ZENON R. PEREZ VS PEOPLE OF THE PHILIPPINES G.R. No.

164763, February 12, 2008 Malversation of Public Funds

public officer may be convicted of malversation even if there is no direct evidence of misappropriation and the only evidence is shortage in his accounts which he has not been able to explain satisfactorily. Verily, an accountable public officer may be found guilty of malversation even if there is no direct evidence of malversation because the law establishes a presumption that mere failure of an accountable officer to produce public funds which have come into his hands on demand by an officer duly authorized to examine his accounts is prima facie case of conversion. Because of the prima facie presumption in Article 217, the burden of evidence is shifted to the accused to adequately explain the location of the funds or property under his custody or control in order to rebut the presumption that he has appropriated or misappropriated for himself the missing funds. Failing to do so, the accused may be convicted under the said provision. However, the presumption is merely prima facie and a rebuttable one. The accountable officer may overcome the presumption by proof to the contrary. If he adduces evidence showing that, in fact, he has not put said funds or property to personal use, then that presumption is at end and the prima facie case is destroyed. In the case at bar, petitioner was not able to present any credible evidence to rebut the presumption that he malversed the missing funds in his custody or control. WHEREFORE, Sandiganbayan the Decision of the 24,

Facts: An audit team conducted a cash examination on the account of petitioner, who was then the acting municipal treasurer of Tubigon, Bohol. In the course of the audit, the amount of P21,331.79 was found in the safe of petitioner. The audit team embodied their findings in the Report of Cash Examination, which also contained an inventory of cash items. Based on the said audit, petitioner was supposed to have on hand the total amount of P94,116.36, instead of the P21,331.79, incurring a shortage of P72,784.57. When asked by the auditing team as to the location of the missing funds, petitioner verbally explained that part of the money was used to pay for the loan of his late brother, another portion was spent for the food of his family, and the rest for his medicine. As a result of the audit, Arlene R. Mandin prepared a memorandum dated January 13, 1989 addressed to the Provincial Auditor of Bohol recommending the filing of the appropriate criminal case against petitioner. Petitioner was charged before the Sandiganbayan with malversation of public funds, defined and penalized by Article 217 of the Revised Penal Code [Malversation of public funds or property; Presumption of malversation]

dated September

2003 is AFFIRMED with the MODIFICATION that petitioner is hereby sentenced to suffer the indeterminate penalty of four (4) years, two (2) months and one (1) day of prision

Issue: Is petitioner guilty of malversation? correccional, as minimum term, to ten (10) years and one (1) Ruling: YES. Malversation is defined and penalized under Article 217 of the Revised Penal Code. The acts punished as malversation are: (1) appropriating public funds or property, (2) taking or misappropriating the same, (3) consenting, or through abandonment or negligence, permitting any other person to take such public funds or property, and (4) being otherwise guilty of the misappropriation or malversation of such funds or property. There are four elements that must concur in order that one may be found guilty of the crime. They are: (a) That the offender be a public officer; (b) That he had the custody or control of funds or property by reason of the duties of his office;(c) That those funds or property involved were public funds or property for which he is accountable; and (d) That he has appropriated, took or misappropriated or consented or, through abandonment or negligence, permitted another person to take them. Evidently, the first three elements are present in the case at bar. At the time of the commission of the crime charged, petitioner was a public officer, being then the acting municipal treasurer of Tubigon, Bohol. By reason of his public office, he was accountable for the public funds under his custody or control. In malversation, all that is necessary to prove is that the defendant received in his possession public funds; that he could not account for them and did not have them in his possession; and that he could not give a reasonable excuse for its disappearance. An accountable day of prision mayor, as maximum term, with perpetual special disqualification. He is likewise ORDERED to pay a fine of P72,784.57, malversed. the amount equal to the funds

NOTES:

POWER OF JUDICIAL REVIEW:

(1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.

