Jacot vs.

Dal
Jacot vs. Dal

Petitioner Nestor Jacot assails the Resolution of COMELEC disqualifying him from running for the
position of Vice-Mayor of Catarman, Camiguin, in the 14 May 2007 National and Local Elections, on
the ground that he failed to make a personal renouncement of US citizenship. He was a natural born
citizen of the Philippines, who became a naturalized citizen of the US on 13 December 1989. He
sought to reacquire his Philippine citizenship under Republic Act No. 9225.
ISSUE: Did Nestor Jacot effectively renounce his US citizenship so as to qualify him to run as a vicemayor?
HELD: No. It bears to emphasize that the oath of allegiance is a general requirement for all those
who wish to run as candidates in Philippine elections; while the renunciation of foreign citizenship is
an additional requisite only for those who have retained or reacquired Philippine citizenship under
Republic Act No. 9225 and who seek elective public posts, considering their special circumstance of
having more than one citizenship.

Sobejana-Condon v Comelec
Failure to renounce foreign citizenship in accordance with the exact tenor of Section 5(2) of Republic
Act (R.A.) No. 9225 [Citizenship Retention and Re-Acquisition Act of 2003]renders a dual citizen
ineligible to run for and thus hold any elective public office.
Thus held the Supreme Court as it dismissed the petition for certiorari of the winning vice-mayoral
candidate of Caba, La Union who was unseated after being disqualified on the ground that her
personal declaration of renunciation of her Australian citizenship was not under oath as required by
RA 9225.
In a 24-page decision penned by Justice Bienvenido L. Reyes, the Court En Banc affirmed in toto the assailed
resolution of the Commission on Elections (COMELEC)en banc dated September 6, 2011 that affirmed the
consolidated Decision dated October 22, 2010 of the Bauang, La Union Regional Trial Court (RTC), Branch 33 that
had declared Teodora Sobejana-Condon disqualified and ineligible to her position as Caba, La Union Vice-Mayor.
The Court held that petitioner Sobejana-Condon was disqualified from running for elective office for failure to
renounce her Australian citizenship under oath contrary to the exact mandate of Sec. 5(2) that the renunciation of
foreign citizenship must be sworn before an officer authorized to administer oath.
The language of the provision is plain and unambiguous. It expresses a single, definite, and sensible meaning and
must thus be read literally. The foreign citizenship must be formally rejected through an affidavit duly sworn before
an officer authorized to administer oath, the Court held.
The Court further held that the petitioners act of running for public office does not suffice to serve as an effective
renunciation of her Australian citizenship. While the Court has previously declared that the filing by a person with
dual citizenship of a certificate of candidate is already considered a renunciation of foreign citizenship, such ruling
was already adjudged superseded by the enactment of RA 9255 on August 29, 2003 which provides for the additional
condition of a personal and sworn renunciation of foreign citizenship. It added that the fact that petitioner won the
elections can not cure the defect of her candidacy since garnering the most number of votes does not validate the
election of a disqualified candidate because the application of the constitutional and statutory provisions on
disqualification is not a matter of popularity.
[Petitioner] is yet to regain her political right to seek elective office. Unless she executes a sworn renunciation of her
Australian citizenship, she is ineligible to run for and hold any elective office in the Philippines, held the Court.
The Court also held that it cannot read the Australian Citizen Act of 1978 under which petitioner claim she deemed to
have lost her Australian citizenship into RA 9225 as the Court would be applying not what the legislative department

