established principle is that the ineligibility of a candidate receiving majority votes does not entitle the candidate receiving the next highest number of votes to be declared elected.51 In this case, the rules on succession under the Local Government Code shall apply, to wit: SECTION 44. Permanent Vacancies in the Offices of the Governor, Vice-Governor, Mayor, and Vice-Mayor. If a permanent vacancy occurs in the office of the xxx mayor, the x x x vicemayor concerned shall become the x x x mayor. xxxx For purposes of this Chapter, a permanent vacancy arises when an elective local official fills a higher vacant office, refuses to assume office, fails to qualify or is removed from office, voluntarily resigns, or is otherwise permanently incapacitated to discharge the functions of his office. (Emphases ours.) Considering Peneras disqualification from holding office as Mayor of Sta. Monica, the proclaimed Vice-Mayor shall then succeed as Mayor. WHEREFORE, premises considered, the instant Petition for Certiorari is hereby DISMISSED. The Resolutions dated 24 July 2007 and 30 January 2008 of the COMELEC Second Division and en banc, respectively, in SPA No. 07-224 are hereby AFFIRMED. In view of the disqualification of petitioner Rosalinda A. Penera from running for the office of Mayor of Sta. Monica, Surigao del Norte, and the resulting permanent vacancy therein, it is hereby DECLARED that the proclaimed Vice-Mayor is the rightful successor to said office. The Temporary Restraining Order issued on 4 March 2008 is hereby ORDERED lifted. Costs against the petitioner.

SO ORDERED.

EN BANC

MILES ANDREW MARI ROCES, Petitioner,

G.R. NO. 167499

Present:

DAVIDE, JR., C.J., PUNO, PANGANIBAN, QUISUMBING, YNARES-SANTIAGO, - versus SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO, and

GARCIA, JJ. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and MARIA ZENAIDA B. ANG PING, Respondents. September 15, 2005 Promulgated:

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION
PUNO, J.: If there is a right, there must be a remedy is an old legal adage. The case at bar provides the perfect setting for the application of this adage which is a demand for simple justice. The facts will show how the respondents right to run for a public office has been frustrated by unscrupulous officials in charge of the sanctity of our electoral process. Petitioner Miles Roces (Roces) and former Congressman Harry Ang Ping (Mr. Ang Ping) filed their respective certificates of candidacy (COCs) for the

position of Representative for the 3rd Congressional District of Manila in the May 2004 elections. On January 5, 2004, a registered voter of Manila named Alejandro Gomez questioned Mr. Ang Pings candidacy before the COMELEC through a petition to deny due course or cancel his COC.[1] The petition alleged that Mr. Ang Ping misrepresented himself to be a natural-born citizen, hence was disqualified for the position. Acting for the COMELEC First Division, Commissioner Virgilio O. Garcilliano issued an order on April 30, 2004 scheduling the promulgation of its resolution on May 5, 2004.[2] Two days before the scheduled promulgation or on May 3, 2004, Mr. Ang Ping filed with the COMELEC a Sworn Declaration of Withdrawal of his COC.[3] The next day, May 4, 2004, the General Counsel for the Nationalist Peoples Coalition, the political party of Mr. Ang Ping, sought that Mr. Ang Pings wife, Ma. Zenaida Ang Ping (Mrs. Ang Ping), substitute for him.[4] Mr. Ang Ping also filed a motion to cancel the scheduled promulgation and dismiss the petition to deny due course or cancel his COC on the same date.[5] On May 5, 2004, Commissioner Resurreccion Z. Borra deferred the promulgation for lack of quorum as he was the sole Commissioner in attendance.[6]

Despite all these developments, the COMELEC First Division, through Commissioners Rufino S.B. Javier, Resurreccion Z. Borra, and Virgilio O. Garcilliano, issued a resolution granting the petition to deny due course to Mr. Ang Pings COC and ordering the Board of Election Inspectors of Manila not to count any vote cast in his favor.[7] It ruled that the resolution which was originally scheduled for promulgation by Commissioner Garcilliano on May 5, 2004 was instead promulgated on April 30, 2004, the same date that the notice of promulgation was issued.[8] The resolution was served on Mr. Ang Pings counsel on May 8, 2004.[9] Compounding the woes of Mr. Ang Ping, and despite the deferment of the promulgation by Commissioner Borra at a hearing on May 5, 2004, the COMELEC First Division issued on the same date an order denying Mr. Ang Pings motion to dismiss. It held that the motion to dismiss was filed after the promulgation of the April 30, 2004 resolution granting the petition to deny due course to Mr. Ang Pings COC.[10] On May 9, 2004, and before the expiration of the five-day reglementary period,[11] Mr. Ang Ping moved for reconsideration of the April 30, 2004 resolution and the case was elevated to the COMELEC en banc.[12]

While the case was still with the COMELEC First Division, or on May 8, 2004, the COMELEC en banc issued Resolution No. 6823, declaring moot Mr. Ang Pings Affidavit of Withdrawal, denying due course to the substitute COC of Mrs. Ang Ping and ordering the Regional Election Director to delete Mr. Ang Pings name from the certified list of candidates.[13] Among the signatories to the Resolution were Commissioners Javier, Borra, and Garcilliano of the COMELEC First Division before which the petition to deny due course was still pending.[14] Mr. Ang Ping had no knowledge of the resolution. Racing against time or on May 11, 2004, the spouses Ang Ping repaired to this Court and filed a petition for certiorari with prayer for temporary restraining order, status quo order and/or writ of preliminary injunction docketed as G.R. No. 163259, assailing COMELEC Resolution No. 6823.[15] The next day or on May 12, 2004, this Court issued a resolution requiring Roces to comment and denied the issuance of an order suspending the proclamation.[16] On the election day itself, the Manila City Board of Canvassers resolved not to canvass the votes for Mr. or Mrs. Ang Ping citing COMELEC Resolution No. 6823.[17] On May 15, 2004, after counting only 6,347 votes out of the 150,387 registered voters in the district, it proclaimed Roces winner.[18] The

spouses Ang Ping appealed the Board resolution to the COMELEC en banc[19] and filed a petition to annul the proclamation[20] but these were dismissed by COMELECs Resolution No. 7257 and Omnibus Order of July 6, 2004.[21] On May 19, 2004, Roces filed his Comment to the petition of spouses Ang Ping with this Court.[22] On May 25, 2004, this Court required the spouses Ang Ping to file their consolidated reply to the Comment.[23] On May 24, 2004, Mrs. Ang Ping filed an Election Protest Ad Cautelam with the House of Representatives Electoral Tribunal (HRET), which was docketed as HRET Case No. 04-004.[24] In her election protest, Mrs. Ang Ping alleged, among others, that COMELEC Resolution No. 6823 was a glaring case of deprivation of Mr. and Mrs. Ang Pings right to elevate SPC 04-224 to the Commission en banc and that the COMELECs April 30, 2004 resolution was irregularly promulgated. Roces filed his answer alleging, among others, that the HRET has no jurisdiction over the case.[25] On July 16, 2004, the spouses Ang Ping filed their consolidated reply with this Court.[26] On July 27, 2004, we required Mrs. Ang Ping to show cause why the petition in G.R. No. 163259 should not be dismissed in view of the filing and pendency of HRET Case No. 04-004.[27] In her Compliance filed on July 30, 2004, Mrs. Ang Ping explained that the issue of whether the COMELEC gravely

abused its discretion in issuing the COMELEC Resolution No. 6823 may be ventilated as one of the issues to be settled in the HRET Election Protest since the non-canvassing of the Ang Ping votes and the proclamation of petitioner Roces were founded on COMELEC Resolution No. 6823 and were raised as the principal issues in the HRET Election Protest. This notwithstanding, the spouses Ang Ping manifested that they will submit to any disposal which this Honorable Court may find appropriate under the above circumstances and would defer and will accept any order/resolution of the Honorable Court that would resolve to dismiss the instant petition/controversy, but allowing them to pursue and concentrate their time and effort in the above-mentioned Ad Cautela HRET Election Protest Case, which they intend to convert to a REGULAR PROTEST case, in such an event.[28] On August 10, 2004, this Court dismissed G.R. No. 163259 in view of the pending HRET protest filed by Mrs. Ang Ping.[29] The resolution eventually became final and executory.[30] Thereafter, Mrs. Ang Ping filed in the HRET a motion to convert the ad cautelam protest to a regular protest. The HRET granted the motion on September 9, 2004.[31] In the HRET, Roces filed a motion to dismiss the protest, assailing in the main the personality of Mrs. Ang Ping to file the protest. It also raised the

following issues: (1) whether the HRET has jurisdiction to review COMELEC Resolution No. 6823; (2) whether Mrs. Ang Ping can validly substitute for Mr. Ang Ping; (3) whether the protest may be resolved by mere canvass of election returns; (4) whether the proceeding is a protest considering that it questions proceedings held before the Manila City Board of Canvassers; (5) whether Mrs. Ang Ping could claim any right to the ballots cast considering she was not listed in the certified list of COMELEC candidates; (6) whether the petition is sufficient in form and substance despite failing to state the specific precincts protested; and (7) whether forum shopping was committed. After extensive oral arguments, the HRET denied Rocess motion to dismiss on March 3, 2005. It ruled that Mrs. Ang Ping was a proper party to file the protest against Roces since: (1) there was no final COMELEC resolution disqualifying or denying due course to the COC of Mr. Ang Ping, thus her substitution for the latter was legally permissible under the Omnibus Election Code;[32] (2) she was one of the candidates voted for during election day in the 3rd District of Manila;[33] and (3) the COMELEC Order of May 5, 2004 was of questionable validity for the reason that: (a) it was issued in violation of its April 30, 2004 resolution setting the promulgation for May 5, 2004 and despite the fact that the records had not yet reached the COMELEC en banc;[34] and (b) there was no prior notice and hearing in violation of Section 78 of the Omnibus Election

Code.[35] Rocess motion for reconsideration of the HRET order was denied on March 21, 2005. Roces then filed the present petition for certiorari assailing the two preceding resolutions of the HRET.[36] The issues for resolution are: (1) whether or not the HRET committed grave abuse of discretion amounting to lack or excess of jurisdiction when it ruled that Mrs. Ang Ping is a proper party to file the election protest despite the denial in due course and cancellation of her COC under COMELEC Resolution No. 6823; and (2) whether or not HRET has jurisdiction to review a resolution or order of the COMELEC and/or declare the same as void and disregard or set it aside. After several months or on April 28, 2005, the COMELEC en banc issued a resolution denying Mr. Ang Pings motion for reconsideration of the COMELECs April 30, 2004 resolution for being moot and academic due to the petitioners proclamation, Mr. Ang Pings withdrawal of his candidacy and Mrs. Ang Pings attempt to substitute for her husband.[37] We hold that the HRET did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it denied the petitioners motion to dismiss for the following reasons:

First. The HRET is the sole judge of all contests relating to the election, returns, and qualifications of the members of the House of Representatives[38] and has the power to promulgate procedural rules to govern proceedings brought before it.[39] This exclusive jurisdiction includes the power to determine whether it has the authority to hear and determine the controversy presented, and the right to decide whether that state of facts exists which confers jurisdiction, as well as all other matters which arise in the case legitimately before it.[40] Accordingly, it has the power to hear and determine, or inquire into, the question of its own jurisdiction, both as to parties and as to subject matter, and to decide all questions, whether of law or fact, the decision of which is necessary to determine the question of jurisdiction.[41] One of the three essential elements of jurisdiction is that proper parties must be present.[42] Consequently, the HRET merely exercised its exclusive jurisdiction when it ruled that Mrs. Ang Ping was a proper party to contest the election of Roces. Second. There is no dispute that to support his motion to dismiss, Roces

offered as evidence the COMELEC resolutions denying due course to Mrs. Ang Pings COC. In doing so, Roces submitted to the HRET the admissibility and validity of these resolutions and the HRET cannot be faulted in reviewing the said resolutions especially for the purpose of determining whether Roces was able to discharge his burden of proving that Mrs. Ang Ping is not the proper party to assail

his election. In passing upon the COMELEC resolutions especially for that purpose, it cannot be said that the HRET usurped the jurisdiction of the COMELEC. On the merits of the HRET ruling, we hold that the HRET did not abuse its discretion in holding that Mrs. Ang Ping is a proper party to contest the election of Roces. Under COMELEC rules, the procedure of promulgation of a decision or resolution is as follows: SECTION 5. Promulgation. The promulgation of a decision or resolution of the Commission or a Division shall be made on a date previously fixed, of which notice shall be served in advance upon the parties or their attorneys personally or by registered mail or by telegram.[43]

Promulgation is important because it determines when the reglementary period begins to toll. In the case at bar, Commissioner Garcilliano fixed the promulgation of its resolution whether to give due course to the candidacy of Mr. Ang Ping on May 5, 2004. For mysterious reasons, the COMELEC First Division of Commissioner Garcillano did not promulgate the resolution on May 5, 2004 in accordance with its notice of promulgation. In violation of the abovecited rule, and despite the

deferment of the promulgation by Commissioner Borra to a date to be set by the COMELEC First Division, the resolution was deemed promulgated by the COMELEC on April 30, 2004 when it was filed with the clerk of court. The April 30, 2004 COMELEC resolution was received by Mr. Ang Pings counsel only on May 8, 2004.[44] The mysterious April 30, 2004 resolution was thereafter used to run roughshod over the rights of the Ang Pings. Thus, on May 5, 2004, the COMELEC First Division of Commissioner Garcilliano denied Mr. Ang Pings motion to dismiss. Allegedly, Mr. Ang Pings motion was filed after the April 30, 2004 resolution. To make matters worse, the COMELEC en banc usurped the jurisdiction of the COMELEC First Division when it issued Resolution No. 6823 on May 8, 2004 which ordered the deletion of Mr. Ang Pings name from the Certified List of Candidates and denied the spouses Ang Pings motions to withdraw and substitute despite the fact that: (1) the reglementary period of Mr. Ang Ping to appeal had not yet expired; and (2) Mr. Ang Ping had filed a motion for reconsideration of the preceding order on May 10, 2004 within the five-day reglementary period. Nowhere is it provided in the law that the COMELEC en banc has the power to assume jurisdiction motu proprio over a petition to deny due course pending

before a division of the Commission. Diametrically opposed thereto are the provisions of the Constitution and COMELEC Rules of Procedure which provide that motions for reconsideration of the COMELEC divisions decisions, resolutions, orders or rulings must first be filed in the Divisions before the Commission en banc may take cognizance thereof, viz.: SECTION 3. The Commission on Elections may sit en banc or in two divisions, and shall promulgate its rules of procedure in order to expedite disposition of election cases, including preproclamation controversies. All such election cases shall be heard and decided in division, provided that motions for reconsideration of decisions shall be decided by the Commission en banc.[45] SECTION 3. The Commission Sitting in Divisions. The Commission shall sit in two (2) Divisions to hear and decide protests or petitions in ordinary actions, special actions, special cases, provisional remedies, contempt and special proceedings except in accreditation of citizens' arms of the Commission.[46] SECTION 5. How Motion for Reconsideration Disposed Of. Upon the filing of a motion to reconsider a decision, resolution, order or ruling of a Division, the Clerk of Court concerned shall, within twenty-four (24) hours from the filing thereof, notify the Presiding Commissioner. The latter shall within two (2) days thereafter certify the case to the Commission en banc. SECTION 6. Duty of Clerk of Court of Commission to Calendar Motion for Resolution. The Clerk of Court concerned shall calendar the motion for reconsideration for the resolution of the Commission en banc within ten (10) days from the certification thereof. (Emphases supplied)[47]

This premature COMELEC Resolution No. 6823 was then used on May 12, 2004, or on the election day itself, by the Manila City Board of Canvassers as the basis of its resolution not to canvass the votes for Mr. or Mrs. Ang Ping. It then proclaimed Roces the winner despite having counted only 6,347 votes out of the 150,387 registered voters of the district.[48] Following these highly suspect resolutions, Roces was proclaimed winner on May 15, 2004. All told, it cannot be denied that the effect of COMELEC en banc Resolution No. 6823 was to execute the April 30, 2004 resolution of its First Division which, at that time, had not yet become final and executory. These irregularities cannot be swept away by the belated COMELEC en bancs April 28, 2005 resolution denying Mr. Ang Pings motion for reconsideration dated May 10, 2004.[49] It is argued that Mrs. Ang Pings motions for reconsideration and appeals cured whatever defects occurred at the COMELEC. Citing T.H. Valderama & Sons, Inc. v. Drilon,[50] Roces points to the petition for certiorari filed with this Court on May 11, 2004 by Mrs. Ang Ping assailing COMELEC Resolution No. 6823 and her acquiescence to any appropriate action taken (by the Court) including the dismissal of the above petition. Contrary to Rocess posture, Valderama and its kin required that the aggrieved party be given an opportunity to be heard. In the case at bar, it ought to be emphasized that the private respondent was systematically denied the opportunity to be heard. The

resolution of the COMELECs First Division was made before its priorily set date of promulgation, deemed final and executory by the COMELEC en banc in Resolution No. 6823 before expiry of the reglementary period, and executed by the Manila City Board of Canvassers. The petition for certiorari filed by Mrs. Ang Ping challenged these resolutions and could not have cured these blatant violations of her right to due process. In truth, this Court referred the case of Mrs. Ang Ping to the HRET where she has filed a protest ad cautelam. There is no iota of doubt that the COMELECs resolutions are void ab initio for violating Mrs. Ang Pings constitutional right to due process. Judgments entered in a proceeding failing to comply with procedural due process are void, as is one entered by a court acting in a manner inconsistent with due process.[51] A void judgment is defined as one that, from its inception, is a complete nullity and without legal effect. A void judgment is not entitled to the respect accorded to, and is attended by none of the consequences of, a valid adjudication. Indeed, a void judgment need not be recognized by anyone, but may be entirely disregarded or declared inoperative by any tribunal in which effect is sought to be given to it. It has no legal or binding force or efficacy for any purpose or at any place. It cannot affect, impair, or create rights, nor can any rights be based on it. All proceedings founded on the void judgment are themselves regarded as invalid and ineffective for any purpose.[52] Needless to stress, the HRET did not

commit grave abuse of discretion in assuming jurisdiction over the election protest as the COMELEC Resolution dated April 30, 2004, Order of May 5, 2004, and Resolution No. 6823 were void ab initio. Third. Petitioner contends that the HRET cannot review decisions of the COMELEC and that COMELEC decisions, orders, or rulings may be solely reviewed by the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof.[53] It is true that generally, the method of assailing a judgment or order of the COMELEC is via petition for certiorari.[54] As aforestated, however, it was petitioner who submitted these resolutions to the HRET as proofs that Mrs. Ang Ping was not a proper party. These same resolutions were collaterally attacked by Mrs. Ang Ping before the HRET when she alleged that these violated her right to due process.[55] A void judgment or resolution may be impeached through collateral attack.[56] A direct attack on a judgment or resolution is defined as an attempt to avoid or correct it in some manner provided by law, in a proceeding instituted for that very purpose, in the same action and in the same tribunal. Conversely, a collateral attack is an attempt to impeach the judgment or resolution by matters dehors the record, before a tribunal other than the one in which it was rendered, in an action other than that in which it was rendered; an attempt to avoid, defeat, or evade it, or deny its force and effect, in some incidental proceeding not provided by law

for the express purpose of attacking it; any proceeding which is not instituted for the express purpose of annulling, correcting, or modifying such decree; an objection, incidentally raised in the course of the proceeding, which presents an issue collateral to the issues made by the pleadings.[57] The rule that a void judgment or decree is subject to collateral attack at any time is based upon a court's inherent authority to expunge void acts from its records.[58] The void resolutions of the COMELEC, especially the April 30, 2004 resolution issued by its First Division, cannot oust the HRET of its jurisdiction over the case at bar. Fourth. We hasten to add that judgments, orders and resolutions should only be declared void in the most exceptional circumstances due to detrimental effects on the doctrine of finality of judgments. The circumstances of this case, however, are unique in that the private respondent was denied due process and was forced to seek justice in the HRET. In fact, it was this Court that referred the private respondent to the HRET when it dismissed the latters petition in G.R. No. 163259 on the ground of the pendency of HRET Case No. 04-004. To grant the petition now would effectively foreclose the private respondents access to any remedy despite violation of her right to due process. IN VIEW WHEREOF, the petition is dismissed. restraining order previously issued by the Court is lifted. The temporary

SO ORDERED. EN BANC

BARANGAY ASSOCIATION FOR NATIONAL ADVANCEMENT AND TRANSPARENCY (BANAT) PARTYLIST, represented by SALVADOR B. BRITANICO, Petitioner,

G.R. NO. 177508

PRESENT:

PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, CARPIO, CORONA,

- versus -

CARPIO-MORALES, CHICO-NAZARIO, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, AND

COMMISSION ON ELECTIONS, RESPONDENT.

BERSAMIN, JJ.

PROMULGATED: AUGUST 7, 2009 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X

DECISION

CARPIO, J.:

THE CASE BEFORE THE COURT IS A PETITION FOR PROHIBITION167[1] WITH A PRAYER FOR THE ISSUANCE OF A TEMPORARY RESTRAINING ORDER OR A WRIT OF PRELIMINARY INJUNCTION168[2] FILED BY PETITIONER ADVANCEMENT BARANGAY AND ASSOCIATION FOR NATIONAL PARTY LIST TRANSPARENCY (BANAT)

(PETITIONER) ASSAILING THE CONSTITUTIONALITY OF REPUBLIC

ACT

NO.

9369

(RA

9369)169[3]

AND

ENJOINING

RESPONDENT

COMMISSION ON ELECTIONS (COMELEC) FROM IMPLEMENTING THE STATUTE.

RA 9369 is a consolidation of Senate Bill No. 2231 and House Bill No. 5352 passed by the Senate on 7 December 2006 and the House of Representatives on 19 December 2006. On 23 January 2007, less than four months before the 14 May 2007 local elections, the President signed RA 9369. Two newspapers of general circulation, Malaya and Business Mirror, published RA 9369 on 26 January 2007. RA 9369 thus took effect on 10 February 2007.

On 7 May 2007, petitioner, a duly accredited multi-sectoral organization, filed this petition for prohibition alleging that RA 9369 violated Section 26(1), Article VI of the Constitution.170[4] Petitioner also assails the constitutionality of Sections 34, 37, 38, and 43 of RA 9369. According to petitioner, these provisions are of questionable application and doubtful validity for failing to comply with the provisions of the Constitution.

The COMELEC and the Office of the Solicitor General (OSG) filed their respective Comments. At the outset, both maintain that RA 9369 enjoys the presumption of constitutionality, save for the prayer of the COMELEC to declare Section 43 as unconstitutional.

The Assailed Provisions of RA 9369

Petitioner assails the following provisions of RA 9369:

1. Section 34 which provides:

SEC. 34. Sec. 26 of Republic Act No. 7166 is hereby amended to read as follows:
SEC. 26. Official Watchers. - Every registered political party or coalition of political parties, and every candidate shall each be entitled to one watcher in every polling place and canvassing center: Provided That, candidates for the Sangguniang Panlalawigan, Sangguniang Panlunsod, or Sangguniang Bayan belonging to the same slate or ticket shall collectively be entitled to only one watcher. The dominant majority party and dominant minority party, which the Commission shall determine in accordance with law, shall each be entitled to one official watcher who shall be paid a fixed per diem of four hundred pesos (400.00). There shall also recognized six principal watchers, representing the six accredited major political parties excluding the dominant majority and minority parties, who shall be designated by the Commission upon nomination of the said parties. These political parties shall be determined by the Commission upon notice and hearing on the basis of the following circumstances: (a) The established record of the said parties, coalition of groups that now composed them, taking into account, among other things, their showing in past election; (b) The number of incumbent elective officials belonging to them ninety (90) days before the date of election; c) Their identifiable political organizations and strengths as evidenced by their organized/chapters;

(d) The ability to fill a complete slate of candidates from the municipal level to the position of President; and (e) Other analogous circumstances that may determine their relative organizations and strengths.

2. Section 37 which provides:

amended

SEC. 37. Section 30 of Republic Act No. 7166 is hereby to read as follows:

SEC. 30. Congress as the National Board of Canvassers for the Election of President and Vice President: The Commission en banc as the National Board of Canvassers for the election of senators: Determination of Authenticity and Due Execution of Certificates of Canvass. Congress and the Commission en banc shall determine the authenticity and due execution of the certificate of canvass for president and vice president and senators, respectively, as accomplished and transmitted to it by the local boards of canvassers, on a showing that: (1) each certificate of canvass was executed, signed and thumbmarked by the chairman and members of the board of canvassers and transmitted or caused to be transmitted to Congress by them; (2) each certificate of canvass contains the names of all of the candidates for president and vice president or senator, as the case may be, and their corresponding votes in words and their corresponding votes in words and in figures; (3) there exits no discrepancy in other authentic copies of the certificates

of canvass or any of its supporting documents such as statement of votes by city/municipality/by precinct or discrepancy in the votes of any candidate in words and figures in the certificate; and (4) there exist no discrepancy in the votes of any candidate in words and figures in the certificates of canvass against the aggregate number of votes appearing in the election returns of precincts covered by the certificate of canvass: Provided, That certified print copies of election returns or certificates of canvass may be used for the purpose of verifying the existence of the discrepancy.

WHEN THE CERTIFICATE OF CANVASS, DULY CERTIFIED BY THE BOARD OF CANVASSERS OF EACH PROVINCE, CITY OF DISTRICT, APPEARS TO BE INCOMPLETE, THE SENATE PRESIDENT OR THE CHAIRMAN OF THE COMMISSION, AS THE CASE MAY BE, SHALL REQUIRE THE BOARD OF CANVASSERS CONCERNED TO TRANSMIT BY PERSONAL DELIVERY, THE ELECTION RETURNS FORM POLLING PLACES THAT WERE NOT INCLUDED IN THE CERTIFICATE OF CANVASS AND SUPPORTING STATEMENTS. SAID ELECTION RETURNS SHALL BE SUBMITTED BY PERSONAL DELIVERY WITHIN TWO (2) DAYS FROM RECEIPT OF NOTICE.

WHEN IT APPEARS THAT ANY CERTIFICATE OF CANVASS OR SUPPORTING STATEMENT OF VOTES BY CITY/MUNICIPALITY OR BY PRECINCT BEARS ERASURES OR ALTERATION WHICH MAY CAST DOUBT AS TO THE VERACITY OF THE NUMBER OF VOTES STATED HEREIN AND MAY AFFECT THE RESULT OF THE ELECTION, UPON REQUESTED OF THE PRESIDENTIAL, VICE PRESIDENTIAL OR SENATORIAL CANDIDATE CONCERNED OR HIS PARTY, CONGRESS OR THE COMMISSION EN BANC, AS THE CASE MAY BE SHALL, FOR THE SOLE PURPOSE OF VERIFYING THE ACTUAL NUMBER OF VOTES CAST FOR PRESIDENT, VICE PRESIDENT OR SENATOR, COUNT THE VOTES AS THEY APPEAR IN THE COPIES OF THE ELECTION RETURNS SUBMITTED TO IT.

IN CASE OF ANY DISCREPANCY, INCOMPLETENESS, ERASURE OR ALTERATION AS MENTIONED ABOVE, THE PROCEDURE ON PREPROCLAMATION CONTROVERSIES SHALL BE ADOPTED AND APPLIED AS PROVIDED IN SECTION 17,18,19 AND 20.

ANY PERSON WHO PRESENT IN EVIDENCE A SIMULATED COPY OF AN ELECTION RETURN, CERTIFICATE OF CANVASS OR STATEMENT OF VOTES, OR A PRINTED COPY OF AN ELECTION RETURN, CERTIFICATE OF CANVASS OR STATEMENT OF VOTES BEARING A SIMULATED CERTIFICATION OR A SIMULATED IMAGE, SHALL BE GUILTY OF AN ELECTION OFFENSE SHALL BE PENALIZED IN ACCORDANCE WITH BATAS PAMBANSA BLG. 881.

3. SECTION 38 WHICH PROVIDES:

SEC. 38. SECTION 15 OF REPUBLIC ACT NO. 7166 IS HEREBY AMENDED TO READ AS FOLLOWS:

SEC. 15. PRE-PROCLAMATION CASES IN ELECTIONS FOR PRESIDENT, VICE PRESIDENT, SENATOR, AND MEMBER OF THE HOUSE OF REPRESENTATIVES. - FOR PURPOSES OF THE ELECTIONS FOR PRESIDENT, VICE PRESIDENT, SENATOR, AND MEMBER OF THE HOUSE OF REPRESENTATIVES, NO PRE-PROCLAMATION CASES SHALL BE ALLOWED ON MATTERS RELATING TO THE PREPARATION, TRANSMISSION, RECEIPT, CUSTODY AND APPRECIATION OF ELECTION RETURNS OR THE CERTIFICATES OF CANVASS, AS THE CASE MAY BE, EXCEPT AS PROVIDED FOR IN SECTION 30 HEREOF. HOWEVER, THIS DOES NOT PRECLUDE THE AUTHORITY OF THE APPROPRIATE CANVASSING BODY MOTU PROPRIO OR UPON WRITTEN COMPLAINT OF AN INTERESTED PERSON

TO CORRECT MANIFEST ERRORS IN THE CERTIFICATE OF CANVASS OR ELECTION RETURNS BEFORE IT. QUESTIONS AFFECTING THE COMPOSITION OR PROCEEDINGS OF THE BOARD OF CANVASSERS MAY BE INITIATED IN THE BOARD OR DIRECTLY WITH THE COMMISSION IN ACCORDANCE WITH SECTION 19 HEREOF.
ANY OBJECTION ON THE ELECTION RETURNS BEFORE THE CITY OR MUNICIPAL BOARD OF CANVASSERS, OR ON THE MUNICIPAL CERTIFICATES OF CANVASS BEFORE THE PROVINCIAL BOARD OF CANVASSERS OR DISTRICT BOARD OF CANVASSERS IN METRO MANILA AREA, SHALL BE SPECIFICALLY NOTICED IN THE MINUTES OF THE RESPECTIVE PROCEEDINGS.

4. SECTION 43 WHICH PROVIDES:

SEC. 43. SECTION 265 OF BATAS PAMBANSA BLG. 881 IS HEREBY AMENDED TO READ AS FOLLOWS:

SEC. 265. PROSECUTION. THE COMMISSION SHALL, THROUGH ITS DULY AUTHORIZED LEGAL OFFICERS, HAVE THE POWER, CONCURRENT WITH THE OTHER PROSECUTING ARMS OF THE

GOVERNMENT, TO CONDUCT PRELIMINARY INVESTIGATION OF ALL ELECTION OFFENSES PUNISHABLE UNDER THIS CODE, AND TO PROSECUTE THE SAME.

THE ISSUES

PETITIONER RAISES THE FOLLOWING ISSUES:

1. WHETHER RA 9369 VIOLATES SECTION 26(1), ARTICLE VI OF THE CONSTITUTION; WHETHER SECTIONS 37 AND 38 VIOLATE SECTION 17, ARTICLE VI171[5] AND PARAGRAPH 7, SECTION 4, ARTICLE VII172[6] OF THE CONSTITUTION; Whether Section 43 violates Section 2(6), Article IX-C of the Constitution;173[7] and WHETHER SECTION 34 VIOLATES SECTION 10, ARTICLE III OF THE CONSTITUTION.174[8]

THE COURTS RULING

THE PETITION HAS NO MERIT.

IS SETTLED THAT EVERY STATUTE IS PRESUMED TO BE CONSTITUTIONAL.175[9]The presumption is that the legislature Those who .sensible and just law ,intended to enact a valid petition the Court to declare a law unconstitutional must show ,ch of the Constitutionthat there is a clear and unequivocal brea ;speculative or argumentative one ,not merely a doubtful .the petition must fail ,otherwise176[10] In this case, petitioner failed to justify why RA 9369 and the assailed provisions should be declared unconstitutional.

RA 9369 does not violate Section 26(1), Article VI of the Constitution Petitioner alleges that the title of RA 9369 is misleading because it speaks of poll automation but contains substantial provisions dealing with the manual canvassing of election returns. Petitioner also alleges that Sections 34, 37, 38, and 43 are neither embraced in the title nor germane to the subject matter of RA 9369.

Both the COMELEC and the OSG maintain that the title of RA 9369 is broad enough to encompass topics which deal not only with the automation process but with everything related to its purpose encouraging a transparent, credible, fair, and accurate elections.

