BLAS F. OPLE, petitioner, vs. RUBEN D.

TORRES, ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO

HABITO, ROBERT BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO VALENCIA, TOMAS P.
AFRICA, HEAD OF THE NATIONAL COMPUTER CENTER andCHAIRMAN OF THE COMMISSION ON
AUDIT, respondents.

DECISION
PUNO, J.:

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to prevent the shrinking of the right to
privacy, which the revered Mr. Justice Brandeis considered as "the most comprehensive of rights and the right most
valued by civilized men."[1] Petitioner Ople prays that we invalidate Administrative Order No. 308 entitled "Adoption of a
National Computerized Identification Reference System" on two important constitutional grounds, viz: one, it is a
usurpation of the power of Congress to legislate, and two, it impermissibly intrudes on our citizenry's protected zone of
privacy. We grant the petition for the rights sought to be vindicated by the petitioner need stronger barriers against further
erosion.
A.O. No. 308 was issued by President Fidel V. Ramos on December 12, 1996 and reads as follows:
"ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM
WHEREAS, there is a need to provide Filipino citizens and foreign residents with the facility to conveniently transact
business with basic service and social security providers and other government instrumentalities;
WHEREAS, this will require a computerized system to properly and efficiently identify persons seeking basic services on
social security and reduce, if not totally eradicate, fraudulent transactions and misrepresentations;
WHEREAS, a concerted and collaborative effort among the various basic services and social security providing agencies
and other government instrumentalities is required to achieve such a system;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested
in me by law, do hereby direct the following:
SECTION 1. Establishment of a National Computerized Identification Reference System. A decentralized Identification
Reference System among the key basic services and social security providers is hereby established.
SEC. 2 Inter-Agency Coordinating Committee. An Inter-Agency Coordinating Committee (IACC) to draw-up the
implementing guidelines and oversee the implementation of the System is hereby created, chaired by the Executive
Secretary, with the following as members:
Head, Presidential Management Staff
Secretary, National Economic Development Authority
Secretary, Department of the Interior and
Local Government
Secretary, Department of Health
Administrator, Government Service Insurance
System,
Administrator, Social Security System, Administrator, National Statistics Office Managing
Director, National Computer Center.
SEC. 3. Secretariat. The National Computer Center (NCC) is hereby designated as secretariat to the IACC and as such
shall provide administrative and technical support to the IACC.
SEC. 4. Linkage Among Agencies. The Population Reference Number (PRN) generated by the NSO shall serve as the
common reference number to establish a linkage among concerned agencies. The IACC Secretariat shall coordinate with
the different Social Security and Services Agencies to establish the standards in the use of Biometrics Technology and in
computer application designs of their respective systems.
SEC. 5. Conduct of Information Dissemination Campaign. The Office of the Press Secretary, in coordination with the
National Statistics Office, the GSIS and SSS as lead agencies and other concerned agencies shall undertake a massive trimedia information dissemination campaign to educate and raise public awareness on the importance and use of the PRN
and the Social Security Identification Reference.
SEC. 6. Funding. The funds necessary for the implementation of the system shall be sourced from the respective budgets
of the concerned agencies.
SEC. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall submit regular reports to the Office of the
President, through the IACC, on the status of implementation of this undertaking.

SEC. 8. Effectivity. This Administrative Order shall take effect immediately.

DONE in the City of Manila, this 12th day of December in the year of Our Lord, Nineteen Hundred and Ninety-Six.
(SGD.) FIDEL V. RAMOS"
A.O. No. 308 was published in four newspapers of general circulation on January 22, 1997 and January 23, 1997. On
January 24, 1997, petitioner filed the instant petition against respondents, then Executive Secretary Ruben Torres and the
heads of the government agencies, who as members of the Inter-Agency Coordinating Committee, are charged with the
implementation of A.O. No. 308. On April 8, 1997, we issued a temporary restraining order enjoining its implementation.
Petitioner contends:
"A. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM
REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O. NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF
THE PHILIPPINES IS, THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE POWERS
OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES.
B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE IMPLEMENTATION OF A.O. NO.
308 IS AN UNCONSTITUTIONAL USURPATION OF THE EXCLUSIVE RIGHT OF CONGRESS TO
APPROPRIATE PUBLIC FUNDS FOR EXPENDITURE.
C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE GROUNDWORK FOR A SYSTEM
WHICH WILL VIOLATE THE BILL OF RIGHTS ENSHRINED IN THE CONSTITUTION."[2]
Respondents counter-argue:
A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT A JUDICIAL REVIEW;
B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND ADMINISTRATIVE POWERS OF THE
PRESIDENT WITHOUT ENCROACHING ON THE LEGISLATIVE POWERS OF CONGRESS;
C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE IDENTIFICATION REFERENCE SYSTEM
MAY BE SOURCED FROM THE BUDGETS OF THE CONCERNED AGENCIES;
D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST IN PRIVACY.[3]
We now resolve.
I
As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of the
petitioner and the justiciability of the case at bar. More specifically, respondents aver that petitioner has no legal interest to
uphold and that the implementing rules of A.O. No. 308 have yet to be promulgated.
These submissions do not deserve our sympathetic ear. Petitioner Ople is a distinguished member of our Senate. As a
Senator, petitioner is possessed of the requisite standing to bring suit raising the issue that the issuance of A.O. No. 308 is
a usurpation of legislative power.[4] As taxpayer and member of the Government Service Insurance System (GSIS),
petitioner can also impugn the legality of the misalignment of public funds and the misuse of GSIS funds to implement
A.O. No. 308.[5]
The ripeness for adjudication of the petition at bar is not affected by the fact that the implementing rules of A.O. No.
308 have yet to be promulgated. Petitioner Ople assails A.O. No. 308 as invalid per se and as infirmed on its face. His
action is not premature for the rules yet to be promulgated cannot cure its fatal defects. Moreover, the respondents
themselves have started the implementation of A.O. No. 308 without waiting for the rules. As early as January 19, 1997,
respondent Social Security System (SSS) caused the publication of a notice to bid for the manufacture of the National
Identification (ID) card. [6] Respondent Executive Secretary Torres has publicly announced that representatives from the
GSIS and the SSS have completed the guidelines for the national identification system. [7] All signals from the respondents
show their unswerving will to implement A.O. No. 308 and we need not wait for the formality of the rules to pass
judgment on its constitutionality. In this light, the dissenters insistence that we tighten the rule on standing is not a
commendable stance as its result would be to throttle an important constitutional principle and a fundamental right.
II
We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere administrative order but a
law and hence, beyond the power of the President to issue. He alleges that A.O. No. 308 establishes a system of
identification that is all-encompassing in scope, affects the life and liberty of every Filipino citizen and foreign resident,
and more particularly, violates their right to privacy.
Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is
understandable. The blurring of the demarcation line between the power of the Legislature to make laws and the power of

the Executive to execute laws will disturb their delicate balance of power and cannot be allowed. Hence, the exercise by
one branch of government of power belonging to another will be given a stricter scrutiny by this Court.
The line that delineates Legislative and Executive power is not indistinct. Legislative power is "the authority, under
the Constitution, to make laws, and to alter and repeal them." [8] The Constitution, as the will of the people in their original,
sovereign and unlimited capacity, has vested this power in the Congress of the Philippines. [9] The grant of legislative
power to Congress is broad, general and comprehensive. [10] The legislative body possesses plenary power for all purposes
of civil government.[11] Any power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress,
unless the Constitution has lodged it elsewhere. [12] In fine, except as limited by the Constitution, either expressly or
impliedly, legislative power embraces all subjects and extends to matters of general concern or common interest. [13]
While Congress is vested with the power to enact laws, the President executes the laws.[14] The executive power is
vested in the President.[15] It is generally defined as the power to enforce and administer the laws. [16] It is the power of
carrying the laws into practical operation and enforcing their due observance. [17]
As head of the Executive Department, the President is the Chief Executive. He represents the government as a whole
and sees to it that all laws are enforced by the officials and employees of his department. [18] He has control over the
executive department, bureaus and offices. This means that he has the authority to assume directly the functions of the
executive department, bureau and office, or interfere with the discretion of its officials. [19] Corollary to the power of
control, the President also has the duty of supervising the enforcement of laws for the maintenance of general peace and
public order. Thus, he is granted administrative power over bureaus and offices under his control to enable him to
discharge his duties effectively.[20]
Administrative power is concerned with the work of applying policies and enforcing orders as determined by
proper governmental organs.[21] It enables the President to fix a uniform standard of administrative efficiency and
check the official conduct of his agents.[22] To this end, he can issue administrative orders, rules and regulations.
Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate to be
covered by an administrative order. An administrative order is:
"Sec. 3. Administrative Orders.-- Acts of the President which relate to particular aspects of governmental operation in
pursuance of his duties as administrative head shall be promulgated in administrative orders." [23]
An administrative order is an ordinance issued by the President which relates to specific aspects in the administrative
operation of government. It must be in harmony with the law and should be for the sole purpose of implementing the
law and carrying out the legislative policy.[24] We reject the argument that A.O. No. 308 implements the legislative
policy of the Administrative Code of 1987. The Code is a general law and "incorporates in a unified document the major
structural, functional and procedural principles of governance" [25] and "embodies changes in administrative structures and
procedures designed to serve the people." [26] The Code is divided into seven (7) Books: Book I deals with Sovereignty and
General Administration, Book II with the Distribution of Powers of the three branches of Government, Book III on the
Office of the President, Book IV on the Executive Branch, Book V on the Constitutional Commissions, Book VI on
National Government Budgeting, and Book VII on Administrative Procedure. These Books contain provisions on the
organization, powers and general administration of the executive, legislative and judicial branches of government, the
organization and administration of departments, bureaus and offices under the executive branch, the organization and
functions of the Constitutional Commissions and other constitutional bodies, the rules on the national government budget,
as well as guidelines for the exercise by administrative agencies of quasi-legislative and quasi-judicial powers. The Code
covers both the internal administration of government, i.e, internal organization, personnel and recruitment, supervision
and discipline, and the effects of the functions performed by administrative officials on private individuals or parties
outside government.[27]
It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of 1987. It
establishes for the first time a National Computerized Identification Reference System. Such a System requires a delicate
adjustment of various contending state policies-- the primacy of national security, the extent of privacy interest against
dossier-gathering by government, the choice of policies, etc. Indeed, the dissent of Mr. Justice Mendoza states that the
A.O. No. 308 involves the all-important freedom of thought. As said administrative order redefines the parameters
of some basic rights of our citizenry vis-a-vis the State as well as the line that separates the administrative power of the
President to make rules and the legislative power of Congress, it ought to be evident that it deals with a subject that should
be covered by law.
Nor is it correct to argue as the dissenters do that A.O. No. 308 is not a law because it confers no right, imposes no
duty, affords no protection, and creates no office. Under A.O. No. 308, a citizen cannot transact business with government
agencies delivering basic services to the people without the contemplated identification card. No citizen will refuse to get
this identification card for no one can avoid dealing with government. It is thus clear as daylight that without the ID, a
citizen will have difficulty exercising his rights and enjoying his privileges. Given this reality, the contention that A.O.
No. 308 gives no right and imposes no duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation and
consequently erodes the plenary power of Congress to make laws. This is contrary to the established approach defining
the traditional limits of administrative legislation. As well stated by Fisher: "x x x Many regulations however, bear
directly on the public. It is here that administrative legislation must be restricted in its scope and
application. Regulations are not supposed to be a substitute for the general policy-making that Congress enacts in
the form of a public law. Although administrative regulations are entitled to respect, the authority to prescribe
rules and regulations is not an independent source of power to make laws."[28]

III
Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it cannot pass constitutional
muster as an administrative legislation because facially it violatesthe right to privacy. The essence of privacy is the
"right to be let alone."[29] In the 1965 case of Griswold v. Connecticut,[30] the United States Supreme Court gave more
substance to the right of privacy when it ruled that the right has a constitutional foundation. It held that there is a right of
privacy which can be found within the penumbras of the First, Third, Fourth, Fifth and Ninth Amendments, [31] viz:
"Specific guarantees in the Bill of Rights have penumbras formed by emanations from these guarantees that help give
them life and substance x x x. Various guarantees create zones of privacy.The right of association contained in the
penumbra of the First Amendment is one, as we have seen. The Third Amendment in its prohibition against the quartering
of soldiers `in any house' in time of peace without the consent of the owner is another facet of that privacy. The Fourth
Amendment explicitly affirms the `right of the people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures.' The Fifth Amendment in its Self-Incrimination Clause enables the citizen to create a
zone of privacy which government may not force him to surrender to his detriment. The Ninth Amendment provides: `The
enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the
people.'"
In the 1968 case of Morfe v. Mutuc,[32] we adopted the Griswold ruling that there is a constitutional right to
privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique Fernando, we held:
"xxx
The Griswold case invalidated a Connecticut statute which made the use of contraceptives a criminal offense on the
ground of its amounting to an unconstitutional invasion of the right of privacy of married persons; rightfully it stressed "a
relationship lying within the zone of privacy created by several fundamental constitutional guarantees." It has wider
implications though. The constitutional right to privacy has come into its own.
So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition independently of its identification
with liberty; in itself, it is fully deserving of constitutional protection. The language of Prof. Emerson is particularly
apt: 'The concept of limited government has always included the idea that governmental powers stop short of certain
intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited
government. Ultimate and pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute
state. In contrast, a system of limited government safeguards a private sector, which belongs to the individual, firmly
distinguishing it from the public sector, which the state can control. Protection of this private sector-- protection, in other
words, of the dignity and integrity of the individual--has become increasingly important as modern society has developed.
All the forces of a technological age --industrialization, urbanization, and organization-- operate to narrow the area of
privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this enclave of private life
marks the difference between a democratic and a totalitarian society.'"
Indeed, if we extend our judicial gaze we will find that the right of privacy is recognized and enshrined in
several provisions of our Constitution.[33] It is expressly recognized in Section 3(1) of the Bill of Rights:
"Sec. 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court,
or when public safety or order requires otherwise as prescribed by law."
Other facets of the right to privacy are protected in various provisions of the Bill of Rights, viz:[34]
"Sec. 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied
the equal protection of the laws.
Sec. 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and
seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or
things to be seized.
x x x.
Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except
upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security,
public safety, or public health, as may be provided by law.
x x x.
Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or
societies for purposes not contrary to law shall not be abridged.
Sec. 17. No person shall be compelled to be a witness against himself."

Zones of privacy are likewise recognized and protected in our laws. The Civil Code provides that "[e]very person
shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons" and punishes as
actionable torts several acts by a person of meddling and prying into the privacy of another. [35] It also holds a public officer
or employee or any private individual liable for damages for any violation of the rights and liberties of another person,
[36]
and recognizes the privacy of letters and other private communications. [37] The Revised Penal Code makes a crime the
violation of secrets by an officer,[38] the revelation of trade and industrial secrets, [39] and trespass to dwelling.[40] Invasion of
privacy is an offense in special laws like the Anti-Wiretapping Law,[41] the Secrecy of Bank Deposit Act[42] and the
Intellectual Property Code.[43] The Rules of Court on privileged communication likewise recognize the privacy of certain
information.[44]
Unlike the dissenters, we prescind from the premise that the right to privacy is a fundamental right
guaranteed by the Constitution, hence, it is the burden of government to show that A.O. No. 308 is justified by
some compelling state interest and that it is narrowly drawn. A.O. No. 308 is predicated on two considerations: (1) the
need to provide our citizens and foreigners with the facility to conveniently transact business with basic service and social
security providers and other government instrumentalities and (2) the need to reduce, if not totally eradicate, fraudulent
transactions and misrepresentations by persons seeking basic services. It is debatable whether these interests are
compelling enough to warrant the issuance of A.O. No. 308. But what is not arguable is the broadness, the vagueness,
the overbreadth of A.O. No. 308 which if implemented will put our people's right to privacy in clear and present
danger.
The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a
"common reference number to establish a linkage among concerned agencies" through the use of "Biometrics
Technology" and "computer application designs."
Biometry or biometrics is "the science of the application of statistical methods to biological facts; a mathematical
analysis of biological data."[45] The term "biometrics" has now evolved into a broad category of technologies which
provide precise confirmation of an individual's identity through the use of the individual's own physiological and
behavioral characteristics.[46] A physiological characteristic is a relatively stable physical characteristic such as a
fingerprint, retinal scan, hand geometry or facial features. A behavioral characteristicis influenced by the individual's
personality and includes voice print, signature and keystroke. [47] Most biometric identification systems use a card or
personal identification number (PIN) for initial identification. The biometric measurement is used to verify that the
individual holding the card or entering the PIN is the legitimate owner of the card or PIN. [48]
A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns the
unique pattern therein into an individual number which is called a biocrypt.The biocrypt is stored in computer data
banks[49] and becomes a means of identifying an individual using a service. This technology requires one's fingertip to be
scanned every time service or access is provided. [50] Another method is the retinal scan. Retinal scan technology employs
optical technology to map the capillary pattern of the retina of the eye. This technology produces a unique print similar to
a finger print.[51] Another biometric method is known as the "artificial nose." This device chemically analyzes the unique
combination of substances excreted from the skin of people. [52] The latest on the list of biometric achievements is
the thermogram. Scientists have found that by taking pictures of a face using infra-red cameras, a unique heat
distribution pattern is seen. The different densities of bone, skin, fat and blood vessels all contribute to the individual's
personal "heat signature."[53]
In the last few decades, technology has progressed at a galloping rate. Some science fictions are now science
facts. Today, biometrics is no longer limited to the use of fingerprint to identify an individual . It is a new science that
uses various technologies in encoding any and all biological characteristics of an individual for identification. It is
noteworthy that A.O. No. 308 does not state what specific biological characteristics and what particular biometrics
technology shall be used to identify people who will seek its coverage. Considering the banquet of options available
to the implementors of A.O. No. 308, the fear that it threatens the right to privacy of our people is not groundless.
A.O. No. 308 should also raise our antennas for a further look will show that it does not state whether
encoding of data is limited to biological information alone for identification purposes. In fact, the Solicitor General
claims that the adoption of the Identification Reference System will contribute to the "generation of population data for
development planning."[54] This is an admission that the PRN will not be used solely for identification but for the
generation of other data with remote relation to the avowed purposes of A.O. No. 308. Clearly, the indefiniteness of A.O.
No. 308 can give the government the roving authority to store and retrieve information for a purpose other than
the identification of the individual through his PRN.
The potential for misuse of the data to be gathered under A.O. No. 308 cannot be underplayed as the
dissenters do. Pursuant to said administrative order, an individual must present his PRN everytime he deals with a
government agency to avail of basic services and security. His transactions with the government agency will necessarily
be recorded-- whether it be in the computer or in the documentary file of the agency. The individual's file may include his
transactions for loan availments, income tax returns, statement of assets and liabilities, reimbursements for medication,
hospitalization, etc. The more frequent the use of the PRN, the better the chance of building a huge and formidable
information base through the electronic linkage of the files. [55] The data may be gathered for gainful and useful
government purposes; but the existence of this vast reservoir of personal information constitutes a covert invitation
to misuse, a temptation that may be too great for some of our authorities to resist.[56]
We can even grant, arguendo, that the computer data file will be limited to the name, address and other basic personal
information about the individual. [57] Even that hospitable assumption will not save A.O. No. 308 from constitutional
infirmity for again said order does not tell us in clear and categorical terms how these information gathered shall be
handled. It does not provide who shall control and access the data, under what circumstances and for what
purpose. These factors are essential to safeguard the privacy and guaranty the integrity of the information. [58] Well to note,

the computer linkage gives other government agencies access to the information. Yet, there are no controls to guard
against leakage of information. When the access code of the control programs of the particular computer system is
broken, an intruder, without fear of sanction or penalty, can make use of the data for whatever purpose, or worse,
manipulate the data stored within the system.[59]
It is plain and we hold that A.O. No. 308 falls short of assuring that personal information which will be gathered
about our people will only be processed for unequivocally specified purposes.[60] The lack of proper safeguards in this
regard of A.O. No. 308 may interfere with the individual's liberty of abode and travel by enabling authorities to track
down his movement; it may also enable unscrupulous persons to access confidential information and circumvent the right
against self-incrimination; it may pave the way for "fishing expeditions" by government authorities and evade the right
against unreasonable searches and seizures. [61] The possibilities of abuse and misuse of the PRN, biometrics and
computer technology are accentuated when we consider that the individual lacks control over what can be read or
placed on his ID, much less verify the correctness of the data encoded. [62] They threaten the very abuses that the
Bill of Rights seeks to prevent.[63]
The ability of a sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual and
transmit it over a national network is one of the most graphic threats of the computer revolution. [64] The computer is
capable of producing a comprehensive dossier on individuals out of information given at different times and for varied
purposes.[65] It can continue adding to the stored data and keeping the information up to date. Retrieval of stored data is
simple. When information of a privileged character finds its way into the computer, it can be extracted together with other
data on the subject.[66] Once extracted, the information is putty in the hands of any person. The end of privacy begins.
Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to the
right to privacy as speculative and hypothetical. Again, we cannot countenance such a laidback posture. The Court will
not be true to its role as the ultimate guardian of the people's liberty if it would not immediately smother the sparks that
endanger their rights but would rather wait for the fire that could consume them.
We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy
with regard to the National ID and the use of biometrics technology as it stands on quicksand. The reasonableness of
a person's expectation of privacy depends on a two-part test: (1) whether by his conduct, the individual has exhibited an
expectation of privacy; and (2) whether this expectation is one that society recognizes as reasonable. [67] The factual
circumstances of the case determines the reasonableness of the expectation. [68] However, other factors, such as customs,
physical surroundings and practices of a particular activity, may serve to create or diminish this expectation. [69] The use of
biometrics and computer technology in A.O. No. 308 does not assure the individual of a reasonable expectation of
privacy.[70] As technology advances, the level of reasonably expected privacy decreases. [71] The measure of protection
granted by the reasonable expectation diminishes as relevant technology becomes more widely accepted. [72] The security
of the computer data file depends not only on the physical inaccessibility of the file but also on the advances in hardware
and software computer technology. A.O. No. 308 is so widely drawn that a minimum standard for a reasonable
expectation of privacy, regardless of technology used, cannot be inferred from its provisions.
The rules and regulations to be drawn by the IACC cannot remedy this fatal defect . Rules and regulations
merely implement the policy of the law or order. On its face, A.O. No. 308 gives the IACC virtually unfettered discretion
to determine the metes and bounds of the ID System.
Nor do our present laws provide adequate safeguards for a reasonable expectation of privacy. Commonwealth
Act No. 591 penalizes the disclosure by any person of data furnished by the individual to the NSO with imprisonment and
fine.[73] Republic Act No. 1161 prohibits public disclosure of SSS employment records and reports. [74] These laws,
however, apply to records and data with the NSO and the SSS. It is not clear whether they may be applied to data with the
other government agencies forming part of the National ID System. The need to clarify the penal aspect of A.O. No. 308
is another reason why its enactment should be given to Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of privacy by using
the rational relationship test.[75] He stressed that the purposes of A.O. No. 308 are:(1) to streamline and speed
up the implementation of basic government services, (2) eradicate fraud by avoiding duplication of services, and
(3) generate population data for development planning. He concludes that these purposes justify the incursions into the
right to privacy for the means are rationally related to the end. [76]
We are not impressed by the argument. In Morfe v. Mutuc,[77] we upheld the constitutionality of R.A. 3019, the AntiGraft and Corrupt Practices Act, as a valid police power measure. We declared that the law, in compelling a public officer
to make an annual report disclosing his assets and liabilities, his sources of income and expenses, did not infringe on the
individual's right to privacy. The law was enacted to promote morality in public administration by curtailing and
minimizing the opportunities for official corruption and maintaining a standard of honesty in the public service. [78]
The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute, not an administrative
order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is clear on what practices were prohibited and penalized,
and it was narrowly drawn to avoid abuses. In the case at bar, A.O. No. 308 may have been impelled by a worthy purpose,
but, it cannot pass constitutional scrutiny for it is not narrowly drawn. And we now hold that when the integrity of
a fundamental right is at stake, this court will give the challenged law, administrative order, rule or regulation a
stricter scrutiny. It will not do for the authorities to invoke the presumption of regularity in the performance of
official duties. Nor is it enough for the authorities to prove that their act is not irrational for a basic right can be
diminished, if not defeated, even when the government does not act irrationally. They must satisfactorily show the
presence of compelling state interests and that the law, rule, or regulation is narrowly drawn to preclude
abuses. This approach is demanded by the 1987 Constitution whose entire matrix is designed to protect human rights and
to prevent authoritarianism. In case of doubt, the least we can do is to lean towards the stance that will not put in danger
the rights protected by the Constitution.

