Rem Rev I 1.Galicto vs Pres. Aquino The Antecedent Facts On July 26, 2010, Pres.

Aquino made public in his first SONAthe alleged excessive allowances, bonuses and other benefits of Officers and Members of the Board of Directors of the MWSS a GOCC. Subsequently, the Senate (Senate) an inquiry in aid of legislation on the reported excessive salaries, allowances, and other benefits of GOCCs and government financial institutions (GFIs). Based on its findings that officials and governing boards of various [GOCCs] and [GFIs] x x x have been granting themselves unwarranted allowances, bonuses, incentives, stock options, and other benefits [as well as other] irregular and abusive practices, the Senate issued Senate Resolution No. 17 urging the President to order the immediate suspension of the unusually large and apparently excessive allowances, bonuses, incentives and other perks of members of the governing boards of [GOCCs] and [GFIs]. Heeding the call of Congress, Pres. Aquino, on September 8, 2010, issued EO 7, entitled Directing the Rationalization of the Compensation and Position Classification System in the [GOCCs] and [GFIs], and for Other Purposes. EO 7 provided for the guiding principles and framework to establish a fixed compensation and position classification system for GOCCs and GFIs. A Task Force was also created to review all remunerations of GOCC and GFI employees and officers, while GOCCs and GFIs were ordered to submit to the Task Force information regarding their compensation. Finally, EO 7 ordered (1) a moratorium on the increases in the salaries and other forms of compensation, except salary adjustments under EO 8011 and EO 900, of all GOCC and GFI employees for an indefinite period to be set by the President,[9] and (2) a suspension of all allowances, bonuses and incentives of members of the Board of Directors/Trustees until December 31, 2010 .[10] EO 7 was published on September 10, 2010. It took effect on September 25, 2010 and precluded the Board of Directors, Trustees and/or Officers of GOCCs from granting and releasing bonuses and allowances to members of the board of directors, and from increasing salary rates of and granting new or additional benefits and allowances to their employees. The Petition The petitioner claims that as a PhilHealth employee, he is affected by the implementation of EO 7, which was issued with grave abuse of discretion amounting to lack or excess of jurisdiction, based on the following arguments: I. EXECUTIVE ORDER NO. 7 IS NULL AND VOID FOR LACK OF LEGAL BASIS DUE TO THE FOLLOWING GROUNDS: A. P.D. 985 IS NOT APPLICABLE AS BASIS FOR EXECUTIVE ORDER NO. 7 BECAUSE THE GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS WERE SUBSEQUENTLY GRANTED THE POWER TO FIX COMPENSATION LONG AFTER SUCH POWER HAS BEEN REVOKED BY P.D. 1597 AND R.A. 6758. THE GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS DO NOT NEED TO HAVE ITS COMPENSATION PLANS, RATES AND POLICIES C.

REVIEWED BY THE DBM AND APPROVED BY THE PRESIDENT BECAUSE P.D. 1597 REQUIRES ONLY THE GOCCs TO REPORT TO THE OFFICE TO THE PRESIDENT THEIR COMPENSATION PLANS AND RATES BUT THE SAME DOES NOT GIVE THE PRESIDENT THE POWER OF CONTROL OVER THE FISCAL POWER OF THE GOCCs. J.R. NO. 4, [SERIES] 2009 IS NOT APPLICABLE AS LEGAL BASIS BECAUSE IT HAD NOT RIPENED INTO X X X LAW, THE SAME NOT HAVING BEEN PUBLISHED. ASSUMING ARGUENDO THAT J.R. NO. 1, S. 2004 (sic) AND J.R. 4, S. 2009 ARE VALID, STILL THEY ARE NOT APPLICABLE AS LEGAL BASIS BECAUSE THEY ARE NOT LAWS WHICH MAY VALIDLY DELEGATE POWER TO THE PRESIDENT TO SUSPEND THE POWER OF THE BOARD TO FIX COMPENSATION. II. EXECUTIVE ORDER NO. 7 IS INVALID FOR DIVESTING THE BOARD OF DIRECTORS OF [THE] GOCCS OF THEIR POWER TO FIX THE COMPENSATION, A POWER WHICH IS A LEGISLATIVE GRANT AND WHICH COULD NOT BE REVOKED OR MODIFIED BY AN EXECUTIVE FIAT. III. EXECUTIVE ORDER NO. 7 IS BY SUBSTANCE A LAW, WHICH IS A DEROGATION OF CONGRESSIONAL PREROGATIVE AND IS THEREFORE UNCONSTITUTIONAL. IV. THE ACTS OF SUSPENDING AND IMPOSING MORATORIUM ARE ULTRA VIRES ACTS BECAUSE J.R. NO. 4 DOES NOT EXPRESSLY AUTHORIZE THE PRESIDENT TO EXERCISE SUCH POWERS. V. EXECUTIVE ORDER NO. 7 IS AN INVALID ISSUANCE BECAUSE IT HAS NO SUFFICIENT STANDARDS AND IS THEREFORE ARBITRARY, UNREASONABLE AND A VIOLATION OF SUBSTANTIVE DUE PROCESS. VI.

D.

B.

EXECUTIVE ORDER NO. 7 INVOLVES THE DETERMINATION AND DISCRETION AS TO WHAT THE LAW SHALL BE AND IS THEREFORE INVALID FOR ITS USURPATION OF LEGISLATIVE

POWER. VII. CONSISTENT WITH THE DECISION OF THE SUPREME COURT IN PIMENTEL V. AGUIRRE CASE, EXECUTIVE ORDER NO. 7 IS ONLY DIRECTORY AND NOT MANDATORY.[12]

petition for declaratory relief should have been filed with the RTC. We painstakingly ruled: After due deliberation on the pleadings filed, we resolve to dismiss this petition for certiorari. First, the respondents neither acted in any judicial or quasijudicial capacity nor arrogated unto themselves any judicial or quasi-judicial prerogatives. A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a special civil action that may be invoked only against a tribunal, board, or officer exercising judicial or quasi-judicial functions. Section 1, Rule 65 of the 1997 Rules of Civil Procedure

The Case for the Respondents

On December 13, 2010, the respondents filed their Comment. They pointed out the following procedural defects as grounds for the petitions dismissal: (1) the petitioner lacks locus standi; (2) the petitioner failed to attach a board resolution or secretarys certificate authorizing him to question EO 7 in behalf of PhilHealth; (3) the petitioners signature does not indicate his PTR Number, Mandatory Continuing Legal Education (MCLE) Compliance Number and Integrated Bar of the Philippines (IBP) Number; (4) the jurat of the Verification and Certification of Non-Forum Shopping failed to indicate a valid identification card as provided under A.M. No. 02-8-13-SC; (5) the President should be dropped as a party respondent as he is immune from suit; and (6) certiorari is not applicable to this case.[13] The respondents also raised substantive defenses to support the validity of EO 7. They claim that the President exercises control over the governing boards of the GOCCs and GFIs; thus, he can fix their compensation packages. In addition, EO 7 was issued in accordance with law for the purpose of controlling the grant of excessive salaries, allowances, incentives and other benefits to GOCC and GFI employees. They also advocate the validity of Joint Resolution (J.R.) No. 4, which they point to as the authority for issuing EO 7.[14] Meanwhile, on June 6, 2011, Congress enacted Republic Act (R.A.) No. 10149,[15] otherwise known as the GOCC Governance Act of 2011. Section 11 of RA 10149 expressly authorizes the President to fix the compensation framework of GOCCs and GFIs. The Courts Ruling We resolve to DISMISS the petition for its patent formal and procedural infirmities, and for having been mooted by subsequent events. A. Certiorari is not the proper remedy

provides: SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted 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 plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. Elsewise stated, for a writ of certiorari to issue, the following requisites must concur: (1) it must be directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of discretion amounting [to] lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. A respondent is said to be exercising judicial function where he has the power to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, is a term which applies to the actions, discretion, etc., of public administrative officers or bodies 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. Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law that gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the respective rights of the contending parties. The respondents do not fall within the ambit of tribunal,

Under the Rules of Court, petitions for Certiorari and Prohibition are availed of to question judicial, quasi-judicial and mandatory acts. Since the issuance of an EO is not judicial, quasi-judicial or a mandatory act, a petition for certiorari and prohibition is an incorrect remedy; instead a petition for declaratory relief under Rule 63 of the Rules of Court, filed with the Regional Trial Court ( RTC), is the proper recourse to assail the validity of EO 7: Section 1. Who may file petition. Any person interested under a deed, will, contract or other written instrument, whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder. (Emphases ours.)

Liga ng mga Barangay National v. City Mayor of Manila[16] is a case in point.[17] In Liga, we dismissed the petition for certiorari to set aside an EO issued by a City Mayor and insisted that a

board, or officer exercising judicial or quasi-judicial functions. As correctly pointed out by the respondents, the enactment by the City Council of Manila of the assailed ordinance and the issuance by respondent Mayor of the questioned executive order were done in the exercise of legislative and executive functions, respectively, and not of judicial or quasi-judicial functions. On this score alone, certiorari will not lie. Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and executive order. It, thus, partakes of the nature of a petition for declaratory relief over which this Court has only appellate, not original, jurisdiction. Section 5, Article VIII of the Constitution provides: Sec. 5. The Supreme Court shall have the following powers: Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. (2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Italics supplied). As such, this petition must necessar[ily] fail, as this Court does not have original jurisdiction over a petition for declaratory relief even if only questions of law are involved.[18]

approaches constitute an abuse of process through a manipulative reading and application of the Rules of Court, we nevertheless resolve that the petition should be dismissed for its blatant violation of the Rules. The transgressions alleged in a petition, however weighty they may sound, cannot be justifications for blatantly disregarding the rules of procedure, particularly when remedial measures were available under these same rules to achieve the petitioners objectives. For our part, we cannot and should not in the name of liberality and the transcendental importance doctrine entertain these types of petitions. As we held in the very recent case of Lozano, et al. vs. Nograles, albeit from a different perspective, our liberal approach has its limits and should not be abused.[23] [emphasis supplied]

B. Petitioner lacks locus standi. Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question on 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.[24] This requirement of standing relates to the constitutional mandate that this Court settle only actual cases or controversies.[25] Thus, as a general rule, a party is allowed to raise a constitutional question when (1) he can show that he will personally suffer some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.[26] Jurisprudence defines interest as "material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest. By real interest is meant a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential interest."[27] To support his claim that he has locus standi to file the present petition, the petitioner contends that as an employee of PhilHealth, he stands to be prejudiced by [EO] 7, which suspends or imposes a moratorium on the grants of salary increases or new or increased benefits to officers and employees of GOCC[s] and x x x curtail[s] the prerogative of those officers who are to fix and determine his compensation.[28] The petitioner also claims that he has standing as a member of the bar in good standing who has an interest in ensuring that laws and orders of the Philippine government are legally and validly issued and implemented. The respondents meanwhile argue that the petitioner is not a real party-in-interest since future increases in salaries and other benefits are merely contingent events or expectancies.[29] The petitioner, too, is not asserting a public right for which he is entitled to seek judicial protection. Section 9 of EO 7 reads: Section 9. Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits. Moratorium on increases in the rates of salaries, and the grant of new increases in the rates of allowances, incentives and other benefits, except salary adjustments pursuant to Executive Order No. 8011 dated June 17, 2009 and Executive Order No. 900 dated June 23, 2010, are hereby imposed until specifically authorized by the President. [emphasis ours] In the present case, we are not convinced that the petitioner has demonstrated that he has a personal

(1)

Likewise, in Southern Hemisphere Engagement Network, Inc. v. Anti Terrorism Council,[19] we similarly dismissed the petitions for certiorari and prohibition challenging the constitutionality of R.A. No. 9372, otherwise known as the Human Security Act of 2007, since the respondents therein (members of the Anti-Terrorism Council) did not exercise judicial or quasi-judicial functions. While we have recognized in the past that we can exercise the discretion and rulemaking authority we are granted under the Constitution, and set aside procedural considerations to permit parties to bring a suit before us at the first instance through certiorari and/or prohibition,[21] this liberal policy remains to be an exception to the general rule, and thus, has its limits. In Concepcion v. Commission on Elections (COMELEC),[22] we emphasized the importance of availing of the proper remedies and cautioned against the wrongful use of certiorari in order to assail the quasi-legislative acts of the COMELEC, especially by the wrong party. In ruling that liberality and the transcendental doctrine cannot trump blatant disregard of procedural rules, and considering that the petitioner had other available remedies (such as a petition for declaratory relief with the appropriate RTC under the terms of Rule 63 of the Rules of Court), as in this case, we categorically ruled: The petitioners unusual approaches and use of Rule 65 of the Rules of Court do not appear to us to be the result of any error in reading Rule 65, given the way the petition was crafted. Rather, it was a backdoor approach to achieve what the petitioner could not directly do in his individual capacity under Rule 65. It was, at the very least, an attempted bypass of other available, albeit lengthier, modes of review that the Rules of Court provide. While we stop short of concluding that the petitioners

stake or material interest in the outcome of the case because his interest, if any, is speculative and based on a mere expectancy. In this case, the curtailment of future increases in his salaries and other benefits cannot but be characterized as contingent events or expectancies. To be sure, he has no vested rights to salary increases and, therefore, the absence of such right deprives the petitioner of legal standing to assail EO 7. It has been held that as to the element of injury, such aspect is not something that just anybody with some grievance or pain may assert. It has to be direct and substantial to make it worth the courts time, as well as the effort of inquiry into the constitutionality of the acts of another department of government. If the asserted injury is more imagined than real, or is merely superficial and insubstantial, then the courts may end up being importuned to decide a matter that does not really justify such an excursion into constitutional adjudication.[30] The rationale for this constitutional requirement of locus standi is by no means trifle. Not only does it assure the vigorous adversary presentation of the case; more importantly, it must suffice to warrant the Judiciarys overruling the determination of a coordinate, democratically elected organ of government, such as the President, and the clear approval by Congress, in this case. Indeed, the rationale goes to the very essence of representative democracies.[31] Neither can the lack of locus standi be cured by the petitioners claim that h e is instituting the present petition as a member of the bar in good standing who has an interest in ensuring that laws and orders of the Philippine government are legally and validly issued. This supposed interest has been branded by the Court in Integrated Bar of the Phils. (IBP) v. Hon. Zamora,[32] as too general an interest which is shared by other groups and [by] the whole citizenry.[33] Thus, the Court ruled in IBP that the mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in that case. The Court made a similar ruling in Prof. David v. Pres. Macapagal-Arroyo[34] and held that the petitioners therein, who are national officers of the IBP, have no legal standing, having failed to allege any direct or potential injury which the IBP, as an institution, or its members may suffer as a consequence of the issuance of Presidential Proclamation No. 1017 and General Order No. 5.[35] We note that while the petition raises vital constitutional and statutory questions concerning the power of the President to fix the compensation packages of GOCCs and GFIs with possible implications on their officials and employees, the same cannot infuse or give the petitioner locus standi under the transcendental importance or paramount public interest doctrine. In Velarde v. Social Justice Society,[36] we held that even if the Court could have exempted the case from the stringent locus standi requirement, such heroic effort would be futile because the transcendental issue could not be resolved any way, due to procedural infirmities and shortcomings, as in the present case.[37] In other words, giving due course to the present petition which is saddled with formal and procedural infirmities explained above in this Resolution, cannot but be an exercise in futility that does not merit the Courts liberality. As we emphasized in Lozano v. Nograles,[38] while the Court has taken an increasingly liberal approach to the rule of locus standi, evolving from the stringent requirements of personal injury to the broader transcendental importance doctrine, such liberality is not to be abused. [39] Finally, since the petitioner has failed to demonstrate a material and personal interest in the issue in dispute, he cannot also be considered to have filed the present case as a representative of PhilHealth. In this regard, we cannot ignore or excuse the blatant failure of the petitioner to provide a Board Resolution or a Secretarys Certificate from PhilHealth to act as its representative. C. The petition has a defective jurat.

We do not see any violation of Section 3, Rule 7 of the Rules of Civil Procedure as the petition bears the petitioners signature and office address. The present suit was brought before this Court by the petitioner himself as a party litigant and not through counsel. Therefore, the requirements under the Supreme Court En Banc Resolution dated November 12, 2001 and Bar Matter No. 1922 do not apply. In Bar Matter No. 1132, April 1, 2003, we clarified that a party who is not a lawyer is not precluded from signing his own pleadings as this is allowed by the Rules of Court; the purpose of requiring a counsel to indicate his IBP Number and PTR Number is merely to protect the public from bogus lawyers. A similar construction should be given to Bar Matter No. 1922, which requires lawyers to indicate their MCLE Certificate of Compliance or Certificate of Exemption; otherwise, the provision that allows parties to sign their own pleadings will be negated. However, the point raised by the respondents regarding the petitioners defective jurat is correct. Indeed, A.M. No. 02-8-13-SC, dated February 19, 2008, calls for a current identification document issued by an official agency bearing the photograph and signature of the individual as competent evidence of identity. Nevertheless, we hasten to clarify that the defective jurat in the Verification/Certification of Non-Forum Shopping is not a fatal defect, as we held in In-N-Out Burger, Inc. v. Sehwani, Incorporated.[41] The verification is only a formal, not a jurisdictional, requirement that the Court may waive. D. The petition has been mooted by supervening events. Because of the transitory nature of EO 7, it has been pointed out that the present case has already been rendered moot by these supervening events: (1) the lapse on December 31, 2010 of Section 10 of EO 7 that suspended the allowances and bonuses of the directors and trustees of GOCCs and GFIs; and (2) the enactment of R.A. No. 10149 amending the provisions in the charters of GOCCs and GFIs empowering their board of directors/trustees to determine their own compensation system, in favor of the grant of authority to the President to perform this act. With the enactment of the GOCC Governance Act of 2011, the President is now authorized to fix the compensation framework of GOCCs and GFIs. The pertinent provisions read: Section 5. Creation of the Governance Commission for Government-Owned or -Controlled Corporations. There is hereby created an advisory, monitoring, and oversight body with authority to formulate, implement and coordinate policies to be known as the Governance Commission for Government-Owned or-Controlled Corporations, hereinafter referred to as the GCG, which shall be attached to the Office of the President. The GCG shall have the following powers and functions: xxxx h) Conduct compensation studies, develop and recommend to the President a competitive compensation and remuneration system which shall attract and retain talent, at the same time allowing the GOCC to be financially sound and sustainable; xxxx Section 8. Coverage of the Compensation and Position Classification System. The GCG, after conducting a compensation study, shall develop a Compensation and Position Classification System which shall apply to all officers and employees of the GOCCs whether under the Salary Standardization Law or exempt therefrom and shall consist of classes of positions grouped into such categories as the GCG may determine,

The respondents claim that the petition should be dismissed for failing to comply with Section 3, Rule 7 of the Rules of Civil Procedure, which requires the party or the counsel representing him to sign the pleading and indicate an address that should not be a post office box. The petition also allegedly violated the Supreme Court En Banc Resolution dated November 12, 2001, requiring counsels to indicate in their pleadings their Roll of Attorneys Number, their PTR Number and their IBP Official Receipt or Lifetime Member Number; otherwise, the pleadings would be considered unsigned and dismissible. Bar Matter No. 1922 likewise states that a counsel should note down his MCLE Certificate of Compliance or Certificate of Exemption in the pleading, but the petitioner had failed to do so.[40]

subject to approval of the President. Section 9. Position Titles and Salary Grades. All positions in the Positions Classification System, as determined by the GCG and as approved by the President, shall be allocated to their proper position titles and salary grades in accordance with an Index of Occupational Services, Position Titles and Salary Grades of the Compensation and Position Classification System, which shall be prepared by the GCG and approved by the President. xxxx [N]o GOCC shall be exempt from the coverage of the Compensation and Position Classification System developed by the GCG under this Act. After careful examination of the records of the case, this Commission (First Division) makes the following observation: 1. Protestant paid the cash deposit amounting to one hundred thousand pesos (P100,000.00) on June 3, 2010 as evidenced by O.R. No. 1118105; and Paragraph nos. 9 to 28 of the initiatory petition filed by the Protestant set forth the specific details of the acts and omissions complained of against the Protestee. It is therefore concluded that the payment by the Protestant on June 3, 2010 is a substantial compliance with the requirement of COMELEC Resolution No. 8804, taking into consideration Section 9(e), Rule 6 of said Resolution. Furthermore, the Protestant has likewise essentially complied with Section 7(g), Rule 6 of the above-mentioned Resolution. In view of the foregoing, this Commission (First Division) RESOLVES to DENY the Protestees special affirmative defenses. SO ORDERED.8 The petitioner moved to reconsider on the ground that the order did not discuss whether the protest specified the alleged irregularities in the conduct of the elections, in violation of Section 2, paragraph 2,9 Rule 19 of COMELEC Resolution No. 8804,10 requiring all decisions to clearly and distinctly express the facts and the law on which they were based; and that it also contravened Section 7(g), 11 Rule 6 of COMELEC Resolution No. 8804 requiring a detailed specification of the acts or omissions complained of. He prayed that the matter be certified to the COMELEC en banc pursuant to Section 1,12 Section 5,13 and Section 6,14 all of Rule 20 of COMELEC Resolution No. 8804. The petitioner insisted that COMELEC Resolution No. 8804 had introduced the requirement for the detailed specification to prevent shotgun fishing expeditions by losing candidates;15 that such requirement contrasted with Rule 6, Section 1 of the 1993 COMELEC Rules of Procedure,16 under which the protest needed only to contain a concise statement of the ultimate facts constituting the cause or causes of action; that Bautistas protest did not meet the new requirement under COMELEC Resolution No. 8804; and that in Pea v. House of Representatives Electoral Tribunal,17 the Court upheld the dismissal of a protest by the House of Representatives Electoral Tribunal (HRET) for not specifically alleging the electoral anomalies and irregularities in the May 8, 1995 elections. In his opposition,18 Bautista countered that the assailed orders, being merely interlocutory, could not be elevated to the COMELEC en banc pursuant to the ruling in Panlilio v. COMELEC;19 that the rules of the COMELEC required the initiatory petition to specify the acts or omissions constituting the electoral frauds, anomalies and election irregularities, and to contain the ultimate facts upon which the cause of action was based; and that Pea v. House of Representatives Electoral Tribunal did not apply because, firstly, Pea had totally different factual antecedents than this case, and, secondly, the omission of material facts from Peas protest prevented the protestee (Alfredo E. Abueg, Jr.) from being apprised of the issues that he must meet and made it eventually impossible for the HRET to determine which ballot boxes had to be collected. On October 7, 2010, the COMELEC First Division issued its second assailed order,20 denying the petitioners motion for reconsideration for failing to show that the first order was contrary to law, to wit: The Protestees August 28, 2010 Motion for Reconsideration with Prayer to Certify the Case to the Commission En Banc relative to the

2.

As may be gleaned from these provisions, the new law amended R.A. No. 7875 and other laws that enabled certain GOCCs and GFIs to fix their own compensation frameworks; the law now authorizes the President to fix the compensation and position classification system for all GOCCs and GFIs, as well as other entities covered by the law. This means that, the President can now reissue an EO containing these same provisions without any legal constraints. A moot case is one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would be of no practical use or value.[42] [A]n action is considered moot when it no longer presents a justiciable controversy because the issues involved have become academic or dead[,] or when the matter in dispute has already been resolved and hence, one is not entitled to judicial intervention unless the issue is likely to be raised again between the parties x x x. Simply stated, there is nothing for the x x x court to resolve as [its] determination x x x has been overtaken by subsequent events.[43] This is the present situation here. Congress, thru R.A. No. 10149, has expressly empowered the President to establish the compensation systems of GOCCs and GFIs. For the Court to still rule upon the supposed unconstitutionality of EO 7 will merely be an academic exercise. Any further discussion of the constitutionality of EO 7 serves no useful purpose since such issue is moot in its face in light of the enactment of R.A. No. 10149. In the words of the eminent constitutional law expert, Fr. Joaquin Bernas, S.J., the Court normally [will not] entertain a petition touching on an issue that has become moot because x x x there would [be] no longer x x x a flesh and blood case for the Court to resolve. 2. Cagas vs COMELEC The petitioner and respondent Claude P. Bautista (Bautista) contested the position of Governor of the Province of Davao del Sur in the May 10, 2010 automated national and local elections. The fast transmission of the results led to the completion by May 14, 2010 of the canvassing of votes cast for Governor of Davao del Sur, and the petitioner was proclaimed the winner (with 163,440 votes), with Bautista garnering 159,527 votes.4 Alleging fraud, anomalies, irregularities, vote-buying and violations of election laws, rules and resolutions, Bautista filed an electoral protest on May 24, 2010 (EPC No. 2010-42).5 The protest was raffled to the COMELEC First Division. In his answer submitted on June 22, 2010,6 the petitioner averred as his special affirmative defenses that Bautista did not make the requisite cash deposit on time; and that Bautista did not render a detailed specification of the acts or omissions complained of. On August 13, 2010, the COMELEC First Division issued the first assailed order denying the special affirmative defenses of the petitioner, 7 viz:

Order issued by the Commission (First Division) dated August 13, 2010 is hereby DENIED for failure to show that the assailed order is contrary to law certiorari. Without going into the merits of the protest, the allegations in the protestants petition have substantially complied with the requirements of COMELEC Resolution No. 8804 that will warrant the opening of the ballot boxes in order to resolve not only the issues raised in the protest but also those set forth in the Protestees answer. When substantial compliance with the rules is satisfied, allowing the protest to proceed is the best way of removing any doubt or uncertainty as to the true will of the electorate. All other issues laid down in the parties pleadings, including those in the Protestees special and affirmative defenses and those expressed in the preliminary conference brief, will best be threshed out in the final resolution of the instant case . The prayer to elevate the instant Motion for Reconsideration to the Commission En Banc is DENIED considering that the 13 August 2010 Order is merely interlocutory and it does not dispose of the instant case with finality, in accordance with Section 5(c), Rule 3 of the COMELEC Rules of Procedure. SO ORDERED. Not satisfied, the petitioner commenced this special civil action directly in this Court . Issue The petitioner submits that: THE RESPONDENT COMELEC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN REFUSING TO DISMISS THE PROTEST FOR INSUFFICIENCY IN FORM AND CONTENT. The petitioner argues that Section 9,21 Rule 6 of COMELEC Resolution No. 8804 obliged the COMELEC First Division to summarily dismiss the protest for being insufficient in form and content; and that the insufficiency in substance arose from the failure of the protest to: ( a) specifically state how the various irregularities and anomalies had affected the results of the elections; (b) indicate in which of the protested precincts were pre-shaded bogus-ballots used; (c) identify the precincts where the PCOS machines had failed to accurately account for the votes in favor of Bautista; and (d) allege with particularity how many additional votes Bautista stood to receive for each of the grounds he protested. He concludes that the COMELEC First Division gravely abused its discretion in allowing the protest of Bautista despite its insufficiency. Moreover, the petitioner urges that the protest be considered as a mere fishing expedition to be outrightly dismissed in light of the elections being held under an automated system. In support of his urging, he cites Roque, Jr. v. Commission on Elections,22 where the Court took judicial notice of the accuracy and reliability of the PCOS machines and CCS computers, such that allegations of massive errors in the automated counting and canvassing had become insufficient as basis for the COMELEC to entertain or to give due course to defective election protests.23 He submits that a protest like Bautistas cast doubt on the automated elections. On the other hand, the Office of the Solicitor General (OSG) and Bautista both posit that the COMELEC had the power and prerogative to determine the sufficiency of the allegations of an election protest; and that certiorari did not lie because the COMELEC First Division acted within its discretion. Additionally, the OSG maintains that the assailed orders, being interlocutory, are not the proper subjects of a petition for certiorari.

As we see it, the decisive issue is whether the Court can take cognizance of the petition for

Ruling We dismiss the petition for lack of merit. The governing provision is Section 7, Article IX of the 1987 Constitution, which provides: Section 7. Each Commission shall decide by a majority vote of all its Members any case or matter brought before it within sixty days from the date of its submission for decision or resolution. A case or matter is deemed submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum required by the rules of the Commission or by the Commission itself. Unless otherwise provided by this Constitution or by law, any decision, order, or ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof.

This provision, although it confers on the Court the power to review any decision, order or ruling of the COMELEC, limits such power to a final decision or resolution of the COMELEC en banc, and does not extend to an interlocutory order issued by a Division of the COMELEC. Otherwise stated, the Court has no power to review on certiorari an interlocutory order or even a final resolution issued by a Division of the COMELEC. The following cogent observations made in Ambil v. Commission on Elections24 are enlightening, viz: To begin with, the power of the Supreme Court to review decisions of the Comelec is prescribed in the Constitution, as follows: Section 7. Each commission shall decide by a majority vote of all its members any case or matter brought before it within sixty days from the date of its submission for decision or resolution. A case or matter is deemed submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum required by the rules of the commission or by the commission itself. Unless otherwise provided by this constitution or by law, any decision, order, or ruling of each commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof. [emphasis supplied] We have interpreted this provision to mean final orders, rulings and decisions of the COMELEC rendered in the exercise of its adjudicatory or quasi-judicial powers. This decision must be a final decision or resolution of the Comelec en banc, not of a division, certainly not an interlocutory order of a division. The Supreme Court has no power to review via certiorari, an interlocutory order or even a final resolution of a Division of the Commission on Elections. The mode by which a decision, order or ruling of the Comelec en banc may be elevated to the Supreme Court is by the special civil action of certiorari under Rule 65 of the 1964 Revised Rules of Court, now expressly provided in Rule 64, 1997 Rules of Civil Procedure, as amended.