the basis and mechanics of HLIs SDP, which was eventually approved by the PARC after a follow-up referendum conducted by the DAR on October 14, 1989, in which 5,117 FWBs, out of 5,315 who participated, opted to receive shares in HLI. On August 15, 1995, HLI applied for the conversion of 500 hectares of land of the hacienda from agricultural to industrial use, pursuant to Sec. 65 of RA 6657. The DAR approved the application on August 14, 1996, subject to payment of three percent (3%) of the gross selling price to the FWBs and to HLIs continued compliance with its undertakings under the SDP, among other conditions. On December 13, 1996, HLI, in exchange for subscription of 12,000,000 shares of stocks of Centennary Holdings, Inc. (Centennary), ceded 300 hectares of the converted area to the latter. Subsequently, Centennary sold the entire 300 hectares for PhP750 million to Luisita Industrial Park Corporation (LIPCO), which used it in developing an industrial complex. From this area was carved out 2 parcels, for which 2 separate titles were issued in the name of LIPCO. Later, LIPCO transferred these 2 parcels to the Rizal Commercial Banking Corporation (RCBC) in payment of LIPCOs PhP431,695,732.10 loan obligations to RCBC. LIPCOs titles were cancelled and new ones were issued to RCBC. Apart from the 500 hectares, another 80.51 hectares were later detached from Hacienda Luisita and acquired by the government as part of the Subic-ClarkTarlac Expressway (SCTEX) complex. Thus, 4,335.75 hectares remained of the original 4,915 hectares Tadeco ceded to HLI. Such, was the state of things when two separate petitions reached the DAR in the latter part of 2003. The first was filed by the Supervisory Group of HLI (Supervisory Group), praying for a renegotiation of the SDOA, or, in the alternative, its revocation. The second petition, praying for the revocation and nullification of the SDOA and the distribution of the lands in the hacienda, was filed by Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA). The DAR then constituted a Special Task Force (STF) to attend to issues relating to the SDP of HLI. After investigation and evaluation, the STF found that HLI has not complied with its obligations under RA 6657 despite the implementation of the SDP. On December 22, 2005, the PARC issued the assailed Resolution No. 2005-32-01, recalling/revoking the SDO plan of Tadeco/HLI. It further resolved that the subject lands be forthwith placed under the compulsory coverage or mandated land acquisition scheme of the CARP. From the foregoing resolution, HLI sought reconsideration. Its motion notwithstanding, HLI also filed a petition before the Supreme Court in light of what it considers as the DARs hasty placing of Hacienda Luisita under CARP even before PARC could rule or even read the motion for reconsideration. PARC would eventually deny HLIs motion for reconsideration via Resolution No. 2006-3401 dated May 3, 2006. 1) Does the PARC possess jurisdiction to recall or revoke HLIs SDP? Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the plan for stock distribution of the corporate landowner belongs to PARC. Contrary to petitioner HLIs posture, PARC also has the power to revoke the SDP which it previously approved. It may be, as urged, that RA 6657 or other executive issuances on agrarian reform do not explicitly vest the PARC

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No. 171101, July 5, 2011
In 1958, the Spanish owners of Compaia General de Tabacos de Filipinas (Tabacalera) sold Hacienda Luisita and the Central Azucarera de Tarlac, the sugar mill of the hacienda, to the Tarlac Development Corporation (Tadeco), then owned and controlled by the Jose Cojuangco Sr. Group. The Central Bank of the Philippines assisted Tadeco in obtaining a dollar loan from a US bank. Also, the GSIS extended a PhP5.911 million loan in favor of Tadeco to pay the peso price component of the sale, with the condition that the lots comprising the Hacienda Luisita be subdivided by the applicant-corporation and sold at cost to the tenants, should there be any, and whenever conditions should exist warranting such action under the provisions of the Land Tenure Act. Tadeco however did not comply with this condition. On May 7, 1980, the martial law administration filed a suit before the Manila RTC against Tadeco, et al., for them to surrender Hacienda Luisita to the then Ministry of Agrarian Reform (MAR) so that the land can be distributed to farmers at cost. Responding, Tadeco alleged that Hacienda Luisita does not have tenants, besides which sugar lands of which the hacienda consisted are not covered by existing agrarian reform legislations. The Manila RTC rendered judgment ordering Tadeco to surrender Hacienda Luisita to the MAR. Therefrom, Tadeco appealed to the CA. On March 17, 1988, during the administration of President Corazon Cojuangco Aquino, the Office of the Solicitor General moved to withdraw the governments case against Tadeco, et al. The CA dismissed the case, subject to the PARCs approval of Tadecos proposed stock distribution plan (SDP) in favor of its farmworkers. [Under EO 229 and later RA 6657, Tadeco had the option of availing stock distribution as an alternative modality to actual land transfer to the farmworkers.] On August 23, 1988, Tadeco organized a spin-off corporation, herein petitioner HLI, as vehicle to facilitate stock acquisition by the farmworkers. For this purpose, Tadeco conveyed to HLI the agricultural land portion (4,915.75 hectares) and other farm-related properties of Hacienda Luisita in exchange for HLI shares of stock. On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement of Hacienda Luisita signified in a referendum their acceptance of the proposed HLIs Stock Distribution Option Plan (SODP). On May 11, 1989, the SDOA was formally entered into by Tadeco, HLI, and the 5,848 qualified FWBs. This attested to by then DAR Secretary Philip Juico. The SDOA embodied