The constitutional requirement that every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof has always been given a practical rather than a technical construction.177[11] The requirement is satisfied if the title is comprehensive enough to include subjects related to the general purpose which the statute seeks to achieve.178[12] The title of a law does not have to be an index of its contents and will suffice if the matters embodied in the text are relevant to each other and may be inferred from the title.179[13] Moreover, a title which declares a statute to be an act to amend a specified code is sufficient and the precise nature of the amendatory act need not be further stated.180[14]

RA 9369 is an amendatory act entitled An Act Amending Republic Act No. 8436, Entitled An Act Authorizing the Commission on Elections to Use an Automated Election System in the May 11, 1998 National or Local Elections and in Subsequent National and Local Electoral Exercises, to Encourage Transparency, Credibility, Fairness and Accuracy of Elections, Amending for the Purpose Batas Pambansa Blg. 881, as Amended, Republic Act No. 7166 and Other Related Election Laws, Providing Funds Therefor and For Other Purposes. Clearly, the subject matter of RA 9369 covers the amendments to RA 8436, Batas Pambansa Blg. 881 (BP 881),181[15] Republic Act No. 7166 (RA 7166),182[16] and other

related election laws to achieve its purpose of promoting transparency, credibility, fairness, and accuracy in the elections. The provisions of RA 9369 assailed by petitioner deal with amendments to specific provisions of RA 7166 and BP 881, specifically: (1) Sections 34, 37 and 38 amend Sections 26, 30 and 15 of RA 7166, respectively; and (2) Section 43 of RA 9369 amends Section 265 of BP 881. Therefore, the assailed provisions are germane to the subject matter of which is to amend RA 7166 and BP 881, among others. RA 9369

Sections 37 and 38 do not violate Section 17, Article VI and Paragraph 7, Section 4, Article VII of the Constitution

PETITIONER ARGUES THAT SECTIONS 37 AND 38 VIOLATE THE CONSTITUTION BY IMPAIRING THE POWERS OF THE PRESIDENTIAL ELECTORAL TRIBUNAL (PET) AND TO THE SENATE ELECTORAL UNDER AND THE VICE TRIBUNAL (SET). CANVASSERS FOR ACCORDING THE PETITIONER, OF PRESIDENT

AMENDED PROVISIONS, CONGRESS AS THE NATIONAL BOARD OF ELECTION PRESIDENT (CONGRESS), AND THE COMELEC ELECTION OF SENATORS MAY NOW EN BANC AS THE ENTERTAIN PRE-

NATIONAL BOARD OF CANVASSERS (COMELEC EN BANC), FOR THE PROCLAMATION CASES IN THE ELECTION OF THE PRESIDENT, VICE PRESIDENT, AND SENATORS. COMELEC PETITIONER CONCLUDES THAT IN THE INDEPENDENCE AND ENTERTAINING PRE-PROCLAMATION CASES, CONGRESS AND THE EN BANC UNDERMINE ENCROACH UPON THE JURISDICTION OF THE PET AND THE SET.

The COMELEC maintains that the amendments introduced by Section 37 pertain only to the adoption and application of the procedures on pre-proclamation controversies in case of any discrepancy, incompleteness, erasure or alteration in the certificates of canvass. The COMELEC adds that Section 37 does not provide that Congress and the COMELEC en banc may now entertain pre-proclamation cases for national elective posts.

OSG argues that the Constitution does not prohibit pre-proclamation cases involving national elective posts. According to the OSG,
7166of RA 15only Section 183[17]proclamation -expressly disallows pre

cases involving national elective posts but this provision was .9369of RA 38subsequently amended by Section In Pimentel III v. COMELEC,184[18] we already discussed the implications of the amendments introduced by Sections 37 and 38 to Sections 15 and 30185[19] of RA 7166, respectively and we declared:

Indeed, this Court recognizes that by virtue of the amendments introduced by Republic Act No. 9369 to Sections 15 and 30 of Republic Act No. 7166, preproclamation cases involving the authenticity and due execution of certificates of canvass are now allowed in elections for President, Vice-President, and Senators. The intention of Congress to treat a case falling under Section 30 of Republic Act No. 7166, as amended by Republic Act No. 9369, as a pre-proclamation case is apparent in the fourth paragraph of the said provision which adopts and applies to such a case the same procedure provided under Sections 17, 18, 19 and 20 of Republic Act No. 7166 on pre-proclamation controversies.

In sum, in [the] elections for President, Vice-President, Senators and Members of the House of Representatives, the general rule is still that preproclamation cases on matters relating to the preparation, transmission, receipt, custody and appreciation of election returns or certificates of canvass are still prohibited. As with other general rules, there are recognized exceptions to the prohibition, namely: (1) correction of manifest errors; (2) questions affecting the composition or proceeding of the board of canvassers; and (3) determination of the authenticity and due execution of certificates of canvass as provided in Section 30 of Republic Act No. 7166, as amended by Republic Act No. 9369.186[20]

In the present case, Congress and the COMELEC en banc do not encroach upon the jurisdiction of the PET and the SET. There is no conflict of jurisdiction since the powers of Congress and the COMELEC en banc, on one hand, and the PET and the SET, on the other, are exercised on different

occasions and for different purposes. The PET is the sole judge of all contests relating to the election, returns and qualifications of the President or Vice President. The SET is the sole judge of all contests relating to the election, returns, and qualifications of members of the Senate. The jurisdiction of the PET and the SET can only be invoked once the winning presidential, vice presidential or senatorial candidates have been proclaimed. On the other hand, under Section 37, Congress and the COMELEC en banc shall determine only the authenticity and due execution of the certificates of canvass. Congress and the COMELEC en banc shall exercise this power before the proclamation of the winning presidential, vice presidential, and senatorial candidates.

Section 43 does not violate Section 2(6), Article IX-C of the Constitution Both petitioner and the COMELEC argue that the Constitution vests in the COMELEC the exclusive power to investigate and prosecute cases of violations of election laws. Petitioner and the COMELEC allege that Section 43 is unconstitutional because it gives the other prosecuting arms of the government concurrent power with the COMELEC to investigate and prosecute election offenses.187[21]

We do not agree with petitioner and the COMELEC that the Constitution gave the COMELEC the exclusive power to investigate and prosecute cases of violations of election laws.

Section 2(6), Article IX-C of the Constitution vests in the COMELEC the power to investigate and, where appropriate, prosecute cases of violations of election laws, including acts or omissions constituting election frauds, offenses, and malpractices. This was an important innovation introduced by the Constitution because this provision was not in the 1935188[22] or 1973189[23] Constitutions.190[24] The phrase [w]here appropriate leaves to the legislature the power to determine the kind of election offenses that the COMELEC shall

prosecute exclusively or concurrently with other prosecuting arms of the government.

The grant of the exclusive power to the COMELEC can be found in Section 265 of BP 881, which provides:
Sec. 265. Prosecution. - The Commission shall, through its duly authorized legal officers, have the exclusive power to conduct preliminary investigation of all election offenses punishable under this Code, and to prosecute the same. The Commission may avail of the assistance of other prosecuting arms of the government: Provided, however, That in the event that the Commission fails to act on any complaint within four months from his filing, the complainant may file the complaint with the office of the fiscal or with the Ministry of Justice for proper investigation and prosecution, if warranted. (Emphasis supplied)

This was also an innovation introduced by BP 881. The history of election laws shows that prior to BP 881, no such exclusive power was ever bestowed on the COMELEC.191[25]

We also note that while Section 265 of BP 881 vests in the COMELEC the exclusive power to conduct preliminary investigations and prosecute election offenses, it likewise authorizes the COMELEC to avail itself of the assistance of other prosecuting arms of the government. In the 1993 COMELEC Rules of Procedure, the authority of the COMELEC was subsequently qualified and explained.192[26] The 1993 COMELEC Rules of Procedure provides:

Rule 34 - Prosecution of Election Offenses

Sec. 1. Authority of the Commission to Prosecute Election Offenses. - The Commission shall have the exclusive power to conduct preliminary investigation of all election offenses punishable under the election laws and to prosecute the same, except as may otherwise be provided by law. (Emphasis supplied)

It is clear that the grant of the exclusive power to investigate and prosecute election offenses to the COMELEC was not by virtue of the Constitution but by BP 881, a legislative enactment. If the intention of the framers of the Constitution were to give the COMELEC the exclusive power to investigate and prosecute election offenses, the framers would have expressly so stated in the Constitution. They did not.

In People v. Basilla,193[27] we acknowledged that without the assistance of provincial and city fiscals and their assistants and staff members, and of the state prosecutors of the Department of Justice, the prompt and fair investigation and prosecution of election offenses committed before or in the course of nationwide elections would simply not be possible.194[28] In COMELEC v. Espaol,195[29] we also stated that enfeebled by lack of funds and the magnitude of its workload, the COMELEC did not have a sufficient number of legal officers to conduct such

investigation and to prosecute such cases.196[30] The prompt investigation, prosecution, and disposition of election offenses constitute an indispensable part of the task of securing free, orderly, honest, peaceful, and credible elections.197[31] Thus, given the plenary power of the legislature to amend or repeal laws, if Congress passes a law amending Section 265 of BP 881, such law does not violate the Constitution. Section 34 does not violate Section 10, Article III of the Constitution assails the constitutionality of the provision which fixes the per diem of poll watchers of the dominant majority and dominant minority parties at on election P
Petitioner argues that this violates the freedom of the parties to contract and their .day .equitable and just ,tions of the contract they see as fairright to x the terms and condi Petitioner adds that this is a purely private contract using private funds which cannot be .regulated by law

The OSG argues that petitioner erroneously invoked the non-impairment clause because this only applies to previously perfected contracts. In this case, there is no perfected contact and, therefore, no obligation will be impaired.

Both the COMELEC and the OSG argue that the law is a proper exercise of police power and it will prevail over a contract. According to the COMELEC, poll watching is not just an ordinary contract but is an agreement with the solemn duty to ensure the sanctity of votes. The role of poll watchers is vested with public interest which can be regulated by Congress in the exercise of its police power. The OSG further argues that the assurance that the poll watchers will receive fair and equitable compensation promotes the general welfare. The OSG also states that this was a reasonable regulation considering that the dominant majority and

minority parties will secure a copy of the election returns and are given the right to assign poll watchers inside the polling precincts.

There is no violation of the non-impairment clause.

First, the non-

impairment clause is limited in application to laws that derogate from prior acts or contracts by enlarging, abridging or in any manner changing the intention of the parties.198[32] There is impairment if a subsequent law changes the terms of a contract between the parties, imposes new conditions, dispenses with those agreed upon or withdraws remedies for the enforcement of the rights of the parties.199[33]

As observed by the OSG, there is no existing contract yet and, therefore, no enforceable right or demandable obligation will be impaired. RA 9369 was enacted more than three months prior to the 14 May 2007 elections. Hence, when the dominant majority and minority parties hired their respective poll watchers for the 14 May 2007 elections, they were deemed to have incorporated in their contracts all the provisions of RA 9369. Second, it is settled that police power is superior to the non-impairment clause.200[34] The constitutional guaranty of non-impairment of contracts is limited by the exercise of the police power of the State, in the interest of public health, safety, morals, and general welfare of the community. Section 8 of COMELEC Resolution No. 1405201[35] specifies the rights and duties of poll watchers:

THE WATCHERS SHALL HAVE THE RIGHT TO STAY IN THE SPACE RESERVED FOR THEM INSIDE THE POLLING PLACE. THEY SHALL HAVE THE RIGHT TO WITNESS AND INFORM THEMSELVES OF THE PROCEEDINGS OF THE BOARD; TO TAKE NOTES OF WHAT THEY MAY SEE OR HEAR, TO TAKE PHOTOGRAPHS OF THE PROCEEDINGS AND INCIDENTS, IF ANY, DURING THE COUNTING OF VOTES, AS WELL AS THE ELECTION RETURNS, TALLY BOARD AND BALLOT BOXES; TO FILE A PROTEST AGAINST ANY IRREGULARITY OR VIOLATION OF LAW WHICH THEY BELIEVE MAY HAVE BEEN COMMITTED BY THE BOARD OR BY ANY OF ITS MEMBERS OR BY ANY PERSON; TO OBTAIN FROM THE BOARD A CERTIFICATE AS TO THE FILING OF SUCH PROTEST AND/OR OF THE RESOLUTION THEREON; TO READ THE BALLOTS AFTER THEY SHALL HAVE BEEN READ BY THE CHAIRMAN, AS WELL AS THE ELECTION RETURNS AFTER THEY SHALL HAVE BEEN COMPLETED AND SIGNED BY THE MEMBERS OF THE BOARD WITHOUT TOUCHING THEM, BUT THEY SHALL NOT SPEAK TO ANY MEMBER OF THE BOARD, OR TO ANY VOTER, OR AMONG THEMSELVES, IN SUCH A MANNER AS WOULD DISTURB THE PROCEEDINGS OF THE BOARD; AND TO BE FURNISHED, UPON REQUEST, WITH A CERTIFICATE OF VOTES FOR THE CANDIDATES, DULY SIGNED AND THUMBMARKED BY THE CHAIRMAN AND ALL THE MEMBERS OF THE BOARD OF ELECTION INSPECTORS.

Additionally, the poll watchers of the dominant majority and minority parties in a precinct shall, if available, affix their signatures and thumbmarks on the election returns for that precinct.202[36] The dominant majority and minority parties shall also be given a copy of the certificates of canvass203[37] and election returns204[38] through their respective poll watchers. Clearly, poll watchers play an important role in the elections.

MOREOVER, WHILE THE CONTRACTING PARTIES MAY ESTABLISH SUCH STIPULATIONS, CLAUSES, TERMS, AND CONDITIONS AS THEY MAY DEEM CONVENIENT, SUCH STIPULATIONS SHOULD NOT BE CONTRARY TO LAW, MORALS, GOOD CUSTOMS, PUBLIC ORDER, OR PUBLIC POLICY.205[39]

IN BELTRAN V. SECRETARY OF HEALTH,206[40] WE SAID:

FURTHERMORE, THE FREEDOM TO CONTRACT IS NOT ABSOLUTE; ALL CONTRACTS AND ALL RIGHTS ARE SUBJECT TO THE POLICE POWER OF THE STATE AND NOT ONLY MAY REGULATIONS WHICH AFFECT THEM BE ESTABLISHED BY THE STATE, BUT ALL SUCH REGULATIONS MUST BE SUBJECT TO CHANGE FROM TIME TO TIME, AS THE GENERAL WELL-BEING OF THE COMMUNITY MAY REQUIRE, OR AS THE CIRCUMSTANCES MAY CHANGE, OR AS EXPERIENCE MAY DEMONSTRATE THE NECESSITY.207[41] (EMPHASIS SUPPLIED)

THEREFORE, ASSUMING THERE WERE EXISTING CONTRACTS, SECTION 34 WOULD STILL BE CONSTITUTIONAL BECAUSE THE LAW WAS ENACTED IN THE EXERCISE OF THE POLICE POWER OF THE STATE TO PROMOTE THE GENERAL WELFARE OF THE PEOPLE. WE AGREE WITH THE COMELEC THAT THE ROLE OF POLL WATCHERS IS INVESTED WITH PUBLIC INTEREST. IN FACT, EVEN PETITIONER CONCEDES THAT POLL WATCHERS NOT ONLY GUARD THE VOTES OF

THEIR RESPECTIVE CANDIDATES OR POLITICAL PARTIES BUT ALSO ENSURE THAT ALL THE VOTES ARE PROPERLY COUNTED. ULTIMATELY, POLL WATCHERS AID IN FAIR AND HONEST THE

ELECTIONS. POLL WATCHERS HELP ENSURE THAT THE ELECTIONS ARE TRANSPARENT, CREDIBLE, FAIR, AND ACCURATE. REGULATION OF THE PER DIEM OF THE POLL WATCHERS OF THE DOMINANT MAJORITY AND MINORITY PARTIES PROMOTES THE GENERAL WELFARE OF THE COMMUNITY AND IS A VALID EXERCISE OF POLICE POWER.

WHEREFORE, we DISMISS the petition for lack of merit.

SO ORDERED. EN BANC

ROBERT P. GUZMAN, Petitioner,

G.R. No. 182380

Present:

PUNO, C.J., QUISUMBING*, YNARES-SANTIAGO*, CARPIO, CORONA, CARPIO MORALES, - versus CHICO-NAZARIO, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO** and COMMISSION ON ELECTIONS, MAYOR RANDOLPH S. TING AND SALVACION GARCIA, ABAD**, JJ.

Respondents.

Promulgated:

August 28, 2009

x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

Through certiorari under Rule 64, in relation to Rule 65, Rules of Court, the petitioner assails the February 18, 2008 resolution of the Commission of Elections en banc (COMELEC),208[1] dismissing his criminal complaint against respondents City Mayor Randolph Ting and City Treasurer Salvacion Garcia, both of Tuguegarao City, charging them with alleged violations of the prohibition against disbursing public funds and undertaking public works, as embodied in Section 261, paragraphs (v) and (w), of the Omnibus Election Code, during the 45-day period of the election ban by purchasing property to be converted into a public cemetery and by issuing the treasury warrant in payment. He asserts that the COMELEC committed grave abuse of discretion amounting to lack or excess of jurisdiction in thereby exonerating City Mayor Ting and City Treasurer Garcia

based on its finding that the acquisition of the land for use as a public cemetery did not constitute public works covered by the ban.

Antecedents

On March 31, 2004, the Sangguniang Panlungsod of Tuguegarao City passed Resolution No. 048-2004 to authorize City Mayor Ting to acquire two parcels of land for use as a public cemetery of the City. Pursuant to the resolution, City Mayor Ting purchased the two parcels of land, identified as Lot Nos. 5860 and 5861 and located at Atulayan Sur, Tuguegarao City, with an aggregate area of 24,816 square meters (covered by Transfer Certificates of Title [TCT] No. T-36942 and TCT No. T-36943 of the Register of Deeds in Tuguegarao City), from Anselmo Almazan, Angelo Almazan and Anselmo Almazan III. As payment, City Treasurer Garcia issued and released Treasury Warrant No. 0001534514 dated April 20, 2004 in the sum of P8,486,027.00. On May 5, 2004, the City Government of Tuguegarao caused the registration of the sale and the issuance of new certificates in its name (i.e., TCT No. T-144428 and TCT No. T-144429).

Based on the transaction, the petitioner filed a complaint in the Office of the Provincial Election Supervisor of Cagayan Province against City Mayor Ting and City Treasurer Garcia, charging them with a violation of Section 261, paragraphs (v) and (w), of the Omnibus Election Code, for having undertaken to

construct a public cemetery and for having released, disbursed and expended public funds within 45 days prior to the May 9, 2004 election, in disregard of the prohibitions under said provisions due to the election ban period having commenced on March 26, 2004 and ended on May 9, 2004.

City Mayor Ting denied the accusations in his counter-affidavit but City Treasurer Garcia opted not to answer.

After investigation, the Acting Provincial Election Supervisor of Cagayan recommended the dismissal of the complaint by a resolution dated December 13, 2006, to wit:

WHEREFORE, premises considered, the undersigned investigator finds that respondents did not violate Section 261 subparagraphs (v) and (w) of the Omnibus Election Code and Sections 1 and 2 of Comelec Resolution No. 6634 and hereby recommends the DISMISSAL of the above-entitled case for lack of merit.209[2]

The COMELEC en banc

adopted the foregoing recommendation in its

own resolution dated February 18, 2008 issued in E.O. Case No. 06-14210[3] and dismissed the complaint for lack of merit, holding that the acquisition of the two parcels of land for a public cemetery was not considered as within the term public

works; and that, consequently, the issuance of Treasury Warrant No. 0001534514 was not for public works and was thus in violation of Section 261 (w) of the Omnibus Election Code.

Not satisfied but without first filing a motion for reconsideration, the petitioner has commenced this special civil action under Rule 64, in relation to Rule 65, Rules of Court, claiming that the COMELEC committed grave abuse of discretion in thereby dismissing his criminal complaint.

Parties Positions

The petitioner contended that the COMELEC's point of view was unduly restrictive and would defeat the very purpose of the law; that it could be deduced from the exceptions stated in Section 261 (v) of the Omnibus Election Code that the disbursement of public funds within the prohibited period should be limited only to the ordinary prosecution of public administration and for emergency purposes; and that any expenditure other than such was proscribed by law.

For his part, City Mayor Ting claimed that the mere acquisition of land to be used as a public cemetery could not be classified as public works; that there would be public works only where and when there was an actual physical activity

being undertaken and after an order to commence work had been issued by the owner to the contractor.

The COMELEC stated that the petition was premature because the petitioner did not first present a motion for reconsideration, as required by Section 1(d), Rule 13 of the 1993 COMELEC Rules of Procedure;211[4] and that as the primary body empowered by the Constitution to investigate and prosecute cases of violations of election laws, including acts or omissions constituting election frauds, offenses and malpractices,212[5] it assumed full discretion and control over determining whether or not probable cause existed to warrant the prosecution in court of an alleged election offense committed by any person.

The Office of the Solicitor General (OSG) concurred with the COMELEC to the effect that the acquisition of the land within the election period for use as a public cemetery was not covered by the 45-day public works ban under Section 261(v) of the Omnibus Election Code; but differed from the COMELEC as to the issuance of Treasury Warrant No. 0001534514, opining that there was probable cause to hold City Mayor Ting and City Treasurer Garcia liable for a violation of Section 261(w), subparagraph (b), of the Omnibus Election Code.

Issues

The issues to be resolved are:

(1) Whether or not the petition was premature;

(2) Whether or not the acquisition of Lots 5860 and 5881 during the period of the election ban was covered by the term public works as to be in violation of Section 261 (v) of the Omnibus Election Code; and

(3) Whether or not the issuance of Treasury Warrant No. 0001534514 during the period of the election ban was in violation of Section 261 (w) of the Omnibus Election Code.

Ruling of the Court

The petition is meritorious.

I The Petition Was Not Premature

The indispensable elements of a petition for certiorari are: (a) that it is directed against a tribunal, board or officer exercising judicial or quasi-judicial functions; (b) that such tribunal, board or officer has acted without or in excess of jurisdiction or with grave abuse of discretion; and (c) that there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.213[6]

The COMELEC asserts that the plain, speedy and adequate remedy available to the petitioner was to file a motion for reconsideration vis--vis the assailed resolution, as required in the 1993 COMELEC Rules of Procedure; and that his omission to do so and his immediately invoking the certiorari jurisdiction of the Supreme Court instead rendered his petition premature.

We do not sustain the COMELEC.

As a rule, it is necessary to file a motion for reconsideration in the court of origin before invoking the certiorari jurisdiction of a superior court. Hence, a

petition for certiorari will not be entertained unless the public respondent has been given first the opportunity through a motion for reconsideration to correct the error being imputed to him.214[7]

The rule is not a rigid one, however, for a prior motion for reconsideration is not necessary in some situations, including the following:

a. Where the order is a patent nullity, as where the court a quo has no jurisdiction;

b. Where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court;

c. Where there is an urgent necessity for the resolution of the question, and any further delay would prejudice the interests of the Government or of the petitioner, or the subject matter of the action is perishable;

d. Where, under the circumstances, a motion for reconsideration would be useless;

e. Where the petitioner was deprived of due process and there is extreme urgency for relief;

f. Where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable;

g. Where the proceedings in the lower court are a nullity for lack of due process;

h. Where the proceedings were ex parte or in which the petitioner had no opportunity to object; and

i.

Where the issue raised is one purely of law or where public interest is involved.215[8]

That the situation of the petitioner falls under the last exception is clear enough. The petitioner challenges only the COMELEC s interpretation of Section 261(v) and (w) of the Omnibus Election Code. Presented here is an issue purely of law, considering that all the facts to which the interpretation is to be applied have already been established and become undisputed. Accordingly, he did not need to first seek the reconsideration of the assailed resolution.

The distinctions between a question of law and a question of fact are well known. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts. Such a question does not involve an examination of the probative value of the evidence presented by the litigants or any of them. But there is a question of fact when the doubt arises as to the truth or falsehood of the alleged facts or when the query necessarily invites calibration of the whole evidence, considering mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation to one another and to the whole, and the probabilities of the situation.216[9]

II Acquisition of Lots 5860 And 5881 During the Period of the Election Ban, Not Considered as Public Works in Violation of Sec. 261 (v), Omnibus Election Code

The COMELEC held in its resolution dated February 18, 2008 that:

To be liable for violation of Section 261 (v), supra, four (4) essential elements must concur and they are:

1. A public official or employee releases, disburses, or expends any public funds; 2. The release, disbursement or expenditure of such funds must be within forty-five days before regular election;

3. The release, disbursement or expenditure of said public funds is for any and all kinds of public works; and

4. The release, disbursement or expenditure of the public funds should not cover any exceptions of Section 261 (v). (Underscoring supplied).

Applying the foregoing as guideline, it is clear that what is prohibited by law is the release, disbursement or expenditure of public funds for any and all kinds of public works. Public works is defined as fixed works (as schools, highways, docks) constructed for public use or enjoyment esp. when financed and owned by the government. From this definition, the purchase of the lots purportedly to be utilized as cemetery by the City Government of Tuguegarao cannot by any stretch of imagination be considered as public works, hence it could not fall within the proscription as mandated under the aforementioned section of the Omnibus Election Code. And since the purchase of the lots is not within the contemplation of the word public works, the third of the elements stated in the foregoing guideline is not present in this case. Hence since not all the elements concurred, the respondents are not liable for violation of Section 261 (v) of the Omnibus Election Code.

The foregoing ratiocination of the COMELEC is correct.

Section 261(v) of the Omnibus Election Code provides as follows:

Section 261. Prohibited acts.- The following shall be guilty of an election offense: x x x (v) Prohibition against release, disbursement or expenditure of public funds.- Any public official or employee including barangay officials and those of government-owned or controlled corporations and their subsidiaries, who, during forty-five days before a regular election and thirty days before a special election, releases, disburses or expends any public funds:

(1) Any and all kinds of public works, except the following:

(a) Maintenance of existing and/or completed public works project: Provided, that not more than the average number of laborers or employees already employed therein during the sixth- month period immediately prior to the beginning of the fortyfive day period before election day shall be permitted to work during such time: Provided, further, That no additional laborer shall be employed for maintenance work within the said period of forty-five days;

(b) Work undertaken by contract through public bidding held, or negotiated contract awarded, before the forty-five day period before election: Provided, That work for the purpose of this section undertaken under the so-called takay or paquiao system shall not be considered as work by contract;

(c) Payment for the usual cost of preparation for working drawings, specifications, bills of materials and equipment, and all incidental expenses for wages of watchmen and other laborers employed for such work in the central office and field storehouses before the beginning of such period: Provided, That the number of such laborers shall not be increased over the number hired when the project or projects were commenced; and

(d) Emergency work necessitated by the occurrence of a public calamity, but such work shall be limited to the restoration of the damaged facility.

No payment shall be made within five days before the date of election to laborers who have rendered services in projects or works except those falling under subparagraphs (a), (b), (c), and (d), of this paragraph.

This prohibition shall not apply to ongoing public works projects commenced before the campaign period or similar projects under foreign agreements. For purposes of this provision, it shall be the duty of the government officials or agencies concerned to report to the Commission the list of all such projects being undertaken by them.

(2) The Ministry of Social Services and Development and any other office in other ministries of the government performing functions similar to the said ministry, except for salaries of personnel and for such other expenses as the Commission may authorize after due and necessary hearing. Should a calamity or disaster occur, all releases normally or usually coursed through the said ministries shall be turned over to, and administered and disbursed by, the Philippine National Red Cross, subject to the supervision of the Commission on Audit or its representatives, and no candidate or his or her spouse or member of his family within the second civil degree of affinity or consanguinity shall participate, directly or indirectly, in the distribution of any relief or other goods to the victims of the calamity or disaster; and

(3) The Ministry of Human Settlements and any other office in any other ministry of the government performing functions similar to the said ministry, except for salaries of personnel and for such other necessary administrative or other expenses as the Commission may authorize after due notice and hearing.

As the legal provision shows, the prohibition of the release, disbursement or expenditure of public funds for any and all kinds of public works depends on the following elements: (a) a public official or employee releases, disburses or spends public funds; (b) the release, disbursement and expenditure is made within 45 days before a regular election or 30 days before a special election; and (c) the public funds are intended for any and all kinds of public works except the four situations enumerated in paragraph (v) of Section 261.

It is decisive to determine, therefore, whether the purchase of the lots for use as a public cemetery constituted public works within the context of the prohibition under the Omnibus Election Code.

We first construe the term public works which the Omnibus Election Code does not define with the aid of extrinsic sources.

The Local Government Code of 1991 considers public works to be the fixed infrastructures and facilities owned and operated by the government for public use and enjoyment. According to the Code, cities have the responsibility of providing infrastructure facilities intended primarily to service the needs of their residents and funded out of city funds, such as, among others, roads and bridges; school buildings and other facilities for public elementary and secondary schools; and clinics, health centers and other health facilities necessary to carry out health services.217[10] Likewise, the Department of Public Works and Highways (DPWH), the engineering and construction arm of the government, associates public works with fixed infrastructures for the public. In the declaration of policy pertinent to the DPWH, Sec. 1, Chapter 1, Title V, Book IV, Administrative Code of 1987, states:

Sec. 1. Declaration of Policy. - The State shall maintain an engineering and construction arm and continuously develop its technology, for the purposes of ensuring the safety of all infrastructure facilities and securing for all public works and highways the highest efficiency and the most appropriate quality in construction. The planning, design, construction and maintenance of infrastructure facilities, especially national highways, flood control and water resources development systems, and other public works in accordance with national development objectives, shall be the responsibility of such an engineering and construction arm. However, the exercise of this responsibility shall be decentralized to the fullest extent feasible.

The enumeration in Sec. 1, supra

infrastructure facilities, especially

national highways, flood control and water resources development systems, and other public works in accordance with national development objectives means

that only the fixed public infrastructures for use of the public are regarded as public works. This construction conforms to the rule of ejusdem generis, which Professor Black has restated thuswise:218[11]

It is a general rule of statutory construction that where general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same general kind or class as those specifically mentioned. But this rule must be discarded where the legislative intention is plain to the contrary.

Accordingly, absent an indication of any contrary legislative intention, the term public works as used in Section 261 (v) of the Omnibus Election Code is

properly construed to refer to any building or structure on land or to structures (such as roads or dams) built by the Government for public use and paid for by public funds. Public works are clearly works, whether of construction or adaptation undertaken and carried out by the national, state, or municipal authorities, designed to subserve some purpose of public necessity, use or convenience, such as public buildings, roads, aqueducts, parks, etc.; or, in other words, all fixed works constructed for public use.219[12]

It becomes inevitable to conclude, therefore, that the petitioner's insistence that the acquisition of Lots 5860 and 5881 for use as a public

cemetery be considered a disbursement of the public funds for public works in violation of Section 261(v) of the Omnibus Election Code unwarranted. was unfounded and

III Issuance of the Treasury Warrant During the Period of the Election Ban Violated Section 261 (w), Omnibus Election Code

Section 261(w) of the Omnibus Election Code reads thus:

xxx (w) Prohibition against construction of public works, delivery of materials for public works and issuance of treasury warrants and similar devices.- During the period of forty five days preceding a regular election and thirty days before a special election, any person who: (a) undertakes the construction of any public works, except for projects or works exempted in the preceding paragraph; or (b) issues, uses or avails of treasury warrants or any device undertaking future delivery of money, goods or other things of value chargeable against public funds. xxx

The OSG posits that the foregoing provision is violated in either of two ways: (a) by any person who, within 45 days preceding a regular election and 30 days before a special election, undertakes the construction of any public works except those enumerated in the preceding paragraph; or (b) by any person who issues, uses or avails of treasury warrants or any device undertaking future delivery of money, goods or other things of value chargeable against public funds within 45 days preceding a regular election and 30 days before a special election.

We concur with the OSG s position.

Section 261 (w) covers not only one act but two, i.e., the act under subparagraph (a) above and that under subparagraph (b) above. For purposes of the prohibition, the acts are separate and distinct, considering that Section 261(w) uses the disjunctive or to separate subparagraphs (a) and (b). In legal

hermeneutics, or is a disjunctive that expresses an alternative or gives a choice of one among two or more things.220[13] The word signifies disassociation and independence of one thing from another thing in an enumeration. It should be construed, as a rule, in the sense that it ordinarily implies as a disjunctive word.221[14] According to Black,222[15] too, the word and can never be read as or, or vice versa, in criminal and penal statutes, where the rule of strict construction prevails. Consequently, whether or not the treasury warrant in question was intended for public works was even of no moment in determining if the legal provision was violated.

There was a probable cause to believe that Section 261(w), subparagraph (b), of the Omnibus Election Code was violated when City Mayor Ting and City Treasurer Garcia issued Treasury Warrant No. 0001534514 during the election ban period. For this reason, our conclusion that the COMELEC en banc gravely abused its discretion in dismissing E.O. Case No. 06-14 for lack of merit is inevitable and irrefragable.

True, the COMELEC, as the body tasked by no less than the 1987 Constitution to investigate and prosecute violations of election laws,223[16] has the full discretion to determine whether or not an election case is to be filed against a person and, consequently, its findings as to the existence of probable cause are not subject to review by courts. Yet, this policy of non-interference does not apply where the COMELEC, as the prosecuting or investigating body, was acting arbitrarily and capriciously, like herein, in reaching a different but patently erroneous result.224[17] The COMELEC was plainly guilty of grave abuse of discretion.

Grave abuse of discretion is present when there is a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, such as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. 225[18]

WHEREFORE, WE grant the petition for certiorari and set aside the resolution dated February 18, 2008 issued in E.O. Case No. 06-14 by the Commission of Elections en banc.

The Commission on Elections is ordered to file the appropriate criminal information against respondents City Mayor Randolph S. Ting and City Treasurer Salvacion Garcia of Tuguegarao City for violation of Section 261 (w), subparagraph (b), of the Omnibus Election Code.

Costs of suit to be paid by the private respondents.