Rule 65, Section 1, 1997 Rules of Civil Procedure, as amended, requires that there be no appeal, or any plain, speedy and adequate remedy in the ordinary course of law. A motion for reconsideration is a plain and adequate remedy provided by law. Failure to abide by this procedural requirement constitutes a ground for dismissal of the petition. In like manner, a decision, order or resolution of a division of the Comelec must be reviewed by the Comelec en banc via a motion for reconsideration before the final en banc decision may be brought to the Supreme Court on certiorari. The pre-requisite filing of a motion for reconsideration is mandatory.xxx25 There is no question, therefore, that the Court has no jurisdiction to take cognizance of the petition for certiorari assailing the denial by the COMELEC First Division of the special affirmative defenses of the petitioner. The proper remedy is for the petitioner to wait for the COMELEC First Division to first decide the protest on its merits, and if the result should aggrieve him, to appeal the denial of his special affirmative defenses to the COMELEC en banc along with the other errors committed by the Division upon the merits. It is true that there may be an exception to the general rule, as the Court conceded in Kho v. Commission on Elections.26 In that case, the protestant assailed the order of the COMELEC First Division admitting an answer with counter-protest belatedly filed in an election protest by filing a petition for certiorari directly in this Court on the ground that the order constituted grave abuse of discretion on the part of the COMELEC First Division. The Court granted the petition and nullified the assailed order for being issued without jurisdiction, and explained the exception thuswise:

reads as follows: Section 2. The Commission en banc. The Commission shall sit en banc in cases hereinafter specifically provided, or in pre-proclamation cases upon a vote of a majority of the members of a Commission, or in all other cases where a division is not authorized to act, or where, upon a unanimous vote of all the members of a Division, an interlocutory matter or issue relative to an action or proceeding before it is decided to be referred to the Commission en banc. In the instant case, it does not appear that the subject controversy is one of the cases specifically provided under the COMELEC Rules of Procedure in which the Commission may sit en banc. Neither is it shown that the present controversy a case where a division is not authorized to act nor a situation wherein the members of the First Division unanimously voted to refer the subject case to the Commission en banc. Clearly, the Commission en banc, under the circumstances shown above, can not be the proper forum which the matter concerning the assailed interlocutory orders can be referred to. In a situation such as this where the Commission in division committed grave abuse of discretion or acted without or in excess of jurisdiction in issuing interlocutory orders relative to an action pending before it and the controversy did not fall under any of the instances mentioned in Section 2, Rule 3 of the COMELEC Rules of Procedure, the remedy of the aggrieved party is not to refer the controversy to the Commission en banc as this is not permissible under its present rules but to elevate it to this Court via a petition for certiorari under Rule 65 of the Rules of Court. (Bold emphasis supplied) Under the exception, therefore, the Court may take cognizance of a petition for certiorari under Rule 64 to review an interlocutory order issued by a Division of the COMELEC on the ground of the issuance being made without jurisdiction or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction when it does not appear to be specifically provided under the COMELEC Rules of Procedure that the matter is one that the COMELEC en banc may sit and consider, or a Division is not authorized to act, or the members of the Division unanimously vote to refer to the COMELEC en banc. Of necessity, the aggrieved party can directly resort to the Court because the COMELEC en banc is not the proper forum in which the matter concerning the assailed interlocutory order can be reviewed. However, the Kho v. Commission on Elections exception has no application herein, because the COMELEC First Division had the competence to determine the lack of detailed specifications of the acts or omissions complained of as required by Rule 6, Section 7 of COMELEC Resolution No. 8804, and whether such lack called for the outright dismissal of the protest. For sure, the 1987 Constitution vested in the COMELEC broad powers involving not only the enforcement and administration of all laws and regulations relative to the conduct of elections but also the resolution and determination of election controversies.27 The breadth of such powers encompasses the authority to determine the sufficiency of allegations contained in every election protest and to decide based on such allegations whether to admit the protest and proceed with the hearing or to outrightly dismiss the protest in accordance with Section 9, Rule 6 of COMELEC Resolution No. 8804. The Court has upheld the COMELECs determination of the sufficiency of allegations contained in election protests, conformably with its imperative duty to ascertain in an election protest, by all means within its command, who was the candidate elected by the electorate.28 Indeed, in Panlilio v. Commission on Elections,29 we brushed aside the contention that the election protest was insufficient in

As to the issue of whether or not the case should be referred to the COMELEC en banc, this Court finds the respondent COMELEC First Division correct when it held in its order dated February 28, 1996 that no final decision, resolution or order has yet been made which will necessitate the elevation of the case and its records to the Commission en banc. No less than the Constitution requires that election cases must be heard and decided first in division and any motion for reconsideration of decisions shall be decided by the Commission en banc. Apparently, the orders dated July 26, 1995, November 15, 1995 and February 28, 1996 and the other orders relating to the admission of the answer with counter-protest are issuances of a Commission in division and are all interlocutory orders because they merely rule upon an incidental issue regarding the admission of Espinosa's answer with counter-protest and do not terminate or finally dispose of the case as they leave something to be done before it is finally decided on the merits. In such a situation, the rule is clear that the authority to resolve incidental matters of a case pending in a division, like the questioned interlocutory orders, falls on the division itself, and not on the Commission en banc. Section 5 (c), Rule 3 of the COMELEC Rules of Procedure explicitly provides for this, Sec. 5. Quorum; Votes Required xxx xxx (c) Any motion to reconsider a decision, resolution, order or ruling of a Division shall be resolved by the Commission en banc except motions on interlocutory orders of the division which shall be resolved by the division which issued the order. (emphasis provided) Furthermore, a look at Section 2, Rule 3 of the COMELEC Rules of Procedure confirms that the subject case does not fall on any of the instances over which the Commission en banc can take cognizance of. It

form and substance and was a sham for having allegations couched in general terms, stating: In Miguel v. COMELEC, the Court belittled the petitioners argument that the protestant had no cause of action, as the allegations of fraud and irregularities, which were couched in general terms, were not sufficient to order the opening of ballot boxes and counting of ballots. The Court states the rules in election protests cognizable by the COMELEC and courts of general jurisdiction, as follows: The rule in this jurisdiction is clear and jurisprudence is even clearer. In a string of categorical pronouncements, we have consistently ruled that when there is an allegation in an election protest that would require the perusal, examination or counting of ballots as evidence, it is the ministerial duty of the trial court to order the opening of the ballot boxes and the examination and counting of ballots deposited therein. In a kindred case, Homer Saquilayan v. COMELEC, the Court considered the allegations in an election protest, similar to those in this case, as sufficient in form and substance. Again, in Dayo v. COMELEC, the Court declared that allegations of fraud and irregularities are sufficient grounds for opening the ballot boxes and examining the questioned ballots. The pronouncement is in accordance with Section 255 of the Omnibus Election Code, which reads: Judicial counting of votes in election contest. Where allegations in a protest or counter-protest so warrant, or whenever in the opinion of the court in the interests of justice so require, it shall immediately order the book of voters, ballot boxes and their keys, ballots and other documents used in the election be brought before it and that the ballots be examined and the votes recounted. In this case, the COMELEC Second Division found that the allegations in the protest and counter-protest warranted the opening of the contested ballot boxes and the examination of their contents to settle at once the conflicting claims of petitioner and private respondent. The petitioner adds that with the Court having noted the reliability and accuracy of the PCOS machines and consolidation/canvassing system (CCS) computers in Roque, Jr. v. Commission on Elections,30 Bautistas election protest assailing the system and procedure of counting and canvassing of votes cast in an automated system of elections should be immediately dismissed. We are not persuaded. Roque, Jr. v. Commission on Elections does not preclude the filing of an election protest to challenge the outcome of an election undertaken in an automated system of elections. Instead, the Court only ruled there that the system and procedure implemented by the COMELEC in evaluating the PCOS machines and CCS computers met the minimum system requirements prescribed in Section 7 of Republic Act No. 8436.31 The Court did not guarantee the efficiency and integrity of the automated system of elections, as can be gleaned from the following pronouncement thereat:

The Court, however, will not indulge in the presumption that nothing would go wrong, that a successful automation election unmarred by fraud, violence, and like irregularities would be the order of the moment on May 10, 2010. Neither will it guarantee, as it cannot guarantee, the effectiveness of the voting machines and the integrity of the counting and consolidation software embedded in them. That task belongs at the first instance to Comelec, as part of its mandate to ensure clean and peaceful elections. This independent constitutional commission, it is true, possesses extraordinary powers and enjoys a considerable latitude in the discharge of its functions. The road, however, towards successful 2010 automation elections would certainly be rough and bumpy. The Comelec is laboring under very tight timelines. It would accordingly need the help of all advocates of orderly and honest elections, of all men and women of goodwill, to smoothen the way and assist Comelec personnel address the fears expressed about the integrity of the system. Like anyone else, the Court would like and wish automated elections to succeed, credibly. 3. Ysidro vs De Castro Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular monthly-paid rank and file employees of the three divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna. It had been the certified bargaining agent for 20 years from 1987 to 1997. Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15 June 1999.5 In compliance with registration requirements, respondent submitted the requisite documents to the BLR for the purpose of acquiring legal personality.6 Upon submission of its charter certificate and other documents, respondent was issued Certificate of Creation of Local or Chapter PDMP-01 by the BLR on 6 July 1999.7 Thereafter, respondent filed with the Med-Arbiter of the DOLE Regional Officer in the National Capital Region (DOLE-NCR), three separate petitions for certification election to represent SMPP, SMCSU, and SMBP.8 All three petitions were dismissed, on the ground that the separate petitions fragmented a single bargaining unit. 9 On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's registration and its dropping from the rolls of legitimate labor organizations. In its petition, petitioner accused respondent of committing fraud and falsification, and non-compliance with registration requirements in obtaining its certificate of registration. It raised allegations that respondent violated Articles 239(a), (b) and (c)10 and 234(c)11 of the Labor Code. Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but a trade union center, hence, it cannot directly create a local or chapter. The petition was docketed as Case No. NCR-OD-9908-007-IRD.12 On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations of fraud and misrepresentation, and irregularity in the submission of documents by respondent. Regional Director Lim further ruled that respondent is allowed to directly create a local or chapter. However, he found that respondent did not comply with the 20% membership requirement and, thus, ordered the cancellation of its certificate of registration and removal from the rolls of legitimate labor organizations.13 Respondent appealed to the BLR. In a Decision dated 19 February 2001, it declared: As a chartered local union, appellant is not required to submit the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate. Thus, the revocation of its registration based on non-compliance with the 20% membership requirement does not have any basis in the rules. Further, although PDMP is considered as a trade union center, it is a holder of Registration Certificate No. FED-11558-LC issued by the BLR on 14 February 1991, which bestowed upon it the status of a legitimate labor organization with all the rights and privileges to act as representative of its members for purposes of collective bargaining agreement. On this basis, PDMP can charter or create a local, in

accordance with the provisions of Department Order No. 9. WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional Director dated July 14, 2000, canceling the registration of appellant San Miguel Packaging Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is REVERSED and SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor organizations.14 While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and misrepresentation, and in upholding that PDMP can directly create a local or a chapter, it reversed the Regional Director's ruling that the 20% membership is a requirement for respondent to attain legal personality as a labor organization. Petitioner thereafter filed a Motion for Reconsideration with the BLR. In a Resolution rendered on 19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for Reconsideration and affirmed its Decision dated 19 February 2001. 15 Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 66200. The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition and affirmed the Decision of the BLR, ruling as follows: In Department Order No. 9, a registered federation or national union may directly create a local by submitting to the BLR copies of the charter certificate, the local's constitution and by-laws, the principal office address of the local, and the names of its officers and their addresses. Upon complying with the documentary requirements, the local shall be issued a certificate and included in the roster of legitimate labor organizations. The [herein respondent] is an affiliate of a registered federation PDMP, having been issued a charter certificate. Under the rules we have reviewed, there is no need for SMPPEU to show a membership of 20% of the employees of the bargaining unit in order to be recognized as a legitimate labor union. xxxx In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED, and the petition is DISMISSED.16 Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied petitioner's Motion for Reconsideration of the aforementioned Decision. Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where petitioner raises the sole issue of: WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT IS NOT REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE EMPLOYEES IN THE BARGAINING UNIT WHERE IT SEEKS TO OPERATE. The present petition questions the legal personality of respondent as a legitimate labor organization. Petitioner posits that respondent is required to submit a list of members comprising at least 20% of the employees in the bargaining unit before it may acquire legitimacy, citing Article 234(c) of the Labor Code which stipulates that any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

a. Fifty pesos (P50.00) registration fee; b. The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; c. The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; d. If the applicant union has been in existence for one or more years, copies of its annual financial reports; and e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification and the list of the members who participated in it.17 Petitioner also insists that the 20% requirement for registration of respondent must be based not on the number of employees of a single division, but in all three divisions of the company in all the offices and plants of SMC since they are all part of one bargaining unit. Petitioner refers to Section 1, Article 1 of the Collective Bargaining Agreement (CBA),18 quoted hereunder: ARTICLE 1 SCOPE Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement consists of all regular rank and file employees paid on the basis of fixed salary per month and employed by the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing Products (SMBP) and San Miguel Packaging Products (SMPP) and in different operations existing in the City of Manila and suburbs, including Metal Closure and Lithography Plant located at Canlubang, Laguna subject to the provisions of Article XV of this Agreement provided however, that if during the term of this Agreement, a plant within the territory covered by this Agreement is transferred outside but within a radius of fifty (50) kilometers from the Rizal Monument, Rizal Park, Metro Manila, the employees in the transferred plant shall remain in the bargaining unit covered by this Agreement. (Emphasis supplied.) Petitioner thus maintains that respondent, in any case, failed to meet this 20% membership requirement since it based its membership on the number of employees of a single division only, namely, the SMPP. There is merit in petitioner's contentions. A legitimate labor organization19 is defined as "any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof."20 The mandate of the Labor Code is to ensure strict compliance with the requirements on registration because a legitimate labor organization is entitled to specific rights under the Labor Code,21 and are involved in activities directly affecting matters of public interest. Registration requirements are intended to afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends. 22 Legitimate labor organizations have exclusive rights under the law which cannot be exercised by nonlegitimate unions, one of which is the right to be certified as the exclusive representative23 of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining. 24 The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization.25

A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of PDMP and was issued Charter Certificate No. 112 on 15 June 1999. Hence, respondent was directly chartered by PDMP. The procedure for registration of a local or chapter of a labor organization is provided in Book V of the Implementing Rules of the Labor Code, as amended by Department Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40 dated 17 February 2003. The Implementing Rules as amended by D.O. No. 9 should govern the resolution of the petition at bar since respondent's petition for certification election was filed with the BLR in 1999; and that of petitioner on 17 August 1999. 26 The applicable Implementing Rules enunciates a two-fold procedure for the creation of a chapter or a local. The first involves the affiliation of an independent union with a federation or national union or industry union. The second, finding application in the instant petition, involves the direct creation of a local or a chapter through the process of chartering.27 A duly registered federation or national union may directly create a local or chapter by submitting to the DOLE Regional Office or to the BLR two copies of the following: (a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapter's constitution and by-laws; Provided, That where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.28 The Implementing Rules stipulate that a local or chapter may be directly created by a federation or national union. A duly constituted local or chapter created in accordance with the foregoing shall acquire legal personality from the date of filing of the complete documents with the BLR.29 The issuance of the certificate of registration by the BLR or the DOLE Regional Office is not the operative act that vests legal personality upon a local or a chapter under Department Order No. 9. Such legal personality is acquired from the filing of the complete documentary requirements enumerated in Section 1, Rule VI. 30 Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9, violated Article 234 of the Labor Code when it provided for less stringent requirements for the creation of a chapter or local. This Court disagrees. Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only upon its registration with the BLR: Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; (d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and (e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. (Italics supplied.) It is emphasized that the foregoing pertains to the registration of an independent labor organization, association or group of unions or workers. However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark case of Progressive Development Corporation v. Secretary, Department of Labor and Employment,31 declared that when an unregistered union becomes a branch, local or chapter, some of the aforementioned requirements for registration are no longer necessary or compulsory. Whereas an applicant for registration of an independent union is mandated to submit, among other things, the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer required of a branch, local or chapter. 32 The intent of the law in imposing less requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor. 33 Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of Department Order No. 9 was directly put in issue, this Court was unequivocal in finding that there is no inconsistency between the Labor Code and Department Order No. 9. As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and misrepresentation, this Court finds that the imputations are not impressed with merit. In the instant case, proof to declare that respondent committed fraud and misrepresentation remains wanting. This Court had, indeed, on several occasions, pronounced that registration based on false and fraudulent statements and documents confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights.35 This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The records of the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasijudicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.36 Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a local or chapter as it is not a legitimate labor organization, it being a trade union center. Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization. Firstly, this line of reasoning attempts to predicate that a trade union center is not a

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legitimate labor organization. In the process, the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same contention premises that a trade union center cannot directly create a local or chapter through the process of chartering. Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor organization, such as PDMP, cannot be subject to a collateral attack. The law is very clear on this matter. Article 212 (h) of the Labor Code, as amended, defines a legitimate labor organization37 as "any labor organization duly registered with the DOLE, and includes any branch or local thereof."38 On the other hand, a trade union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules. 39 The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack.40 It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules. The aforementioned provision is enunciated in the following: Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-LC by the BLR on 14 February 1991. Until the certificate of registration of PDMP is cancelled, its legal personality as a legitimate labor organization subsists. Once a union acquires legitimate status as a labor organization, it continues to be recognized as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.41 It bears to emphasize that what is being directly challenged is the personality of respondent as a legitimate labor organization and not that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain questions indirectly impugning the legitimacy of PDMP. Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organization, 42 and continues to be recognized as such until its certificate of registration is successfully impugned and thereafter cancelled or revoked in an independent action for cancellation. We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being a trade union center. This Court reverses the finding of the appellate court and BLR on this ground, and rules that PDMP cannot directly create a local or chapter. After an exhaustive study of the governing labor law provisions, both statutory and regulatory, 43 we find no legal justification to support the conclusion that a trade union center is allowed to directly create a local or chapter through chartering. Apropos, we take this occasion to reiterate the first and fundamental duty of this Court, which is to apply the law. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein. 44 Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on social justice,45 the provisions of the Labor Code and the Implementing Rules have been subject to several amendments, and they continue to evolve, considering that labor plays a major role as a socio-economic

force. The Labor Code was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481. Incidentally, the term trade union center was never mentioned under Presidential Decree No. 442, even as it was amended by Republic Act No. 6715. The term trade union center was first adopted in the Implementing Rules, under Department Order No. 9. Culling from its definition as provided by Department Order No. 9, a trade union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules.46 The same rule provides that the application for registration of an industry or trade union center shall be supported by the following: (a) The list of its member organizations and their respective presidents and, in the case of an industry union, the industry where the union seeks to operate; (b) The resolution of membership of each member organization, approved by the Board of Directors of such union; (c) The name and principal address of the applicant, the names of its officers and their addresses, the minutes of its organizational meeting/s, and the list of member organizations and their representatives who attended such meeting/s; and (d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the presidents of the member organizations, provided that where the ratification was done simultaneously with the organizational meeting, it shall be sufficient that the fact of ratification be included in the minutes of the organizational meeting.47 Evidently, while a "national union" or "federation" is a labor organization with at least ten locals or chapters or affiliates, each of which must be a duly certified or recognized collective bargaining agent; 48 a trade union center, on the other hand, is composed of a group of registered national unions or federations.49 The Implementing Rules, as amended by Department Order No. 9, provide that "a duly registered federation or national union" may directly create a local or chapter. The provision reads: Section 1. Chartering and creation of a local/chapter. A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: (a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapter's constitution and by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.50

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Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local or chapter through chartering a duly registered federation or a national union. Department Order No. 9 defines a "chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal personality through a charter certificate, issued by a duly registered federation or national union and reported to the Regional Office in accordance with Rule III, Section 2-E of these Rules.51 Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines" lapsed52 into law on 25 May 2007 and became effective on 14 June 2007.53 This law further amends the Labor Code provisions on Labor Relations. Pertinent amendments read as follows: SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby further amended to read as follows: ART. 234. Requirements of Registration. A federation, national union or industry or trade union center or an independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; (c) In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; (d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and (e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as follows: ART. 234-A. Chartering and Creation of a Local Chapter. A duly registered federation or national union may directly create a local chapter by issuing a charter certificate indicating the establishment of the local chapter. The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate. The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following documents in addition to its charter certificate: (a) The names of the chapter's officers, their addresses, and the principal office of the chapter; and (b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and by-laws are

the same as that of the federation or the national union, this fact shall be indicated accordingly. The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president. (Emphasis ours.) Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure for chartering or creating a local or chapter, namely Article 234-A, still makes no mention of a "trade union center." Also worth emphasizing is that even in the most recent amendment of the implementing rules, 54 there was no mention of a trade union center as being among the labor organizations allowed to charter. This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or things are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. If a statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions or effects are excluded. 55 Where the terms are expressly limited to certain matters, it may not, by interpretation or construction, be extended to other matters. 56 Such is the case here. If its intent were otherwise, the law could have so easily and conveniently included "trade union centers" in identifying the labor organizations allowed to charter a chapter or local. Anything that is not included in the enumeration is excluded therefrom, and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein.57 The rule is restrictive in the sense that it proceeds from the premise that the legislating body would not have made specific enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned.58 Expressium facit cessare tacitum.59 What is expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person, object or thing omitted must have been omitted intentionally. Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor organizations to directly create a chapter or local through chartering is given to a federation or national union, then a trade union center is without authority to charter directly. The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and voluntary organization of a strong and united labor movement,60 and thus assure the rights of workers to self-organization.61 The mandate of the Labor Code in ensuring strict compliance with the procedural requirements for registration is not without reason. It has been observed that the formation of a local or chapter becomes a handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient device for a small group of employees to foist a not-sodesirable federation or union on unsuspecting co-workers and pare the need for wholehearted voluntariness, which is basic to free unionism.62 As a legitimate labor organization is entitled to specific rights under the Labor Code and involved in activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties affected. 63 However, as this Court has enunciated in Progressive Development Corporation v. Secretary of Department of Labor and Employment , it is not this Court's function to augment the requirements prescribed by law. Our only recourse, as previously discussed, is to exact strict compliance with what the law provides as requisites for local or chapter formation.64 In sum, although PDMP as a trade union center is a legitimate labor organization, it has no power to directly create a local or chapter. Thus, SMPPEU-PDMP cannot be created under the more lenient requirements for chartering, but must have complied with the more stringent rules for creation and registration of an independent union, including the 20% membership requirement. 4. Dipad vs Sps. Olivan

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Due to a collision between the car of petitioner spouses Dipad and the passenger jeep owned by respondents, the former filed a civil action for damages before the sala of Municipal Trial Court (MTC) Judge Clavecilla. During trial, Roberto Dipad mentioned in his direct testimony that because he was not able to make use of his vehicle for his buy-and-sell business, he suffered damages by way of lost income for three months 2 amounting to 40,000. Then, during cross-examination, the defense required him to produce his 3 personal copy of his ITRs for the years 2001, 2002 and 2003. Dipad vehemently objected on the ground of confidentiality of the ITRs. He also claimed that the demand therefor was incriminatory and in the nature of a fishing expedition. By reason of the opposition, Judge Clavecilla suspended the trial and required petitioners to show their basis for invoking the confidentiality of the ITRs. After the parties submitted their respective Comments on the matter, the MTC in its 3 February 2005 Order required the production of the ITRs. Aggrieved, the spouses Dipad filed a Motion for Reconsideration, which was denied by Judge Clavecilla. Thereafter, they instituted a Rule 65 Petition for Certiorari and Prohibition before the RTC, assailing the 3 February 2005 Order of the MTC for having been issued with grave abuse of discretion amounting to lack 4 or excess of jurisdiction. In that Petition, they opposed Judge Clavecillas ruling in this wise: x x x [T]he respondent Judge stated in his order dated February 3, 2005 (Annex G) in Civil Case No. 11884 that the cited provision does not apply, stating that what is being requested to be produced is plaintiffs copy of their tax returns for the years 2001 to 2003 x x x, thereby ordering the plaintiffs therein, now the petitioners, to furnish defendants counsel within five (5) days from receipt of this order copy of their income tax returns for the years 2001 to 2003, inclusive. We beg to differ to such holding, because if a copy of a taxpayers retu rn filed with the Bureau of Internal Revenue can be open to inspection only upon the order of the President of the Philippines, such provision presupposes the confidentiality of the document; and with more reason that the taxpayer cannot be compelled to yield his copy of the said document. (Emphasis in the original) xxx xxx xxx Thus, it is indubitable that compelling the petitioners to produce petitioner Roberto Dipads Income Tax Returns and furnish copies thereof to the private respondents would be violative of the provisions of the National Internal Revenue Code on the rule on confidentiality of Income Tax return as discussed above x x x. (Underscoring supplied) 5 In its 6 May 2005 Decision, the RTC dismissed the Rule 65 Petition for being an inappropriate remedy. According to the trial court, the errors committed by Judge Clavecilla were, if at all, mere errors of judgment correctible not by the extraordinary writ of certiorari, but by ordinary appeal. Petitioners moved 6 for reconsideration, but their motion was denied by the RTC. Hence, this appeal. The issue presented in this case is straightforward. Petitioners insist that that the RTC committed reversible error in dismissing their Rule 65 Petition as an improper appeal, since grave abuse of discretion amounting to excess of jurisdiction was committed by MTC Judge Clavecilla when he required the

7 production of their ITRs. In support of their claim and to prove the confidentiality of the ITRs they cite Section 71 of the National Internal Revenue Code, which reads: Section 71. Disposition of Income Tax Returns, Publication of Lists of Taxpayers and Filers After the assessment shall have been made, as provided in this Title, the returns, together with any corrections thereof which may have been made by the Commissioner, shall be filed in the Office of the Commissioner and shall constitute public records and be open to inspection as such upon the order of the President of the Philippines, under rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner. The Commissioner may, in each year, cause to be prepared and published in any newspaper the lists containing the names and addresses of persons who have filed income tax returns. They also quote from National Internal Revenue Code (2001) authored by Epifanio G. Gonzales and 9 Celestina M. Robledo-Gonzales: The general rule is that despite a court order, copies of the income tax returns cannot be furnished in view of the prohibition contained in Section 332 (now Section 286) of the Tax Code. However, under Section 11 of Regulation 33 of the Department of Finance the Commissioner of Internal Revenue may furnish copies of income tax returns for use as evidence in court litigation when the government of the Philippine Islands is interested in the result. Thus, in the case of Cu Unjieng vs. Posadas, 58 Phil. 360, which involves the production of income tax returns in a criminal case, the Supreme Court held that copies of the returns can be furnished therein because a criminal case is a sort of a case in which, above all others, the government, as a corporate representative of all society, is highly and immediately interested. But in a civil case where the government is not interested in the results, no income tax returns or tax census statements may be furnished the courts even if the production thereof is in obedience to the court order (see BIR Ruling No. 4, S. 1971). RULING OF THE COURT The appeal is lacking in merit. 10 Upon perusal of the reference, we find that petitioners inaccurately quoted the commentary. 11 portions they lifted from the annotation purport to explain Section 270 of the NIRC. The

The provision prohibits employees of the Bureau of Internal Revenue (BIR) from divulging the trade secrets of taxpayers. Section 270 obviously does not address the confidentiality of ITRs. Thus, petitioners 12 cannot rely on the inappropriate provision, the Decisions including the cited Cu Unjieng v. Posadas, the rulings of the BIR, or issuances of the Department of Finance that apply that provision. Furthermore, in contrast to the interpretation by petitioners of the commentary that ITRs cannot be divulged, their very reference characterizes Section 71 as an exception to the rule on the unlawful

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13 divulgence of trade secrets: Exceptions or acts which do not constitute unlawful divulgence of trade secrets. (a) Section 71 of the Tax Code makes income tax returns public records and opens them to inspection upon order of the President of the Philippines. x x x. This Court then reminds the counsels of their duty of candor, fairness and good faith when they face the court. Canon 10.02 of the Code of Professional Responsibility instructs that a lawyer shall not knowingly misquote or misrepresent the contents of a paper; the language or the argument of opposing counsel, or the text of a decision or authority, or knowingly cite as law a provision already rendered inoperative by repeal or amendment; or assert as a fact that which has not been proved. Nevertheless, we proceed to the contention of petitioners against the RTCs dismissal of their Rule 65 Petition. In this regard, we stress that it is basic in our jurisdiction that a petition for certiorari under Rule 14 15 65 is not a mode of appeal. The remedy, which is narrow in scope, only corrects errors of 16 jurisdiction. Thus, if the issue involves an error of judgment, the error is correctible by an appeal via 17 a Rule 45 petition, and not by a writ of certiorari under Rule 65 of the Rules of Court. As defined in jurisprudence, errors of jurisdiction occur when the court exercises jurisdiction not 18 conferred upon it by law. They may also occur when the court or tribunal, although it has jurisdiction, 19 acts in excess of it or with grave abuse of discretion amounting to lack of jurisdiction. On the contrary, errors of judgment are those that the court may commit in the exercise of its jurisdiction. 20 They include errors of procedure or mistakes in the courts findings based on a mistake of law or of 21 fact. Here, it is patently clear that petitioners do not question whether the MTC has jurisdiction or authority to resolve the issue of confidentiality of ITRs. Rather, th ey assail the wisdom of the MTCs very judgment and appreciation of the ITR as not confidential. Specifically, they claim that the ruling violated the provisions on the NIRC on the alleged rule on confidentiality of ITRs. Based on the definitions above, we conclude similarly as the RTC that if there is an error to speak of, the error relates only to a mistake in the application of law, and not to an error jurisdiction or grave abuse of discretion amounting to excess of jurisdiction. The only error petitioners raise refers to Judge Clavecillas mistake of not applying Section 71, which allegedly prohibits the production of ITRs because of confidentiality. Certainly, as correctly posited by the court a quo, if every error committed by the trial court is subject to certiorari, trial would never come to an end, and the docket will be clogged ad infinitum. 5. Miguel Arroyo vs DOJ Acting on the discovery of alleged new evidence and the surfacing of new witnesses indicating the occurrence of massive electoral fraud and manipulation of election results in the 2004 and 2007 National Elections, on August 2, 2011, the Comelec issued Resolution No. 9266 approving the creation of a committee jointly with the Department of Justice (DOJ), which shall conduct preliminary investigation on the alleged election offenses and anomalies committed during the 2004 and 2007 elections.