has deemed wise to require. To do so would be a brazen encroachment upon the sovereign will and power of the
people of this Republic.
Petitioner Sobejano-Condon was a natural-born Filipino citizen on August 8, 1944 but became a naturalized
Australian citizen due to her marriage to one Kevin Thomas Condon on December 13, 1984. On December 2, 2005,
she filed an application to re-acquire Philippine citizenship before the Philippine Embassy in Canberra, Australia
pursuant to Sec. 3 of RA 9225, which was approved and she took her oath of allegiance to the Republic on December
5, 2005.
On September 18, 2006, petitioner filed an unsworn Declaration of Renunciation of Australian Citizenship before the
Department of Immigration and Indigenous Affairs, Canberra, Australia, which in turn issued the order dated
September 27, 2006 certifying that she has ceased to be an Australian citizen.
She ran for Mayor in her hometown of Caba, La Union in 2007 elections but lost her bid. She ran again and won in
the May 2010 elections, this time for position of Vice-Mayor, and took her oath on May 13, 2010. However, private
respondents Luis M. Bautista, et al., all registered voters of Caba, La Union, filed separate petitions for quo
warranto questioning her eligibility before the RTC on the issue of her dual citizenship and that she failed to execute
a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to
administer an oath.
The RTC on October 22, 2010 ruled that petitioners failure to comply with sec. 5(2) of RA 9225 rendered her
ineligible to run and hold public office. It also nullified her proclamation as winning candidate and declared the
position of Vice-Mayor in Caba, La Union vacant. Sobejana-Condon appealed to the COMELEC and the poll bodys
Second Division dismissed the same for failure to pay the docket fees within the prescribed period. On motion for
reconsideration, the appeal was reinstated by the COMELEC en banc in its September 6, 2011 resolution. However,
the COMELEC en banc,in the same resolution, concurred with the findings and conclusions of the RTC. Thus, it
dismissed petitioners instant appeal for lack of merit and affirmed the October 22, 2010 decision of the RTC, as well
as granted the Motion for Execution filed by private respondents.
The Court held also that the COMELEC en banc did not commit grave abuse of discretion when it proceeded to decide
the substantive merits of the petitioners appeal after ruling for reinstatement. It held that an appeal may be
simultaneously reinstated and definitively resolved by the COMELEC en banc in a resolution disposing of a motion
for reconsideration pursuant to Sec. 3, Art. IX-C of the Constitution and Sec. 5(c), Rule 3 of the COMELEC Rules of
Procedure.
The Court further held that the COMELEC en banc has the power to order discretionary execution of judgment which
is expressly sanctioned by Section 1, Rule 41 of the COMELEC Rules of Procedure.
Citing Sec. 2, Rule 39 of the Rules of Court, the Court also held that execution pending appeal may be issued by an
appellate court after the trial court has lost jurisdiction.
The Court held that private respondents are not estopped from questioning petitioners eligibility to hold public office
pursuant to Sec. 253 of the Omnibus Election Code which allows the filing of quo warranto petition within 10 days
after the proclamation of the elections results, which was what private respondents did. (GR No. 198742, SobejanaCondon v. COMELEC, August 10, 2012)

(BM No. 2112,In Re: Petition to Re-Acquire the Privilege to Practice Law in the Philippines, Epifanio B.
Muneses, Petitioner, July 24, 2012)

The Supreme Court En Banc has recently granted the petition of a lawyer to practice law in the
Philippines once again after losing the said privilege to practice law when he became a citizen of the
United States of America in 1981 and then re-acquiring his Philippine citizenship in 2006 pursuant
to RA 9225, the Citizenship Retention and Re-Acquisition Act of 2003.

The Court further directed the Office of the Bar Confidant (OBC) to draft the necessary guidelines
for the re-acquisition of the privilege to resume the practice of law for the guidance of the Bench
and the Bar.
In a six-page resolution penned by Justice Bienvenido L. Reyes, the Court unanimously held that
upon favorable recommendation from the OBC, Atty. Epifanio B. Muneses satisfactorily complied
with all the requirements sought by the OBC and met all the qualifications and none of the
disqualifications for membership in the Bar. In particular, he had submitted in compliance the
following: 1) Petition for Re-Acquisition of Philippine Citizenship; 2) Order (for Re-Acquisition of
Philippine Citizenship); 3) Oath of Allegiance to the Republic of the Philippines; 4) Certificate of
Re-Acquisition/Retention of Philippine Citizenship issued by the Bureau of Immigration, in lieu of
the Identification Certificate; 5) Certification dated May 19, 2010 of the IBP-Surigao City Chapter
attesting to his good moral character as well as his updated payment of annual membership dues; 6)
Professional Tax Receipt (PTR) for the year 2010; 7) Certificate of Compliance with the MCLE for
the 2nd compliance period; and 8) Certification dated December 5, 2008 of Atty. Gloria EstenzoRamos, Coordinator, UC-MCLE Program, University of Cebu, College of Law attesting to his
compliance with the MCLE.
The Court sees no bar to the petitioners resumption to the practice of law in the
Philippines, the Court declared, subject to the condition that Atty. Muneses re-take the
Lawyers Oath and pay the appropriate fee.
The Court reiterated that Filipino citizenship is a continuing requirement for the practice of law, loss
of which means the termination of ones membership in the Bar and the privilege to engage in
the practice of law. Thus, a Filipino lawyer who becomes a citizen of another country but later
re-acquires his Philippine citizenship under RA 9225 remains to be a member of the Philippine
Bar, it added. It also noted that the right to resume the practice of law, however, is not
automatic and Section 5 of RA 9225 states that a person who intends to practice his profession
in the Philippines must apply with the proper authority for the license or permit to engage in such
practice.