The case of Whalen v. Roe[79] cited by the Solicitor General is also off-line. In Whalen, the United States Supreme
Court was presented with the question of whether the State of New York could keep a centralized computer record of the
names and addresses of all persons who obtained certain drugs pursuant to a doctor's prescription. The New York State
Controlled Substances Act of 1972 required physicians to identify patients obtaining prescription drugs enumerated in the
statute, i.e., drugs with a recognized medical use but with a potential for abuse, so that the names and addresses of the
patients can be recorded in a centralized computer file of the State Department of Health. The plaintiffs, who were
patients and doctors, claimed that some people might decline necessary medication because of their fear that the
computerized data may be readily available and open to public disclosure; and that once disclosed, it may stigmatize them
as drug addicts.[80] The plaintiffs alleged that the statute invaded a constitutionally protected zone of privacy, i.e, the
individual interest in avoiding disclosure of personal matters, and the interest in independence in making certain kinds of
important decisions. The U.S. Supreme Court held that while an individual's interest in avoiding disclosure of personal
matters is an aspect of the right to privacy, the statute did not pose a grievous threat to establish a constitutional
violation. The Court found that the statute was necessary to aid in the enforcement of laws designed to minimize the
misuse of dangerous drugs. The patient-identification requirement was a product of an orderly and rational
legislative decision made upon recommendation by a specially appointed commission which held extensive hearings
on the matter. Moreover, the statute was narrowly drawn and contained numerous safeguards against
indiscriminate disclosure. The statute laid down the procedure and requirements for the gathering, storage and retrieval
of the information. It enumerated who were authorized to access the data. It also prohibited public disclosure of the data
by imposing penalties for its violation. In view of these safeguards, the infringement of the patients' right to privacy was
justified by a valid exercise of police power. As we discussed above, A.O. No. 308 lacks these vital safeguards.
Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per se against the use of
computers to accumulate, store, process, retrieve and transmit data to improve our bureaucracy. Computers work
wonders to achieve the efficiency which both government and private industry seek. Many information systems in
different countries make use of the computer to facilitate important social objectives, such as better law enforcement,
faster delivery of public services, more efficient management of credit and insurance programs, improvement of
telecommunications and streamlining of financial activities. [81] Used wisely, data stored in the computer could help good
administration by making accurate and comprehensive information for those who have to frame policy and make key
decisions.[82] The benefits of the computer has revolutionized information technology. It developed the internet,
[83]
introduced the concept of cyberspace[84] and the information superhighway where the individual, armed only with his
personal computer, may surf and search all kinds and classes of information from libraries and databases connected to the
net.
In no uncertain terms, we also underscore that the right to privacy does not bar all incursions into individual
privacy. The right is not intended to stifle scientific and technological advancements that enhance public service
and the common good. It merely requires that the law be narrowly focused [85] and a compelling interest justify such
intrusions.[86]Intrusions into the right must be accompanied by proper safeguards and well-defined standards to prevent
unconstitutional invasions. We reiterate that any law or order that invades individual privacy will be subjected by this
Court to strict scrutiny. The reason for this stance was laid down in Morfe v. Mutuc, to wit:
"The concept of limited government has always included the idea that governmental powers stop short of certain
intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited
government. Ultimate and pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute
state. In contrast, a system of limited government safeguards a private sector, which belongs to the individual, firmly
distinguishing it from the public sector, which the state can control. Protection of this private sector-- protection, in other
words, of the dignity and integrity of the individual-- has become increasingly important as modern society has developed.
All the forces of a technological age-- industrialization, urbanization, and organization-- operate to narrow the area of
privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this enclave of private life
marks the difference between a democratic and a totalitarian society." [87]
IV
The right to privacy is one of the most threatened rights of man living in a mass society. The threats emanate
from various sources-- governments, journalists, employers, social scientists, etc. [88] In the case at bar, the threat comes
from the executive branch of government which by issuing A.O. No. 308 pressures the people to surrender their privacy
by giving information about themselves on the pretext that it will facilitate delivery of basic services. Given the recordkeeping power of the computer, only the indifferent will fail to perceive the danger thatA.O. No. 308 gives the
government the power to compile a devastating dossier against unsuspecting citizens. It is timely to take note of the
well-worded warning of Kalvin, Jr., "the disturbing result could be that everyone will live burdened by an unerasable
record of his past and his limitations. In a way, the threat is that because of its record-keeping, the society will have lost its
benign capacity to forget."[89] Oblivious to this counsel, the dissents still say we should not be too quick in labelling the
right to privacy as a fundamental right. We close with the statement that the right to privacy was not engraved in our
Constitution for flattery.
IN VIEW WHEREOF, the petition is granted and Administrative Order No. 308 entitled "Adoption of a National
Computerized Identification Reference System" declared null and void for being unconstitutional.
SO ORDERED.

G.R. No. 115455 October 30, 1995

ARTURO M. TOLENTINO, petitioner,
vs.
THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE, respondents.
G.R. No. 115525 October 30, 1995
JUAN T. DAVID, petitioner,
vs.
TEOFISTO T. GUINGONA, JR., as Executive Secretary; ROBERTO DE OCAMPO, as Secretary of Finance; LIWAYWAY
VINZONS-CHATO, as Commissioner of Internal Revenue; and their AUTHORIZED AGENTS OR
REPRESENTATIVES, respondents.
G.R. No. 115543 October 30, 1995
RAUL S. ROCO and the INTEGRATED BAR OF THE PHILIPPINES, petitioners,
vs.
THE SECRETARY OF THE DEPARTMENT OF FINANCE; THE COMMISSIONERS OF THE BUREAU OF INTERNAL REVENUE
AND BUREAU OF CUSTOMS, respondents.
G.R. No. 115544 October 30, 1995
PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO., INC.; KAMAHALAN PUBLISHING CORPORATION; PHILIPPINE
JOURNALISTS, INC.; JOSE L. PAVIA; and OFELIA L. DIMALANTA,petitioners,
vs.
HON. LIWAYWAY V. CHATO, in her capacity as Commissioner of Internal Revenue; HON. TEOFISTO T. GUINGONA, JR., in his
capacity as Executive Secretary; and HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of Finance, respondents.
G.R. No. 115754 October 30, 1995
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC., (CREBA), petitioner,
vs.
THE COMMISSIONER OF INTERNAL REVENUE, respondent.
G.R. No. 115781 October 30, 1995
KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO,
EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO,
RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, MOVEMENT OF ATTORNEYS FOR BROTHERHOOD,
INTEGRITY AND NATIONALISM, INC. ("MABINI"), FREEDOM FROM DEBT COALITION, INC., and PHILIPPINE BIBLE SOCIETY,
INC. and WIGBERTO TAADA, petitioners,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE, THE COMMISSIONER OF INTERNAL REVENUE and THE
COMMISSIONER OF CUSTOMS, respondents.
G.R. No. 115852 October 30, 1995
PHILIPPINE AIRLINES, INC., petitioner,
vs.
THE SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL REVENUE, respondents.
G.R. No. 115873 October 30, 1995
COOPERATIVE UNION OF THE PHILIPPINES, petitioner,
vs.
HON. LIWAYWAY V. CHATO, in her capacity as the Commissioner of Internal Revenue, HON. TEOFISTO T. GUINGONA, JR., in
his capacity as Executive Secretary, and HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of
Finance, respondents.
G.R. No. 115931 October 30, 1995
PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION, INC. and ASSOCIATION OF PHILIPPINE BOOK SELLERS, petitioners,
vs.
HON. ROBERTO B. DE OCAMPO, as the Secretary of Finance; HON. LIWAYWAY V. CHATO, as the Commissioner of Internal
Revenue; and HON. GUILLERMO PARAYNO, JR., in his capacity as the Commissioner of Customs, respondents.
RESOLUTION

MENDOZA, J.:
These are motions seeking reconsideration of our decision dismissing the petitions filed in these cases for the
declaration of unconstitutionality of R.A. No. 7716, otherwise known as the Expanded Value-Added Tax Law. The
motions, of which there are 10 in all, have been filed by the several petitioners in these cases, with the exception of
the Philippine Educational Publishers Association, Inc. and the Association of Philippine Booksellers, petitioners in
G.R. No. 115931.
The Solicitor General, representing the respondents, filed a consolidated comment, to which the Philippine Airlines,
Inc., petitioner in G.R. No. 115852, and the Philippine Press Institute, Inc., petitioner in G.R. No. 115544, and Juan
T. David, petitioner in G.R. No. 115525, each filed a reply. In turn the Solicitor General filed on June 1, 1995 a
rejoinder to the PPI's reply.
On June 27, 1995 the matter was submitted for resolution.
I. Power of the Senate to propose amendments to revenue bills. Some of the petitioners (Tolentino, Kilosbayan, Inc.,
Philippine Airlines (PAL), Roco, and Chamber of Real Estate and Builders Association (CREBA)) reiterate previous
claims made by them that R.A. No. 7716 did not "originate exclusively" in the House of Representatives as required
by Art. VI, 24 of the Constitution. Although they admit that H. No. 11197 was filed in the House of Representatives
where it passed three readings and that afterward it was sent to the Senate where after first reading it was referred
to the Senate Ways and Means Committee, they complain that the Senate did not pass it on second and third
readings. Instead what the Senate did was to pass its own version (S. No. 1630) which it approved on May 24,
1994. Petitioner Tolentino adds that what the Senate committee should have done was to amend H. No. 11197 by
striking out the text of the bill and substituting it with the text of S. No. 1630. That way, it is said, "the bill remains a
House bill and the Senate version just becomes the text (only the text) of the House bill."
The contention has no merit.
The enactment of S. No. 1630 is not the only instance in which the Senate proposed an amendment to a House
revenue bill by enacting its own version of a revenue bill. On at least two occasions during the Eighth Congress, the
Senate passed its own version of revenue bills, which, in consolidation with House bills earlier passed, became the
enrolled bills. These were:
R.A. No. 7369 (AN ACT TO AMEND THE OMNIBUS INVESTMENTS CODE OF 1987 BY EXTENDING FROM FIVE
(5) YEARS TO TEN YEARS THE PERIOD FOR TAX AND DUTY EXEMPTION AND TAX CREDIT ON CAPITAL
EQUIPMENT) which was approved by the President on April 10, 1992. This Act is actually a consolidation of H. No.
34254, which was approved by the House on January 29, 1992, and S. No. 1920, which was approved by the
Senate on February 3, 1992.
R.A. No. 7549 (AN ACT GRANTING TAX EXEMPTIONS TO WHOEVER SHALL GIVE REWARD TO ANY FILIPINO
ATHLETE WINNING A MEDAL IN OLYMPIC GAMES) which was approved by the President on May 22, 1992. This
Act is a consolidation of H. No. 22232, which was approved by the House of Representatives on August 2, 1989,
and S. No. 807, which was approved by the Senate on October 21, 1991.
On the other hand, the Ninth Congress passed revenue laws which were also the result of the consolidation of
House and Senate bills. These are the following, with indications of the dates on which the laws were approved by
the President and dates the separate bills of the two chambers of Congress were respectively passed:
1. R.A. NO. 7642
AN ACT INCREASING THE PENALTIES FOR TAX EVASION, AMENDING FOR THIS PURPOSE
THE PERTINENT SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE (December 28,
1992).
House Bill No. 2165, October 5, 1992
Senate Bill No. 32, December 7, 1992
2. R.A. NO. 7643
AN ACT TO EMPOWER THE COMMISSIONER OF INTERNAL REVENUE TO REQUIRE THE
PAYMENT OF THE VALUE-ADDED TAX EVERY MONTH AND TO ALLOW LOCAL GOVERNMENT
UNITS TO SHARE IN VAT REVENUE, AMENDING FOR THIS PURPOSE CERTAIN SECTIONS OF
THE NATIONAL INTERNAL REVENUE CODE (December 28, 1992)

House Bill No. 1503, September 3, 1992

Senate Bill No. 968, December 7, 1992
3. R.A. NO. 7646
AN ACT AUTHORIZING THE COMMISSIONER OF INTERNAL REVENUE TO PRESCRIBE THE
PLACE FOR PAYMENT OF INTERNAL REVENUE TAXES BY LARGE TAXPAYERS, AMENDING
FOR THIS PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE,
AS AMENDED (February 24, 1993)
House Bill No. 1470, October 20, 1992
Senate Bill No. 35, November 19, 1992
4. R.A. NO. 7649
AN ACT REQUIRING THE GOVERNMENT OR ANY OF ITS POLITICAL SUBDIVISIONS,
INSTRUMENTALITIES OR AGENCIES INCLUDING GOVERNMENT-OWNED OR CONTROLLED
CORPORATIONS (GOCCS) TO DEDUCT AND WITHHOLD THE VALUE-ADDED TAX DUE AT THE
RATE OF THREE PERCENT (3%) ON GROSS PAYMENT FOR THE PURCHASE OF GOODS AND
SIX PERCENT (6%) ON GROSS RECEIPTS FOR SERVICES RENDERED BY CONTRACTORS
(April 6, 1993)
House Bill No. 5260, January 26, 1993
Senate Bill No. 1141, March 30, 1993
5. R.A. NO. 7656
AN ACT REQUIRING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS TO
DECLARE DIVIDENDS UNDER CERTAIN CONDITIONS TO THE NATIONAL GOVERNMENT, AND
FOR OTHER PURPOSES (November 9, 1993)
House Bill No. 11024, November 3, 1993
Senate Bill No. 1168, November 3, 1993
6. R.A. NO. 7660
AN ACT RATIONALIZING FURTHER THE STRUCTURE AND ADMINISTRATION OF THE
DOCUMENTARY STAMP TAX, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED, ALLOCATING FUNDS FOR SPECIFIC
PROGRAMS, AND FOR OTHER PURPOSES (December 23, 1993)
House Bill No. 7789, May 31, 1993
Senate Bill No. 1330, November 18, 1993
7. R.A. NO. 7717
AN ACT IMPOSING A TAX ON THE SALE, BARTER OR EXCHANGE OF SHARES OF STOCK
LISTED AND TRADED THROUGH THE LOCAL STOCK EXCHANGE OR THROUGH INITIAL
PUBLIC OFFERING, AMENDING FOR THE PURPOSE THE NATIONAL INTERNAL REVENUE
CODE, AS AMENDED, BY INSERTING A NEW SECTION AND REPEALING CERTAIN
SUBSECTIONS THEREOF (May 5, 1994)
House Bill No. 9187, November 3, 1993
Senate Bill No. 1127, March 23, 1994
Thus, the enactment of S. No. 1630 is not the only instance in which the Senate, in the exercise of its power to
propose amendments to bills required to originate in the House, passed its own version of a House revenue

measure. It is noteworthy that, in the particular case of S. No. 1630, petitioners Tolentino and Roco, as members of
the Senate, voted to approve it on second and third readings.
On the other hand, amendment by substitution, in the manner urged by petitioner Tolentino, concerns a mere matter
of form. Petitioner has not shown what substantial difference it would make if, as the Senate actually did in this
case, a separate bill like S. No. 1630 is instead enacted as a substitute measure, "taking into
Consideration . . . H.B. 11197."
Indeed, so far as pertinent, the Rules of the Senate only provide:
RULE XXIX
AMENDMENTS
xxx xxx xxx
68. Not more than one amendment to the original amendment shall be considered.
No amendment by substitution shall be entertained unless the text thereof is submitted in writing.
Any of said amendments may be withdrawn before a vote is taken thereon.
69. No amendment which seeks the inclusion of a legislative provision foreign to the subject matter
of a bill (rider) shall be entertained.
xxx xxx xxx
70-A. A bill or resolution shall not be amended by substituting it with another which covers a subject
distinct from that proposed in the original bill or resolution. (emphasis added).
Nor is there merit in petitioners' contention that, with regard to revenue bills, the Philippine Senate possesses less
power than the U.S. Senate because of textual differences between constitutional provisions giving them the power
to propose or concur with amendments.
Art. I, 7, cl. 1 of the U.S. Constitution reads:
All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may
propose or concur with amendments as on other Bills.
Art. VI, 24 of our Constitution reads:
All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House of Representatives, but the
Senate may propose or concur with amendments.
The addition of the word "exclusively" in the Philippine Constitution and the decision to drop the phrase "as on other
Bills" in the American version, according to petitioners, shows the intention of the framers of our Constitution to
restrict the Senate's power to propose amendments to revenue bills. Petitioner Tolentino contends that the word
"exclusively" was inserted to modify "originate" and "the words 'as in any other bills' (sic) were eliminated so as to
show that these bills were not to be like other bills but must be treated as a special kind."
The history of this provision does not support this contention. The supposed indicia of constitutional intent are
nothing but the relics of an unsuccessful attempt to limit the power of the Senate. It will be recalled that the 1935
Constitution originally provided for a unicameral National Assembly. When it was decided in 1939 to change to a
bicameral legislature, it became necessary to provide for the procedure for lawmaking by the Senate and the House
of Representatives. The work of proposing amendments to the Constitution was done by the National Assembly,
acting as a constituent assembly, some of whose members, jealous of preserving the Assembly's lawmaking
powers, sought to curtail the powers of the proposed Senate. Accordingly they proposed the following provision:
All bills appropriating public funds, revenue or tariff bills, bills of local application, and private bills
shall originate exclusively in the Assembly, but the Senate may propose or concur with amendments.
In case of disapproval by the Senate of any such bills, the Assembly may repass the same by a twothirds vote of all its members, and thereupon, the bill so repassed shall be deemed enacted and may
be submitted to the President for corresponding action. In the event that the Senate should fail to

finally act on any such bills, the Assembly may, after thirty days from the opening of the next regular
session of the same legislative term, reapprove the same with a vote of two-thirds of all the
members of the Assembly. And upon such reapproval, the bill shall be deemed enacted and may be
submitted to the President for corresponding action.
The special committee on the revision of laws of the Second National Assembly vetoed the proposal. It deleted
everything after the first sentence. As rewritten, the proposal was approved by the National Assembly and embodied
in Resolution No. 38, as amended by Resolution No. 73. (J. ARUEGO, KNOW YOUR CONSTITUTION 65-66
(1950)). The proposed amendment was submitted to the people and ratified by them in the elections held on June
18, 1940.
This is the history of Art. VI, 18 (2) of the 1935 Constitution, from which Art. VI, 24 of the present Constitution was
derived. It explains why the word "exclusively" was added to the American text from which the framers of the
Philippine Constitution borrowed and why the phrase "as on other Bills" was not copied. Considering the defeat of
the proposal, the power of the Senate to propose amendments must be understood to be full, plenary and complete
"as on other Bills." Thus, because revenue bills are required to originate exclusively in the House of
Representatives, the Senate cannot enact revenue measures of its own without such bills. After a revenue bill is
passed and sent over to it by the House, however, the Senate certainly can pass its own version on the same
subject matter. This follows from the coequality of the two chambers of Congress.
That this is also the understanding of book authors of the scope of the Senate's power to concur is clear from the
following commentaries:
The power of the Senate to propose or concur with amendments is apparently without restriction. It
would seem that by virtue of this power, the Senate can practically re-write a bill required to come
from the House and leave only a trace of the original bill. For example, a general revenue bill passed
by the lower house of the United States Congress contained provisions for the imposition of an
inheritance tax . This was changed by the Senate into a corporation tax. The amending authority of
the Senate was declared by the United States Supreme Court to be sufficiently broad to enable it to
make the alteration. [Flint v. Stone Tracy Company, 220 U.S. 107, 55 L. ed. 389].
(L. TAADA AND F. CARREON, POLITICAL LAW OF THE PHILIPPINES 247 (1961))
The above-mentioned bills are supposed to be initiated by the House of Representatives because it
is more numerous in membership and therefore also more representative of the people. Moreover,
its members are presumed to be more familiar with the needs of the country in regard to the
enactment of the legislation involved.
The Senate is, however, allowed much leeway in the exercise of its power to propose or concur with
amendments to the bills initiated by the House of Representatives. Thus, in one case, a bill
introduced in the U.S. House of Representatives was changed by the Senate to make a proposed
inheritance tax a corporation tax. It is also accepted practice for the Senate to introduce what is
known as an amendment by substitution, which may entirely replace the bill initiated in the House of
Representatives.
(I. CRUZ, PHILIPPINE POLITICAL LAW 144-145 (1993)).
In sum, while Art. VI, 24 provides that all appropriation, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills must "originate exclusively in the House of Representatives," it also
adds, "but the Senate may propose or concur with amendments." In the exercise of this power, the Senate may
propose an entirely new bill as a substitute measure. As petitioner Tolentino states in a high school text, a committee
to which a bill is referred may do any of the following:
(1) to endorse the bill without changes; (2) to make changes in the bill omitting or adding sections or
altering its language; (3) to make and endorse an entirely new bill as a substitute, in which case it
will be known as a committee bill; or (4) to make no report at all.
(A. TOLENTINO, THE GOVERNMENT OF THE PHILIPPINES 258 (1950))
To except from this procedure the amendment of bills which are required to originate in the House by prescribing
that the number of the House bill and its other parts up to the enacting clause must be preserved although the text
of the Senate amendment may be incorporated in place of the original body of the bill is to insist on a mere
technicality. At any rate there is no rule prescribing this form. S. No. 1630, as a substitute measure, is therefore as
much an amendment of H. No. 11197 as any which the Senate could have made.