SO ORDERED. MUNICIPAL CORPORATIONS

EN BANC

MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner,

G.R. No. 155650

Present:

PANGANIBAN, C.J., PUNO, QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, - versus CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, CALLEJO, SR., AZCUNA, COURT OF APPEALS, CITY OF PARAAQUE, CITY MAYOR OF PARAAQUE, SANGGUNIANG PANGLUNGSOD NG PARAAQUE, CITY ASSESSOR OF PARAAQUE, and CITY TREASURER OF PARAAQUE, Promulgated: TINGA, CHICO-NAZARIO, GARCIA, and VELASCO, JR., JJ.

Respondents.

July 20, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I ON

CARPIO, J.:

The Antecedents

Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport (NAIA) Complex in Paraaque City under Executive Order No. 903, otherwise known as the Revised Charter of the Manila International Airport Authority ( MIAA Charter ). Executive Order No. 903 was issued on 21 July 1983 by then President Ferdinand E. Marcos. Subsequently, Executive Order Nos. 909226[1] and 298227[2] amended the MIAA Charter.

As operator of the international airport, MIAA administers the land, improvements and equipment within the NAIA Complex. The MIAA Charter

transferred to MIAA approximately 600 hectares of land,228[3] including the runways and buildings ( Airport Lands and Buildings ) then under the Bureau of Air Transportation.229[4] The MIAA Charter further provides that no portion of the land transferred to MIAA shall be disposed of through sale or any other mode unless specifically approved by the President of the Philippines.230[5]

On 21 March 1997, the Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061. The OGCC opined that the Local Government Code of 1991 withdrew the exemption from real estate tax granted to MIAA under Section 21 of the MIAA Charter. Thus, MIAA negotiated with respondent City of Paraaque to pay the real estate tax imposed by the City. MIAA then paid some of the real estate tax already due.

On 28 June 2001, MIAA received Final Notices of Real Estate Tax Delinquency from the City of Paraaque for the taxable years 1992 to 2001. MIAA s real estate tax delinquency is broken down as follows:

TAX DECLARATION E-016-01370 E-016-01374 E-016-01375 E-016-01376

TAXABLE YEAR 1992-2001 1992-2001 1992-2001 1992-2001

TAX DUE 19,558,160.00 111,689,424.90 20,276,058.00 58,144,028.00

PENALTY 11,201,083.20 68,149,479.59 12,371,832.00 35,477,712.00

TOTAL 30,789,243.20 179,838,904.49 32,647,890.00 93,621,740.00

E-016-01377 E-016-01378 E-016-01379 E-016-01380 *E-016-013-85 *E-016-01387 *E-016-01396 GRAND TOTAL

1992-2001 1992-2001 1992-2001 1992-2001 1998-2001 1998-2001 1998-2001

18,134,614.65 111,107,950.40 4,322,340.00 7,776,436.00 6,444,810.00 34,876,800.00 75,240.00 P392,435,861.95

11,065,188.59 67,794,681.59 2,637,360.00 4,744,944.00 2,900,164.50 5,694,560.00 33,858.00 P232,070,863.47

29,199,803.24 178,902,631.99 6,959,700.00 12,521,380.00 9,344,974.50 50,571,360.00 109,098.00 P 624,506,725.42

1992-1997 RPT was paid on Dec. 24, 1997 as per O.R.#9476102 for P4,207,028.75 #9476101 for P28,676,480.00 #9476103 for P49,115.00231[6]

On 17 July 2001, the City of Paraaque, through its City Treasurer, issued notices of levy and warrants of levy on the Airport Lands and Buildings. The Mayor of the City of Paraaque threatened to sell at public auction the Airport Lands and Buildings should MIAA fail to pay the real estate tax delinquency. MIAA thus sought a clarification of OGCC Opinion No. 061.

On 9 August 2001, the OGCC issued Opinion No. 147 clarifying OGCC Opinion No. 061. The OGCC pointed out that Section 206 of the Local Government Code requires persons exempt from real estate tax to show proof of exemption. The OGCC opined that Section 21 of the MIAA Charter is the proof that MIAA is exempt from real estate tax.

On 1 October 2001, MIAA filed with the Court of Appeals an original petition for prohibition and injunction, with prayer for preliminary injunction or temporary restraining order. The petition sought to restrain the City of Paraaque from imposing real estate tax on, levying against, and auctioning for public sale the Airport Lands and Buildings. The petition was docketed as CA-G.R. SP No. 66878.

On 5 October 2001, the Court of Appeals dismissed the petition because MIAA filed it beyond the 60-day reglementary period. The Court of Appeals also denied on 27 September 2002 MIAA s motion for reconsideration and supplemental motion for reconsideration. Hence, MIAA filed on 5 December 2002 the present petition for review.232[7]

Meanwhile, in January 2003, the City of Paraaque posted notices of auction sale at the Barangay Halls of Barangays Vitalez, Sto. Nio, and Tambo, Paraaque City; in the public market of Barangay La Huerta; and in the main lobby of the Paraaque City Hall. The City of Paraaque published the notices in the 3 and 10 January 2003 issues of the Philippine Daily Inquirer, a newspaper of general circulation in the Philippines. The notices announced the public auction sale of the Airport Lands and Buildings to the highest bidder on 7 February 2003, 10:00 a.m., at the Legislative Session Hall Building of Paraaque City.

A day before the public auction, or on 6 February 2003, at 5:10 p.m., MIAA filed before this Court an Urgent Ex-Parte and Reiteratory Motion for the Issuance of a Temporary Restraining Order. The motion sought to restrain respondents the City of Paraaque, City Mayor of Paraaque, Sangguniang Panglungsod ng Paraaque, City Treasurer of Paraaque, and the City Assessor of Paraaque ( respondents ) from auctioning the Airport Lands and Buildings.

On 7 February 2003, this Court issued a temporary restraining order (TRO) effective immediately. The Court ordered respondents to cease and desist from selling at public auction the Airport Lands and Buildings. Respondents received the TRO on the same day that the Court issued it. However, respondents received the TRO only at 1:25 p.m. or three hours after the conclusion of the public auction.

On 10 February 2003, this Court issued a Resolution confirming nunc pro tunc the TRO.

On 29 March 2005, the Court heard the parties in oral arguments. In compliance with the directive issued during the hearing, MIAA, respondent City of Paraaque, and the Solicitor General subsequently submitted their respective Memoranda.

MIAA admits that the MIAA Charter has placed the title to the Airport Lands and Buildings in the name of MIAA. However, MIAA points out that it cannot claim ownership over these properties since the real owner of the Airport Lands and Buildings is the Republic of the Philippines. The MIAA Charter mandates MIAA to devote the Airport Lands and Buildings for the benefit of the general public. Since the Airport Lands and Buildings are devoted to public use and public service, the ownership of these properties remains with the State. The Airport Lands and Buildings are thus inalienable and are not subject to real estate tax by local governments.

MIAA also points out that Section 21 of the MIAA Charter specifically exempts MIAA from the payment of real estate tax. MIAA insists that it is also exempt from real estate tax under Section 234 of the Local Government Code because the Airport Lands and Buildings are owned by the Republic. To justify the exemption, MIAA invokes the principle that the government cannot tax itself. MIAA points out that the reason for tax exemption of public property is that its taxation would not inure to any public advantage, since in such a case the tax debtor is also the tax creditor.

Respondents invoke Section 193 of the Local Government Code, which expressly withdrew the tax exemption privileges of government-owned andcontrolled corporations upon the effectivity of the Local Government Code.

Respondents also argue that a basic rule of statutory construction is that the express mention of one person, thing, or act excludes all others. An international airport is not among the exceptions mentioned in Section 193 of the Local Government Code. Thus, respondents assert that MIAA cannot claim that the Airport Lands and Buildings are exempt from real estate tax.

Respondents also cite the ruling of this Court in Mactan International Airport v. Marcos233[8] where we held that the Local Government Code has withdrawn the exemption from real estate tax granted to international airports. Respondents further argue that since MIAA has already paid some of the real estate tax assessments, it is now estopped from claiming that the Airport Lands and Buildings are exempt from real estate tax.

The Issue

This petition raises the threshold issue of whether the Airport Lands and Buildings of MIAA are exempt from real estate tax under existing laws. If so exempt, then the real estate tax assessments issued by the City of Paraaque, and all proceedings taken pursuant to such assessments, are void. In such event, the other issues raised in this petition become moot.

The Court s Ruling

We rule that MIAA s Airport Lands and Buildings are exempt from real estate tax imposed by local governments.

First, MIAA is not a government-owned or controlled corporation but an instrumentality of the National Government and thus exempt from local taxation. Second, the real properties of MIAA are owned by the Republic of the Philippines and thus exempt from real estate tax.

1. MIAA is Not a Government-Owned or Controlled Corporation

Respondents argue that MIAA, being a government-owned or controlled corporation, is not exempt from real estate tax. Respondents claim that the deletion of the phrase any government-owned or controlled so exempt by its charter in Section 234(e) of the Local Government Code withdrew the real estate tax exemption of government-owned or controlled corporations. The deleted phrase appeared in Section 40(a) of the 1974 Real Property Tax Code enumerating the entities exempt from real estate tax.

There is no dispute that a government-owned or controlled corporation is not exempt from real estate tax. However, MIAA is not a government-owned or

controlled corporation.

Section 2(13) of the Introductory Provisions of the

Administrative Code of 1987 defines a government-owned or controlled corporation as follows:

SEC. 2. General Terms Defined. x x x x

(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock: x x x. (Emphasis supplied)

A government-owned or controlled corporation must be organized as a stock or non-stock corporation. MIAA is not organized as a stock or non-stock

corporation. MIAA is not a stock corporation because it has no capital stock divided into shares. MIAA has no stockholders or voting shares. Section 10 of the MIAA Charter234[9] provides:

SECTION 10. Capital. The capital of the Authority to be contributed by the National Government shall be increased from Two and One-half Billion (P2,500,000,000.00) Pesos to Ten Billion (P10,000,000,000.00) Pesos to consist of:

(a) The value of fixed assets including airport facilities, runways and equipment and such other properties, movable and immovable[,] which may be contributed by the National Government or transferred by it from any of its agencies, the valuation of which shall be determined jointly with the Department of Budget and Management and the Commission on Audit on the date of such contribution or transfer after making due allowances for depreciation and other deductions taking into account the loans and other liabilities of the Authority at the time of the takeover of the assets and other properties;

(b) That the amount of P605 million as of December 31, 1986 representing about seventy percentum (70%) of the unremitted share of the National Government from 1983 to 1986 to be remitted to the National Treasury as provided for in Section 11 of E. O. No. 903 as amended, shall be converted into the equity of the National Government in the Authority. Thereafter, the Government contribution to the capital of the Authority shall be provided in the General Appropriations Act.

Clearly, under its Charter, MIAA does not have capital stock that is divided into shares.

Section 3 of the Corporation Code235[10] defines a stock corporation as one whose capital stock is divided into shares and x x x authorized to distribute to the holders of such shares dividends x x x. MIAA has capital but it is not divided into shares of stock. MIAA has no stockholders or voting shares. Hence, MIAA is not a stock corporation.

MIAA is also not a non-stock corporation because it has no members. Section 87 of the Corporation Code defines a non-stock corporation as one where no part of its income is distributable as dividends to its members, trustees or officers. A non-stock corporation must have members. Even if we assume that the Government is considered as the sole member of MIAA, this will not make

MIAA a non-stock corporation. Non-stock corporations cannot distribute any part of their income to their members. Section 11 of the MIAA Charter mandates MIAA to remit 20% of its annual gross operating income to the National Treasury.236[11] This prevents MIAA from qualifying as a nonstock corporation.

Section 88 of the Corporation Code provides that non-stock corporations are organized for charitable, religious, educational, professional, cultural, recreational, fraternal, literary, scientific, social, civil service, or similar purposes, like trade, industry, agriculture and like chambers. not organized for any of these purposes. MIAA, a public utility, is organized to operate an international and domestic airport for public use. MIAA is

Since MIAA is neither a stock nor a non-stock corporation, MIAA does not qualify as a governmentowned or controlled corporation. What then is the legal status of MIAA within the National Government?

MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions. MIAA is like any other

government instrumentality, the only difference is that MIAA is vested with corporate powers. Section 2(10) of the Introductory Provisions of the

Administrative Code defines a government instrumentality as follows:

SEC. 2. General Terms Defined.

xxxx

(10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. x x x (Emphasis supplied)

When the law vests in a government instrumentality corporate powers, the instrumentality does not become a corporation. Unless the government

instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality exercising not only governmental but also corporate powers. Thus, MIAA exercises the governmental powers of eminent and

domain,237[12] police authority238[13] and the levying of fees charges.239[14] At the same time, MIAA exercises

all the powers of a

corporation under the Corporation Law, insofar as these powers are not inconsistent with the provisions of this Executive Order. 240[15]

Likewise, when the law makes a government instrumentality operationally autonomous, the instrumentality remains part of the National Government machinery although not integrated with the department framework. The MIAA Charter expressly states that transforming MIAA into a separate and

autonomous viable. 242[17]

body 241[16]

will

make

its

operation

more

financially

Many government instrumentalities are vested with corporate powers but they do not become stock or non-stock corporations, which is a necessary condition before an agency or instrumentality is deemed a government-owned or controlled corporation. Examples are the Mactan International Airport Authority, the Philippine Ports Authority, the University of the Philippines and Bangko Sentral ng Pilipinas. All these government instrumentalities exercise corporate

powers but they are not organized as stock or non-stock corporations as required by Section 2(13) of the Introductory Provisions of the Administrative Code. These government instrumentalities are sometimes loosely called government corporate entities. However, they are not government-owned or controlled

corporations in the strict sense as understood under the Administrative Code, which is the governing law defining the legal relationship and status of government entities.

A government instrumentality like MIAA falls under Section 133(o) of the Local Government Code, which states:

SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:

xxxx

(o) Taxes, fees or charges of any kind on the National agencies and instrumentalities and local government units. underscoring supplied)

Government, its (Emphasis and

Section 133(o) recognizes the basic principle that local governments cannot tax the national government, which historically merely delegated to local governments the power to tax. While the 1987 Constitution now includes

taxation as one of the powers of local governments, local governments may only exercise such power subject to such guidelines and limitations as the Congress may provide. 243[18]

When local governments invoke the power to tax on national government instrumentalities, such power is construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. Any doubt whether a person, article or activity is taxable is resolved against taxation. This rule applies with greater force when local governments seek to tax national government instrumentalities.

Another rule is that a tax exemption is strictly construed against the taxpayer claiming the exemption. However, when Congress grants an exemption to a national government instrumentality from local taxation, such exemption is

construed liberally in favor of the national government instrumentality. As this Court declared in Maceda v. Macaraig, Jr.:

The reason for the rule does not apply in the case of exemptions running to the benefit of the government itself or its agencies. In such case the practical effect of an exemption is merely to reduce the amount of money that has to be handled by government in the course of its operations. For these reasons, provisions granting exemptions to government agencies may be construed liberally, in favor of non taxliability of such agencies.244[19]

There is, moreover, no point in national and local governments taxing each other, unless a sound and compelling policy requires such transfer of public funds from one government pocket to another.

There is also no reason for local governments to tax national government instrumentalities for rendering essential public services to inhabitants of local governments. The only exception is when the legislature clearly intended to tax government instrumentalities for the delivery of essential public services for sound and compelling policy considerations. There must be express language in the law empowering local governments to tax national government

instrumentalities. Any doubt whether such power exists is resolved against local governments.

Thus, Section 133 of the Local Government Code states that unless otherwise provided in the Code, local governments cannot tax national As this Court held in Basco v. Philippine

government instrumentalities.

Amusements and Gaming Corporation:

The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional laws enacted by Congress to carry into execution the powers vested in the federal government. (MC Culloch v. Maryland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the supremacy of the National Government over local governments.

Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of power on the part of the States to touch, in that way (taxation) at least, the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or political subdivision can regulate a federal instrumentality in such a way as to prevent it from consummating its federal responsibilities, or even to seriously burden it in the accomplishment of them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)

Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities may perceive to be undesirable activities or enterprise using the power to tax as a tool for regulation (U.S. v. Sanchez, 340 US 42).

The power to tax which was called by Justice Marshall as the power to destroy (Mc Culloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which has the inherent power to wield it. 245[20]

2. Airport Lands and Buildings of MIAA are Owned by the Republic

a. Airport Lands and Buildings are of Public Dominion

The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by the State or the Republic of the Philippines. The Civil Code provides:

ARTICLE 419. Property is either of public dominion or of private ownership.

ARTICLE 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (Emphasis supplied)

ARTICLE 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.

ARTICLE 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.

No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, like roads, canals, rivers, torrents, ports and bridges constructed by the State, are owned by the State. The term ports includes seaports and airports. The MIAA Airport Lands and Buildings constitute a port constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus owned by the State or the Republic of the Philippines.

The Airport Lands and Buildings are devoted to public use because they are used by the public for international and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character of the Airport Lands and Buildings as properties for public use. The operation by the government of a tollway does not change

the character of the road as one for public use. Someone must pay for the maintenance of the road, either the public indirectly through the taxes they pay the government, or only those among the public who actually use the road through the toll fees they pay upon using the road. The tollway system is even a more efficient and equitable manner of taxing the public for the maintenance of public roads.

The charging of fees to the public does not determine the character of the property whether it is of public dominion or not. Article 420 of the Civil Code defines property of public dominion as one intended for public use. Even if the government collects toll fees, the road is still intended for

public use if anyone can use the road under the same terms and conditions as the rest of the public. The charging of fees, the limitation on the kind of vehicles that can use the road, the speed restrictions and other conditions for the use of the road do not affect the public character of the road.

The terminal fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute the bulk of the income that maintains the operations of MIAA. The collection of such fees does not change the character of MIAA as an airport for public use. Such fees are often termed user s tax. This means taxing those among the public who actually use a public facility instead of taxing all the public including those who never use the particular public facility. A user s tax is more equitable Constitution.246[21] a principle of taxation mandated in the 1987

The Airport Lands and Buildings of MIAA, which its Charter calls the principal airport of the Philippines for both international and domestic air traffic, 247[22] are properties of public dominion because they are intended for public use. As properties of public dominion, they indisputably belong to the

State or the Republic of the Philippines.

b. Airport Lands and Buildings are Outside the Commerce of Man

The Airport Lands and Buildings of MIAA are devoted to public use and thus are properties of public dominion. As properties of public dominion, the Airport Lands and Buildings are outside the commerce of man. The Court has ruled repeatedly that properties of public dominion are outside the commerce of man. As early as 1915, this Court already ruled in Municipality of Cavite v. Rojas that properties devoted to public use are outside the commerce of man, thus:

According to article 344 of the Civil Code: Property for public use in provinces and in towns comprises the provincial and town roads, the squares, streets, fountains, and public waters, the promenades, and public works of general service supported by said towns or provinces.

The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could not in 1907 withdraw or exclude from public use a portion thereof in order to lease it for the sole benefit of the defendant Hilaria Rojas. In leasing a portion of said plaza or public place to the defendant for private use the plaintiff municipality exceeded its authority in the exercise of its powers by executing a contract over a thing of which it could not dispose, nor is it empowered so to do.

The Civil Code, article 1271, prescribes that everything which is not outside the commerce of man may be the object of a contract, and plazas and streets are outside of this commerce, as was decided by the supreme court of Spain in its decision of February 12, 1895, which says: Communal things that cannot be sold because they are by their very nature outside of commerce are those for public use, such as the plazas, streets, common lands, rivers, fountains, etc. (Emphasis supplied) 248[23]

Again in Espiritu v. Municipal Council, the Court declared that properties of public dominion are outside the commerce of man:

xxx Town plazas are properties of public dominion, to be devoted to public use and to be made available to the public in general. They are outside the commerce of man and cannot be disposed of or even leased by the municipality to private parties. While in case of war or during an emergency, town plazas may be occupied temporarily by private individuals, as was done and as was tolerated by the Municipality of Pozorrubio, when the emergency has ceased, said temporary occupation or use must also cease, and the town officials should see to it that the town plazas should ever be kept open to the public and free from encumbrances or illegal private constructions.249[24] (Emphasis supplied)

The Court has also ruled that property of public dominion, being outside the commerce of man, cannot be the subject of an auction sale.250[25]

Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy on execution or auction sale of any property of public dominion is void for being contrary to public policy. Essential public services will stop if properties of public dominion are subject to encumbrances, foreclosures and auction sale. This will happen if the City of Paraaque can foreclose and compel the auction sale of the 600-hectare runway of the MIAA for non-payment of real estate tax.

Before MIAA can encumber251[26] the Airport Lands and Buildings, the President must first withdraw from public use the Airport Lands and Buildings. Sections 83 and 88 of the Public Land Law or Commonwealth Act No. 141, which remains to this day the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands, 252[27] provide:

SECTION 83. Upon the recommendation of the Secretary of Agriculture and Natural Resources, the President may designate by proclamation any tract or tracts of land of the public domain as reservations for the use of the Republic of the Philippines or of any of its branches, or of the inhabitants thereof, in accordance with regulations prescribed for this purposes, or for quasi-public uses or purposes when the public interest requires it, including reservations for highways, rights of way for railroads, hydraulic power sites, irrigation systems, communal pastures or lequas communales,

public parks, public quarries, public fishponds, working men s village and other improvements for the public benefit.

SECTION 88. The tract or tracts of land reserved under the provisions of Section eighty-three shall be non-alienable and shall not be subject to occupation, entry, sale, lease, or other disposition until again declared alienable under the provisions of this Act or by proclamation of the President. (Emphasis and underscoring supplied)

Thus, unless the President issues a proclamation withdrawing the Airport Lands and Buildings from public use, these properties remain properties of public dominion and are inalienable. Since the Airport Lands and Buildings are

inalienable in their present status as properties of public dominion, they are not subject to levy on execution or foreclosure sale. As long as the Airport Lands and Buildings are reserved for public use, their ownership remains with the State or the Republic of the Philippines.

The authority of the President to reserve lands of the public domain for public use, and to withdraw such public use, is reiterated in Section 14, Chapter 4, Title I, Book III of the Administrative Code of 1987, which states:

SEC. 14. Power to Reserve Lands of the Public and Private Domain 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;

x x x x. (Emphasis supplied)

There is no question, therefore, that unless the Airport Lands and Buildings are withdrawn by law or presidential proclamation from public use, they are properties of public dominion, owned by the Republic and outside the commerce of man.

c. MIAA is a Mere Trustee of the Republic

MIAA is merely holding title to the Airport Lands and Buildings in trust for the Republic. Section 48, Chapter 12, Book I of the Administrative Code allows instrumentalities like MIAA to hold title to real properties owned by the Republic, thus:

SEC. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following:

(1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless the authority therefor is expressly vested by law in another officer.

(2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality. (Emphasis supplied)

In MIAA s case, its status as a mere trustee of the Airport Lands and Buildings is clearer because even its executive head cannot sign the deed of conveyance on behalf of the Republic. sign such deed of conveyance.253[28] Only the President of the Republic can

d. Transfer to MIAA was Meant to Implement a Reorganization

The MIAA Charter, which is a law, transferred to MIAA the title to the Airport Lands and Buildings from the Bureau of Air Transportation of the Department of Transportation and Communications. The MIAA Charter provides:

SECTION 3.

Creation of the Manila International Airport Authority.

xxxx

The land where the Airport is presently located as well as the surrounding land area of approximately six hundred hectares, are hereby transferred, conveyed and assigned to the ownership and administration of the Authority, subject to existing rights, if any. The Bureau of Lands and other appropriate government agencies shall

undertake an actual survey of the area transferred within one year from the promulgation of this Executive Order and the corresponding title to be issued in the name of the Authority. Any portion thereof shall not be disposed through sale or through any other mode unless specifically approved by the President of the Philippines. (Emphasis supplied)

SECTION 22. Transfer of Existing Facilities and Intangible Assets. All existing public airport facilities, runways, lands, buildings and other property, movable or immovable, belonging to the Airport, and all assets, powers, rights, interests and privileges belonging to the Bureau of Air Transportation relating to airport works or air operations, including all equipment which are necessary for the operation of crash fire and rescue facilities, are hereby transferred to the Authority. (Emphasis supplied)

SECTION 25. Abolition of the Manila International Airport as a Division in the Bureau of Air Transportation and Transitory Provisions. The Manila International Airport including the Manila Domestic Airport as a division under the Bureau of Air Transportation is hereby abolished.

x x x x.

The MIAA Charter transferred the Airport Lands and Buildings to MIAA without the Republic receiving cash, promissory notes or even stock since MIAA is not a stock corporation.

The whereas clauses of the MIAA Charter explain the rationale for the transfer of the Airport Lands and Buildings to MIAA, thus:

WHEREAS, the Manila International Airport as the principal airport of the Philippines for both international and domestic air traffic, is required to provide standards of airport accommodation and service comparable with the best airports in the world;

WHEREAS, domestic and other terminals, general aviation and other facilities, have to be upgraded to meet the current and future air traffic and other demands of aviation in Metro Manila;

WHEREAS, a management and organization study has indicated that the objectives of providing high standards of accommodation and service within the context of a financially viable operation, will best be achieved by a separate and autonomous body; and

WHEREAS, under Presidential Decree No. 1416, as amended by Presidential Decree No. 1772, the President of the Philippines is given continuing authority to reorganize the National Government, which authority includes the creation of new entities, agencies and instrumentalities of the Government[.] (Emphasis supplied)

The transfer of the Airport Lands and Buildings from the Bureau of Air Transportation to MIAA was not meant to transfer beneficial ownership of these assets from the Republic to MIAA. The purpose was merely to reorganize a division in the Bureau of Air Transportation into a separate and autonomous body. The Republic remains the beneficial owner of the Airport Lands and Buildings. MIAA itself is owned solely by the Republic. No party claims any ownership rights over MIAA s assets adverse to the Republic.

The MIAA Charter expressly provides that the Airport Lands and Buildings shall not be disposed through sale or through any other mode unless specifically approved by the President of the Philippines. This only means that

the Republic retained the beneficial ownership of the Airport Lands and Buildings

because under Article 428 of the Civil Code, only the owner has the right to x x x dispose of a thing. Since MIAA cannot dispose of the Airport Lands and

Buildings, MIAA does not own the Airport Lands and Buildings.

At any time, the President can transfer back to the Republic title to the Airport Lands and Buildings without the Republic paying MIAA any consideration. Under Section 3 of the MIAA Charter, the President is the only one who can authorize the sale or disposition of the Airport Lands and Buildings. This only confirms that the Airport Lands and Buildings belong to the Republic.

e. Real Property Owned by the Republic is Not Taxable

Section 234(a) of the Local Government Code exempts from real estate tax any [r]eal property owned by the Republic of the Philippines. Section 234(a) provides:

SEC. 234. Exemptions from Real Property Tax. from payment of the real property tax:

The following are exempted

(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person;

x x x. (Emphasis supplied)

This exemption should be read in relation with Section 133(o) of the same Code, which prohibits local governments from imposing [t]axes, fees or charges of any kind on the National Government, its agencies and instrumentalities x x x. The real properties owned by the Republic are titled

either in the name of the Republic itself or in the name of agencies or instrumentalities of the National Government. The Administrative Code allows real property owned by the Republic to be titled in the name of agencies or instrumentalities of the national government. Such real properties remain owned by the Republic and continue to be exempt from real estate tax.

The Republic may grant the beneficial use of its real property to an agency or instrumentality of the national government. This happens when title of the

real property is transferred to an agency or instrumentality even as the Republic remains the owner of the real property. Such arrangement does not result in the loss of the tax exemption. Section 234(a) of the Local Government Code states that real property owned by the Republic loses its tax exemption only if the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person. MIAA, as a government instrumentality, is not a taxable person under Section 133(o) of the Local Government Code. Thus, even if we assume

that the Republic has granted to MIAA the beneficial use of the Airport Lands and Buildings, such fact does not make these real properties subject to real estate tax.

However, portions of the Airport Lands and Buildings that MIAA leases to private entities are not exempt from real estate tax. For example, the land area occupied by hangars that MIAA leases to private corporations is subject to real estate tax. In such a case, MIAA has granted the beneficial use of such land area

for a consideration to a taxable person and therefore such land area is subject to real estate tax. In Lung Center of the Philippines v. Quezon City, the Court ruled:

Accordingly, we hold that the portions of the land leased to private entities as well as those parts of the hospital leased to private individuals are not exempt from such taxes. On the other hand, the portions of the land occupied by the hospital and portions of the hospital used for its patients, whether paying or non-paying, are exempt from real property taxes.254[29]

3. Refutation of Arguments of Minority

The minority asserts that the MIAA is not exempt from real estate tax because Section 193 of the Local Government Code of 1991 withdrew the tax exemption of all persons, whether natural or juridical upon the effectivity of the Code. Section 193 provides:

SEC. 193. Withdrawal of Tax Exemption Privileges Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled

corporations, except local water districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions are hereby withdrawn upon effectivity of this Code. (Emphasis supplied)

The minority states that MIAA is indisputably a juridical person.

The

minority argues that since the Local Government Code withdrew the tax exemption of all juridical persons, then MIAA is not exempt from real estate tax. Thus, the minority declares:

It is evident from the quoted provisions of the Local Government Code that the withdrawn exemptions from realty tax cover not just GOCCs, but all persons. To repeat, the provisions lay down the explicit proposition that the withdrawal of realty tax exemption applies to all persons. The reference to or the inclusion of GOCCs is only clarificatory or illustrative of the explicit provision.

The term All persons encompasses the two classes of persons recognized under our laws, natural and juridical persons. Obviously, MIAA is not a natural person. Thus, the determinative test is not just whether MIAA is a GOCC, but whether MIAA is a juridical person at all. (Emphasis and underscoring in the original)

The minority posits that the determinative test whether MIAA is exempt from local taxation is its status whether MIAA is a juridical person or not. The

minority also insists that Sections 193 and 234 may be examined in isolation from Section 133(o) to ascertain MIAA s claim of exemption.

The argument of the minority is fatally flawed.

Section 193 of the Local

Government Code expressly withdrew the tax exemption of all juridical persons [u]nless otherwise provided in this Code. Now, Section 133(o) of the Local

Government Code expressly provides otherwise, specifically prohibiting local governments from imposing any kind of tax on national government instrumentalities. Section 133(o) states:

SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:

xxxx

(o) Taxes, fees or charges of any kinds on the National Government, its agencies and instrumentalities, and local government units. underscoring supplied) (Emphasis and

By express mandate of the Local Government Code, local governments cannot impose any kind of tax on national government instrumentalities like the MIAA. Local governments are devoid of power to tax the national government, its agencies and instrumentalities. The taxing powers of local governments do

not extend to the national government, its agencies and instrumentalities, [u]nless otherwise provided in this Code as stated in the saving clause of

Section 133. The saving clause refers to Section 234(a) on the exception to the exemption from real estate tax of real property owned by the Republic.

The minority, however, theorizes that unless exempted in Section 193 itself, all juridical persons are subject to tax by local governments. The minority insists that the juridical persons exempt from local taxation are limited to the three classes of entities specifically enumerated as exempt in Section 193. Thus, the minority states:

x x x Under Section 193, the exemption is limited to (a) local water districts; (b) cooperatives duly registered under Republic Act No. 6938; and (c) non-stock and nonprofit hospitals and educational institutions. It would be belaboring the obvious why the MIAA does not fall within any of the exempt entities under Section 193. (Emphasis supplied)

The minority s theory directly contradicts and completely negates Section 133(o) of the Local Government Code. This theory will result in gross absurdities. It will make the national government, which itself is a juridical person, subject to tax by local governments since the national government is not included in the enumeration of exempt entities in Section 193. Under this theory, local

governments can impose any kind of local tax, and not only real estate tax, on the national government.

Under the minority s theory, many national government instrumentalities with juridical personalities will also be subject to any kind of local tax, and not only real estate tax. Some of the national government instrumentalities vested by law with juridical personalities are: Bangko Sentral ng Pilipinas,255[30] Philippine Rice Research Institute,256[31] Laguna Lake Development Authority,257[32] Fisheries Development Authority,258[33] Bases Conversion Development Authority,259[34] Philippine Ports Authority,260[35] Cagayan de Oro Port Authority,261[36] San Fernando Port Authority,262[37] Cebu Port Authority,263[38] and Philippine National Railways.264[39]

The minority s theory violates Section 133(o) of the Local Government Code which expressly prohibits local governments from imposing any kind of tax on national government instrumentalities. Section 133(o) does not distinguish

between national government instrumentalities with or without juridical personalities. Where the law does not distinguish, courts should not distinguish. Thus, Section 133(o) applies to all national government instrumentalities, with or without juridical personalities. The determinative test whether MIAA is exempt from local taxation is not whether MIAA is a juridical person, but whether it is a national government instrumentality under Section 133(o) of the Local Government Code. Section 133(o) is the specific provision of law prohibiting local governments from imposing any kind of tax on the national government, its agencies and instrumentalities.

Section 133 of the Local Government Code starts with the saving clause [u]nless otherwise provided in this Code. This means that unless the Local

Government Code grants an express authorization, local governments have no power to tax the national government, its agencies and instrumentalities. Clearly, the rule is local governments have no power to tax the national government, its agencies and instrumentalities. As an exception to this rule, local governments may tax the national government, its agencies and instrumentalities only if the Local Government Code expressly so provides.