Detailed Digest of Gamboa vs. Finance Secretary, G.R. No. 176579,

June 28, 2011

WILSON P. GAMBOA vs. FINANCE

SECRETARY TEVES
G.R. No. 176579, promulgated June 28, 2011
X----------------------------------------------------------------------------X

DECISION
CARPIO, J.:
I.

THE FACTS
This is a petition to nullify the sale of shares of stock of Philippine Telecommunications
Investment Corporation (PTIC) by the government of the Republic of the Philippines, acting through
the Inter-Agency Privatization Council (IPC), to Metro Pacific Assets Holdings, Inc. (MPAH), an
affiliate of First Pacific Company Limited (First Pacific), a Hong Kong-based investment
management and holding company and a shareholder of the Philippine Long Distance Telephone
Company (PLDT).
The petitioner questioned the sale on the ground that it also involved an indirect sale of 12
million shares (or about 6.3 percent of the outstanding common shares) of PLDT owned by PTIC to
First Pacific. With the this sale, First Pacifics common shareholdings in PLDT increased from 30.7
percent to 37 percent, thereby increasing the total common shareholdings of foreigners in PLDT to
about 81.47%. This, according to the petitioner, violates Section 11, Article XII of the 1987 Philippine
Constitution which limits foreign ownership of the capital of a public utility to not more than 40%.

II.

THE ISSUE
Does the term capital in Section 11, Article XII of the Constitution refer to the total common
shares only, or to the total outstanding capital stock (combined total of common and non-voting
preferred shares) of PLDT, a public utility?

III. THE RULING

[The Court partly granted the petition and held that the term capital in Section 11, Article XII
of the Constitution refers only to shares of stock entitled to vote in the election of directors of a public
utility, or in the instant case, to the total common shares of PLDT.]
Section 11, Article XII (National Economy and Patrimony) of the 1987 Constitution mandates
the Filipinization of public utilities, to wit:
Section 11. No franchise, certificate, or any other form of authorization for the operation of
a public utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines, at least sixty per centum of whose
capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in
character or for a longer period than fifty years. Neither shall any such franchise or right be granted
except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress

when the common good so requires. The State shall encourage equity participation in public utilities by
the general public. The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive and managing
officers of such corporation or association must be citizens of the Philippines. (Emphasis supplied)

The term capital in Section 11, Article XII of the Constitution refers only to shares of stock
entitled to vote in the election of directors, and thus in the present case only to common shares, and
not to the total outstanding capital stock comprising both common and non-voting preferred shares
[of PLDT].
xxx

xxx

xxx

Indisputably, one of the rights of a stockholder is the right to participate in the control or
management of the corporation. This is exercised through his vote in the election of directors
because it is the board of directors that controls or manages the corporation. In the absence of
provisions in the articles of incorporation denying voting rights to preferred shares, preferred shares
have the same voting rights as common shares. However, preferred shareholders are often
excluded from any control, that is, deprived of the right to vote in the election of directors and on
other matters, on the theory that the preferred shareholders are merely investors in the corporation
for income in the same manner as bondholders. xxx.
Considering that common shares have voting rights which translate to control, as opposed to
preferred shares which usually have no voting rights, the term capital in Section 11, Article XII of
the Constitution refers only to common shares. However, if the preferred shares also have the right
to vote in the election of directors, then the term capital shall include such preferred shares
because the right to participate in the control or management of the corporation is exercised through
the right to vote in the election of directors. In short, the term capital in Section 11, Article XII of the
Constitution refers only to shares of stock that can vote in the election of directors.
xxx

xxx

xxx

Mere legal title is insufficient to meet the 60 percent Filipino-owned capital required in the
Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with 60
percent of the voting rights, is required. The legal and beneficial ownership of 60 percent of the
outstanding capital stock must rest in the hands of Filipino nationals in accordance with the
constitutional mandate. Otherwise, the corporation is considered as non-Philippine national[s].
xxx

xxx

xxx

To construe broadly the term capital as the total outstanding capital stock, including both
common and non-voting preferred shares, grossly contravenes the intent and letter of the
Constitution that the State shall develop a self-reliant and independent national economy effectively