6 On August 4, 2011, the Secretary of Justice issued Department Order No. 640 naming three (3) of its prosecutors to the Joint Committee. On August 15, 2011, the Comelec and the DOJ issued Joint Order No. 001-2011 creating and constituting a Joint Committee and Fact-Finding Team on the 2004 and 2007 National Elections electoral fraud and manipulation cases. The Joint Committee and the Fact-Finding Team are composed of officials from the DOJ and the Comelec. Section 2 of the Joint Order lays down the mandate of the Joint Committee, to wit: Section 2. Mandate. The Committee shall conduct the necessary preliminary investigation on the basis of the evidence gathered and the charges recommended by the Fact-Finding Team created and referred to in Section 4 hereof. Resolutions finding probable cause for election offenses, defined and penalized under the Omnibus Election Code and other election laws shall be approved by the Comelec in accordance with the Comelec Rules of Procedure. For other offenses, or those not covered by the Omnibus Election Code and other election laws, the corresponding criminal information may be filed directly with the appropriate 7 courts. 8 The Fact-Finding Team, on the other hand, was created for the purpose of gathering real, documentary, and testimonial evidence, which can be utilized in the preliminary investigation to be conducted by the Joint Committee. Its specific duties and functions as enumerated in Section 4 of the Joint Order are as follows: . a) Gather and document reports, intelligence information, and investigative leads from official as well as unofficial sources and informants; b) Conduct interviews, record testimonies, take affidavits of witnesses, and collate material and relevant documentary evidence, such as, but not limited to, election documents used in the 2004 and 2007 national elections. For security reasons, or to protect the identities of informants, the Fact-Finding Team may conduct interviews or document testimonies discreetly; c) Assess and evaluate affidavits already executed and other documentary evidence submitted or may be submitted to the Fact- Finding Team and/or Committee; d) Identify the offenders, their offenses and the manner of their commission, individually or in conspiracy, and the provisions of election and general criminal laws violated, establish evidence for individual criminal and administrative liability and prosecution, and prepare the necessary documentation, such as complaints and charge sheets for the initiation of preliminary investigation proceedings against said individuals to be conducted by the Committee; e) Regularly submit to the Committee, the Secretary of Justice and the Chairman of the Comelec periodic reports and recommendations, supported by real, testimonial and documentary evidence, which may then serve as the Committees basis for immediately commencing appropriate preliminary investigation proceedings, as provided under Section 6 of this Joint Order; and f) Upon the termination of its investigation, make a full and final report to the Committee, the 9 Secretary of Justice, and the Chairman of the Comelec.

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10 Pursuant to Section 7 Rules of Procedure. of the Joint Order, on August 23, 2011, the Joint Committee promulgated its In an Order

29 dated November 15, 2011, the Joint Committee denied the aforesaid motions of petitioners. 30 GMA subsequently filed a motion for reconsideration. On November 16, 2011, the Joint Committee promulgated a Joint Resolution which was later indorsed to 31 the Comelec. On November 18, 2011, after conducting a special session, the Comelec en banc issued a 32 Resolution approving and adopting the Joint Resolution subject to modifications. On even date, pursuant to the above Resolution, the Comelecs Law Department filed with the Regional Trial Court (RTC), Pasay City, an Information against petitioner GMA, Governor Andal Ampatuan, Sr., and Atty. Lintang H. Bedol, for violation of Section 42 (b)(3) of Republic Act (R.A.) No. 9369, amending 34 Section 27 (b) of R.A. No. 6646, docketed as Criminal Case No. RPSY-11-04432-CR. The case was raffled to Branch 112 and the corresponding Warrant of Arrest was issued which was served on GMA on 35 the same day. 36 On November 18, 2011, petitioner GMA filed with the RTC an Urgent Omnibus Motion Ad Cautelam with leave to allow the Joint Committee to resolve the motion for reconsideration filed by GMA, to defer issuance of a warrant of arrest and a Hold Departure Order, and to proceed to judicial determination of 37 probable cause. She, likewise, filed with the Comelec a Motion to Vacate Ad Cautelam praying that its Resolution be vacated for being null and void. The RTC nonetheless issued a warrant for her arrest which was duly served. GMA thereafter filed a Motion for Bail which was granted. The Courts Ruling Procedural Issues Respondents claim that Mike Arroyos petition is moot and that of GMA is moot and academic. They explain that the Mike Arroyo petition presents no actual controversy that necessitates the exercise by the Court of its power of judicial review, considering that he was not among those indicted for electoral sabotage in the 2007 national elections as the Comelec dismissed the case against him for insufficiency of 44 evidence. Anent the 2004 national elections, the Fact-Finding Team is yet to complete its investigation 45 so Mike Arroyos apprehensions are merely speculative and anticipatory. As to the GMA petition, respondents aver that any judgment of the Court will have no practical legal effect because an Information 46 has already been filed against her in Branch 112, RTC of Pasay City. With the filing of the Information, the RTC has already acquired jurisdiction over the case, including all issues relating to the 47 constitutionality or legality of her preliminary investigation. Respondents also claim that the issues relating to the constitutionality and validity of the conduct of the preliminary investigation of GMA are 48 best left to the trial court, considering that it involves questions of fact. Respondents add that considering that the RTC has concurrent jurisdiction to determine a constitutional issue, it will be practical 49 for the Court to allow the RTC to determine the constitutional issues in this case. We do not agree.

The members of the Fact-Finding Team unanimously agreed that the subject of the Initial Report would be the electoral fraud and manipulation of election results allegedly committed during the May 14, 2007 11 elections. Thus, in its Initial Report dated October 20, 2011, the Fact-Finding Team concluded that manipulation of the results in the May 14, 2007 senatorial elections in the provinces of North and South 12 Cotabato and Maguindanao were indeed perpetrated. The Fact-Finding Team recommended that 13 petitioner Abalos and ten (10) others be subjected to preliminary investigation for electoral sabotage for 14 conspiring to manipulate the election results in North and South Cotabato. Twenty-six (26) persons, including petitioners GMA and Abalos, were likewise recommended for preliminary investigation for 15 electoral sabotage for manipulating the election results in Maguindanao. Several persons were also 16 recommended to be charged administratively, while others, including petitioner Mike Arroyo, were 17 recommended to be subjected to further investigation. The case resulting from the investigation of the Fact-Finding Team was docketed as DOJ- Comelec Case No. 001-2011. Meanwhile, on October 17, 2011, Senator Aquilino Pimentel III (Senator Pimentel) filed a Complaint18 19 Affidavit for Electoral Sabotage against petitioners and twelve others and several John Does and Jane Does. The case was docketed as DOJ-Comelec Case No. 002-2011. On October 24, 2011, the Joint Committee issued two subpoenas against petitioners in DOJ-Comelec Case 20 Nos. 001-2011 and 002-2011. On November 3, 2011, petitioners, through counsel, appeared before the 21 Joint Committee. On that preliminary hearing, the Joint Committee consolidated the two DOJ-Comelec cases. Respondents therein were likewise ordered to submit their Counter-Affidavits by November 14, 22 2011. Thereafter, petitioners filed before the Court separate Petitions for Certiorari and Prohibition with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction assailing 23 the creation of the Joint Panel. The petitions were eventually consolidated. 24 On November 14, 2011, petitioner Mike Arroyo filed a Motion to Defer Proceedings before the Joint Committee, in view of the pendency of his petition before the Court. On the same day, petitioner GMA 25 filed before the Joint Committee an Omnibus Motion Ad Cautelam to require Senator Pimentel to furnish her with documents referred to in his complaint-affidavit and for the production of election documents as basis for the charge of electoral sabotage. GMA contended that for the crime of electoral sabotage to be established, there is a need to present election documents allegedly tampered which 26 resulted in the increase or decrease in the number of votes of local and national candidates. GMA prayed that she be allowed to file her counter-affidavit within ten (10) days from receipt of the requested 27 documents. Petitioner Abalos, for his part, filed a Motion to Suspend Proceedings ( Ex Abundante Ad 28 Cautelam), in view of the pendency of his petition brought before the Court.

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Mootness It cannot be gainsaid that for a court to exercise its power of adjudication, there must be an actual case or controversy, that is, one which involves a conflict of legal rights, an assertion of opposite legal claims 50 susceptible of judicial resolution. The case must not be moot or academic or based on extra-legal or 51 other similar considerations not cognizable by a court of justice. A case becomes moot and academic when it ceases to present a justiciable controversy so that a 52 declaration on the issue would be of no practical use or value. However, a case should not be dismissed simply because one of the issues raised therein had become moot and academic by the onset of a supervening event, whether intended or incidental, if there are other causes which need to be resolved after 53 trial. Here, the consolidated cases are not rendered moot and academic by the promulgation of the Joint Resolution by the Joint Committee and the approval thereof by the Comelec. It must be recalled that the main issues in the three petitions before us are the constitutionality and legality of the creation of the Joint Committee and the Fact-Finding Team as well as the proceedings undertaken pursuant thereto. The assailed Joint Order specifically provides that the Joint Committee was created for purposes of investigating the alleged massive electoral fraud during the 2004 and 2007 national elections. However, in the Fact-Finding Teams Initial Report, the team specifically agreed that the report would focus on the irregularities during the 2007 elections. Also, in its November 18, 2011 Resolution, the Comelec, while directing the filing of information against petitioners Abalos and GMA, ordered that further investigations be conducted against the other respondents therein. Apparently, the Fact-Finding Teams and Joint Committees respective mandates have not been fulfilled and they are, therefore, bound to continue discharging their duties set forth in the assailed Joint Order. Moreover, petitioners question the validity of the proceedings undertaken by the Fact-Finding Team and the Joint Committee leading to the filing of information, on constitutional grounds. We are not, therefore, barred from deciding on the petitions simply by the occurrence of the supervening events of filing an information and dismissal of the charges. Jurisdiction over the validity of the conduct of the preliminary investigation

arrest, the Court could not ignore the undue haste in the filing of the information and the inordinate interest of the government in filing the same. Thus, this Court took time to determine whether or not there was, indeed, probable cause to warrant the filing of information. This, notwithstanding the fact that information had been filed and a warrant of arrest had been issued. Petitioners therein came directly to this Court and sought relief to rectify the injustice that they suffered. Hierarchy of courts Neither can the petitions be dismissed solely because of violation of the principle of hierarchy of courts. This principle requires that recourse must first be made to the lower-ranked court exercising concurrent 57 jurisdiction with a higher court. The Supreme Court has original jurisdiction over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. While this jurisdiction is shared with the Court of Appeals and the RTC, a direct invocation of this Courts jurisdiction is allowed when there are special and important reasons therefor, clearly and especially set out in the petition, as in the 58 present case. In the consolidated petitions, petitioners invoke exemption from the observance of the rule on hierarchy of courts in keeping with the Courts duty to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and the laws, and that they have not 59 abused the discretion given to them. It is noteworthy that the consolidated petitions assail the constitutionality of issuances and resolutions of the DOJ and the Comelec. The general rule is that this Court shall exercise only appellate jurisdiction over cases involving the constitutionality of a statute, treaty or regulation. However, such rule is subject to exception, that is, in circumstances where the Court believes that resolving the issue of constitutionality of a law or regulation at the first instance is of paramount importance and immediately affects the social, 60 economic, and moral well-being of the people. This case falls within the exception. An expeditious resolution of the issues raised in the petitions is necessary. Besides, the Court has entertained a direct resort to the Court without the requisite motion for reconsideration filed below or without exhaustion of administrative remedies 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 petitioners and when there is an 61 alleged violation of due process, as in the present case. We apply the same relaxation of the Rules in the present case and, thus, entertain direct resort to this Court. Substantive Issues Bases for the creation of the Fact-Finding Team and Joint Committee

This is not the first time that the Court is confronted with the issue of jurisdiction to conduct preliminary investigation and at the same time with the propriety of the conduct of preliminary investigation. In 54 Cojuangco, Jr. v. Presidential Commission on Good Government [PCGG], the Court resolved two issues, namely: (1) whether or not the PCGG has the power to conduct a preliminary investigation of the anti-graft and corruption cases filed by the Solicitor General against Eduardo Conjuangco, Jr. and other respondents for the alleged misuse of coconut levy funds; and (2) on the assumption that it has jurisdiction to conduct such a preliminary investigation, whether or not its conduct constitutes a violation of 55 petitioners right to due process and equal protection of the law. The Court decided these issues notwithstanding the fact that Informations had already been filed with the trial court. 56 In Allado v. Diokno, in a petition for certiorari assailing the propriety of the issuance of a warrant of

Section 2, Article IX-C of the 1987 Constitution enumerates the powers and functions of the Comelec. Paragraph (6) thereof vests in the Comelec the power to: (6) File, upon a verified complaint, or on its own initiative, petitions in court for inclusion or exclusion of voters; investigate and, where appropriate, prosecute cases of violations of election laws, including acts or omissions constituting election frauds, offenses, and malpractices. This was an important innovation introduced by the 1987 Constitution, because the above-quoted 62 provision was not in the 1935 and 1973 Constitutions.

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The grant to the Comelec of the power to investigate and prosecute election offenses as an adjunct to the enforcement and administration of all election laws is intended to enable the Comelec to effectively insure to the people the free, orderly, and honest conduct of elections. The failure of the Comelec to exercise this power could result in the frustration of the true will of the people and make a mere idle ceremony of the 63 sacred right and duty of every qualified citizen to vote. The constitutional grant of prosecutorial power in the Comelec was reflected in Section 265 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election Code, to wit: Section 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 [public prosecutor], or with the Ministry [Department] of Justice for proper investigation and prosecution, if warranted. Under the above provision of law, the power to conduct preliminary investigation is vested exclusively with the Comelec. The latter, however, was given by the same provision of law the authority to avail itself 64 65 of the assistance of other prosecuting arms of the government. Thus, under Section 2, Rule 34 of the Comelec Rules of Procedure, provincial and city prosecutors and their assistants are given continuing authority as deputies to conduct preliminary investigation of complaints involving election offenses under election laws and to prosecute the same. The complaints may be filed directly with them or may be 66 indorsed to them by the petitioner or its duly authorized representatives. Thus, under the Omnibus Election Code, while the exclusive jurisdiction to conduct preliminary investigation had been lodged with the Comelec, the prosecutors had been conducting preliminary investigations pursuant to the continuing delegated authority given by the Comelec. The reason for this 67 delegation of authority has been explained in Commission on Elections v. Espaol: The deputation of the Provincial and City Prosecutors is necessitated by the need for prompt investigation and dispensation of election cases as an indispensable part of the task of securing fine, orderly, honest, peaceful and credible elections. Enfeebled by lack of funds and the magnitude of its workload, the petitioner does not have a sufficient number of legal officers to conduct such investigation and to 68 prosecute such cases. 69 Moreover, as we acknowledged in People v. Basilla, the prompt and fair investigation and prosecution of election offenses committed before or in the course of nationwide elections would simply not be possible without the assistance of provincial and city fiscals [prosecutors] and their assistants and staff 70 members, and of the state prosecutors of the DOJ. 71 Section 265 of the Omnibus Election Code was amended by Section 43 of R.A. No. 9369, Section 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 which reads:

investigation of all election offenses punishable under this Code, and to prosecute the same. As clearly set forth above, instead of a mere delegated authority, the other prosecuting arms of the government, such as the DOJ, now exercise concurrent jurisdiction with the Comelec to conduct preliminary investigation of all election offenses and to prosecute the same. It is, therefore, not only the power but the duty of both the Comelec and the DOJ to perform any act necessary to ensure the prompt and fair investigation and prosecution of election offenses. Pursuant to the above constitutional and statutory provisions, and as will be explained further below, we find no impediment for the Comelec and the DOJ to create the Joint Committee and Fact-Finding Team for the purpose of conducting a thorough investigation of the alleged massive electoral fraud and the manipulation of election results in the 2004 and 2007 national elections relating in particular to the 73 presidential and senatorial elections. Constitutionality of Joint-Order No. 001-2011 A. Equal Protection Clause Petitioners claim that the creation of the Joint Committee and Fact- Finding Team is in violation of the equal protection clause of the Constitution because its sole purpose is the investigation and prosecution of certain persons and incidents. They argue that there is no substantial distinction between the allegations of massive electoral fraud in 2004 and 2007, on the one hand, and previous and subsequent national elections, on the other hand; and no substantial distinction between petitioners and the other persons or public officials who might have been involved in previous election offenses. They insist that the Joint Panel was created to target only the Arroyo Administration as well as public officials linked to the Arroyo Administration. To bolster their claim, petitioners explain that Joint Order No. 001-2011 is similar to Executive Order No. 1 (creating the Philippine Truth Commission) which this Court had already nullified for being violative of the equal protection clause. Respondents, however, refute the above contentions and argue that the wide array of the possible election offenses and broad spectrum of individuals who may have committed them, if any, immediately negate the assertion that the assailed orders are aimed only at the officials of the Arroyo Administration. We agree with the respondents. The equal protection clause is enshrined in Section 1, Article III of the Constitution which reads: Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall 74 any person be denied the equal protection of the laws. The concept of equal protection has been laid down in Biraogo v. Philippine Truth Commission of 75 2010: One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section 1, Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide for a more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause. According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. It requires public

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bodies and institutions to treat similarly-situated individuals in a similar manner. The purpose of the equal protection clause is to secure every person within a state's jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statute or by its improper execution through the state's duly-constituted authorities. In other words, the concept of equal justice under the law requires the state to govern impartially, and it may not draw distinctions between individuals solely on differences 76 that are irrelevant to a legitimate governmental objective. Unlike the matter addressed by the Courts ruling in Biraogo v. Philippine Truth Commission of 2010, Joint Order No. 001-2011 cannot be nullified on the ground that it singles out the officials of the Arroyo Administration and, therefore, it infringes the equal protection clause. The Philippine Truth Commission of 2010 was expressly created for the purpose of investigating alleged graft and corruption during the 77 Arroyo Administration since Executive Order No. 1 specifically referred to the previous administration; while the Joint Committee was created for the purpose of conductin g preliminary investigation of election offenses during the 2004 and 2007 elections. While GMA and Mike Arroyo were among those subjected to preliminary investigation, not all respondents therein were linked to GMA as there were public officers who were investigated upon in connection with their acts in the performance of their official duties. Private individuals were also subjected to the investigation by the Joint Committee. The equal protection guarantee exists to prevent undue favor or privilege. It is intended to eliminate discrimination and oppression based on inequality. Recognizing the existence of real differences among men, it does not demand absolute equality. It merely requires that all persons under like circumstances and 78 conditions shall be treated alike both as to privileges conferred and liabilities enforced. We once held that the Office of the Ombudsman is granted virtually plenary investigatory powers by the Constitution and by law and thus may, for every particular investigation, whether commenced by complaint or on its own initiative, decide how best to pursue each investigation. Since the Office of the Ombudsman is granted such latitude, its varying treatment of similarly situated investigations cannot by 79 itself be considered a violation of any of the parties rights to the equal protection of the laws. This same doctrine should likewise apply in the present case. Thus, as the constitutional body granted with the broad power of enforcing and administering all laws and 80 regulations relative to the conduct of an election, plebiscite, initiative, referendum and recall, and tasked 81 to ensure free, orderly, honest, peaceful, and credible elections, the Comelec has the authority to determine how best to perform such constitutional mandate. Pursuant to this authority, the Comelec issues various resolutions prior to every local or national elections setting forth the guidelines to be observed in the conduct of the elections. This shows that every election is distinct and requires different guidelines in order to ensure that the rules are updated to respond to existing circumstances. Moreover, as has been practiced in the past, complaints for violations of election laws may be filed either with the Comelec or with the DOJ. The Comelec may even initiate, motu proprio, complaints for election 82 offenses. Pursuant to law and the Comelecs own Rules, investigations may be conducted either by the Comelec itself through its law department or through the prosecutors of the DOJ. These varying procedures and treatment do not, however, mean that respondents are not treated alike. Thus, petitioners insistence of infringement of their constitutional right to equal protection of the law is misplaced. B. Due Process Petitioners claim that the Joint Panel does not possess the required cold neutrality of an impartial judge because it is all at once the evidence- gatherer, prosecutor and judge. They explain that since the Fact-

Finding Team has found probable cause to subject them to preliminary investigation, it is impossible for the Joint Committee to arrive at an opposite conclusion. Petitioners likewise express doubts of any possibility that the Joint Committee will be fair and impartial to them as Secretary De Lima and Chairman Brillantes had repeatedly expressed prejudgment against petitioners through their statements captured by the media. For their part, respondents contend that petitioners failed to present proof that the President of the Philippines, Secretary of Justice, and Chairman of the Comelec actually made the statements allegedly prejudging their case and in the context in which they interpreted them. They likewise contend that assuming that said statements were made, there was no showing that Secretary De Lima had tried to intervene in the investigation to influence its outcome nor was it proven that the Joint Committee itself had prejudged the case. Lastly, they point out that Joint Order No. 001-2011 created two bodies, the FactFinding Team and the Joint Committee, with their respective mandates. Hence, they cannot be considered as one. We find for respondents. It is settled that the conduct of preliminary investigation is, like court proceedings, subject to the 83 requirements of both substantive and procedural due process. Preliminary investigation is considered as a judicial proceeding wherein the prosecutor or investigating officer, by the nature of his functions, acts as 84 a quasi-judicial officer. The authority of a prosecutor or investigating officer duly empowered to preside over or to conduct a preliminary investigation is no less than that of a municipal judge or even an RTC 85 86 Judge. Thus, as emphasized by the Court in Ladlad v. Velasco: x x x We cannot emphasize too strongly that prosecutors should not allow, and should avoid, giving the impression that their noble office is being used or prostituted, wittingly or unwittingly, for political ends, or other purposes alien to, or subversive of, the basic and fundamental objective of serving the interest of justice evenhandedly, without fear or favor to any and all litigants alike, whether rich or poor, weak or strong, powerless or mighty. Only by strict adherence to the established procedure may public's perception 87 of the impartiality of the prosecutor be enhanced. In this case, as correctly pointed out by respondents, there was no showing that the statements claimed to have prejudged the case against petitioners were made by Secretary De Lima and Chairman Brillantes or were in the prejudicial context in which petitioners claimed the statements were made. A reading of the statements allegedly made by them reveals that they were just responding to hypothetical questions in the event that probable cause would eventually be found by the Joint Committee. More importantly, there was no proof or even an allegation that the Joint Committee itself, tasked to conduct the requisite preliminary investigation against petitioners, made biased statements that would convey to the public that the members were favoring a particular party. Neither did the petitioners show that the President of the Philippines, the Secretary of Justice or the Chairman of the Comelec intervened in the conduct of the preliminary investigation or exerted undue pressure on their subordinates to tailor their 88 decision with their public declarations and adhere to a pre- determined result. Moreover, insofar as the Comelec is concerned, it must be emphasized that the constitutional body is collegial. The act of the head 89 of a collegial body cannot be considered as that of the entire body itself. In equating the alleged bias of the above-named officials with that of the Joint Committee, there would be no arm of the government 90 credible enough to conduct a preliminary investigation. It must also be emphasized that Joint Order No. 001-2011 created two bodies, namely: (1) the Fact-

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Finding Team tasked to gather real, documentary and testimonial evidence which can be utilized in the preliminary investigation to be conducted by the Joint Committee; and (2) the Joint Committee mandated to conduct preliminary investigation. It is, therefore, inaccurate to say that there is only one body which acted as evidence-gatherer, prosecutor and judge. C. Separation of powers Petitioners claim that the Joint Panel is a new public office as shown by its composition, the creation of its own Rules of Procedure, and the source of funding for its operation. It is their position that the power of the DOJ to investigate the commission of crimes and the Comelecs constitutional mandate to investigate and prosecute violations of election laws do not include the power to create a new public office in the guise of a joint committee. Thus, in creating the Joint Panel, the DOJ and the Comelec encroached upon the power of the Legislature to create public office. Respondents dispute this and contend that the Joint Committee and Fact-Finding Team are not new public offices, but merely collaborations between two existing government agencies sharing concurrent jurisdiction. This is shown by the fact that the members of the Joint Panel are existing officers of the DOJ and the Comelec who exercise duties and functions that are already vested in them. Again, we agree with respondents. As clearly explained above, the Comelec is granted the power to investigate, and where appropriate, prosecute cases of election offenses. This is necessary in ensuring free, orderly, honest, peaceful and credible elections. On the other hand, the DOJ is mandated to administer the criminal justice system in accordance with the accepted processes thereof consisting in the investigation of the crimes, prosecution 91 of offenders and administration of the correctional system. It is specifically empowered to investigate 92 the commission of crimes, prosecute offenders and administer the probation and correction system. Also, the provincial or city prosecutors and their assistants, as well as the national and regional state 93 prosecutors, are specifically named as the officers authorized to conduct preliminary investigation. Recently, the Comelec, through its duly authorized legal offices, is given the power, concurrent with the other prosecuting arms of the government such as the DOJ, to conduct preliminary investigation of all 94 election offenses. Undoubtedly, it is the Constitution, statutes, and the Rules of Court and not the assailed Joint Order which give the DOJ and the Comelec the power to conduct preliminary investigation. No new power is given to them by virtue of the assailed order. As to the members of the Joint Committee and Fact-Finding Team, they perform such functions that they already perform by virtue of their current positions as prosecutors of the DOJ and legal officers of the Comelec. Thus, in no way can we consider the Joint Committee as a new public office. D. Independence of the Comelec Petitioners claim that in creating the Joint Panel, the Comelec has effectively abdicated its constitutional mandate to investigate and, where appropriate, to prosecute cases of violation of election laws including acts or omissions constituting election frauds, offenses, and malpractices in favor of the Executive Department acting through the DOJ Secretary. Under the set-up, the Comelec personnel is placed under the supervision and control of the DOJ. The chairperson is a DOJ official. Thus, the Comelec has willingly surrendered its independence to the DOJ and has acceded to share its exercise of judgment and discretion with the Executive Branch. We do not agree.