The saving clause in Section 133 refers to the exception to the exemption in Section 234(a) of the Code, which makes the national government subject to real estate tax when it gives the beneficial use of its real properties to a taxable entity. Section 234(a) of the Local Government Code provides:

SEC. 234. Exemptions from Real Property Tax from payment of the real property tax:

The following are exempted

(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person.

x x x. (Emphasis supplied)

Under Section 234(a), real property owned by the Republic is exempt from real estate tax. The exception to this exemption is when the government gives the beneficial use of the real property to a taxable entity.

The exception to the exemption in Section 234(a) is the only instance when the national government, its agencies and instrumentalities are subject to any kind of tax by local governments. The exception to the exemption applies only to real estate tax and not to any other tax. The justification for the exception to the exemption is that the real property, although owned by the Republic, is not devoted to public use or public service but devoted to the private gain of a taxable person.

The minority also argues that since Section 133 precedes Section 193 and 234 of the Local Government Code, the later provisions prevail over Section 133. Thus, the minority asserts:

x x x Moreover, sequentially Section 133 antecedes Section 193 and 234. Following an accepted rule of construction, in case of conflict the subsequent provisions should prevail. Therefore, MIAA, as a juridical person, is subject to real property taxes, the general exemptions attaching to instrumentalities under Section 133(o) of the Local Government Code being qualified by Sections 193 and 234 of the same law. (Emphasis supplied)

The minority assumes that there is an irreconcilable conflict between Section 133 on one hand, and Sections 193 and 234 on the other. No one has urged that there is such a conflict, much less has any one presented a

persuasive argument that there is such a conflict. The minority s assumption of an irreconcilable conflict in the statutory provisions is an egregious error for two reasons.

First, there is no conflict whatsoever between Sections 133 and 193 because Section 193 expressly admits its subordination to other provisions of the Code when Section 193 states [u]nless otherwise provided in this Code. By its own words, Section 193 admits the superiority of other provisions of the Local Government Code that limit the exercise of the taxing power in Section 193. When a provision of law grants a power but withholds such power on certain matters, there is no conflict between the grant of power and the withholding of

power. The grantee of the power simply cannot exercise the power on matters withheld from its power.

Second, Section 133 is entitled Common Limitations on the Taxing Powers of Local Government Units. Section 133 limits the grant to local governments of the power to tax, and not merely the exercise of a delegated power to tax. Section 133 states that the taxing powers of local governments shall not extend to the levy of any kind of tax on the national government, its agencies and instrumentalities. There is no clearer limitation on the taxing power than this.

Since Section 133 prescribes the common limitations on the taxing powers of local governments, Section 133 logically prevails over Section 193 which grants local governments such taxing powers. By their very meaning and purpose, the common limitations on the taxing power prevail over the grant or exercise of the taxing power. If the taxing power of local governments in

Section 193 prevails over the limitations on such taxing power in Section 133, then local governments can impose any kind of tax on the national government, its agencies and instrumentalities a gross absurdity.

Local governments have no power to tax the national government, its agencies and instrumentalities, except as otherwise provided in the Local Government Code pursuant to the saving clause in Section 133 stating [u]nless otherwise provided in this Code. which is an exception to the exemption of the Republic from real estate tax imposed by local governments This exception

refers to Section 234(a) of

the Code. The exception to the exemption in Section 234(a) subjects real property owned by the Republic, whether titled in the name of the national government, its agencies or instrumentalities, to real estate tax if the beneficial use of such property is given to a taxable entity.

The minority also claims that the definition in the Administrative Code of the phrase government-owned or controlled corporation is not controlling. The minority points out that Section 2 of the Introductory Provisions of the Administrative Code admits that its definitions are not controlling when it provides:

SEC. 2. General Terms Defined. Unless the specific words of the text, or the context as a whole, or a particular statute, shall require a different meaning:

xxxx

The minority then concludes that reliance on the Administrative Code definition is flawed.

The minority s argument is a non sequitur.

True, Section 2 of the

Administrative Code recognizes that a statute may require a different meaning than that defined in the Administrative Code. However, this does not

automatically mean that the definition in the Administrative Code does not apply to the Local Government Code. Section 2 of the Administrative Code clearly

states that unless the specific words x x x of a particular statute shall require a different meaning, the definition in Section 2 of the Administrative Code shall apply. Thus, unless there is specific language in the Local Government Code

defining the phrase government-owned or controlled corporation differently

from the definition in the Administrative Code, the definition in the Administrative Code prevails.

The minority does not point to any provision in the Local Government Code defining the phrase government-owned or controlled corporation differently from the definition in the Administrative Code. Indeed, there is none. The Local Government Code is silent on the definition of the phrase government-owned or controlled corporation. The Administrative Code, however, expressly defines the phrase government-owned or controlled corporation. The inescapable

conclusion is that the Administrative Code definition of the phrase governmentowned or controlled corporation applies to the Local Government Code.

The third whereas clause of the Administrative Code states that the Code incorporates in a unified document the major structural, functional and procedural principles and rules of governance. Thus, the Administrative Code is

the governing law defining the status and relationship of government departments, bureaus, offices, agencies and instrumentalities. Unless a statute expressly provides for a different status and relationship for a specific government unit or entity, the provisions of the Administrative Code prevail.

The minority also contends that the phrase government-owned or controlled corporation should apply only to corporations organized under the Corporation Code, the general incorporation law, and not to corporations created by special charters. The minority sees

no reason why government corporations with special charters should have a capital stock. Thus, the minority declares:

I submit that the definition of government-owned or controlled corporations under the Administrative Code refer to those corporations owned by the government or its instrumentalities which are created not by legislative enactment, but formed and organized under the Corporation Code through registration with the Securities and Exchange Commission. In short, these are GOCCs without original charters.

xxxx

It might as well be worth pointing out that there is no point in requiring a capital structure for GOCCs whose full ownership is limited by its charter to the State or Republic. Such GOCCs are not empowered to declare dividends or alienate their capital shares.

The contention of the minority is seriously flawed. It is not in accord with the Constitution and existing legislations. It will also result in gross absurdities.

First, the Administrative Code definition of the phrase government-owned or controlled corporation does not distinguish between one incorporated under the Corporation Code or under a special charter. distinguish, courts should not distinguish. Where the law does not

Second, Congress has created through special charters several governmentowned corporations organized as stock corporations. Prime examples are the

Land Bank of the Philippines and the Development Bank of the Philippines. The special charter265[40] of the Land Bank of the Philippines provides:

SECTION 81. Capital. The authorized capital stock of the Bank shall be nine billion pesos, divided into seven hundred and eighty million common shares with a par value of ten pesos each, which shall be fully subscribed by the Government, and one hundred and twenty million preferred shares with a par value of ten pesos each, which shall be issued in accordance with the provisions of Sections seventy-seven and eightythree of this Code. (Emphasis supplied)

Likewise, the special charter266[41] of the Development Bank of the Philippines provides:

SECTION 7. Authorized Capital Stock Par value. The capital stock of the Bank shall be Five Billion Pesos to be divided into Fifty Million common shares with par value of P100 per share. These shares are available for subscription by the National Government. Upon the effectivity of this Charter, the National Government shall subscribe to Twenty-Five Million common shares of stock worth Two Billion Five Hundred Million which shall be deemed paid for by the Government with the net asset values of the Bank remaining after the transfer of assets and liabilities as provided in Section 30 hereof. (Emphasis supplied)

Other government-owned corporations organized as stock corporations under their special charters are the Philippine Crop Insurance

Corporation,267[42] Philippine International Trading Corporation,268[43] and the Philippine National Bank269[44] before it was reorganized as a stock corporation under the Corporation Code. All these government-owned corporations

organized under special charters as stock corporations are subject to real estate tax on real properties owned by them. To rule that they are not government-

owned or controlled corporations because they are not registered with the Securities and Exchange Commission would remove them from the reach of Section 234 of the Local Government Code, thus exempting them from real estate tax.

Third, the government-owned or controlled corporations created through special charters are those that meet the two conditions prescribed in Section 16, Article XII of the Constitution. The first condition is that the government-owned or controlled corporation must be established for the common good. The second condition is that the government-owned or controlled corporation must meet the test of economic viability. Section 16, Article XII of the 1987 Constitution provides:

SEC. 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability. (Emphasis and underscoring supplied)

The

Constitution

expressly

authorizes

the

legislature

to

create

government-owned or controlled corporations through special charters only if these entities are required to meet the twin conditions of common good and economic viability. In other words, Congress has no power to create

government-owned or controlled corporations with special charters unless they are made to comply with the two conditions of common good and economic viability. The test of economic viability applies only to government-owned or controlled corporations that perform economic or commercial activities and need to compete in the market place. Being essentially economic vehicles of the State for the common good meaning for economic development purposes these

government-owned or controlled corporations with special charters are usually organized as stock corporations just like ordinary private corporations.

In contrast, government instrumentalities vested with corporate powers and performing governmental or public functions need not meet the test of economic viability. These instrumentalities perform essential public services for the common good, services that every modern State must provide its citizens. These instrumentalities need not be economically viable since the government may even subsidize their entire operations. These instrumentalities are not the government-owned or controlled corporations referred to in Section 16, Article XII of the 1987 Constitution.

Thus, the Constitution imposes no limitation when the legislature creates government instrumentalities vested with corporate powers but performing essential governmental or public functions. Congress has plenary authority to create government instrumentalities vested with corporate powers provided these instrumentalities perform essential government functions or public services. However, when the legislature creates through special charters

corporations that perform economic or commercial activities, such entities known as government-owned or controlled corporations must meet the test

of economic viability because they compete in the market place.

This is the situation of the Land Bank of the Philippines and the Development Bank of the Philippines and similar government-owned or controlled corporations, which derive their income to meet operating expenses solely from commercial transactions in competition with the private sector. The intent of the Constitution is to prevent the creation of government-owned or controlled corporations that cannot survive on their own in the market place and thus merely drain the public coffers.

Commissioner Blas F. Ople, proponent of the test of economic viability, explained to the Constitutional Commission the purpose of this test, as follows:

MR. OPLE: Madam President, the reason for this concern is really that when the government creates a corporation, there is a sense in which this corporation becomes exempt from the test of economic performance. We know what happened in the past. If a government corporation loses, then it makes its claim upon the taxpayers money through new equity infusions from the government and what is always invoked is the common good. That is the reason why this year, out of a budget of P115 billion for the entire government, about P28 billion of this will go into equity infusions to support a few government financial institutions. And this is all taxpayers money which could have

been relocated to agrarian reform, to social services like health and education, to augment the salaries of grossly underpaid public employees. And yet this is all going down the drain.

Therefore, when we insert the phrase ECONOMIC VIABILITY together with the common good, this becomes a restraint on future enthusiasts for state capitalism to excuse themselves from the responsibility of meeting the market test so that they become viable. And so, Madam President, I reiterate, for the committee s consideration and I am glad that I am joined in this proposal by Commissioner Foz, the insertion of the standard of ECONOMIC VIABILITY OR THE ECONOMIC TEST, together with the common good.270[45]

Father Joaquin G. Bernas, a leading member of the Constitutional Commission, explains in his textbook The 1987 Constitution of the Republic of the Philippines: A Commentary:
The second sentence was added by the 1986 Constitutional Commission. The significant addition, however, is the phrase in the interest of the common good and subject to the test of economic viability. The addition includes the ideas that they must show capacity to function efficiently in business and that they should not go into activities which the private sector can do better. Moreover, economic viability is more than financial viability but also includes capability to make profit and generate benefits not quantifiable in financial terms.271[46] (Emphasis supplied)

Clearly, the test of economic viability does not apply to government entities vested with corporate powers and performing essential public services. The State is obligated to render essential public services regardless of the economic viability of providing such service. The non-economic viability of

rendering such essential public service does not excuse the State from withholding such essential services from the public.

However, government-owned or controlled corporations with special charters, organized essentially for economic or commercial objectives, must meet the test of economic viability. These are the government-owned or controlled corporations that are usually organized under their special charters as stock corporations, like the Land Bank of the Philippines and the Development Bank of the Philippines. These are the government-owned or controlled corporations, along with government-owned or controlled corporations organized under the Corporation Code, that fall under the definition of government-owned or controlled corporations in Section 2(10) of the Administrative Code.

The MIAA need not meet the test of economic viability because the legislature did not create MIAA to compete in the market place. MIAA does not compete in the market place because there is no competing international airport operated by the private sector. MIAA performs an essential public service as the primary domestic and international airport of the Philippines. The operation of an international airport requires the presence of personnel from the following government agencies:

1.

The Bureau of Immigration and Deportation, to document the arrival and departure of passengers, screening out those without

visas or travel documents, or those with hold departure orders;

2.

The Bureau of Customs, to collect import duties or enforce the ban on prohibited importations;

3.

The quarantine office of the Department of Health, to enforce health measures against the spread of infectious diseases into the

country;

4.

The Department of Agriculture, to enforce measures against the spread of plant and animal diseases into the country;

5.

The Aviation Security Command of the Philippine National Police, to prevent the entry of terrorists and the escape of criminals,

as well as to secure the airport premises from terrorist attack or seizure;

6.

The Air Traffic Office of the Department of Transportation and Communications, to authorize aircraft to enter or leave Philippine

airspace, as well as to land on, or take off from, the airport; and

7.

The MIAA, to provide the proper premises

such as runway and buildings

for the government personnel, passengers, and

airlines, and to manage the airport operations.

All these agencies of government perform government functions essential to the operation of an international airport.

MIAA performs an essential public service that every modern State must provide its citizens. MIAA derives its revenues principally from the mandatory fees and charges MIAA imposes on passengers and airlines. The terminal fees that MIAA charges every passenger are regulatory or administrative fees272

[47] and not income from commercial transactions.

MIAA falls under the definition of a government instrumentality under Section 2(10) of the Introductory Provisions of the Administrative Code, which provides:

SEC. 2. General Terms Defined. x x x x

(10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. x x x (Emphasis supplied)

The fact alone that MIAA is endowed with corporate powers does not make MIAA a government-owned or controlled corporation. Without a change in its capital structure, MIAA remains a government instrumentality under Section 2(10) of the Introductory Provisions of the Administrative Code. More importantly, as long as MIAA renders essential public services, it need not comply with the test of economic viability. Thus, MIAA is outside the scope of the

phrase government-owned or controlled corporations under Section 16, Article XII of the 1987 Constitution.

The minority belittles the use in the Local Government Code of the phrase government-owned or controlled corporation as merely clarificatory or

illustrative. This is fatal. The 1987 Constitution prescribes explicit conditions for the creation of government-owned or controlled corporations. The

Administrative Code defines what constitutes a government-owned or controlled corporation. To belittle this phrase as clarificatory or illustrative is grave error.

To summarize, MIAA is not a government-owned or controlled corporation under Section 2(13) of the Introductory Provisions of the Administrative Code because it is not organized as a stock or non-stock corporation. Neither is MIAA a government-owned or controlled corporation under Section 16, Article XII of the 1987 Constitution because MIAA is not required to meet the test of economic viability. MIAA is a government instrumentality vested with corporate powers and performing essential public services pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. As a government instrumentality, MIAA is not subject to any kind of tax by local governments under Section 133(o) of the Local Government Code. The exception to the exemption in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under the Local Government Code. Such exception applies only if the beneficial use of real property owned by the Republic is given to a taxable entity.

Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of public dominion. dominion are owned by the State or the Republic. provides: Properties of public

Article 420 of the Civil Code

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (Emphasis supplied)

The term ports x x x constructed by the State includes airports and seaports. The Airport Lands and Buildings of MIAA are intended for public use, and at the very least intended for public service. Whether intended for public use or public service, the Airport Lands and Buildings are properties of public dominion. As properties of public dominion, the Airport Lands and Buildings are owned by the Republic and thus exempt from real estate tax under Section 234(a) of the Local Government Code.

4. Conclusion

Under Section 2(10) and (13) of the Introductory Provisions of the Administrative Code, which governs the legal relation and status of government units, agencies and offices within the entire government machinery, MIAA is a government instrumentality and not a government-owned or controlled

corporation. Under Section 133(o) of the Local Government Code, MIAA as a government instrumentality is not a taxable person because it is not subject to [t]axes, fees or charges of any kind by local governments. The only exception is when MIAA leases its real property to a taxable person as provided in Section 234(a) of the Local Government Code, in which case the specific real property leased becomes subject to real estate tax. Thus, only portions of the Airport Lands and Buildings leased to taxable persons like private parties are subject to real estate tax by the City of Paraaque.

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted to public use, are properties of public dominion and thus owned by the State or the Republic of the Philippines. Article 420 specifically mentions ports x x x constructed by the State, which includes public airports and seaports, as properties of public dominion and owned by the Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are expressly exempt from real estate tax under Section 234(a) of the Local Government Code. This Court has

also repeatedly ruled that properties of public dominion are not subject to execution or foreclosure sale.

WHEREFORE, we GRANT the petition.

We SET ASIDE the assailed 27 September

Resolutions of the Court of Appeals of 5 October 2001 and

2002 in CA-G.R. SP No. 66878. We DECLARE the Airport Lands and Buildings of the Manila International Airport Authority EXEMPT from the real estate tax

imposed by the City of Paraaque. We declare VOID all the real estate tax assessments, including the final notices of real estate tax delinquencies, issued by the City of Paraaque on the Airport Lands and Buildings of the Manila International Airport Authority, except for the portions that the Manila International Airport Authority has leased to private parties. We also declare

VOID the assailed auction sale, and all its effects, of the Airport Lands and Buildings of the Manila International Airport Authority.

No costs.

SO ORDERED. SECOND DIVISION

THE CITY GOVERNMENT OF QUEZON CITY, AND THE CITY TREASURER OF QUEZON CITY, DR. VICTOR B. ENRIGA, Petitioners,

G.R. No. 162015

Present:

PUNO, J., Chairperson, SANDOVAL-GUTIERREZ, - versus CORONA, AZCUNA, and

GARCIA, JJ.

BAYAN TELECOMMUNICATIONS, INC., Respondent.

Promulgated:

March 6, 2006

x----------------------------------------------------------------------------------x

DECISION
GARCIA, J.:

Before the Court, on pure questions of law, is this petition for review on certiorari under Rule 45 of the Rules of Court to nullify and set aside the following issuances of the Regional Trial Court (RTC) of Quezon City, Branch 227, in its Civil Case No. Q-02-47292, to wit:

1)

Decision273[1] dated June 6, 2003, declaring respondent Bayan Telecommunications, Inc. exempt from real estate taxation on its real properties located in Quezon City; and Order274[2] dated December 30, 2003, denying petitioners motion for reconsideration.

2)

The facts: Respondent Bayan Telecommunications, Inc.275[3] (Bayantel) is a legislative franchise holder under Republic Act (Rep. Act) No. 3259276[4] to establish and operate radio stations for domestic telecommunications, radiophone, broadcasting and telecasting.

Of relevance to this controversy is the tax provision of Rep. Act No. 3259, embodied in Section 14 thereof, which reads:
SECTION 14. (a) The grantee shall be liable to pay the same taxes on its real estate, buildings and personal property, exclusive of the franchise, as other persons or corporations are now or hereafter may be required by law to pay. (b) The grantee shall further pay to the Treasurer of the Philippines each year, within ten days after the audit and approval of the accounts as prescribed in this Act, one and one-half per centum of all gross receipts from the business transacted under this franchise by the said grantee (Emphasis supplied).

On January 1, 1992, Rep. Act No. 7160, otherwise known as the Local Government Code of 1991 (LGC), took effect. Section 232 of the

Code grants local government units within the Metro Manila Area the power to levy tax on real properties, thus:
SEC. 232. Power to Levy Real Property Tax. A province or city or a municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery and other improvements not hereinafter specifically exempted.

Complementing the aforequoted provision is the second paragraph of Section 234 of the same Code which withdrew any exemption from realty tax heretofore granted to or enjoyed by all persons, natural or juridical, to wit:
SEC. 234 - Exemptions from Real Property Tax. exempted from payment of the real property tax: xxx xxx xxx The following are

Except as provided herein, any exemption from payment of real property tax previously granted to, or enjoyed by, all persons, whether natural or juridical, including government-owned-or-controlled corporations is hereby withdrawn upon effectivity of this Code (Emphasis supplied).

On July 20, 1992, barely

few months after the LGC took effect,

Congress enacted Rep. Act No. 7633, amending Bayantel s original franchise. The amendatory law (Rep. Act No. 7633) contained the following tax provision:
SEC. 11. The grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee, its successors or assigns shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee, its successors or assigns and the said percentage shall be in lieu of

all taxes on this franchise or earnings thereof. Provided, That the grantee, its successors or assigns shall continue to be liable for income taxes payable under Title II of the National Internal Revenue Code . xxx. [Emphasis supplied]

It is undisputed that within the territorial boundary of Quezon City, Bayantel owned several real properties on which it maintained various telecommunications facilities. These real properties, as hereunder

described, are covered by the following tax declarations:

(a) Tax Declaration Nos. D-096-04071, D-096-04074, D-096-04072 and D096-04073 pertaining to Bayantels Head Office and Operations Center in Roosevelt St., San Francisco del Monte, Quezon City allegedly the nerve center of petitioners telecommunications franchise operations, said Operation Center housing mainly petitioners Network Operations Group and switching, transmission and related equipment; Tax Declaration Nos. D-124-01013, D-124-00939, D-124-00920 and D124-00941 covering Bayantels land, building and equipment in Maginhawa St., Barangay East Teachers Village, Quezon City which houses telecommunications facilities; and Tax Declaration Nos. D-011-10809, D-011-10810, D-011-10811, and D011-11540 referring to Bayantels Exchange Center located in Proj. 8, Brgy. Bahay Toro, Tandang Sora, Quezon City which houses the Network Operations Group and cover switching, transmission and other related equipment.

(b)

(c)

In 1993, the government of Quezon City, pursuant to the taxing power vested on local government units by Section 5, Article X of the 1987 Constitution, infra, in relation to Section 232 of the LGC, supra, enacted City Ordinance No. SP-91, S-93, otherwise known as the Quezon City Revenue Code (QCRC),277[5] imposing, under Section 5 thereof, a

real property tax on all real properties in Quezon City, and, reiterating in its Section 6, the withdrawal of exemption from real property tax under Section 234 of the LGC, supra. Furthermore, much like the LGC, the QCRC, under its Section 230, withdrew tax exemption privileges in general, as follows:
SEC. 230. Withdrawal of Tax Exemption Privileges. Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government owned or controlled corporations, except local water districts, cooperatives duly registered under RA 6938, non-stock and non-profit hospitals and educational institutions, business enterprises certified by the Board of Investments (BOI) as pioneer or non-pioneer for a period of six (6) and four (4) years, respectively, are hereby withdrawn effective upon approval of this Code (Emphasis supplied).

Conformably with the City s Revenue Code, new tax declarations for Bayantel s real properties in Quezon City were issued by the City Assessor and were received by Bayantel on August 13, 1998, except one (Tax Declaration No. 124-01013) which was received on July 14, 1999.

Meanwhile, on March 16, 1995, Rep. Act No. 7925,278[6] otherwise known as the Public Telecommunications Policy Act of the Philippines, envisaged to level the playing field among telecommunications companies, took effect. Section 23 of the Act provides:
SEC. 23. Equality of Treatment in the Telecommunications Industry. Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shall ipso facto become part of previously

granted telecommunications franchises and shall be accorded immediately and unconditionally to the grantees of such franchises: Provided, however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning territory covered by the franchise, the life span of the franchise, or the type of service authorized by the franchise.

On January 7, 1999, Bayantel wrote the office of the City Assessor seeking the exclusion of its real properties in the city from the roll of taxable real properties. With its request having been denied, Bayantel

interposed an appeal with the Local Board of Assessment Appeals (LBAA). And, evidently on its firm belief of its exempt status, Bayantel did not pay the real property taxes assessed against it by the Quezon City government. On account thereof, the Quezon City Treasurer sent out notices of delinquency for the total amount of P43,878,208.18, followed by the issuance of several warrants of levy against Bayantel s properties preparatory to their sale at a public auction set on July 30, 2002. Threatened with the imminent loss of its properties, Bayantel immediately withdrew its appeal with the LBAA and instead filed with the RTC of Quezon City a petition for prohibition with an urgent

application for a temporary restraining order (TRO) and/or writ of preliminary injunction, thereat docketed as Civil Case No. Q-02-47292, which was raffled to Branch 227 of the court. On July 29, 2002, or in the eve of the public auction scheduled the following day, the lower court issued a TRO, followed, after due hearing, by a writ of preliminary injunction via its order of August 20, 2002.

And, having heard the parties on the merits, the same court came out with its challenged Decision of June 6, 2003, the dispositive portion of which reads:
WHEREFORE, premises considered, pursuant to the enabling franchise under Section 11 of Republic Act No. 7633, the real estate properties and buildings of petitioner [now, respondent Bayantel] which have been admitted to be used in the operation of petitioners franchise described in the following tax declarations are hereby DECLARED exempt from real estate taxation: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Tax Declaration No. D-096-04071 Tax Declaration No. D-096-04074 Tax Declaration No. D-124-01013 Tax Declaration No. D-011-10810 Tax Declaration No. D-011-10811 Tax Declaration No. D-011-10809 Tax Declaration No. D-124-00941 Tax Declaration No. D-124-00940 Tax Declaration No. D-124-00939 Tax Declaration No. D-096-04072 Tax Declaration No. D-096-04073 Tax Declaration No. D-011-11540

The preliminary prohibitory injunction issued in the August 20, 2002 Order of this Court is hereby made permanent. Since this is a resolution of a purely legal issue, there is no pronouncement as to costs. SO ORDERED.

Their motion for reconsideration having been denied by the court in its Order dated December 30, 2003, petitioners elevated the case directly to this Court on pure questions of law, ascribing to the lower court the following errors:
I. [I]n declaring the real properties of respondent exempt from real property taxes notwithstanding the fact that the tax exemption granted to Bayantel in its original franchise had been withdrawn by the [LGC] and that the said exemption was not restored by the enactment of RA 7633.

II.

[In] declaring the real properties of respondent exempt from real property taxes notwithstanding the enactment of the [QCRC] which withdrew the tax exemption which may have been granted by RA 7633. [In] declaring the real properties of respondent exempt from real property taxes notwithstanding the vague and ambiguous grant of tax exemption provided under Section 11 of RA 7633. [In] declaring the real properties of respondent exempt from real property taxes notwithstanding the fact that [it] had failed to exhaust administrative remedies in its claim for real property tax exemption. (Words in bracket added.)

III.

IV.

As we see it, the errors assigned may ultimately be reduced to two (2) basic issues, namely:
1. 2. Whether or not Bayantels real properties in Quezon City are exempt from real property taxes under its legislative franchise; and Whether or not Bayantel is required to exhaust administrative remedies before seeking judicial relief with the trial court.

We shall first address the second issue, the same being procedural in nature. Petitioners argue that Bayantel had failed to avail itself of the

administrative remedies provided for under the LGC, adding that the trial court erred in giving due course to Bayantel s petition for prohibition. To petitioners, the appeal mechanics under the LGC constitute Bayantel s plain and speedy remedy in this case. The Court does not agree. Petitions for prohibition are governed by the following provision of Rule 65 of the Rules of Court:

SEC. 2. Petition for prohibition. When the proceedings of any tribunal, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other 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 commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise, granting such incidental reliefs as law and justice may require.

With the reality that Bayantel s real properties were already levied upon on account of its nonpayment of real estate taxes thereon, the Court agrees with Bayantel that an appeal to the LBAA is not a speedy and adequate remedy within the context of the aforequoted Section 2 of Rule 65. This is not to mention of the auction sale of said properties already scheduled on July 30, 2002.

Moreover, one of the recognized exceptions to the exhaustion- ofadministrative remedies rule is when, as here, only legal issues are to be resolved. In fact, the Court, cognizant of the nature of the questions presently involved, gave due course to the instant petition. As the Court has said in Ty vs. Trampe:279[7]

xxx. Although as a rule, administrative remedies must first be exhausted before resort to judicial action can prosper, there is a well-settled exception in cases where the controversy does not involve questions of fact but only of law. xxx.

Lest it be overlooked, an appeal to the LBAA, to be properly considered, required prior payment under protest of the amount of P43,878,208.18, a figure which, in the light of the then prevailing Asian financial crisis, may have been difficult to raise up. Given this reality, an appeal to the LBAA may not be considered as a plain, speedy and adequate remedy. It is thus understandable why Bayantel opted to withdraw its earlier appeal with the LBAA and, instead, filed its petition for prohibition with urgent application for injunctive relief in Civil Case No. Q-02-47292. The remedy availed of by Bayantel under Section 2, Rule 65 of the Rules of Court must be upheld.

This brings the Court to the more weighty question of whether or not Bayantel s real properties in Quezon City are, under its franchise, exempt from real property tax.

The lower court resolved the issue in the affirmative, basically owing to the phrase exclusive of this franchise found in Section 11 of Bayantel s amended franchise, Rep. Act No. 7633. To petitioners, however, the language of Section 11 of Rep. Act No. 7633 is neither clear nor unequivocal. The elaborate and extensive discussion devoted by trial court the

on the meaning and import of said phrase, they add, It is petitioners thesis that Bayantel was in no time

suggests as much.

given any express exemption from the payment of real property tax under its amendatory franchise.

There seems to be no issue as to Bayantel s exemption from real estate taxes by virtue of the term exclusive of the franchise qualifying the phrase same taxes on its real estate, buildings and personal property, found in Section 14, supra, of its franchise, Rep. Act No. 3259, as originally granted. The legislative intent expressed in the phrase exclusive of this franchise cannot be construed other than distinguishing between two (2) sets of properties, be they real or personal, owned by the franchisee, namely, (a) those actually, directly and exclusively used in its radio or telecommunications business, and (b) those properties which are not so used. It is worthy to note that the properties subject of the

present controversy are only those which are admittedly falling under the first category. To the mind of the Court, Section 14 of Rep. Act No. 3259 effectively works to grant or delegate to local governments of Congress inherent power to tax the franchisee s properties belonging to the second group of properties indicated above, that is, all properties which, exclusive of this franchise, are not actually and directly used in the pursuit of its franchise. As may be recalled, the taxing power of local governments under both the 1935 and the 1973 Constitutions solely depended upon an enabling law. Absent such enabling law, local government units were without authority to impose and collect taxes on real properties within their respective territorial jurisdictions. While Section 14 of Rep. Act No. 3259 may be validly viewed as an implied delegation of power to tax, the delegation under that

provision, as couched, is limited to

impositions over properties of the

franchisee which are not actually, directly and exclusively used in the pursuit of its franchise. Necessarily, other properties of Bayantel directly used in the pursuit of its business are beyond the pale of the delegated taxing power of local governments. In a very real sense, therefore, real properties of Bayantel, save those exclusive of its franchise, are

subject to realty taxes. Ultimately, therefore, the inevitable result was that all realties which are actually, directly and exclusively used in the operation of its franchise are exempted from any property tax. Bayantel s franchise being national in character, the exemption thus granted under Section 14 of Rep. Act No. 3259 applies to all its real or personal properties found anywhere within the Philippine archipelago. However, with the LGC s taking effect on January 1, 1992, Bayantel s exemption from real estate taxes for properties of whatever kind located within the Metro Manila area was, by force of Section 234 of the Code, supra, expressly withdrawn. But, not long thereafter, however, or on July 20, 1992, Congress passed Rep. Act No. 7633 amending Bayantel s original franchise. Worthy of note is that Section 11 of Rep. Act No. 7633 is a virtual reenacment of the tax provision, i.e., Section 14, supra, of Bayantel s original franchise under Rep. Act No. 3259. Stated otherwise, Section 14 of Rep. Act No. 3259 which was deemed impliedly repealed by Section 234 of the LGC was expressly revived under Section 14 of Rep. Act No. 7633. In concrete terms, the realty tax exemption heretofore enjoyed by Bayantel under its original franchise, but subsequently withdrawn by

force of Section 234 of the LGC, has been restored by Section 14 of Rep. Act No. 7633. The Court has taken stock of the fact that by virtue of Section 5, Article X of the 1987 Constitution,280[8] local governments are empowered to levy taxes. And pursuant to this constitutional empowerment, juxtaposed with Section 232281[9] of the LGC, the Quezon City

government enacted in 1993 its local Revenue Code, imposing real property tax on all real properties found within its territorial jurisdiction. And as earlier stated, the City s Revenue Code, just like the LGC, expressly withdrew, under Section 230 thereof, supra, all tax exemption privileges in general. This thus raises the question of whether or not the City s Revenue Code pursuant to which the city treasurer of Quezon City levied real

property taxes against Bayantel s real properties located within the City effectively withdrew the tax exemption enjoyed by Bayantel under its franchise, as amended. Bayantel answers the poser in the negative arguing that once again it is only liable to pay the same taxes, as any other persons or corporations on all its real or personal properties, exclusive of its franchise.

Bayantel s posture is well-taken. While the system of local government taxation has changed with the onset of the 1987 Constitution, the power of local government units to tax is still limited. As we explained in Mactan Cebu International Airport Authority:282[10]
The power to tax is primarily vested in the Congress; however, in our jurisdiction, it may be exercised by local legislative bodies, no longer merely be virtue of a valid delegation as before, but pursuant to direct authority conferred by Section 5, Article X of the Constitution. Under the latter, the exercise of the power may be subject to such guidelines and limitations as the Congress may provide which, however, must be consistent with the basic policy of local autonomy. (at p. 680; Emphasis supplied.)