II. S. No. 1630 a mere amendment of H. No. 11197. Petitioners' basic error is that they assume that S. No. 1630 is
an independent and distinct bill. Hence their repeated references to its certification that it was passed by the Senate
"in substitution of S.B. No. 1129, taking into consideration P.S. Res. No. 734 and H.B. No. 11197," implying that
there is something substantially different between the reference to S. No. 1129 and the reference to H. No. 11197.
From this premise, they conclude that R.A. No. 7716 originated both in the House and in the Senate and that it is
the product of two "half-baked bills because neither H. No. 11197 nor S. No. 1630 was passed by both houses of
Congress."
In point of fact, in several instances the provisions of S. No. 1630, clearly appear to be mere amendments of the
corresponding provisions of H. No. 11197. The very tabular comparison of the provisions of H. No. 11197 and S. No.
1630 attached as Supplement A to the basic petition of petitioner Tolentino, while showing differences between the
two bills, at the same time indicates that the provisions of the Senate bill were precisely intended to be amendments
to the House bill.
Without H. No. 11197, the Senate could not have enacted S. No. 1630. Because the Senate bill was a mere
amendment of the House bill, H. No. 11197 in its original form did not have to pass the Senate on second and three
readings. It was enough that after it was passed on first reading it was referred to the Senate Committee on Ways
and Means. Neither was it required that S. No. 1630 be passed by the House of Representatives before the two bills
could be referred to the Conference Committee.
There is legislative precedent for what was done in the case of H. No. 11197 and S. No. 1630. When the House bill
and Senate bill, which became R.A. No. 1405 (Act prohibiting the disclosure of bank deposits), were referred to a
conference committee, the question was raised whether the two bills could be the subject of such conference,
considering that the bill from one house had not been passed by the other and vice versa. As Congressman Duran
put the question:
MR. DURAN. Therefore, I raise this question of order as to procedure: If a House bill is passed by
the House but not passed by the Senate, and a Senate bill of a similar nature is passed in the
Senate but never passed in the House, can the two bills be the subject of a conference, and can a
law be enacted from these two bills? I understand that the Senate bill in this particular instance does
not refer to investments in government securities, whereas the bill in the House, which was
introduced by the Speaker, covers two subject matters: not only investigation of deposits in banks
but also investigation of investments in government securities. Now, since the two bills differ in their
subject matter, I believe that no law can be enacted.
Ruling on the point of order raised, the chair (Speaker Jose B. Laurel, Jr.) said:
THE SPEAKER. The report of the conference committee is in order. It is precisely in cases like this
where a conference should be had. If the House bill had been approved by the Senate, there would
have been no need of a conference; but precisely because the Senate passed another bill on the
same subject matter, the conference committee had to be created, and we are now considering the
report of that committee.
(2 CONG. REC. NO. 13, July 27, 1955, pp. 3841-42 (emphasis added))
III. The President's certification. The fallacy in thinking that H. No. 11197 and S. No. 1630 are distinct and unrelated
measures also accounts for the petitioners' (Kilosbayan's and PAL's) contention that because the President
separately certified to the need for the immediate enactment of these measures, his certification was ineffectual and
void. The certification had to be made of the version of the same revenue bill which at the moment was being
considered. Otherwise, to follow petitioners' theory, it would be necessary for the President to certify as many bills
as are presented in a house of Congress even though the bills are merely versions of the bill he has already
certified. It is enough that he certifies the bill which, at the time he makes the certification, is under consideration.
Since on March 22, 1994 the Senate was considering S. No. 1630, it was that bill which had to be certified. For that
matter on June 1, 1993 the President had earlier certified H. No. 9210 for immediate enactment because it was the
one which at that time was being considered by the House. This bill was later substituted, together with other bills,
by H. No. 11197.
As to what Presidential certification can accomplish, we have already explained in the main decision that the phrase
"except when the President certifies to the necessity of its immediate enactment, etc." in Art. VI, 26 (2) qualifies not
only the requirement that "printed copies [of a bill] in its final form [must be] distributed to the members three days
before its passage" but also the requirement that before a bill can become a law it must have passed "three
readings on separate days." There is not only textual support for such construction but historical basis as well.
Art. VI, 21 (2) of the 1935 Constitution originally provided:

(2) No bill shall be passed by either House unless it shall have been printed and copies thereof in its
final form furnished its Members at least three calendar days prior to its passage, except when the
President shall have certified to the necessity of its immediate enactment. Upon the last reading of a
bill, no amendment thereof shall be allowed and the question upon its passage shall be taken
immediately thereafter, and the yeas and nays entered on the Journal.
When the 1973 Constitution was adopted, it was provided in Art. VIII, 19 (2):
(2) No bill shall become a law unless it has passed three readings on separate days, and printed
copies thereof in its final form have been distributed to the Members three days before its passage,
except when the Prime Minister certifies to the necessity of its immediate enactment to meet a public
calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and
the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the
Journal.
This provision of the 1973 document, with slight modification, was adopted in Art. VI, 26 (2) of the present
Constitution, thus:
(2) No bill passed by either House shall become a law unless it has passed three readings on
separate days, and printed copies thereof in its final form have been distributed to its Members three
days before its passage, except when the President certifies to the necessity of its immediate
enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment
thereto shall be allowed, and the vote thereon shall be taken immediately thereafter, and
the yeasand nays entered in the Journal.
The exception is based on the prudential consideration that if in all cases three readings on separate days are
required and a bill has to be printed in final form before it can be passed, the need for a law may be rendered
academic by the occurrence of the very emergency or public calamity which it is meant to address.
Petitioners further contend that a "growing budget deficit" is not an emergency, especially in a country like the
Philippines where budget deficit is a chronic condition. Even if this were the case, an enormous budget deficit does
not make the need for R.A. No. 7716 any less urgent or the situation calling for its enactment any less an
emergency.
Apparently, the members of the Senate (including some of the petitioners in these cases) believed that there was an
urgent need for consideration of S. No. 1630, because they responded to the call of the President by voting on the
bill on second and third readings on the same day. While the judicial department is not bound by the Senate's
acceptance of the President's certification, the respect due coequal departments of the government in matters
committed to them by the Constitution and the absence of a clear showing of grave abuse of discretion caution a
stay of the judicial hand.
At any rate, we are satisfied that S. No. 1630 received thorough consideration in the Senate where it was discussed
for six days. Only its distribution in advance in its final printed form was actually dispensed with by holding the voting
on second and third readings on the same day (March 24, 1994). Otherwise, sufficient time between the submission
of the bill on February 8, 1994 on second reading and its approval on March 24, 1994 elapsed before it was finally
voted on by the Senate on third reading.
The purpose for which three readings on separate days is required is said to be two-fold: (1) to inform the members
of Congress of what they must vote on and (2) to give them notice that a measure is progressing through the
enacting process, thus enabling them and others interested in the measure to prepare their positions with reference
to it. (1 J. G. SUTHERLAND, STATUTES AND STATUTORY CONSTRUCTION 10.04, p. 282 (1972)). These
purposes were substantially achieved in the case of R.A. No. 7716.
IV. Power of Conference Committee. It is contended (principally by Kilosbayan, Inc. and the Movement of Attorneys
for Brotherhood, Integrity and Nationalism, Inc. (MABINI)) that in violation of the constitutional policy of full public
disclosure and the people's right to know (Art. II, 28 and Art. III, 7) the Conference Committee met for two days in
executive session with only the conferees present.
As pointed out in our main decision, even in the United States it was customary to hold such sessions with only the
conferees and their staffs in attendance and it was only in 1975 when a new rule was adopted requiring open
sessions. Unlike its American counterpart, the Philippine Congress has not adopted a rule prescribing open
hearings for conference committees.

It is nevertheless claimed that in the United States, before the adoption of the rule in 1975, at least staff members
were present. These were staff members of the Senators and Congressmen, however, who may be presumed to be
their confidential men, not stenographers as in this case who on the last two days of the conference were excluded.
There is no showing that the conferees themselves did not take notes of their proceedings so as to give petitioner
Kilosbayan basis for claiming that even in secret diplomatic negotiations involving state interests, conferees keep
notes of their meetings. Above all, the public's right to know was fully served because the Conference Committee in
this case submitted a report showing the changes made on the differing versions of the House and the Senate.
Petitioners cite the rules of both houses which provide that conference committee reports must contain "a detailed,
sufficiently explicit statement of the changes in or other amendments." These changes are shown in the bill attached
to the Conference Committee Report. The members of both houses could thus ascertain what changes had been
made in the original bills without the need of a statement detailing the changes.
The same question now presented was raised when the bill which became R.A. No. 1400 (Land Reform Act of
1955) was reported by the Conference Committee. Congressman Bengzon raised a point of order. He said:
MR. BENGZON. My point of order is that it is out of order to consider the report of the conference
committee regarding House Bill No. 2557 by reason of the provision of Section 11, Article XII, of the
Rules of this House which provides specifically that the conference report must be accompanied by
a detailed statement of the effects of the amendment on the bill of the House. This conference
committee report is not accompanied by that detailed statement, Mr. Speaker. Therefore it is out of
order to consider it.
Petitioner Tolentino, then the Majority Floor Leader, answered:
MR. TOLENTINO. Mr. Speaker, I should just like to say a few words in connection with the point of
order raised by the gentleman from Pangasinan.
There is no question about the provision of the Rule cited by the gentleman from Pangasinan,
butthis provision applies to those cases where only portions of the bill have been amended. In this
case before us an entire bill is presented; therefore, it can be easily seen from the reading of the bill
what the provisions are. Besides, this procedure has been an established practice.
After some interruption, he continued:
MR. TOLENTINO. As I was saying, Mr. Speaker, we have to look into the reason for the provisions of
the Rules, and the reason for the requirement in the provision cited by the gentleman from
Pangasinan is when there are only certain words or phrases inserted in or deleted from the
provisions of the bill included in the conference report, and we cannot understand what those words
and phrases mean and their relation to the bill. In that case, it is necessary to make a detailed
statement on how those words and phrases will affect the bill as a whole; but when the entire bill
itself is copied verbatim in the conference report, that is not necessary. So when the reason for the
Rule does not exist, the Rule does not exist.
(2 CONG. REC. NO. 2, p. 4056. (emphasis added))
Congressman Tolentino was sustained by the chair. The record shows that when the ruling was appealed, it was
upheld by viva voce and when a division of the House was called, it was sustained by a vote of 48 to 5. (Id.,
p. 4058)
Nor is there any doubt about the power of a conference committee to insert new provisions as long as these are
germane to the subject of the conference. As this Court held in Philippine Judges Association v. Prado, 227 SCRA
703 (1993), in an opinion written by then Justice Cruz, the jurisdiction of the conference committee is not limited to
resolving differences between the Senate and the House. It may propose an entirely new provision. What is
important is that its report is subsequently approved by the respective houses of Congress. This Court ruled that it
would not entertain allegations that, because new provisions had been added by the conference committee, there
was thereby a violation of the constitutional injunction that "upon the last reading of a bill, no amendment thereto
shall be allowed."
Applying these principles, we shall decline to look into the petitioners' charges that an amendment
was made upon the last reading of the bill that eventually became R.A. No. 7354 and
that copiesthereof in its final form were not distributed among the members of each House. Both the
enrolled bill and the legislative journals certify that the measure was duly enacted i.e., in accordance

with Article VI, Sec. 26 (2) of the Constitution. We are bound by such official assurances from a
coordinate department of the government, to which we owe, at the very least, a becoming courtesy.
(Id. at 710. (emphasis added))
It is interesting to note the following description of conference committees in the Philippines in a 1979 study:
Conference committees may be of two types: free or instructed. These committees may be given
instructions by their parent bodies or they may be left without instructions. Normally the conference
committees are without instructions, and this is why they are often critically referred to as "the little
legislatures." Once bills have been sent to them, the conferees have almost unlimited authority to
change the clauses of the bills and in fact sometimes introduce new measures that were not in the
original legislation. No minutes are kept, and members' activities on conference committees are
difficult to determine. One congressman known for his idealism put it this way: "I killed a bill on
export incentives for my interest group [copra] in the conference committee but I could not have
done so anywhere else." The conference committee submits a report to both houses, and usually it
is accepted. If the report is not accepted, then the committee is discharged and new members are
appointed.
(R. Jackson, Committees in the Philippine Congress, in COMMITTEES AND LEGISLATURES: A
COMPARATIVE ANALYSIS 163 (J. D. LEES AND M. SHAW, eds.)).
In citing this study, we pass no judgment on the methods of conference committees. We cite it only to say that
conference committees here are no different from their counterparts in the United States whose vast powers we
noted in Philippine Judges Association v. Prado, supra. At all events, under Art. VI, 16(3) each house has the
power "to determine the rules of its proceedings," including those of its committees. Any meaningful change in the
method and procedures of Congress or its committees must therefore be sought in that body itself.
V. The titles of S. No. 1630 and H. No. 11197. PAL maintains that R.A. No. 7716 violates Art. VI, 26 (1) of the
Constitution which provides that "Every bill passed by Congress shall embrace only one subject which shall be
expressed in the title thereof." PAL contends that the amendment of its franchise by the withdrawal of its exemption
from the VAT is not expressed in the title of the law.
Pursuant to 13 of P.D. No. 1590, PAL pays a franchise tax of 2% on its gross revenue "in lieu of all other taxes,
duties, royalties, registration, license and other fees and charges of any kind, nature, or description, imposed,
levied, established, assessed or collected by any municipal, city, provincial or national authority or government
agency, now or in the future."
PAL was exempted from the payment of the VAT along with other entities by 103 of the National Internal Revenue
Code, which provides as follows:
103. Exempt transactions. The following shall be exempt from the value-added tax:
xxx xxx xxx
(q) Transactions which are exempt under special laws or international agreements to which the
Philippines is a signatory.
R.A. No. 7716 seeks to withdraw certain exemptions, including that granted to PAL, by amending 103, as follows:
103. Exempt transactions. The following shall be exempt from the value-added tax:
xxx xxx xxx
(q) Transactions which are exempt under special laws, except those granted under Presidential
Decree Nos. 66, 529, 972, 1491, 1590. . . .
The amendment of 103 is expressed in the title of R.A. No. 7716 which reads:
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE
AND ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING AND
REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES.

By stating that R.A. No. 7716 seeks to "[RESTRUCTURE] THE VALUE-ADDED TAX (VAT) SYSTEM [BY]
WIDENING ITS TAX BASE AND ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING
AND REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED AND FOR OTHER PURPOSES," Congress thereby clearly expresses its intention to amend any
provision of the NIRC which stands in the way of accomplishing the purpose of the law.
PAL asserts that the amendment of its franchise must be reflected in the title of the law by specific reference to P.D.
No. 1590. It is unnecessary to do this in order to comply with the constitutional requirement, since it is already stated
in the title that the law seeks to amend the pertinent provisions of the NIRC, among which is 103(q), in order to
widen the base of the VAT. Actually, it is the bill which becomes a law that is required to express in its title the
subject of legislation. The titles of H. No. 11197 and S. No. 1630 in fact specifically referred to 103 of the NIRC as
among the provisions sought to be amended. We are satisfied that sufficient notice had been given of the pendency
of these bills in Congress before they were enacted into what is now R.A.
No. 7716.
In Philippine Judges Association v. Prado, supra, a similar argument as that now made by PAL was rejected. R.A.
No. 7354 is entitled AN ACT CREATING THE PHILIPPINE POSTAL CORPORATION, DEFINING ITS POWERS,
FUNCTIONS AND RESPONSIBILITIES, PROVIDING FOR REGULATION OF THE INDUSTRY AND FOR OTHER
PURPOSES CONNECTED THEREWITH. It contained a provision repealing all franking privileges. It was contended
that the withdrawal of franking privileges was not expressed in the title of the law. In holding that there was sufficient
description of the subject of the law in its title, including the repeal of franking privileges, this Court held:
To require every end and means necessary for the accomplishment of the general objectives of the
statute to be expressed in its title would not only be unreasonable but would actually render
legislation impossible. [Cooley, Constitutional Limitations, 8th Ed., p. 297] As has been correctly
explained:
The details of a legislative act need not be specifically stated in its title, but matter
germane to the subject as expressed in the title, and adopted to the accomplishment
of the object in view, may properly be included in the act. Thus, it is proper to create
in the same act the machinery by which the act is to be enforced, to prescribe the
penalties for its infraction, and to remove obstacles in the way of its execution. If
such matters are properly connected with the subject as expressed in the title, it is
unnecessary that they should also have special mention in the title. (Southern Pac.
Co. v. Bartine, 170 Fed. 725)
(227 SCRA at 707-708)
VI. Claims of press freedom and religious liberty. We have held that, as a general proposition, the press is not
exempt from the taxing power of the State and that what the constitutional guarantee of free press prohibits are laws
which single out the press or target a group belonging to the press for special treatment or which in any way
discriminate against the press on the basis of the content of the publication, and R.A. No. 7716 is none of these.
Now it is contended by the PPI that by removing the exemption of the press from the VAT while maintaining those
granted to others, the law discriminates against the press. At any rate, it is averred, "even nondiscriminatory taxation
of constitutionally guaranteed freedom is unconstitutional."
With respect to the first contention, it would suffice to say that since the law granted the press a privilege, the law
could take back the privilege anytime without offense to the Constitution. The reason is simple: by granting
exemptions, the State does not forever waive the exercise of its sovereign prerogative.
Indeed, in withdrawing the exemption, the law merely subjects the press to the same tax burden to which other
businesses have long ago been subject. It is thus different from the tax involved in the cases invoked by the PPI.
The license tax in Grosjean v. American Press Co., 297 U.S. 233, 80 L. Ed. 660 (1936) was found to be
discriminatory because it was laid on the gross advertising receipts only of newspapers whose weekly circulation
was over 20,000, with the result that the tax applied only to 13 out of 124 publishers in Louisiana. These large
papers were critical of Senator Huey Long who controlled the state legislature which enacted the license tax. The
censorial motivation for the law was thus evident.
On the other hand, in Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 75 L. Ed. 2d
295 (1983), the tax was found to be discriminatory because although it could have been made liable for the sales
tax or, in lieu thereof, for the use tax on the privilege of using, storing or consuming tangible goods, the press was
not. Instead, the press was exempted from both taxes. It was, however, later made to pay a specialuse tax on the
cost of paper and ink which made these items "the only items subject to the use tax that were component of goods

to be sold at retail." The U.S. Supreme Court held that the differential treatment of the press "suggests that the goal
of regulation is not related to suppression of expression, and such goal is presumptively unconstitutional." It would
therefore appear that even a law that favors the press is constitutionally suspect. (See the dissent of Rehnquist, J. in
that case)
Nor is it true that only two exemptions previously granted by E.O. No. 273 are withdrawn "absolutely and
unqualifiedly" by R.A. No. 7716. Other exemptions from the VAT, such as those previously granted to PAL,
petroleum concessionaires, enterprises registered with the Export Processing Zone Authority, and many more are
likewise totally withdrawn, in addition to exemptions which are partially withdrawn, in an effort to broaden the base of
the tax.
The PPI says that the discriminatory treatment of the press is highlighted by the fact that transactions, which are
profit oriented, continue to enjoy exemption under R.A. No. 7716. An enumeration of some of these transactions will
suffice to show that by and large this is not so and that the exemptions are granted for a purpose. As the Solicitor
General says, such exemptions are granted, in some cases, to encourage agricultural production and, in other
cases, for the personal benefit of the end-user rather than for profit. The exempt transactions are:
(a) Goods for consumption or use which are in their original state (agricultural, marine and forest
products, cotton seeds in their original state, fertilizers, seeds, seedlings, fingerlings, fish, prawn
livestock and poultry feeds) and goods or services to enhance agriculture (milling of palay, corn,
sugar cane and raw sugar, livestock, poultry feeds, fertilizer, ingredients used for the manufacture of
feeds).
(b) Goods used for personal consumption or use (household and personal effects of citizens
returning to the Philippines) or for professional use, like professional instruments and implements, by
persons coming to the Philippines to settle here.
(c) Goods subject to excise tax such as petroleum products or to be used for manufacture of
petroleum products subject to excise tax and services subject to percentage tax.
(d) Educational services, medical, dental, hospital and veterinary services, and services rendered
under employer-employee relationship.
(e) Works of art and similar creations sold by the artist himself.
(f) Transactions exempted under special laws, or international agreements.
(g) Export-sales by persons not VAT-registered.
(h) Goods or services with gross annual sale or receipt not exceeding P500,000.00.
(Respondents' Consolidated Comment on the Motions for Reconsideration, pp. 58-60)
The PPI asserts that it does not really matter that the law does not discriminate against the press because "even
nondiscriminatory taxation on constitutionally guaranteed freedom is unconstitutional." PPI cites in support of this
assertion the following statement in Murdock v. Pennsylvania, 319 U.S. 105, 87 L. Ed. 1292 (1943):
The fact that the ordinance is "nondiscriminatory" is immaterial. The protection afforded by the First
Amendment is not so restricted. A license tax certainly does not acquire constitutional validity
because it classifies the privileges protected by the First Amendment along with the wares and
merchandise of hucksters and peddlers and treats them all alike. Such equality in treatment does not
save the ordinance. Freedom of press, freedom of speech, freedom of religion are in preferred
position.
The Court was speaking in that case of a license tax, which, unlike an ordinary tax, is mainly for regulation. Its
imposition on the press is unconstitutional because it lays a prior restraint on the exercise of its right. Hence,
although its application to others, such those selling goods, is valid, its application to the press or to religious
groups, such as the Jehovah's Witnesses, in connection with the latter's sale of religious books and pamphlets, is
unconstitutional. As the U.S. Supreme Court put it, "it is one thing to impose a tax on income or property of a
preacher. It is quite another thing to exact a tax on him for delivering a sermon."
A similar ruling was made by this Court in American Bible Society v. City of Manila, 101 Phil. 386 (1957) which
invalidated a city ordinance requiring a business license fee on those engaged in the sale of general merchandise. It

was held that the tax could not be imposed on the sale of bibles by the American Bible Society without restraining
the free exercise of its right to propagate.
The VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a privilege, much less a
constitutional right. It is imposed on the sale, barter, lease or exchange of goods or properties or the sale or
exchange of services and the lease of properties purely for revenue purposes. To subject the press to its payment is
not to burden the exercise of its right any more than to make the press pay income tax or subject it to general
regulation is not to violate its freedom under the Constitution.
Additionally, the Philippine Bible Society, Inc. claims that although it sells bibles, the proceeds derived from the sales
are used to subsidize the cost of printing copies which are given free to those who cannot afford to pay so that to tax
the sales would be to increase the price, while reducing the volume of sale. Granting that to be the case, the
resulting burden on the exercise of religious freedom is so incidental as to make it difficult to differentiate it from any
other economic imposition that might make the right to disseminate religious doctrines costly. Otherwise, to follow
the petitioner's argument, to increase the tax on the sale of vestments would be to lay an impermissible burden on
the right of the preacher to make a sermon.
On the other hand the registration fee of P1,000.00 imposed by 107 of the NIRC, as amended by 7 of R.A. No.
7716, although fixed in amount, is really just to pay for the expenses of registration and enforcement of provisions
such as those relating to accounting in 108 of the NIRC. That the PBS distributes free bibles and therefore is not
liable to pay the VAT does not excuse it from the payment of this fee because it also sells some copies. At any rate
whether the PBS is liable for the VAT must be decided in concrete cases, in the event it is assessed this tax by the
Commissioner of Internal Revenue.
VII. Alleged violations of the due process, equal protection and contract clauses and the rule on taxation. CREBA
asserts that R.A. No. 7716 (1) impairs the obligations of contracts, (2) classifies transactions as covered or exempt
without reasonable basis and (3) violates the rule that taxes should be uniform and equitable and that Congress
shall "evolve a progressive system of taxation."
With respect to the first contention, it is claimed that the application of the tax to existing contracts of the sale of real
property by installment or on deferred payment basis would result in substantial increases in the monthly
amortizations to be paid because of the 10% VAT. The additional amount, it is pointed out, is something that the
buyer did not anticipate at the time he entered into the contract.
The short answer to this is the one given by this Court in an early case: "Authorities from numerous sources are
cited by the plaintiffs, but none of them show that a lawful tax on a new subject, or an increased tax on an old one,
interferes with a contract or impairs its obligation, within the meaning of the Constitution. Even though such taxation
may affect particular contracts, as it may increase the debt of one person and lessen the security of another, or may
impose additional burdens upon one class and release the burdens of another, still the tax must be paid unless
prohibited by the Constitution, nor can it be said that it impairs the obligation of any existing contract in its true legal
sense." (La Insular v. Machuca Go-Tauco and Nubla Co-Siong, 39 Phil. 567, 574 (1919)). Indeed not only existing
laws but also "the reservation of the essential attributes of sovereignty, is . . . read into contracts as a postulate of
the legal order." (Philippine-American Life Ins. Co. v. Auditor General, 22 SCRA 135, 147 (1968)) Contracts must be
understood as having been made in reference to the possible exercise of the rightful authority of the government
and no obligation of contract can extend to the defeat of that authority. (Norman v. Baltimore and Ohio R.R., 79 L.
Ed. 885 (1935)).
It is next pointed out that while 4 of R.A. No. 7716 exempts such transactions as the sale of agricultural products,
food items, petroleum, and medical and veterinary services, it grants no exemption on the sale of real property
which is equally essential. The sale of real property for socialized and low-cost housing is exempted from the tax,
but CREBA claims that real estate transactions of "the less poor," i.e., the middle class, who are equally homeless,
should likewise be exempted.
The sale of food items, petroleum, medical and veterinary services, etc., which are essential goods and services
was already exempt under 103, pars. (b) (d) (1) of the NIRC before the enactment of R.A. No. 7716. Petitioner is in
error in claiming that R.A. No. 7716 granted exemption to these transactions, while subjecting those of petitioner to
the payment of the VAT. Moreover, there is a difference between the "homeless poor" and the "homeless less poor"
in the example given by petitioner, because the second group or middle class can afford to rent houses in the
meantime that they cannot yet buy their own homes. The two social classes are thus differently situated in life. "It is
inherent in the power to tax that the State be free to select the subjects of taxation, and it has been repeatedly held
that 'inequalities which result from a singling out of one particular class for taxation, or exemption infringe no
constitutional limitation.'" (Lutz v. Araneta, 98 Phil. 148, 153 (1955). Accord, City of Baguio v. De Leon, 134 Phil. 912
(1968); Sison, Jr. v. Ancheta, 130 SCRA 654, 663 (1984); Kapatiran ng mga Naglilingkod sa Pamahalaan ng
Pilipinas, Inc. v. Tan, 163 SCRA 371 (1988)).