95 Section 1, Article IX-A of the 1987 Constitution expressly describes all the Constitutional Commissions as independent. Although essentially executive in nature, they are not under the control of the President of 96 the Philippines in the discharge of their respective functions. The Constitution envisions a truly independent Comelec committed to ensure free, orderly, honest, peaceful, and credible elections and to serve as the guardian of the peoples sacred right of suffrage the citizenrys vital weapon in effecting a 97 peaceful change of government and in achieving and promoting political stability. Prior to the amendment of Section 265 of the Omnibus Election Code, the Comelec had the exclusive authority to investigate and prosecute election offenses. In the discharge of this exclusive power, the Comelec was given the right to avail and, in fact, availed of the assistance of other prosecuting arms of the government such as the prosecutors of the DOJ. By virtue of this continuing authority, the state prosecutors and the provincial or city prosecutors were authorized to receive the complaint for election offense and delegate the conduct of investigation to any of their assistants. The investigating prosecutor, in turn, would make a recommendation either to dismiss the complaint or to file the information. This recommendation is subject to the approval of the state, provincial or city prosecutor, who himself may file the information with the proper court if he finds sufficient cause to do so, subject, however, to the 98 accuseds right to appeal to the Comelec. 99 Moreover, during the past national and local elections, the Comelec issued Resolutions requesting the Secretary of Justice to assign prosecutors as members of Special Task Forces to assist the Comelec in the investigation and prosecution of election offenses. These Special Task Forces were created because of the need for additional lawyers to handle the investigation and prosecution of election offenses. Clearly, the Comelec recognizes the need to delegate to the prosecutors the power to conduct preliminary investigation. Otherwise, the prompt resolution of alleged election offenses will not be attained. This delegation of power, otherwise known as deputation, has long been recognized and, in fact, been utilized as an effective means of disposing of various election offense cases. Apparently, as mere deputies, the prosecutors played a vital role in the conduct of preliminary investigation, in the resolution of complaints filed before them, and in the filing of the informations with the proper court. As pointed out by the Court in Barangay Association for National Advancement and Transparency 100 (BANAT) Party-List v. Commission on Elections, the grant of exclusive power to investigate and prosecute cases of election offenses to the Comelec was not by virtue of the Constitution but by the Omnibus Election Code which was eventually amended by Section 43 of R.A. 9369. Thus, the DOJ now conducts preliminary investigation of election offenses concurrently with the Comelec and no longer as mere deputies. If the prosecutors had been allowed to conduct preliminary investigation and file the necessary information by virtue only of a delegated authority, they now have better grounds to perform such function by virtue of the statutory grant of authority. If deputation was justified because of lack of funds and legal officers to ensure prompt and fair investigation and prosecution of election offenses, the same justification should be cited to justify the grant to the other prosecuting arms of the government of such concurrent jurisdiction. In view of the foregoing disquisition, we find no impediment for the creation of a Joint Committee. While the composition of the Joint Committee and Fact-Finding Team is dominated by DOJ officials, it does not necessarily follow that the Comelec is inferior. Under the Joint Order, resolutions of the Joint Committee finding probable cause for election offenses shall still be approved by the Comelec in accordance with the Comelec Rules of Procedure. This shows that the Comelec, though it acts jointly with the DOJ, remains in control of the proceedings. In no way can we say that the Comelec has thereby abdicated its independence to the executive department.

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The text and intent of the constitutional provision granting the Comelec the authority to investigate and prosecute election offenses is to give the Comelec all the necessary and incidental powers for it to achieve 101 the objective of holding free, orderly, honest, peaceful, and credible elections. The Comelec should be allowed considerable latitude in devising means and methods that will insure the accomplishment of the 102 great objective for which it was created. We may not agree fully with its choice of means, but unless 103 these are clearly illegal or constitute gross abuse of discretion, this Court should not interfere. Thus, Comelec Resolution No. 9266, approving the creation of the Joint Committee and Fact-Finding Team, should be viewed not as an abdication of the constitutional bodys independence but as a means to fulfill its duty of ensuring the prompt investigation and prosecution of election offenses as an adjunct of its mandate of ensuring a free, orderly, honest, peaceful and credible elections. Although it belongs to the executive department, as the agency tasked to investigate crimes, prosecute offenders, and administer the correctional system, the DOJ is likewise not barred from acting jointly with the Comelec. It must be emphasized that the DOJ and the Comelec exercise concurrent jurisdiction in conducting preliminary investigation of election offenses. The doctrine of concurrent jurisdiction means equal jurisdiction to deal with the 104 same subject matter. Contrary to the contention of the petitioners, there is no prohibition on simultaneous exercise of power between two coordinate

107 Ombudsman. None of these problems would likely arise in the present case. The Comelec and the DOJ themselves agreed that they would exercise their concurrent jurisdiction jointly. Although the preliminary investigation was conducted on the basis of two complaints the initial report of the Fact-Finding Team and the complaint of Senator Pimentel both complaints were filed with the Joint Committee. Consequently, the complaints were filed with and the preliminary investigation was conducted by only one investigative body. Thus, we find no reason to disallow the exercise of concurrent jurisdiction jointly by those given such authority. This is especially true in this case given the magnitude of the crimes allegedly committed by petitioners. The joint preliminary investigation also serves to maximize the resources and manpower of both the Comelec and the DOJ for the prompt disposition of the cases. Citing the principle of concurrent jurisdiction, petitioners insist that the investigation conducted by the Comelec involving Radam and Martirizar bars the creation of the Joint Committee for purposes of conducting another preliminary investigation. In short, they claim that the exercise by the Comelec of its jurisdiction to investigate excludes other bodies such as the DOJ and the Joint Committee from taking cognizance of the case. Petitioners add that the investigation should have been conducted also by the Comelec as the 2007 cases of Radam and Martirizar include several John Does and Jane Does. We do not agree. While the Comelec conducted the preliminary investigation against Radam, Martirizar and other unidentified persons, it only pertains to election offenses allegedly committed in North and South Cotabato. On the other hand, the preliminary investigation conducted by the Joint Committee (involving GMA) pertains to election offenses supposedly committed in Maguindanao. More importantly, considering the broad power of the Comelec to choose the means of fulfilling its duty of ensuring the prompt investigation and prosecution of election offenses as discussed earlier, there is nothing wrong if the Comelec chooses to work jointly with the DOJ in the conduct of said investigation. To reiterate, in no way can we consider this as an act abdicating the independence of the Comelec. Publication Requirement

bodies. What is prohibited is the situation where one files a complaint against a respondent initially with one office (such as the Comelec) for preliminary investigation which was immediately acted upon by said office and the re-filing of substantially the same complaint with another office (such as the DOJ). The subsequent assumption of jurisdiction by the second office over the cases filed will not be allowed. Indeed, it is a settled rule that the body or agency that first takes cognizance of the complaint shall exercise jurisdiction to the exclusion of 105 106 the others. As cogently held by the Court in Department of Justice v. Hon. Liwag: To allow the same complaint to be filed successively before two or more investigative bodies would promote multiplicity of proceedings. It would also cause undue difficulties to the respondent who would have to appear and defend his position before every agency or body where the same complaint was filed. This would lead hapless litigants at a loss as to where to appear and plead their cause or defense. There is yet another undesirable consequence. There is the distinct possibility that the two bodies exercising jurisdiction at the same time would come up with conflicting resolutions regarding the guilt of the respondents. Finally, the second investigation would entail an unnecessary expenditure of public funds, and the use of valuable and limited resources of Government, in a duplication of proceedings already started with the In the conduct of preliminary investigation, the DOJ is governed by the Rules of Court, while the Comelec is governed by the 1993 Comelec Rules of Procedure. There is, therefore, no need to promulgate new Rules as may be complementary to the DOJ and Comelec Rules. As earlier discussed, considering that Joint Order No. 001-2011 only enables the Comelec and the DOJ to exercise powers which are already vested in them by the Constitution and other existing laws, it need not be published for it to be valid and effective. A close examination of the Joint Committees Rules of Procedure, however, would show that its provisions affect the public. Specifically, the following provisions of the Rules either restrict the rights of or provide remedies to the affected parties, to wit: (1) Section 1 provides that the Joint Committee will no longer entertain complaints from the public as soon as the Fact-Finding Team submits its final report, except for such complaints involving offenses mentioned in the Fact-Finding Teams Final Report; (2) Section 2 states that the Joint Committee shall not entertain a Motion to Dismiss; and (3) Section 5 provides that a Motion for Reconsideration may be availed of by the aggrieved parties against the Joint Committees Resolution. Consequently, publication of the Rules is necessary. The publication requirement covers not only statutes but administrative regulations and issuances, as 108 clearly outlined in Taada v. Tuvera: We hold therefore that all statutes, including those of local application and private laws, shall be published

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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 also 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 109 followed by their subordinates in the performance of their duties. 110 As opposed to Honasan II v. The Panel of Investigating Prosecutors of the Department of Justice, where the Court held that OMB-DOJ Joint Circular No. 95-001 is only an internal arrangement between the DOJ and the Office of the Ombudsman outlining the authority and responsibilities among prosecutors of both offices in the conduct of preliminary investigation, the assailed Joint Committees Rules of Procedure regulate not only the prosecutors of the DOJ and the Comelec but also the conduct and rights of persons, or the public in general. The publication requirement should, therefore, not be ignored. Publication is a necessary component of procedural due process to give as wide publicity as possible so 111 that all persons having an interest in the proceedings may be notified thereof. The requirement of publication is intended to satisfy the basic requirements of due process. It is imperative for it will be the height of injustice to punish or otherwise burden a citizen for the transgressions of a law or rule of which 112 he had no notice whatsoever. Nevertheless, even if the Joint Committees Rules of Procedure is ineffective for lack of publication, the proceedings undertaken by the Joint Committee are not rendered null and void for that reason, because the preliminary investigation was conducted by the Joint Committee pursuant to the procedures laid down in Rule 112 of the Rules on Criminal Procedure and the 1993 Comelec Rules of Procedure. Validity of the Conduct of Preliminary Investigation 113 In her Supplemental Petition, GMA outlines the incidents that took place after the filing of the instant petition, specifically the issuance by the Joint Committee of the Joint Resolution, the approval with modification of such resolution by the Comelec and the filing of information and the issuance of a warrant of arrest by the RTC. With these supervening events, GMA further assails the validity of the proceedings that took place based on the following additional grounds: (1) the undue and unbelievable haste attending the Joint Committees conduct of the preliminary investigation, its resolution of the case, and its referral to and approval by the Comelec, taken in conjunction with the statements from the Office of the President, demonstrate a deliberate and reprehensible pattern of abuse of inalienable rights and a blatant disregard of the envisioned integrity and independence of the Comelec; (2) as it stands, the creation of the Joint Committee was for the singular purpose of railroading the proceedings in the prosecution of the petitioner and in flagrant violation of her right to due process and equal protection of the laws; (3) the proceedings of the Joint Committee cannot be considered impartial and fair, considering that respondents have acted as law enforcers, who conducted the criminal investigation, gathered evidence and thereafter ordered the filing of complaints, and at the same time authorized preliminary investigation based on the complaints they caused to be filed; (4) the Comelec became an instrument of oppression when it hastily approved the resolution of the Joint Committee even if two of its members were in no position to cast their votes as they admitted to not having yet read the voluminous records of the cases; and (5) flagrant and repeated

violations of her right to due process at every stage of the proceedings demonstrate a deliberate attempt to 114 single out petitioner through the creation of the Joint Committee. 115 In their Supplement to the Consolidated Comment, respondents accuse petitioners of violating the rule against forum shopping. They contend that in filing the Supplemental Petition before the Court, the Urgent Omnibus Motion Ad Cautelam with the RTC, and the Motion to Vacate Ad Cautelam with the Comelec, GMA raises the common issue of whether or not the proceedings before the Joint Committee and the Comelec are null and void for violating the Constitution. Respondents likewise claim that the issues raised in the supplemental petition are factual which is beyond the power of this Court to decide. We cannot dismiss the cases before us on the ground of forum shopping. Forum shopping is the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another and possibly favorable opinion in another forum other than by appeal or the special 116 civil action of certiorari. There can also be forum shopping when a party institutes two or more suits in different courts, either simultaneously or successively, in order to ask the courts to rule on the same and related causes and/or to grant the same or substantially the same reliefs on the supposition that one or the other court would make a favorable disposition or increase a partys chances of obtaining a favorable 117 decision or action. Indeed, petitioner GMA filed a Supplemental Petition before the Court, an Urgent Omnibus Motion Ad Cautelam before the RTC, and a Motion to Vacate Ad Cautelam before the Comelec, emphasizing the unbelievable haste committed by the Joint Committee and the Comelec in disposing of the cases before them. However, a plain reading of the allegations in GMAs motion before the RTC would show that GMA raised the issue of undue haste in issuing the Joint Resolution only in support of her prayer for the trial court to hold in abeyance the issuance of the warrant of arrest, considering that her motion for reconsideration of the denial of her motion to be furnished copies of documents was not yet acted upon by the Joint Committee. If at all the constitutional issue of violation of due process was raised, it was merely incidental. More importantly, GMA raised in her motion with the RTC the finding of probable cause as she sought the judicial determination of probable cause which is not an issue in the petitions before us. GMAs ultimate prayer is actually for the court to defer the issuance of the warrant of arrest. Clearly, the reliefs sought in the RTC are different from the reliefs sought in this case. Thus, there is no forum shopping. With respect to the Motion to Vacate Ad Cautelam filed with the Comelec, while the issues raised therein are substantially similar to the issues in the supplemental petition which, therefore, strictly speaking, warrants outright dismissal on the ground of forum shopping, we cannot do so in this case in light of the 118 due process issues raised by GMA. It is worthy to note that the main issues in the present petitions are the constitutionality of the creation of the Joint Panel and the validity of the proceedings undertaken pursuant thereto for alleged violation of the constitutional right to due process. In questioning the propriety of the conduct of the preliminary investigation in her Supplemental Petition, GMA only raises her continuing objection to the exercise of jurisdiction of the Joint Committee and the Comelec. There is, therefore, no impediment for the Court to rule on the validity of the conduct of preliminary investigation. 119 In Uy v. Office of the Ombudsman, the Court explained the nature of preliminary investigation, to wit:

A preliminary investigation is held before an accused is placed on trial to secure the innocent against hasty, malicious, and oppressive prosecution; to protect him from an open and public accusation of a crime, as well as from the trouble, expenses, and anxiety of a public trial. It is also intended to protect the

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state from having to conduct useless and expensive trials. While the right is statutory rather than constitutional, it is a component of due process in administering criminal justice. The right to have a preliminary investigation conducted before being bound for trial and before being exposed to the risk of incarceration and penalty is not a mere formal or technical right; it is a substantive right. To deny the accused's claim to a preliminary investigation is to deprive him of the full measure of his right to due process. A preliminary investigation is the crucial sieve in the criminal justice system which spells for an individual the difference between months if not years of agonizing trial and possibly jail term, on the one hand, and peace of mind and liberty, on the other hand. Thus, we have characterized the right to a preliminary investigation as not a mere formal or technical right but a substantive one, forming part of due 121 process in criminal justice. In a preliminary investigation, the Rules of Court guarantee the petitioners basic due process rights such as the right to be furnished a copy of the complaint, the affidavits, and other supporting documents, and the 122 right to submit counter-affidavits, and other supporting documents in her defense. Admittedly, GMA received the notice requiring her to submit her counter-affidavit. Yet, she did not comply, allegedly because she could not prepare her counter-affidavit. She claimed that she was not furnished by Senator Pimentel pertinent documents that she needed to adequately prepare her counter-affidavit. 123 In her Omnibus Motion Ad Cautelam to require Senator Pimentel to furnish her with documents referred to in his complaint-affidavit and for production of election documents as basis for the charge of electoral sabotage, GMA prayed that the Joint Committee issue an Order directing the Fact-Finding Team and Senator Pimentel to furnish her with copies of the following documents: a. Complaint-affidavit and other relevant documents of Senator Aquilino Pimentel III filed before the Commission on Elections against Attys. Lilia Suan-Radam and Yogie Martirizar, as well as the Informations filed in the Regional Trial Court of Pasay City, Branch 114 in Criminal Case Nos. R-PSU11-03190-CR to R-PSU-11-03200-CR. . Records in the petitions filed by complainant Pimentel before the National Board of Canvassers, specifically in NBC Case Nos. 07-162, 07-168, 07-157, 07-159, 07-161 and 07-163. Documents which served as basis in the allegations of Significant findin gs specific to the protested municipalities in the Province of Maguindanao. Documents which served as basis in the allegations of Significant findings specific to the protested municipalities in the Province of Lanao del Norte. Documents which served as basis in the allegations of Significant findings specific to the protested municipalities in the Province of Shariff Kabunsuan. Documents which served as basis in the allegations of Significant findings specific to the protested municipalities in the Province of Lanao del Sur. Documents which served as basis in the allegations of Significant findings specific to the protested municipalities in the Province of Sulu.

Documents which served as basis in the allegations of Significant findings speci fic to the protested municipalities in the Province of Basilan. Documents which served as basis in the allegations of Significant findings specific to the protested 124 municipalities in the Province of Sultan Kudarat.

GMA likewise requested the production of election documents used in the Provinces of South and North 125 Cotabato and Maguindanao. The Joint Committee, however, denied GMAs motion which carried with it the denial to extend the filing of her counter-affidavit. Consequently, the cases were submitted for resolution sans GMAs and the other petitioners counter-affidavits. This, according to GMA, violates her right to due process of law. We do not agree. GMAs insistence of her right to be furnished the above-enumerated documents is based on Section 3 (b), Rule 112 of the Rules on Criminal Procedure, which reads: (b) x x x The respondent shall have the right to examine the evidence submitted by the complainant which he may not have been furnished and to copy them at his expense. If the evidence is voluminous, the complainant may be required to specify those which he intends to present against the respondent, and these shall be made available for examination or copying by the respondent at his expense, Objects as evidence need not be furnished a party but shall be made available for examination, copying or 126 photographing at the expense of the requesting party. Section 6 (a), Rule 34 of the Comelec Rules of Procedure also grants the respondent such right of examination, to wit: Sec. 6. Conduct of preliminary investigation. (a) If on the basis of the complaint, affidavits and other supporting evidence, the investigating officer finds no ground to continue with the inquiry, he shall recommend the dismissal of the complaint and shall follow the procedure prescribed in Sec. 8 (c) of this Rule. Otherwise, he shall issue a subpoena to the respondent, attaching thereto a copy of the complaint, affidavits and other supporting documents giving said respondent ten (10) days from receipt within which to submit counter-affidavits and other supporting documents. The respondent shall have the right to examine all other evidence submitted by the complainant. Clearly from the above-quoted provisions, the subpoena issued against respondent [therein] should be accompanied by a copy of the complaint and the supporting affidavits and documents. GMA also has the right to examine documents but such right of examination is limited only to the documents or evidence submitted by the complainants (Senator Pimentel and the Fact-Finding Team) which she may not have been furnished and to copy them at her expense. While it is true that Senator Pimentel referred to certain election documents which served as bases in the allegations of significant findings specific to the protested municipalities involved, there were no annexes 128 or attachments to the complaint filed. As stated in the Joint Committees Order dated November 15, 2011 denying GMAs Omnibus Motion Ad Cautelam, Senator Pimentel was ordered to furnish petitioners

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129 with all the supporting evidence. However, Senator Pimentel manifested that he was adopting all the 130 affidavits attached to the Fact-Finding Teams Initial Report. Therefore, when GMA was furnished with the documents attached to the Initial Report, she was already granted the right to examine as guaranteed by the Comelec Rules of Procedure and the Rules on Criminal Procedure. Those were the only documents submitted by the complainants to the Committee. If there are other documents that were referred to in Senator Pimentels complaint but were not submitted to the Joint Committee, the latter considered those documents unnecessary at that point (without foreclosing the relevance of other evidence 131 that may later be presented during the trial) as the evidence submitted before it were considered 132 adequate to find probable cause against her. Anyway, the failure of the complainant to submit documents supporting his allegations in the complaint may only weaken his claims and eventually works for the benefit of the respondent as these merely are allegations unsupported by independent evidence. We must, however, emphasize at this point that during the preliminary investigation, the complainants are not obliged to prove their cause beyond reasonable doubt. It would be unfair to expect them to present the 133 entire evidence needed to secure the conviction of the accused prior to the filing of information. A preliminary investigation is not the occasion for the full and exhaustive display of the parties respective evidence but the presentation only of such evidence as may engender a well-grounded belief that an 134 offense has been committed and that the accused is probably guilty thereof and should be held for trial. 135 Precisely there is a trial to allow the reception of evidence for the prosecution in support of the charge. With the denial of GMAs motion to be furnished with and examine the documents referred to in Senator Pimentels complaint, GMAs motion to extend the filing of her counter-affidavit and countervailing evidence was consequently denied. Indeed, considering the nature of the crime for which GMA was subjected to preliminary investigation and the documents attached to the complaint, it is incumbent upon the Joint Committee to afford her ample time to examine the documents submitted to [the Joint Committee] in order that she would be able to prepare her counter-affidavit. She cannot, however, insist to examine documents not in the possession and custody of the Joint Committee nor submitted by the complainants. Otherwise, it might cause undue and unnecessary delay in the disposition of the cases. This undue delay might result in the violation of the right to a speedy disposition of cases as enshrined in Section 16, Article III of the Constitution which states that all persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies. The constitutional right to speedy disposition of cases is not limited to the accused in criminal proceedings but extends to all parties in all cases, including civil and administrative cases, and in all proceedings, including judicial and 136 quasi-judicial hearings. Any party to a case has the right to demand on all officials tasked with the 137 administration of justice to expedite its disposition. Society has a particular interest in bringing swift 138 prosecutions, and the societys representatives are the ones who should protect that interest. Even assuming for the sake of argument that the denial of GMAs motion to be furnished with and examine the documents referred to in Senator Pimentels complaint carried with it the denial to extend the filing of her counter-affidavit and other countervailing evidence rendering the preliminary investigation irregular, such irregularity would not divest the RTC of jurisdiction over the case and would not nullify the warrant of arrest issued in connection therewith, considering that Informations had already been filed against petitioners, except Mike Arroyo. This would only compel us to suspend the proceedings in the RTC and remand the case to the Joint Committee so that GMA could submit her counter-affidavit and other countervailing evidence if she still opts to. However, to do so would hold back the progress of the case which is anathema to the accuseds right to speedy disposition of cases.

It is well settled that the absence [or irregularity] of preliminary investigation does not affect the courts jurisdiction over the case. Nor does it impair the validity of the criminal information or render it defective. 139 Dismissal is not the remedy. Neither is it a ground to quash the information or nullify the order of 140 arrest issued against the accused or justify the release of the accused from detention. The proper course of action that should be taken is to hold in abeyance the proceedings upon such information and to remand 141 the case for the conduct of preliminary investigation. 142 In the landmark cases of Cojuangco, Jr. v. Presidential Commission on Good Government [PCGG] 143 and Allado v. Diokno, we dismissed the criminal cases and set aside the informations and warrants of arrest. In Cojuangco, we dismissed the criminal case because the information was filed by the PCGG which we declared to be unauthorized to conduct the preliminary investigation and, consequently, file the information as it did not possess the cold neutrality of an impartial judge. In Allado, we set aside the warrant of arrest issued against petitioners therein and enjoined the trial court from proceeding further for lack of probable cause. For one, there was serious doubt on the reported death of the victim in that case since the corpus delicti had not been established nor had his remains been recovered; and based on the evidence submitted, there was nothing to incriminate petitioners therein. In this case, we cannot reach the same conclusion because the Information filed before the RTC of Pasay City was filed by the Comelec en banc which had the authority to file the information for electoral sabotage and because the presence or absence of probable cause is not an issue herein. As can be gleaned from their assignment of errors/issues, petitioners did not question the finding of probable cause in any of their supplemental petitions. It was only in GMAs memorandum where she belatedly included a discussion on the insufficiency of the evidence supporting the finding of probable cause for the filing of the Information for electoral sabotage 144 against her. A closer look at her arguments, however, would show that they were included only to highlight the necessity of examining the election documents GMA requested to see before she could file her counter-affidavit. At any rate, since GMA failed to submit her counter-affidavit and other countervailing evidence within the period required by the Joint Committee, we cannot excuse her from non- compliance. There might have been overzealousness on the part of the Joint Committee in terminating the investigation, endorsing the Joint Resolution to the Comelec for approval, and in filing the information in court. However, speed in the conduct of proceedings by a judicial or quasi-judicial officer cannot per se be 145 instantly attributed to an injudicious performance of functions. The orderly administration of justice 146 remains the paramount consideration with particular regard to the peculiar circumstances of each case. To be sure, petitioners were given the opportunity to present countervailing evidence. Instead of complying with the Joint Committees directive, several motions were filed but were denied by the Joint Committee. Consequently, petitioners right to submit counter-affidavit and countervailing evidence was forfeited. Taking into account the constitutional right to speedy disposition of cases and following the procedures set forth in the Rules on Criminal Procedure and the Comelec Rules of Procedure, the Joint Committee finally reached its conclusion and referred the case to the Comelec. The latter, in turn, performed its task and filed the information in court. Indeed, petitioners were given the opportunity to be heard. They even actively participated in the proceedings and in fact filed several motions before the Joint Committee. Consistent with the constitutional mandate of speedy disposition of cases, unnecessary delays should be avoided. Finally, we take judicial notice that on February 23, 2012, GMA was already arraigned and entered a plea of not guilty to the charge against her and thereafter filed a Motion for Bail which has been granted. Considering that the constitutionality of the creation of the Joint Panel is sustained, the actions of the Joint Committee and Fact-Finding Team are valid and effective. As the information was filed by the Commission authorized to do so, its validity is sustained. Thus, we consider said entry of plea and the

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Petition for Bail waiver on the part of GMA of her right to submit counter- affidavit and countervailing evidence before the Joint Committee, and recognition of the validity of the information against her. Her act indicates that she opts to avail of judicial remedies instead of the executive remedy of going back to the Joint Committee for the submission of the counter- affidavit and countervailing evidence. Besides, as discussed earlier, the absence [or irregularity] of preliminary investigation does not affect the courts jurisdiction over the case nor does it impair the validity of the criminal information or render it defective. It must be stressed, however, that this supervening event does not render the cases before the Court moot and academic as the main issues raised by petitioners are the constitutionality of the creation of the Joint Committee and the Fact-Finding Team and the validity of the proceedings undertaken pursuant to their respective mandates. The Court notes that the Joint Committee and the Comelec have not disposed of the cases of the other respondents subjects of the preliminary investigation as some of them were subjected to further investigation. In order to remove the cloud of doubt that pervades that petitioners are being singled out, it is to the best interest of all the parties concerned that the Joint Committee and the Comelec terminate the proceedings as to the other respondents therein and not make a piecemeal disposition of the cases. A peripheral issue which nonetheless deserves our attention is the question about the credibility of the Comelec brought about by the alleged professional relationship between Comelec Chairman Brillantes on one hand and the complainant Senator Pimentel and Fernando Poe, Jr. (FPJ), GMAs rival in the 2004 147 elections, on the other hand; and by the other Commissioners reasons for their partial inhibition. To be sure, Chairman Brillantes relationship with FPJ and Senator Pimentel is not one of the grounds for the mandatory disqualification of a Commissioner. At its most expansive, it may be considered a ground for voluntary inhibition which is indeed discretionary as the same was primarily a matter of conscience and sound discretion on the part of the Commissioner judge based on his or her rational and logical assessment 148 of the case. Bare allegations of bias and prejudice are not enough in the absence of clear and convincing evidence to overcome the presumption that a judge will undertake his noble role to dispense 149 justice according to law and evidence without fear or favor. It being discretionary and since Commissioner Brillantes was in the best position to determine whether or not there was a need to inhibit from the case, his decision to participate in the proceedings, in view of higher interest of justice, equity and public interest, should be respected. While a party has the right to seek the inhibition or disqualification of a judge (or prosecutor or Commissioner) who does not appear to be wholly free, disinterested, impartial, and independent in handling the case, this right must be weighed with his duty to 150 decide cases without fear of repression. 151 Indeed, in Javier v. Comelec, the Court set aside the Comelecs decision against Javier when it was disclosed that one of the Commissioners who had decided the case was a law partner of Javiers opponent and who had refused to excuse himself from hearing the case. Javier, however, is not applicable in this case. First, the cited case involves the Comelecs exercise of its adjudicatory function as it was called upon to resolve the propriety of the proclamation of the winner in the May 1984 elections for Batasang Pambansa of Antique. Clearly, the grounds for inhibition/disqualification were applicable. Second, the case arose at the time where the purity of suffrage has been defiled and the popular will scorned through 152 the confabulation of those in authority. In other words, the controversy arose at the time when the public confidence in the Comelec was practically nil because of its transparent bias in favor of the 153 administration. Lastly, in determining the propriety of the decision rendered by the Comelec, the Court took into consideration not only the relationship (being former partners in the law firm) between private respondents therein, Arturo F. Pacificador, and then Comelec Commissioner Jaime Opinion (Commissioner Opinion) but also the general attitude of the Comelec toward the party in power at that

time. Moreover, the questioned Comelec decision was rendered only by a division of the Comelec. The Court thus concluded in Javier that Commissioner Opinions refusal to inhibit himself divested the Comelecs Second Division of the necessary vote for the questioned decision and rendered the 154 proceedings null and void. On the contrary, the present case involves only the conduct of preliminary investigation and the questioned resolution is an act of the Comelec En Banc where all the Commissioners participated and more than a majority (even if Chairman Brillantes is excluded) voted in favor of the assailed Comelec resolution. Unlike in 1986, public confidence in the Comelec remains. The Commissioners have already taken their positions in light of the claim of bias and partiality and the causes of t heir partial inhibition. Their positions should be respected confident that in doing so, they had the end in view of ensuring that the credibility of the Commission is not seriously affected. To recapitulate, we find and so hold that petitioners failed to establish any constitutional or legal impediment to the creation of the Joint DOJ- Comelec Preliminary Investigation Committee and FactFinding Team. First, while GMA and Mike Arroyo were among those subjected to preliminary investigation, not all respondents therein were linked to GMA; thus, Joint Order No. 001-2011 does not violate the equal protection clause of the Constitution. Second, the due process clause is likewise not infringed upon by the alleged prejudgment of the case as petitioners failed to prove that the Joint Panel itself showed such bias and partiality against them. Neither was it shown that the Justice Secretary herself actually intervened in the conduct of the preliminary investigation. More importantly, considering that the Comelec is a collegial body, the perceived prejudgment of Chairman Brillantes as head of the Comelec cannot be considered an act of the body itself. Third, the assailed Joint Order did not create new offices because the Joint Committee and Fact-Finding Team perform functions that they already perform by virtue of the Constitution, the statutes, and the Rules of Court. Fourth, in acting jointly with the DOJ, the Comelec cannot be considered to have abdicated its independence in favor of the executive branch of government. Resolution No. 9266 was validly issued by the Comelec as a means to fulfill its duty of ensuring the prompt investigation and prosecution of election offenses as an adjunct of its mandate of ensuring a free, orderly, honest, peaceful, and credible elections. The role of the DOJ in the conduct of preliminary investigation of election offenses has long been recognized by the Comelec because of its lack of funds and legal officers to conduct investigations and to prosecute such cases on its own. This is especially true after R.A. No. 9369 vested in the Comelec and the DOJ the concurrent jurisdiction to conduct preliminary investigation of all election offenses. While we uphold the validity of Comelec Resolution No. 9266 and Joint Order No. 001-2011, we declare the Joint Committees Rules of Procedure infirm for failure to comply with the publication requirement. Consequently, Rule 112 of the Rules on Criminal Procedure and the 1993 Comelec Rules of Procedure govern. Fifth, petitioners were given the opportunity to be heard. They were furnished a copy of the complaint, the affidavits, and other supporting documents submitted to the Joint Committee and they were required to submit their counter-affidavit and countervailing evidence. As to petitioners Mike Arroyo and Abalos, the pendency of the cases before the Court does not automatically suspend the proceedings before the Joint Committee nor excuse them from their failure to file the required counter-affidavits. With the foregoing disquisitions, we find no reason to nullify the proceedings undertaken by the Joint Committee and the Comelec in the electoral sabotage cases against petitioners.