with the power to revoke/recall an approved SDP. Such power or authority, however, is deemed possessed by PARC under the principle of necessary implication, a basic postulate that what is implied in a statute is as much a part of it as that which is expressed. Following the doctrine of necessary implication, it may be stated that the conferment of express power to approve a plan for stock distribution of the agricultural land of corporate owners necessarily includes the power to revoke or recall the approval of the plan. To deny PARC such revocatory power would reduce it into a toothless agency of CARP, because the very same agency tasked to ensure compliance by the corporate landowner with the approved SDP would be without authority to impose sanctions for non-compliance with it. (2) [Issue raised by intervenor FARM (group of farmworkers)] Is Sec. 31 of RA 6657, which allows stock transfer in lieu of outright land transfer, unconstitutional? (2) NO, Sec. 31 of RA 6657 is not unconstitutional. [The Court actually refused to pass upon the constitutional question because it was not raised at the earliest opportunity and because the resolution thereof is not the lis mota of the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the modes of acquisition under RA 9700.] When the Court is called upon to exercise its power of judicial review over, and pass upon the constitutionality of, acts of the executive or legislative departments, it does so only when the following essential requirements are first met, to wit: (1) there is an actual case or controversy; (2) that the constitutional question is raised at the earliest possible opportunity by a proper party or one with locus standi [the right to bring an action]; and (3) the issue of constitutionality must be the very lis mota of the case. Not all the foregoing requirements are satisfied in the case at bar. While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 31 of RA 6657 as early as November 21, 1989 when PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter, and why its members received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP that said plan and approving resolution were sought to be revoked, but not, to stress, by FARM or any of its members, but by petitioner AMBALA. Furthermore, the AMBALA petition did NOT question the constitutionality of Sec. 31 of RA 6657, but concentrated on the purported flaws and gaps in the subsequent implementation of the SDP. Even the public respondents, as represented by the Solicitor General, did not question the constitutionality of the provision. On the other hand, FARM, whose 27 members formerly belonged to AMBALA, raised the constitutionality of Sec. 31 only on May 3, 2007 when it filed its Supplemental Comment with the Court. Thus, it took FARM some eighteen (18) years from November 21, 1989 before it challenged the constitutionality of Sec. 31 of RA 6657 which is quite too late in the day. The FARM members slept on their rights and even accepted benefits from the SDP with nary a complaint on the alleged unconstitutionality of Sec. 31 upon which the benefits were derived. The Court cannot now be goaded into resolving a constitutional issue that FARM failed to