Finally, it is contended, for the reasons already noted, that R.A. No. 7716 also violates Art. VI, 28(1) which provides
that "The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of
taxation."
Equality and uniformity of taxation means that all taxable articles or kinds of property of the same class be taxed at
the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of
taxation. To satisfy this requirement it is enough that the statute or ordinance applies equally to all persons, forms
and corporations placed in similar situation. (City of Baguio v. De Leon, supra; Sison, Jr. v. Ancheta, supra)
Indeed, the VAT was already provided in E.O. No. 273 long before R.A. No. 7716 was enacted. R.A. No. 7716
merely expands the base of the tax. The validity of the original VAT Law was questioned in Kapatiran ng
Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, 163 SCRA 383 (1988) on grounds similar to those made in
these cases, namely, that the law was "oppressive, discriminatory, unjust and regressive in violation of Art. VI,
28(1) of the Constitution." (At 382) Rejecting the challenge to the law, this Court held:
As the Court sees it, EO 273 satisfies all the requirements of a valid tax. It is uniform. . . .
The sales tax adopted in EO 273 is applied similarly on all goods and services sold to the public,
which are not exempt, at the constant rate of 0% or 10%.
The disputed sales tax is also equitable. It is imposed only on sales of goods or services by persons
engaged in business with an aggregate gross annual sales exceeding P200,000.00. Small corner
sari-sari stores are consequently exempt from its application. Likewise exempt from the tax are sales
of farm and marine products, so that the costs of basic food and other necessities, spared as they
are from the incidence of the VAT, are expected to be relatively lower and within the reach of the
general public.
(At 382-383)
The CREBA claims that the VAT is regressive. A similar claim is made by the Cooperative Union of the Philippines,
Inc. (CUP), while petitioner Juan T. David argues that the law contravenes the mandate of Congress to provide for a
progressive system of taxation because the law imposes a flat rate of 10% and thus places the tax burden on all
taxpayers without regard to their ability to pay.
The Constitution does not really prohibit the imposition of indirect taxes which, like the VAT, are regressive. What it
simply provides is that Congress shall "evolve a progressive system of taxation." The constitutional provision has
been interpreted to mean simply that "direct taxes are . . . to be preferred [and] as much as possible, indirect taxes
should be minimized." (E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 221 (Second ed. (1977)).
Indeed, the mandate to Congress is not to prescribe, but to evolve, a progressive tax system. Otherwise, sales
taxes, which perhaps are the oldest form of indirect taxes, would have been prohibited with the proclamation of Art.
VIII, 17(1) of the 1973 Constitution from which the present Art. VI, 28(1) was taken. Sales taxes are also
regressive.
Resort to indirect taxes should be minimized but not avoided entirely because it is difficult, if not impossible, to avoid
them by imposing such taxes according to the taxpayers' ability to pay. In the case of the VAT, the law minimizes the
regressive effects of this imposition by providing for zero rating of certain transactions (R.A. No. 7716, 3, amending
102 (b) of the NIRC), while granting exemptions to other transactions. (R.A. No. 7716, 4, amending 103 of the
NIRC).
Thus, the following transactions involving basic and essential goods and services are exempted from the VAT:
(a) Goods for consumption or use which are in their original state (agricultural, marine and forest
products, cotton seeds in their original state, fertilizers, seeds, seedlings, fingerlings, fish, prawn
livestock and poultry feeds) and goods or services to enhance agriculture (milling of palay, corn
sugar cane and raw sugar, livestock, poultry feeds, fertilizer, ingredients used for the manufacture of
feeds).
(b) Goods used for personal consumption or use (household and personal effects of citizens
returning to the Philippines) and or professional use, like professional instruments and implements,
by persons coming to the Philippines to settle here.
(c) Goods subject to excise tax such as petroleum products or to be used for manufacture of
petroleum products subject to excise tax and services subject to percentage tax.

(d) Educational services, medical, dental, hospital and veterinary services, and services rendered
under employer-employee relationship.
(e) Works of art and similar creations sold by the artist himself.
(f) Transactions exempted under special laws, or international agreements.
(g) Export-sales by persons not VAT-registered.
(h) Goods or services with gross annual sale or receipt not exceeding P500,000.00.
(Respondents' Consolidated Comment on the Motions for Reconsideration, pp. 58-60)
On the other hand, the transactions which are subject to the VAT are those which involve goods and services which
are used or availed of mainly by higher income groups. These include real properties held primarily for sale to
customers or for lease in the ordinary course of trade or business, the right or privilege to use patent, copyright, and
other similar property or right, the right or privilege to use industrial, commercial or scientific equipment, motion
picture films, tapes and discs, radio, television, satellite transmission and cable television time, hotels, restaurants
and similar places, securities, lending investments, taxicabs, utility cars for rent, tourist buses, and other common
carriers, services of franchise grantees of telephone and telegraph.
The problem with CREBA's petition is that it presents broad claims of constitutional violations by tendering issues
not at retail but at wholesale and in the abstract. There is no fully developed record which can impart to adjudication
the impact of actuality. There is no factual foundation to show in the concrete the application of the law to actual
contracts and exemplify its effect on property rights. For the fact is that petitioner's members have not even been
assessed the VAT. Petitioner's case is not made concrete by a series of hypothetical questions asked which are no
different from those dealt with in advisory opinions.
The difficulty confronting petitioner is thus apparent. He alleges arbitrariness. A mere allegation, as
here, does not suffice. There must be a factual foundation of such unconstitutional taint. Considering
that petitioner here would condemn such a provision as void on its face, he has not made out a
case. This is merely to adhere to the authoritative doctrine that where the due process and equal
protection clauses are invoked, considering that they are not fixed rules but rather broad standards,
there is a need for proof of such persuasive character as would lead to such a conclusion. Absent
such a showing, the presumption of validity must prevail.
(Sison, Jr. v. Ancheta, 130 SCRA at 661)
Adjudication of these broad claims must await the development of a concrete case. It may be that postponement of
adjudication would result in a multiplicity of suits. This need not be the case, however. Enforcement of the law may
give rise to such a case. A test case, provided it is an actual case and not an abstract or hypothetical one, may thus
be presented.
Nor is hardship to taxpayers alone an adequate justification for adjudicating abstract issues. Otherwise, adjudication
would be no different from the giving of advisory opinion that does not really settle legal issues.
We are told that it is our duty under Art. VIII, 1, 2 to decide whenever a claim is made that "there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of
the government." This duty can only arise if an actual case or controversy is before us. Under Art . VIII, 5 our
jurisdiction is defined in terms of "cases" and all that Art. VIII, 1, 2 can plausibly mean is that in the exercise of
that jurisdiction we have the judicial power to determine questions of grave abuse of discretion by any branch or
instrumentality of the government.
Put in another way, what is granted in Art. VIII, 1, 2 is "judicial power," which is "the power of a court to hear and
decide cases pending between parties who have the right to sue and be sued in the courts of law and equity" (Lamb
v. Phipps, 22 Phil. 456, 559 (1912)), as distinguished from legislative and executive power. This power cannot be
directly appropriated until it is apportioned among several courts either by the Constitution, as in the case of Art. VIII,
5, or by statute, as in the case of the Judiciary Act of 1948 (R.A. No. 296) and the Judiciary Reorganization Act of
1980 (B.P. Blg. 129). The power thus apportioned constitutes the court's "jurisdiction," defined as "the power
conferred by law upon a court or judge to take cognizance of a case, to the exclusion of all others." (United States v.
Arceo, 6 Phil. 29 (1906)) Without an actual case coming within its jurisdiction, this Court cannot inquire into any
allegation of grave abuse of discretion by the other departments of the government.

VIII. Alleged violation of policy towards cooperatives. On the other hand, the Cooperative Union of the Philippines
(CUP), after briefly surveying the course of legislation, argues that it was to adopt a definite policy of granting tax
exemption to cooperatives that the present Constitution embodies provisions on cooperatives. To subject
cooperatives to the VAT would therefore be to infringe a constitutional policy. Petitioner claims that in 1973, P.D. No.
175 was promulgated exempting cooperatives from the payment of income taxes and sales taxes but in 1984,
because of the crisis which menaced the national economy, this exemption was withdrawn by P.D. No. 1955; that in
1986, P.D. No. 2008 again granted cooperatives exemption from income and sales taxes until December 31, 1991,
but, in the same year, E.O. No. 93 revoked the exemption; and that finally in 1987 the framers of the Constitution
"repudiated the previous actions of the government adverse to the interests of the cooperatives, that is, the
repeated revocation of the tax exemption to cooperatives and instead upheld the policy of strengthening the
cooperatives by way of the grant of tax exemptions," by providing the following in Art. XII:
1. The goals of the national economy are a more equitable distribution of opportunities, income,
and wealth; a sustained increase in the amount of goods and services produced by the nation for the
benefit of the people; and an expanding productivity as the key to raising the quality of life for all,
especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of human and
natural resources, and which are competitive in both domestic and foreign markets. However, the
State shall protect Filipino enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given
optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and
similar collective organizations, shall be encouraged to broaden the base of their ownership.
15. The Congress shall create an agency to promote the viability and growth of cooperatives as
instruments for social justice and economic development.
Petitioner's contention has no merit. In the first place, it is not true that P.D. No. 1955 singled out cooperatives by
withdrawing their exemption from income and sales taxes under P.D. No. 175, 5. What P.D. No. 1955, 1 did was
to withdraw the exemptions and preferential treatments theretofore granted to private business enterprises in
general, in view of the economic crisis which then beset the nation. It is true that after P.D. No. 2008, 2 had
restored the tax exemptions of cooperatives in 1986, the exemption was again repealed by E.O. No. 93, 1, but
then again cooperatives were not the only ones whose exemptions were withdrawn. The withdrawal of tax
incentives applied to all, including government and private entities. In the second place, the Constitution does not
really require that cooperatives be granted tax exemptions in order to promote their growth and viability. Hence,
there is no basis for petitioner's assertion that the government's policy toward cooperatives had been one of
vacillation, as far as the grant of tax privileges was concerned, and that it was to put an end to this indecision that
the constitutional provisions cited were adopted. Perhaps as a matter of policy cooperatives should be granted tax
exemptions, but that is left to the discretion of Congress. If Congress does not grant exemption and there is no
discrimination to cooperatives, no violation of any constitutional policy can be charged.
Indeed, petitioner's theory amounts to saying that under the Constitution cooperatives are exempt from taxation.
Such theory is contrary to the Constitution under which only the following are exempt from taxation: charitable
institutions, churches and parsonages, by reason of Art. VI, 28 (3), and non-stock, non-profit educational
institutions by reason of Art. XIV, 4 (3).
CUP's further ground for seeking the invalidation of R.A. No. 7716 is that it denies cooperatives the equal protection
of the law because electric cooperatives are exempted from the VAT. The classification between electric and other
cooperatives (farmers cooperatives, producers cooperatives, marketing cooperatives, etc.) apparently rests on a
congressional determination that there is greater need to provide cheaper electric power to as many people as
possible, especially those living in the rural areas, than there is to provide them with other necessities in life. We
cannot say that such classification is unreasonable.
We have carefully read the various arguments raised against the constitutional validity of R.A. No. 7716. We have in
fact taken the extraordinary step of enjoining its enforcement pending resolution of these cases. We have now come
to the conclusion that the law suffers from none of the infirmities attributed to it by petitioners and that its enactment
by the other branches of the government does not constitute a grave abuse of discretion. Any question as to its
necessity, desirability or expediency must be addressed to Congress as the body which is electorally responsible,
remembering that, as Justice Holmes has said, "legislators are the ultimate guardians of the liberties and welfare of
the people in quite as great a degree as are the courts." (Missouri, Kansas & Texas Ry. Co. v. May, 194 U.S. 267,
270, 48 L. Ed. 971, 973 (1904)). It is not right, as petitioner in G.R. No. 115543 does in arguing that we should
enforce the public accountability of legislators, that those who took part in passing the law in question by voting for it

in Congress should later thrust to the courts the burden of reviewing measures in the flush of enactment. This Court
does not sit as a third branch of the legislature, much less exercise a veto power over legislation.
WHEREFORE, the motions for reconsideration are denied with finality and the temporary restraining order
previously issued is hereby lifted.
SO ORDERED.

SPOUSES ALEJANDRO MIRASOL and LILIA E. MIRASOL, petitioners, vs. THE COURT OF APPEALS, PHILIPPINE
NATIONAL BANK, and PHILIPPINE EXCHANGE CO., INC., respondents.

DECISION
QUISUMBING, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals dated July 22, 1996, in CA-G.R. CV
No. 38607, as well as of its resolution of January 23, 1997, denying petitioners motion for reconsideration. The challenged
decision reversed the judgment of the Regional Trial Court of Bacolod City, Branch 42 in Civil Case No. 14725.
The factual background of this case, as gleaned from the records, is as follows:
The Mirasols are sugarland owners and planters. In 1973-1974, they produced 70,501.08 piculs [1] of sugar, 25,662.36
of which were assigned for export. The following crop year, their acreage planted to the same crop was lower, yielding
65,100 piculs of sugar, with 23,696.40 piculs marked for export.
Private respondent Philippine National Bank (PNB) financed the Mirasols sugar production venture for crop years,
1973-1974 and 1974-1975 under a crop loan financing scheme. Under said scheme, the Mirasols signed Credit
Agreements, a Chattel Mortgage on Standing Crops, and a Real Estate Mortgage in favor of PNB. The Chattel Mortgage
empowered PNB as the petitioners attorney-in-fact to negotiate and to sell the latters sugar in both domestic and export
markets and to apply the proceeds to the payment of their obligations to it.
Exercising his law-making powers under Martial Law, then President Ferdinand Marcos issued Presidential Decree
(P.D.) No. 579[2] in November, 1974. The decree authorized private respondent Philippine Exchange Co., Inc. (PHILEX)
to purchase sugar allocated for export to the United States and to other foreign markets. The price and quantity was
determined by the Sugar Quota Administration, PNB, the Department of Trade and Industry, and finally, by the Office of
the President. The decree further authorized PNB to finance PHILEXs purchases. Finally, the decree directed that
whatever profit PHILEX might realize from sales of sugar abroad was to be remitted to a special fund of the national
government, after commissions, overhead expenses and liabilities had been deducted. The government offices and entities
tasked by existing laws and administrative regulations to oversee the sugar export pegged the purchase price of export
sugar in crop years 1973-1974 and 1974-1975 at P180.00 per picul.
PNB continued to finance the sugar production of the Mirasols for crop years 1975-1976 and 1976-1977. These crop
loans and similar obligations were secured by real estate mortgages over several properties of the Mirasols and chattel
mortgages over standing crops. Believing that the proceeds of their sugar sales to PNB, if properly accounted for, were
more than enough to pay their obligations, petitioners asked PNB for an accounting of the proceeds of the sale of their
export sugar. PNB ignored the request. Meanwhile, petitioners continued to avail of other loans from PNB and to make
unfunded withdrawals from their current accounts with said bank. PNB then asked petitioners to settle their due and
demandable accounts. As a result of these demands for payment, petitioners on August 4, 1977, conveyed to PNB real
properties valued at P1,410,466.00 by way of dacion en pago, leaving an unpaid overdrawn account of P1,513,347.78.
On August 10, 1982, the balance of outstanding sugar crop and other loans owed by petitioners to PNB stood
at P15,964,252.93. Despite demands, the Mirasols failed to settle said due and demandable accounts.PNB then proceeded
to extrajudicially foreclose the mortgaged properties. After applying the proceeds of the auction sale of the mortgaged
realties, PNB still had a deficiency claim of P12,551,252.93.
Petitioners continued to ask PNB to account for the proceeds of the sale of their export sugar for crop years 19731974 and 1974-1975, insisting that said proceeds, if properly liquidated, could offset their outstanding obligations with the
bank. PNB remained adamant in its stance that under P.D. No. 579, there was nothing to account since under said law, all
earnings from the export sales of sugar pertained to the National Government and were subject to the disposition of the
President of the Philippines for public purposes.
On August 9, 1979, the Mirasols filed a suit for accounting, specific performance, and damages against PNB with the
Regional Trial Court of Bacolod City, docketed as Civil Case No. 14725.
On June 16, 1987, the complaint was amended to implead PHILEX as party-defendant.
The parties agreed at pre-trial to limit the issues to the following:
1. The constitutionality and/or legality of Presidential Decrees numbered 338, 579, and 1192;

2. The determination of the total amount allegedly due the plaintiffs from the defendants corresponding to the allege(d)
unliquidated cost price of export sugar during crop years 1973-1974 and 1974-1975. [3]
After trial on the merits, the trial court decided as follows:
WHEREFORE, the foregoing premises considered, judgment is hereby rendered in favor of the plaintiffs and against the
defendants Philippine National Bank (PNB) and Philippine Exchange Co., Inc. (PHILEX):
(1)Declaring Presidential Decree 579 enacted on November 12, 1974 and all circulars, as well as policies, orders
and other issuances issued in furtherance thereof, unconstitutional and therefore, NULL and VOID being in
gross violation of the Bill of Rights;
(2) Ordering defendants PNB and PHILEX to pay, jointly and severally, plaintiffs the whole amount
corresponding to the residue of the unliquidated actual cost price of 25,662 piculs in export sugar for crop
year 1973-1974 at an average price of P300.00 per picul, deducting therefrom however, the amount of
P180.00 already paid in advance plus the allowable deductions in service fees and other charges;
(3) And also, for the same defendants to pay, jointly and severally, same plaintiffs the whole amount
corresponding to the unpaid actual price of 14,596 piculs of export sugar for crop year 1974-1975 at an
average rate of P214.14 per picul minus however, the sum of P180.00 per picul already paid by the
defendants in advance and the allowable deducting (sic) in service fees and other charges.
The unliquidated amount of money due the plaintiffs but withheld by the defendants, shall earn the legal rate of interest at
12% per annum computed from the date this action was instituted until fully paid; and, finally
(4) Directing the defendants PNB and PHILEX to pay, jointly and severally, plaintiffs the sum of P50,000.00 in
moral damages and the amount of P50,000.00 as attorneys fees, plus the costs of this litigation.
SO ORDERED.[4]
The same was, however, modified by a Resolution of the trial court dated May 14, 1992, which added the following
paragraph:
This decision should however, be interpreted without prejudice to whatever benefits that may have accrued in favor of the
plaintiffs with the passage and approval of Republic Act 7202 otherwise known as the Sugar Restitution Law, authorizing
the restitution of losses suffered by the plaintiffs from Crop year 1974-1975 to Crop year 1984-1985 occasioned by the
actuations of government-owned and controlled agencies. (Underscoring in the original).
SO ORDERED.[5]
The Mirasols then filed an appeal with the respondent court, docketed as CA-G.R. CV No. 38607, faulting the trial
court for not nullifying the dacion en pago and the mortgage contracts, as well as the foreclosure of their mortgaged
properties. Also faulted was the trial courts failure to award them the full money claims and damages sought from both
PNB and PHILEX.
On July 22, 1996, the Court of Appeals reversed the trial court as follows:
WHEREFORE, this Court renders judgment REVERSING the appealed Decision and entering the following verdict:
1. Declaring the dacion en pago and the foreclosure of the mortgaged properties valid;
2. Ordering the PNB to render an accounting of the sugar account of the Mirasol[s] specifically stating the indebtedness of
the latter to the former and the proceeds of Mirasols 1973-1974 and 1974-1975 sugar production sold pursuant to and in
accordance with P.D. 579 and the issuances therefrom;
3. Ordering the PNB to recompute in accordance with RA 7202 Mirasols indebtedness to it crediting to the latter
payments already made as well as the auction price of their foreclosed real estate and stipulated value of their properties
ceded to PNB in the dacon (sic) en pago;
4. Whatever the result of the recomputation of Mirasols account, the outstanding balance or the excess payment shall be
governed by the pertinent provisions of RA 7202.