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WHEREFORE, premises considered, the petitions and supplemental petitions are DISMISSED. Comelec Resolution No. 9266 dated August 2, 2011, Joint Order No. 001-2011 dated August 15, 2011, and the Fact- Finding Teams Initial Report dated October 20, 2011, are declared VALID. However, the Rules of Procedure on the Conduct of Preliminary Investigation on the Alleged Election Fraud in the 2004 and 2007 National Elections is declared INEFFECTIVE for lack of publication. In view of the constitutionality of the Joint Panel and the proceedings having been conducted in accordance with Rule 112 of the Rules on Criminal Procedure and Rule 34 of the Comelec Rules of Procedure, the conduct of the preliminary investigation is hereby declared VALID. 6. BPI vs Hong On September 16, 1997, the EYCO Group of Companies (EYCO) filed a petition for suspension of payments and rehabilitation before the Securities and Exchange Commission (SEC), docketed as SEC Case No. 09-97-5764. A stay order was issued on September 19, 1997 enjoining the disposition in any manner except in the ordinary course of business and payment outside of legitimate business expenses during the pendency of the proceedings, and suspending all actions, claims and proceedings against EYCO until further orders from the SEC.[3] On December 18, 1998, the hearing panel approved the proposed rehabilitation plan prepared by EYCO despite the recommendation of the management committee for the adoption of the rehabilitation plan prepared and submitted by the steering committee of the Consortium of Creditor Banks which appealed the order to the Commission. [4] On September 14, 1999, the SEC rendered its decision disapproving the petition for suspension of payments, terminating EYCO s proposed rehabilitation plan and ordering the dissolution and liquidation of the petitioning corporation. The case was remanded to the hearing panel for liquidation proceedings.[5] On appeal by EYCO, (CA-G.R. SP No. 55208) the CA upheld the SEC ruling. EYCO then filed a petition for certiorari before this Court, docketed as G.R. No. 145977,which case was eventually dismissed under Resolution dated May 3, 2005 upon joint manifestation and motion to dismiss filed by the parties. [6] Said resolution had become final and executory on June 16, 2005.[7] Sometime in November 2000 while the case was still pending with the CA, petitioner Bank of the Philippine Islands (BPI), filed with the Office of the Clerk of Court, Regional Trial Court of Valenzuela City, a petition for extra-judicial foreclosure of real properties mortgaged to it by Eyco Properties, Inc. and Blue Star Mahogany, Inc. Public auction of the mortgaged properties was scheduled on December 19, 2000.[8] Claiming that the foreclosure proceedings initiated by petitioner was illegal, respondent Eduardo Hong, an unsecured creditor of Nikon Industrial Corporation, one of the companies of EYCO, filed an action for injunction and damages against the petitioner in the same court (RTC of Valenzuela City). On its principal cause of action, the complaint alleged that: 18. The ex-officio sheriff has no authority to sell the mortgaged properties. Upon his appointment as liquidator, Edgardo Tarriela was empowered by the SEC to receive and preserve all assets, and cause their valuation (SEC Rules on Corporate Recovery, Rule VI, Section 64). Therefore, the SEC retains jurisdiction over the mortgaged properties of EYCO Properties, Inc. To allow the ex-officio sheriff to take possession of the mortgaged properties and sell the same in a foreclosure sale would be in derogation of said jurisdiction. 19. All the assets of the EYCO Group should thus be surrendered for collation to the liquidator and all claims against the EYCO Group should be filed with the liquidator in the liquidation proceedings with the SEC. The SEC, at which the liquidation is pending, has jurisdiction over the mortgaged properties to the exclusion of any other court. Consequently, the ex-officio sheriff has absolutely no jurisdiction to issue the notice of sheriffs sale and to sell the mortgaged properties on 19 December 2000. 20. Moreover, the sale of the mortgaged properties on 19 December 2000 would give undue preference to defendant FEBTC to the detriment of other creditors, particularly plaintiff. This was specifically

proscribed by the Supreme Court stating in the case of Bank of the Philippine Islands v. Court of Appeals that whenever a distressed corporation asks SEC for rehabilitation and suspension of payments, preferred creditors may no longer assert such preference, but shall stand on equal footing with other creditors. Consequently, foreclosure should be disallowed so as not to prejudice other creditors or cause discrimination among them.[9] (Emphasis supplied.) After hearing, the trial court issued a temporary restraining order (TRO). Petitioner filed a motion to dismiss[10] arguing that by plaintiffs own allegations in the complaint, jurisdiction over the reliefs prayed for belongs to the SEC, and that plaintiff is actually resorting to forum shopping since he has filed a claim with the SEC and the designated Liquidator in the ongoing liquidation of the EYCO Group of Companies. In his Opposition,[11] plaintiff (respondent) asserted that the RTC has jurisdiction on the issue of propriety and validity of the foreclosure by petitioner, in accordance with Section 1, Rule 4 of the 1997 Rules of Civil Procedure, as amended, the suit being in the nature of a real action. On January 17, 2001, the trial court denied the motion to dismiss.[12] Petitioners motion for reconsideration was likewise denied.[13] Petitioner challenged the validity of the trial courts ruling before the CA via a petition for certiorari under Rule 65. The CA affirmed the trial courts denial of petitioners motion to dismiss. It held that questions relating to the validity or legality of the foreclosure proceedings, including an action to enjoin the same, must necessarily be cognizable by the RTC, notwithstanding that the SEC likewise possesses the power to issue injunction in all cases in which it has jurisdiction as provided in Sec. 6 (a) of Presidential Decree (P.D.) No. 902-A. Further, the CA stated that an action for foreclosure of mortgage and all incidents relative thereto including its validity or invalidity is within the jurisdiction of the RTC and is not among those cases over which the SEC exercises exclusive and original jurisdiction under Sec. 5 of P.D. No. 902A. Consequently, no grave abuse of discretion was committed by the trial court in issuing the assailed orders. With the CAs denial of its motion for reconsideration, petitioner is now before this Court raising the sole issue of whether the RTC can take cognizance of the injunction suit despite the pendency of SEC Case No. 09-97-5764. The petition has no merit. Jurisdiction is defined as the power and authority of a court to hear and decide a case. [14] A courts jurisdiction over the subject matter of the action is conferred only by the Constitution or by statute.[15] The nature of an action and the subject matter thereof, as well as which court or agency of the government has jurisdiction over the same, are determined by the material allegations of the complaint in relation to the law involved and the character of the reliefs prayed for, whether or not the complainant/plaintiff is entitled to any or all of such reliefs.[16] And jurisdiction being a matter of substantive law, the established rule is that the statute in force at the time of the commencement of the action determines the jurisdiction of the court.[17] Perusal of the complaint reveals that respondent does not ask the trial court to rule on its interest or claim -- as an unsecured creditor of two companies under EYCO -- against the latters properties mortgaged to petitioner. The complaint principally seeks to enjoin the foreclosure proceedings initiated by petitioner over those properties on the ground that such properties are held in trust and placed under the jurisdiction of the appointed Liquidator in SEC Case No. 09-97-5764. Thus, Civil Case No. 349-V-00 is one for injunction with prayer for damages. An action for injunction is a suit which has for its purpose the enjoinment of the defendant, perpetually or for a particular time, from the commission or continuance of a specific act, or his compulsion to continue performance of a particular act. It has an independent existence, and is distinct from the ancillary remedy of preliminary injunction which cannot exist except only as a part or an incident of an independent action or proceeding. In an action for injunction, the auxiliary remedy of preliminary injunction, prohibitory or mandatory, may issue.[18] As a rule, actions for injunction and damages lie within the jurisdiction of the RTC pursuant to Section 19 of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, as amended by Republic Act (R.A.) No. 7691. Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigations is incapable of pecuniary estimation;

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xxxx (6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising x x x judicial or quasi-judicial functions; xxxx (8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses, and costs or the value of the property in controversy exceeds Three hundred thousand pesos (P300,000.00) or, in such other cases in Metro Manila, where the demand exclusive of the above-mentioned items exceeds Four hundred thousand pesos (P400,000.00). (Italics supplied.) On the other hand, Sec. 6 (a) of P.D. No. 902-A empowered the SEC to issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction. Such cases in which the SEC exercises original and exclusive jurisdiction are the following: (a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder, partners, members of associations or organizations registered with the Commission; (b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; and (c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations.[19] Previously, under the Rules of Procedure on Corporate Recovery, the SEC upon termination of cases involving petitions for suspension of payments or rehabilitation may, motu proprio, or on motion by any interested party, or on the basis of the findings and recommendation of the Management Committee that the continuance in business of the debtor is no longer feasible or profitable, or no longer works to the best interest of the stockholders, parties-litigants, creditors, or the general public, order the dissolution of the debtor and the liquidation of its remaining assets appointing a Liquidator for the purpose. [20] The debtors properties are then deemed to have been conveyed to the Liquidator in trust for the benefit of creditors, stockholders and other persons in interest. This notwithstanding, any lien or preference to any property shall be recognized by the Liquidator in favor of the security or lienholder, to the extent allowed by law, in the implementation of the liquidation plan.[21] However, R.A. No. 8799, which took effect on August 8, 2000, transferred to the appropriate regional trial courts the SECs jurisdiction over those cases enumerated in Sec. 5 of P.D. No. 902 A. Section 5.2 of R.A. No. 8799 provides: SEC. 5.2 The Commissions jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. (Emphasis supplied.) Upon the effectivity of R.A. No. 8799, SEC Case No. 09-97-5764 was no longer pending. The SEC finally disposed of said case when it rendered on September 14, 1999 the decision disapproving the petition for suspension of payments, terminating the proposed rehabilitation plan, and ordering the

dissolution and liquidation of the petitioning corporation. With the enactment of the new law, jurisdiction over the liquidation proceedings ordered in SEC Case No. 09-97-5764 was transferred to the RTC branch designated by the Supreme Court to exercise jurisdiction over cases formerly cognizable by the SEC. As this Court held in Consuelo Metal Corporation v. Planters Development Bank [22]: The SEC assumed jurisdiction over CMCs petition for suspension of payment and issued a suspension order on 2 April 1996 after it found CMCs petition to be sufficient in form and substance. While CMCs petition was still pending with the SEC as of 30 June 2000, it was finally disposed of on 29 November 2000 when the SEC issued its Omnibus Order directing the dissolution of CMC and the transfer of the liquidation proceedings before the appropriate trial court. The SEC finally disposed of CMCs petition for suspension of payment when it determined that CMC could no longer be successfully rehabilitated. However, the SECs jurisdiction does not extend to the liquidation of a corporation. While the SEC has jurisdiction to order the dissolution of a corporation, jurisdiction over the liquidation of the corporation now pertains to the appropriate regional trial courts. This is the reason why the SEC, in its 29 November 2000 Omnibus Order, directed that the proceedings on and implementation of the order of liquidation be commenced at the Regional Trial Court to which this case shall be transferred. This is the correct procedure because the liquidation of a corporation requires the settlement of claims for and against the corporation, which clearly falls under the jurisdiction of the regular courts. The trial court is in the best position to convene all the creditors of the corporation, ascertain their claims, and determine their preferences.[23] (Emphasis supplied.) There is no showing in the records that SEC Case No. 09-97-5764 had been transferred to the appropriate RTC designated as Special Commercial Court at the time of the commencement of the injunction suit on December 18, 2000. Given the urgency of the situation and the proximity of the scheduled public auction of the mortgaged properties as per the Notice of Sheriffs Sale, respondent was constrained to seek relief from the same court having jurisdiction over the foreclosure proceedings RTC of Valenzuela City. Respondent thus filed Civil Case No. 349-V-00 in the RTC of Valenzuela City on December 18, 2000 questioning the validity of and enjoining the extrajudicial foreclosure initiated by petitioner. Pursuant to its original jurisdiction over suits for injunction and damages, the RTC of Valenzuela City, Branch 75 properly took cognizance of the injunction case filed by the respondent. No reversible error was therefore committed by the CA when it ruled that the RTC of Valenzuela City, Branch 75 had jurisdiction to hear and decide respondents complaint for injunction and damages. Lastly, it may be mentioned that while the Consortium of Creditor Banks had agreed to end their opposition to the liquidation proceedings upon the execution of the Agreement[24] dated February 10, 2003, on the basis of which the parties moved for the dismissal of G.R. No. 145977, it is to be noted that petitioner is not a party to the said agreement. Thus, even assuming that the SEC retained jurisdiction over SEC Case No. 09-97-5764, petitioner was not bound by the terms and conditions of the Agreement relative to the foreclosure of those mortgaged properties belonging to EYCO and/or other accommodation mortgagors. 7. Land Bank vs Montalvan Respondents Paz O. Montalvan and Jesus J. Montalvan are spouses and registered owners of parcels of land situated in Balintonga (formerly Monterico) Aloran, Misamis Occidental. The said property is covered by Transfer Certificate of Title Nos. (TCTs) T-285 and T-294 with an area of approximately 162.9669 hectares. On 12 September 1989, they voluntarily offered to sell the entire property to the Government under the Comprehensive Agrarian Reform Program (CARP). In reply to the voluntary offer to sell (VOS) of respondents, the Department of Agrarian Reform (DAR), through its Regional Office (Region 10) in Cagayan de Oro City, informed them that it was focusing only on 147.6913 hectares of the entire 162.9669-hectare land. After conducting a field investigation report on the chosen portion, which it reduced further to only 72 hectares out of the 147.6913

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hectares that it would be acquiring (the expropriated portion), the DAR found that the remaining 75.6913hectare land (the excluded portion) was not suitable for agriculture.[3] Thereafter, the DAR Regional Office sent a Notice of Land Valuation, by which it offered to pay respondents the amount of 510,768.72 for the expropriated portion of their property, including improvements thereon. Respondents raised their objections to the valuation and argued that the coconut trees alone, if converted to coco lumber bring a net value of at least 35,000 per hectare, and the offer was for only 30,000 per hectare, or less than the actual value of the land and the coconuts on it.[4] (Emphasis supplied.) However, the DAR explained that it could only acquire the 72 hectares of the expropriated portion, because the excluded portion was above an 18% slope or was undeveloped, which made it exempt from CARP coverage. The DAR likewise noted the rejection by respondents of its valuation and stated that the matter had been referred to the DAR Adjudication Board (DARAB) for administrative summary proceedings to determine the compensation for the expropriated portion. On 07 February 1992, without any action forthcoming from the DARAB, respondents directly filed a separate Complaint with the RTC, acting as a SAC, for the latter to fix the just compensation for the expropriated portion of their agricultural lands. Petitioner LBP moved to dismiss respondents Complaint on the ground that the proceedings for the valuation of the lands were still pending with the DARAB. In its Order dated 30 March 1992, the SAC denied the Motion to Dismiss. It likewise denied the subsequent Motion for Reconsideration filed by petitioner LBP. Hence, the latter duly filed its Answer and raised, as an affirmative defense, respondents failure to exhaust administrative remedies before resorting to the Complaint for just compensation before the SAC. Significantly, while the cases in the DARAB and the SAC were still pending, the DAR on 03 September 1992 caused the partial cancellation of TCT No. T-285 in the name of respondents. A new title (TCT No. T-11696) in the name of the Republic of the Philippines was issued covering the entire 147.6913 hectares. Nevertheless, petitioner LBP made no deposit in favor of respondents Montalvan as just compensation for the entire land. During the trial in the SAC, Engr. Jose Montalvan, the son of respondents, testified that the DAR had indeed acquired both the expropriated and the excluded portions of his parents lands. These portions, previously titled under TCT No. T -285, were acquired by the DAR, even if the investigation and valuations conducted by the latter and petitioner LBP were limited only to the 72-hectare expropriated portion. In its Decision dated 12 October 1992, the DARAB ruled on the referral with respect to the disputed valuation and upheld the DARs earlier valuation of 510,768.72 for the 72 -hectare expropriated land.[5] On 21 January 1993, the DARAB issued a Certification that confirmed that no appeal was filed from its Decision, which, hence, became final and executory. Citing the recent DARAB Decision and Certification, petitioner LBP moved, for a second time, for the dismissal of respondents Complaint in the SAC. Yet, the SAC rejected petitioners plea and again denied its second Motion to Dismiss.[6] In the Order dated 11 October 1995, the SAC directed petitioner LBP to revaluate the property using the guidelines in the recently amended DAR Administrative Orders.[7] Hence, petitioner bank submitted a revaluation of the expropriated portion and offered 1,020,010.66 as just compensation. Despite the increase in petitioners earlier offer, respondents Montalvan rejected it.

disposed as follows: WHEREFORE, in light of the foregoing considerations, judgment is hereby rendered ordering the Department of Agrarian Reform to acquire plaintiffs 162.9669 hectares of land embraced in TCT No. T-285 and TCT No. T-294, subject to retention, if qualified; and ordering Land Bank to pay for and as just compensation for the 72 hectares at 50,000.00 per hectare and at 35,000.00 per hectare for the rest of the areas; and to pay the costs.[11] Acting on the Notice of Appeal filed by petitioner LBP,[12] the CA issued the questioned 18 March 2009 Decision and affirmed the award of just compensation to respondents Montalvan, but deleted the payment of costs, as follows: WHEREFORE, the Decision dated March 15, 2002 of the Regional Trial Court, Branch 15 of Ozamis City, acting as a Special Agrarian Court, appealed from is AFFIRMED with the modification that since the DAR actually acquired way back September 3, 1992 plaintiffs land known as Lot 1-Psu 53883 containing 147.6913 hectares covered by TCT No. T-285 previously in the name of the plaintiffs and now covered by TCT No. T-11696 in the name of the Republic of the Philippines, the defendant Land Bank of the Philippines is hereby Ordered to pay just compensation for the same at Fifty thousand pesos (50,000.00) per hectare for the 72 hectares and at Thirty-five thousand pesos (35,000.00) per hectare for the rest of the area of 75.6913 hectares, and that the payment of costs is deleted.[13] Petitioner LBP partially moved for the reconsideration of the assailed CA Decision. It argued that only the 72-hectare expropriated property was subject to CARP, but not the excluded property, which was allegedly outside the jurisdiction of the SAC. Moreover, it argued that the award of 35,000 per hectare for the 75.6913-hectare excluded portion had no factual and legal bases. However, the appellate court remained unconvinced and denied the Motion for Reconsideration.[14] Hence, the instant Rule 45 Petition filed by petitioner LBP. ISSUES A. Considering the pendency of the DARAB proceedings, whether respondents Montalvans filing with the SAC of a Petition for judicial determination of just compensation was premature and in violation of the rule on the exhaustion of administrative remedies. B. Whether the Court has authority to review the determination made by the SAC with respect to the amount of just compensation. C. Whether petitioner LBP can be directed to pay just compensation for the 75.6913-hectare excluded portion, which is now titled in the name of the Republic of the Philippines, even if these lands are not suitable for agricultural purposes. OUR RULING Finding no merit in the arguments raised by petitioner LBP, the Court denies the instant Rule 45 Petition. However, the third issue with respect to the just compensation for the excluded portion of respondents Montalvans lands deserves some consideration. With respect to the first issue, petitioner LBP argues that respondents filing with the SAC of a separate Complaint for the determination of just compensation was premature and in violation of the doctrine of exhaustion of administrative remedies. Petitioner reasoned that the revaluation proceedings in the DARAB following respondents rejection of the initial DAR offer were still pending. The line of reasoning employed by petitioner is not novel and has since been discredited by jurisprudential precedents. The SAC has been statutorily determined to have original and exclusive jurisdiction over all petitions for the determination of just compensation due to landowners under the CARP.[15]

Considering the impasse, the SAC constituted an independent panel of commissioners[8] to evaluate and assess the property, a move that was not opposed by petitioner LBP. On 30 May 2001, the panel of commissioners submitted a Commissioners Report dated 12 January 2000,[9] in which they agreed that the fair market value of the 72-hectare expropriated property of respondents was 50,000 per hectare, or a total of 3,600,000. After the submission of the Commissioners Report, petitioner LBP reassessed the land and offered to pay respondents 26,210.75 per hectare, or a total of 1,887,174.12 for the expropriated portion.[10] However, this latest valuation offer was again rejected by respondents Montalvan. Thereafter, petitioner LBP raised its objections to the Commissioners Report and alleged that the commissioners were all selected by respondents Montalvan, thus making their findings as to the market value of the expropriated portion self-serving. The SAC favored the valuations made by the Panel of Commissioners over the 72-hectare expropriated portion and even directed petitioner LBP to also pay respondents Montalvan for the 75.6913hectare excluded lands, all titled in the name of the Republic, in its Decision dated 15 March 2002, which

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This legal principle has been upheld in a number of this Courts decisions and has passed into the province of established doctrine in agrarian reform jurisprudence.[16] In fact, this Court has sustained the exclusive authority of the SAC over the DARAB, even in instances when no administrative proceedings were conducted in the DARAB.[17] In LBP v. CA,[18] the Court affirmed the jurisdiction of the SAC (RTC-Cabanatuan City, Branch 23) in determining the just compensation due to Marcia E. Ramos for her expropriated ricelands, even though the proceedings in the DARAB were still continuing at the time she resorted to the direct filing of a Complaint with the SAC. This doctrine was reiterated in LBP v. Celada,[19] in which Leonila P. Celada was permitted to file a petition for judicial determination of just compensation with the SAC (RTC-Tagbilaran City), even if the summary administrative proceedings in the DARAB (Region VIICebu City) had just been initiated. It was not an error for the SAC to assume jurisdiction over the issue of just compensation despite the pendency of the DARAB proceedings, as thus ruled by the Court: We do not agree with petitioners submission that the SAC erred in assuming jurisdiction over respondents petition for determination of just compensation despite the pendency of the administrative proceedings before the DARAB. In Land Bank of the Philippines v. Court of Appeals, the landowner filed an action for determination of just compensation without waiting for the completion of the DARABs re-evaluation of the land. The Court nonetheless held therein that the SAC acquired jurisdiction over the action for the following reason: It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners. This original and exclusive jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials original jurisdiction in compensation cases and make the RTC an appellate court for the review of administrative decisions. Thus, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the SAC by private respondent is valid. It would be well to emphasize that the taking of property under R.A. No. 6657 is an exercise of the power of eminent domain by the State. The valuation of property or determination of just compensation in eminent domain proceedings is essentially a judicial function which is vested with the courts and not with administrative agencies. Consequently, the SAC properly took cognizance of respondents petition for determination of just compensation.[20] (Emphasis supplied.) These judicial precedents are directly applicable to the case at bar. That the DARAB proceedings are still pending is not a fatal defect that will oust the SAC from its original and exclusive jurisdiction over a petition for judicial determination of just compensation in an agrarian reform case. The DAR referral of the issue of valuation to the DARAB will not prevent respondents from asserting in the

SAC their rights as landowners, especially since the function of fixing the award of just compensation is properly lodged with the trial court and is not an administrative undertaking.[21] Neither can respondents failure to file a motion for reconsideration or an appeal from the Decision of the DARAB be considered as a grave and serious violation of the doctrine of exhaustion of administrative remedies. Such reasoning would ultimately deprive the SAC of the authority to hear and decide the matter of just compensation. There is no inherent inconsistency between (a) the primary jurisdiction of the DAR to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all questions involving the implementation of agrarian reform, including those of just compensation; and (b) the original and exclusive jurisdiction of the SAC over all petitions for the determination of just compensation. The first refers to administrative proceedings, while the sec ond refers to judicial proceedings.[22] The jurisdiction of the SAC is not any less original and exclusive, because the question is first passed upon by the DAR; as the judicial proceedings are not a continuation of the administrative determination.[23] In LBP v. Escandor,[24] the Court further made the following distinctions: It is settled that the determination of just compensation is a judicial function. The DARs land valuation is only preliminary and is not, by any means, final and conclusive upon the landowner or any other interested party. In the exercise of their functions, the courts still have the final say on what the amount of just compensation will be. Although the DAR is vested with primary jurisdiction under the Comprehensive Agrarian Reform Law (CARL) of 1988 to determine in a preliminary manner the reasonable compensation for lands taken under the CARP, such determination is subject to challenge in the courts. The CARL vests in the RTCs, sitting as SACs, original and exclusive jurisdiction over all petitions for the determination of just compensation. This means that the RTCs do not exercise mere appellate jurisdiction over just compensation disputes. We have held that the jurisdiction of the RTCs is not any less original and exclusive because the question is first passed upon by the DAR. The proceedings before the RTC are not a continuation of the administrative determination. Indeed, although the law may provide that the decision of the DAR is final and unappealable, still a resort to the courts cannot be foreclosed on the theory that courts are the guarantors of the legality of administrative action.[25] (Emphasis supplied.) Applied to the instant case, the mere fact that landowners, respondents herein, failed to avail themselves of a motion for reconsideration or of an appeal from an adverse Decision of the DARAB will not affect the jurisdiction of the SAC, which had already been exercising authority over the case prior to that adverse ruling. Not being a continuation of the administrative proceedings, the pending Complaint filed by respondents Montalvan in the judicial courts will not be foreclosed by the DARABs Decision. As regards the second issue of the amount of just compensation awarded to respondents by the SAC for the 72-hectare expropriated agricultural lands, petitioner LBP again fails to convince the Court. Petitioner asks us to evaluate the SAC-appointed Panel of Commissioners evidentiary basis for determining the value of respondents property. In effect, petitioner ban k is praying for the resolution of a question of fact, which is improper in the instant Rule 45 Petition. This Court is not a trier of facts; it is not its function to reexamine the SACs factual findings, which were supported by the report of the independent Panel of Commissioners and were duly affirmed by the appellate court.[26] Absent any allegation of irregularity or grave abuse of discretion, the factual findings of the lower courts, if substantiated by the Commissioners Report, are perforce binding and conclusive on this Court and will no longer be disturbed. Hence, the judicial determination of the value of the expropriated portion amounting to 50,000 per hectare is affirmed. We now come to the third and final issue surrounding the appellate court s ruling, which directed the DAR and petitioner LBP to pay just compensation for the excluded portion of the lands of respondents Montalvan. To recall, when respondents Montalvan voluntarily offered to sell their property, the DAR