controlled by Filipinos. A broad definition unjustifiably disregards who owns the all-important voting
stock, which necessarily equates to control of the public utility.
We shall illustrate the glaring anomaly in giving a broad definition to the term capital. Let us
assume that a corporation has 100 common shares owned by foreigners and 1,000,000 non-voting
preferred shares owned by Filipinos, with both classes of share having a par value of one peso
(P1.00) per share. Under the broad definition of the term capital, such corporation would be
considered compliant with the 40 percent constitutional limit on foreign equity of public utilities since
the overwhelming majority, or more than 99.999 percent, of the total outstanding capital stock is
Filipino owned. This is obviously absurd.
In the example given, only the foreigners holding the common shares have voting rights in
the election of directors, even if they hold only 100 shares. The foreigners, with a minuscule equity of
less than 0.001 percent, exercise control over the public utility. On the other hand, the Filipinos,
holding more than 99.999 percent of the equity, cannot vote in the election of directors and hence,
have no control over the public utility. This starkly circumvents the intent of the framers of the
Constitution, as well as the clear language of the Constitution, to place the control of public utilities in
the hands of Filipinos. It also renders illusory the State policy of an independent national
economy effectively controlled by Filipinos.
The example given is not theoretical but can be found in the real world, and in fact exists in
the present case.
xxx

xxx

xxx

[O]nly holders of common shares can vote in the election of directors [of PLDT], meaning
only common shareholders exercise control over PLDT. Conversely, holders of preferred shares,
who have no voting rights in the election of directors, do not have any control over PLDT. In fact,
under PLDTs Articles of Incorporation, holders of common shares have voting rights for all
purposes, while holders of preferred shares have no voting right for any purpose whatsoever.
It must be stressed, and respondents do not dispute, that foreigners hold a majority of the
common shares of PLDT. In fact, based on PLDTs 2010 General Information Sheet (GIS), which is
a document required to be submitted annually to the Securities and Exchange
Commission, foreigners hold 120,046,690 common shares of PLDT whereas Filipinos hold only
66,750,622 common shares. In other words, foreigners hold 64.27% of the total number of PLDTs
common shares, while Filipinos hold only 35.73%. Since holding a majority of the common shares
equates to control, it is clear that foreigners exercise control over PLDT. Such amount of control
unmistakably exceeds the allowable 40 percent limit on foreign ownership of public utilities expressly
mandated in Section 11, Article XII of the Constitution.
As shown in PLDTs 2010 GIS, as submitted to the SEC, the par value of PLDT common
shares is P5.00 per share, whereas the par value of preferred shares is P10.00 per share. In other

words, preferred shares have twice the par value of common shares but cannot elect directors and
have only 1/70 of the dividends of common shares. Moreover, 99.44% of the preferred shares are
owned by Filipinos while foreigners own only a minuscule 0.56% of the preferred shares. Worse,
preferred shares constitute 77.85% of the authorized capital stock of PLDT while common shares
constitute only 22.15%. This undeniably shows that beneficial interest in PLDT is not with the nonvoting preferred shares but with the common shares, blatantly violating the constitutional
requirement of 60 percent Filipino control and Filipino beneficial ownership in a public utility.
The legal and beneficial ownership of 60 percent of the outstanding capital stock must rest in
the hands of Filipinos in accordance with the constitutional mandate. Full beneficial ownership of 60
percent of the outstanding capital stock, coupled with 60 percent of the voting rights, is
constitutionally required for the States grant of authority to operate a public utility. The undisputed
fact that the PLDT preferred shares, 99.44% owned by Filipinos, are non-voting and earn only 1/70
of the dividends that PLDT common shares earn, grossly violates the constitutional requirement of
60 percent Filipino control and Filipino beneficial ownership of a public utility.
In short, Filipinos hold less than 60 percent of the voting stock, and earn less than 60 percent
of the dividends, of PLDT. This directly contravenes the express command in Section 11, Article XII
of the Constitution that [n]o franchise, certificate, or any other form of authorization for the operation
of a public utility shall be granted except to x x x corporations x x x organized under the laws of the
Philippines, at least sixty per centum of whose capital is owned by such citizens x x x.
To repeat, (1) foreigners own 64.27% of the common shares of PLDT, which class of shares
exercises the sole right to vote in the election of directors, and thus exercise control over PLDT; (2)
Filipinos own only 35.73% of PLDTs common shares, constituting a minority of the voting stock, and
thus do not exercise control over PLDT; (3) preferred shares, 99.44% owned by Filipinos, have no
voting rights; (4) preferred shares earn only 1/70 of the dividends that common shares earn; (5)
preferred shares have twice the par value of common shares; and (6) preferred shares constitute
77.85% of the authorized capital stock of PLDT and common shares only 22.15%. This kind of
ownership and control of a public utility is a mockery of the Constitution.
Incidentally, the fact that PLDT common shares with a par value of P5.00 have a current
stock market value of P2,328.00 per share, while PLDT preferred shares with a par value of P10.00
per share have a current stock market value ranging from only P10.92 to P11.06 per share, is a
glaring confirmation by the market that control and beneficial ownership of PLDT rest with the
common shares, not with the preferred shares.
xxx