SO ORDERED.[6]
On August 28, 1996, petitioners moved for reconsideration, which the appellate court denied on January 23, 1997.
Hence, the instant petition, with petitioners submitting the following issues for our resolution:
1. Whether the Trial Court has jurisdiction to declare a statute unconstitutional without notice to the Solicitor General
where the parties have agreed to submit such issue for the resolution of the Trial Court.
2. Whether PD 579 and subsequent issuances[7] thereof are unconstitutional.
3. Whether the Honorable Court of Appeals committed manifest error in not applying the doctrine of piercing the
corporate veil between respondents PNB and PHILEX.
4. Whether the Honorable Court of Appeals committed manifest error in upholding the validity of the foreclosure on
petitioners property and in upholding the validity of the dacion en pago in this case.
5. Whether the Honorable Court of Appeals committed manifest error in not awarding damages to petitioners grounds
relied upon the allowance of the petition. (Underscored in the original)[8]
On the first issue. It is settled that Regional Trial Courts have the authority and jurisdiction to consider the
constitutionality of a statute, presidential decree, or executive order.[9] The Constitution vests the power of judicial review
or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction,
ordinance, or regulation not only in this Court, but in all Regional Trial Courts. [10] In J.M. Tuason and Co. v. Court of
Appeals, 3 SCRA 696 (1961) we held:
Plainly, the Constitution contemplates that the inferior courts should have jurisdiction in cases involving constitutionality
of any treaty or law, for it speaks of appellate review of final judgments of inferior courts in cases where such
constitutionality happens to be in issue.[11]
Furthermore, B.P. Blg. 129 grants Regional Trial Courts the authority to rule on the conformity of laws or treaties
with the Constitution, thus:
SECTION 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;
The pivotal issue, which we must address, is whether it was proper for the trial court to have exercised judicial
review.
Petitioners argue that the Court of Appeals erred in finding that it was improper for the trial court to have declared
P.D. No. 579[12] unconstitutional, since petitioners had not complied with Rule 64, Section 3, of the Rules of
Court. Petitioners contend that said Rule specifically refers only to actions for declaratory relief and not to an ordinary
action for accounting, specific performance, and damages.
Petitioners contentions are bereft of merit. Rule 64, Section 3 of the Rules of Court provides:
SEC. 3. Notice to Solicitor General. In any action which involves the validity of a statute, or executive order or regulation,
the Solicitor General shall be notified by the party attacking the statute, executive order, or regulation, and shall be
entitled to be heard upon such question.
This should be read in relation to Section 1 [c] of P.D. No. 478, [13] which states in part:
SECTION 1. Functions and Organizations (1) The Office of the Solicitor General shallhave the following specific powers
and functions:
xxx
[c] Appear in any court in any action involving the validity of any treaty, law, executive order or proclamation, rule or
regulation when in his judgment his intervention is necessary or when requested by the court.

It is basic legal construction that where words of command such as shall, must, or ought are employed, they are
generally and ordinarily regarded as mandatory.[14] Thus, where, as in Rule 64, Section 3 of the Rules of Court, the word
shall is used, a mandatory duty is imposed, which the courts ought to enforce.
The purpose of the mandatory notice in Rule 64, Section 3 is to enable the Solicitor General to decide whether or not
his intervention in the action assailing the validity of a law or treaty is necessary. To deny the Solicitor General such
notice would be tantamount to depriving him of his day in court. We must stress that, contrary to petitioners stand, the
mandatory notice requirement is not limited to actions involving declaratory relief and similar remedies. The rule itself
provides that such notice is required in any action and not just actions involving declaratory relief. Where there is no
ambiguity in the words used in the rule, there is no room for construction. [15] In all actions assailing the validity of a
statute, treaty, presidential decree, order, or proclamation, notice to the Solicitor General is mandatory.
In this case, the Solicitor General was never notified about Civil Case No. 14725. Nor did the trial court ever require
him to appear in person or by a representative or to file any pleading or memorandum on the constitutionality of the
assailed decree. Hence, the Court of Appeals did not err in holding that lack of the required notice made it improper for
the trial court to pass upon the constitutional validity of the questioned presidential decrees.
As regards the second issue, petitioners contend that P.D. No. 579 and its implementing issuances are void for
violating the due process clause and the prohibition against the taking of private property without just compensation.
Petitioners now ask this Court to exercise its power of judicial review.
Jurisprudence has laid down the following requisites for the exercise of this power: First, there must be before the
Court an actual case calling for the exercise of judicial review. Second, the question before the Court must be ripe for
adjudication. Third, the person challenging the validity of the act must have standing to challenge. Fourth, the question of
constitutionality must have been raised at the earliest opportunity, and lastly, the issue of constitutionality must be the
very lis mota of the case. [16]
As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be settled on other grounds.
The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of the political
departments are valid, absent a clear and unmistakable showing to the contrary. To doubt is to sustain. This presumption is
based on the doctrine of separation of powers. This means that the measure had first been carefully studied by the
legislative and executive departments and found to be in accord with the Constitution before it was finally enacted and
approved.[18]
[17]

The present case was instituted primarily for accounting and specific performance. The Court of Appeals correctly
ruled that PNBs obligation to render an accounting is an issue, which can be determined, without having to rule on the
constitutionality of P.D. No. 579. In fact there is nothing in P.D. No. 579, which is applicable to PNBs intransigence in
refusing to give an accounting. The governing law should be the law on agency, it being undisputed that PNB acted as
petitioners agent. In other words, the requisite that the constitutionality of the law in question be the very lis mota of the
case is absent. Thus we cannot rule on the constitutionality ofP.D. No. 579.
Petitioners further contend that the passage of R.A. No. 7202 [19] rendered P.D. No. 579 unconstitutional, since R.A.
No. 7202 affirms that under P.D. 579, the due process clause of the Constitution and the right of the sugar planters not to
be deprived of their property without just compensation were violated.
A perusal of the text of R.A. No. 7202 shows that the repealing clause of said law merely reads:
SEC. 10. All laws, acts, executive orders and circulars in conflict herewith are hereby repealed or modified accordingly.
The settled rule of statutory construction is that repeals by implication are not favored. [20] R.A. No. 7202 cannot be
deemed to have repealed P.D. No. 579. In addition, the power to declare a law unconstitutional does not lie with the
legislature, but with the courts. [21] Assuming arguendo that R.A. No. 7202 did indeed repeal P.D. No. 579, said repeal is
not a legislative declaration finding the earlier law unconstitutional.
To resolve the third issue, petitioners ask us to apply the doctrine of piercing the veil of corporate fiction with respect
to PNB and PHILEX. Petitioners submit that PHILEX was a wholly-owned subsidiary of PNB prior to the latters
privatization.
We note, however, that the appellate court made the following finding of fact:
1. PNB and PHILEX are separate juridical persons and there is no reason to pierce the veil of corporate personality. Both
existed by virtue of separate organic acts. They had separate operations and different purposes and powers. [22]

Findings of fact by the Court of Appeals are conclusive and binding upon this Court unless said findings are not
supported by the evidence.[23] Our jurisdiction in a petition for review under Rule 45 of the Rules of Court is limited only
to reviewing questions of law and factual issues are not within its province. [24] In view of the aforequoted finding of fact,
no manifest error is chargeable to the respondent court for refusing to pierce the veil of corporate fiction.
On the fourth issue, the appellate court found that there were two sets of accounts between petitioners and PNB,
namely:
1. The accounts relative to the loan financing scheme entered into by the Mirasols with PNB (PNBs Brief, p. 16) On the
question of how much the PNB lent the Mirasols for crop years 1973-1974 and 1974-1975, the evidence recited by the
lower court in its decision was deficient. We are offered (sic) PNB the amount of FIFTEEN MILLION NINE HUNDRED
SIXTY FOUR THOUSAND TWO HUNDRED FIFTY TWO PESOS and NINETY THREE Centavos (Ps15,964,252.93)
but this is the alleged balance the Mirasols owe PNB covering the years 1975 to 1982.
2. The account relative to the Mirasols current account Numbers 5186 and 5177 involving the amount of THREE
MILLION FOUR HUNDRED THOUSAND Pesos (P3,400,000.00) PNB claims against the Mirasols. (PNBs Brief, p. 17)
In regard to the first set of accounts, besides the proceeds from PNBs sale of sugar (involving the defendant PHILEX in
relation to the export portion of the stock), the PNB foreclosed the Mirasols mortgaged properties realizing therefrom in
1982 THREE MILLION FOUR HUNDRED THIRTEEN THOUSAND Pesos (P3,413,000.00), the PNB itself having
acquired the properties as the highest bidder.
As to the second set of accounts, PNB proposed, and the Mirasols accepted, a dacion en pago scheme by which the
Mirasols conveyed to PNB pieces of property valued at ONE MILLION FOUR HUNDRED TEN THOUSAND FOUR
HUNDRED SIXTY-SIX Pesos (Ps1,410,466.00) (PNBs Brief, pp. 16-17).[25]
Petitioners now claim that the dacion en pago and the foreclosure of their mortgaged properties were void for want
of consideration. Petitioners insist that the loans granted them by PNB from 1975 to 1982 had been fully paid by virtue of
legal compensation. Hence, the foreclosure was invalid and of no effect, since the mortgages were already fully
discharged. It is also averred that they agreed to the dacion only by virtue of a martial law Arrest, Search, and Seizure
Order (ASSO).
We find petitioners arguments unpersuasive. Both the lower court and the appellate court found that the Mirasols
admitted that they were indebted to PNB in the sum stated in the latters counterclaim. [26] Petitioners nonetheless insist that
the same can be offset by the unliquidated amounts owed them by PNB for crop years 1973-74 and 1974-75. Petitioners
argument has no basis in law. For legal compensation to take place, the requirements set forth in Articles 1278 and 1279
of the Civil Code must be present. Said articles read as follows:
Art. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other.
Art. 1279. In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the
other;
(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also
of the same quality if the latter has been stated;
(3) That the two debts are due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third persons and communicated
in due time to the debtor.
In the present case, set-off or compensation cannot take place between the parties because:
First, neither of the parties are mutually creditors and debtors of each other. Under P.D. No. 579, neither PNB nor
PHILEX could retain any difference claimed by the Mirasols in the price of sugar sold by the two firms. P.D. No. 579
prescribed where the profits from the sales are to be paid, to wit:

SECTION 7. x x x After deducting its commission of two and one-half (2-1/2%) percent of gross sales, the balance of the
proceeds of sugar trading operations for every crop year shall be set aside by the Philippine Exchange Company, Inc,. as
profits which shall be paid to a special fund of the National Government subject to the disposition of the President for
public purposes.
Thus, as correctly found by the Court of Appeals, there was nothing with which PNB was supposed to have off-set
Mirasols admitted indebtedness.[27]
Second, compensation cannot take place where one claim, as in the instant case, is still the subject of litigation, as the
same cannot be deemed liquidated.[28]
With respect to the duress allegedly employed by PNB, which impugned petitioners consent to the dacion en pago,
both the trial court and the Court of Appeals found that there was no evidence to support said claim. Factual findings of
the trial court, affirmed by the appellate court, are conclusive upon this Court. [29]
On the fifth issue, the trial court awarded petitioners P50,000.00 in moral damages and P50,000.00 in attorneys fees.
Petitioners now theorize that it was error for the Court of Appeals to have deleted these awards, considering that the
appellate court found PNB breached its duty as an agent to render an accounting to petitioners.
An agents failure to render an accounting to his principal is contrary to Article 1891 of the Civil Code. [30] The erring
agent is liable for damages under Article 1170 of the Civil Code, which states:
Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.
Article 1170 of the Civil Code, however, must be construed in relation to Article 2217 of said Code which reads:
Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages
may be recovered if they are the proximate result of the defendants wrongful act or omission.
Moral damages are explicitly authorized in breaches of contract where the defendant acted fraudulently or in bad
faith.[31] Good faith, however, is always presumed and any person who seeks to be awarded damages due to the acts of
another has the burden of proving that the latter acted in bad faith, with malice, or with ill motive. In the instant case,
petitioners have failed to show malice or bad faith [32] on the part of PNB in failing to render an accounting. Absent such
showing, moral damages cannot be awarded.
Nor can we restore the award of attorneys fees and costs of suit in favor of petitioners. Under Article 2208 (5) of the
Civil Code, attorneys fees are allowed in the absence of stipulation only if the defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiffs plainly valid, just, and demandable claim. As earlier stated, petitioners have not
proven bad faith on the part of PNB and PHILEX.
WHEREFORE, the instant petition is DENIED and the assailed decision of the respondent court in CA-G.R. CV
38607 AFFIRMED. Costs against petitioners.
SO ORDERED.

INTEGRATED BAR OF THE PHILIPPINES, petitioner, vs. HON. RONALDO B. ZAMORA, GEN. PANFILO M.
LACSON, GEN. EDGAR B. AGLIPAY, and GEN. ANGELO REYES, respondents.

DECISION
KAPUNAN, J.:
At bar is a special civil action for certiorari and prohibition with prayer for issuance of a temporary
restraining order seeking to nullify on constitutional grounds the order of President Joseph Ejercito Estrada
commanding the deployment of the Philippine Marines (the Marines) to join the Philippine National Police (the
PNP) in visibility patrols around the metropolis.

In view of the alarming increase in violent crimes in Metro Manila, like robberies, kidnappings and
carnappings, the President, in a verbal directive, ordered the PNP and the Marines to conduct joint visibility
patrols for the purpose of crime prevention and suppression. The Secretary of National Defense, the Chief of
Staff of the Armed Forces of the Philippines (the AFP), the Chief of the PNP and the Secretary of the Interior
and Local Government were tasked to execute and implement the said order. In compliance with the
presidential mandate, the PNP Chief, through Police Chief Superintendent Edgar B. Aglipay, formulated Letter
of Instruction 02/2000[1] (the LOI) which detailed the manner by which the joint visibility patrols, called Task
ForceTulungan, would be conducted.[2] Task Force Tulungan was placed under the leadership of the Police
Chief of Metro Manila.
Subsequently, the President confirmed his previous directive on the deployment of the Marines in a
Memorandum, dated 24 January 2000, addressed to the Chief of Staff of the AFP and the PNP Chief. [3] In the
Memorandum, the President expressed his desire to improve the peace and order situation in Metro Manila
through a more effective crime prevention program including increased police patrols. [4] The President further
stated that to heighten police visibility in the metropolis, augmentation from the AFP is necessary.[5] Invoking his
powers as Commander-in-Chief under Section 18, Article VII of the Constitution, the President directed the
AFP Chief of Staff and PNP Chief to coordinate with each other for the proper deployment and utilization of the
Marines to assist the PNP in preventing or suppressing criminal or lawless violence. [6] Finally, the President
declared that the services of the Marines in the anti-crime campaign are merely temporary in nature and for a
reasonable period only, until such time when the situation shall have improved.[7]
The LOI explains the concept of the PNP-Philippine Marines joint visibility patrols as follows:
xxx
2. PURPOSE:
The Joint Implementing Police Visibility Patrols between the PNP NCRPO and the Philippine Marines
partnership in the conduct of visibility patrols in Metro Manila for the suppression of crime prevention and other
serious threats to national security.
3. SITUATION:
Criminal incidents in Metro Manila have been perpetrated not only by ordinary criminals but also by organized
syndicates whose members include active and former police/military personnel whose training, skill, discipline
and firepower prove well-above the present capability of the local police alone to handle. The deployment of a
joint PNP NCRPO-Philippine Marines in the conduct of police visibility patrol in urban areas will reduce the
incidence of crimes specially those perpetrated by active or former police/military personnel.
4. MISSION:
The PNP NCRPO will organize a provisional Task Force to conduct joint NCRPO-PM visibility patrols to keep
Metro Manila streets crime-free, through a sustained street patrolling to minimize or eradicate all forms of highprofile crimes especially those perpetrated by organized crime syndicates whose members include those that
are well-trained, disciplined and well-armed active or former PNP/Military personnel.
5. CONCEPT IN JOINT VISIBILITY PATROL OPERATIONS:
a. The visibility patrols shall be conducted jointly by the NCRPO [National Capital Regional Police Office] and
the Philippine Marines to curb criminality in Metro Manila and to preserve the internal security of the state
against insurgents and other serious threat to national security, although the primary responsibility over
Internal Security Operations still rests upon the AFP.
b. The principle of integration of efforts shall be applied to eradicate all forms of high-profile crimes perpetrated
by organized crime syndicates operating in Metro Manila. This concept requires the military and police to work
cohesively and unify efforts to ensure a focused, effective and holistic approach in addressing crime
prevention. Along this line, the role of the military and police aside from neutralizing crime syndicates is to
bring a wholesome atmosphere wherein delivery of basic services to the people and development is achieved.
Hand-in-hand with this joint NCRPO-Philippine Marines visibility patrols, local Police Units are responsible for
the maintenance of peace and order in their locality.
c. To ensure the effective implementation of this project, a provisional Task Force TULUNGAN shall be
organized to provide the mechanism, structure, and procedures for the integrated planning, coordinating,
monitoring and assessing the security situation.
xxx.[8]
The selected areas of deployment under the LOI are: Monumento Circle, North Edsa (SM City), Araneta
Shopping Center, Greenhills, SM Megamall, Makati Commercial Center, LRT/MRT Stations and the NAIA and
Domestic Airport.[9]

On 17 January 2000, the Integrated Bar of the Philippines (the IBP) filed the instant petition to annul LOI
02/2000 and to declare the deployment of the Philippine Marines, null and void and unconstitutional, arguing
that:
I
THE DEPLOYMENT OF THE PHILIPPINE MARINES IN METRO MANILA IS VIOLATIVE OF THE
CONSTITUTION, IN THAT:
A) NO EMERGENCY SITUATION OBTAINS IN METRO MANILA AS WOULD JUSTIFY, EVEN ONLY
REMOTELY, THE DEPLOYMENT OF SOLDIERS FOR LAW ENFORCEMENT WORK; HENCE, SAID
DEPLOYMENT IS IN DEROGATION OF ARTICLE II, SECTION 3 OF THE CONSTITUTION;
B) SAID DEPLOYMENT CONSTITUTES AN INSIDIOUS INCURSION BY THE MILITARY IN A CIVILIAN
FUNCTION OF GOVERNMENT (LAW ENFORCEMENT) IN DEROGATION OF ARTICLE XVI, SECTION 5
(4), OF THE CONSTITUTION;
C) SAID DEPLOYMENT CREATES A DANGEROUS TENDENCY TO RELY ON THE MILITARY TO
PERFORM THE CIVILIAN FUNCTIONS OF THE GOVERNMENT.
II
IN MILITARIZING LAW ENFORCEMENT IN METRO MANILA, THE ADMINISTRATION IS UNWITTINGLY
MAKING THE MILITARY MORE POWERFUL THAN WHAT IT SHOULD REALLY BE UNDER THE
CONSTITUTION.[10]
Asserting itself as the official organization of Filipino lawyers tasked with the bounden duty to uphold the
rule of law and the Constitution, the IBP questions the validity of the deployment and utilization of the Marines
to assist the PNP in law enforcement.
Without granting due course to the petition, the Court in a Resolution, [11] dated 25 January 2000, required
the Solicitor General to file his Comment on the petition. On 8 February 2000, the Solicitor General submitted
his Comment.
The Solicitor General vigorously defends the constitutionality of the act of the President in deploying the
Marines, contending, among others, that petitioner has no legal standing; that the question of deployment of
the Marines is not proper for judicial scrutiny since the same involves a political question; that the organization
and conduct of police visibility patrols, which feature the team-up of one police officer and one Philippine
Marine soldier, does not violate the civilian supremacy clause in the Constitution.
The issues raised in the present petition are: (1) Whether or not petitioner has legal standing; (2) Whether
or not the Presidents factual determination of the necessity of calling the armed forces is subject to judicial
review; and, (3) Whether or not the calling of the armed forces to assist the PNP in joint visibility patrols
violates the constitutional provisions on civilian supremacy over the military and the civilian character of the
PNP.
The petition has no merit.
First, petitioner failed to sufficiently show that it is in possession of the requisites of standing to raise the
issues in the petition. Second, the President did not commit grave abuse of discretion amounting to lack or
excess of jurisdiction nor did he commit a violation of the civilian supremacy clause of the Constitution.
The power of judicial review is set forth in Section 1, Article VIII of the Constitution, to wit:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.
When questions of constitutional significance are raised, the Court can exercise its power of judicial review
only if the following requisites are complied with, namely: (1) the existence of an actual and appropriate case;
(2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise of judicial
review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis mota of the case.[12]

The IBP has not sufficiently complied with the requisites of standing in this case.
Legal standing or locus standi has been defined as a personal and substantial interest in the case such
that the party has sustained or will sustain direct injury as a result of the governmental act that is being

challenged.[13] The term interest means a material interest, an interest in issue affected by the decree, as
distinguished from mere interest in the question involved, or a mere incidental interest. [14] The gist of the
question of standing is whether a party alleges such personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions.[15]
In the case at bar, the IBP primarily anchors its standing on its alleged responsibility to uphold the rule of
law and the Constitution. Apart from this declaration, however, the IBP asserts no other basis in support of
its locus standi. 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 this case. This is too general an interest which is
shared by other groups and the whole citizenry. Based on the standards above-stated, the IBP has failed to
present a specific and substantial interest in the resolution of the case. Its fundamental purpose which, under
Section 2, Rule 139-A of the Rules of Court, is to elevate the standards of the law profession and to improve
the administration of justice is alien to, and cannot be affected by the deployment of the Marines. It should also
be noted that the interest of the National President of the IBP who signed the petition, is his alone, absent a
formal board resolution authorizing him to file the present action. To be sure, members of the BAR, those in the
judiciary included, have varying opinions on the issue. Moreover, the IBP, assuming that it has duly authorized
the National President to file the petition, has not shown any specific injury which it has suffered or may suffer
by virtue of the questioned governmental act. Indeed, none of its members, whom the IBP purportedly
represents, has sustained any form of injury as a result of the operation of the joint visibility patrols. Neither is it
alleged that any of its members has been arrested or that their civil liberties have been violated by the
deployment of the Marines. What the IBP projects as injurious is the supposed militarization of law
enforcement which might threaten Philippine democratic institutions and may cause more harm than good in
the long run. Not only is the presumed injury not personal in character, it is likewise too vague, highly
speculative and uncertain to satisfy the requirement of standing. Since petitioner has not successfully
established a direct and personal injury as a consequence of the questioned act, it does not possess the
personality to assail the validity of the deployment of the Marines. This Court, however, does not categorically
rule that the IBP has absolutely no standing to raise constitutional issues now or in the future. The IBP must,
by way of allegations and proof, satisfy this Court that it has sufficient stake to obtain judicial resolution of the
controversy.
Having stated the foregoing, it must be emphasized that this Court has the discretion to take cognizance
of a suit which does not satisfy the requirement of legal standing when paramount interest is involved. [16] In not
a few cases, the Court has adopted a liberal attitude on the locus standi of a petitioner where the petitioner is
able to craft an issue of transcendental significance to the people. [17] Thus, when the issues raised are of
paramount importance to the public, the Court may brush aside technicalities of procedure. [18] In this case, a
reading of the petition shows that the IBP has advanced constitutional issues which deserve the attention of
this Court in view of their seriousness, novelty and weight as precedents. Moreover, because peace and order
are under constant threat and lawless violence occurs in increasing tempo, undoubtedly aggravated by the
Mindanao insurgency problem, the legal controversy raised in the petition almost certainly will not go away. It
will stare us in the face again. It, therefore, behooves the Court to relax the rules on standing and to resolve
the issue now, rather than later.