Clearly then, while a new slant on the subject of local taxation now prevails in the sense that the former doctrine of local government units delegated power to tax had been effectively modified with Article X, Section 5 of the 1987 Constitution now in place, .the basic doctrine on local taxation remains essentially the same. For as the Court stressed in Mactan, the power to tax is [still] primarily vested in the Congress.

This new perspective is best articulated by Fr. Joaquin G. Bernas, S.J., himself a Commissioner of the 1986 Constitutional Commission which crafted the 1987 Constitution, thus:
What is the effect of Section 5 on the fiscal position of municipal corporations? Section 5 does not change the doctrine that municipal corporations do not possess inherent powers of taxation. What it does is to confer municipal corporations a general power to levy taxes and otherwise create sources of revenue. They no longer have to wait for a statutory grant of these powers. The power of the legislative authority relative to the fiscal powers of local governments has been reduced to the authority to impose limitations on

municipal powers. Moreover, these limitations must be consistent with the basic policy of local autonomy. The important legal effect of Section 5 is thus to reverse the principle that doubts are resolved against municipal corporations. Henceforth, in interpreting statutory provisions on municipal fiscal powers, doubts will be resolved in favor of municipal corporations. It is understood, however, that taxes imposed by local government must be for a public purpose, uniform within a locality, must not be confiscatory, and must be within the jurisdiction of the local unit to pass.283[11] (Emphasis supplied).

In net effect, the controversy presently before the Court involves, at bottom, a clash between the inherent taxing power of the legislature, includes the power to exempt, and the local

which necessarily

government s delegated power to tax under the aegis of the 1987 Constitution.

Now to go back to the Quezon City Revenue Code which imposed real estate taxes on all real properties within the city s territory and removed exemptions theretofore previously granted to, enjoyed by all persons, whether natural or juridical or presently

., 284[12] there can

really be no dispute that the power of the Quezon City Government to tax is limited by Section 232 of the LGC which expressly provides that a province or city or municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery, exempted. and other improvement not hereinafter specifically

Under this law, the Legislature highlighted its power to

thereafter exempt certain realties from the taxing power of local government units. An interpretation denying Congress such power to

exempt would reduce the phrase not hereinafter specifically exempted as a pure jargon, without meaning whatsoever. Needless to state, such absurd situation is unacceptable.

For sure, in Philippine Long Distance Telephone Company, Inc. (PLDT) vs. City of Davao,285[13] this Court has upheld the power of Congress to grant exemptions over the power of local government units to impose taxes. There, the Court wrote:
Indeed, the grant of taxing powers to local government units under the Constitution and the LGC does not affect the power of Congress to grant exemptions to certain persons, pursuant to a declared national policy. The legal effect of the constitutional grant to local governments simply means that in interpreting statutory provisions on municipal taxing powers, doubts must be resolved in favor of municipal corporations. (Emphasis supplied.)

As we see it, then, the issue in this case no longer dwells on whether Congress has the power to exempt Bayantel s properties from realty taxes by its enactment of Rep. Act No. 7633 which amended Bayantel s original franchise. The more decisive question turns on whether Congress actually did exempt Bayantel s properties at all by virtue of Section 11 of Rep. Act No. 7633. Admittedly, Rep. Act No. 7633 was enacted subsequent to the LGC. Perfectly aware that the LGC has already withdrawn Bayantel s former

exemption from realty taxes, Congress opted to pass Rep. Act No. 7633

using, under Section 11 thereof, exactly the same defining phrase exclusive of this franchise which was the basis for Bayantel s

exemption from realty taxes prior to the LGC. In plain language, Section 11 of Rep. Act No. 7633 states that the grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. The

Court views this subsequent piece of legislation as an express and real intention on the part of Congress to once again remove from the LGC s delegated taxing power, all of the franchisee s (Bayantel s) properties that are actually, directly and exclusively used in the pursuit of its franchise. WHEREFORE, the petition is DENIED. No pronouncement as to costs. SO ORDERED.
EN BANC [G.R. No. 138810. September 29, 2004] BATANGAS CATV, INC., petitioner, vs. THE COURT OF APPEALS, THE BATANGAS CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY MAYOR, respondents. DECISION SANDOVAL-GUTIERREZ, J.: In the late 1940s, John Walson, an appliance dealer in Pennsylvania, suffered a decline in the sale of television (tv) sets because of poor reception of signals in his community. Troubled, he built an antenna on top of a nearby mountain. Using coaxial cable lines, he distributed the tv

signals from the antenna to the homes of his customers. Walsons innovative idea improved his sales and at the same time gave birth to a new telecommunication system -- the Community Antenna Television (CATV) or Cable Television.[1] This technological breakthrough found its way in our shores and, like in its country of origin, it spawned legal controversies, especially in the field of regulation. The case at bar is just another occasion to clarify a shady area. Here, we are tasked to resolve the inquiry -- may a local government unit (LGU) regulate the subscriber rates charged by CATV operators within its territorial jurisdiction? This is a petition for review on certiorari filed by Batangas CATV, Inc. (petitioner herein) against the Sangguniang Panlungsod and the Mayor of Batangas City (respondents herein) assailing the Court of Appeals (1) Decision[2] dated February 12, 1999 and (2) Resolution[3] dated May 26, 1999, in CA-G.R. CV No. 52361.[4] The Appellate Court reversed and set aside the Judgment[5] dated October 29, 1995 of the Regional Trial Court (RTC), Branch 7, Batangas City in Civil Case No. 4254,[6] holding that neither of the respondents has the power to fix the subscriber rates of CATV operators, such being outside the scope of the LGUs power. The antecedent facts are as follows: On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210[7] granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, provided, however, that any increase of rates shall be subject to the approval of the Sangguniang Panlungsod.[8] Sometime in November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter[9] threatening to cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod, pursuant to Resolution No. 210. Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction docketed as Civil Case No. 4254. It alleged that respondent Sangguniang Panlungsod has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines. On October 29, 1995, the trial court decided in favor of petitioner, thus: WHEREFORE, as prayed for, the defendants, their representatives, agents, deputies or other persons acting on their behalf or under their instructions, are hereby enjoined from canceling plaintiffs permit to operate a Cable Antenna Television (CATV) system in the City of Batangas or its environs or in any manner, from interfering with the authority and power of the National Telecommunications Commission to grant franchises to operate CATV systems to qualified applicants, and the right of plaintiff in fixing its service rates which needs no prior approval of the Sangguniang Panlungsod of Batangas City.

The counterclaim of the plaintiff is hereby dismissed. No pronouncement as to costs. IT IS SO ORDERED.[10] The trial court held that the enactment of Resolution No. 210 by respondent violates the States deregulation policy as set forth by then NTC Commissioner Jose Luis A. Alcuaz in his Memorandum dated August 25, 1989. Also, it pointed out that the sole agency of the government which can regulate CATV operation is the NTC, and that the LGUs cannot exercise regulatory power over it without appropriate legislation. Unsatisfied, respondents elevated the case to the Court of Appeals, docketed as CA-G.R. CV No. 52361. On February 12, 1999, the Appellate Court reversed and set aside the trial courts Decision, ratiocinating as follows: Although the Certificate of Authority to operate a Cable Antenna Television (CATV) System is granted by the National Telecommunications Commission pursuant to Executive Order No. 205, this does not preclude the Sangguniang Panlungsod from regulating the operation of the CATV in their locality under the powers vested upon it by Batas Pambansa Bilang 337, otherwise known as the Local Government Code of 1983. Section 177 (now Section 457 paragraph 3 (ii) of Republic Act 7160) provides: Section 177. Powers and Duties The Sangguniang Panlungsod shall: a) Enact such ordinances as may be necessary to carry into effect and discharge the responsibilities conferred upon it by law, and such as shall be necessary and proper to provide for health and safety, comfort and convenience, maintain peace and order, improve the morals, and promote the prosperity and general welfare of the community and the inhabitants thereof, and the protection of property therein; xxx d) Regulate, fix the license fee for, and tax any business or profession being carried on and exercised within the territorial jurisdiction of the city, except travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe restaurants, and tourist inns of international standards which shall remain under the licensing and regulatory power of the Ministry of Tourism which shall exercise such authority without infringement on the taxing and regulatory powers of the city government; Under cover of the General Welfare Clause as provided in this section, Local Government Units can perform just about any power that will benefit their constituencies. Thus, local government units can exercise powers that are: (1) expressly granted; (2) necessarily implied from the power that is expressly granted; (3) necessary, appropriate or incidental for its efficient and effective governance; and (4) essential to the promotion of the general welfare of their inhabitants. (Pimentel, The Local Government Code of 1991, p. 46)

Verily, the regulation of businesses in the locality is expressly provided in the Local Government Code. The fixing of service rates is lawful under the General Welfare Clause. Resolution No. 210 granting appellee a permit to construct, install and operate a community antenna television (CATV) system in Batangas City as quoted earlier in this decision, authorized the grantee to impose charges which cannot be increased except upon approval of the Sangguniang Bayan. It further provided that in case of violation by the grantee of the terms and conditions/requirements specifically provided therein, the City shall have the right to withdraw the franchise. Appellee increased the service rates from EIGHTY EIGHT PESOS (P88.00) to ONE HUNDRED EIGHTY PESOS (P180.00) (Records, p. 25) without the approval of appellant. Such act breached Resolution No. 210 which gives appellant the right to withdraw the permit granted to appellee.[11] Petitioner filed a motion for reconsideration but was denied.[12] Hence, the instant petition for review on certiorari anchored on the following assignments of error: I THE COURT OF APPEALS ERRED IN HOLDING THAT THE GENERAL WELFARE CLAUSE OF THE LOCAL GOVERNMENT CODE AUTHORIZES RESPONDENT SANGGUNIANG PANLUNGSOD TO EXERCISE THE REGULATORY FUNCTION SOLELY LODGED WITH THE NATIONAL TELECOMMUNICATIONS COMMISSION UNDER EXECUTIVE ORDER NO. 205, INCLUDING THE AUTHORITY TO FIX AND/OR APPROVE THE SERVICE RATES OF CATV OPERATORS; AND II THE COURT OF APPEALS ERRED IN REVERSING THE DECISION APPEALED FROM AND DISMISSING PETITIONERS COMPLAINT.[13] Petitioner contends that while Republic Act No. 7160, the Local Government Code of 1991, extends to the LGUs the general power to perform any act that will benefit their constituents, nonetheless, it does not authorize them to regulate the CATV operation. Pursuant to E.O. No. 205, only the NTC has the authority to regulate the CATV operation, including the fixing of subscriber rates. Respondents counter that the Appellate Court did not commit any reversible error in rendering the assailed Decision. First, Resolution No. 210 was enacted pursuant to Section 177(c) and (d) of Batas Pambansa Bilang 337, the Local Government Code of 1983, which authorizes LGUs to regulate businesses. The term businesses necessarily includes the CATV industry. And second, Resolution No. 210 is in the nature of a contract between petitioner and respondents, it

being a grant to the former of a franchise to operate a CATV system. To hold that E.O. No. 205 amended its terms would violate the constitutional prohibition against impairment of contracts.[14] The petition is impressed with merit. Earlier, we posed the question -- may a local government unit (LGU) regulate the subscriber rates charged by CATV operators within its territorial jurisdiction? A review of pertinent laws and jurisprudence yields a negative answer. President Ferdinand E. Marcos was the first one to place the CATV industry under the regulatory power of the national government.[15] On June 11, 1978, he issued Presidential Decree (P.D.) No. 1512[16] establishing a monopoly of the industry by granting Sining Makulay, Inc., an exclusive franchise to operate CATV system in any place within the Philippines. Accordingly, it terminated all franchises, permits or certificates for the operation of CATV system previously granted by local governments or by any instrumentality or agency of the national government.[17] Likewise, it prescribed the subscriber rates to be charged by Sining Makulay, Inc. to its customers.[18] On July 21, 1979, President Marcos issued Letter of Instruction (LOI) No. 894 vesting upon the Chairman of the Board of Communications direct supervision over the operations of Sining Makulay, Inc. Three days after, he issued E.O. No. 546[19] integrating the Board of Communications[20] and the Telecommunications Control Bureau[21] to form a single entity to be known as the National Telecommunications Commission. Two of its assigned functions are: a. Issue Certificate of Public Convenience for the operation of communications utilities and services, radio communications systems, wire or wireless telephone or telegraph systems, radio and television broadcasting system and other similar public utilities; b. Establish, prescribe and regulate areas of operation of particular operators of public service communications; and determine and prescribe charges or rates pertinent to the operation of such public utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies recognized by the Philippine Government as the proper arbiter of such charges or rates; Although Sining Makulay Inc.s exclusive franchise had a life term of 25 years, it was cut short by the advent of the 1986 Revolution. Upon President Corazon C. Aquinos assumption of power, she issued E.O. No. 205[22] opening the CATV industry to all citizens of the Philippines. It mandated the NTC to grant Certificates of Authority to CATV operators and to issue the necessary implementing rules and regulations. On September 9, 1997, President Fidel V. Ramos issued E.O. No. 436[23] prescribing policy guidelines to govern CATV operation in the Philippines. Cast in more definitive terms, it restated the NTCs regulatory powers over CATV operations, thus:

SECTION 2. The regulation and supervision of the cable television industry in the Philippines shall remain vested solely with the National Telecommunications Commission (NTC). SECTION 3. Only persons, associations, partnerships, corporations or cooperatives, granted a Provisional Authority or Certificate of Authority by the Commission may install, operate and maintain a cable television system or render cable television service within a service area. Clearly, it has been more than two decades now since our national government, through the NTC, assumed regulatory power over the CATV industry. Changes in the political arena did not alter the trend. Instead, subsequent presidential issuances further reinforced the NTCs power. Significantly, President Marcos and President Aquino, in the exercise of their legislative power, issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205. Hence, they have the force and effect of statutes or laws passed by Congress.[24] That the regulatory power stays with the NTC is also clear from President Ramos E.O. No. 436 mandating that the regulation and supervision of the CATV industry shall remain vested solely in the NTC. Blacks Law Dictionary defines sole as without another or others.[25] The logical conclusion, therefore, is that in light of the above laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the exclusion of other bodies. But, lest we be misunderstood, nothing herein should be interpreted as to strip LGUs of their general power to prescribe regulations under the general welfare clause of the Local Government Code. It must be emphasized that when E.O. No. 436 decrees that the regulatory power shall be vested solely in the NTC, it pertains to the regulatory power over those matters which are peculiarly within the NTCs competence, such as, the: (1) determination of rates, (2) issuance of certificates of authority, (3) establishment of areas of operation, (4) examination and assessment of the legal, technical and financial qualifications of applicant operators, (5) granting of permits for the use of frequencies, (6) regulation of ownership and operation, (7) adjudication of issues arising from its functions, and (8) other similar matters.[26] Within these areas, the NTC reigns supreme as it possesses the exclusive power to regulate -- a power comprising varied acts, such as to fix, establish, or control; to adjust by rule, method or established mode; to direct by rule or restriction; or to subject to governing principles or laws.[27] Coincidentally, respondents justify their exercise of regulatory power over petitioners CATV operation under the general welfare clause of the Local Government Code of 1983. The Court of Appeals sustained their stance. There is no dispute that respondent Sangguniang Panlungsod, like other local legislative bodies, has been empowered to enact ordinances and approve resolutions under the general welfare clause of B.P. Blg. 337, the Local Government Code of 1983. That it continues to posses such power is clear under the new law, R.A. No. 7160 (the Local Government Code of 1991). Section 16 thereof provides: SECTION 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate,

or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among others, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant, scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. In addition, Section 458 of the same Code specifically mandates: SECTION 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang Panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, x x x: The general welfare clause is the delegation in statutory form of the police power of the State to LGUs.[28] Through this, LGUs may prescribe regulations to protect the lives, health, and property of their constituents and maintain peace and order within their respective territorial jurisdictions. Accordingly, we have upheld enactments providing, for instance, the regulation of gambling,[29] the occupation of rig drivers,[30] the installation and operation of pinball machines,[31] the maintenance and operation of cockpits,[32] the exhumation and transfer of corpses from public burial grounds,[33] and the operation of hotels, motels, and lodging houses[34] as valid exercises by local legislatures of the police power under the general welfare clause. Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system the use of public streets, rights of ways, the founding of structures, and the parceling of large regions allow an LGU a certain degree of regulation over CATV operators.[35] This is the same regulation that it exercises over all private enterprises within its territory. But, while we recognize the LGUs power under the general welfare clause, we cannot sustain Resolution No. 210. We are convinced that respondents strayed from the well recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the States deregulation policy over the CATV industry. I. Resolution No. 210 is an enactment of an LGU acting only as agent of the national legislature. Necessarily, its act must reflect and conform to the will of its principal. To test its validity, we must apply the particular requisites of a valid ordinance as laid down by the accepted principles governing municipal corporations. [36]

Speaking for the Court in the leading case of United States vs. Abendan,[37] Justice Moreland said: An ordinance enacted by virtue of the general welfare clause is valid, unless it contravenes the fundamental law of the Philippine Islands, or an Act of the Philippine Legislature, or unless it is against public policy, or is unreasonable, oppressive, partial, discriminating, or in derogation of common right. In De la Cruz vs. Paraz,[38] we laid the general rule that ordinances passed by virtue of the implied power found in the general welfare clause must be reasonable, consonant with the general powers and purposes of the corporation, and not inconsistent with the laws or policy of the State. The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205 and E.O. No. 436 insofar as it permits respondent Sangguniang Panlungsod to usurp a power exclusively vested in the NTC, i.e., the power to fix the subscriber rates charged by CATV operators. As earlier discussed, the fixing of subscriber rates is definitely one of the matters within the NTCs exclusive domain. In this regard, it is appropriate to stress that where the state legislature has made provision for the regulation of conduct, it has manifested its intention that the subject matter shall be fully covered by the statute, and that a municipality, under its general powers, cannot regulate the same conduct.[39] In Keller vs. State,[40] it was held that: Where there is no express power in the charter of a municipality authorizing it to adopt ordinances regulating certain matters which are specifically covered by a general statute, a municipal ordinance, insofar as it attempts to regulate the subject which is completely covered by a general statute of the legislature, may be rendered invalid. x x x Where the subject is of statewide concern, and the legislature has appropriated the field and declared the rule, its declaration is binding throughout the State. A reason advanced for this view is that such ordinances are in excess of the powers granted to the municipal corporation.[41] Since E.O. No. 205, a general law, mandates that the regulation of CATV operations shall be exercised by the NTC, an LGU cannot enact an ordinance or approve a resolution in violation of the said law. It is a fundamental principle that municipal ordinances are inferior in status and subordinate to the laws of the state. An ordinance in conflict with a state law of general character and statewide application is universally held to be invalid.[42] The principle is frequently expressed in the declaration that municipal authorities, under a general grant of power, cannot adopt ordinances which infringe the spirit of a state law or repugnant to the general policy of the state.[43] In every power to pass ordinances given to a municipality, there is an implied restriction that the ordinances shall be consistent with the general law.[44] In the language of Justice Isagani Cruz (ret.), this Court, in Magtajas vs. Pryce Properties Corp., Inc.,[45] ruled that: The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress,

from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the State, and the corporation could not prevent it. We know of no limitation on the right so far as to the corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature. This basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax, which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it. Respondents have an ingenious retort against the above disquisition. Their theory is that the regulatory power of the LGUs is granted by R.A. No. 7160 (the Local Government Code of 1991), a handiwork of the national lawmaking authority. They contend that R.A. No. 7160 repealed E.O. No. 205 (issued by President Aquino). Respondents argument espouses a bad precedent. To say that LGUs exercise the same regulatory power over matters which are peculiarly within the NTCs competence is to promote a scenario of LGUs and the NTC locked in constant clash over the appropriate regulatory measure on the same subject matter. LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of the NTC. At any rate, we find no basis to conclude that R.A. No. 7160 repealed E.O. No. 205, either expressly or impliedly. It is noteworthy that R.A. No. 7160 repealing clause, which painstakingly mentions the specific laws or the parts thereof which are repealed, does not include E.O. No. 205, thus: SECTION 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the Local Government Code." Executive Order No. 112 (1987), and Executive Order No. 319 (1988) are hereby repealed. (b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and issuances related to or concerning the barangay are hereby repealed.

(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special Education Fund; Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree No. 436 as amended by Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no force and effect. (d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects. (e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Section 12 of Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972, as amended, and (f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly. Neither is there an indication that E.O. No. 205 was impliedly repealed by R.A. No. 7160. It is a settled rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable showing of such intentions. In Mecano vs. Commission on Audit,[46] we ruled: Repeal by implication proceeds on the premise that where a statute of later date clearly reveals an intention on the part of the legislature to abrogate a prior act on the subject, that intention must be given effect. Hence, before there can be a repeal, there must be a clear showing on the part of the lawmaker that the intent in enacting the new law was to abrogate the old one. The intention to repeal must be clear and manifest; otherwise, at least, as a general rule, the later act is to be construed as a continuation of, and not a substitute for, the first act and will continue so far as the two acts are the same from the time of the first enactment. As previously stated, E.O. No. 436 (issued by President Ramos) vests upon the NTC the power to regulate the CATV operation in this country. So also Memorandum Circular No. 8-9-95, the Implementing Rules and Regulations of R.A. No. 7925 (the Public Telecommunications Policy Act of the Philippines). This shows that the NTCs regulatory power over CATV operation is continuously recognized. It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive confrontation, courts must exert every effort to reconcile them, remembering that both laws deserve a becoming respect as the handiwork of coordinate branches of the government.[47] On the assumption of a conflict between E.O. No. 205 and R.A. No. 7160, the proper action is not to uphold one and annul the other but to give effect to both by harmonizing them if possible. This recourse finds application here. Thus, we hold that the NTC, under E.O. No. 205, has exclusive jurisdiction over matters affecting CATV operation, including specifically the fixing of subscriber rates, but nothing herein precludes LGUs from exercising its

general power, under R.A. No. 7160, to prescribe regulations to promote the health, morals, peace, education, good order or safety and general welfare of their constituents. In effect, both laws become equally effective and mutually complementary. The grant of regulatory power to the NTC is easily understandable. CATV system is not a mere local concern. The complexities that characterize this new technology demand that it be regulated by a specialized agency. This is particularly true in the area of rate-fixing. Rate fixing involves a series of technical operations.[48] Consequently, on the hands of the regulatory body lies the ample discretion in the choice of such rational processes as might be appropriate to the solution of its highly complicated and technical problems. Considering that the CATV industry is so technical a field, we believe that the NTC, a specialized agency, is in a better position than the LGU, to regulate it. Notably, in United States vs. Southwestern Cable Co.,[49] the US Supreme Court affirmed the Federal Communications Commissions (FCCs) jurisdiction over CATV operation. The Court held that the FCCs authority over cable systems assures the preservation of the local broadcast service and an equitable distribution of broadcast services among the various regions of the country. II. Resolution No. 210 violated the States deregulation policy. Deregulation is the reduction of government regulation of business to permit freer markets and competition.[50] Oftentimes, the State, through its regulatory agencies, carries out a policy of deregulation to attain certain objectives or to address certain problems. In the field of telecommunications, it is recognized that many areas in the Philippines are still unserved or underserved. Thus, to encourage private sectors to venture in this field and be partners of the government in stimulating the growth and development of telecommunications, the State promoted the policy of deregulation. In the United States, the country where CATV originated, the Congress observed, when it adopted the Telecommunications Act of 1996, that there was a need to provide a procompetitive, deregulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition. The FCC has adopted regulations to implement the requirements of the 1996 Act and the intent of the Congress. Our country follows the same policy. The fifth Whereas Clause of E.O. No. 436 states: WHEREAS, professionalism and self-regulation among existing operators, through a nationally recognized cable television operators association, have enhanced the growth of the cable television industry and must therefore be maintained along with minimal reasonable government regulations; This policy reaffirms the NTCs mandate set forth in the Memorandum dated August 25, 1989 of Commissioner Jose Luis A. Alcuaz, to wit:

In line with the purpose and objective of MC 4-08-88, Cable Television System or Community Antenna Television (CATV) is made part of the broadcast media to promote the orderly growth of the Cable Television Industry it being in its developing stage. Being part of the Broadcast Media, the service rates of CATV are likewise considered deregulated in accordance with MC 06-2-81 dated 25 February 1981, the implementing guidelines for the authorization and operation of Radio and Television Broadcasting stations/systems. Further, the Commission will issue Provisional Authority to existing CATV operators to authorize their operations for a period of ninety (90) days until such time that the Commission can issue the regular Certificate of Authority. When the State declared a policy of deregulation, the LGUs are bound to follow. To rule otherwise is to render the States policy ineffective. Being mere creatures of the State, LGUs cannot defeat national policies through enactments of contrary measures. Verily, in the case at bar, petitioner may increase its subscriber rates without respondents approval. At this juncture, it bears emphasizing that municipal corporations are bodies politic and corporate, created not only as local units of local self-government, but as governmental agencies of the state.[51] The legislature, by establishing a municipal corporation, does not divest the State of any of its sovereignty; absolve itself from its right and duty to administer the public affairs of the entire state; or divest itself of any power over the inhabitants of the district which it possesses before the charter was granted.[52] Respondents likewise argue that E.O. No. 205 violates the constitutional prohibition against impairment of contracts, Resolution No. 210 of Batangas City Sangguniang Panlungsod being a grant of franchise to petitioner. We are not convinced. There is no law specifically authorizing the LGUs to grant franchises to operate CATV system. Whatever authority the LGUs had before, the same had been withdrawn when President Marcos issued P.D. No. 1512 terminating all franchises, permits or certificates for the operation of CATV system previously granted by local governments. Today, pursuant to Section 3 of E.O. No. 436, only persons, associations, partnerships, corporations or cooperatives granted a Provisional Authority or Certificate of Authority by the NTC may install, operate and maintain a cable television system or render cable television service within a service area. It is clear that in the absence of constitutional or legislative authorization, municipalities have no power to grant franchises.[53] Consequently, the protection of the constitutional provision as to impairment of the obligation of a contract does not extend to privileges, franchises and grants given by a municipality in excess of its powers, or ultra vires.[54] One last word. The devolution of powers to the LGUs, pursuant to the Constitutional mandate of ensuring their autonomy, has bred jurisdictional tension between said LGUs and the State. LGUs must be reminded that they merely form part of the whole. Thus, when the Drafters of the 1987 Constitution enunciated the policy of ensuring the autonomy of local governments,[55] it

was never their intention to create an imperium in imperio and install an intra-sovereign political subdivision independent of a single sovereign state. WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated February 12, 1999 as well as its Resolution dated May 26, 1999 in CA-G.R. CV No. 52461, are hereby REVERSED. The RTC Decision in Civil Case No. 4254 is AFFIRMED. No pronouncement as to costs. SO ORDERED. EN BANC [G.R. No. 149743. February 18, 2005] LEONARDO TAN, ROBERT UY and LAMBERTO TE, petitioners, vs. SOCORRO Y. PEREA, respondent. DECISION TINGA, J.: The resolution of the present petition effectively settles the question of how many cockpits may be allowed to operate in a city or municipality. There are two competing values of high order that come to fore in this casethe traditional power of the national government to enact police power measures, on one hand, and the vague principle of local autonomy now enshrined in the Constitution on the other. The facts are simple, but may be best appreciated taking into account the legal milieu which frames them. In 1974, Presidential Decree (P.D.) No. 449, otherwise known as the Cockfighting Law of 1974, was enacted. Section 5(b) of the Decree provided for limits on the number of cockpits that may be established in cities and municipalities in the following manner: Section 5. Cockpits and Cockfighting in General. (b) Establishment of Cockpits. Only one cockpit shall be allowed in each city or municipality, except that in cities or municipalities with a population of over one hundred thousand, two cockpits may be established, maintained and operated. With the enactment of the Local Government Code of 1991,[1] the municipal sangguniang bayan were empowered, [a]ny law to the contrary notwithstanding, to authorize and license the establishment, operation and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks.[2]

In 1993, the Sangguniang Bayan of the municipality of Daanbantayan,[3] Cebu Province, enacted Municipal Ordinance No. 6 (Ordinance No. 6), Series of 1993, which served as the Revised Omnibus Ordinance prescribing and promulgating the rules and regulations governing cockpit operations in Daanbantayan.[4] Section 5 thereof, relative to the number of cockpits allowed in the municipality, stated: Section 5. There shall be allowed to operate in the Municipality of Daanbantayan, Province of Cebu, not more than its equal number of cockpits based upon the population provided for in PD 449, provided however, that this specific section can be amended for purposes of establishing additional cockpits, if the Municipal population so warrants.[5] Shortly thereafter, the Sangguniang Bayan passed an amendatory ordinance, Municipal Ordinance No. 7 (Ordinance No. 7), Series of 1993, which amended the aforequoted Section 5 to now read as follows: Section 5. Establishment of Cockpit. There shall be allowed to operate in the Municipality of Daanbantayan, Province of Cebu, not more than three (3) cockpits.[6] On 8 November 1995, petitioner Leonardo Tan (Tan) applied with the Municipal Gamefowl Commission for the issuance of a permit/license to establish and operate a cockpit in Sitio Combado, Bagay, in Daanbantayan. At the time of his application, there was already another cockpit in operation in Daanbantayan, operated by respondent Socorro Y. Perea (Perea), who was the duly franchised and licensed cockpit operator in the municipality since the 1970s. Pereas franchise, per records, was valid until 2002.[7] The Municipal Gamefowl Commission favorably recommended to the mayor of Daanbantayan, petitioner Lamberto Te (Te), that a permit be issued to Tan. On 20 January 1996, Te issued a mayors permit allowing Tan to establish/operate/conduct the business of a cockpit in Combado, Bagay, Daanbantayan, Cebu for the period from 20 January 1996 to 31 December 1996.[8] This act of the mayor served as cause for Perea to file a Complaint for damages with a prayer for injunction against Tan, Te, and Roberto Uy, the latter allegedly an agent of Tan.[9] Perea alleged that there was no lawful basis for the establishment of a second cockpit. She claimed that Tan conducted his cockpit fights not in Combado, but in Malingin, at a site less than five kilometers away from her own cockpit. She insisted that the unlawful operation of Tans cockpit has caused injury to her own legitimate business, and demanded damages of at least Ten Thousand Pesos (P10,000.00) per month as actual damages, One Hundred Fifty Thousand Pesos (P150,000.00) as moral damages, and Fifty Thousand Pesos (P50,000.00) as exemplary damages. Perea also prayed that the permit issued by Te in favor of Tan be declared as null and void, and that a permanent writ of injunction be issued against Te and Tan preventing Tan from conducting cockfights within the municipality and Te from issuing any authority for Tan to pursue such activity.[10] The case was heard by the Regional Trial Court (RTC),[11] Branch 61 of Bogo, Cebu, which initially granted a writ of preliminary injunction.[12] During trial, herein petitioners asserted that

under the Local Government Code of 1991, the sangguniang bayan of each municipality now had the power and authority to grant franchises and enact ordinances authorizing the establishment, licensing, operation and maintenance of cockpits.[13] By virtue of such authority, the Sangguniang Bayan of Daanbantayan promulgated Ordinance Nos. 6 and 7. On the other hand, Perea claimed that the amendment authorizing the operation of not more than three (3) cockpits in Daanbantayan violated Section 5(b) of the Cockfighting Law of 1974, which allowed for only one cockpit in a municipality with a population as Daanbantayan.[14] In a Decision dated 10 March 1997, the RTC dismissed the complaint. The court observed that Section 5 of Ordinance No. 6, prior to its amendment, was by specific provision, an implementation of the Cockfighting Law.[15] Yet according to the RTC, questions could be raised as to the efficacy of the subsequent amendment under Ordinance No. 7, since under the old Section 5, an amendment allowing additional cockpits could be had only if the municipal population so warrants.[16] While the RTC seemed to doubt whether this condition had actually been fulfilled, it nonetheless declared that since the case was only for damages, the [RTC] cannot grant more relief than that prayed for.[17] It ruled that there was no evidence, testimonial or documentary, to show that plaintiff had actually suffered damages. Neither was there evidence that Te, by issuing the permit to Tan, had acted in bad faith, since such issuance was pursuant to municipal ordinances that nonetheless remained in force.[18] Finally, the RTC noted that the assailed permit had expired on 31 December 1996, and there was no showing that it had been renewed.[19] Perea filed a Motion for Reconsideration which was denied in an Order dated 24 February 1998. In this Order, the RTC categorically stated that Ordinance Nos. 6 and 7 were valid and legal for all intents and purpose[s].[20] The RTC also noted that the Sangguniang Bayan had also promulgated Resolution No. 78-96, conferring on Tan a franchise to operate a cockpit for a period of ten (10) years from February 1996 to 2006.[21] This Resolution was likewise affirmed as valid by the RTC. The RTC noted that while the ordinances seemed to be in conflict with the Cockfighting Law, any doubt in interpretation should be resolved in favor of the grant of more power to the local government unit, following the principles of devolution under the Local Government Code.[22] The Decision and Order of the RTC were assailed by Perea on an appeal with the Court of Appeals which on 21 May 2001, rendered the Decision now assailed.[23] The perspective from which the Court of Appeals viewed the issue was markedly different from that adopted by the RTC. Its analysis of the Local Government Code, particularly Section 447(a)(3)(V), was that the provision vesting unto the sangguniang bayan the power to authorize and license the establishment of cockpits did not do away with the Cockfighting Law, as these two laws are not necessarily inconsistent with each other. What the provision of the Local Government Code did, according to the Court of Appeals, was to transfer to the sangguniang bayan powers that were previously conferred on the Municipal Gamefowl Commission.[24] Given these premises, the appellate court declared as follows: Ordinance No. 7 should [be] held invalid for allowing, in unconditional terms, the operation of not more than three cockpits in Daan Bantayan (sic), clearly dispensing with the standard set

forth in PD 449. However, this issue appears to have been mooted by the expiration of the Mayors Permit granted to the defendant which has not been renewed.[25] As to the question of damages, the Court of Appeals agreed with the findings of the RTC that Perea was not entitled to damages. Thus, it affirmed the previous ruling denying the claim for damages. However, the Court of Appeals modified the RTCs Decision in that it now ordered that Tan be enjoined from operating a cockpit and conducting any cockfights within Daanbantayan.[26] Thus, the present Petition for Review on Certiorari. Petitioners present two legal questions for determination: whether the Local Government Code has rendered inoperative the Cockfighting Law; and whether the validity of a municipal ordinance may be determined in an action for damages which does not even contain a prayer to declare the ordinance invalid.[27] As the denial of the prayer for damages by the lower court is not put in issue before this Court, it shall not be passed upon on review. The first question raised is particularly interesting, and any definitive resolution on that point would have obvious ramifications not only to Daanbantayan, but all other municipalities and cities. However, we must first determine the proper scope of judicial inquiry that we could engage in, given the nature of the initiatory complaint and the rulings rendered thereupon, the exact point raised in the second question. Petitioners claim that the Court of Appeals, in declaring Ordinance No. 7 as invalid, embarked on an unwarranted collateral attack on the validity of a municipal ordinance.[28] Pereas complaint, which was for damages with preliminary injunction, did not pray for the nullity of Ordinance No. 7. The Municipality of Daanbantayan as a local government unit was not made a party to the case, nor did any legal counsel on its behalf enter any appearance. Neither was the Office of the Solicitor General given any notice of the case.[29] These concerns are not trivial.[30] Yet, we must point out that the Court of Appeals did not expressly nullify Ordinance No. 7, or any ordinance for that matter. What the appellate court did was to say that Ordinance No. 7 should therefore be held invalid for being in violation of the Cockfighting Law.[31] In the next breath though, the Court of Appeals backtracked, saying that this issue appears to have been mooted by the expiration of the Mayors Permit granted to Tan.[32] But our curiosity is aroused by the dispositive portion of the assailed Decision, wherein the Court of Appeals enjoined Tan from operating a cockpit and conducting any cockfights within Daanbantayan.[33] Absent the invalidity of Ordinance No. 7, there would be no basis for this injunction. After all, any future operation of a cockpit by Tan in Daanbantayan, assuming all other requisites are complied with, would be validly authorized should Ordinance No. 7 subsist. So it seems, for all intents and purposes, that the Court of Appeals did deem Ordinance No. 7 a nullity. Through such resort, did the appellate court in effect allow a collateral attack on the validity of an ordinance through an action for damages, as the petitioners argue?