assail after the lapse of a long period of time and the occurrence of numerous events and activities which resulted from the application of an alleged unconstitutional legal provision. The last but the most important requisite that the constitutional issue must be the very lis mota of the case does not likewise obtain. The lis mota aspect is not present, the constitutional issue tendered not being critical to the resolution of the case. The unyielding rule has been to avoid, whenever plausible, an issue assailing the constitutionality of a statute or governmental act. If some other grounds exist by which judgment can be made without touching the constitutionality of a law, such recourse is favored. The lis mota [The cause of the suit or action in this case], proceeding from the basic positions originally taken by AMBALA (to which the FARM members previously belonged) and the Supervisory Group, is the alleged noncompliance by HLI with the conditions of the SDP to support a plea for its revocation. And before the Court, the lis mota is whether or not PARC acted in grave abuse of discretion when it ordered the recall of the SDP for such noncompliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions. To be sure, any of these key issues may be resolved without plunging into the constitutionality of Sec. 31 of RA 6657. Moreover, looking deeply into the underlying petitions of AMBALA, et al., it is not the said section per se that is invalid, but rather it is the alleged application of the said provision in the SDP that is flawed. It may be well to note at this juncture that Sec. 5 of RA 9700, amending Sec. 7 of RA 6657, has all but superseded Sec. 31 of RA 6657 vis--vis the stock distribution component of said Sec. 31. In its pertinent part, Sec. 5 of RA 9700 provides: [T]hat after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to sell and compulsory acquisition. Thus, for all intents and purposes, the stock distribution scheme under Sec. 31 of RA 6657 is no longer an available option under existing law. The question of whether or not it is unconstitutional should be a moot issue. [WHEREFORE, the instant petition is DENIED. PARC Resolution No. 2005-32-01 dated December 22, 2005 and Resolution No. 2006-34-01 dated May 3, 2006, placing the lands subject of HLIs SDP under compulsory coverage on mandated land acquisition scheme of the CARP, are hereby AFFIRMED with the MODIFICATION that the original 6,296 qualified FWBs shall have the option to remain as stockholders of HLI. DAR shall immediately schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as the case may be, over their printed names.]

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No. 171101, November 22, 2011
THE FACTS On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed by HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLIs Stock Distribution Plan (SDP) and placing the subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive Agrarian Reform Program (CARP) of the government. The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are operative facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court declared that the revocation of the SDP must, by application of the operative fact principle, give way to the right of the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders or [choose actual land distribution]. It thus ordered the Department of Agrarian Reform (DAR) to immediately schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as the case may be, over their printed names. The parties thereafter filed their respective motions for reconsideration of the Court decision. THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI be reconsidered? . YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI should be reconsidered. [The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders, which is unlikely, control will never be in the hands of the FWBs. Control means the majority of [sic] 50% plus at least one share of the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus one [1] HLI share). The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control over HLI.] DELA LLANA v THE CHAIRPERSON of COA Facts: Petitioner Gualberto Dela Llana, as a taxpayer wrote to the COA regarding the recommendation of the Senate Committee on Agriculture and Food that the Department of

Agriculture set up an internal pre-audit service [A pre-audit is an examination of financial transactions before their consumption or payment] It seeks to determine whether the following conditions are present: (1) the proposed expenditure complies with an appropriation law or other specific statutory authority; (2) sufficient funds are available for the purpose; (3) the proposed expenditure is not unreasonable or extravagant, and the unexpended balance of appropriations to which it will be charged is sufficient to cover the entire amount of the expenditure; and (4) the transaction is approved by the proper authority and the claim is duly supported by authentic underlying evidence.. The COA replied to Dela Llana informing him of the prior issuance of Circular No. 89-299 which provides that whenever the circumstances warrant, the COA may reinstitute pre-audit or adopt such other control measures as necessary and appropriate to protect the funds and property of an agency, Dela Llana filed a petition for certiorari alleging that the preaudit duty on the part of the COA cannot be lifted by a mere circular, considering that the pre-audit is a constitutional mandate enshrined in Section 2 of Article IX-D of the 1987 Constitution.

Issues: 1.

Whether or not the petition for certiorari filed by dela llana is proper.

The petition for certiorari is not proper. Dela lllna is corrected in that decision and orders of the COA are reviewable by the Court via a petition for certiorari. However, these refer to decisions and orders which were rendered by the COA in its quasijudicial capacity. Circular No 89-299 was promulgated by the COA under its quasi-legislative or rule-making powers. Hence, Circular No 89-299 is not reviewable by certiorari. Nonetheless the court has in the past seen fit to step in and resolve petitions despite their being the subject of an improper remedy, Dela Llana averred that the conduct of pre-audit by the COA could have prevented the occurrence of the numerous alleged irregularities in the government transactions that involved substantial amounts of public money. This is a serious allegation of a grave deficiency in observing a constitutional duty if proven correct. The court can use its authority to set aside errors of practice of technicalities of procedure, including the aforementioned technical defects of the petition, and resolve the merits of a case with such serious allegations of constitutional breach. Petitioners allegations find no support in the aforequoted Constitutional provision. There is nothing in the said provision that requires the COA to conduct a pre-audit of all government transactions and for all government agencies. provides The that a only clear reference is to a for pre-audit certain requirement is found in Section 2, paragraph 1, which post-audit mandated