The President did not commit grave abuse of discretion in calling out the Marines.

In the case at bar, the bone of contention concerns the factual determination of the President of the
necessity of calling the armed forces, particularly the Marines, to aid the PNP in visibility patrols. In this regard,
the IBP admits that the deployment of the military personnel falls under the Commander-in-Chief powers of the
President as stated in Section 18, Article VII of the Constitution, specifically, the power to call out the armed
forces to prevent or suppress lawless violence, invasion or rebellion. What the IBP questions, however, is the
basis for the calling of the Marines under the aforestated provision. According to the IBP, no emergency exists
that would justify the need for the calling of the military to assist the police force. It contends that no lawless
violence, invasion or rebellion exist to warrant the calling of the Marines. Thus, the IBP prays that this Court
review the sufficiency of the factual basis for said troop [Marine] deployment.[19]
The Solicitor General, on the other hand, contends that the issue pertaining to the necessity of calling the
armed forces is not proper for judicial scrutiny since it involves a political question and the resolution of factual
issues which are beyond the review powers of this Court.
As framed by the parties, the underlying issues are the scope of presidential powers and limits, and the
extent of judicial review. But, while this Court gives considerable weight to the parties formulation of the issues,
the resolution of the controversy may warrant a creative approach that goes beyond the narrow confines of the
issues raised. Thus, while the parties are in agreement that the power exercised by the President is the power
to call out the armed forces, the Court is of the view that the power involved may be no more than the
maintenance of peace and order and promotion of the general welfare. [20] For one, the realities on the ground
do not show that there exist a state of warfare, widespread civil unrest or anarchy. Secondly, the full brunt of
the military is not brought upon the citizenry, a point discussed in the latter part of this decision. In the words of
the late Justice Irene Cortes in Marcos v. Manglapus:

More particularly, this case calls for the exercise of the Presidents powers as protector of the
peace. [Rossiter, The American Presidency]. The power of the President to keep the peace is not limited
merely to exercising the commander-in-chief powers in times of emergency or to leading the State against
external and internal threats to its existence. The President is not only clothed with extraordinary powers in
times of emergency, but is also tasked with attending to the day-to-day problems of maintaining peace and
order and ensuring domestic tranquility in times when no foreign foe appears on the horizon. Wide discretion,
within the bounds of law, in fulfilling presidential duties in times of peace is not in any way diminished by the
relative want of an emergency specified in the commander-in-chief provision. For in making the President
commander-in-chief the enumeration of powers that follow cannot be said to exclude the Presidents exercising
as Commander-in-Chief powers short of the calling of the armed forces, or suspending the privilege of the writ
of habeas corpus or declaring martial law, in order to keep the peace, and maintain public order and security.
xxx[21]
Nonetheless, even if it is conceded that the power involved is the Presidents power to call out the armed
forces to prevent or suppress lawless violence, invasion or rebellion, the resolution of the controversy will
reach a similar result.
We now address the Solicitor Generals argument that the issue involved is not susceptible to review by
the judiciary because it involves a political question, and thus, not justiciable.
As a general proposition, a controversy is justiciable if it refers to a matter which is appropriate for court
review.[22] It pertains to issues which are inherently susceptible of being decided on grounds recognized by law.
Nevertheless, the Court does not automatically assume jurisdiction over actual constitutional cases brought
before it even in instances that are ripe for resolution. One class of cases wherein the Court hesitates to rule
on are political questions. The reason is that political questions are concerned with issues dependent upon the
wisdom, not the legality, of a particular act or measure being assailed. Moreover, the political question being a
function of the separation of powers, the courts will not normally interfere with the workings of another co-equal
branch unless the case shows a clear need for the courts to step in to uphold the law and the Constitution.
As Taada v. Cuenco[23] puts it, political questions refer to those questions which, under the Constitution,
are to be decided by the people in their sovereign capacity, or in regard to which full discretionary authority has
been delegated to the legislative or executive branch of government. Thus, if an issue is clearly identified by
the text of the Constitution as matters for discretionary action by a particular branch of government or to the
people themselves then it is held to be a political question. In the classic formulation of Justice Brennan
in Baker v. Carr,[24] [p]rominent on the surface of any case held to involve a political question is found a
textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of
judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an
initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a courts undertaking
independent resolution without expressing lack of the respect due coordinate branches of government; or an
unusual need for unquestioning adherence to a political decision already made; or the potentiality of
embarassment from multifarious pronouncements by various departments on the one question.
The 1987 Constitution expands the concept of judicial review by providing that (T)he Judicial power shall
be vested in one Supreme Court and in such lower courts as may be established by law. Judicial power
includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
[25]
Under this definition, the Court cannot agree with the Solicitor General that the issue involved is a political
question beyond the jurisdiction of this Court to review. When the grant of power is qualified, conditional or
subject to limitations, the issue of whether the prescribed qualifications or conditions have been met or the
limitations respected, is justiciable - the problem being one of legality or validity, not its wisdom. [26] Moreover,
the jurisdiction to delimit constitutional boundaries has been given to this Court. [27] When political questions are
involved, the Constitution limits the determination as to whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the official whose action is being
questioned.[28]
By grave abuse of discretion is meant simply capricious or whimsical exercise of judgment that is
patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by
law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion or hostility.[29] Under this definition, a court is without power to directly decide
matters over which full discretionary authority has been delegated. But while this Court has no power to
substitute its judgment for that of Congress or of the President, it may look into the question of whether such
exercise has been made in grave abuse of discretion. [30] A showing that plenary power is granted either
department of government, may not be an obstacle to judicial inquiry, for the improvident exercise or abuse
thereof may give rise to justiciable controversy.[31]
When the President calls the armed forces to prevent or suppress lawless violence, invasion or rebellion,
he necessarily exercises a discretionary power solely vested in his wisdom. This is clear from the intent of the
framers and from the text of the Constitution itself. The Court, thus, cannot be called upon to overrule the
Presidents wisdom or substitute its own. However, this does not prevent an examination of whether such
power was exercised within permissible constitutional limits or whether it was exercised in a manner
constituting grave abuse of discretion. In view of the constitutional intent to give the President full discretionary
power to determine the necessity of calling out the armed forces, it is incumbent upon the petitioner to show

that the Presidents decision is totally bereft of factual basis. The present petition fails to discharge such heavy
burden as there is no evidence to support the assertion that there exist no justification for calling out the armed
forces. There is, likewise, no evidence to support the proposition that grave abuse was committed because the
power to call was exercised in such a manner as to violate the constitutional provision on civilian supremacy
over the military. In the performance of this Courts duty of purposeful hesitation [32] before declaring an act of
another branch as unconstitutional, only where such grave abuse of discretion is clearly shown shall the Court
interfere with the Presidents judgment. To doubt is to sustain.
There is a clear textual commitment under the Constitution to bestow on the President full discretionary
power to call out the armed forces and to determine the necessity for the exercise of such power. Section 18,
Article VII of the Constitution, which embodies the powers of the President as Commander-in-Chief, provides in
part:
The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it
becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or
rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding
sixty days, suspend the privilege of the writ of habeas corpus, or place the Philippines or any part thereof
under martial law.
xxx
The full discretionary power of the President to determine the factual basis for the exercise of the calling
out power is also implied and further reinforced in the rest of Section 18, Article VII which reads, thus:
xxx
Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ
of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress,
voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such
proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the
President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be
determined by the Congress, if the invasion or rebellion shall persist and public safety requires it.
The Congress, if not in session, shall within twenty-four hours following such proclamation or suspension,
convene in accordance with its rules without need of a call.
The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual
basis of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof,
and must promulgate its decision thereon within thirty days from its filing.
A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the
civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and
agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the
writ.
The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or
offenses inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be released.
Under the foregoing provisions, Congress may revoke such proclamation or suspension and the Court
may review the sufficiency of the factual basis thereof. However, there is no such equivalent provision dealing
with the revocation or review of the Presidents action to call out the armed forces. The distinction places the
calling out power in a different category from the power to declare martial law and the power to suspend the
privilege of the writ of habeas corpus, otherwise, the framers of the Constitution would have simply lumped
together the three powers and provided for their revocation and review without any qualification. Expressio
unius est exclusio alterius. Where the terms are expressly limited to certain matters, it may not, by
interpretation or construction, be extended to other matters. [33] That the intent of the Constitution is exactly what
its letter says, i.e., that the power to call is fully discretionary to the President, is extant in the deliberation of the
Constitutional Commission, to wit:
FR. BERNAS. It will not make any difference. I may add that there is a graduated power of the President as
Commander-in-Chief. First, he can call out such Armed Forces as may be necessary to suppress lawless
violence; then he can suspend the privilege of the writ of habeas corpus, then he can impose martial law. This
is a graduated sequence.
When he judges that it is necessary to impose martial law or suspend the privilege of the writ of habeas
corpus, his judgment is subject to review. We are making it subject to review by the Supreme Court and
subject to concurrence by the National Assembly. But when he exercises this lesser power of calling on the

Armed Forces, when he says it is necessary, it is my opinion that his judgment cannot be reviewed by
anybody.
xxx
FR. BERNAS. Let me just add that when we only have imminent danger, the matter can be handled by the first
sentence: The President may call out such armed forces to prevent or suppress lawless violence, invasion or
rebellion. So we feel that that is sufficient for handling imminent danger.
MR. DE LOS REYES. So actually, if a President feels that there is imminent danger, the matter can be handled
by the First Sentence: The President....may call out such Armed Forces to prevent or suppress lawless
violence, invasion or rebellion. So we feel that that is sufficient for handling imminent danger, of invasion or
rebellion, instead of imposing martial law or suspending the writ ofhabeas corpus, he must necessarily have to
call the Armed Forces of the Philippines as their Commander-in-Chief. Is that the idea?
MR. REGALADO. That does not require any concurrence by the legislature nor is it subject to judicial review.[34]
The reason for the difference in the treatment of the aforementioned powers highlights the intent to grant
the President the widest leeway and broadest discretion in using the power to call out because it is considered
as the lesser and more benign power compared to the power to suspend the privilege of the writ of habeas
corpus and the power to impose martial law, both of which involve the curtailment and suppression of certain
basic civil rights and individual freedoms, and thus necessitating safeguards by Congress and review by this
Court.
Moreover, under Section 18, Article VII of the Constitution, in the exercise of the power to suspend the
privilege of the writ of habeas corpus or to impose martial law, two conditions must concur: (1) there must be
an actual invasion or rebellion and, (2) public safety must require it. These conditions are not required in the
case of the power to call out the armed forces. The only criterion is that whenever it becomes necessary, the
President may call the armed forces to prevent or suppress lawless violence, invasion or rebellion." The
implication is that the President is given full discretion and wide latitude in the exercise of the power to call as
compared to the two other powers.
If the petitioner fails, by way of proof, to support the assertion that the President acted without factual
basis, then this Court cannot undertake an independent investigation beyond the pleadings. The factual
necessity of calling out the armed forces is not easily quantifiable and cannot be objectively established since
matters considered for satisfying the same is a combination of several factors which are not always accessible
to the courts. Besides the absence of textual standards that the court may use to judge necessity, information
necessary to arrive at such judgment might also prove unmanageable for the courts. Certain pertinent
information might be difficult to verify, or wholly unavailable to the courts. In many instances, the evidence
upon which the President might decide that there is a need to call out the armed forces may be of a nature not
constituting technical proof.
On the other hand, the President as Commander-in-Chief has a vast intelligence network to gather
information, some of which may be classified as highly confidential or affecting the security of the state. In the
exercise of the power to call, on-the-spot decisions may be imperatively necessary in emergency situations to
avert great loss of human lives and mass destruction of property.Indeed, the decision to call out the military to
prevent or suppress lawless violence must be done swiftly and decisively if it were to have any effect at
all. Such a scenario is not farfetched when we consider the present situation in Mindanao, where the
insurgency problem could spill over the other parts of the country. The determination of the necessity for the
calling out power if subjected to unfettered judicial scrutiny could be a veritable prescription for disaster, as
such power may be unduly straitjacketed by an injunction or a temporary restraining order every time it is
exercised.
Thus, it is the unclouded intent of the Constitution to vest upon the President, as Commander-in-Chief of
the Armed Forces, full discretion to call forth the military when in his judgment it is necessary to do so in order
to prevent or suppress lawless violence, invasion or rebellion. Unless the petitioner can show that the exercise
of such discretion was gravely abused, the Presidents exercise of judgment deserves to be accorded respect
from this Court.
The President has already determined the necessity and factual basis for calling the armed forces. In his
Memorandum, he categorically asserted that, [V]iolent crimes like bank/store robberies, holdups, kidnappings
and carnappings continue to occur in Metro Manila... [35] We do not doubt the veracity of the Presidents
assessment of the situation, especially in the light of present developments. The Court takes judicial notice of
the recent bombings perpetrated by lawless elements in the shopping malls, public utilities, and other public
places. These are among the areas of deployment described in the LOI 2000. Considering all these facts, we
hold that the President has sufficient factual basis to call for military aid in law enforcement and in the exercise
of this constitutional power.

The deployment of the Marines does not violate the civilian supremacy clause nor does it infringe the
civilian character of the police force.

Prescinding from its argument that no emergency situation exists to justify the calling of the Marines, the
IBP asserts that by the deployment of the Marines, the civilian task of law enforcement is militarized in violation
of Section 3, Article II[36] of the Constitution.
We disagree. The deployment of the Marines does not constitute a breach of the civilian supremacy
clause. The calling of the Marines in this case constitutes permissible use of military assets for civilian law
enforcement. The participation of the Marines in the conduct of joint visibility patrols is appropriately
circumscribed. The limited participation of the Marines is evident in the provisions of the LOI itself, which
sufficiently provides the metes and bounds of the Marines authority. It is noteworthy that the local police forces
are the ones in charge of the visibility patrols at all times, the real authority belonging to the PNP. In fact, the
Metro Manila Police Chief is the overall leader of the PNP-Philippine Marines joint visibility patrols. [37] Under the
LOI, the police forces are tasked to brief or orient the soldiers on police patrol procedures. [38] It is their
responsibility to direct and manage the deployment of the Marines. [39] It is, likewise, their duty to provide the
necessary equipment to the Marines and render logistical support to these soldiers. [40] In view of the foregoing,
it cannot be properly argued that military authority is supreme over civilian authority.Moreover, the deployment
of the Marines to assist the PNP does not unmake the civilian character of the police force. Neither does it
amount to an insidious incursion of the military in the task of law enforcement in violation of Section 5(4),
Article XVI of the Constitution.[41]
In this regard, it is not correct to say that General Angelo Reyes, Chief of Staff of the AFP, by his alleged
involvement in civilian law enforcement, has been virtually appointed to a civilian post in derogation of the
aforecited provision. The real authority in these operations, as stated in the LOI, is lodged with the head of a
civilian institution, the PNP, and not with the military. Such being the case, it does not matter whether the AFP
Chief actually participates in the Task Force Tulungan since he does not exercise any authority or control over
the same. Since none of the Marines was incorporated or enlisted as members of the PNP, there can be no
appointment to civilian position to speak of. Hence, the deployment of the Marines in the joint visibility patrols
does not destroy the civilian character of the PNP.
Considering the above circumstances, the Marines render nothing more than assistance required in
conducting the patrols. As such, there can be no insidious incursion of the military in civilian affairs nor can
there be a violation of the civilian supremacy clause in the Constitution.
It is worth mentioning that military assistance to civilian authorities in various forms persists in Philippine
jurisdiction. The Philippine experience reveals that it is not averse to requesting the assistance of the military in
the implementation and execution of certain traditionally civil functions. As correctly pointed out by the Solicitor
General, some of the multifarious activities wherein military aid has been rendered, exemplifying the activities
that bring both the civilian and the military together in a relationship of cooperation, are:
1. Elections;[42]
2. Administration of the Philippine National Red Cross;[43]
3. Relief and rescue operations during calamities and disasters;[44]
4. Amateur sports promotion and development;[45]
5. Development of the culture and the arts;[46]
6. Conservation of natural resources;[47]
7. Implementation of the agrarian reform program;[48]
8. Enforcement of customs laws;[49]
9. Composite civilian-military law enforcement activities;[50]
10. Conduct of licensure examinations;[51]
11. Conduct of nationwide tests for elementary and high school students;[52]
12. Anti-drug enforcement activities;[53]
13. Sanitary inspections;[54]
14. Conduct of census work;[55]
15. Administration of the Civil Aeronautics Board;[56]
16. Assistance in installation of weather forecasting devices;[57]
17. Peace and order policy formulation in local government units.[58]
This unquestionably constitutes a gloss on executive power resulting from a systematic, unbroken,
executive practice, long pursued to the knowledge of Congress and, yet, never before questioned. [59] What we
have here is mutual support and cooperation between the military and civilian authorities, not derogation of
civilian supremacy.
In the United States, where a long tradition of suspicion and hostility towards the use of military force for
domestic purposes has persisted,[60] and whose Constitution, unlike ours, does not expressly provide for the
power to call, the use of military personnel by civilian law enforcement officers is allowed under circumstances
similar to those surrounding the present deployment of the Philippine Marines. Under the Posse

Comitatus Act[61] of the US, the use of the military in civilian law enforcement is generally prohibited, except in
certain allowable circumstances. A provision of the Act states:
1385. Use of Army and Air Force as posse comitatus
Whoever, except in cases and under circumstances expressly authorized by the Constitution or Act of
Congress, willfully uses any part of the Army or the Air Force as posse comitatus or otherwise to execute the
laws shall be fined not more than $10,000 or imprisoned not more than two years, or both.[62]
To determine whether there is a violation of the Posse Comitatus Act in the use of military personnel, the
US courts[63] apply the following standards, to wit:
Were Army or Air Force personnel used by the civilian law enforcement officers at Wounded Knee in such a
manner that the military personnel subjected the citizens to the exercise of military power which was
regulatory, proscriptive, or compulsory[64] George Washington Law Review, pp. 404-433 (1986), which
discusses the four divergent standards for assessing acceptable involvement of military personnel in civil law
enforcement. See likewise HONORED IN THE BREECH: PRESIDENTIAL AUTHORITY TO EXECUTE THE
LAWS WITH MILITARY FORCE, 83 Yale Law Journal, pp. 130-152, 1973. 64 in nature, either presently or
prospectively?
xxx
When this concept is transplanted into the present legal context, we take it to mean that military involvement,
even when not expressly authorized by the Constitution or a statute, does not violate the Posse Comitatus Act
unless it actually regulates, forbids or compels some conduct on the part of those claiming relief. A mere threat
of some future injury would be insufficient. (emphasis supplied)
Even if the Court were to apply the above rigid standards to the present case to determine whether there
is permissible use of the military in civilian law enforcement, the conclusion is inevitable that no violation of the
civilian supremacy clause in the Constitution is committed. On this point, the Court agrees with the observation
of the Solicitor General:
3. The designation of tasks in Annex A[65] does not constitute the exercise of regulatory, proscriptive, or
compulsory military power. First, the soldiers do not control or direct the operation. This is evident from
Nos. 6,[66] 8(k)[67] and 9(a)[68] of Annex A. These soldiers, second, also have no power to prohibit or
condemn. In No. 9(d)[69] of Annex A, all arrested persons are brought to the nearest police stations for
proper disposition. And last, these soldiers apply no coercive force. The materials or equipment issued to
them, as shown in No. 8(c)[70] of Annex A, are all low impact and defensive in character. The conclusion is
that there being no exercise of regulatory, proscriptive or compulsory military power, the deployment of a
handful of Philippine Marines constitutes no impermissible use of military power for civilian law
enforcement.[71]
It appears that the present petition is anchored on fear that once the armed forces are deployed, the
military will gain ascendancy, and thus place in peril our cherished liberties. Such apprehensions, however, are
unfounded. The power to call the armed forces is just that - calling out the armed forces. Unless, petitioner IBP
can show, which it has not, that in the deployment of the Marines, the President has violated the fundamental
law, exceeded his authority or jeopardized the civil liberties of the people, this Court is not inclined to overrule
the Presidents determination of the factual basis for the calling of the Marines to prevent or suppress lawless
violence.
One last point. Since the institution of the joint visibility patrol in January, 2000, not a single citizen has
complained that his political or civil rights have been violated as a result of the deployment of the Marines. It
was precisely to safeguard peace, tranquility and the civil liberties of the people that the joint visibility patrol
was conceived. Freedom and democracy will be in full bloom only when people feel secure in their homes and
in the streets, not when the shadows of violence and anarchy constantly lurk in their midst.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Melo, Purisima, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr.,
JJ., concur.
Bellosillo, J., on official leave.
Puno, J., see separate opinion.
Vitug, J., see separate opinion.
Mendoza, J., see concurring and dissenting opinion.
Panganiban, J., in the result.
Quisumbing, J., joins the opinion of J. Mendoza.