The initiatory Complaint filed by Perea deserves close scrutiny. Immediately, it can be seen that it is not only an action for damages, but also one for injunction. An action for injunction will require judicial determination whether there exists a right in esse which is to be protected, and if there is an act constituting a violation of such right against which injunction is sought. At the same time, the mere fact of injury alone does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. In other words, in order that the law will give redress for an act causing damage, there must be damnum et injuriathat act must be not only hurtful, but wrongful.[34] Indubitably, the determination of whether injunction or damages avail in this case requires the ascertainment of whether a second cockpit may be legally allowed in Daanbantayan. If this is permissible, Perea would not be entitled either to injunctive relief or damages. Moreover, an examination of the specific allegations in the Complaint reveals that Perea therein puts into question the legal basis for allowing Tan to operate another cockpit in Daanbantayan. She asserted that there is no lawful basis for the establishment of a second cockpit considering the small population of [Daanbantayan],[35] a claim which alludes to Section 5(b) of the Cockfighting Law which prohibits the establishment of a second cockpit in municipalities of less than ten thousand (10,000) in population. Perea likewise assails the validity of the permit issued to Tan and prays for its annulment, and also seeks that Te be enjoined from issuing any special permit not only to Tan, but also to any other person outside of a duly licensed cockpit in Daanbantayan, Cebu.[36] It would have been preferable had Perea expressly sought the annulment of Ordinance No. 7. Yet it is apparent from her Complaint that she sufficiently alleges that there is no legal basis for the establishment of a second cockpit. More importantly, the petitioners themselves raised the valid effect of Ordinance No. 7 at the heart of their defense against the complaint, as adverted to in their Answer.[37] The averment in the Answer that Ordinance No. 7 is valid can be considered as an affirmative defense, as it is the allegation of a new matter which, while hypothetically admitting the material allegations in the complaint, would nevertheless bar recovery.[38] Clearly then, the validity of Ordinance No. 7 became a justiciable matter for the RTC, and indeed Perea squarely raised the argument during trial that said ordinance violated the Cockfighting Law.[39] Moreover, the assailed rulings of the RTC, its Decision and subsequent Order denying Pereas Motion for Reconsideration, both discuss the validity of Ordinance No. 7. In the Decision, the RTC evaded making a categorical ruling on the ordinances validity because the case was only for damages, [thus the RTC could] not grant more relief than that prayed for. This reasoning is unjustified, considering that Perea also prayed for an injunction, as well as for the annulment of Tans permit. The resolution of these two questions could very well hinge on the validity of Ordinance No. 7. Still, in the Order denying Pereas Motion for Reconsideration, the RTC felt less inhibited and promptly declared as valid not only Ordinance No. 7, but also Resolution No. 78-96 of the Sangguniang Bayan dated 23 February 1996, which conferred on Tan a franchise to operate a cockpit from 1996 to 2006.[40] In the Order, the RTC ruled that while Ordinance No. 7 was in

apparent conflict with the Cockfighting Law, the ordinance was justified under Section 447(a)(3)(v) of the Local Government Code. This express affirmation of the validity of Ordinance No. 7 by the RTC was the first assigned error in Pereas appeal to the Court of Appeals.[41] In their Appellees Brief before the appellate court, the petitioners likewise argued that Ordinance No. 7 was valid and that the Cockfighting Law was repealed by the Local Government Code.[42] On the basis of these arguments, the Court of Appeals rendered its assailed Decision, including its ruling that the Section 5(b) of the Cockfighting Law remains in effect notwithstanding the enactment of the Local Government Code. Indubitably, the question on the validity of Ordinance No. 7 in view of the continuing efficacy of Section 5(b) of the Cockfighting Law is one that has been fully litigated in the courts below. We are comfortable with reviewing that question in the case at bar and make dispositions proceeding from that key legal question. This is militated by the realization that in order to resolve the question whether injunction should be imposed against the petitioners, there must be first a determination whether Tan may be allowed to operate a second cockpit in Daanbantayan. Thus, the conflict between Section 5(b) of the Cockfighting Law and Ordinance No. 7 now ripens for adjudication. In arguing that Section 5(b) of the Cockfighting Law has been repealed, petitioners cite the following provisions of Section 447(a)(3)(v) of the Local Government Code: Section 447. Powers, Duties, Functions and Compensation. (a) The sangguniang bayan, as the legislative body of the municipality, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the municipality and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the municipality as provided for under Section 22 of this Code, and shall: .... (3) Subject to the provisions of Book II of this Code, grant franchises, enact ordinances authorizing the issuance of permits or licenses, or enact ordinances levying taxes, fees and charges upon such conditions and for such purposes intended to promote the general welfare of the inhabitants of the municipality, and pursuant to this legislative authority shall: .... (v) Any law to the contrary notwithstanding, authorize and license the establishment, operation, and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks; Provided, that existing rights should not be prejudiced; For the petitioners, Section 447(a)(3)(v) sufficiently repeals Section 5(b) of the Cockfighting Law, vesting as it does on LGUs the power and authority to issue franchises and regulate the

operation and establishment of cockpits in their respective municipalities, any law to the contrary notwithstanding. However, while the Local Government Code expressly repealed several laws, the Cockfighting Law was not among them. Section 534(f) of the Local Government Code declares that all general and special laws or decrees inconsistent with the Code are hereby repealed or modified accordingly, but such clause is not an express repealing clause because it fails to identify or designate the acts that are intended to be repealed.[43] It is a cardinal rule in statutory construction that implied repeals are disfavored and will not be so declared unless the intent of the legislators is manifest.[44] As laws are presumed to be passed with deliberation and with knowledge of all existing ones on the subject, it is logical to conclude that in passing a statute it is not intended to interfere with or abrogate a former law relating to the same subject matter, unless the repugnancy between the two is not only irreconcilable but also clear and convincing as a result of the language used, or unless the latter Act fully embraces the subject matter of the earlier.[45] Is the one-cockpit-per-municipality rule under the Cockfighting Law clearly and convincingly irreconcilable with Section 447(a)(3)(v) of the Local Government Code? The clear import of Section 447(a)(3)(v) is that it is the sangguniang bayan which is empowered to authorize and license the establishment, operation and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks, notwithstanding any law to the contrary. The necessity of the qualifying phrase any law to the contrary notwithstanding can be discerned by examining the history of laws pertaining to the authorization of cockpit operation in this country. Cockfighting, or sabong in the local parlance, has a long and storied tradition in our culture and was prevalent even during the Spanish occupation. When the newly-arrived Americans proceeded to organize a governmental structure in the Philippines, they recognized cockfighting as an activity that needed to be regulated, and it was deemed that it was the local municipal council that was best suited to oversee such regulation. Hence, under Section 40 of Act No. 82, the general act for the organization of municipal governments promulgated in 1901, the municipal council was empowered to license, tax or close cockpits. This power of the municipal council to authorize or license cockpits was repeatedly recognized even after the establishment of the present Republic in 1946.[46] Such authority granted unto the municipal councils to license the operation of cockpits was generally unqualified by restrictions.[47] The Revised Administrative Code did impose restrictions on what days cockfights could be held.[48] However, in the 1970s, the desire for stricter licensing requirements of cockpits started to see legislative fruit. The Cockfighting Law of 1974 enacted several of these restrictions. Apart from the one-cockpit-per-municipality rule, other restrictions were imposed, such as the limitation of ownership of cockpits to Filipino citizens.[49] More importantly, under Section 6 of the Cockfighting Law, it was the city or municipal mayor who was authorized to issue licenses for the operation and maintenance of cockpits, subject to the approval of the Chief of Constabulary or his authorized representatives.[50] Thus, the sole discretion to authorize the operation of cockpits was removed from the local government unit since the approval of the Chief of Constabulary was now required.

P.D. No. 1802 reestablished the Philippine Gamefowl Commission[51] and imposed further structure in the regulation of cockfighting. Under Section 4 thereof, city and municipal mayors with the concurrence of their respective sangguniang panglunsod or sangguniang bayan, were given the authority to license and regulate cockfighting, under the supervision of the City Mayor or the Provincial Governor. However, Section 4 of P.D. No. 1802 was subsequently amended, removing the supervision exercised by the mayor or governor and substituting in their stead the Philippine Gamefowl Commission. The amended provision ordained: Sec. 4. City and Municipal Mayors with the concurrence of their respective Sanggunians shall have the authority to license and regulate regular cockfighting pursuant to the rules and regulations promulgated by the Commission and subject to its review and supervision. The Court, on a few occasions prior to the enactment of the Local Government Code in 1991, had opportunity to expound on Section 4 as amended. A discussion of these cases will provide a better understanding of the qualifier any law to the contrary notwithstanding provided in Section 447(a)(3)(v). In Philippine Gamefowl Commission v. Intermediate Appellate Court,[52] the Court, through Justice Cruz, asserted that the conferment of the power to license and regulate municipal cockpits in municipal authorities is in line with the policy of local autonomy embodied in the Constitution.[53] The Court affirmed the annulment of a resolution of the Philippine Gamefowl Commission which ordered the revocation of a permit issued by a municipal mayor for the operation of a cockpit and the issuance of a new permit to a different applicant. According to the Court, the Philippine Gamefowl Commission did not possess the power to issue cockpit licenses, as this was vested by Section 4 of P.D. No. 1802, as amended, to the municipal mayor with the concurrence of the sanggunian. It emphasized that the Philippine Gamefowl Commission only had review and supervision powers, as distinguished from control, over ordinary cockpits.[54] The Court also noted that the regulation of cockpits was vested in municipal officials, subject only to the guidelines laid down by the Philippine Gamefowl Commission.[55] The Court conceded that [if] at all, the power to review includes the power to disapprove; but it does not carry the authority to substitute ones own preferences for that chosen by the subordinate in the exercise of its sound discretion. The twin pronouncements that it is the municipal authorities who are empowered to issue cockpit licenses and that the powers of the Philippine Gamefowl Commission were limited to review and supervision were affirmed in Deang v. Intermediate Appellate Court,[56] Municipality of Malolos v. Libangang Malolos Inc.[57] and Adlawan v. Intermediate Appellate Court.[58] But notably in Cootauco v. Court of Appeals,[59] the Court especially noted that Philippine Gamefowl Commission did indicate that the Commissions power of review includes the power to disapprove.[60] Interestingly, Justice Cruz, the writer of Philippine Gamefowl Commission, qualified his concurrence in Cootauco subject to the reservations made in [Philippine Gamefowl Commission] regarding the review powers of the PGC over cockpit licenses issued by city and municipal mayors.[61] These cases reiterate what has been the traditional prerogative of municipal officials to control the issuances of licenses for the operation of cockpits. Nevertheless, the newly-introduced role of

the Philippine Gamefowl Commission vis--vis the operation of cockpits had caused some degree of controversy, as shown by the cases above cited. Then, the Local Government Code of 1991 was enacted. There is no more forceful authority on this landmark legislation than Senator Aquilino Pimentel, Jr., its principal author. In his annotations to the Local Government Code, he makes the following remarks relating to Section 447(a)(3)(v): 12. Licensing power. In connection with the power to grant licenses lodged with it, the Sangguniang Bayan may now regulate not only businesses but also occupations, professions or callings that do not require government examinations within its jurisdiction. It may also authorize and license the establishment, operation and maintenance of cockpits, regulate cockfighting, and the commercial breeding of gamecocks. Existing rights however, may not be prejudiced. The power to license cockpits and permits for cockfighting has been removed completely from the Gamefowl Commission. Thus, that part of the ruling of the Supreme Court in the case of Municipality of Malolos v. Libangang Malolos, Inc. et al., which held that the regulation of cockpits is vested in the municipal councils guidelines laid down by the Philippine Gamefowl Commission is no longer controlling. Under [Section 447(a)(3)(v)], the power of the Sanggunian concerned is no longer subject to the supervision of the Gamefowl Commission.[62] The above observations may be faulted somewhat in the sense that they fail to acknowledge the Courts consistent position that the licensing power over cockpits belongs exclusively to the municipal authorities and not the Philippine Gamefowl Commission. Yet these views of Senator Pimentel evince the apparent confusion regarding the role of the Philippine Gamefowl Commission as indicated in the cases previously cited, and accordingly bring the phrase Section 447(a)(3)(v) used in any law to the contrary notwithstanding into its proper light. The qualifier serves notice, in case it was still doubtful, that it is the sanggunian bayan concerned alone which has the power to authorize and license the establishment, operation and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks within its territorial jurisdiction. Given the historical perspective, it becomes evident why the legislature found the need to use the phrase any law to the contrary notwithstanding in Section 447(a)(3)(v). However, does the phrase similarly allow the Sangguniang Bayan to authorize more cockpits than allowed under Section 5(d) of the Cockfighting Law? Certainly, applying the test of implied repeal, these two provisions can stand together. While the sanggunian retains the power to authorize and license the establishment, operation, and maintenance of cockpits, its discretion is limited in that it cannot authorize more than one cockpit per city or municipality, unless such cities or municipalities have a population of over one hundred thousand, in which case two cockpits may be established. Considering that Section 447(a)(3)(v) speaks essentially of the identity of the wielder of the power of control and supervision over cockpit operation, it is not inconsistent with previous enactments that impose restrictions on how such power may be exercised. In short, there is no dichotomy between affirming the power and subjecting it to limitations at the same time.

Perhaps more essential than the fact that the two controverted provisions are not inconsistent when put together, the Court recognizes that Section 5(d) of the Cockfighting Law arises from a valid exercise of police power by the national government. Of course, local governments are similarly empowered under Section 16 of the Local Government Code. The national government ought to be attuned to the sensitivities of devolution and strive to be sparing in usurping the prerogatives of local governments to regulate the general welfare of their constituents. We do not doubt, however, the ability of the national government to implement police power measures that affect the subjects of municipal government, especially if the subject of regulation is a condition of universal character irrespective of territorial jurisdictions. Cockfighting is one such condition. It is a traditionally regulated activity, due to the attendant gambling involved[63] or maybe even the fact that it essentially consists of two birds killing each other for public amusement. Laws have been enacted restricting the days when cockfights could be held,[64] and legislation has even been emphatic that cockfights could not be held on holidays celebrating national honor such as Independence Day[65] and Rizal Day.[66] The Whereas clauses of the Cockfighting Law emphasize that cockfighting should neither be exploited as an object of commercialism or business enterprise, nor made a tool of uncontrolled gambling, but more as a vehicle for the preservation and perpetuation of native Filipino heritage and thereby enhance our national identity.[67] The obvious thrust of our laws designating when cockfights could be held is to limit cockfighting and imposing the one-cockpit-per-municipality rule is in line with that aim. Cockfighting is a valid matter of police power regulation, as it is a form of gambling essentially antagonistic to the aims of enhancing national productivity and self-reliance.[68] Limitation on the number of cockpits in a given municipality is a reasonably necessary means for the accomplishment of the purpose of controlling cockfighting, for clearly more cockpits equals more cockfights. If we construe Section 447(a)(3)(v) as vesting an unlimited discretion to the sanggunian to control all aspects of cockpits and cockfighting in their respective jurisdiction, this could lead to the prospect of daily cockfights in municipalities, a certain distraction in the daily routine of life in a municipality. This certainly goes against the grain of the legislation earlier discussed. If the arguments of the petitioners were adopted, the national government would be effectively barred from imposing any future regulatory enactments pertaining to cockpits and cockfighting unless it were to repeal Section 447(a)(3)(v). A municipal ordinance must not contravene the Constitution or any statute, otherwise it is void.[69] Ordinance No. 7 unmistakably contravenes the Cockfighting Law in allowing three cockpits in Daanbantayan. Thus, no rights can be asserted by the petitioners arising from the Ordinance. We find the grant of injunction as ordered by the appellate court to be well-taken. WHEREFORE, the petition is DENIED. Costs against petitioners. SO ORDERED.

Davide, Jr., CJ., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur.

EN BANC

JOSE C. MIRANDA, Petitioner,

G.R. NO. 154098

Present:

DAVIDE, JR., C.J., - versus PUNO, PANGANIBAN, QUISUMBING, YNARES-SANTIAGO, HON. SANDIGANBAYAN, OFFICE OF THE OMBUDSMAN, SEC. JOSE D. LINA, JR., in his capacity as Secretary of the DILG, and FAUSTINO DY, JR. in his capacity as Governor of the Province of Isabela, Respondents. SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, *CORONA, CARPIO MORALES, CALLEJO, SR., AZCUNA, TINGA,

CHICO-NAZARIO, and GARCIA, JJ.

Promulgated:

July 27, 2005 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

PUNO, J.: First, the facts. The Ombudsman placed petitioner Jose C. Miranda (Mayor Miranda) then the mayor of Santiago City, Isabela, under preventive suspension for six months from 25 July 1997 to 25 January 1998 for alleged violations of Republic Act No. 6713, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees.[1] Subsequently, then Vice Mayor Amelita S. Navarro (Vice Mayor Navarro) filed a Complaint with the Office of the Ombudsman (Ombudsman) on 1 December 1997 which was docketed as OMB-1-97-2312.[2] In

the said Complaint, Vice Mayor Navarro alleged that Mayor Miranda committed the following acts on 24 November 1997 despite the continuing effectivity of the Ombudsmans preventive suspension order: (a) issued a memorandum addressed to Navarro advising her that he was assuming his position as City Mayor;[3] (b) gave directives to the heads of offices and other employees;[4] (c) issued Office Order No. 11-021 which authorized certain persons to start work;[5] and (d) insisted on performing the functions and duties of Mayor despite Navarrros requests to desist from doing so without a valid court order and in spite of the order of Department of Interior and Local Government (DILG) Undersecretary Manuel Sanchez directing him to cease from reassuming the position.[6] Vice Mayor Navarro contended that Mayor Miranda committed the felony of usurpation of authority or official functions under Article 177 of the Revised Penal Code (RPC).[7] In his counter-affidavit, Mayor Miranda asserted that he reassumed office on the advice of his lawyer and in good faith.[8] He contended that under Section 63(b) of the Local Government Code, local elective officials could not be preventively suspended for a period beyond 60 days.[9] He also averred that, on the day he reassumed office, he received a memorandum from DILG Undersecretary Manuel Sanchez instructing him to vacate his office and he immediately complied with the same.[10] Notably, Mayor Mirandas counter-

affidavit also stated that he left the mayoralty post after coercion by the Philippine National Police.[11] On 28 October 1998, the Ombudsman filed with the Sandiganbayan an Information against Mayor Miranda for violation of Article 177 of the RPC, penalizing usurpation of authority. On 20 November 1998, the Sandiganbayan ordered the Office of Special Prosecutor to conduct a reinvestigation of the case in light of the manifestations made by prosecution and defense counsel.[12] After reinvestigation, Special Prosecution Officer Rodrigo V. Coquia (Coquia) recommended the dismissal of the case in a Resolution dated 14 September 2000.[13] Coquia held that Miranda reassumed his office in good faith and on mistake of fact due to the difficult questions of law involved.[14] Then Ombudsman Aniano A. Desierto (Ombudsman Desierto) referred Coquias resolution to the Ombudsmans Chief Legal Counsel for review. The Chief Legal Counsel disagreed with Coquias findings and recommended the filing of the case against Mayor Miranda.[15] He pointed out that Mayor Mirandas invocation of good faith was belied by the fact that he received a memorandum from the DILG informing him that his view of the preventive suspension period was untenable and that he should serve out its remaining period.[16] He further noted that Miranda violated the orders of both the Ombudsman and the DILG.[17]

Ombudsman Desierto adopted the Chief Legal Counsels recommendation,[18] and the case was re-raffled to Special Prosecution Officer Evelyn T. Lucero. Subsequently, the prosecution filed an amended Information with the Sandiganbayan,[19] to which the petitioner interposed a negative plea.[20] On 28 November 2001, the prosecution filed before the Sandiganbayan a motion to suspend Mayor Miranda pendente lite based on Section 13 of Republic Act No. 3019 (R.A. No. 3019), otherwise known as the Anti-Graft and Corrupt Practices Act.[21] Miranda opposed the motion on the ground that the offense of usurpation of authority or official functions under Article 177 of the RPC is not embraced by Section 13 of R.A. No. 3019 which only contemplates offenses enumerated under R.A. No. 3019, Title VII, Book II of the RPC or which involve fraud upon government or public funds or property.[22] In a Resolution dated 4 February 2002, the Sandiganbayan preventively suspended Mayor Miranda from office for 90 days.[23] The anti-graft court held that a violation of Article 177 of the RPC involves fraud which in a general sense is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust or confidence justly reposed, resulting in damage to another or by which an undue and unconscious advantage is taken of another.[24] It further ruled that Mirandas

act fell within the catch-all provision x x x or for any offense involving fraud upon government.[25] Mirandas motion for reconsideration was denied in the Sandiganbayans Resolution dated 17 June 2002.[26] Hence, the present petition assailing the Sandiganbayans orders of preventive suspension. The petitioner contends that the Sandiganbayan gravely abused its discretion when it preventively suspended him on a ground not authorized by law and raises the following issues: (1) whether Section 13 of R.A. No. 3019 applies only to fraudulent acts involving public funds or property; and (2) whether the crime of usurpation of authority or official functions involves fraud upon government or public funds or property found in Section 13 of R.A. No. 3019. We rule in the negative. First. Section 13 of R.A. No. 3019, as amended, provides:

Section 13. Suspension and loss of benefits. Any incumbent public officer against whom any criminal prosecution under a valid information under this Act or under Title 7, Book II of the Revised Penal Code or for any offense involving fraud upon government or public funds or property whether as a simple or as a complex offense and in whatever stage of execution and mode of participation, is pending in court, shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled to reinstatement and to the salaries and benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him.

In the event that such convicted officer, who may have already been separated from the service, has already received such benefits he shall be liable to restitute the same to the Government.

The Sandiganbayan properly construed Section 13 of R.A. No. 3019 as covering two types of offenses: (1) any offense involving fraud on the government; and (2) any offense involving public funds or property. Contrary to the submission of the petitioner, nothing in R.A. No. 3019 evinces any legislative intent to limit Section 13 only to acts involving fraud on public funds or property. The phrase any offense involving fraud upon government or public funds or property is clear and categorical. To limit the use of government as an adjective that qualifies funds is baseless. The word public precedes funds and distinguishes the same from private funds. To qualify further public funds as government funds, as petitioner claims is the laws intent, is plainly superfluous. We are bound by the rule that a statute should be construed reasonably with reference to its controlling purpose and its provisions should not be given a meaning that is inconsistent with its scope and object. R.A. No. 3019, commonly known as the Anti-Graft and Corrupt Practices Act, should be read to protect the State from fraud by its own officials.

Second. We further hold that the Sandiganbayan did not gravely abuse its discretion when it ruled that petitioners act fell within the catch-all provision x x x or for any offense involving fraud upon government. The term fraud is defined, viz.: An instance or an act of trickery or deceit esp. when involving misrepresentation: an act of deluding[27]

It is obvious to the eyes that the phrase fraud upon government means any instance or act of trickery or deceit against the government. It cannot be read restrictively so as to be equivalent to malversation of funds as this is covered by the preceding phrase any offense involving . . . public funds or property. It ought to follow that fraud upon government was committed when the petitioner allegedly assumed the duties and performed acts pertaining to the Office of the Mayor under pretense of official position. The dissent opines that fraud upon government is not necessarily an essential element of the crime of usurpation of authority. The submission may be correct as a general proposition but general propositions hardly decide a case. In the case at bar, the issue is whether the alleged acts of usurpation of authority committed by the petitioner involve fraud upon government or public funds or property as the

term is understood under Section 13 of R.A. No. 3019. In ruling in the affirmative, the Sandiganbayan held: Let us take a look at the acts complained of as alleged in the Amended Information dated July 27, 2001: x x x the above-named accused, a public officer, being then the elected City Mayor of Santiago City, while under preventive suspension did then and there, willfully, unlawfully and knowingly and under pretense of official position, assume the duties and functions of the Office of the Mayor, issue directives and memoranda, and appoint certain persons to various positions in the City Government and perform acts pertaining to an office to which he knowingly was deprived of. Moreover, in private complainant Amelita S. Navarros Affidavit of Complaint dated November 26, 1997, she said: x x x, he proceeded to his office and started giving directives to the various heads of office and other employees, the unexpected acts of respondents had caused serious disruptions in the day to day affairs of the city government. Accuseds acts therefore in assuming the duties and function of the Office of the Mayor despite his suspension from said office resulted to a clear disruption of office and worst, a chaotic situation in the affairs of the government as the employees, as well as the public, suffered confusion as to who is the head of the Office. This actuation of herein accused constitutes fraud which in general sense is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust or confidence justly reposed, resulting in damage to another or by which an undue and unconscious advantage is taken of another (37 Am. Jur. 2d 19 at Sec. 19). Hence, the act complained of against accused herein falls in the catchall provision x x x or for any offense involving fraud upon government x x x. Moreover, the firmly entrenched doctrine which was held by the Highest Tribunal in a long line of cases is that x x x under

Section 13 of the Anti-Graft and Corrupt Practices Law, the suspension of a public officer is mandatory after a determination has been made of the validity of the Information x x x. In fact, as early as 1984 in the case of Bayot v. Sandiganbayan, 128 SCRA 383, the Honorable Supreme Court speaking thru Justice Relova said: Once the information is found to be sufficient in form and substance, then the Court must issue the order of suspension as a matter of course. There are no ifs and buts about it. x x x After a perusal of the amended information herein, it clearly appeared that the same was apparently valid for it conforms to the requirements laid down under Section 6[,] Rule 110 of the Rules of Court. In fact, accused herein interposed a negative plea thereto thereby tacitly acquiescing to the validity of the said Information. There being no valid ground raised by the accused sufficient enough to warrant denial of the prayer of the prosecution in its Motion to Suspend Accused Pende[n]te Lite (sic) and in consonance with the imperious mandate of the law, the said prayer should be accorded affirmative relief.[28] (Citations omitted)

In denying petitioners Motion for Reconsideration, the Sandiganbayan further held: Accused in his motion substantially alleged that Article 177 (Usurpation of Authority and Official Function) of the Revised Penal Code, which is the charge against herein accused, does not fall under the catchall provision of Section 13 of Republic Act No. 3019 x x x or for any offense involving fraud upon government or public funds or property x x x. He said that the acts complained of as alleged in the Information do not constitute fraud upon government or public fund or property.

Though the argument by the accused seems plausible, this Court is still inclined to uphold its ruling suspending accused pendente lite. The accused argued that the fraud contemplated in the law is one involving (1) government funds or property; and (2) public funds or property. This is precisely availing in the case at bar. The Information in herein case, says: x x x accused x x x assume the duties and functions of the Office of the Mayor, issue directives and memoranda and appoint certain persons to various positions in the city government, and perform acts pertaining to an office to which he knowingly was deprived of. When accused-mayor appointed persons in various positions, he indirectly dealt with the citys funds as those persons appointed will be given their respective salaries, benefits and other monetary consideration which will be paid wholly or mainly out of the citys funds. Additionally, when he performed acts pertaining to the Office of the Mayor, i.e.[,] approval of vouchers, and payment of other expenses which is subject to proof, he likewise indirectly dealt with the funds of the city. Moreover, as the prosecution said, when accused Miranda, willfully and knowingly, during the effectivity of his suspension barged into the City Hall, issued orders and directives and performed functions as City Mayor, he was sending the unwritten yet visible message that he was authorized to do and function as such. x x x. We hold this as a fraud upon government resulting in the chaos or confusion albeit temporary, as the employees would be in a quandary whom to follow or obey. Hence, considering that the charge herein evidently falls within the compass of the suspension provision invoked by the prosecution, there is no cogent reason for this Court to depart from its previous ruling. Further, considering the mandatory tenor of Section 13[,] Republic Act No. 3019, the motion for reconsideration is hereby denied. Accordingly, the Motion for Reconsideration is denied for lack of merit.[29]

This Court finds no reason to disagree with the Sandiganbayan. Its conclusions are amply supported by the record. Additionally, the issue of whether petitioner committed fraud upon the government or public funds or property is essentially factual. In a special civil action for certiorari, the only question that may be raised is whether or not the respondent acted without or in excess of jurisdiction or with grave abuse of discretion. The Court cannot correct errors of fact or law which do not amount to grave abuse of discretion.[30] The dissenting opinion, however, says there was no fraud. It holds that it would be fraud of public funds if these public officials just collected their salaries without rendering service to the government. It further asserts that fraud upon government must be read so as to require that malversation of funds was committed.[31] This is a complete volte face from its claim that Section 13 of R.A. No. 3019 covers two types of offenses: (1) any offense involving fraud upon the government; and (2) any offense involving public funds or property.[32] What is more, adopting the dissenting opinions line of reasoning would render superfluous the phrase fraud upon government as malversation is subsumed by any offense involving public funds or property. Third. We are not a bit persuaded by the posture of the petitioner that he reassumed office under an honest belief that he was no longer under preventive

suspension. Petitioners pretense cannot stand scrutiny. Petitioners own affidavit states:[33] 8. That on November 24, 1997, at that time, (sic) I had already served my single preventive suspension for a total number of ONE HUNDRED TWENTY (120) days more or less counted from July 24, 1997, which far exceeds the allowable period of 60 days as maximum preventive suspension, for a single suspension for a local elective official like me as provided for under the Local Government Code of 1991 (sic) on the same date, November 24, 1997 in good faith and upon the advise (sic) of my lawyers, I notified both the Ombudsman and DILG of my intention to assume my office as the duly elected City Mayor of Santiago City; 9. That earlier on November 24, 1997 I started to reassume my office and functions as City Mayor of Santiago City; surprisingly on the same date, November 24, 1997 I received a memorandum issued by Undersecretary Manuel R. Sanchez of DILG instructing me to cease and desist from my plan to reassume the functions and duties of my office; 10. For less than a week, after November 24, 1997 ViceMayor AMELITA NAVARRO relentlessly harassed and threatened me and my constituents with bodily harm using the strong arm of the law thru the brute force of the PNP courteousy (sic) of Undersecretary Manuel R. Sanchez I was constrained to ceased (sic) from performing my duties and functions to avoid any possible unfortunate incident that may happen to me and any constituents; x x x.[34] (Emphases supplied)

By petitioners own admission, he refused to leave his position despite the memorandum of Undersecretary Sanchez and left only a few days after receipt thereof due to the coercion of the Philippine National Police. This contradicts

his assertion that he immediately complied with the memorandum of Undersecretary Sanchez.[35] Petitioner cannot escape from his own admission. To be sure, petitioners honest belief defense is old hat. In the 1956 case of People v. Hilvano,[36] the facts are: When Mayor Fidencio Latorre of Villareal, Samar, departed for Manila on official business early in the morning of September 22, 1952, he designated the herein defendant Francisco Hilvano, councilor, to discharge the duties of his office. Later, during office hours on that same day, Vice-Mayor Juan Latorre went to the municipal building; and having found Hilvano acting in the place of the Mayor, he served written notices to the corresponding municipal officers, including Hilvano, that he (Juan Latorre) as Vice-Mayor was assuming the duties of the absent mayor. However, Hilvano refused to yield, arguing that he had been designated by the Mayor. Whereupon the Vice-Mayor sent a telegram to the Executive Secretary informing the latter of the controversy. And the said Secretary replied by letter, that under sec. 2195 of the Revised Administrative Code it was the Vice-Mayor who should discharge the duties of the Mayor during the latters temporary absence. Shown this official pronouncement, Hilvano still refused to surrender the position. Again the Vice-Mayor sought the opinion of the Provincial Fiscal, who by letter (Exhibit D), replied that the Vice-Mayor had the right to the office. Notwithstanding such opinion which was exhibited to him Hilvano declined to vacate the post, which he held for about a month, appointing some policemen, solemnizing marriages and collecting the corresponding salary for mayor. Wherefore Francisco Hilvano was prosecuted and after trial was convicted of usurpation of public authority under Republic Act No. 10. He appealed in due time.