government or private entities with state subsidy or equity

and only when the internal control system of an audited entity is inadequate. In such a situation, the COA may adopt measures, including a temporary or special pre-audit, to correct the deficiencies. Hence, the conduct of a pre-audit is not a mandatory duty that this Court may compel the COA to perform. This discretion on its part is in line with the constitutional pronouncement that the COA has the exclusive authority to define the scope of its audit and examination. When the language of the law is clear and explicit, there is no room for interpretation, only application.[19] Neither can the scope of the provision be unduly enlarged by this Court. WHEREFORE, premises considered, the Petition is DISMISSED. SO ORDERED.

and GFIs empowering their boards of directors/trustees to determine their own compensation system and instead expressly authorizing the President to fix the compensation framework of GOCCs and GFIs. With its mootness, the Court ruled that there is no longer any actual controversy between adverse parties. For the Court to still rule upon the supposed

unconstitutionality of EO 7 will merely be an academic exercise. Any further discussion on its constitutionality serves no useful purpose. All told, in view of the supervening events rendering the petition moot, as well as its patent formal and procedural infirmities, we no longer see any reason for the Court to resolve the other issues raised in the petition, the Court said.

GALICTO VS AQUINO
As the issuance of EO 7 was not a judicial, quasi-judicial, or THE Supreme Court has dismissed a petition questioning the constitutionality of President Benigno Aquino IIIs Executive Order 7, which bars the release of bonuses and allowances to the board of directors of government-ownedand-controlled-corporations financial institutions. In a 19-page en banc resolution penned by Associate Justice Arturo Brion, the Court unanimously [commonly] ruled to dismiss the petition filed by lawyer Jelbert Galicto, an employee of the Philippine Health Insurance Corporation (PhilHealth), seeking to declare null and void the moratorium on the increase in salary, incentives and other forms of compensation of all GOCCs and GFI employees. EO 7, which took effect September 25, 2010, provided the framework for a fixed compensation and position In his separate opinion, Chief Justice Renato Corona claimed that Section 56 of the General Provisions of RA 10147 acknowledges the Presidents power to approve or disapprove "any grant of or increase in salaries, allowances, and other fringe benefits with respect to all RA 6758-exempt GOCCs and GFIs." The SC ruled that any discussion on the constitutionality of EO 7 is moot on its face in light of the enactment of Republic Act 10149, or the GOCC Governance Act of 2011, which amended the provisions in the charters of the GOCCs "There is nothing there which limits or constricts the power of the President as Chief Executive to prescribe such policies, parameters and guidelines which in his discretion would best The SC said the petitioner cannot be considered to have filed his petition as a PhilHealth representative as he failed to present a Board Resolution or Secretarys Certificate from PhilHealth authorizing him as such. (GOCCs) and government The High Court also said that petitioner lacked locus standi or a personal and substantial interest such that he has sustained or will sustain direct injury as a result of EO 7s implementation. It said that Galicto has no vested right to salary increases and therefore, the absence of such right deprives the petitioner of legal standing to assail EO 7. mandatory act, the SC said the proper remedy is not a petition for certiorari and prohibition but one of declaratory relief under Rule 63 of the Rules of Court.

classification for GOCCs and GFIs. It likewise created a Task Force to review all remunerations of GOCC and GFI officers and employees and ordered a moratorium on the increases in their salaries.

serve public interest by regulating the compensation and position classification system of these entities," said Corona. Without any showing of grave abuse of discretion on the part of the President, Corona said the Court must recognize in the President, as Chief Executive, the power and duty to protect and promote public interest through rationalization of the compensation and position classification system in executive departments, bureaus, offices, and agencies including GOCCs and GFIs. (JCV/Sunnex)