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Regional Office selected only 72 hectares as suitable for agriculture and subject to the payment of just compensation. It, however, showed no interest in acquiring under the CARP the 75.6913 hectares. A legal difficulty, however, arose before this Court when the DAR caused the transfer of the title to the entire 147.6913-hectare land, and yet offered to pay just compensation only for the expropriated, and not for the excluded, portion. Clearly, it was a mistake on the part of the Republic to transfer the title of respondents Montalvan over the entire 147.6913-hectare land. In its Field Investigation Report, the DAR established its intent to acquire only 72 hectares, which was suitable for agricultural purposes under the CARP. But instead of dividing the lands and issuing two titles over the two portions (one, subject of the CARP; and the other, excluded therefrom), the DAR simply caused the transfer of the entire title to the name of the Republic, without distinction between the expropriated and the excluded portions. Hence, the DAR unjustly enriched itself when it appropriated the entire 147.6913-hectare real property of respondents Montalvan, because the entire lot was decidedly beyond the area it had intended to subject to agrarian reform under the VOS arrangement. Even the Field Investigation Report issued by the DAR found that the excluded portion together with the five-hectare retention limit was not to be the subject of agrarian reform expropriation. Under the Civil Code,[27] there is unjust enrichment when a person retains the property of another without just or legal ground and against the fundamental principles of justice, equity and good conscience.[28] Hence, although the Court affirms the award of just compensation for the expropriated portion owned by respondents, the Republic cannot hold on to the excluded portion consisting of 75.6913 hectares, despite both portions being included under one new title issued in its favor. The consequence of our finding of unjust and improper titling of the entire property by the Republic is that the title over the excluded portion shall be returned or transferred back to respondents Montalvan, with damages. The costs of the cancellation of the present title and the issuance of two new titles over the divided portions of the property (the expropriated portion to be retained by the Republic under the VOS arrangement in the CARP, and the excluded portion to revert to respondents) shall be borne by DAR, without prejudice to the right of respondents to seek damages in a proper court. The reason for this is that DAR cannot be compelled to purchase an entire property offered under a VOS scheme, especially when some portions are unsuitable for agriculture. In LBP v. Wycoco,[29] we ruled thus: Anent the third issue, the DAR cannot be compelled to purchase the entire property voluntarily offered by Wycoco. The power to determine whether a parcel of land may come within the coverage of the Comprehensive Agrarian Reform Program is essentially lodged with the DAR. That Wycoco will suffer damages by the DARs non-acquisition of the approximately 10 hectare portion of the entire land which was found to be not suitable for agriculture is no justification to compel DAR to acquire the whole area.[30] The discretion to choose which among the lands submitted under a VOS scheme to be subject of agrarian reform coverage lies with the DAR. In this case, after its experts had examined the properties offered by respondents Montalvan, the DAR identified only the 72-hectare expropriated portion as suitable under the CARP for agricultural purposes. Both the SAC and the CA exceeded their jurisdiction when they resolved to substitute the discretion given to the DAR and ordered that even the excluded portion be subject to agrarian reform expropriation, even if found to be unsuitable for agricultural purposes. In addition, the failure of the lower courts to receive and hear evidence of the values of the excluded portions further highlights the lack of factual and legal bases for the payment of just compensation. The SAC ordered the DAR and petitioner LBP to pay 35,000 per hectare for the excluded portion.[31] However, no factual basis was offered to sustain this specific rate of payment, except for the self-serving claims of respondents Montalvan, who rejected the DARs initial valuation and cited the presence of coconut trees as justification for demanding an increase in the offer.[32] Indeed, the Commissioners Report was specifically limited to the expropriated port ion and made no findings on the value of the excluded portion.[33] The transfer of the title to the entire property, which was beyond the scope of the agrarian reform expropriation proceedings in the DARAB and the SAC, nevertheless entitles respondents as landowners to claim damages for having been deprived of the use and possession of the excluded

portion. A government agencys prolonged occupation of private property without the benefit of expropriation proceedings entitles the landowner to damages.[34] Temperate or moderate damages may be recovered when the court finds that some pecuniary loss has been suffered, but its amount cannot be proved with certainty from the nature of the case.[35] These damages may be allowed when the court is convinced that the aggrieved party suffered some pecuniary loss but, from the nature of the case, definite proof of that pecuniary loss cannot be adduced.[36] When the court is convinced that there has been such a loss, the judge is empowered to calculate moderate damages, rather than let the complainant suffer without redress from the defendants wrongful act.[37] In the instant case, the DAR violated the property rights of respondent landowners when it caused the titling of the entire land to encompass even the 75.6913-hectare excluded portion. This invasion of proprietary rights, which is imputable to the Republic, deserves redress. However, the form of that redress is limited in this case to damages arising from the erroneous titling of the property. It cannot extend to the point where the Republic would be compelled to acquire the excluded portion, beyond the coverage of the CARP, and pay just compensation for land ill-suited for agricultural purposes, as prayed for by respondents and ordered by the courts below. 8. COCOFED vs Rep. of Phil. As may be recalled, the Court, in its resolution adverted to, approved, upon motion of petitioner Philippine Coconut Producers Federation, Inc. (COCOFED), the conversion of the sequestered 753,848,312 Class "A" and "B" common shares of San Miguel Corporation (SMC), registered in the name of Coconut Industry Investment Fund (CIIF) Holding Companies (hereunder referred to as SMC Common Shares), into 753,848,312 SMC Series 1 Preferred Shares. Oppositors-intervenors Salonga, et al. anchor their plea for reconsideration on the following submission or issues: 1 The conversion of the shares is patently disadvantageous to the government and the coconut farmers, given that SMCs option to redeem ensures that the shares will be bought at less than their market value. 2 The honorable court overlooks the value of the fact that the government, as opposed to the current administration, is the winning party in the case below and thus has no incentive to convert. 2 The Court is not inclined to reconsider. The two (2) issues and the arguments and citations in support thereof are, for the most part and with slight variations, clearly replications of oppositors-intervenors previous position presented in opposition to COCOFEDs motion for approval of the conversion in question. They have been amply considered, discussed at length, and found to be bereft of merit. Oppositors-intervenors harp on the perceived economic disadvantages and harm that the government would likely suffer by the approval of the proposed conversion. Pursuing this point, it is argued that the Court missed the fact that the current value of the shares in question is increasing and the "perceived advantages of pegging the issue price at PhP 75 are dwindling on a daily basis." 3 Oppositors-intervenors concerns, encapsulated above, have been adequately addressed in some detail in

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the resolution subject of this motion. For reference we reproduce what we wrote: Salonga, et al. also argue that the proposed redemption is a right to buy the preferred shares at less than the market value. That the market value of the preferred shares may be higher than the issue price of PhP 75 per share at the time of redemption is possible. But then the opposite scenario is also possible. Again, the Court need not delve into policy decisions of government agencies because of their expertise and special knowledge of these matters. Suffice it to say that all indications show that SMC will redeem said preferred shares in the third year and not later because the dividend rate of 8% it has to pay on said shares is higher than the interest it will pay to the banks in case it simply obtains a loan. When market prices of shares are low, it is possible that interest rate on loans will likewise be low. On the other hand, if SMC has available cash, it would be prudent for it to use such cash to redeem the shares than place it in a regular bank deposit which will earn lower interests. It is plainly expensive and costly for SMC to keep on paying the 8% dividend rate annually in the hope that the market value of the shares will go up before it redeems the shares. Likewise, the conclusion that respondent Republic will suffer a loss corresponding to the difference between a high market value and the issue price does not take into account the dividends to be earned by the preferred shares for the three years prior to redemption. The guaranteed PhP 6 per share dividend multiplied by three years will amount to PhP 18. If one adds PhP 18 to the issue price of PhP 75, then the holders of the preferred shares will have actually attained a price of PhP 93 which hews closely to the speculative PhP 100 per share price indicated by movants-intervenors.4 (Emphasis added.) Elaborating on how the value of the sequestered shares will be preserved and conserved, we said: Moreover, the conversion may be viewed as a sound business strategy to preserve and conserve the value of the governments interests in CIIF SMC shares. Preservation is attaine d by fixing the value today at a significant premium over the market price and ensuring that such value is not going to decline despite negative market conditions. Conservation is realized thru an improvement in the earnings value via the 8% per annum dividends versus the uncertain and most likely lower dividends on common shares. In this recourse, it would appear that oppositors-intervenors seem unable to accept, in particular, the soundness angle of the conversion. But as we have explained, the conversion of the shares along with the safeguards attached thereto will ensure that the value of the shares will be preserved. In effect, due to the nature of stocks in general and the prevailing business conditions, the government, through the Presidential Commission on Good Government (PCGG), chose not to speculate with the CIIF SMC shares, as prima facie public property, in the hope that there would be a brighter economy in the future, and that the value of the shares would increase. We must respect the decision of the executive department, absent a clear showing of grave abuse of discretion. Next, oppositors-intervenors argue that: The very reason why the PCGG and the OSG [Office of Solicitor General] are before this Honorable Court is precisely because, on their own, they have no authority to alter the nature of the sequestered shares. This fact ought not to be novel to this Honorable Court because it is the Court itself that established such jurisprudence. Thus, the reference to separation of powers is rather gratuitous.5 The Court to be sure agrees with the thesis that, under present state of things, the PCGG and the Office of the Solicitor General have no power, by themselves, to convert the sequestered shares of stock. That portion, however, about the reference to the separation of powers being gratuitous does not commend itself for concurrence. As may be noted, the reference to the separation of powers concept was made in the context that the ownership of the subject sequestered shares is the subject of a case before this Court; hence, the need of the Courts approval for the desired conversion is effected. Apropos the separation of powers doctrine and its relevance to this case, it may well be appropriate to again quote the following excerpts from our decision in JG Summit Holdings, Inc. v. Court of Appeals,6 to

wit: The role of the Courts is to ascertain whether a branch or instrumentality of the Government has transgressed its constitutional boundaries. But the Courts will not interfere with executive or legislative discretion exercised within those boundaries. Otherwise, it strays into the realm of policy decisionmaking. and our complementary holding in Ledesma v. Court of Appeals,7 thus: x x x [A] court is without power to directly decide matters over which full discretionary authority has been delegated to the legislative or executive branch of the government. It is not empowered to substitute its judgment for that of Congress or of the President. It may, however, look into the question of whether such exercise has been made in grave abuse of discretion. The point, in fine, is: while it may, in appropriate cases, look into the question of whether or not the PCGG acted in grave abuse of discretion, the Court is not empowered to review and go into the wisdom of the policy decision or choices of PCGG and other executive agencies of the government. This is the limited mandate of this Court. And as we have determined in our Resolution, the PCGG thoroughly studied and considered the effects of conversion and, based upon such study, concluded that it would best serve the purpose of maintaining and preserving the value of the shares of stock to convert the same. It was proved that the PCGG had exercised proper diligence in reviewing the pros and cons of the conversion. The efforts PCGG have taken with respect to the desired stock conversion argue against the notion of grave abuse of discretion.1avvphi1 Anent the second issue that it is the government, as opposed to the current administration of President Gloria Macapagal-Arroyo, that is the winning party in the case below and has no incentive to convert, the Court finds that this argument has no merit. The current administration, or any administration for that matter, cannot be detached from the government. In the final analysis, the seat of executive powers is located in the sitting President who heads the government and/or the "administration." Under the government established under the Constitution, it is the executive branch, either pursuant to the residual power of the President or by force of her enumerated powers under the laws, that has control over all matters pertaining to the disposition of government property or, in this case, sequestered assets under the administration of the PCGG. Surely, such control is neither legislative nor judicial. As the Court aptly held in Springer v. Government of the Philippine Islands,8 resolving the issue as to which between the Governor-General, as head of the executive branch, and the Legislature may vote the shares of stock held by the government: It is clear that they are not legislative in character, and still more clear that they are not judicial. The fact that they do not fall within the authority of either of these two constitutes legal ground for concluding that they do fall within that of the remaining one among which the powers of the government are divided. The executive branch, through the PCGG, has given its assent to the conversion and such decision may be deemed to be the decision of the government. The notion suggested by oppositors-intervenors that the current administration, thru the PCGG, is without power to decide and act on the conversion on the theory that the head of the current administration is not government, cannot be sustained for lack of legal basis. Likewise, before the Court is the Motion to Admit Motion for Reconsideration with Motion for Reconsideration [Re: Conversion of SMC Shares] dated October 16, 2009 9 filed by movants-intervenors Wigberto E. Taada; Oscar F. Santos; Surigao del Sur Federation of Agricultural Cooperatives (SUFAC) and Moro Farmers Association of Zamboanga del Sur (MOFAZS); and Pambansang Kilusan ng mga Samahan ng Magsasaka (PAKISAMA).

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In filing their motion, movants-intervenors explain that: Messrs. Taada and Santos earlier joined an opposition filed by a group led by former Senate President Jovito R. Salonga, by way of solidarity and without desire or intent of trifling with judicial processes as, in fact, the instant Motion for Reconsideration is filed by herein movants-intervenors, through counsel, Atty. Taada, and also by way of supplement and support to the Opposition earlier filed by Salonga, et al., and the Opposition originally intended to be filed by herein Movants-intervenors.10 (Emphasis supplied.) Movants-intervenors argue further that the Court allowed them to intervene in a Resolution in G.R. No. 180702, which also arose from Sandiganbayan Civil Case No. 0033-F and, thus, should similarly be allowed to intervene in the instant case.11 This motion of Taada, et al. must fail. As it were, Atty. Taada and Oscar Santos admit having joined oppositors-intervenors Salonga, et al. in the latters October 7, 2009 motion for reconsideration. Accordingly, they should have voiced out all their arguments in the Salonga motion for reconsideration following the Omnibus Motion Rule. The filing of yet another motion for reconsideration by way of supplement to the Salonga motion for reconsideration is a clear deviation from the Omnibus Motion Rule and cannot be countenanced. Even the joinder of SUFAC, MOFAZS, and PAKISAMA with co-intervenors Taada and Santos will not cure the flawed motion. In Heirs of Geronimo Restrivera v. De Guzman, 12 the Court explained why: Indeed, the right of intervention should be accorded to any one having title to property "which is the subject of litigation, provided that his right will be substantially affected by the direct legal operation and effect of the decision, and provided also that it is reasonably necessary for him to safeguard an interest of his own which no other party on record is interested in protecting." (Emphasis supplied.) SUFAC, MOFAZS, and PAKISAMA all failed to demonstrate that none of the existing parties, that are similarly situated as they, would not defend their common interest. In the instant case, COCOFED, the federation of farmers associations recognized by the Philippine Coconut Authority, has actively participated in the instant case, vigorously defending their rights and those of all the coconut farmers who are supposedly stockholders of SMC. The Court can extend to the instant motion of Taada, et al. the benefit of the liberal application of procedural rules and entertain the motion and resolve the issues therein. Nonetheless, an examination of the issues raised in the Taada motion for reconsideration would show that the same have been more than adequately addressed in our Resolution of September 19, 2009. Movants-intervenors contend that the challenged resolution violates the Courts holding in San Miguel Corporation v. Sandiganbayan,13 as the conversion of the sequestered common shares into treasury shares would destroy the character of the shares of stock. The invocation of San Miguel Corporation is quite misplaced, it being inapplicable since it is not on all fours factually with the instant case. San Miguel Corporation involved the sale by the 14 CIIF Companies, through the United Coconut Planters Bank (UCPB), of 33,133,266 SMC shares, to the SMC. Before the perfection of the sale, however, the said shares were sequestered. Thus, the SMC group suspended payment of the purchase price of the shares, while the UCPB group rescinded the sale. Later, the SMC and UCPB groups entered into a Compromise Agreement and Amicable Settlement, whereby they undertook to continue with the sale of

the subject shares of stock. The parties, over the opposition of both the Republic and the COCOFED, then moved for the approval of this agreement by the Sandiganbayan where the case was then pending. Later, UCPB and the SMC groups implemented their agreement extra-judicially, withdrawing, at the same time, their petition for the approval of their aforementioned compromise agreement. Thereafter, the Sandiganbayan issued an Order dated August 5, 1991, directing the SMC to deliver to the graft court the sequestered SMC shares that it bought from UCPB. This was followed by another Order dated March 18, 1992, for the delivery to the court of dividends pertaining to the subject SMC shares. It was these two delivery Orders that were submitted for the consideration of the Court. An examination of the facts of San Miguel Corporation would show the factual dissimilarities of such case to the instant controversy. First, in San Miguel Corporation, the Court did not even pass upon the validity of the Compromise Agreement, while, in the instant case, the Court approved the conversion. Second, in the instant case, court approval was sought before the execution of the conversion, while in San Miguel Corporation, no court approval was sought for the Compromise Agreement. And third, in San Miguel Corporation, both the Republic and COCOFED opposed the Compromise Agreement, while, in the instant case, they both agreed to the conversion. Clearly, San Miguel Corporation finds no application to the instant case. Moreover, our ruling in San Miguel Corporation did not per se forbid the conversion of sequestered common shares into preferred/treasury shares. As we held thereat, the changes that are unacceptable are those "of any permanent character that will alter their being sequestered shares and, therefore, in custodia legis, that is to say, under the control and disposition of this Court." Here, the SMC Series 1 Preferred Shares will also be sequestered in exchange for the common shares originally sequestered. Thus, the approval of the conversion of the subject SMC shares in the instant case does not run counter, as movants insist otherwise, to the ruling in San Miguel Corporation. Movants-intervenors also assail the conversion of the SMC shares from common to preferred on another angle, thus: Simply, there is no right to vote: There is no greater alteration of the very nature of a common share. In a very real sense, therefore, a common share with all its rights, is reduced to a mere promissory note; worse, an unsecured and conditional promissory note, the returns on which is dependent on available retained earnings and the over-all viability of SMC.14 The assault is without merit. Again, by their very nature, shares of common stock, while giving the stockholder the right to vote, do not guarantee that the vote of the stockholder will prevail. That is non sequitur. This we explained in the Resolution subject of reconsideration: The mere presence of four (4) PCGG nominated directors in the SMC Board does not mean it can prevent board actions that are viewed to fritter away the company assets. Even under the status quo, PCGG has no controlling sway in the SMC Board, let alone a veto power at 24% of the stockholdings. In relinquishing the voting rights, the government, through the PCGG, is not in reality ceding control. Moreover, PCGG has ample powers to address alleged strategies to thwart recovery of ill-gotten wealth. Thus, the loss of voting rights has no significant effect on PCGGs function to recover ill -gotten wealth or prevent dissipation of sequestered assets.151avvphi1 Movants-intervenors likewise challenge the legality of the conversion in light of Commission on Audit (COA) Circular No. 89-296, which provides that the divestment or disposal of government property shall be undertaken primarily through public auction.

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The postulation has no merit, for there is, in the first place, no divestment or disposal of the SMC shares. The CIIF companies shall remain the registered owners of the SMC Series 1 Preferred Shares after conversion, although the shares are still subject of sequestration. To state the obvious, these SMC shares are not yet government assets as ownership thereof are still to be peremptorily determined. Hence, COA Circular No. 89-296, which covers only the disposition of government property, cannot plausibly be made to govern the conversion of the SMC shares in question, assuming for the nonce that the challenged conversion is equivalent to disposition. As explained in the September 17, 2009 Resolution, the sequestered assets are akin to property subject of preliminary attachment or receivership. As stated in the assailed resolution, the Court is authorized to allow the conversion of the subject shares under Rule 57, Sec. 11, in relation to Rule 59, Sec. 6 of the Rules of Court. And as may be recalled, the Court, in Palm Avenue Realty Development Corporation v. PCGG,16 allowed the sale of sequestered properties without an auction sale given that, as here, the sequestered assets would not have fetched the correct market price. In the instant case, the same is also true. It is highly doubtful that anyone other than SMC would purchase the sequestered shares at market value. Finally, Taada, et al. posit the view that the conversion of shares needs the acquiescence of the 14 CIIF companies. The contention is untenable. It should be remembered that the SMC shares allegedly owned by the CIIF companies are sequestered assets under the control and supervision of the PCGG pursuant to Executive Order No. 1, Series of 1986. Be that as it may, it is the duty of the PCGG to preserve the sequestered assets and prevent their dissipation. In the exercise of its powers, the PCGG need not seek or obtain the consent or even the acquiescence of the sequestered assets owner with respect to any of its acts intended to preserve such assets. Otherwise, it would be well-nigh impossible for PCGG to perform its duties and exercise its powers under existing laws, for the owner of the sequestered assets will more often than not oppose or resist PCGGs actions if their consent is a condition precedent. The act of PCGG of proposing the conversion of the sequestered SMC shares to Series 1 Preferred Shares was clearly an exercise of its mandate under existing laws, where the consent of the CIIF Companies is rendered unnecessary. Additionally, the above contention has been rendered moot with the filing on October 26, 2009 of the Manifestation dated October 23, 2009. Attached to such Manifestation is the Secretarys Certificate of the 14 CIIF companies approving the conversion of the SMC Common Shares into Series 1 Preferred Shares.17 As a final consideration, the Court also takes note of the Motion for Leave to Intervene and to File and Admit Attached Motion for Partial Reconsideration dated October 5, 2009 and the Motion for Partial Reconsideration dated October 6, 2009 filed by movant-intervenor UCPB. UCPB claims to have direct interest in the SMC shares subject of the instant case, being the statutory administrator, pursuant to Presidential Decree No. (PD) 1468, of the Coconut Industry Investment Fund and as an investor in the CIIF companies. UCPB argues that, as the statutory administrator of the CIIF, the proceeds of the net dividend earnings of, and/or redemption proceeds from, the Series 1 Preferred Shares of SMC should be deposited in escrow with it rather than, as directed by the Court in its September 17, 2009 Resolution, with the Development Bank of the Philippines (DBP) or the Land Bank of the Philippines (LBP). Concededly, UCPB is the administrator of the CIIF, which invested in the subject Series 1 Preferred Shares of SMC. UCPBs legal authority as such administrator does not, however, include its bei ng made the exclusive depository bank of the proceeds of dividends, interest, or income from the investments solely with UCPB. To be sure, the relevant decrees, PD Nos. 775, 961, and 1468, did not constitute UCPBthe bank acquired for the coconut farmers under PD 755to be the sole depositary of the

proceeds of the returns of the investments authorized under Sec. 9, Art. III of PD 1468. Besides, since the subject sequestered SMC shares are under custodia legis, the Court has certain control over them and their fruits. Nonetheless, the PCGG, having administrative control over the subject sequestered shares pending resolution of the actual ownership thereof, possesses discretion, taking into account the greater interest of the government and the farmers, to decide on where to deposit on escrow the net dividend earnings of, and/or redemption proceeds from, the Series 1 Preferred Shares of SMC. The depository bank may be the DBP/LBP or the UCPB. WHEREFORE, the Court resolves to DENY for lack of merit the: (1) Motion for Reconsideration dated October 7, 2009 filed by oppositors-intervenors Jovito R. Salonga, Wigberto E. Taada, Oscar F. Santos, Ana Theresa Hontiveros, and Teofisto L. Guingona III; and (2) Motion to Admit Motion for Reconsideration with Motion for Reconsideration [Re: Conversion of SMC Shares] dated October 16, 2009 filed by movants-intervenors Wigberto E. Taada, Oscar F. Santos, SUFAC, MOFAZS, represented by Romeo C. Royandoyan, and PAKISAMA, represented by Vicente Fabe. The Court PARTIALLY GRANTS the Motion for Leave to Intervene and to File and Admit Attached Motion for Partial Reconsideration dated October 5, 2009, and the Motion for Partial Reconsideration dated October 6, 2009 filed by movant-intervenor UCPB. The Court AMENDS its Resolution dated September 17, 2009 to give to the PCGG the discretion in depositing on escrow the net dividend earnings on, and/or redemption proceeds from, the Series 1 Preferred Shares of SMC, either with the Development Bank of the Philippines/Land Bank of the Philippines or with the United Coconut Planters Bank, having in mind the greater interest of the government and the coconut farmers. 9. Banez vs Concepcion The present controversy started almost four decades ago when Leodegario B. Ramos (Ramos), one of the defendants in Civil Case No. 722-M-2002, discovered that a parcel of land with an area of 1,233 square meters, more or less, which was a portion of a bigger tract of land with an area of 3,054 square meters, more or less, located in Meycauayan, Bulacan that he had adjudicated solely to himself upon his mothers death on November 16, 1982 had been earlier transferred by his mother to one Ricardo Asuncion, who had, in turn, sold it to the late Rodrigo Gomez. On February 1, 1990, Ramos, alleging that Gomez had induced him to sell the 1,233 square meters to Gomez on the understanding that Gomez would settle Ramos obligation to three other persons, commenced in the RTC in Valenzuela an action against Gomez, also known as Domingo Ng Lim, seeking the rescission of their contract of sale and the payment of damages, docketed as Civil Case No. 3287-V-90 entitled Leodegario B. Ramos v. Rodrigo Gomez, a.k.a. Domingo Ng Lim. 6 On October 9, 1990, before the Valenzuela RTC could decide Civil Case No. 3287-V-90 on the merits, Ramos and Gomez entered into a compromise agreement.7 The RTC approved their compromise agreement through its decision rendered on the same date.8 The petitioner, being then the counsel of Ramos in Civil Case No. 3287-V-90, assisted Ramos in entering into the compromise agreement "to finally terminate this case." The terms and conditions of the compromise agreement were as follows: COME NOW, the Parties, assisted by their respective counsels, and before this Honorable Court, most respectfully submit this COMPROMISE AGREEMENT for approval, as to finally terminate this case, the terms and conditions of which being as follows:

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1. That out of the total area of Three Thousand and Fifty Four (3,054) sq. m., more or less, covered by formerly O.C.T. No. P-2492 (M), Registry of Deeds of Bulacan, known as Lot No. 6821, Cad-337 Lot 4020-E, Csd-04-001618-D, and now by the Reconstituted Transfer Certificate of Title No. T-10179-P (M) defendant shall cause survey of said property, at its own expense, to segregate the area of One Thousand Two Hundred Thirty-Three, (1,233) sq. m. more or less, to take along lines two (2) to three (3), then to four (4) and up to five (5) of said plan, Csd-04-001618-D; 2. That upon completion of the technical survey and plan, defendant shall cause the registration of the Deed of Absolute Sale executed by plaintiff over the 1,233 sq. m. in his favor and that defendant shall deliver the survey and plan pertaining to the 1,821 sq, m. to the plaintiff with both parties defraying the cost of registration and titling over their respective shares; 3. That to carry out the foregoing, plaintiff shall entrust the Owners Duplicate of said TCT No. T -10179P (M), Registry of Deeds of Meycauayan, Bulacan, to the defendant, upon approval of this COMPROMISE AGREEMENT by the Court; 4. That upon the approval of this Compromise Agreement plaintiff shall execute a Deed of Absolute Sale in favor of defendant over the 1,233 sq. m. surveyed and segregated from the 1,821 sq. m. which should remain with the plaintiff and to be titled in his name; 5. That plaintiff obligates himself to return his loan obligation to the defendant, in the principal sum of P 80,000.00 plus P 20,000.00 for the use thereof, and an additional sum of P 10,000.00 in the concept of attorneys fees, which sums shall be guaranteed by a post-dated check, in the amount of P 110,000.00 in plaintiffs name with his prior endorsement, drawn and issued by plaintiffs counsel, for a period of Sixty (60) days from October 9, 1990; 6. That in the event the check issued pursuant to paragraph 5 hereof, is dishonored for any reason whatsoever, upon presentment for payment, then this Compromise Agreement, shall be considered null and void and of no effect whatsoever; 7. That upon faithful compliance with the terms and conditions of this COMPROMISE AGREEMENT and the Decision based thereon, the parties hereto shall have respectively waived, conceded and abandoned all claims and rights of action of whatever kind or nature, against each other over the subject property. WHEREFORE, premises considered, the parties hereto hereby jointly and severally pray before this Honorable Court to approve this COMPROMISE AGREEMENT and thereupon render its Decision based thereon terminating the case. One of the stipulations of the compromise agreement was for Ramos to execute a deed of absolute sale in favor of Gomez respecting the parcel of land with an area of 1,233 square meters, and covered by Transfer Certificate of Title (TCT) No. T-13005 P(M) in the name of Ramos.9 Another stipulation was for the petitioner to issue post-dated checks totaling P 110,000.00 to guarantee the payment by Ramos of his monetary obligations towards Gomez as stated in the compromise agreement broken down as follows: (a) P 80,000.00 as Ramos loan obligation to Gomez; (b) P 20,000.00 for the use of the loan; and (c) P 10,000.00 as attorneys fees. Of these amounts, only P 80,000.00 was ultimately paid to Gomez, because the petitioners check dated April 23, 1991 for the balance of P 30,000.00 was dishonored for insufficiency of funds. Gomez meanwhile died on November 7, 1990. He was survived by his wife Tsui Yuk Ying and their minor children (collectively to be referred to as the Estate of Gomez). The Estate of Gomez sued Ramos and the petitioner for specific performance in the RTC in Caloocan City to recover the balance of P

30,000.00 (Civil Case No. C-15750). On February 28, 1994, however, Civil Case No. C-15750 was amicably settled through a compromise agreement, whereby the petitioner directly bound himself to pay to the Estate of Gomez P 10,000.00 on or before March 15, 1994; P 10,000.00 on or before April 15, 1994; and P 10,000.00 on or before May 15, 1994. The Estate of Gomez performed the obligations of Gomez under the first paragraph of the compromise agreement of October 9, 1990 by causing the survey of the bigger tract of land containing an area of 3,054 square meters, more or less, in order to segregate the area of 1,233 square meters that should be transferred by Ramos to Gomez in accordance with Ramos undertaking under the second paragraph of the compromise agreement of October 9, 1990. But Ramos failed to cause the registration of the deed of absolute sale pursuant to the second paragraph of the compromise agreement of October 9, 1990 despite the Estate of Gomez having already complied with Gomezs undertaking to deliver the approved survey plan and to shoulder the expenses for that purpose. Nor did Ramos deliver to the Estate of Gomez the owners duplicate copy of TCT No. T-10179 P(M) of the Registry of Deeds of Meycauayan, Bulacan, as stipulated under the third paragraph of the compromise agreement of October 9, 1990. Instead, Ramos and the petitioner caused to be registered the 1,233 square meter portion in Ramoss name under TCT No. T13005-P(M) of the Registry of Deeds of Meycauayan, Bulacan. Accordingly, on July 6, 1995, the Estate of Gomez brought a complaint for specific performance against Ramos and the petitioner in the RTC in Valenzuela (Civil Case No. 4679-V-95)10 in order to recover the 1,233 square meter lot. However, the Valenzuela RTC dismissed the complaint on April 1, 1996 upon the motion of Ramos and the petitioner on the ground of improper venue because the objective was to recover the ownership and possession of realty situated in Meycauayan, Bulacan, and because the proper recourse was to enforce the judgment by compromise Agreement rendered on October 9, 1990 through a motion for execution. The Estate of Gomez appealed the order of dismissal to the Court of Appeals (CA), which ruled on July 24, 2001 to affirm the Valenzuela RTC and to dismiss the appeal (CA-G.R. CV No. 54231). On September 20, 2002, the Estate of Gomez commenced Civil Case No. 722-M-2002 in the Valenzuela RTC, ostensibly to revive the judgment by compromise rendered on October 9, 1990 in Civil Case No. 3287-V-90, praying that Ramos be ordered to execute the deed of absolute sale covering the 1,233 square meter lot pursuant to the fourth stipulation of the compromise agreement of October 9, 1990. The petitioner was impleaded as a party-defendant because of his having guaranteed the performance by Ramos of his obligation and for having actively participated in the transaction. On January 8, 2003, the petitioner moved for the dismissal of Civil Case No. 722-M-2002, alleging that the action was already barred by res judicata and by prescription; that he was not a real party-in-interest; and that the amount he had guaranteed with his personal check had already been paid by Ramos with his own money.11 Initially, on February 18, 2003,12 the RTC granted the petitioners motion to dismiss, finding that the right of action had already prescribed due to more than 12 years having elapsed from the approval of the compromise agreement on October 9, 1990, citing Article 1143 (3) of the Civil Code (which provides a 10-year period within which a right of action based upon a judgment must be brought from). On March 24, 2003,13 however, the RTC reversed itself upon motion of the Estate of Gomez and set aside its order of February 18, 2003. The RTC reinstated Civil Case No. 722-M-2002, holding that the filing of the complaint for specific performance on July 6, 1995 in the Valenzuela RTC (Civil Case No. 4679-V95) had interrupted the prescriptive period pursuant to Article 1155 of the Civil Code. The petitioner sought reconsideration, but the RTC denied his motion for that purpose on April 21, 2003.