In rejecting the defense of the accused Hilvano, we ruled:[37]

There is no excuse for defendant-appellant. In the beginning he might have pleaded good faith, invoking the designation by the Mayor; but after he had been shown the letter of the Executive Secretary and the opinion of the provincial fiscal, he had no right thereafter stubbornly to stick to the position. He was rightfully convicted.

Petitioners excuse for violating the order of preventive suspension is too flimsy to merit even a side-glance. He alleged that he merely followed the advice of his lawyer. If petitioner and his counsel had an iota of respect for the rule of law, they should have assailed the validity of the order of suspension in court instead of taking the law into their own hands. Fourth. It should be stressed that petitioner was suspended by the

Sandiganbayan. Under Section 13 of R.A. No. 3019, this suspension is mandatory if the information is sufficient. Understandably, the dissent argues that the Amended Information is insufficient in form as it should have expressly and clearly stated that Miranda re-assumed office to defraud the government or that in re-assuming office Miranda committed acts that defrauded the government[38] and that it is improper to take into account the petitioners admissions in his affidavit for this purpose.

With due respect, the dissent is way off-line. The records will show that petitioner did not file a motion to quash the information or a motion for bill of particulars before pleading to the information. It is basic that entering a plea waives any objection the petitioner may have to the validity of the information except on the following grounds: (1) the information charges no offense; (2) the trial court has no jurisdiction over the offense charged; (3) the penalty or the offense has been extinguished; and (4) double jeopardy has attached.[39] Objections to the sufficiency of the allegations in the Amended Information do not fall among the exceptions to the rule. They fall under the objection that the information does not conform substantially to the prescribed form.[40] Needless to state, the petitioner has by his acts acquiesced to the validity and sufficiency of the Amended Information. It is, thus, incorrect for the dissenting opinion to peddle the proposition that the petitioner has been deprived of his constitutional right to be apprised of the nature and cause of the accusation against him. Worse, it is improper for the dissenting opinion to raise this issue motu proprio. Under our Rules of Court, it is the petitioner who should raise this objection in a motion to quash or motion for bill of particulars before entering his plea.[41] The irregular procedure followed by the dissent would encourage the pernicious practice of sandbagging where counsel foregoes raising a pleading defect before trial where it can be easily corrected only to raise the defect later in the hope of obtaining an

arrest of judgment or new trial from a sympathetic magistrate.[42] It is precisely this evil that is addressed by Rule 117, Section 9 of our Revised Rules of Criminal Procedure. Even assuming for the nonce, that the objection to the sufficiency of the information was raised in a timely fashion by the petitioner, the dissenting opinions arguments still do not convince. The validity or sufficiency of allegations in an information is determined according to the provisions of Section 9 of the Revised Rules of Criminal Procedure, viz: SECTION 9. Cause of the Accusation. The acts or omissions complained of as constituting the offense and the qualifying and aggravating circumstances must be stated in ordinary and concise language and not necessarily in the language used in the statute but in terms sufficient to enable a person of common understanding to know what offense is being charged as well as its qualifying and aggravating circumstances and for the court to pronounce judgment.[43]

The test is whether the crime is described in intelligible terms with such particularity as to apprise the accused, with reasonable certainty, of the offense charged. The raison detre of the rule is to enable the accused to suitably prepare his defense.[44] A perusal of the Amended Information will bear out that it has hurdled this legal bar. We quote its contents:

That on or about 24 November 1997, in the City of Santiago, Isabela, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a public officer, being then the elected City Mayor of Santiago City, while under preventive suspension, did, then and there, willfully, unlawfully, and knowingly and under pretense of official position, assume the duties and function of the Office of the Mayor, issue directives and memoranda, and appoint certain persons to various positions in the city government, and perform acts pertaining to an office to which he knowingly was deprived of.[45]

Using this test, it cannot be said that the Amended Information failed to properly apprise the petitioner of the charge against him. The information charged the petitioner with assuming the duties and performing acts pertaining to the office of Mayor willfully, unlawfully and knowingly under the pretense of official position. Moreover, it states some of the specific acts which constitute usurpation of official functions, namely, issuing directives and memoranda and appointing certain persons to various positions in the city government. These allegations are clear enough for a layman to understand. Indeed, even the petitioner does not complain about their ambiguity. Only the dissent does. Fifth. The dissenting opinion also contends that the Ombudsmans authority to preventively suspend local elective officials for 6 months is limited by Section 63(b) of the Local Government Code. Under the latter law, petitioner can only be suspended for a maximum period of 60 days. It then jumps to the

conclusion that petitioner could not have usurped authority because he reassumed office after 60 days.[46] With due respect, the dissent fails to focus on the proper issue. The issue before this Court is whether the Sandiganbayan committed a grave abuse of discretion in suspending the petitioner for 90 days. The validity of the Ombudsmans order of preventive suspension of the petitioner for 6 months is not the one assailed in the case at bar. The irrelevance of the suspension order of the Ombudsman notwithstanding, the reliance of the dissenting opinion on Garcia v. Mojica is inapropos. In Garcia, we held: Given these findings, we cannot say now that there is no evidence sufficiently strong to justify the imposition of preventive suspension against petitioner. But considering its purpose and the circumstances in the case brought before us, it does appear to us that the imposition of the maximum period of six months is unwarranted. On behalf of respondents, the Solicitor General stated during his oral argument at the hearing that the documents mentioned in respondents' comment (such as purchase orders, purchase requests, and disbursement vouchers), documents that show petitioner's guilt, were obtained after petitioner had been suspended. Even if an afterthought, he claimed they strengthen the evidence of respondents against petitioner. If the purpose of the preventive suspension was to enable the investigating authority to gather documents without intervention from petitioner, then, from respondents' submission, we can only conclude that this purpose was already achieved, during the nearly month-long suspension of petitioner from June 25 to July 19, 1999. Granting that now the evidence against petitioner is already strong, even without conceding that initially

it was weak, it is clear to us that the maximum six-month period is excessive and definitely longer than necessary for the Ombudsman to make its legitimate case against petitioner. We must conclude that the period during which petitioner was already preventively suspended, has been sufficient for the lawful purpose of preventing petitioner from hiding and destroying needed documents, or harassing and preventing witnesses who wish to appear against him. We reach the foregoing conclusion, however, without necessarily subscribing to petitioner's claim that the Local Government Code, which he averred should apply to this case of an elective local official, has been violated. True, under said Code, preventive suspension may only be imposed after the issues are joined, and only for a maximum period of sixty days. Here, petitioner was suspended without having had the chance to refute first the charges against him, and for the maximum period of six months provided by the Ombudsman Law. But as respondents argue, administrative complaints commenced under the Ombudsman Law are distinct from those initiated under the Local Government Code. Respondents point out that the shorter period of suspension under the Local Government Code is intended to limit the period of suspension that may be imposed by a mayor, a governor, or the President, who may be motivated by partisan political considerations. In contrast the Ombudsman, who can impose a longer period of preventive suspension, is not likely to be similarly motivated because it is a constitutional body. The distinction is valid but not decisive, in our view, of whether there has been grave abuse of discretion in a specific case of preventive suspension. [47] (Emphases supplied)

Nowhere in Garcia is it stated that the limits provided in the Local Government Code apply to the Ombudsman. In fact, the Court expressly stated that its decision was rendered without subscribing to the petitioners claim that the

Local Government Code had been violated. In fine, the Court only ruled that the Ombudsman acted with grave abuse of discretion in imposing a 6-month preventive suspension since it was admitted that the documents required were already obtained by 19 July 1999 or 24 days after the imposition of the preventive suspension. Therefore, the purpose for which the suspension was imposed was already served. The dissenting opinion also cites the case of Rios v. Sandiganbayan[48] as basis for assailing the Ombudsmans order of preventive suspension. Rios is neither here nor there since the powers of the Sandiganbayan were at issue in that case, not those of the Ombudsman. It is also worth noting that Rios cited Section 63 of the Local Government Code as its legal basis. This provision provides: SECTION 63. Preventive Suspension. (a) Preventive suspension may be imposed: (1) By the President, if the respondent is an elective official of a province, a highly urbanized or an independent component city; By the governor, if the respondent is an elective official of a component city or municipality; or By the mayor, if the respondent is an elective official of the barangay.

(2) (3) (b)

Preventive suspension may be imposed at any time after the issues are joined, when the evidence of guilt is strong, and given the gravity of the offense, there is great probability that

(c)

the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence: Provided, That, any single preventive suspension of local elective officials shall not extend beyond sixty (60) days: Provided, further, That in the event that several administrative cases are filed against an elective official, he cannot be preventively suspended for more than ninety (90) days within a single year on the same ground or grounds existing and known at the time of the first suspension. Upon expiration of the preventive suspension, the suspended elective official shall be deemed reinstated in office without prejudice to the continuation of the proceedings against him, which shall be terminated within one hundred twenty (120) days from the time he was formally notified of the case against him. However, if the delay in the proceedings of the case is due to his fault, neglect, or request, other than the appeal duly filed, the duration of such delay shall not be counted in computing the time of termination of the case.

It is plain that the provision was only meant as a cap on the discretionary power of the President, governor and mayor to impose excessively long preventive suspensions. The Ombudsman is not mentioned in the said provision and was not meant to be governed thereby. Indeed, the reason is not hard to distill. The President, governor and mayor are political personages. As such, the possibility of extraneous factors influencing their decision to impose preventive suspensions is not remote. The Ombudsman, on the other hand, is not subject to political pressure given the independence of the office which is protected by no less than the

Constitution. This view was embraced by the Court in Hagad v. Gozo-Dadole[49] and Garcia v. Mojica.[50] In Hagad, we held: Respondent local officials contend that the 6-month preventive suspension without pay under Section 24 of the Ombudsman Act is much too repugnant to the 60-day preventive suspension provided by Section 63 of the Local Government Code to even now maintain its application. The two provisions govern differently. In order to justify the preventive suspension of a public official under Section 24 of R.A. No. 6770, the evidence of guilt should be strong, and (a) the charge against the officer or employee should involve dishonestly, oppression or grave misconduct or neglect in the performance of duty; (b) that the charges should warrant removal from the service; or (c) the respondent's continued stay in office would prejudice the case filed against him. The Ombudsman can impose the 6-month preventive suspension to all public officials, whether elective or appointive, who are under investigation. Upon the other hand, in imposing the shorter period of sixty (60) days of preventive suspension prescribed in the Local Government Code of 1991 on an elective local official (at any time after the issues are joined), it would be enough that (a) there is reasonable ground to believe that the respondent has committed the act or acts complained of, (b) the evidence of culpability is strong,(c) the gravity of the offense so warrants, or (d) the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence.[51]

In the same vein, we made the following observations in Garcia, viz.:

Respondents may be correct in pointing out the reason for the shorter period of preventive suspension imposable under the Local Government Code. Political color could taint the exercise of the

power to suspend local officials by the mayor, governor, or President's office. In contrast the Ombudsman, considering the constitutional origin of his Office, always ought to be insulated from the vagaries of politics, as respondents would have us believe. x x x It was also argued in Hagad, that the six-month preventive suspension under the Ombudsman Law is "much too repugnant" to the 60-day period that may be imposed under the Local Government Code. But per J. Vitug, "the two provisions govern differently." [52] (Emphases supplied)

There is no reason to reverse this ruling. Our above ruling is in accord with the intent of the law. It bears emphasis that Senator Pimentel[53] explained during the Senate deliberations that the purpose of Section 63 of the Code is to prevent the abuse of the power of preventive suspension by members of the executive branch, to wit: The President.[54] I recall that in the case of Iloilo City Mayor Ganzon, he challenged the right of the President, acting through the Secretary of Local Government, I think, Luis Santos, to suspend him Senator Pimentel. That is true, Mr. President. The President. - - contending that under the new Constitution, even the President does not have that right. Senator Pimentel. Now, as far as we are concerned, the Senate Committee is ready to adopt a more stringent rule regarding the power of removal and suspension by the Office of the President over local government officials, Mr. President. We

would only wish to point out that in a subsequent section, we have provided for the power of suspension of local government officials to be limited only to 60 days and not more than 90 days in any one year, regardless of the number of administrative charges that may be filed against a local government official. We, in fact, had in mind the case of Mayor Ganzon of Iloilo where the Secretary of Local Government sort of serialized the filing of charges against him so that he can be continuously suspended when one case is filed right after the other, Mr. President. The President. Can that be done under this new Code? Senator Pimentel. Under our proposal, that can no longer be done, Mr. President.[55]

Verily, Section 63 of the Local Government Code does not govern preventive suspensions imposed by the Ombudsman, which is a constitutionally created office and independent from the Executive branch of government.[56] The Ombudsmans power of preventive suspension is governed by Republic Act No. 6770,[57] otherwise known as The Ombudsman Act of 1989, which provides: SECTION 24. Preventive Suspension. The Ombudsman or his Deputy may preventively suspend any officer or employee under his authority pending an investigation, if in his judgment the evidence of guilt is strong, and (a) the charge against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (b) the charges would warrant removal from the service; or (c) the respondent's continued stay in office may prejudice the case filed against him. The preventive suspension shall continue until the case is terminated by the Office of the Ombudsman but not more than six

months, without pay, except when the delay in the disposition of the case by the Office of the Ombudsman is due to the fault, negligence or petition of the respondent, in which case the period of such delay shall not be counted in computing the period of suspension herein provided.[58] (Emphasis supplied)

The six-month period of preventive suspension imposed by the Ombudsman[59] was indubitably within the limit provided by its enabling law. This enabling law has not been modified by the legislature. The dissenting opinion submits that providing for a six-month limit for the Ombudsman while keeping the limit for executive officials at sixty days violates the constitutional proscription against equal protection of the law. In essence, it avers that there is no substantial distinction between preventive suspensions handed down by the Ombudsman and those imposed by executive officials. On the contrary, there is a world of difference between them. The Constitution has endowed the Ombudsman with unique safeguards to ensure immunity from political pressure. Among these statutory protections are fiscal autonomy,[60] fixed term of office[61] and classification as an impeachable officer.[62] This much was recognized by this Court in the earlier cited case of Garcia v. Mojica.[63] Moreover, there are stricter safeguards for imposition of preventive suspension by the Ombudsman. The Ombudsman Act of 1989 requires that the Ombudsman determine: (1) that the evidence of guilt is strong; and (2) that any of

the following circumstances are present: (a) the charge against such officer or employee involves dishonesty, oppression, or grave misconduct or neglect in the performance of duty; (b) the charges would warrant removal from the service; or (c) the respondent's continued stay in office may prejudice the case filed against him.[64] The dissenting opinion finally points out the possibility of abuse by the Ombudsman in imposing preventive suspensions. The short reply is that all powers are susceptible of abuse but that is no reason to strike down the grant of power. Suffice it to say that the proper remedies against abuse in the exercise of power are a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure or amendment of the Ombudsmans enabling law by the legislature, not a contortionist statutory interpretation by this Court. IN VIEW WHEREOF, the instant petition is DISMISSED there being no showing that the Sandiganbayan gravely abused its discretion in issuing its Resolution of 4 February 2002, preventively suspending the petitioner for 90 days.

EN BANC

LIZA M. QUIROG and RENE L. RELAMPAGOS, Petitioners,

G.R. No. 163443

- versus -

GOVERNOR ERICO B. AUMENTADO, Respondent.

x--------------------------------------x

G.R. No. 163568 CIVIL SERVICE COMMISSION, Petitioner, Present:

PUNO, C.J. QUISUMBING, YNARES-SANTIAGO, CARPIO, AUSTRIA-MARTINEZ, CORONA,

CARPIO MORALES, AZCUNA, TINGA, -versus CHICO-NAZARIO, VELASCO JR., NACHURA, REYES, LEONARDO-DE CASTRO, BRION, JJ. Promulgated:

November 11, 2008 COURT OF APPEALS and GOV. ERICO B. AUMENTADO, Respondents. x-----------------------------------------------------------------------------------------x

DECISION

LEONARDO-DE CASTRO, J.:

Before this Court are two consolidated petitions for review under Rule 45 of the Rules of Court both assailing and seeking to set aside the Court of Appeals (CA) Decision286[1] dated March 31, 2003 and the Resolution287[2] dated April 12, 2004 in CA-G.R. SP No. 70255. The Decision set aside Resolution Nos. 011812 and 020271 dated November 20, 2001 and February 22, 2002, respectively, of the Civil Service Commission in Administrative NDC No. 01-88 and reinstated the (a) June 28, 2001 Order and (b) July 23, 2001 Decision of the Civil Service Commission Regional Office No. VII.

The facts as culled from the records are as follows:

On May 28, 2001, Bohol Provincial Governor Rene L. Relampagos permanently appointed288[3] Liza M. Quirog as Provincial Government Department Head289[4] of the Office of the Bohol Provincial Agriculture (PGDHOPA). The appointment was confirmed by the Sangguniang Panlalawigan in

Resolution No. 2001-199290[5] on June 1, 2001. On even date, Quirog took her oath of office.

Before the issuance of the permanent appointment, the Personnel Selection Board (PSB) of the Human Resource Management and Development Office of Bohol issued a certification291[6] that Quirog was one of two candidates qualified for the position of PGDH-OPA.

A copy of the Monthly Report on Personnel Actions (ROPA) covering the months of May and June 2001 of the provincial government was submitted to the Civil Service Commission Regional Office No. VII (CSCROVII), Cebu City.

In the Order dated June 28, 2001292[7], the Director of CSCROVII invalidated Quirog s appointment as PGDH-OPA upon finding that the same was part of the bulk appointments issued by then Governor Relampagos after the May 14, 2001 elections allegedly in violation of Item No. 3(d)293[8] of CSC Resolution No. 010988 dated June 4, 2001. The Order pointed out that the prohibition

against the issuance of midnight appointments was already laid down as early as February 29, 2000 in CSC Resolution No. 000550.294[9]

Both Relampagos and Quirog moved for reconsideration of the CSCROVII Order, alleging that when the latter took her oath of office on June 1, 2001, CSC Resolution No. 010988 was not yet effective as it took effect only on June 4, 2001. They argued that the subject appointment cannot be considered a midnight appointment because it was made days before the expiration of Relampagos term, and that Quirog was already the acting Provincial Agriculturist a year prior to said appointment or since June 19, 2000.295[10] Besides, so they asserted, since Quirog had already taken her oath of office, assumed her duties and collected her salary for the month of June, 2001, she had already acquired a legal, not merely equitable, right to the position in question, which cannot be taken away from her either by revocation of the appointment or by removal except for cause and with previous notice and hearing.

In a decision296[11] dated July 23, 2001, the CSCROVII denied Quirog s and Relampagos motion for reconsideration for lack of legal personality to file such pleading, citing Section 2, Rule VI of CSC Memorandum Circular (MC) No. 40, series of 1998. The CSCROVII explained that only the appointing officer may

request reconsideration of the disapproval of an appointment by the Civil Service Commission. Even if Relampagos was the one who appointed Quirog, he could not file a motion for reconsideration because his term as governor had already expired.

Aggrieved, the petitioners in G.R. No. 163443 appealed to the Civil Service Commission (CSC) where their joint appeal was docketed as Adm. NDC No. 01-88.

On November 20, 2001, the CSC issued Resolution No. 011812,297[12] which granted the said joint appeal and set aside the order and decision of the CSCROVII. More specifically, the Resolution states:

WHEREFORE, the joint appeal of former Governor Rene L. Relampagos and Liza M. Quirog is hereby GRANTED. Accordingly, the decision dated July 23, 2001 of the Civil Service Commission-Regional Office No. VII and CSCRO No. VII Order dated June 28, 2001 are hereby set aside. Said Regional Office is enjoined to approve the appointment of Quirog to the position of Provincial Government Head, Office of the Provincial Agriculturist, Province of Bohol.

According to the CSC, since Relampagos had ceased to be the appointing authority upon the expiration of his term as governor and incumbent Governor

Erico B. Aumentado was not the official who made the subject appointment, equity dictates that the appointee Quirog be allowed to question the decision to obviate possible damage or injury to the delivery of public service. The CSC also declared that the appointment of Quirog was not a midnight appointment as it was not hurriedly issued nor did it subvert the policies of the incoming administration. The CSC relaxed the application of Item 3(a)298[13] in CSC

Resolution 01-0988 requiring that appointments should have gone through the regular screening by the PSB before the election ban or the prohibited period from March 30, 2001 to May 14, 2001. After noting that the selection board only deliberated upon Quirog s qualifications on May 24, 2001, or after the election ban, the CSC ratiocinated that the spirit, rather than the letter of the said rule should prevail as long as the case did not involve a midnight appointment proscribed by Aytona v. Castillo, et al.299[14] Lastly, the CSC justified Quirog s appointment even though such was included among 46 post-election appointments because of the need to immediately fill up in a permanent capacity the vacant position of Provincial Agriculturist and the fact that Governor Aumentado expressly declared his trust and confidence in Quirog in his Memorandum No. 1300[15] dated July 2, 2001.

On December 10, 2001, incumbent Bohol Governor Erico B. Aumentado filed an amended Motion for Reconsideration301[16] of the CSC Resolution No. 011812. He insisted that Quirog and Relampagos had no legal personality to file a motion for reconsideration of the disapproved appointment or to appeal the same. He insisted that Quirog s appointment was a midnight appointment.

Aumentado added that the selection board which screened Quirog s qualifications was not validly constituted and that the subject appointment was made more than six months from the time it was published on July 23, 2000 in violation of CSC Resolution No. 010114302[17] dated January 10, 2001. Aumentado insisted that Relampagos made 97, not 46, mass appointments on the eve of his term, 95 of which were invalidated by the CSC Bohol Field Office and two, including that of Quirog, by the CSCROVII.

In Resolution No. 020271303[18] dated February 22, 2002, the CSC denied Aumentado s motion for reconsideration. Aumentado then filed a petition for review304[19] under Rule 43 of the Rules of Court with the CA where it was docketed as CA-G.R. SP No. 70255.

On March 31,

2003, the

CA

rendered the

herein challenged

Decision,305[20] granting Aumentado s petition. The CA reversed and set aside CSC Resolution No. 011812 and ruled that Quirog s appeal should have been dismissed outright for lack of legal personality:

WHEREFORE, based on the foregoing premises, the instant petition is hereby GRANTED, the assailed CSC Resolution Nos. 011812 and 020271, dated November 20, 2001 and February 22, 2002 respectively, are REVERSED and SET ASIDE. The CSCROVII s June 28, 2001 Order and its July 23, 2001 Decision are hereby REINSTATED.

SO ORDERED.

On April 12, 2004, the CA rendered the second assailed Resolution,306[21] denying Quirog and Relampagos motion for reconsideration.

From the adverse decision of the CA, the CSC as well as Relampagos and Quirog interposed separate petitions for review on certiorari. Relampagos and Quirog s petition307[22] filed on June 25, 2004, was docketed as G.R. No. 163443,

while the CSC s petition308[23] filed on July 8, 2004, was docketed as G.R. No. 163568.

In the Resolution309[24] dated July 13, 2004, the Court ordered the consolidation of the two petitions.

The consolidated petitions present the following issues for the Court s resolution: (1) whether or not petitioners Relampagos and Quirog have the legal standing to file a motion for reconsideration of, or appeal from, the disapproval of the latter s appointment by the Civil Service Commission, (2) whether or not Quirog s appointment violated Item 3 of CSC Resolution No. 010988 dated June 4, 2001, and 3) whether or not the subject appointment was a midnight appointment.

In the herein challenged decision, the CA held that only the appointing authority could challenge the CSC s disapproval of an appointment. In arriving at such a conclusion, the CA relied solely on Section 2 of Rule VI of CSC Memorandum Circular (MC) No. 40, series of 1998310[25] which provides:

Sec. 2. Requests for reconsideration of, or appeal from, the disapproval of an appointment may be made by the appointing authority and submitted to the Commission within fifteen (15) days from receipt of the disapproved appointment.

The petitioners share the view that the word may in the afore-quoted provision simply means that a request for reconsideration or appeal from a disapproved appointment is not vested exclusively in the appointing authority and that Quirog s appeal should have been given due course because she was the real party-in-interest, being the one aggrieved by the disapproval of the appointment.

Petitioners Quirog and Relampagos contend that their appeal before the CA should not have been dismissed on a mere technicality such as lack of legal personality. They argued that litigants must be afforded full opportunity for the adjudication of their case on the merits.

The CSC for its part, pointed out that in previously decided cases, the CSC allowed the appointees to take relief from the disapproval of their appointments as an exception to the rule on legal standing.

Upon the other hand, respondent Aumentado maintains that the controlling rule on the matter of legal standing is the afore-cited Section 2, Rule VI, CSC MC No. 40, series of 1998. He anchors his argument in Mathay, Jr. v. Civil Service Commission,311[26] where the Court laid down the ruling that only the appointing authority can request for reconsideration of a CSC-disapproved appointment.

The Court rules for the petitioners.

In the recent case of Abella, Jr. v. Civil Service Commission,312[27] the Court declared that both the appointing authority and the appointee are equally real parties in interest who have the requisite legal standing to bring an action challenging a CSC disapproval of an appointment. In said case, we held that:

The CSC s disapproval of an appointment is a challenge to the exercise of the appointing authority s discretion. The appointing authority must have the right to contest the disapproval. Thus, Section 2 of Rule VI of CSC Memorandum Circular 40, s. 1998 is justified insofar as it allows the appointing authority to request reconsideration or appeal.

xxx

Although the earlier discussion demonstrates that the appointing authority is adversely affected by the CSC s Order and is a real party in interest, the appointee is rightly a real party in interest too. He is also injured by the CSC disapproval, because he is prevented from assuming the office in a permanent capacity. Moreover, he would necessarily benefit if a favorable judgment is obtained, as an approved appointment would confer on him all the rights and privileges of a permanent appointee.

xxx

Section 2 of Rule VI of CSC Memorandum Circular 40, s. 1998 should not be interpreted to restrict solely to the appointing authority the right to move for a reconsideration of, or to appeal, the disapproval of an appointment. PD 807 and EO 292, from which the CSC derives the authority to promulgate its rules and regulations, are silent on whether appointees have a similar right to file motions for reconsideration of, or appeals from, unfavorable decisions involving appointments. Indeed, there is no legislative intent to bar appointees from challenging the CSC s disapproval.

The view that only the appointing authority may request reconsideration or appeal is too narrow. The appointee should have the same right. Parenthetically, CSC Resolution 99-1936 recognizes the right of the adversely affected party to appeal to the CSC Regional Offices prior to elevating a matter to the CSC Central Office. The adversely affected party necessarily includes the appointee.313[28]

Also, in Abella, Jr, we held that the right of the appointee to seek reconsideration or appeal was not the main issue in Mathay:

This judicial pronouncement does not override Mathay v. Civil Service Commission xxx. The Court merely noted in passing -- by way of obiter -- that based on a similar provision, only the appointing officer could request reconsideration of actions taken by the CSC on appointments.

In that case, Quezon City Mayor Ismael A. Mathay Jr. sought the nullification of CSC Resolutions that recalled his appointment of a city government officer. He filed a Petition assailing the CA Decision, which had previously denied his Petition for Certiorari for being the wrong remedy and for being filed out of time. We observed then that the CSC Resolutions were already final and could no longer be elevated to the CA. Furthermore, Mathay s Petition for Certiorari filed with the CA was improper, because there was an available remedy of appeal. And the CSC could not have acted without jurisdiction, considering that it was empowered to recall an appointment initially approved.

The right of the appointee to seek reconsideration or appeal was not the main issue in Mathay. At any rate, the present case is being decided en banc, and the ruling may reverse previous doctrines laid down by this Court. 314[29]

Clearly, pursuant to Abella, Jr., Quirog had the right to ask for reconsideration of, or to appeal the adverse ruling of CSCROVII. In contrast, Relampagos, by reason of the expiration of his term as governor, had lost the legal personality to contest the disapproval of the appointment.

As to the validity of Quirog s appointment, the CSCROVII disapproved Quirog s appointment for non-compliance with Item No. 3 of CSC Resolution No.

010988 dated June 4, 2001. Item No. 3 refers to the disapproval of appointments unless certain requisites are complied with. Item No. 3 reads:

3. All appointments, whether original, transfer, reemployment, reappointment, promotion or demotion, x x x which are issued AFTER the elections, regardless of their dates of effectivity and/or date of receipt by the Commission, x x x shall be disapproved unless the following requisites concur relative to their issuance: a) The appointment has gone through the regular screening by the Personnel Selection Board (PSB) before the prohibited period on the issuance of appointments as shown by the PSB report or minutes of its meeting; b) That the appointee is qualified; c) There is a need to fill up the vacancy immediately in order not to prejudice public service and/or endanger public safety; d) That the appointment is not one of those mass appointments issued after the elections.

The CSC ruled that the promotional appointment extended to Quirog by Governor Relampagos was not violative of the aforesaid CSC Resolution. This interpretation by the CSC of its own rules should be given great weight and consideration for after all, it is the agency tasked with interpreting or applying the same.

Records disclose that on May 28, 2001, the PSB of the Human Resource Management and Development Office of Bohol, issued a certification315[30] that

Quirog was one of two candidates qualified for the position of PGDH-OPA. On the same day, Quirog was appointed by then Governor Relampagos and on June 1, 2001, she took her oath of office. CSC Resolution No. 010988 was issued three days later, or on June 4, 2001. Evidently, the CSCROVII should not have subjected Quirog s appointment to the requirements under said resolution, as its application is against the prospective application of laws. Having no provision regarding its retroactive application to appointments made prior to its effectivity, CSC Resolution No. 010988 must be taken to be of prospective application. As we have held time and again:

Since the retroactive application of a law usually divests rights that have already become vested, the rule in statutory construction is that all statutes are to be construed as having only a prospective operation unless the purpose and intention of the legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used.316[31]

Prescinding therefrom, it cannot be said that Quirog s appointment violated CSC Resolution No. 010988, the said Resolution having taken effect after the questioned appointment was extended.

It cannot also be said that Quirog s appointment was a midnight appointment. The constitutional prohibition on so-called midnight appointments,

specifically, those made within two (2) months immediately prior to the next presidential elections, applies only to the President or Acting President.317[32]

As the Court ruled in De Rama v. CA318[33]:

The records reveal that when the petitioner brought the matter of recalling the appointments of the fourteen (14) private respondents before the CSC, the only reason he cited to justify his action was that these were midnight appointments that are forbidden under Article VII, Section 15 of the Constitution. However, the CSC ruled, and correctly so, that the said prohibition applies only to presidential appointments. In truth and in fact, there is no law that prohibits local elective officials from making appointments during the last days of his or her tenure.

We, however, hasten to add that the aforementioned ruling does not mean that the raison d etre behind the prohibition against midnight appointments may not be applied to those made by chief executives of local government units, as here. Indeed, the prohibition is precisely designed to discourage, nay, even preclude, losing candidates from issuing appointments merely for partisan purposes thereby depriving the incoming administration of the opportunity to make the corresponding appointments in line with its new policies. As we held in Aytona v. Castillo:

The filling up of vacancies in important positions, if few, and so spaced as to afford some assurance of deliberate action and careful consideration of the need for the appointment and the appointee's qualifications may undoubtedly be permitted. But the issuance of 350 appointments in one night and the planned induction of almost all of them in a few hours before the inauguration of the new President may, with some reason, be regarded by the latter as an abuse of Presidential prerogatives, the steps taken being apparently a mere partisan effort to fill all vacant positions irrespective of fitness and other conditions, and thereby to deprive the new administration of an opportunity to make the corresponding appointments.319[34] (Emphasis ours)

The appointment of Quirog cannot be categorized as a midnight appointment. For it is beyond dispute that Quirog had been discharging and performing the duties concomitant with the subject position for a year prior to her permanent appointment thereto. Surely, the fact that she was only

permanently appointed to the position of PGDH-OPA after a year of being the Acting Provincial Agriculturist more than adequately shows that the filling up of the position resulted from deliberate action and a careful consideration of the need for the appointment and the appointee's qualifications. The fact that

Quirog had been the Acting Provincial Agriculturist since June 2000 all the more highlights the public need for said position to be permanently filled up.