LOCUS STANDI: The gist of the question of standing is whether a party alleges such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions. Here, the sufficient interest preventing the illegal expenditure of money raised by taxation required in taxpayers suits is established. Thus, in the claim that PDAF funds have been illegally disbursed and wasted through the enforcement of an invalid or unconstitutional law, LAMP should be allowed to sue. Lastly, the Court is of the view that the petition poses issues impressed with paramount public interest. The ramification [result] of issues involving the unconstitutional spending of PDAF deserves the consideration of the Court, warranting the assumption of jurisdiction over the petition. II. The Court rules in the negative. In determining whether or not a statute is unconstitutional, the Court does not lose sight of the presumption of validity accorded to statutory acts of Congress. To justify the nullification of the law or its implementation, there must be a clear and unequivocal, not a doubtful, breach of the Constitution. In case of doubt in the sufficiency of proof establishing unconstitutionality, the Court must sustain legislation because to invalidate [a law] based on x x x baseless supposition is an affront to the wisdom not only of the legislature that passed it but also of the executive which approved it. The petition is miserably wanting in this regard. No convincing proof was presented showing that, indeed, there were direct releases of funds to the Members of Congress, who actually spend them according to their sole discretion. Devoid of any pertinent evidentiary support that illegal misuse of PDAF in the form of kickbacks has become a common exercise of unscrupulous Members of Congress, the Court cannot indulge the petitioners request for rejection of a law which is outwardly legal and capable of lawful enforcement. PORK BARREL: The Members of Congress are then requested by the President to recommend projects and programs which may be funded from the PDAF. The list submitted by the Members of Congress is endorsed by the Speaker of the House of Representatives to the DBM, which reviews and determines whether such list of projects submitted are consistent with the guidelines and the priorities set by the Executive.33 This demonstrates the power given to the President to execute appropriation laws and therefore, to exercise the spending per se of the budget. As applied to this case, the petition is seriously wanting in establishing that individual Members of Congress receive and thereafter spend funds out of PDAF. So long as there is no showing of a direct participation of legislators in the actual spending of the budget, the constitutional boundaries between the Executive and the Legislative in the budgetary process remain intact. Again, all presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that a law may work hardship does not render it unconstitutional; that if any reasonable basis may

LAMP VS SEC.
FACTS: For consideration of the Court is an original action for certiorari assailing the constitutionality and legality of the implementation of the Priority Development Assistance Fund (PDAF) as provided for in Republic Act (R.A.) 9206 or the General Appropriations Act for 2004 (GAA of 2004). Petitioner Lawyers Against Monopoly and Poverty(LAMP), a group of lawyers who have banded together with a mission of dismantling all forms of political, economic or social monopoly in the country. According to LAMP, the above provision is silent and, therefore, prohibits an automatic or direct allocation of lump sums to individual senators and congressmen for the funding of projects. It does not empower individual Members of Congress to propose, select and identify programs and projects to be funded out of PDAF. For LAMP, this situation runs afoul against the principle of separation of powers because in receiving and, thereafter, spending funds for their chosen projects, the Members of Congress in effect intrude into an executive function. Further, the authority to propose and select projects does not pertain to legislation. It is, in fact, a non-legislative function devoid of constitutional sanction,8 and, therefore, impermissible and must be considered nothing less than malfeasance. RESPONDENTS POSITION: the perceptions of LAMP on the implementation of PDAF must not be based on mere speculations circulated in the news media preaching the evils of pork barrel. ISSUES: 1) whether or not the mandatory requisites for the exercise of judicial review are met in this case; and 2) whether or not the implementation of PDAF by the Members of Congress is unconstitutional and illegal. HELD: I. A question is ripe for adjudication when the act being challenged has had a direct adverse [poor] effect on the individual challenging it. In this case, the petitioner contested the implementation of an alleged unconstitutional statute, as citizens and taxpayers. The petition complains of illegal disbursement of public funds derived from taxation and this is sufficient reason to say that there indeed exists a definite, concrete, real or substantial controversy before the Court.

be conceived which supports the statute, it will be upheld, and the challenger must negate all possible bases; that the courts are not concerned with the wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation of the constitution in favor of the constitutionality of legislation should be adopted.