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On May 12, 2003, the petitioner filed a second motion for reconsideration, maintaining that the Estate of Gomezs right of action had already prescribed; and that the judgment by compromise of October 9, 1990 had already settled the entire controversy between the parties. On August 19, 2003,14 the RTC denied the second motion for reconsideration for lack of merit. Hence, this special civil action for certiorari commenced on September 4, 2003 directly in this Court. Issues The petitioner insists that: xxx the lower court acted with grave abuse of discretion, amounting to lack of, or in excess of jurisdiction, when, after having correctly ordered the dismissal of the case below, on the ground of prescription under Art. 1144, par. 3, of the Civil Code, it reconsidered and set aside the same, on the factually baseless and legally untenable Motion for Reconsideration of Private Respondent, insisting, with grave abuse of discretion, if not bordering on ignorance of law, and too afraid to face reality, that it is Art. 1155 of the same code, as invoked by Private Respondents, that applies, and required herein petitioner to file his answer, despite petitioners first Motion for Reconsideration, which it treated as a mere scrap of paper, yet, at the same [sic] again it insisted that Article 1155 of the Civil Code should apply, and, thereafter when, with like, if not greater grave abuse of discretion, amounting to lack, or in excess of jurisdiction, it again denied petitioners Second Motion for Reconsideration for lack of merit, and giving petitioner a non-extendible period of ten 10 days from notice, to file his answer.15 In his reply to the Estate of Gomezs comment,16 the petitioner elucidated as follows: 1) Whether or not, the Honorable public respondent Judge gravely abused his discretion, amounting to lack of, or in excess of jurisdiction, when, after ordered the dismissal of Civil Case No. 722-M-2002, as prescription has set in, under Art. 1143 of the Civil Code, he set aside and reconsidered his said Order, on motion of plaintiff, by thereafter denied petitioners Motion for Reconsideration, and Second Motion for Reconsideration, insisting, despite his being presumed to know the law, that the said action is not barred by prescription, under Art. 1145 of the Civil Code; 2) Whether or not, the present pending action, Civil Case No. 722-M-2002, before Branch 12 of the Regional Trial Court of Malolos, Bulacan, is barred, and should be ordered be dismissed, on the ground of prescription, under the law and the rules, and applicable jurisprudence. 3) Whether or not, the same action may be dismissed on other valid grounds. 17 The petitioner submits that Civil Case No. 722-M-2002 was one for the revival of the judgment upon a compromise agreement rendered in Civil Case No. 3287-V-90 that attained finality on October 9, 1990; that considering that an action for revival must be filed within 10 years from the date of finality, pursuant to Article 1144 of the Civil Code,18 in relation to Section 6, Rule 39 of the Rules of Court,19 Civil Case No. 722-M-2002 was already barred by prescription, having been filed beyond the 10-year prescriptive period; that the RTC gravely abused its discretion in reinstating the complaint despite prescription having already set in; that the dismissal of Civil Case No. 722-M-2002 was proper also because the judgment had already been fully satisfied; that the claim relative to the 1,233 square meter lot under the compromise agreement had been waived, abandoned, or otherwise extinguished on account of the failure of the Estate of Gomezs counsel to move for the issuance of a writ of execution; and that the Estate of Gomez could not rely upon the pendency and effects of the appeal from the action for specific performance after its dismissal had been affirmed by the CA on grounds of improper venue, the plaintiffs lack of personality, and improper remedy (due to the proper remedy being by execution of the judgment).

The Estate of Gomez countered that the filing on July 6, 1995 of the action for specific performance in the RTC in Valenzuela stopped the running of the prescriptive period; that the period commenced to run again after the CA dismissed that action on July 24, 2001; that the total elapsed period was only five years and 11 months; and that the action for the revival of judgment filed on September 20, 2002 was within the period of 10 years to enforce a final and executory judgment by action. Ruling We dismiss the petition for certiorari. The orders that the petitioner seeks to challenge and to annul are the orders denying his motion to dismiss. It is settled, however, that an order denying a motion to dismiss, being merely interlocutory, cannot be the basis of a petition for certiorari. An interlocutory order is not the proper subject of a certiorari challenge by virtue of its not terminating the proceedings in which it is issued. To allow such order to be the subject of review by certiorari not only delays the administration of justice, but also unduly burdens the courts. 20 But a petition for certiorari may be filed to assail an interlocutory order if it is issued without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion amounting to lack or excess of jurisdiction. This is because as to such order there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. Rule 65 of the Rules of Court expressly recognizes the exception by providing as follows: Section 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasijudicial functions has acted 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 plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (1a) The exception does not apply to this challenge. The petitioner has not demonstrated how the assailed orders could have been issued without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion amounting to lack or excess of jurisdiction. Nor has he convinced us that he had no plain, speedy, and adequate remedy in the ordinary course of law. In fact and in law, he has, like filing his answer and going to pre-trial and trial. In the end, should he still have the need to seek the review of the decision of the RTC, he could also even appeal the denial of the motion to dismiss. That, in reality, was his proper remedy in the ordinary course of law. Yet another reason to dismiss the petition for certiorari exists. Although the Court, the CA and the RTC have concurrence of jurisdiction to issue writs of certiorari, the petitioner had no unrestrained freedom to choose which among the several courts might his petition for certiorari be filed in. In other words, he must observe the hierarchy of courts, the policy in relation to which has been explicitly defined in Section 4 of Rule 65 concerning the petitions for the extraordinary writs of certiorari, prohibition and mandamus, to wit: Section 4. When and where petition filed. - The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the

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denial of the said motion. The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in the aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the Court of Appeals. No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding fifteen (15) days. (4a)21 (Emphasis supplied) Accordingly, his direct filing of the petition for certiorari in this Court instead of in the CA should be disallowed considering that he did not present in the petition any special and compelling reasons to support his choice of this Court as the forum. The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the policy is not to be ignored without serious consequences. The strictness of the policy is designed to shield the Court from having to deal with causes that are also well within the competence of the lower courts, and thus leave time to the Court to deal with the more fundamental and more essential tasks that the Constitution has assigned to it. The Court may act on petitions for the extraordinary writs of certiorari, prohibition and mandamus only when absolutely necessary or when serious and important reasons exist to justify an exception to the policy. This was why the Court stressed in Vergara, Sr. v. Suelto: 22 xxx. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the socalled extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should generally be exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or another are not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the writs procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe. (Emphasis supplied) In People v. Cuaresma,23 the Court has also amplified the need for strict adherence to the policy of hierarchy of courts. There, noting "a growing tendency on the part of litigants and lawyers to have their applications for the so-called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately by the highest tribunal of the land," the Court has cautioned lawyers and litigants against taking a direct resort to the highest tribunal, viz: xxx. This Courts original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts x x x, which may issue the writ, enforceable in any part of their respective regions. It is also shared by this Court, and by the Regional Trial Court, with the Court of Appeals x x x, although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the extraordinary writs was restricted to those "in aid of its appellate jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs

against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme 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. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the restriction on the jurisdiction of the Court of Appeals in this regard, supra resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for the extraordinary writs which, but for the expansion of the Appellate Court corresponding jurisdiction, would have had to be filed with it. xxxx The Court therefore closes this decision with the declaration for the information and evidence of all concerned, that it will not only continue to enforce the policy, but will require a more strict observance thereof. (Emphasis supplied) There being no special, important or compelling reason that justified the direct filing of the petition for certiorari in this Court in violation of the policy on hierarchy of courts, its outright dismissal is unavoidable. Still, even granting that the petition for certiorari might be directly filed in this Court, its dismissal must also follow because its consideration and resolution would unavoidably demand the consideration and evaluation of evidentiary matters. The Court is not a trier of facts, and cannot accept the petition for certiorari for that reason. Although commenced ostensibly for the recovery of possession and ownership of real property, Civil Case No. 722-M-2002 was really an action to revive the judgment by compromise dated October 9, 1990 because the ultimate outcome would be no other than to order the execution of the judgment by compromise. Indeed, it has been held that "there is no substantial difference between an action expressly called one for revival of judgment and an action for recovery of property under a right adjudged under and evidenced by a final judgment."24 In addition, the parties themselves have treated the complaint in Civil Case No. 722-M-2002 as one for revival. Accordingly, the parties should be fully heard on their respective claims like in any other independent action.1wphi1 The petitioners defense of prescription to bar Civil Case No. 722-M-2002 presents another evidentiary concern. Article 1144 of the Civil Code requires, indeed, that an action to revive a judgment must be brought before it is barred by prescription, which was ten years from the accrual of the right of action.25 It is clear, however, that such a defense could not be determined in the hearing of the petitioners motion to dismiss considering that the complaint did not show on its face that the period to bring the action to revive had already lapsed. An allegation of prescription, as the Court put it in Pineda v. Heirs of Eliseo Guevara,26 "can effectively be used in a motion to dismiss only when the complaint on its face shows that indeed the action has already prescribed, [o]therwise, the issue of prescription is one involving evidentiary matters requiring a full blown trial on the merits and cannot be determined in a mere motion to dismiss." At any rate, the mere lapse of the period per se did not render the judgment stale within the context of the law on prescription, for events that effectively suspended the running of the period of limitation might have intervened. In other words, the Estate of Gomez was not precluded from showing such events, if any. The Court recognized this possibility of suspension in Lancita v. Magbanua:27 In computing the time limited for suing out of an execution, although there is authority to the contrary, the general rule is that there should not be included the time when execution is stayed, either by agreement of the parties for a definite time, by injunction, by the taking of an appeal or writ of error so as to operate as a

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supersedeas, by the death of a party or otherwise. Any interruption or delay occasioned by the debtor will extend the time within which the writ may be issued without scire facias. Verily, the need to prove the existence or non-existence of significant matters, like supervening events, in order to show either that Civil Case No. 722-M-2002 was batTed by prescription or not was present and undeniable. Moreover, the petitioner himself raised factual issues in his motion to dismiss, like his averment of full payment or discharge of the obligation of Ramos and the waiver or abandonment of rights under the compromise agreement. The proof thereon cannot be received in certiorari proceedings before the Court, but should be established in the RTC. 10. Metropo. Cebu Water Dist. Vs Mactan Rock Ind.

the form of a proposed/draft decision. MCWD did not attend the hearings. It did not submit evidence other than those annexed to its Answer. Neither did it file a formal offer of evidence, or a memorandum of legal arguments.17 Decision of the CIAC The CIAC promulgated its Decision18 on April 14, 2005, the dispositive portion of which reads: WHEREFORE[,] premises considered, judgment is hereby rendered as follows: 1. Ordering the reformation of Clause 17 of the Water Supply Contract to read:

Petitioner Metropolitan Cebu Water District (MCWD) is a government-owned and controlled corporation (GOCC) created pursuant to Presidential Decree (PD) No. 198,3 as amended, with its principal office address at the MCWD Building, Magallanes corner Lapu-Lapu Streets, Cebu City.4 It is mandated to supply water within its service area in the cities of Cebu, Talisay, Mandaue, and Lapu-Lapu and the municipalities of Compostela, Liloan, Consolacion, and Cordova in the Province of Cebu.5 Respondent Metro Rock Industries, Inc. (MRII) is a domestic corporation with principal office address at the 2nd Level of the Waterfront Cebu Hotel and Casino, Lahug, Cebu City. 6 On May 19, 1997, MCWD entered into a Water Supply Contract 7 (the Contract) with MRII wherein it was agreed that the latter would supply MCWD with potable water, in accordance with the World Health Organization (WHO) standard or the Philippine national standard, with a minimum guaranteed annual volume.8 On March 15, 2004, MRII filed a Complaint 9 against MCWD with the Construction Industry Arbitration Commission (CIAC), citing the arbitration clause (Clause 18)10 of the Contract. The case was docketed as CIAC Case No. 12-2004. In the said complaint, MRII sought the reformation of Clause 17 of the Contract, or the Price Escalation/De-Escalation Clause, in order to include Capital Cost Recovery in the price escalation formula, and to have such revised formula applied from 1996 when the bidding was conducted, instead of from the first day when MRII started selling water to MCWD. It also sought the payment of the unpaid price escalation/adjustment, and the payment of unpaid variation/extra work order and interest/cost of money up to December 31, 2003.11 On May 7, 2002, MCWD filed its Answer12 dated April 27, 2004, which included a motion to dismiss the complaint on the ground that the CIAC had no jurisdiction over the case, as the Contract was not one for construction or infrastructure. The CIAC thereafter issued an order13 denying MCWDs motion to dismiss, and calling the parties to a preliminary conference for the review and signing of the Terms of Reference. 14 MCWD, thus, filed a petition for certiorari15 under Rule 65 with the CA, questioning the jurisdiction of the CIAC. The petition was docketed as CA-G.R. SP. No. 85579 (First Petition). Meanwhile, the CIAC proceeded with the preliminary conference scheduled on June 10 and July 22, 2004 which MWCD opted not to attend. MRII and the CIAC both signed the Terms of Reference. Pursuant to the Terms of Reference and the CIAC Order dated July 22, 2004, MRII submitted its documentary evidence and affidavits of its witnesses.16 On August 27, 2004, MRII submitted its Formal Offer of Evidence and its memorandum of arguments in

17[.] Price Escalation and/or De-Escalation shall be based on the parametric formula: 17.1 Power Rate Price Adjustment/Power Cost Adjustment Current Power Rate - Base Power Rate x 30% of base selling price of water Base Power Rate 17.2 Consumer Price Index (CPI) Adjustment/Operating Cost Adjustment: Current CPI Base CPI x 40% of base selling price of water Base CPI 17.3 Capital Cost Recovery Adjustment: Current Peso to Base Peso to US$ US$ Exchange Rate Exchange Rate x 30% of base selling price of water Base Peso to US $ Exchange Rate Price escalation shall be reckoned from January 1999 when the water was first delivered by Mactan Rock Industries, Inc. to the MCWD facilities in Mactan. The base CPI, base US$ Exchange Rate and the Base Power Rate shall be the prevailing rate in January 1999, while the Base Selling Price of water shall mean the 1996 rate per cubic meter of water as provided for in the Water Supply Contract. 2. Ordering Respondent Metropolitan Cebu Water District to pay Claimant, Mactan Rock Industries, Inc[.] under the reformed Clause 17 of the Water Supply Contract, the net amount of Php12,126,296.70 plus legal interest of six percent (6%) per annum from the (sic) March 15, 2004, the date of filling (sic) of the case with the Construction Industry Arbitration Commission, the rate increased to twelve percent (12%) per annum from the date the herein Decision have (sic) become final and executory until the foregoing amounts shall have been fully paid[.] 3. Claimant Mactan Rock Industries, Inc. and Metropolitan Cebu Water District shall share equally the cost of arbitration. SO ORDERED.19 Decision of the CA in CA-G.R. SP No. 85579 - Petition for certiorari under Rule 65 with the Court of

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Appeals questioning the jurisdiction of the CIAC Meanwhile, on October 28, 2005, the CA in its decision20 in the First Petition upheld the jurisdiction of the CIAC over the case. The CA held that when parties agree to settle their disputes arising from or connected with construction contracts, the CIAC acquires primary jurisdiction. 21 Citing Philrock Inc. v. Construction Industry Arbitration Commission,22 the CA stated that the CIAC may resolve not only the merits of such controversies, but may also award damages, interest, attorneys fees, and expenses of litigation, when appropriate.23 Second, the CA held that the claims in question fall under the jurisdiction of the CIAC. Thus:

matter of the reckoning period for the computation of the escalation cost from January 9, 1999, or the first day of delivery of water. Moreover, the CA found that the CIAC did not err in ruling that the contract be reformed to include Capital Cost Recovery in the parametric formula for price escalation. Neither did it err in holding that the Capital Cost Recovery shall be 30% of the Base Selling Price of water as a consequence of the reformation of Clause 17. Finally, the CA stressed that "factual findings of administrative agencies which are deemed to have acquired expertise in matters within their respective jurisdictions are generally accorded not only respect but even finality when supported by substantial evidence."29 MCWD filed a motion for reconsideration but it was denied in the CA Resolution dated March 30, 2006.

Xxx Section 4 of Executive Order No. 1008, otherwise known as the Construction Industry Arbitration Law delineates CIACs jurisdiction as "original and exclusive jurisdic tion over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the disputes arise before or after the completion of the contract, or after abandonment thereof." Moreover, Section 5 (k) of Republic Act No. 9184 otherwise known as [the] Government Procurement Reform Act expressly defines "infrastructure project" as including "water supply[,]" construction, rehabilitation[,] demolition, repair, restoration and maintenance. Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration. It is to be highlighted that the dispute in the case at bar arose from the parties incongruent positions with regard to clause 17 of the Water Supply Contract[,] specifically the price escalation/adjustment. The instant case involves technical discrepancies that are better left to an arbitral body that has expertise in those areas. Nevertheless, in any event, the inclusion of an arbitration clause in a contract does not ipso facto divest the courts of jurisdiction to pass upon the findings of arbitral bodies, because the awards are still judicially reviewable under certain conditions. 24 (Citations omitted.) MCWDs motion for reconsideration of the decision in the First Petition was still pending when it filed the petition for review25 under Rule 43 (Second Petition) appealing the decision of the CIAC. The motion for reconsideration was eventually denied in a Resolution 26 dated May 3, 2006. MCWD did not appeal from the denial of the motion. It, thus, became final and executory.27 Decision of the CA in CA-G.R. CEB SP. No. 00623 Petition for review under Rule 43 appealing the decision of the CIAC Aggrieved by the CIAC Decision, MCWD filed a petition for review under Rule 43 with the CA which was docketed as CA-G.R. CEB SP. No. 00623. The CA, however, dismissed the petition in its Decision dated February 20, 2006. The Court therein stated that the issue of jurisdiction had already been resolved by the 18th Division in the First Petition, where the CA upheld the jurisdiction of the CIAC over Arbitration Case No. 12-2004. Citing jurisprudence, the CA also ruled that there being an arbitration clause in the Contract, the action for reformation of contract instituted by MRII in this case fell squarely within the jurisdiction of the CIAC, not the courts. In relation to this, the CA noted that the present rule is that courts will look with favor upon amicable agreements to settle disputes through arbitration, and will only interfere with great reluctance to anticipate or nullify the action of the arbitrator. MCWD being a signatory and a party to the Water Supply Contract, it cannot escape its obligation under the arbitration clause. 28 The CA also held that the CIAC did not err in finding that the Water Supply Contract is clear on the

Thus, this petition. ISSUES MCWD raises the following issues in its petition for review: MAY THE CONSTRUCTION INDUSTRY [ARBITRATION] COMMISSION EXERCISE JURISDICTION OVER DISPUTES ARISING FROM A WATER SUPPLY CONTRACT? MAY A PARTY, WHO IS A SIGNATORY TO THE WATER SUPPLY CONTRACT[,] IN EFFECT SUBMITTING ITSELF TO THE JURISDICTION OF THE CONSTRUCTION INDUSTRY ARBITRATION COMMISSION, QUESTION THE JURISDICTION OF [THE] CIAC? DOES THE CONSTRUCTION INDUSTRY ARBITRATION COMMISSION HAVE THE (SIC) JURISDICTION OVER A COMPLAINT PRAYING FOR A REFORMATION OF A WATER SUPPLY CONTRACT? MAY THE COURT OF APPEALS REFUSE TO RENDER A [SIC] JUDGMENT ON AN ISSUE BECAUSE THIS HAS BEEN ALREADY SETTLED IN A DECISION RENDERED BY ANOTHER DIVISION OF THE COURT OF APPEALS IN A PETITION FOR CERTIORARI, EVEN IF THE SAID DECISION HAS NOT YET BEEN (SIC) FINAL DUE TO A TIMELY FILING OF A MOTION FOR RECONSIDERATION?30 RULING OF THE COURT Creation of the CIAC The Construction Industry Arbitration Commission (CIAC) was created in 1985 under Executive Order (E.O.) No. 1008 (Creating an Arbitration Machinery for the Philippine Construction Industry), in recognition of the need to establish an arbitral machinery that would expeditiously settle construction industry disputes. The prompt resolution of problems arising from, or connected to, the construction industry was considered necessary and vital for the fulfillment of national development goals, as the construction industry provided employment to a large segment of the national labor force, and was a leading contributor to the gross national product. 31 Under Section 4 of E.O. No. 1008, the CIACs jurisdiction was specifically delineated as fo llows:

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SECTION 4. Jurisdiction - The CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the disputes arise before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration. The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual provisions; amount of damages and penalties; commencement time and delays; maintenance and defects; payment default of employer or contractor and changes in contract cost. Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall continue to be covered by the Labor Code of the Philippines. (Underscoring supplied) The jurisdiction of the CIAC as a quasi-judicial body is confined to construction disputes, that is, those arising from, or connected to, contracts involving "all on-site works on buildings or altering structures from land clearance through completion including excavation, erection and assembly and installation of components and equipment."33 The CIAC has jurisdiction over all such disputes whether the dispute arises before or after the completion of the contract.34 Whether the CIAC has jurisdiction over the dispute As earlier stated, following the denial of its motion to dismiss by CIAC, MCWD filed the First Petition with the CA, which decided in favor of MRII and upheld the jurisdiction of the CIAC. Not being in conformity, MCWD filed a motion for reconsideration. While the said motion was pending with the CA, MCWD filed the Second Petition with the same court. Eventually, the motion was denied, and MCWD never appealed the case. Thus, the decision of the CA in the First Petition became final and executory. The question now is whether such final and executory decision is binding such that courts are generally precluded from passing judgment on the issue of jurisdiction in the present petition. The Court finds in the affirmative. This Court has held time and again that a final and executory judgment, no matter how erroneous, cannot be changed, even by this Court. Nothing is more settled in law than that once a judgment attains finality, it thereby becomes immutable and unalterable. It may no longer be modified in any respect, even if such modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land.35 In its Decision in the First Petition, the CA affirmed the arbitral bodys finding in CIAC Case No. 12 -2004 that the case was within its jurisdiction. Such decision having become final, it is beyond the jurisdiction of this Court, or any court or body, for that matter, to review or modify, even supposing for the sake of argument, that it is indeed erroneous. Also, the parties apparently characterized the Contract as one involving construction, as its arbitration clause specifically refers disputes, controversies or claims arising out of or relating to the Contract or the
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breach, termination or validity thereof, if the same cannot be settled amicably, to an arbitration tribunal, in accordance with E.O. No. 1008, or the Construction Industry Arbitration Law: V. DISPUTES AND JURISDICTION: 18. Any dispute, controversy or claim arising out of or relating to this contract or the breach, termination or invalidity thereof, if the same cannot be settled amicably, may be submitted for arbitration to an Arbitration Tribunal in accordance with Executive Order No. 1008 dated 4 February 1985, otherwise known as the Construction Industry Arbitration Law and the place of arbitration shall be the City of Cebu, Philippines, otherwise said dispute or controversy arising out of the contract or breach thereof shall be submitted to the court of law having jurisdiction thereof in the city where MCWD is located. 36 Had the parties been of the mutual understanding that the Contract was not of construction, they could have instead referred the matter to arbitration citing Republic Act (R.A.) No. 876, or The Arbitration Law. Having been passed into law in 1953, the said statute was already in existence at the time the contract was entered into, and could have been applied to arbitration proceedings other than those specifically within the arbitral jurisdiction of the CIAC. Whether the CA erred in refusing to render judgment on the issue of jurisdiction ___________ On a related matter, MWCD also raises the issue of whether the 19th Division of the CA, Cebu City, erred in refusing to render judgment on the issue of jurisdiction raised in the Second Petition on the ground that it had already been settled by the 18th Division in its decision in the First Petition, even if the 18th Division decision had not yet become final due to a timely filing of a motion for reconsideration. The Court rules in the negative. The 19th Division was correct in refusing to render judgment on the issue of jurisdiction as, at that time, the issue was still pending before another division of the CA. Litis pendentia is predicated on the principle that a party should not be allowed to vex another more than once regarding the same subject matter and for the same cause of action. It is founded on the public policy that the same subject matter should not be the subject of controversy in courts more than once, in order that possible conflicting judgments may be avoided for the sake of the stability of the rights and status of persons, and also to avoid the costs and expenses incident to numerous suits. 37 With the two petitions then pending before the CA, all the elements of litis pendentia were present, that is, identity of the parties in the two actions, substantial identity in the causes of action and in the reliefs sought by the parties, and identity between the two actions such that any judgment that may be rendered in one case, regardless of which party is successful, would amount to res judicata in the other.38 In both cases, MCWD was the petitioner and MRII, the respondent. Although they differ in form, in essence, the two cases involved a common issue, that is, MCWDs challenge to the jurisdiction of the CIAC over the arbitration proceedings arising from the Water Supply Contract between the petitioner and respondent. To determine whether there is identity of the rights asserted and reliefs prayed for, grounded on the same facts and bases, the following tests may be utilized: (1) whether the same evidence would support and sustain both the first and the second causes of action, also known as the "same evidence" test; or (2) whether the defenses in one case may be used to substantiate the complaint in the other. 39 Also fundamental is the test of determining whether the cause of action in the second case existed at the time of