SEPARATE OPINION

PUNO, J.:
If the case at bar is significant, it is because of the government attempt to foist the political question
doctrine to shield an executive act done in the exercise of the commander-in-chief powers from judicial
scrutiny. If the attempt succeeded, it would have diminished the power of judicial review and weakened
the checking authority of this Court over the Chief Executive when he exercises his commander-inchief powers. The attempt should remind us of the tragedy that befell the country when this Court
sought refuge in the political question doctrine and forfeited its most important role as protector of the
civil and political rights of our people. The ongoing conflict in Mindanao may worsen and can force the
Chief Executive to resort to the use of his greater commander-in-chief powers, hence, this Court
should be extra cautious in assaying similar attempts. A laid back posture may not sit well with our
people considering that the 1987 Constitution strengthened the checking powers of this Court and
expanded its jurisdiction precisely to stop any act constituting xxx grave abuse of jurisdiction xxx on
the part of any branch or instrumentality of the Government.1
The importance of the issue at bar includes this humble separate opinion. We can best perceive the
different intersecting dimensions of the political question doctrine by viewing them from the broader canvass of
history. Political questions are defined as those questions which under the Constitution, are to be decided by
the people in their sovereign capacity, or in regard to which full discretionary authority has been delegated to
the legislative or executive branch of government.2 They have two aspects: (1) those matters that are to be
exercised by the people in their primary political capacity and (2) matters which have been specifically
delegated to some other department or particular office of the government, with discretionary power to
act.3 The exercise of the discretionary power of the legislative or executive branch of government was often the
area where the Court had to wrestle with the political question doctrine.4
A brief review of some of our case law will thus give us a sharper perspective of the political question
doctrine. This question confronted the Court as early as 1905 in the case of Barcelon v. Baker.5 The
Governor-General of the Philippine Islands, pursuant to a resolution of the Philippine Commission, suspended
the privilege of the writ of habeas corpus in Cavite and Batangas based on a finding of open insurrection in
said provinces. Felix Barcelon, who was detained by constabulary officers in Batangas, filed a petition for the
issuance of a writ of habeas corpus alleging that there was no open insurrection in Batangas. The issue to
resolve was whether or not the judicial department may investigate the facts upon which the legislative (the
Philippine Commission) and executive (the Governor-General) branches of government acted in suspending
the privilege of the writ.
The Court ruled that under our form of government, one department has no authority to inquire into the
acts of another, which acts are performed within the discretion of the other department. 6Surveying American
law and jurisprudence, it held that whenever a statute gives discretionary power to any person, to be exercised
by him upon his own opinion of certain facts, the statute constitutes him the sole judge of the existence of
those facts.7 Since the Philippine Bill of 1902 empowered the Philippine Commission and the GovernorGeneral to suspend the privilege of the writ of habeas corpus, this power is exclusively within the discretion of
the legislative and executive branches of government. The exercise of this discretion is conclusive upon
the courts.8
The Court further held that once a determination is made by the executive and legislative departments that
the conditions justifying the assailed acts exists, it will presume that the conditions continue until the same
authority decide that they no longer exist. 9 It adopted the rationale that the executive branch, thru its civil and
military branches, are better situated to obtain information about peace and order from every corner of the
nation, in contrast with the judicial department, with its very limited machinery.10 The seed of the political
question doctrine was thus planted in Philippine soil.
The doctrine barring judicial review because of the political question doctrine was next applied to
the internal affairs of the legislature. The Court refused to interfere in the legislative exercise of disciplinary
power over its own members. In the 1924 case of Alejandrino v. Quezon,11 Alejandrino, who was appointed
Senator by the Governor-General, was declared by Senate Resolution as guilty of disorderly conduct for
assaulting another Senator in the course of a debate, and was suspended from office for one year. Senator
Alejandrino filed a petition for mandamus and injunction to compel the Senate to reinstate him. The Court held
that under the Jones Law, the power of the Senate to punish its members for disorderly behavior does not
authorize it to suspend an appointive member from the exercise of his office. While the Court found that the
suspension was illegal, it refused to issue the writ of mandamus on the ground that "the Supreme Court does
not possess the power of coercion to make the Philippine Senate take any particular action. [T]he Philippine
Legislature or any branch thereof cannot be directly controlled in the exercise of their legislative powers by any
judicial process."12
The issue revisited the Court twenty-two (22) years later. In 1946, in Vera v. Avelino,13 three senators-elect
who had been prevented from taking their oaths of office by a Senate resolution repaired to this Court to
compel their colleagues to allow them to occupy their seats contending that only the Electoral Tribunal had
jurisdiction over contests relating to their election, returns and qualifications. Again, the Court refused to
intervene citing Alejandrino and affirmed the inherent right of the legislature to determine who shall be
admitted to its membership.
In the 1947 case of Mabanag v. Lopez-Vito,14 three Senators and eight representatives who were
proclaimed elected by Comelec were not allowed by Congress to take part in the voting for the passage of the
Parity amendment to the Constitution. If their votes had been counted, the affirmative votes in favor of the

proposed amendment would have been short of the necessary three-fourths vote in either House of Congress
to pass the amendment. The amendment was eventually submitted to the people for ratification. The Court
declined to intervene and held that a proposal to amend the Constitution is a highly political function performed
by Congress in its sovereign legislative capacity.15
In the 1955 case of Arnault v. Balagtas,16 petitioner, a private citizen, assailed the legality of his detention
ordered by the Senate for his refusal to answer questions put to him by members of one of its investigating
committees. This Court refused to order his release holding that the process by which a contumacious witness
is dealt with by the legislature is a necessary concomitant of the legislative process and the legislature's
exercise of its discretionary authority is not subject to judicial interference.
In the 1960 case of Osmena v. Pendatun,17 the Court followed the traditional line. Congressman Sergio
Osmena, Jr. was suspended by the House of Representatives for serious disorderly behavior for making a
privilege speech imputing "malicious charges" against the President of the Philippines. Osmena, Jr. invoked
the power of review of this Court but the Court once more did not interfere with Congress' power to discipline
its members.
The contours of the political question doctrine have always been tricky. To be sure, the Court did not
always stay its hand whenever the doctrine is invoked. In the 1949 case of Avelino v. Cuenco,18 Senate
President Jose Avelino, who was deposed and replaced, questioned his successor's title claiming that the latter
had been elected without a quorum. The petition was initially dismissed on the ground that the selection of
Senate President was an internal matter and not subject to judicial review. 19 On reconsideration, however, the
Court ruled that it could assume jurisdiction over the controversy in light of subsequent events justifying
intervention among which was the existence of a quorum. 20 Though the petition was ultimately dismissed, the
Court declared respondent Cuenco as the legally elected Senate President.
In the 1957 case of Tanada v. Cuenco,21 the Court assumed jurisdiction over a dispute involving the
formation and composition of the Senate Electoral Tribunal. It rejected the Solicitor General's claim that the
dispute involved a political question. Instead, it declared that the Senate is not clothed with "full discretionary
authority" in the choice of members of the Senate Electoral Tribunal and the exercise of its power thereon is
subject to constitutional limitations which are mandatory in nature. 22 It held that under the Constitution, the
membership of the Senate Electoral Tribunal was designed to insure the exercise of judicial impartiality in the
disposition of election contests affecting members of the lawmaking body.23 The Court then nullified the
election to the Senate Electoral Tribunal made by Senators belonging to the party having the largest number of
votes of two of their party members but purporting to act on behalf of the party having the second highest
number of votes.
In the 1962 case of Cunanan v. Tan, Jr.,24 the Court passed judgment on whether Congress had formed
the Commission on Appointments in accordance with the Constitution and found that it did not. It declared that
the Commission on Appointments is a creature of the Constitution and its power does not come from Congress
but from the Constitution.
The
1967
case
of Gonzales
v.
Comelec25 and
the
1971
case
of Tolentino
v.
26
Comelec abandoned Mabanag v. Lopez-Vito. The question of whether or not Congress, acting as a
constituent assembly in proposing amendments to the Constitution violates the Constitution was held to be a
justiciable and not a political issue. In Gonzales, the Court ruled:
"It is true that in Mabanag v. Lopez-Vito, this Court characterizing the issue submitted thereto as a political one,
declined to pass upon the question whether or not a given number of votes cast in Congress in favor of a
proposed amendment to the Constitution-which was being submitted to the people for ratification-satisfied the
three-fourths vote requirement of the fundamental law. The force of this precedent has been weakened,
however, by Suanes v. Chief Accountant of the Senate, Avelino v. Cuenco, Tanada v. Cuenco, and Macias v.
Commission on Elections. In the first, we held that the officers and employees of the Senate Electoral Tribunal
are under its supervision and control, not of that of the Senate President, as claimed by the latter; in the
second, this Court proceeded to determine the number of Senators necessary for a quorum in the Senate; in
the third, we nullified the election, by Senators belonging to the party having the largest number of votes in said
chamber, purporting to act on behalf of the party having the second largest number of votes therein, of two (2)
Senators belonging to the first party, as members, for the second party, of the Senate Electoral Tribunal; and in
the fourth, we declared unconstitutional an act of Congress purporting to apportion the representative districts
for the House of Representatives upon the ground that the apportionment had not been made as may be
possible according to the number of inhabitants of each province. Thus, we rejected the theory, advanced in
these four cases, that the issues therein raised were political questions the determination of which is beyond
judicial review.27
The Court explained that the power to amend the Constitution or to propose amendments thereto is not
included in the general grant of legislative powers to Congress. As a constituent assembly, the members of
Congress derive their authority from the fundamental law and they do not have the final say on whether their
acts are within or beyond constitutional limits. 28 This ruling was reiterated in Tolentino which held that acts of a
constitutional convention called for the purpose of proposing amendments to the Constitution are at par with
acts of Congress acting as a constituent assembly.29

In sum, this Court brushed aside the political question doctrine and assumed jurisdiction
whenever it found constitutionally-imposed limits on the exercise of powers conferred upon the
Legislature.30
The Court hewed to the same line as regards the exercise of Executive power. Thus, the respect
accorded executive discretion was observed in Severino v. Governor-General,31where it was held that the
Governor-General, as head of the executive department, could not be compelled by mandamus to call a
special election in the town of Silay for the purpose of electing a municipal president. Mandamus and injunction
could not lie to enforce or restrain a duty which is discretionary. It was held that when the Legislature conferred
upon the Governor-General powers and duties, it did so for the reason that he was in a better position to know
the needs of the country than any other member of the executive department, and with full confidence that he
will perform such duties as his best judgment dictates.32
Similarly, in Abueva v. Wood,33 the Court held that the Governor-General could not be compelled by
mandamus to produce certain vouchers showing the various expenditures of the Independence
Commission. Under the principle of separation of powers, it ruled that it was not intended by the Constitution
that one branch of government could encroach upon the field of duty of the other. Each department has an
exclusive field within which it can perform its part within certain discretionary limits. 34 It observed that "the
executive and legislative departments of government are frequently called upon to deal with what are known as
political questions, with which the judicial department of government has no intervention. In all such questions,
the courts uniformly refused to intervene for the purpose of directing or controlling the actions of the other
department; such questions being many times reserved to those departments in the organic law of the state."35
In Forties v. Tiaco,36 the Court also refused to take cognizance of a case enjoining the Chief Executive
from deporting an obnoxious alien whose continued presence in the Philippines was found by him to be
injurious to the public interest. It noted that sudden and unexpected conditions may arise, growing out of the
presence of untrustworthy aliens, which demand immediate action.The President's inherent power to deport
undesirable aliens is universally denominated as political, and this power continues to exist for the preservation
of the peace and domestic tranquility of the nation.37
In Manalang v. Quitoriano,38 the Court also declined to interfere in the exercise of the President's
appointing power. It held that the appointing power is the exclusive prerogative of the President, upon which no
limitations may be imposed by Congress, except those resulting from the need of securing concurrence of the
Commission on Appointments and from the exercise of the limited legislative power to prescribe qualifications
to a given appointive office.
We now come to the exercise by the President of his powers as Commander-in-Chief vis-a-vis the
political question doctrine. In the 1940's, this Court has held that as Commander-in-Chief of the Armed Forces,
the President has the power to determine whether war, in the legal sense, still continues or has terminated. It
ruled that it is within the province of the political department and not of the judicial department of government to
determine when war is at end.39
In 1952, the Court decided the landmark case of Montenegro v. Castaneda.40 President Quirino
suspended the privilege of the writ of habeas corpus for persons detained or to be detained for crimes of
sedition, insurrection or rebellion. The Court, citing Barcelon, declared that the authority to decide whether the
exigency has arisen requiring the suspension of the privilege belongs to the President and his decision is final
and conclusive on the courts.41
Barcelon was the ruling case law until the 1971 case of Lansang v. Garcia came.42 Lansang
reversed the previous cases and held that the suspension of the privilege of the writ of habeas corpus was not
a political question. According to the Court, the weight of Barcelon was diluted by two factors: (1) it relied
heavily on Martin v. Mott, which involved the U.S. President's power to call out the militia which is a much
broader power than suspension of the privilege of the writ; and (2) the privilege was suspended by the
American Governor-General whose act, as representative of the sovereign affecting the freedom of its
subjects, could not be equated with that of the President of the Philippines dealing with the freedom of the
sovereign Filipino people.
The Court declared that the power to suspend the privilege of the writ of habeas corpus is neither
absolute nor unqualified because the Constitution sets limits on the exercise of executive discretion
on the matter. These limits are: (1) that the privilege must not be suspended except only in cases of invasion,
insurrection or rebellion or imminent danger thereof; and (2) when the public safety requires it, in any of which
events the same may be suspended wherever during such period the necessity for the suspension shall
exist. The extent of the power which may be inquired into by courts is defined by these limitations.43
On the vital issue of how the Court may inquire into the President's exercise of power, it ruled that the
function of the Court is not to supplant but merely to check the Executive; to ascertain whether the President
has gone beyond the constitutional limits of his jurisdiction, not to exercise the power vested in him or to
determine the wisdom of his act. Judicial inquiry is confined to the question of whether the President did not act
arbitrarily.44 Using this yardstick, the Court found that the President did not.
The emergency period of the 1970's flooded the Court with cases which raised the political question
defense. The issue divided the Court down the middle. Javellana v. Executive Secretary45 showed that while
a majority of the Court held that the issue of whether or not the 1973 Constitution had been ratified in
accordance with the 1935 Constitution was justiciable, a majority also ruled that the decisive issue of whether

the 1973 Constitution had come into force and effect, with or without constitutional ratification, was a political
question.46
The validity of the declaration of martial law by then President Marcos was next litigated before the
Court. In Aquino, Jr. v. Enrile,47 it upheld the President's declaration of martial law. On whether the validity of
the imposition of martial law was a political or justiciable question, the Court was almost evenly divided. Onehalf embraced the political question position and the other half subscribed to the justiciable position in
Lansang. Those adhering to the political question doctrine used different methods of approach to it.48
In 1983, the Lansang ruling was weakened by the Court in Garcia-Padilla v. Enrile.49 The petitioners
therein were arrested and detained by the Philippine Constabulary by virtue of a Presidential Commitment
Order (PCO). Petitioners sought the issuance of a writ of habeas corpus. The Court found that the PCO had
the function of validating a person's detention for any of the offenses covered in Proclamation No. 2045 which
continued in force the suspension of the privilege of the writ of habeas corpus. It held that the issuance of the
PCO by the President was not subject to judicial inquiry.50 It went further by declaring that there was a need to
re-examine Lansang with a view to reverting to Barcelon and Montenegro. It observed that in times of war or
national emergency, the President must be given absolute control for the very life of the nation and government
is in great peril. The President, it intoned, is answerable only to his conscience, the people, and God.51
But barely six (6) days after Garcia-Padilla, the Court promulgated Morales, Jr. v.
Enrile52 reiterating Lansang. It held that by the power of judicial review, the Court must inquire into every
phase and aspect of a person's detention from the moment he was taken into custody up to the moment the
court passes upon the merits of the petition. Only after such a scrutiny can the court satisfy itself that the due
process clause of the Constitution has been met.53
It is now history that the improper reliance by the Court on the political question doctrine eroded
the people's faith in its capacity to check abuses committed by the then Executive in the exercise of
his commander-in-chief powers, particularly violations against human rights. The refusal of courts to
be pro-active in the exercise of its checking power drove the people to the streets to resort to
extralegal remedies. They gave birth to EDSA.
Two lessons were not lost to the members of the Constitutional Commission that drafted the 1987
Constitution. The first was the need to grant this Court the express power to review the exercise of the powers
as commander-in-chief by the President and deny it of any discretion to decline its
exercise. The second was the need to compel the Court to be pro-active by expanding its jurisdiction and,
thus, reject its laid back stance against acts constituting grave abuse of discretion on the part of any branch or
instrumentality of government. Then Chief Justice Roberto Concepcion, a member of the Constitutional
Commission, worked for the insertion of the second paragraph of Section 1, Article VIII in the draft
Constitution,54 which reads:
"Sec. 1. x x x.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of
the Government."
The language of the provision clearly gives the Court the power to strike down acts amounting to grave abuse
of discretion of both the legislative and executive branches of government.
We should interpret Section 18, Article VII of the 1987 Constitution in light of our constitutional history. The
provision states:
"Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and
whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless
violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he
may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place
the Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of
martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in
person or in writing to Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members
in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set
aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend
such proclamation or suspension for a period to be determined by Congress, if the invasion or rebellion shall
persist and public safety requires it.
The Congress, if not in session, shall, within twenty-four hours following such proclamation or suspension,
convene in accordance with its rules without need of a call.
The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the
factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the
extension thereof, and must promulgate its decision thereon within thirty days from its filing.

x x x."
It is clear from the foregoing that the President, as Commander-in-Chief of the armed forces of
the Philippines, may call out the armed forces subject to two conditions: (1) whenever it becomes
necessary; and (2) to prevent or suppress lawless violence, invasion or rebellion. Undeniably, these
conditions lay down the sine qua requirement for the exercise of the power and the objective sought to
be attained by the exercise of the power. They define the constitutional parameters of the calling out
power. Whether or not there is compliance with these parameters is a justiciable issue and is not a
political question.
I am not unaware that in the deliberations of the Constitutional Commission, Commissioner Bernas opined
that the President's exercise of the "calling out power," unlike the suspension of the privilege of the writ of
habeas corpus and the declaration of martial law, is not a justiciable issue but a political question and therefore
not subject to judicial review.
It must be borne in mind, however, that while a member's opinion expressed on the floor of the
Constitutional Convention is valuable, it is not necessarily expressive of the people's intent. 55The proceedings
of the Convention are less conclusive on the proper construction of the fundamental law than are legislative
proceedings of the proper construction of a statute, for in the latter case it is the intent of the legislature the
courts seek, while in the former, courts seek to arrive at the intent of the people through the discussions and
deliberations of their representatives.56 The conventional wisdom is that the Constitution does not derive its
force from the convention which framed it, but from the people who ratified it, the intent to be arrived at is that
of the people.57
It is true that the third paragraph of Section 18, Article VII of the 1987 Constitution expressly gives
the Court the power to review the sufficiency of the factual bases used by the President in the
suspension of the privilege of the writ of habeas corpus and the declaration of martial law. It does not
follow, however, that just because the same provision did not grant to this Court the power to review
the exercise of the calling out power by the President, ergo, this Court cannot pass upon the validity of
its exercise.
Given the light of our constitutional history, this express grant of power merely means that the
Court cannot decline the exercise of its power because of the political question doctrine as it did in the
past. In fine, the express grant simply stresses the mandatory duty of this Court to check the exercise
of the commander-in-chief powers of the President. It eliminated the discretion of the Court not to
wield its power of review thru the use of the political question doctrine.
It may be conceded that the calling out power may be a "lesser power" compared to the power to suspend
the privilege of the writ of habeas corpus and the power to declare martial law. Even then, its exercise cannot
be left to the absolute discretion of the Chief Executive as Commander-in-Chief of the armed forces, as its
impact on the rights of our people protected by the Constitution cannot be downgraded. We cannot hold that
acts of the commander-in-chief cannot be reviewed on the ground that they have lesser impact on the civil and
political rights of our people. The exercise of the calling out power may be "benign" in the case at bar but may
not be so in future cases.
The counsel of Mr. Chief Justice Enrique M. Fernando, in his Dissenting and Concurring Opinion
in Lansang that it would be dangerous and misleading to push the political question doctrine too far,
is apropos. It will not be complementary to the Court if it handcuffs itself to helplessness when a grievously
injured citizen seeks relief from a palpably unwarranted use of presidential or military power, especially when
the question at issue falls in the penumbra between the "political" and the "justiciable. "58
We should not water down the ruling that deciding whether a matter has been committed by the
Constitution to another branch of government, or whether the action of that branch exceeds whatever authority
has been committed, is a delicate exercise in constitutional interpretation, and is a responsibility of the Court
as ultimate interpreter of the fundamental law.59 When private justiciable rights are involved in a suit, the
Court must not refuse to assume jurisdiction even though questions of extreme political importance are
necessarily involved.60 Every officer under a constitutional government must act according to law and subject to
the controlling power of the people, acting through the courts, as well as through the executive and
legislative. One department is just as representative of the other, and the judiciary is the department which is
charged with the special duty of determining the limitations which the law places upon all official
action.61 Thishistoric role of the Court is the foundation stone of a government of laws and not of men.62
I join the Decision in its result.

SEPARATE OPINION
VITUG, J.:
In the equation of judicial power, neither of two extremes - one totalistic and the other bounded - is
acceptable nor ideal. The 1987 Constitution has introduced its definition of the term "judicial power" to be that
which -

x x x includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.1
It is not meant that the Supreme Court must be deemed vested with the awesome power of overseeing the
entire bureaucracy, let alone of institutionalizing judicial absolutism, under its mandate.But while this Court
does not wield unlimited authority to strike down an act of its two co-equal branches of government, it must not
wither under technical guise on its constitutionally ordained task to intervene, and to nullify if need be, any such
act as and when it is attended by grave abuse of discretion amounting to lack or excess of jurisdiction. The
proscription then against an interposition by the Court into purely political questions, heretofore known, no
longer holds within that context.
Justice Feria, in the case of Avelino vs. Cuenco,2 has aptly elucidated in his concurring opinion:
"x x x [I] concur with the majority that this Court has jurisdiction over cases like the present x x x so as to
establish in this country the judicial supremacy, with the Supreme Court as the final arbiter, to see that no one
branch or agency of the government transcends the Constitution, not only in justiceable but political questions
as well."3
It is here when the Court must have to depart from the broad principle of separation of powers that disallows
an intrusion by it in respect to the purely political decisions of its independent and coordinate agencies of
government.
The term grave abuse of discretion is long understood in our jurisprudence as being, and confined to, a
capricious and whimsical or despotic exercise of judgment amounting to lack or excess of jurisdiction. Minus
the not-so-unusual exaggerations often invoked by litigants in the duel of views, the act of the President
in simply calling on the Armed Forces of the Philippines, an executive prerogative, to assist the
Philippine National Police in "joint visibility patrols" in the metropolis does not, I believe, constitute grave
abuse of discretion that would now warrant an exercise by the Supreme Court of its extraordinary power as so
envisioned by the fundamental law.
Accordingly, I vote for the dismissal of the petition.
MENDOZA, J., concurring and dissenting:
I concur in the opinion of the Court insofar as it holds petitioner to be without standing to question the
validity of LOI 02/2000 which mandates the Philippine Marines to conduct "joint visibility" patrols with the police
in Metro Manila. But I dissent insofar as the opinion dismisses the petition in this case on other grounds. I
submit that judgment on the substantive constitutional issues raised by petitioner must await an actual case
involving real parties with "injuries" to show as a result of the operation of the challenged executive
action. While as an organization for the advancement of the rule of law petitioner has an interest in upholding
the Constitution, its interest is indistinguishable from the interest of the rest of the citizenry and falls short of
that which is necessary to give petitioner standing.
As I have indicated elsewhere, a citizens' suit challenging the constitutionality of governmental action
requires that (1) the petitioner must have suffered an "injury in fact" of an actual or imminent nature; (2) there
must be a causal connection between the injury and the conduct complained of; and (3) the injury is likely to be
redressed by a favorable action by this Court.1 The "injury in fact" test requires more than injury to a cognizable
interest. It requires that the party seeking review be himself among those injured.2
My insistence on compliance with the standing requirement is grounded in the conviction that only a party
injured by the operation of the governmental action challenged is in the best position to aid the Court in
determining the precise nature of the problem presented. Many a time we have adverted to the power of
judicial review as an awesome power not to be exercised save in the most exigent situation. For, indeed,
sound judgment on momentous constitutional questions is not likely to be reached unless it is the result of a
clash of adversary arguments which only parties with direct and specific interest in the outcome of the
controversy can make. This is true not only when we strike down a law or official action but also when we
uphold it.
In this case, because of the absence of parties with real and substantial interest to protect, we do not have
evidence on the effect of military presence in malls and commercial centers, i.e., whether such presence is
coercive or benign. We do not know whether the presence of so many marines and policemen scares
shoppers, tourists, and peaceful civilians, or whether it is reassuring to them. To be sure, the deployment of
troops to such places is not like parading them at the Luneta on Independence Day. Neither is it, however, like
calling them out because of actual fighting or the outbreak of violence.
We need to have evidence on these questions because, under the Constitution, the President's power to
call out the armed forces in order to suppress lawless violence, invasion or rebellion is subject to the limitation
that the exercise of this power is required in the interest of public safety.3
Indeed, whether it is the calling out of the armed forces alone in order to suppress lawless violence,
invasion or rebellion or also the suspension of the privilege of the writ of habeas corpus or the proclamation of

martial law (in case of invasion or rebellion), the exercise of the President's powers as commander-in-chief,
requires proof - not mere assertion.4 As has been pointed out, "Standing is not `an ingenious academic
exercise in the conceivable' . . . but requires . . . a factual showing of perceptible harm."5
Because of the absence of such record evidence, we are left to guess or even speculate on these
questions. Thus, at one point, the majority opinion says that what is involved here is not even the calling out of
the armed forces but only the use of marines for law enforcement. (p. 13) At another point, however, the
majority opinion somersaults and says that because of bombings perpetrated by lawless elements, the
deployment of troops in shopping centers and public utilities is justified. (p. 24)
We are likely to err in dismissing the suit brought in this case on the ground that the calling out of the
military does not violate the Constitution, just as we are likely to do so if we grant the petition and invalidate the
executive issuance in question. For indeed, the lack of a real, earnest and vital controversy can only
impoverish the judicial process. That is why, as Justice Laurel emphasized in the Angara case, "this power of
judicial review is limited to actual cases and controversies to be exercised after full opportunity of argument by
the parties, and limited further to the constitutional question raised or the very lis mota presented."6
We are told, however, that the issues raised in this case are of "paramount interest" to the nation. It is
precisely because the issues raised are of paramount importance that we should all the more forego ruling on
the constitutional issues raised by petitioner and limit the dismissal of this petition on the ground of lack of
standing of petitioner. A Fabian policy of leaving well enough alone is a counsel of prudence.
For these reasons and with due appreciation of the scholarly attention lavished by the majority opinion on
the constitutional questions raised, I am constrained to limit my concurrence to the dismissal of this suit on the
ground of lack of standing of petitioner and the consequent lack of an actual case or controversy.