ISSUES: a. WON the petitioner has Locus Standi to bring the case to court b. WON Villars appointment as COA Chairman, while sitting in that body and after having served for four (4) years of his seven (7) year term as COA commissioner, is valid in light of the term limitations imposed under, and the circumscribing concepts tucked in, Sec. 1 (2), Art. IX(D) of the Constitution HELD: Issue of Locus Standi: This case before us is of transcendental importance, since it obviously has far-reaching implications, and there is a need to promulgate rules that will guide the bench, bar, and the public in future analogous cases. We, thus, assume a liberal stance and allow petitioner to institute the instant petition. In David vs Macapagal Arroyo, the Court laid out the bare minimum norm before the so-called non-traditional suitors may be extended standing to sue, thusly: a. For taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional; b. For voters, there must be a showing of obvious interest in the validity of the election law in question c. For concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and d. For legislators, there must be a claim that the official action complained of infringes their prerogatives as legislators. On the substantive issue: Sec. 1 (2), Art. IX(D) of the Constitution provides that: (2) The Chairman and Commissioners [on Audit] shall be appointed by the President with the consent of the Commission on Appointments for a term of seven years without reappointment. Of those first appointed, the Chairman shall hold office for seven years, one commissioner for five years, and the other commissioner for three years, without reappointment. Appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor. In no case shall any member be appointed or designated in a temporary or acting capacity. Petitioner now asseverates the view that Sec. 1(2), Art. IX(D) of the 1987 Constitution proscribes reappointment of any kind within the commission, the point being that a second appointment, be it for the same position (commissioner to another position of commissioner) or upgraded position (commissioner to chairperson) is a prohibited reappointment and is a nullity ab initio. The Court finds petitioners position bereft of merit. The flaw lies in regarding the word reappointment as, in context, embracing any and all species of appointment. The rule is that if a statute or constitutional provision is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. The first sentence is unequivocal enough. The COA Chairman shall be appointed by the President for a term of seven years, and if he has served the full term, then he can no longer be reappointed or extended another appointment. In the same vein, a Commissioner who was appointed for a term of seven years who likewise served the full term is barred from being reappointed. In short, once the Chairman or Commissioner shall have served the full term of seven

DENNIS A. B. FUNA, PETITIONER, VS. THE CHAIRMAN, COA, REYNALDO A. VILLAR G.R. No. 192791, April 24, 2012
FACTS: Funa challenges the constitutionality of the appointment of Reynaldo A. Villar as Chairman of the COA. Following the retirement of Carague on February 2, 2008 and during the fourth year of Villar as COA Commissioner, Villar was designated as Acting Chairman of COA from February 4, 2008 to April 14, 2008. Subsequently, on April 18, 2008, Villar was nominated and appointed as Chairman of the COA. Shortly thereafter, on June 11, 2008, the Commission on Appointments confirmed his appointment. He was to serve as Chairman of COA, as expressly indicated in the appointment papers, until the expiration of the original term of his office as COA Commissioner or on February 2, 2011. Challenged in this recourse, Villar, in an obvious bid to lend color of title to his hold on the chairmanship, insists that his appointment as COA Chairman accorded him a fresh term of 7 years which is yet to lapse. He would argue, in fine, that his term of office, as such chairman, is up to February 2, 2015, or 7 years reckoned from February 2, 2008 when he was appointed to that position. Before the Court could resolve this petition, Villar, via a letter dated February 22, 2011 addressed to President Benigno S. Aquino III, signified his intention to step down from office upon the appointment of his replacement. True to his word, Villar vacated his position when President Benigno Simeon Aquino III named Ma. Gracia Pulido-Tan (Chairman Tan) COA Chairman. This development has rendered this petition and the main issue tendered therein moot and academic. Although deemed moot due to the intervening appointment of Chairman Tan and the resignation of Villar, We consider the instant case as falling within the requirements for review of a moot and academic case, since it asserts at least four exceptions to the mootness rule discussed in David vs Macapagal Arroyo namely: a. There is a grave violation of the Constitution; b. The case involves a situation of exceptional character and is of paramount public interest; c. The constitutional issue raised requires the formulation of controlling principles to guide the bench, the bar and the public; d. The case is capable of repetition yet evading review. The procedural aspect comes down to the question of whether or not the following requisites for the exercise of judicial review of an executive act obtain in this petition, viz: a. There must be an actual case or justiciable controversy before the court b. The question before it must be ripe for adjudication; c. The person challenging the act must be a proper party; and d. The issue of constitutionality must be raised at the earliest opportunity and must be the very litis mota of the case