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the filing of the first case.40 In the First Petition, MCWD argued that the CIACs issuance of its Order41 dated May 28, 2004 was tainted with grave abuse of discretion amounting to excess or lack of jurisdiction. Thus, MCWD stated in its prayer: WHEREFORE, in light of the premises laid down, petitioner most respectfully prays: 1. Upon the filing of this Petition, a Writ of Preliminary Injunction or restraining order be issued forthwith, enjoining the respondent from proceeding with the hearing of the case until further orders from the Honorable Court of Appeals; 2. After consideration, petitioner also prays that the Order dated May 28, 2004, denying petitioners motion to dismiss be declared without force and effect; 3. Petitioner also prays that the Construction Industry Arbitration Commission be barred from hearing the case filed by Mactan Rock Industries, Inc., private respondent herein. Other measures of relief, which are just and equitable under the foregoing premise are also prayed for. 42 The Second Petition, on the other hand, raised the following issues: a. Whether or not the Arbitral Tribunal of CIAC gravely erred in taking and exercising jurisdiction over the complaint filed by the respondent; b. Whether or not the Arbitral Tribunal of CIAC gravely erred in reforming Clause 17 of the Contract; c. Whether or not the same tribunal gravely committed an error in considering Capital Cost Recovery Adjustment in awarding in favor of the complainant, when the same is extraneous to the provisions of the contract;43 Thus, it prayed: WHEREFORE, PREMISES CONSIDERED, it is most respectfully prayed of the Honorable Court that a Judgment be issued reversing the findings of the Arbitral Tribunal of the Construction Industry Arbitration Commission in its Decision dated April 14, 2005, as far as the order of reformation of the water supply contract and in granting the monetary award. It is further prayed that the decision rendered by the Arbitral Tribunal be declared invalid for want of jurisdiction to arbitrate and to order the reformation of the water supply contract; It is also prayed that the decision awarding money to the respondent be strike (sic) down as erroneous and without legal basis for lack of jurisdiction by the Arbitral Tribunal, which rendered the Decision. It is also prayed that a Temporary Restraining Order and a Writ of Preliminary Injunction be issued at the outset, ordering the stay of execution pending the resolution of the issues raised in the Petition. Other measures of relief, which are just and equitable, are also prayed for. 44

In both cases, the parties also necessarily relied on the same laws and arguments in support of their respective positions on the matter of jurisdiction. In the First Petition, in support of its argument, that the CIAC had no jurisdiction to arbitrate the causes of action raised by MRII, MCWD cited the portions of the Contract on the obligations of the water supplier, E.O. No. 1008 (specifically Section 4 on jurisdiction), the Rules of Procedure Governing Construction Arbitration (Section 1, Article III). It also alleged that in issuing the order denying its motion to dismiss, the CIAC misread the provisions of LOI No. 1186 and R.A. No. 9184 on the definition of an infrastructure project.45 MRII, however, opined that the CIAC had jurisdiction over the complaint and, therefore, correctly denied petitioners motion to dismiss. MRII argued that certiorari was not a proper remedy in case of denial of a motion to dismiss and that the claims fell squarely under CIACs original and exclusive jurisdiction. MRII, in support of its position, cited Section 1 of LOI No. 1186 and Section 5(k) of R.A. No. 9184. MRII further proposed that, as shown by MCWDs pro-forma Water Supply Contract, Specifications, Invitation to Submit Proposal, Pre-Bid Conference minutes, Addendum No. 1, and MRIIs Technical and Financial Proposals, the undertaking contemplated by the parties is one of infrastructure and of works, rather than one of supply or mere services.46 In the Second Petition, in support of the issue of jurisdiction, MCWD again relied on Section 4 of E.O. No. 1008 and Section 1, Article III of the Rules of Procedure Governing Construction Arbitration. It also brought to fore the alleged faulty conclusion of MRII that a water supply contract is subsumed under the definition of an infrastructure project under LOI 1186.47 In its Comment, MRII reiterated and adopted its arguments before the CIAC, and insisted that the undertaking contemplated by the parties was one of infrastructure and of works, as distinguished from "mere supply from off-the-shelf or from mere services."48 Section 1 of LOI No. 1186, to define "infrastructure" and Section 5(k) of R.A. No. 9184 to include "water supply," were again cited. In support of its arguments, MRII cited anew MCWDs pro-forma Water Supply Contract, Specifications (in its Invitation to Submit Proposal), pronouncements at the Pre-Bid Conference, Addendum No. 1, and MRIIs Technical and Financial Proposals. MRII further extensively reproduced the content of the joint affidavit of Messrs. Antonio P. Tompar and Lito R. Maderazo, MRIIs President/CEO and Financial Manager, respectively.49 Given that the same arguments were raised on the matter of CIAC jurisdiction, the parties thus relied on substantially the same evidence in both petitions. MCWD annexed to both petitions copies of the Water Supply Contract, the complaint filed by MRII with the CIAC, and its Answer to the said complaint. On the other hand, MRII presented Addendum No. 1 to the Water Supply Contract and its Technical and Financial Proposals. Moreover, the first cause of action in the Second Petition, that is, the CIACs having assumed jurisdiction, allegedly unlawfully, over the dispute arising from the Water Supply Contract, obviously existed at the time the First Petition was filed, as the latter case dealt with the jurisdiction of the CIAC over the complaint filed. Finally, any judgment that may be rendered in the First Petition on the matter of whether the CIAC has jurisdiction over the arbitration proceedings, regardless of which party was successful, would amount to res judicata in the Second Petition, insofar as the issue of jurisdiction is concerned. In fact, what MCWD should have done was to appeal to the Court after the denial of its motion for reconsideration in the First Petition. For not having done so, the decision therein became final and, therefore, immutable. Thus, following the above discussion, the 19th Division was correct in refusing to render judgment on the issue of jurisdiction in the Second Petition.

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Whether the CIAC had jurisdiction to order the reformation of the Water Supply Contract The jurisdiction of courts and quasi-judicial bodies is determined by the Constitution and the law. 50 It cannot be fixed by the will of the parties to the dispute, nor can it be expanded or diminished by stipulation or agreement. 51 The text of Section 4 of E.O. No. 1008 is broad enough to cover any dispute arising from, or connected with, construction contracts, whether these involve mere contractual money claims or execution of the works. This jurisdiction cannot be altered by stipulations restricting the nature of construction disputes, appointing another arbitral body, or making that bodys decision final and binding.52 Thus, unless specifically excluded, all incidents and matters relating to construction contracts are deemed to be within the jurisdiction of the CIAC. Based on the previously cited provision outlining the CIACs jurisdiction, it is clear that with regard to contracts over which it has jurisdiction, the only matters that have been excluded by law are disputes arising from employer-employee relationships, which continue to be governed by the Labor Code of the Philippines. Moreover, this is consistent with the policy against split jurisdiction. In fact, in National Irrigation Administration v. Court of Appeals,53 it was held that the CIAC had jurisdiction over the dispute, and not the contract. Therefore, even if the contract preceded the existence of the CIAC, since the dispute arose when the CIAC had already been constituted, the arbitral board was exercising current, and not retroactive, jurisdiction. In the same case, it was held that as long as the parties agree to submit to voluntary arbitration, regardless of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such that, even if they specifically choose another forum, the parties will not be precluded from electing to submit their dispute to the CIAC because this right has been vested upon each party by law. This is consistent with the principle that when an administrative agency or body is conferred quasi-judicial functions, all controversies relating to the subject matter pertaining to its specialization are deemed to be included within its jurisdiction since the law does not sanction a split of jurisdiction, as stated in Pea v. Government Service Insurance System.54 In Pea, the Court held that although the complaint for specific performance, annulment of mortgage, and damages filed by the petitioner against the respondent included title to, possession of, or interest in, real estate, it was well within the jurisdiction of the Housing and Land Use Regulatory Board (HLURB), a quasi-judicial body, as it involved a claim against the subdivision developer, Queens Row Subdivision, Inc., as well as the Government Service Insurance System (GSIS). This case was later cited in Badillo v. Court of Appeals,55 where the Court concluded that the HLURB had jurisdiction over complaints for annulment of title. The Court also held that courts will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion, such as that of the HLURB, the sole regulatory body for housing and land development. It was further pointed out that the extent to which an administrative agency may exercise its powers depends on the provisions of the statute creating such agency. The ponencia further quoted from C.T. Torres Enterprises, Inc. v. Hibionada:56 The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise.

In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world. In Bagunu v. Spouses Aggabao,57 the Court ruled that the RTC must defer the exercise of its jurisdiction on related issues involving the same subject matter properly within its jurisdiction, such as the distinct cause of action for reformation of contracts involving the same property, since the DENR assumed jurisdiction over the lot in question, pursuant to its mandate. In National Housing Authority v. First United Constructors Corporation ,58 the Court held that there was no basis for the exclusion of claims for business losses from the jurisdiction of the CIAC because E.O. No. 1008 "excludes from the coverage of the law only those disputes arising from employer-employee relationships which are covered by the Labor Code, conveying an intention to encompass a broad range of arbitrable issues within the jurisdiction of CIAC."59 Section 4 provides that "(t)he jurisdiction of the CIAC may include but is not limited to x x x," underscoring the expansive character of the CIACs jurisdiction. Very clearly, the CIAC has jurisdiction over a broad range of issues and claims arising from construction disputes, including but not limited to claims for unrealized profits and opportunity or business losses. What E.O. No. 1008 emphatically excludes is only disputes arising from employer-employee relationships.60 Where the law does not delineate, neither should we. Neither the provisions of the Civil Code on reformation of contracts nor the law creating the CIAC exclude the reformation of contracts from its jurisdiction. Jurisprudence further dictates that the grant of jurisdiction over related and incidental matters is implied by law. Therefore, because the CIAC has been held to have jurisdiction over the Contract, it follows that it has jurisdiction to order the reformation of the Contract as well. Whether MCWD can validly refuse to participate in the arbitration proceedings In light of the finality of the CA decision on the matter of jurisdiction, the only remaining issue to be disposed of is whether the CIAC could proceed with the case even if the MCWD refused to participate in the arbitration proceedings. The Court rules in the affirmative. Though one party can refuse to participate in the arbitration proceedings, this cannot prevent the CIAC from proceeding with the case and issuing an award in favor of one of the parties. Section 4.2 of the Revised Rules of Procedure Governing Construction Arbitration (CIAC Rules) specifically provides that where the jurisdiction of the CIAC is properly invoked by the filing of a Request for Arbitration in accordance with CIAC Rules, the failure of a respondent to appear, which amounts to refusal to arbitrate, will not stay the proceedings, notwithstanding the absence of the respondent or the lack of participation of such party. In such cases, the CIAC is mandated to appoint the arbitrator/s in accordance with the Rules, and the arbitration proceedings shall continue. The award shall then be made after receiving the evidence of the claimant. In such a case, all is not lost for the party who did not participate. Even after failing to appear, a respondent is still given the opportunity, under the CIAC Rules, to have the proceedings reopened and be allowed to present evidence, although with the qualification that this is done before an award is issued: 4.2.1 In the event that, before award, the Respondent who had not earlier questioned the jurisdiction of the Tribunal, appears and offers to present his evidence, the Arbitral Tribunal may, for reasons that justifies

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(sic) the failure to appear, reopen the proceedings, require him to file his answer with or without counterclaims, pay the fees, where required under these Rules, and allow him to present his evidence, with limited right to cross examine witnesses already in the discretion of the Tribunal. Evidence already admitted shall remain. The Tribunal shall decide the effect of such controverting evidence presented by the Respondent on evidence already admitted prior to such belated appearance. Thus, under the CIAC Rules, even without the participation of one of the parties in the proceedings, the CIAC is still required to proceed with the hearing of the construction dispute. 61 This Court has held that the CIAC has jurisdiction over a dispute arising from a construction contract even though only one of the parties requested for arbitration.62 In fact, in Philrock, Inc. v. Construction Industry Arbitration Commission,63 the Court held that the CIAC retained jurisdiction even if both parties had withdrawn their consent to arbitrate. In this case, there being a valid arbitration clause mutually stipulated by the parties, they are both contractually bound to settle their dispute through arbitration before the CIAC. MCWD refused to participate, but this should not affect the authority of the CIAC to conduct the proceedings, and, thereafter, issue an arbitral award. Now, with the CIAC decision being questioned by MCWD, the Court takes a cursory reading of the said decision. It reveals that the conclusions arrived at by CIAC are supported by facts and the law. Article 1359 of the Civil Code states that when there has been a meeting of the minds of the parties to a contract, but their true intention is not expressed in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument to the end that such true intention may be expressed. The CIAC, in this case, found that the parametric formula for price escalation reflected in the Water Supply Contract involved two items: Power Rate Price Adjustment (30% of the base selling price of water) and Consumer Price Index Adjustment (40% of the base selling price of water). The remaining 30% of the selling price of water, which should have been for Capital Cost Recovery, was inadvertently left out in this parametric formula. Thus, the Contract should be reformed accordingly to reflect the intention of the parties to include in the price escalation formula the Capital Cost Recovery Adjustment. These conclusions were affirmed by the CA in the assailed decision of February 20, 2006. As noted by MCWD in its reply, however, the dispositive portion of the CIAC decision reforming the price escalation formula is inconsistent with what was stated in the body of the decision. The formula contained in the body of the decision is as follows: WHEREFORE[,] premises considered, judgment is hereby rendered as follows: 1. Ordering the reformation of Clause 17 of the Water Supply Contract to read: 17[.] Price Escalation and/or De-Escalation shall be based on the parametric formula: The general rule is that where there is a conflict between the fallo, or the dispositive part, and the body of the decision or order, the fallo prevails on the theory that the fallo is the final order and becomes the subject of execution, while the body of the decision merely contains the reasons or conclusions of the court ordering nothing. However, where one can clearly and unquestionably conclude from the body of the decision that there was a mistake in the dispositive portion, the body of the decision will prevail. 65 Following the reasoning of the CIAC in this case, there are three components to price adjustment: (1)

Power Cost Adjustment (30% of the base selling price of water); (2) Operating Cost Adjustment (40% of the base selling price of water); and (3) Capital Cost Adjustment (30% of the base selling price of water). In turn, the second componentOperating Cost Adjustmentis computed based on Local Operating Cost Adjustment (30%), and Foreign Operating Cost Adjustment (70%). Capital Cost Adjustment, on the other hand, is composed of Local Capital Cost Adjustment (30%), and Foreign Capital Cost Adjustment (70%). This is consistent with the formula set forth in the body of the CIAC decision. If the formula in the dispositive portion were to be followed, Operating Cost Adjustment would be computed with the Local Operating Cost Adjustment representing the entire 40% of the base selling price of water instead of just 30% of the Operating Cost Adjustment. Moreover, if the Capital Cost Recovery Adjustment were to be computed based solely on Foreign Capital Cost Recovery Adjustment, it would represent the entire 30% of the base selling price of water, and not just 70% of the Capital Cost Recovery Adjustment. The omission of the marked portions of the formula as stated in the body of the CIAC decision represents substantial changes to the formula for price escalation. It is thus clear that the formula as stated in the body of the decision should govern. WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in C.A.G.R. CEB SP. No. 00623 are AFFIRMED with the modification that the formula for the computation of the Capital Cost Recovery Adjustment in the fallo of the CIAC decision should be amended to read as follows: WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Ordering the reformation of Clause 17 of the Water Supply Contract to read: 17. Price Escalation and/or De-Escalation shall be based on the parametric formula: 17.1. Power Rate Price Adjustment/Power Cost Adjustment Price escalation shall be reckoned from January 1999 when the water was first delivered by Mactan Rock Industries, Inc.1awp++i1 to the MCWD facilities in Mactan. The base CPI, base US$ Exchange Rate and the Base Power Rate shall be the prevailing rate in January 1999, while the Base Selling Price of water shall mean the 1996 rate per cubic meter of water as provided for in the Water Supply Contract. 2. Ordering Respondent Metropolitan Cebu Water District to pay Claimant, Mactan Rock Industries, Inc. under the reformed Clause 17 of the Water Supply Contract, the net amount of Php12,126,296.70 plus legal interest of six percent (6%) per annum from March 15, 2004, the date of filing of the case with the Construction Industry Arbitration Commission, and twelve percent (12%) per annum from the date this Decision becomes final and executory, until the foregoing amounts shall have been fully paid. 3. Claimant Mactan Rock Industries, Inc. and Metropolitan Cebu Water District shall share the cost of arbitration equally. 11. Pacific Ace vs Yanasigawa Respondent Eiji Yanagisawa (Eiji), a Japanese national, and Evelyn F. Castaeda (Evelyn), a Filipina, contracted marriage on July 12, 1989 in the City Hall of Manila.4

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On August 23, 1995, Evelyn purchased a 152 square-meter townhouse unit located at Bo. Sto. Nio, Paraaque, Metro Manila (Paraaque townhouse unit).5 The Registry of Deeds for Paraaque issued Transfer Certificate of Title (TCT) No. 99791 to "Evelyn P. Castaeda, Filipino, married to Ejie Yanagisawa, Japanese citizen[,] both of legal age."6 In 1996, Eiji filed a complaint for the declaration of nullity of his marriage with Evelyn on the ground of bigamy (nullity of marriage case). The complaint, docketed as Civil Case No. 96-776, was raffled to Branch 149 of the Regional Trial Court of Makati (Makati RTC). During the pendency of the case, Eiji filed a Motion for the Issuance of a Restraining Order against Evelyn and an Application for a Writ of a Preliminary Injunction. He asked that Evelyn be enjoined from disposing or encumbering all of the properties registered in her name. At the hearing on the said motion, Evelyn and her lawyer voluntarily undertook not to dispose of the properties registered in her name during the pendency of the case, thus rendering Eijis application and motion moot. On the basis of said commitment, the Makati RTC rendered the following Order dated October 2, 1996: ORDER In view of the commitment made in open court by Atty. Lupo Leyva, counsel for the defendant [Evelyn], together with his client, the defendant in this case, that the properties registered in the name of the defendant would not be disposed of, alienated or encumbered in any manner during the pendency of this petition, the Motion for the Issuance of a Restraining Order and Application for a Writ of a Preliminary Injunction scheduled today is hereby considered moot and academic. SO ORDERED.7 (Emphasis supplied.) The above Order was annotated on the title of the Paraaque townhouse unit or TCT No. 99791, thus:

Eiji learned of the REM upon its annotation on TCT No. 99791. Deeming the mortgage as a violation of the Makati RTCs October 2, 1996 Order, Eiji filed a complaint for the annulment of REM (annulment of mortgage case) against Evelyn and PAFIN.15 The complaint, docketed as Civil Case No. 98-0431, was raffled to Branch 258 of the Regional Trial Court of Paraaque City (Paraaque RTC). For its defense, PAFIN denied prior knowledge of the October 2, 1996 Order against Evelyn. It admitted, however, that it did not conduct any verification of the title with the Registry of Deeds of Paraaque City "because x x x Evelyn was a good, friendly and trusted neighbor."16 PAFIN maintained that Eiji has no personality to seek the annulment of the REM because a foreign national cannot own real properties located within the Philippines.17 Evelyn also denied having knowledge of the October 2, 1996 Order.18 Evelyn asserted that she paid for the property with her own funds19 and that she has exclusive ownership thereof. 20 Paraaque Regional Trial Court Decision21 The Paraaque RTC determined that the only issue before it is "whether x x x [Eiji] has a cause of action against the defendants and x x x is entitled to the reliefs prayed for despite the fact that he is not the registered owner of the property being a Japanese national."22 The Paraaque RTC explained that Eiji, as a foreign national, cannot possibly own the mortgaged property. Without ownership, or any other law or contract binding the defendants to him, Eiji has no cause of action that may be asserted against them.23 Thus, the Paraaque RTC dismissed Eijis complaint: WHEREFORE, premises considered, for failure of the plaintiff to state a cause of action against defendants, EVELYN CASTAEDA YANAGISAWA and Pacific Ace Finance Ltd. (PAFIN), this case is DISMISSED. The counterclaim and cross-claim are likewise DISMISSED.

Entry No. 8729 Order issued by Hon. Josefina Guevara Salonga, Judge, RTC, Branch 149, Makati City, ordering the defendant in Civil Case No. 96-776 entitled Eiji Yanagisawa, Plaintiff-versusEvelyn Castaeda Yanagisawa, that the properties registered in the name of the defendant would not be disposed of, alienated or encumbered in any manner during the pendency of the petition, the Motion for the Issuance of a Restraining Order and Application for a Writ of Preliminary Injunction is hereby considered moot and academic. Date of Instrument October 2, 1996 Date of Inscription March 17, 1997 11:21 a.m.8 (Emphasis supplied.) Sometime in March 1997, Evelyn obtained a loan of P500,000.00 from petitioner Pacific Ace Finance Ltd. (PAFIN).9 To secure the loan, Evelyn executed on August 25, 1998 a real estate mortgage (REM) 10 in favor of PAFIN over the Paraaque townhouse unit covered by TCT No. 99791. The instrument was submitted to the Register of Deeds of Paraaque City for annotation on the same date. 11 At the time of the mortgage, Eijis appeal in the nullity of marriage case was pending before the CA. 12 The Makati RTC had dissolved Eiji and Evelyns marriage,13 and had ordered the liquidation of their registered properties, including the Paraaque townhouse unit, with its proceeds to be divided between the parties. 14 The Decision of the Makati RTC did not lift or dissolve its October 2, 1996 Order on Evelyns commitment not to dispose of or encumber the properties registered in her name.

SO ORDERED.24 Eiji appealed the trial courts decision arguing that the trial court erred in holding that his inability to own real estate property in the Philippines deprives him of all interest in the mortgaged property, which was bought with his money. He added that the Makati RTC has even recognized his contribution in the purchase of the property by its declaration that he is entitled to half of the proceeds that would be obtained from its sale. Eiji also emphasized that Evelyn had made a commitment to him and to the Makati RTC that she would not dispose of, alienate, or encumber the properties registered in her name while the case was pending. This commitment incapacitates Evelyn from entering into the REM contract. Court of Appeals Decision25 The CA found merit in Eijis appeal. The CA noted that the Makati RTC ruled on Eijis and Evelyns ownership rights over the properties that were acquired during their marriage, including the Paraaque townhouse unit. It was determined therein that the registered properties should be sold at public auction and the proceeds thereof to be divided between Eiji and Evelyn.26

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Contrary to this ruling, the Paraaque RTC ruled that Eiji has no ownership rights over the Paraaque townhouse unit in light of the constitutional prohibition on foreign ownership of lands and that the subject property is Evelyns exclusive property.27 The appellate court determined that the Paraaque RTCs Decision was improper because it violated the doctrine of non-interference. Courts of equal jurisdiction, such as regional trial courts, have no appellate jurisdiction over each other.28 For this reason, the CA annulled and set aside the Paraaque RTCs decision to dismiss Eijis complaint.29 The CA then proceeded to resolve Eijis complaint.30 The CA noted that Eiji anchored his complaint upon Evelyns violation of her commitment to the Makati RTC and to Eiji that she would not dispose of, alienate, or encumber the properties registered in her name, including the Paraaque townhouse unit.1wphi1 This commitment created a right in favor of Eiji to rely thereon and a correlative obligation on Evelyns part not to encumber the Paraaque townhouse unit. Since Evelyns commitment was annotated on TCT No. 99791, all those who deal with the said property are charged with notice of the burdens on the property and its registered owner. 31 On the basis of Evelyns commitment and its annotation on TCT No. 99791, the CA determined that Eiji has a cause of action to annul the REM contract. Evelyn was aware of her legal impediment to encumber and dispose of the Paraaque townhouse unit. Meanwhile, PAFIN displayed a wanton disregard of ordinary prudence when it admitted not conducting any verification of the title whatsoever. The CA determined that PAFIN was a mortgagee in bad faith.32 Thus, the CA annulled the REM executed by Evelyn in favor of PAFIN. The parties to the annulled mortgage filed separate motions for reconsideration on August 22, 2006, 33 which were both denied for lack of merit by the appellate court in its November 7, 2006 Resolution.34 PAFIN filed this petition for review. Petitioners Arguments Petitioner seeks a reversal of the CA Decision, which allegedly affirmed the Makati RTC ruling that Eiji is a co-owner of the mortgaged property. PAFIN insists that the CA sustained a violation of the constitution with its declaration that an alien can have an interest in real property located in the Philippines.35 Petitioner also seeks the reinstatement of the Paraaque RTCs Decision dated April 20, 2003 36 and prays that this Court render a decision that Eiji cannot have ownership rights over the mortgaged property and that Evelyn enjoys exclusive ownership thereof. As the sole owner, Evelyn can validly mortgage the same to PAFIN without need of Eijis consent. Corollarily, Eiji has no cause of action to seek the REMs annulment.37 Respondents Arguments Respondent argues that he has an interest to have the REM annulled on two grounds: First, Evelyn made a commitment in open court that she will not encumber the Paraaque townhouse unit during the pendency of the case. Second, the Makati RTCs decision declared that he is entitled to share in the proceeds of the Paraaque townhouse unit.38

Respondent also insists that petitioner is in bad faith for entering into the mortgage contract with Evelyn despite the annotation on TCT No. 99791 that Evelyn committed herself not to encumber the same. 39 Issues Petitioner raises the following issues:40 1. Whether a real property in the Philippines can be part of the community property of a Filipina and her foreigner spouse; 2. Whether a real property registered solely in the name of the Filipina wife is paraphernal or conjugal; 3. Who is entitled to the real property mentioned above when the marriage is declared void? 4. Whether the Paraaque RTC can rule on the issue of ownership, even as the same issue was already ruled upon by the Makati RTC and is pending appeal in the CA. Our Ruling The petition has no merit. Contrary to petitioners stance, the CA did not make any disposition as to who b etween Eiji and Evelyn owns the Paraaque townhouse unit. It simply ruled that the Makati RTC had acquired jurisdiction over the said question and should not have been interfered with by the Paraaque RTC. The CA only clarified that it was improper for the Paraaque RTC to have reviewed the ruling of a co-equal court. The Court agrees with the CA. The issue of ownership and liquidation of properties acquired during the cohabitation of Eiji and Evelyn has been submitted for the resolution of the Makati RTC, and is pending41 appeal before the CA. The doctrine of judicial stability or non-interference dictates that the assumption by the Makati RTC over the issue operates as an "insurmountable barrier" to the subsequent assumption by the Paraaque RTC.42 By insisting on ruling on the same issue, the Paraaque RTC effectively interfered with the Makati RTCs resolution of the issue and created the possibility of conflicting decisions. Cojuangco v. Villegas43 states: "The various branches of the [regional trial courts] of a province or city, having as they have the same or equal authority and exercising as they do concurrent and coordinate jurisdiction, should not, cannot and are not permitted to interfere with their respective cases, much less with their orders or judgments. A contrary rule would obviously lead to confusion and seriously hamper the administration of justice." The matter is further explained thus: It has been held that "even in cases of concurrent jurisdiction, it is, also, axiomatic that the court first acquiring jurisdiction excludes the other courts." In addition, it is a familiar principle that when a court of competent jurisdiction acquires jurisdiction over the subject matter of a case, its authority continues, subject only to the appellate authority, until the matter is finally and completely disposed of, and that no court of co-ordinate authority is at liberty to interfere with its action. This doctrine is applicable to civil cases, to criminal prosecutions, and to courts-martial. The principle is essential to the proper and orderly administration of the laws; and while its observance might be required on the grounds of judicial comity and courtesy, it does not rest upon such considerations exclusively, but is enforced to prevent unseemly, expensive, and dangerous conflicts of jurisdiction and of the process.44

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Petitioner maintains that it was imperative for the Paraaque RTC to rule on the ownership issue because it was essential for the determination of the validity of the REM.45 The Court disagrees. A review of the complaint shows that Eiji did not claim ownership of the Paraaque townhouse unit or his right to consent to the REM as his bases for seeking its annulment. Instead, Eiji invoked his right to rely on Evelyns commitment not t o dispose of or encumber the property (as confirmed in the October 2, 1996 Order of the Makati RTC), and the annotation of the said commitment on TCT No. 99791. It was Evelyn and PAFIN that raised Eijis incapacity to own real property as their defense to the suit.1wphi1 They maintained that Eiji, as an alien incapacitated to own real estate in the Philippines, need not consent to the REM contract for its validity. But this argument is beside the point and is not a proper defense to the right asserted by Eiji. This defense does not negate Eijis right to rely on the October 2, 1996 Order of the Makati RTC and to hold third persons, who deal with the registered property, to the annotations entered on the title. Thus, the RTC erred in dismissing the complaint based on this defense. Petitioner did not question the rest of the appellate courts ruling, which held that Evelyn and PAFIN executed the REM in complete disregard and violation of the October 2, 1996 Order of the Makati RTC and the annotation on TCT No. 99791. It did not dispute the legal effect of the October 2, 1996 Order on Evelyns capacity to encumber the Paraaque townhouse unit nor the CAs finding that petitioner is a mortgagee in bad faith. The October 2, 1996 Order, embodying Evelyns commitmen t not to dispose of or encumber the property, is akin to an injunction order against the disposition or encumbrance of the property. Jurisprudence holds that all acts done in violation of a standing injunction order are voidable as to the party enjoined and third parties who are not in good faith.46 The party, in whose favor the injunction is issued, has a cause of action to seek the annulment of the offending actions.47 The following is instructive: An injunction or restraining order must be obeyed while it remains in full force and effect until the injunction or restraining order has been set aside, vacated, or modified by the court which granted it, or until the order or decree awarding it has been reversed on appeal. The injuction must be obeyed irrespective of the ultimate validity of the order, and no matter how unreasonable and unjust the injunction may be in its terms.48 In view of the foregoing discussion, we find no need to discuss the other issues raised by the petitioner.

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45