Besides, as correctly held by the CSC:

A careful evaluation of the circumstances obtaining in the issuance of the appointment of Quirog shows the absence of the element of hurriedness on the part of former Governor Relampagos which characterizes a midnight appointment. There is also wanting in the records of the case the subversion by the former governor of the policies of the incumbent Governor Erico Aumentado as a logical consequence of the issuance of Quirog s appointment by the latter. Both elements are the primordial considerations by the Supreme Court when it laid down its ruling in prohibiting midnight appointments in the landmark case of Aytona vs Castillo, et. al.320[35]

In any event, respondent Governor Aumentado, in a Memorandum321[36] dated March 4, 2003, has reinstated Quirog to the permanent position of PGDHOPA. Such act of respondent bespeaks of his acceptance of the validity of

Quirog s appointment and recognition that indeed, the latter is qualified for the subject position.

WHEREFORE, the assailed Decision dated March 31, 2003 and the Resolution dated April 12, 2004 of the Court of Appeals are REVERSED AND SET ASIDE and CSC Resolution Nos. 011812 and 020271 dated November 20, 2001 and February 22, 2002, respectively, are AFFIRMED.

EN BANC

THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and BAYANI FERNANDO as Chairman of the Metropolitan Manila Development Authority, Petitioners,

G.R. No. 170656

Present:

PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, VIRON TRANSPORTATION CO., INC., Respondent. CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, VELASCO, JR., NACHURA, and REYES, JJ. x --------------------------------------------- x

- versus -

HON. ALBERTO G. ROMULO, Executive Secretary, the METROPOLITAN MANILA DEVELOPMENT AUTHORITY and BAYANI FERNANDO as Chairman of the Metropolitan Manila Development Authority, Petitioners,

G.R. No. 170657

- versus -

MENCORP TRANSPORTATION SYSTEM, INC., Respondent. Promulgated:

August 15, 2007 x-----------------------------------------------------------------------------------------x

DECISION

CARPIO MORALES, J.:

The following conditions in 1969, as observed by this Court:

Vehicles have increased in number. Traffic congestion has moved from bad to worse, from tolerable to critical. The number of people who use the thoroughfares has multiplied x x x,322[1]

have remained unchecked and have reverberated to this day. Traffic jams continue to clog the streets of Metro Manila, bringing vehicles to a standstill at main road arteries during rush hour traffic and sapping peoples energies and patience in the process.

The present petition for review on certiorari, rooted in the traffic congestion problem, questions the authority of the Metropolitan Manila Development Authority (MMDA) to order the closure of provincial bus terminals along Epifanio de los Santos Avenue (EDSA) and major thoroughfares of Metro Manila.

Specifically challenged are two Orders issued by Judge Silvino T. Pampilo, Jr. of the Regional Trial Court (RTC) of Manila, Branch 26 in Civil Case Nos. 03105850 and 03-106224.

The first assailed Order of September 8, 2005,323[2] which resolved a motion for reconsideration filed by herein respondents, declared Executive Order (E.O.) No. 179, hereafter referred to as the E.O., unconstitutional as it constitutes an unreasonable exercise of police power. The second assailed Order of November 23, 2005324[3] denied petitioners motion for reconsideration.

The following facts are not disputed:

President Gloria Macapagal Arroyo issued the E.O. on February 10, 2003, PROVIDING FOR THE ESTABLISHMENT OF GREATER MANILA MASS TRANSPORT SYSTEM, the pertinent portions of which read:

WHEREAS, Metro Manila continues to be the center of employment opportunities, trade and commerce of the Greater Metro Manila area; WHEREAS, the traffic situation in Metro Manila has affected the adjacent provinces of Bulacan, Cavite, Laguna, and Rizal, owing to the continued

movement of residents and industries to more affordable and economically viable locations in these provinces; WHEREAS, the Metropolitan Manila Development Authority (MMDA) is tasked to undertake measures to ease traffic congestion in Metro Manila and ensure the convenient and efficient travel of commuters within its jurisdiction; WHEREAS, a primary cause of traffic congestion in Metro Manila has been the numerous buses plying the streets that impedes [sic] the flow of vehicles and commuters due to the inefficient connectivity of the different transport modes; WHEREAS, the MMDA has recommended a plan to decongest traffic by eliminating the bus terminals now located along major Metro Manila thoroughfares and providing more convenient access to the mass transport system to the commuting public through the provision of mass transport terminal facilities that would integrate the existing transport modes, namely the buses, the rail-based systems of the LRT, MRT and PNR and to facilitate and ensure efficient travel through the improved connectivity of the different transport modes; WHEREAS, the national government must provide the necessary funding requirements to immediately implement and render operational these projects; and extent to MMDA such other assistance as may be warranted to ensure their expeditious prosecution. NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, by virtue of the powers vested in me by law, do hereby order: Section 1. THE PROJECT. The project shall be identified as GREATER MANILA TRANSPORT SYSTEM Project. Section 2. PROJECT OBJECTIVES. In accordance with the plan proposed by MMDA, the project aims to develop four (4) interim intermodal mass transport terminals to integrate the different transport modes, as well as those that shall hereafter be developed, to serve the commuting public in the northwest, north, east, south, and southwest of Metro Manila. Initially, the project shall concentrate on immediately establishing the mass transport terminals for the north and south Metro Manila commuters as hereinafter described. Section 3. PROJECT IMPLEMENTING AGENCY. The Metropolitan Manila Development Authority (MMDA), is hereby designated as the implementing Agency for the project. For this purpose, MMDA is directed to undertake such infrastructure development work as may be necessary and, thereafter, manage the project until it may be turned-over to more appropriate

agencies, if found suitable and convenient. Specifically, MMDA shall have the following functions and responsibilities: a) Cause the preparation of the Master Plan for the projects, including the designs and costing; b) Coordinate the use of the land and/or properties needed for the project with the respective agencies and/or entities owning them; c) Supervise and manage the construction of the necessary structures and facilities; d) Execute such contracts or agreements as may be necessary, with the appropriate government agencies, entities, and/or private persons, in accordance with existing laws and pertinent regulations, to facilitate the implementation of the project; e) Accept, manage and disburse such funds as may be necessary for the construction and/or implementation of the projects, in accordance with prevailing accounting and audit polices and practice in government. f) Enlist the assistance of any national government agency, office or department, including local government units, government-owned or controlled corporations, as may be necessary; g) Assign or hire the necessary personnel for the above purposes; and h) Perform such other related functions as may be necessary to enable it to accomplish the objectives and purposes of this Executive Order.325[4] (Emphasis in the original; underscoring supplied)

As the above-quoted portions of the E.O. noted, the primary cause of traffic congestion in Metro Manila has been the numerous buses plying the streets and the inefficient connectivity of the different transport modes;326[5] and the MMDA had recommended a plan to decongest traffic by eliminating the bus terminals now located along major Metro Manila thoroughfares and providing more and convenient access to the mass transport system to the commuting public through

the provision of mass transport terminal facilities327[6] which plan is referred to under the E.O. as the Greater Manila Mass Transport System Project (the Project).

The E.O. thus designated the MMDA as the implementing agency for the Project.

Pursuant to the E.O., the Metro Manila Council (MMC), the governing board and policymaking body of the MMDA, issued Resolution No. 03-07 series of 2003328[7] expressing full support of the Project. Recognizing the imperative to integrate the different transport modes via the establishment of common bus parking terminal areas, the MMC cited the need to remove the bus terminals located along major thoroughfares of Metro Manila.329[8]

On February 24, 2003, Viron Transport Co., Inc. (Viron), a domestic corporation engaged in the business of public transportation with a provincial bus

operation,330[9] filed a petition for declaratory relief331[10] before the RTC332[11] of Manila.

In its petition which was docketed as Civil Case No. 03-105850, Viron alleged that the MMDA, through Chairman Fernando, was poised to issue a Circular, Memorandum or Order closing, or tantamount to closing, all provincial bus terminals along EDSA and in the whole of the Metropolis under the pretext of traffic regulation.333[12] This impending move, it stressed, would mean the closure of its bus terminal in Sampaloc, Manila and two others in Quezon City.

Alleging that the MMDAs authority does not include the power to direct provincial bus operators to abandon their existing bus terminals to thus deprive them of the use of their property, Viron asked the court to construe the scope, extent and limitation of the power of the MMDA to regulate traffic under R.A. No. 7924, AN ACT CREATING THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES.

Viron also asked for a ruling on whether the planned closure of provincial bus terminals would contravene the Public Service Act and related laws which mandate public utilities to provide and maintain their own terminals as a requisite for the privilege of operating as common carriers.334[13]

Mencorp Transportation System, Inc. (Mencorp), another provincial bus operator, later filed a similar petition for declaratory relief335[14] against Executive Secretary Alberto G. Romulo and MMDA Chairman Fernando.

Mencorp asked the court to declare the E.O. unconstitutional and illegal for transgressing the possessory rights of owners and operators of public land transportation units over their respective terminals.

Averring that MMDA Chairman Fernando had begun to implement a plan to close and eliminate all provincial bus terminals along EDSA and in the whole of the metropolis and to transfer their operations to common bus terminals,336[15] Mencorp prayed for the issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction to restrain the impending closure of its bus terminals which it was leasing at the corner of EDSA and New York Street in Cubao and at

the intersection of Blumentritt, Laon Laan and Halcon Streets in Quezon City. The petition was docketed as Civil Case No. 03-106224 and was raffled to Branch 47 of the RTC of Manila.

Mencorps petition was consolidated on June 19, 2003 with Virons petition which was raffled to Branch 26 of the RTC, Manila.

Mencorps prayer for a TRO and/or writ of injunction was denied as was its application for the issuance of a preliminary injunction.337[16]

In the Pre-Trial Order338[17] issued by the trial court, the issues were narrowed down to whether 1) the MMDAs power to regulate traffic in Metro Manila included the power to direct provincial bus operators to abandon and close their duly established and existing bus terminals in order to conduct business in a common terminal; (2) the E.O. is consistent with the Public Service Act and the Constitution; and (3) provincial bus operators would be deprived of their real properties without due process of law should they be required to use the common bus terminals.

Upon the agreement of the parties, they filed their respective position papers in lieu of hearings.

By Decision339[18] of January 24, 2005, the trial court sustained the constitutionality and legality of the E.O. pursuant to R.A. No. 7924, which empowered the MMDA to administer Metro Manilas basic services including those of transport and traffic management.

The trial court held that the E.O. was a valid exercise of the police power of the State as it satisfied the two tests of lawful subject matter and lawful means, hence, Virons and Mencorps property rights must yield to police power.

On the separate motions for reconsideration of Viron and Mencorp, the trial court, by Order of September 8, 2005, reversed its Decision, this time holding that the E.O. was an unreasonable exercise of police power; that the authority of the MMDA under Section (5)(e) of R.A. No. 7924 does not include the power to order the closure of Virons and Mencorps existing bus terminals; and that the E.O. is inconsistent with the provisions of the Public Service Act.

Petitioners motion for reconsideration was denied by Resolution of November 23, 2005.

Hence, this petition, which faults the trial court for failing to rule that: (1) the requisites of declaratory relief are not present, there being no justiciable controversy in Civil Case Nos. 03-105850 and 03-106224; and (2) the President has the authority to undertake or cause the implementation of the Project.340[19]

Petitioners contend that there is no justiciable controversy in the cases for declaratory relief as nothing in the body of the E.O. mentions or orders the closure and elimination of bus terminals along the major thoroughfares of Metro Manila. Viron and Mencorp, they argue, failed to produce any letter or communication from the Executive Department apprising them of an immediate plan to close down their bus terminals.

And petitioners maintain that the E.O. is only an administrative directive to government agencies to coordinate with the MMDA and to make available for use government property along EDSA and South Expressway corridors. They add that the only relation created by the E.O. is that between the Chief Executive and the implementing officials, but not between third persons.

The petition fails.

It is true, as respondents have pointed out, that the alleged deficiency of the consolidated petitions to meet the requirement of justiciability was not among the issues defined for resolution in the Pre-Trial Order of January 12, 2004. It is equally true, however, that the question was repeatedly raised by petitioners in their Answer to Virons petition,341[20] Paper of August 23, 2004.343[22] their Comment of April 29, 2003 opposing Mencorps prayer for the issuance of a TRO,342[21] and their Position

In bringing their petitions before the trial court, both respondents pleaded the existence of the essential requisites for their respective petitions for declaratory relief,344[23] and refuted petitioners contention that a justiciable controversy was lacking.345[24] There can be no denying, therefore, that the issue was raised and discussed by the parties before the trial court.

The following are the essential requisites for a declaratory relief petition: (a) there must be a justiciable controversy; (b) the controversy must be between persons whose interests are adverse; (c) the party seeking declaratory relief must

have a legal interest in the controversy; and (d) the issue invoked must be ripe for judicial determination.346[25]

The requirement of the presence of a justiciable controversy is satisfied when an actual controversy or the ripening seeds thereof exist between the parties, all of whom are sui juris and before the court, and the declaration sought will help in ending the controversy.347[26] A question becomes justiciable when it is translated into a claim of right which is actually contested.348[27]

In the present cases, respondents resort to court was prompted by the issuance of the E.O. The 4th Whereas clause of the E.O. sets out in clear strokes the MMDAs plan to decongest traffic by eliminating the bus terminals now located along major Metro Manila thoroughfares and providing more convenient access to the mass transport system to the commuting public through the provision of mass transport terminal facilities x x x. (Emphasis supplied)

Section 2 of the E.O. thereafter lays down the immediate establishment of common bus terminals for north- and south-bound commuters. For this purpose, Section 8 directs the Department of Budget and Management to allocate funds of not more than one hundred million pesos (P100,000,000) to cover the cost of the

construction of the north and south terminals. And the E.O. was made effective immediately.

The MMDAs resolve to immediately implement the Project, its denials to the contrary notwithstanding, is also evident from telltale circumstances, foremost of which was the passage by the MMC of Resolution No. 03-07, Series of 2003 expressing its full support of the immediate implementation of the Project.

Notable from the 5th Whereas clause of the MMC Resolution is the plan to remove the bus terminals located along major thoroughfares of Metro Manila and an urgent need to integrate the different transport modes. The 7th Whereas clause proceeds to mention the establishment of the North and South terminals.

As alleged in Virons petition, a diagram of the GMA-MTS North Bus/Rail Terminal had been drawn up, and construction of the terminal is already in progress. The MMDA, in its Answer349[28] and Position Paper,350[29] in fact affirmed that the government had begun to implement the Project.

It thus appears that the issue has already transcended the boundaries of what is merely conjectural or anticipatory.

Under the circumstances, for respondents to wait for the actual issuance by the MMDA of an order for the closure of respondents bus terminals would be foolhardy for, by then, the proper action to bring would no longer be for declaratory relief which, under Section 1, Rule 63351[30] of the Rules of Court, must be brought before there is a breach or violation of rights.

As for petitioners contention that the E.O. is a mere administrative issuance which creates no relation with third persons, it does not persuade. Suffice it to stress that to ensure the success of the Project for which the concerned government agencies are directed to coordinate their activities and resources, the existing bus terminals owned, operated or leased by third persons like respondents would have to be eliminated; and respondents would be forced to operate from the common bus terminals.

It cannot be gainsaid that the E.O. would have an adverse effect on respondents. The closure of their bus terminals would mean, among other things, the loss of income from the operation and/or rentals of stalls thereat. Precisely, respondents claim a deprivation of their constitutional right to property without due process of law.

Respondents have thus amply demonstrated a personal and substantial interest in the case such that [they have] sustained, or will sustain, direct injury as a result of [the E.O.s] enforcement.352[31] Consequently, the established rule that the constitutionality of a law or administrative issuance can be challenged by one who will sustain a direct injury as a result of its enforcement has been satisfied by respondents.

On to the merits of the case.

Respondents posit that the MMDA is devoid of authority to order the elimination of their bus terminals under the E.O. which, they argue, is unconstitutional because it violates both the Constitution and the Public Service Act; and that neither is the MMDA clothed with such authority under R.A. No. 7924.

Petitioners submit, however, that the real issue concerns the Presidents authority to undertake or to cause the implementation of the Project. They assert that the authority of the President is derived from E.O. No. 125, REORGANIZING THE MINISTRY OF TRANSPORTATION AND COMMUNICATIONS DEFINING ITS POWERS AND FUNCTIONS AND FOR OTHER PURPOSES, her residual power and/or E.O. No. 292, otherwise known

as the Administrative Code of 1987. They add that the E.O. is also a valid exercise of the police power.

E.O. No. 125,353[32] which former President Corazon Aquino issued in the exercise of legislative powers, reorganized the then Ministry (now Department) of Transportation and Communications. Sections 4, 5, 6 and 22 of E.O. 125, as amended by E.O. 125-A,354[33] read:

SECTION 4. Mandate. The Ministry shall be the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated networks of transportation and communication systems as well as in the fast, safe, efficient and reliable postal, transportation and communications services. To accomplish such mandate, the Ministry shall have the following objectives: (a) Promote the development of dependable and coordinated networks of transportation and communications systems; (b) Guide government and private investment in the development of the countrys intermodal transportation and communications systems in a most practical, expeditious, and orderly fashion for maximum safety, service, and cost effectiveness; (Emphasis and underscoring supplied) xxxx SECTION 5. Powers and Functions. To accomplish its mandate, the Ministry shall have the following powers and functions: (a) Formulate and recommend national policies and guidelines for the preparation and implementation of integrated and comprehensive transportation and communications systems at the national, regional and local levels;

(b) Establish and administer comprehensive and integrated programs for transportation and communications, and for this purpose, may call on any agency, corporation, or organization, whether public or private, whose development programs include transportation and communications as an integral part thereof, to participate and assist in the preparation and implementation of such program; (c) Assess, review and provide direction to transportation and communications research and development programs of the government in coordination with other institutions concerned; (d) Administer all laws, rules and regulations in the field of transportation and communications; (Emphasis and underscoring supplied) xxxx SECTION 6. Authority and Responsibility. The authority and responsibility for the exercise of the mandate of the Ministry and for the discharge of its powers and functions shall be vested in the Minister of Transportation and Communications, hereinafter referred to as the Minister, who shall have supervision and control over the Ministry and shall be appointed by the President. (Emphasis and underscoring supplied) SECTION 22. Implementing Authority of Minister. The Minister shall issue such orders, rules, regulations and other issuances as may be necessary to ensure the effective implementation of the provisions of this Executive Order. (Emphasis and underscoring supplied)

It is readily apparent from the abovequoted provisions of E.O. No. 125, as amended, that the President, then possessed of and exercising legislative powers, mandated the DOTC to be the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity to promote, develop and regulate networks of transportation and communications. The grant of authority to the DOTC includes the power to establish and administer comprehensive and integrated programs for transportation and communications.

As may be seen further, the Minister (now Secretary) of the DOTC is vested with the authority and responsibility to exercise the mandate given to the department. Accordingly, the DOTC Secretary is authorized to issue such orders, rules, regulations and other issuances as may be necessary to ensure the effective implementation of the law.

Since, under the law, the DOTC is authorized to establish and administer programs and projects for transportation, it follows that the President may exercise the same power and authority to order the implementation of the Project, which admittedly is one for transportation.

Such authority springs from the Presidents power of control over all executive departments as well as the obligation for the faithful execution of the laws under Article VII, Section 17 of the Constitution which 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.

This constitutional provision is echoed in Section 1, Book III of the Administrative Code of 1987. Notably, Section 38, Chapter 37, Book IV of the same Code defines the Presidents power of supervision and control over the executive departments, viz:

SECTION 38. Definition of Administrative Relationships. Unless otherwise expressly stated in the Code or in other laws defining the special relationships of particular agencies, administrative relationships shall be categorized and defined as follows: (1) Supervision and Control. Supervision and control shall include authority to act directly whenever a specific function is entrusted by law or regulation to a subordinate; direct the performance of duty; restrain the commission of acts; review, approve, reverse or modify acts and decisions of subordinate officials or units; determine priorities in the execution of plans and programs. Unless a different meaning is explicitly provided in the specific law governing the relationship of particular agencies the word "control" shall encompass supervision and control as defined in this paragraph. x x x (Emphasis and underscoring supplied)

Thus, whenever a specific function is entrusted by law or regulation to a subordinate, the President may act directly or merely direct the performance of a duty.355[34]

Respecting the Presidents authority to order the implementation of the Project in the exercise of the police power of the State, suffice it to stress that the powers vested in the DOTC Secretary to establish and administer comprehensive and integrated programs for transportation and communications and to issue orders, rules and regulations to implement such mandate (which, as previously discussed, may also be exercised by the President) have been so delegated for the

good and welfare of the people. Hence, these powers partake of the nature of police power.

Police power is the plenary power vested in the legislature to make, ordain, and establish wholesome and reasonable laws, statutes and ordinances, not repugnant to the Constitution, for the good and welfare of the people.356[35] This power to prescribe regulations to promote the health, morals, education, good order or safety, and general welfare of the people flows from the recognition that salus populi est suprema lex the welfare of the people is the supreme law.

While police power rests primarily with the legislature, such power may be delegated, as it is in fact increasingly being delegated.357[36] By virtue of a valid delegation, the power may be exercised by the President and administrative boards358[37] as well as by the lawmaking bodies of municipal corporations or local governments under an express delegation by the Local Government Code of 1991.359[38]

The authority of the President to order the implementation of the Project notwithstanding, the designation of the MMDA as the implementing agency for the Project may not be sustained. It is ultra vires, there being no legal basis therefor.

It bears stressing that under the provisions of E.O. No. 125, as amended, it is the DOTC, and not the MMDA, which is authorized to establish and implement a project such as the one subject of the cases at bar. Thus, the President, although authorized to establish or cause the implementation of the Project, must exercise the authority through the instrumentality of the DOTC which, by law, is the primary implementing and administrative entity in the promotion, development and regulation of networks of transportation, and the one so authorized to establish and implement a project such as the Project in question.

By designating the MMDA as the implementing agency of the Project, the President clearly overstepped the limits of the authority conferred by law, rendering E.O. No. 179 ultra vires.

In another vein, the validity of the designation of MMDA flies in the absence of a specific grant of authority to it under R.A. No. 7924.

To recall, R.A. No. 7924 declared the Metropolitan Manila area360[39] as a special development and administrative region and placed the administration of metro-wide basic services affecting the region under the MMDA.

Section 2 of R.A. No. 7924 specifically authorizes the MMDA to perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory authority over the delivery of metro-wide services, including transport and traffic management.361[40] Section 5 of the same law enumerates the powers and functions of the MMDA as follows:

(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the delivery of metro-wide services, land use and physical development within Metropolitan Manila, consistent with national development objectives and priorities; (b) Prepare, coordinate and regulate the implementation of mediumterm investment programs for metro-wide services which shall indicate sources and uses of funds for priority programs and projects, and which shall include the packaging of projects and presentation to funding institutions; (c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create appropriate project management offices; (d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify bottlenecks and adopt solutions to problems of implementation;

(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulate the implementation of all programs and projects concerning traffic management, specifically pertaining to enforcement, engineering and education. Upon request, it shall be extended assistance and cooperation, including but not limited to, assignment of personnel, by all other government agencies and offices concerned; (f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations, whether moving or non-moving in nature, and confiscate and suspend or revoke drivers licenses in the enforcement of such traffic laws and regulations, the provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this purpose, the Authority shall impose all traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of local government units, duly licensed security guards, or members of non-governmental organizations to whom may be delegated certain authority, subject to such conditions and requirements as the Authority may impose; and (g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking of delivery of basic services to the local government units, when deemed necessary subject to prior coordination with and consent of the local government unit concerned. (Emphasis and underscoring supplied)

The scope of the function of MMDA as an administrative, coordinating and policy-setting body has been settled in Metropolitan Manila Development Authority (MMDA) v. Bel-Air Village Association, Inc.362[41] Court stressed: In that case, the

Clearly, the scope of the MMDAs function is limited to the delivery of the seven (7) basic services. One of these is transport and traffic management which includes the formulation and monitoring of policies, standards and projects to rationalize the existing transport operations, infrastructure requirements, the

use of thoroughfares and promotion of the safe movement of persons and goods. It also covers the mass transport system and the institution of a system of road regulation, the administration of all traffic enforcement operations, traffic engineering services and traffic education programs, including the institution of a single ticketing system in Metro Manila for traffic violations. Under this service, the MMDA is expressly authorized to to set the policies concerning traffic and coordinate and regulate the implementation of all traffic management programs. In addition, the MMDA may install and administer a single ticketing system, fix, impose and collect fines and penalties for all traffic violations. It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative power. Even the Metro Manila Council has not been delegated any legislative power. Unlike the legislative bodies of the local government units, there is no provision in R.A. No. 7924 that empowers the MMDA or its Council to enact ordinances, approve resolutions and appropriate funds for the general welfare of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, a development authority. It is an agency created for the purpose of laying down policies and coordinating with the various national government agencies, peoples organizations, non-governmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in nature and these are actually summed up in the charter itself, viz: SECTION 2. Creation Development Authority. . . . of the Metropolitan Manila

The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of the local government units concerning purely local matters.363[42] (Emphasis and underscoring supplied)

In light of the administrative nature of its powers and functions, the MMDA is devoid of authority to implement the Project as envisioned by the E.O; hence, it

could not have been validly designated by the President to undertake the Project. It follows that the MMDA cannot validly order the elimination of respondents terminals.

Even the MMDAs claimed authority under the police power must necessarily fail in consonance with the above-quoted ruling in MMDA v. Bel-Air Village Association, Inc. and this Courts subsequent ruling in Metropolitan Manila Development Authority v. Garin364[43] that the MMDA is not vested with police power.

Even assuming arguendo that police power was delegated to the MMDA, its exercise of such power does not satisfy the two tests of a valid police power measure, viz: (1) the interest of the public generally, as distinguished from that of a particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.365[44] Stated differently, the police power legislation must be firmly grounded on public interest and welfare and a reasonable relation must exist between the purposes and the means.

As early as Calalang v. Williams,366[45] this Court recognized that traffic congestion is a public, not merely a private, concern. The Court therein held that public welfare underlies the contested statute authorizing the Director of Public Works to promulgate rules and regulations to regulate and control traffic on national roads.

Likewise, in Luque v. Villegas,367[46] this Court emphasized that public welfare lies at the bottom of any regulatory measure designed to relieve congestion of traffic, which is, to say the least, a menace to public safety.368[47] As such, measures calculated to promote the safety and convenience of the people using the thoroughfares by the regulation of vehicular traffic present a proper subject for the exercise of police power.

Notably, the parties herein concede that traffic congestion is a public concern that needs to be addressed immediately. Indeed, the E.O. was issued due to the felt need to address the worsening traffic congestion in Metro Manila which, the MMDA so determined, is caused by the increasing volume of buses plying the major thoroughfares and the inefficient connectivity of existing transport systems. It is thus beyond cavil that the motivating force behind the issuance of the E.O. is the interest of the public in general.

Are the means employed appropriate and reasonably necessary for the accomplishment of the purpose. Are they not duly oppressive?

With the avowed objective of decongesting traffic in Metro Manila, the E.O. seeks to eliminate[e] the bus terminals now located along major Metro Manila thoroughfares and provid[e] more convenient access to the mass transport system to the commuting public through the provision of mass transport terminal facilities x x x.369[48] Common carriers with terminals along the major thoroughfares of Metro Manila would thus be compelled to close down their existing bus terminals and use the MMDA-designated common parking areas.

In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,370[49] two city ordinances were passed by the Sangguniang Panlungsod of Lucena, directing public utility vehicles to unload and load passengers at the Lucena Grand Central Terminal, which was given the exclusive franchise to operate a single common terminal. Declaring that no other terminals shall be situated, constructed, maintained or established inside or within the city of Lucena, the sanggunian declared as inoperable all temporary terminals therein.

The ordinances were challenged before this Court for being unconstitutional on the ground that, inter alia, the measures constituted an invalid exercise of police power, an undue taking of private property, and a violation of the constitutional prohibition against monopolies.

Citing De la Cruz v. Paras371[50] and Lupangco v. Court of Appeals,372[51] this Court held that the assailed ordinances were characterized by overbreadth, as they went beyond what was reasonably necessary to solve the traffic problem in the city. And it found that the compulsory use of the Lucena Grand Terminal was unduly oppressive because it would subject its users to fees, rentals and charges.

The true role of Constitutional Law is to effect an equilibrium between authority and liberty so that rights are exercised within the framework of the law and the laws are enacted with due deference to rights. A due deference to the rights of the individual thus requires a more careful formulation of solutions to societal problems. From the memorandum filed before this Court by petitioner, it is gathered that the Sangguniang Panlungsod had identified the cause of traffic congestion to be the indiscriminate loading and unloading of passengers by buses on the streets of the city proper, hence, the conclusion that the terminals contributed to the proliferation of buses obstructing traffic on the city streets. Bus terminals per se do not, however, impede or help impede the flow of traffic. How the outright proscription against the existence of all terminals, apart from that franchised to petitioner, can be considered as reasonably necessary to solve the traffic problem, this Court has not been enlightened. If terminals lack adequate space such that bus drivers are compelled to load and

unload passengers on the streets instead of inside the terminals, then reasonable specifications for the size of terminals could be instituted, with permits to operate the same denied those which are unable to meet the specifications.

In the subject ordinances, however, the scope of the proscription against the maintenance of terminals is so broad that even entities which might be able to provide facilities better than the franchised terminal are barred from operating at all. (Emphasis and underscoring supplied)

As in Lucena, this Court fails to see how the prohibition against the existence of respondents terminals can be considered a reasonable necessity to ease traffic congestion in the metropolis. On the contrary, the elimination of respondents bus terminals brings forth the distinct possibility and the equally harrowing reality of traffic congestion in the common parking areas, a case of transference from one site to another.

Less intrusive measures such as curbing the proliferation of colorum buses, vans and taxis entering Metro Manila and using the streets for parking and passenger pick-up points, as respondents suggest, might even be more effective in easing the traffic situation. So would the strict enforcement of traffic rules and the removal of obstructions from major thoroughfares.

As to the alleged confiscatory character of the E.O., it need only to be stated that respondents certificates of public convenience confer no property right, and

are mere licenses or privileges.373[52] As such, these must yield to legislation safeguarding the interest of the people.

Even then, for reasons which bear reiteration, the MMDA cannot order the closure of respondents terminals not only because no authority to implement the Project has been granted nor legislative or police power been delegated to it, but also because the elimination of the terminals does not satisfy the standards of a valid police power measure.

Finally, an order for the closure of respondents terminals is not in line with the provisions of the Public Service Act.

Paragraph (a), Section 13 of Chapter II of the Public Service Act (now Section 5 of Executive Order No. 202, creating the Land Transportation Franchising and Regulatory Board or LFTRB) vested the Public Service Commission (PSC, now the LTFRB) with x x x jurisdiction, supervision and control over all public services and their franchises, equipment and other properties x x x.

Consonant with such grant of authority, the PSC was empowered to impose such conditions as to construction, equipment, maintenance, service,

or operation as the public interests and convenience may reasonably require374[53] in approving any franchise or privilege.

Further, Section 16 (g) and (h) of the Public Service Act375[54] provided that the Commission shall have the power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary:

(g) To compel any public service to furnish safe, adequate, and proper service as regards the manner of furnishing the same as well as the maintenance of the necessary material and equipment. (h) To require any public service to establish, construct, maintain, and operate any reasonable extension of its existing facilities, where in the judgment of said Commission, such extension is reasonable and practicable and will furnish sufficient business to justify the construction and maintenance of the same and when the financial condition of the said public service reasonably warrants the original expenditure required in making and operating such extension.(Emphasis and underscoring supplied)

The establishment, as well as the maintenance of vehicle parking areas or passenger terminals, is generally considered a necessary service to be provided by provincial bus operators like respondents, hence, the investments they have poured

into the acquisition or lease of suitable terminal sites. Eliminating the terminals would thus run counter to the provisions of the Public Service Act.

This Court commiserates with the MMDA for the roadblocks thrown in the way of its efforts at solving the pestering problem of traffic congestion in Metro Manila. These efforts are commendable, to say the least, in the face of the abominable traffic situation of our roads day in and day out. This Court can only interpret, not change, the law, however. It needs only to be reiterated that it is the DOTC as the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity to promote, develop and regulate networks of transportation and communications which has the power

to establish and administer a transportation project like the Project subject of the case at bar.

No matter how noble the intentions of the MMDA may be then, any plan, strategy or project which it is not authorized to implement cannot pass muster.

WHEREFORE, the Petition is, in light of the foregoing disquisition, DENIED. E.O. No. 179 is declared NULL and VOID for being ultra vires.