years, then he can no longer be reappointed to either the position of Chairman or Commissioner. The obvious intent of the framers is to prevent the president from dominating the Commission by allowing him to appoint an additional or two more commissioners. On the other hand, the provision, on its face, does not prohibit a promotional appointment from commissioner to chairman as long as the commissioner has not served the full term of seven years, further qualified by the third sentence of Sec. 1(2), Article IX (D) that the appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor. In addition, such promotional appointment to the position of Chairman must conform to the rotational plan or the staggering of terms in the commission membership such that the aggregate of the service of the Commissioner in said position and the term to which he will be appointed to the position of Chairman must not exceed seven years so as not to disrupt the rotational system in the commission prescribed by Sec. 1(2), Art. IX(D). In conclusion, there is nothing in Sec. 1(2), Article IX(D) that explicitly precludes a promotional appointment from Commissioner to Chairman, provided it is made under the aforestated circumstances or conditions. The Court is likewise unable to sustain Villars proposition that his promotional appointment as COA Chairman gave him a completely fresh 7- year termfrom February 2008 to February 2015given his four (4)-year tenure as COA commissioner devalues all the past pronouncements made by this Court. While there had been divergence of opinion as to the import of the word reappointment, there has been unanimity on the dictum that in no case can one be a COA member, either as chairman or commissioner, or a mix of both positions, for an aggregate term of more than 7 years. A contrary view would allow a circumvention of the aggregate 7-year service limitation and would be constitutionally offensive as it would wreak havoc to the spirit of the rotational system of succession. In net effect, then President Macapagal-Arroyo could not have had, under any circumstance, validly appointed Villar as COA Chairman, for a full 7- year appointment, as the Constitution decrees, was not legally feasible in light of the 7-year aggregate rule. Villar had already served 4 years of his 7-year term as COA Commissioner. A shorter term, however, to comply with said rule would also be invalid as the corresponding appointment would effectively breach the clear purpose of the Constitution of giving to every appointee so appointed subsequent to the first set of commissioners, a fixed term of office of 7 years. To recapitulate, a COA commissioner like respondent Villar who serves for a period less than seven (7) years cannot be appointed as chairman when such position became vacant as a result of the expiration of the 7-year term of the predecessor (Carague). Such appointment to a full term is not valid and constitutional, as the appointee will be allowed to serve more than seven (7) years under the constitutional ban. To sum up, the Court restates its ruling on Sec. 1(2), Art. IX(D) of the Constitution, viz: 1. The appointment of members of any of the three constitutional commissions, after the expiration of the uneven terms of office of the first set of commissioners, shall always be for a fixed term of seven (7) years; an appointment for a lesser period is void and unconstitutional. The appointing authority cannot validly shorten the full term of seven (7) years in case of the expiration of the term as

this will result in the distortion of the rotational system prescribed by the Constitution. 2. Appointments to vacancies resulting from certain causes (death, resignation, disability or impeachment) shall only be for the unexpired portion of the term of the predecessor, but such appointments cannot be less than the unexpired portion as this will likewise disrupt the staggering of terms laid down under Sec. 1(2), Art. IX(D). 3. Members of the Commission, e.g. COA, COMELEC or CSC, who were appointed for a full term of seven years and who served the entire period, are barred from reappointment to any position in the Commission. Corollarily, the first appointees in the Commission under the Constitution are also covered by the prohibition against reappointment. 4. A commissioner who resigns after serving in the Commission for less than seven years is eligible for an appointment to the position of Chairman for the unexpired portion of the term of the departing chairman. Such appointment is not covered by the ban on reappointment, provided that the aggregate period of the length of service as commissioner and the unexpired period of the term of the predecessor will not exceed seven (7) years and provided further that the vacancy in the position of Chairman resulted from death, resignation, disability or removal by impeachment. The Court clarifies that reappointment found in Sec. 1(2), Art. IX(D) means a movement to one and the same office (Commissioner to Commissioner or Chairman to Chairman). On the other hand, an appointment involving a movement to a different position or office (Commissioner to Chairman) would constitute a new appointment and, hence, not, in the strict legal sense, a reappointment barred under the Constitution. 5. Any member of the Commission cannot be appointed or designated in a temporary or acting capacity.