xxx

xxx

WHEREFORE, we PARTLY GRANT the petition and rule that the term capital in Section
11, Article XII of the 1987 Constitution refers only to shares of stock entitled to vote in the election of
directors, and thus in the present case only to common shares, and not to the total outstanding
capital stock (common and non-voting preferred shares). Respondent Chairperson of the Securities

and Exchange Commission is DIRECTED to apply this definition of the term capital in determining
the extent of allowable foreign ownership in respondent Philippine Long Distance Telephone
Company, and if there is a violation of Section 11, Article XII of the Constitution, to impose the
appropriate sanctions under the law.

TOLENTINO VS. THE SECRETARY OF FINANCE Case Digest

ARTURO M. TOLENTINO VS. THE SECRETARY OF FINANCE and THE COMMISSIONER OF
INTERNAL
REVENUE
1994
Aug
25
G.R.
No.
115455
235
SCRA
630
FACTS: The valued-added tax (VAT) is levied on the sale, barter or exchange of goods and
properties as well as on the sale or exchange of services. It is equivalent to 10% of the gross selling
price or gross value in money of goods or properties sold, bartered or exchanged or of the gross
receipts from the sale or exchange of services. Republic Act No. 7716 seeks to widen the tax base
of the existing VAT system and enhance its administration by amending the National Internal
Revenue
Code.
The Chamber of Real Estate and Builders Association (CREBA) contends that the imposition of VAT
on sales and leases by virtue of contracts entered into prior to the effectivity of the law would violate
the
constitutional
provision
of
non-impairment
of
contracts.
ISSUE: Whether R.A. No. 7716 is unconstitutional on ground that it violates the contract clause
under
Art.
III,
sec
10
of
the
Bill
of
Rights.
RULING: No. The Supreme Court the contention of CREBA, that the imposition of the VAT on the
sales and leases of real estate by virtue of contracts entered into prior to the effectivity of the law
would violate the constitutional provision of non-impairment of contracts, is only slightly less abstract
but nonetheless hypothetical. It is enough to say that the parties to a contract cannot, through the
exercise of prophetic discernment, fetter the exercise of the taxing power of the State. For not only
are existing laws read into contracts in order to fix obligations as between parties, but the reservation
of essential attributes of sovereign power is also read into contracts as a basic postulate of the legal
order. The policy of protecting contracts against impairment presupposes the maintenance of a
government which retains adequate authority to secure the peace and good order of society. In truth,
the Contract Clause has never been thought as a limitation on the exercise of the State's power of
taxation save only where a tax exemption has been granted for a valid consideration.
Such is not the case of PAL in G.R. No. 115852, and the Court does not understand it to make this
claim. Rather, its position, as discussed above, is that the removal of its tax exemption cannot be
made
by
a
general,
but
only
by
a
specific,
law.
Further, the Supreme Court held the validity of Republic Act No. 7716 in its formal and substantive
aspects as this has been raised in the various cases before it. To sum up, the Court holds:
(1) That the procedural requirements of the Constitution have been complied with by Congress in the
enactment
of
the
statute;
(2) That judicial inquiry whether the formal requirements for the enactment of statutes - beyond
those prescribed by the Constitution - have been observed is precluded by the principle of
separation
of
powers;

(3) That the law does not abridge freedom of speech, expression or the press, nor interfere with the
free exercise of religion, nor deny to any of the parties the right to an education; and
(4) That, in view of the absence of a factual foundation of record, claims that the law is regressive,
oppressive and confiscatory and that it violates vested rights protected under the Contract Clause
are prematurely raised and do not justify the grant of prospective relief by writ of prohibition.
WHEREFORE, the petitions are DISMISSED.