G.R. No. 170735

December 17, 2007

IMMACULADA L. GARCIA, petitioner,

vs.
SOCIAL SECURITY COMMISSION LEGAL AND COLLECTION, SOCIAL SECURITY SYSTEM, respondents.
DECISION
CHICO-NAZARIO, J.:
This is petition for review on Certiorari under Rule 45 of the Rules of Court is assailing the 2 June 2005
Decision1 and 8 December 2005 Resolution2 both of the Court of Appeals in CA-G.R. SP No. 85923. the
appellate court affirmed the --- Order and --- Resolution both of the Social Security Commission (SSC) in SSC
Case No. 10048, finding Immaculada L. Garcia (Garcia), the sole surviving director of Impact Corporation,
petitioner herein, liable for unremitted, albeit collected, SSS contributions.

Petitioner Immaculada L. Garcia, Eduardo de Leon, Ricardo de Leon, Pacita Fernandez, and Consuelo
Villanueva were directors3 of Impact Corporation. The corporation was engaged in the business of
manufacturing aluminum tube containers and operated two factories. One was a "slug" foundry-factory located
in Cuyapo, Nueva Ecija, while the other was an Extrusion Plant in Cainta, Metro Manila, which processed the
"slugs" into aluminum collapsible tubes and similar containers for toothpaste and other related products.
Records show that around 1978, Impact Corporation started encountering financial problems. By 1980, labor
unrest besieged the corporation.
In March 1983, Impact Corporation filed with the Securities and Exchange Commission (SEC) a Petition for
Suspension of Payments,4 docketed as SEC Case No. 02423, in which it stated that:
[Impact Corporation] has been and still is engaged in the business of manufacturing aluminum tube
containers x x x.
xxxx
In brief, it is an on-going, viable, and profitable enterprise.

On 8 May 1985, the union of Impact Corporation filed a Notice of Strike with the Ministry of Labor which was
followed by a declaration of strike on 28 July 1985. Subsequently, the Ministry of Labor certified the labor
dispute for compulsory arbitration to the National Labor Relations Commission (NLRC) in an Order5 dated 25
August 1985. The Ministry of Labor, in the same Order, noted the inability of Impact Corporation to pay wages,
13th month pay, and SSS remittances due to cash liquidity problems. A portion of the order reads:
On the claims of unpaid wages, unpaid 13th month pay and non-remittance of loan amortization and SSS
premiums, we are for directing the company to pay the same to the workers and to remit loan amortizations
and SSS premiums previously deducted from their wages to the Social Security System. Such claims were
never contested by the company both during the hearing below and in our office. In fact, such claims were
admitted by the company although it alleged cash liquidity as the main reason for such non-payment.
WHEREFORE, the dispute at Impact Corporation is hereby certified to the National Labor Relations
Commission for compulsory arbitration in accordance with Article 264 (g) of the Labor Code, as amended.
xxxx
The company is directed to pay all the entitled workers unpaid wages, unpaid 13th month pay and to remit to
the Social Security System loan amortizations and SSS premiums previously deducted from the wages of
the workers.6

On 3 July 1985, the Social Security System (SSS), through its Legal and Collection Division (LCD), filed a case
before the SSC for the collection of unremitted SSS premium contributions withheld by Impact Corporation
from its employees. The case which impleaded Impact Corporation as respondent was docketed as SSC Case
No. 10048.7
Impact Corporation was compulsorily covered by the SSS as an employer effective 15 July 1963 and was
assigned Employer I.D. No. 03-2745100-21.
In answer to the allegations raised in SSC Case No. 10048, Impact Corporation, through its then Vice
President Ricardo de Leon, explained in a letter dated 18 July 1985 that it had been confronted with strikes in
1984 and layoffs were effected thereafter. It further argued that the P402,988.93 is erroneous. It explained
among other things, that its operations had been suspended and that it was waiting for the resolution on its
Petition for Suspension of Payments by the SEC under SEC Case No. 2423. Despite due notice, the
corporation failed to appear at the hearings. The SSC ordered the investigating team of the SSS to determine if
it can still file its claim for unpaid premium contributions against the corporation under the Petition for
Suspension of Payments.
In the meantime, the Petition for Suspension of Payments was dismissed which was pending before the SEC
in an Order8 dated 12 December 1985. Impact Corporation resumed operations but only for its winding up and
dissolution.9 Due to Impact Corporations liability and cash flow problems, all of its assets, namely, its
machineries, equipment, office furniture and fixtures, were sold to scrap dealers to answer for its arrears in
rentals.
On 1 December 1995, the SSS-LCD filed an amended Petition10 in SSC Case No. 10048 wherein the directors
of Impact Corporation were directly impleaded as respondents, namely: Eduardo de Leon, Ricardo de
Leon,11Pacita Fernandez, Consuelo Villanueva, and petitioner. The amounts sought to be collected
totaled P453,845.78 and P10,856.85 for the periods August 1980 to December 1984 and August 1981 to July
1984, respectively, and the penalties for late remittance at the rate of 3% per month from the date the
contributions fell due until fully paid pursuant to Section 22(a) of the Social Security Law,12 as amended, in the
amounts of P49,941.67 andP2,474,662.82.

Period

August 1980 to December 1984

August 1981 to July 1984

Unremitted
Amount

Penalties
(3% Interest Per
Month)

Total

P 453,845.78

P49, 941.67

503,787.45

P 10,856.85

P2, 474, 662.82

2,485,519.67

Summonses were not served upon Eduardo de Leon, Pacita Fernandez, and Consuelo Villanueva, their
whereabouts unknown. They were all later determined to be deceased. On the other hand, due to failure to file
his responsive pleading, Ricardo de Leon was declared in default.
Petitioner filed with the SSC a Motion to Dismiss13 on grounds of prescription, lack of cause of action and
cessation of business, but the Motion was denied for lack of merit.14 In her Answer with Counterclaim15 dated 20
May 1999, petitioner averred that Impact Corporation had ceased operations in 1980. In her defense, she
insisted that she was a mere director without managerial functions, and she ceased to be such in 1982. Even
as a stockholder and director of Impact Corporation, petitioner contended that she cannot be made personally
liable for the corporate obligations of Impact Corporation since her liability extended only up to the extent of her
unpaid subscription, of which she had none since her subscription was already fully paid. The petitioner raised
the same arguments in her Position Paper. 16
On 23 January 1998, Ricardo de Leon died following the death, too, of Pacita Fernandez died on 7 February
2000. In an Order dated 11 April 2000, the SSC directed the System to check if Impact Corporation had
leviable properties to which the investigating team of respondent SSS manifested that the Impact Corporation
had already been dissolved and its assets disposed of.17
In a Resolution dated 28 May 2003, the Social Security Commission ruled in favor of SSS and declared
petitioner liable to pay the unremitted contributions and penalties, stating the following:
WHEREFORE, premises considered, this Commission finds, and so holds, that respondents Impact
Corporation and/or Immaculada L. Garcia, as director and responsible officer of the said corporation, is
liable to pay the SSS the amounts of P442,988.93, representing the unpaid SS contributions of their
employees for the period August 1980 to December 1984, not inclusive, and P10,856.85, representing the
balance of the unpaid SS contributions in favor of Donato Campos, Jaime Mascarenas, Bonifacio Franco
and Romeo Fullon for the period August 1980 to December 1984, not inclusive, as well as the 3% per month
penalty imposed thereon for late payment in the amounts of P3,194,548.63 and P78,441.33, respectively,
computed as of April 30, 2003. This is without prejudice to the right of the SSS to collect the penalties
accruing after April 30, 2003 and to institute other appropriate actions against the respondent corporation
and/or its responsible officers.
Should the respondents pay their liability for unpaid SSS contributions within sixty (60) days from receipt of a
copy of this Resolution, the 3% per month penalty for late payment thereof shall be deemed condoned
pursuant to SSC Res. No. 397-S.97, as amended by SSC Res. Nos. 112-S.98 and 982-S.99, implementing
the provision on condonation of penalty under Section 30 of R.A. No. 8282.
In the event the respondents fail to pay their liabilities within the aforestated period, let a writ of execution be
issued, pursuant to Section 22 (c) [2] of the SS Law, as amended, for the satisfaction of their liabilities to the
SSS.18

Petitioner filed a Motion for Reconsideration19 of the afore-quoted Decision but it was denied for lack of merit in
an Order20 dated 4 August 2004, thus:
Nowhere in the questioned Resolution dated May 28, 2003 is it stated that the other directors of the defunct
Impact Corporation are absolved from their contribution and penalty liabilities to the SSS. It is certainly
farthest from the intention of the petitioner SSS or this Commission to pin the entire liability of Impact
Corporation on movant Immaculada L. Garcia, to the exclusion of the directors of the corporation namely:
Eduardo de Leon, Ricardo de Leon, Pacita Fernandez and Conzuelo Villanueva, who were all impleaded as
parties-respondents in this case.
The case record shows that there was failure of service of summonses upon respondents Eduardo de Leon,
Pacita Fernandez and Conzuelo Villanueva, who are all deceased, for the reason that their whereabouts are
unknown. Moreover, neither the legal heirs nor the estate of the defaulted respondent Ricardo de Leon were
substituted as parties-respondents in this case when he died on January 23, 1998. Needless to state, the
Commission did not acquire jurisdiction over the persons or estates of the other directors of Impact
Corporation, hence, it could not validly render any pronouncement as to their liabilities in this case.

Furthermore, the movant cannot raise in a motion for reconsideration the defense that she was no longer a
director of Impact Corporation in 1982, when she was allegedly eased out by the managing directors of
Impact Corporation as purportedly shown in the Deed of Sale and Assignment of Shares of Stock dated
January 22, 1982. This defense was neither pleaded in her Motion to Dismiss dated January 17, 1996 nor in
her Answer with Counterclaim dated May 18, 1999 and is, thus, deemed waived pursuant to Section 1, Rule
9 of the 1997 Rules of Civil Procedure, which has suppletory application to the Revised Rules of Procedure
of the Commission.
Finally, this Commission has already ruled in the Order dated April 27, 1999 that since the original Petition
was filed by the SSS on July 3, 1985, and was merely amended on December 1, 1995 to implead the
responsible officers of Impact Corporation, without changing its causes of action, the same was instituted
well within the 20-year prescriptive period provided under Section 22 (b) of the SS Law, as amended,
considering that the contribution delinquency assessment covered the period August 1980 to December
1984.
In view thereof, the instant Motion for Reconsideration is hereby denied for lack of merit.

Petitioner elevated her case to the Court of Appeals via a Petition for Review. Respondent SSS filed its
Comment dated 20 January 2005, and petitioner submitted her Reply thereto on 4 April 2005.
The Court of Appeals, applying Section 28(f) of the Social Security Law,21 again ruled against petitioner. It
dismissed the petitioners Petition in a Decision dated 2 June 2005, the dispositive portion of which reads:
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. The assailed Resolution
dated 28 May 2003 and the Order dated 4 August 2004 of the Social Security Commission are AFFIRMED
in toto.22

Aggrieved, petitioner filed a Motion for Reconsideration of the appellate courts Decision but her Motion was
denied in a Resolution dated 8 December 2005.
Hence, the instant Petition in which petitioner insists that the Court of Appeals committed grave error in holding
her solely liable for the collected but unremitted SSS premium contributions and the consequent late penalty
payments due thereon. Petitioner anchors her Petition on the following arguments:
I. SECTION 28(F) OF THE SSS LAW PROVIDES THAT A MANAGING HEAD, DIRECTOR OR PARTNER
IS LIABLE ONLY FOR THE PENALTIES OF THE EMPLOYER CORPORATION AND NOT FOR UNPAID
SSS CONTRIBUTIONS OF THE EMPLOYER CORPORATION.
II. UNDER THE SSS LAW, IT IS THE MANAGING HEADS, DIRECTORS OR PARTNERS WHO SHALL BE
LIABLE TOGETHER WITH THE CORPORATION. IN THIS CASE, PETITIONER HAS CEASED TO BE A
STOCKHOLDER OF IMPACT CORPORATION IN 1982. EVEN WHILE SHE WAS A STOCKHOLDER, SHE
NEVER PARTICIPATED IN THE DAILY OPERATIONS OF IMPACT CORPORATION.
III. UNDER SECTION 31 OF THE CORPORATION CODE, ONLY DIRECTORS, TRUSTEES OR
OFFICERS WHO PARTICIPATE IN UNLAWFUL ACTS OR ARE GUILTY OF GROSS NEGLIGENCE AND
BAD FAITH SHALL BE PERSONALLY LIABLE. OTHERWISE, BEING A MERE STOCKHOLDER, SHE IS
LIABLE ONLY TO THE EXTENT OF HER SUBSCRIPTION.
IV. IMPACT CORPORATION SUFFERED IRREVERSIBLE ECONOMIC LOSSES, EVENTS WHICH WERE
NEITHER DESIRED NOR CAUSED BY ANY ACT OF THE PETITIONER. THUS, BY REASON OF
FORTUITOUS EVENTS, THE PETITIONER SHOULD BE ABSOLVED FROM LIABILITY.
V. RESPONDENT SOCIAL SECURITY SYSTEM FAILED MISERABLY IN EXERTING EFFORTS TO
ACQUIRE JURISDICTION OVER THE LEVIABLE ASSETS OF IMPACT CORPORATION, PERSON/S
AND/OR ESTATE/S OF THE OTHER DIRECTORS OR OFFICERS OF IMPACT CORPORATION.
VI. THE HONORABLE COMMISSION SERIOUSLY ERRED IN NOT RENDERING A JUDGMENT BY
DEFAULT AGAINST THE DIRECTORS UPON WHOM IT ACQUIRED JURISDICTION.

Based on the foregoing, petitioner prays that the Decision dated 2 June 2005 and the Resolution dated 8
December 2005 of the Court of Appeals be reversed and set aside, and a new one be rendered absolving her
of any and all liabilities under the Social Security Law.
In sum, the core issue to be resolved in this case is whether or not petitioner, as the only surviving director of
Impact Corporation, can be made solely liable for the corporate obligations of Impact Corporation pertaining to
unremitted SSS premium contributions and penalties therefore.
As a covered employer under the Social Security Law, it is the obligation of Impact Corporation under the
provisions of Sections 18, 19 and 22 thereof, as amended, to deduct from its duly covered employees monthly
salaries their shares as premium contributions and remit the same to the SSS, together with the employers
shares of the contributions to the petitioner, for and in their behalf.

From all indications, the corporation has already been dissolved. Respondents are now going after petitioner
who is the only surviving director of Impact Corporation.
A cursory review of the alleged grave errors of law committed by the Court of Appeals above reveals there
seems to be no dispute as to the assessed liability of Impact Corporation for the unremitted SSS premiums of
its employees for the period January 1980 to December 1984.
There is also no dispute as to the fact that the employees SSS premium contributions have been deducted
from their salaries by Impact Corporation.
Petitioner in assailing the Court of Appeals Decision, distinguishes the penalties from the unremitted or unpaid
SSS premium contributions. She points out that although the appellate court is of the opinion that the
concerned officers of an employer corporation are liable for the penalties for non-remittance of premiums, it still
affirmed the SSC Resolution holding petitioner liable for the unpaid SSS premium contributions in addition to
the penalties.
Petitioner avers that under the aforesaid provision, the liability does not include liability for the unremitted SSS
premium contributions.
Petitioners argument is ridiculous. The interpretation petitioner would like us to adopt finds no support in law or
in jurisprudence. While the Court of Appeals Decision provided that Section 28(f) refers to the liabilities
pertaining to penalty for the non-remittance of SSS employee contributions, holding that it is distinct from the
amount of the supposed SSS remittances, petitioner mistakenly concluded that Section 28(f) is applicable only
to penalties and not to the liability of the employer for the unremitted premium contributions. Clearly, a
simplistic interpretation of the law is untenable. It is a rule in statutory construction that every part of the statute
must be interpreted with reference to the context, i.e., that every part of the statute must be considered
together with the other parts, and kept subservient to the general intent of the whole enactment.23 The liability
imposed as contemplated under the foregoing Section 28(f) of the Social Security Law does not preclude the
liability for the unremitted amount. Relevant to Section 28(f) is Section 22 of the same law.
SEC. 22. Remittance of Contributions. -- (a) The contributions imposed in the preceding Section shall be
remitted to the SSS within the first ten (10) days of each calendar month following the month for which they
are applicable or within such time as the Commission may prescribe. Every employer required to deduct and
to remit such contributions shall be liable for their payment and if any contribution is not paid to the SSS as
herein prescribed, he shall pay besides the contribution a penalty thereon of three percent (3%) per month
from the date the contribution falls due until paid. If deemed expedient and advisable by the Commission,
the collection and remittance of contributions shall be made quarterly or semi-annually in advance, the
contributions payable by the employees to be advanced by their respective employers:Provided, That upon
separation of an employee, any contribution so paid in advance but not due shall be credited or refunded to
his employer.

Under Section 22(a), every employer is required to deduct and remit such contributions penalty refers to the
3% penalty that automatically attaches to the delayed SSS premium contributions. The spirit, rather than the
letter of a law determines construction of a provision of law. It is a cardinal rule in statutory construction that in
interpreting the meaning and scope of a term used in the law, a careful review of the whole law involved, as
well as the intendment of the law, must be made.24 Nowhere in the provision or in the Decision can it be
inferred that the persons liable are absolved from paying the unremitted premium contributions.
Elementary is the rule that when laws or rules are clear, it is incumbent upon the judge to apply them
regardless of personal belief or predilections - when the law is unambiguous and unequivocal, application not
interpretation thereof is imperative.25 However, where the language of a statute is vague and ambiguous, an
interpretation thereof is resorted to. An interpretation thereof is necessary in instances where a literal
interpretation would be either impossible or absurd or would lead to an injustice. A law is deemed ambiguous
when it is capable of being understood by reasonably well-informed persons in either of two or more
senses.26 The fact that a law admits of different interpretations is the best evidence that it is vague and
ambiguous.27 In the instant case, petitioner interprets Section 28(f) of the Social Security Law as applicable
only to penalties and not to the liability of the employer for the unremitted premium contributions. Respondents
present a more logical interpretation that is consistent with the provisions as a whole and with the legislative
intent behind the Social Security Law.
This Court cannot be made to accept an interpretation that would defeat the intent of the law and its
legislators.28
Petitioner also challenges the finding of the Court of Appeals that under Section 28(f) of the Social Security
Law, a mere director or officer of an employer corporation, and not necessarily a "managing" director or officer,
can be held liable for the unpaid SSS premium contributions.
Section 28(f) of the Social Security Law provides the following:

(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or
any other institution, its managing head, directors or partners shall be liable to the penalties provided in this
Act for the offense.

This Court agrees in petitioners observation that the SSS did not even deny nor rebut the claim that petitioner
was not the "managing head" of Impact Corporation. However, the Court of Appeals rightly held that petitioner,
as a director of Impact Corporation, is among those officers covered by Section 28(f) of the Social Security
Law.
Petitioner invokes the rule in statutory construction called ejusdem generic; that is, where general words follow
an enumeration of persons or things, by words of a particular and specific meaning, such general words are
not to be construed in their widest extent, but are to be held as applying only to persons or things of the same
kind or class as those specifically mentioned. According to petitioner, to be held liable under Section 28(f) of
the Social Security Law, one must be the "managing head," "managing director," or "managing partner." This
Court though finds no need to resort to statutory construction. Section 28(f) of the Social Security Law imposes
penalty on:
(1) the managing head;
(2) directors; or
(3) partners, for offenses committed by a juridical person

The said provision does not qualify that the director or partner should likewise be a "managing director" or
"managing partner."29 The law is clear and unambiguous.
Petitioner nonetheless raises the defense that under Section 31 of the Corporation Code, only directors,
trustees or officers who participate in unlawful acts or are guilty of gross negligence and bad faith shall be
personally liable, and that being a mere stockholder, she is liable only to the extent of her subscription.
Section 31 of the Corporation Code, stipulating on the liability of directors, trustees, or officers, provides:
SEC. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully and knowingly vote for
or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in
directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty
as such directors, or trustees shall be liable jointly and severally for all damages resulting therefrom suffered
by the corporation, its stockholders or members and other persons.

Basic is the rule that a corporation is invested by law with a personality separate and distinct from that of the
persons composing it as well as from that of any other legal entity to which it may be related. A corporation is a
juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general,
from the people comprising it. Following this, the general rule applied is that obligations incurred by the
corporation, acting through its directors, officers and employees, are its sole liabilities.30 A director, officer, and
employee of a corporation are generally not held personally liable for obligations incurred by the corporation.
Being a mere fiction of law, however, there are peculiar situations or valid grounds that can exist to warrant the
disregard of its independent being and the lifting of the corporate veil. This situation might arise when a
corporation is used to evade a just and due obligation or to justify a wrong, to shield or perpetrate fraud, to
carry out other similar unjustifiable aims or intentions, or as a subterfuge to commit injustice and so circumvent
the law.31 Thus, Section 31 of the Corporation Law provides:
Taking a cue from the above provision, a corporate director, a trustee or an officer, may be held solidarily liable
with the corporation in the following instances:
1. When directors and trustees or, in appropriate cases, the officers of
a corporation-(a) vote for or assent to patently unlawful acts of the corporation;
(b) act in bad faith or with gross negligence in directing the corporate affairs;
(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members,
and other persons.
2. When a director or officer has consented to the issuance of watered stocks or who, having knowledge
thereof, did not forthwith file with the corporate secretary his written objection thereto.
3. When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and
solidarily liable with the Corporation.

4. When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate
action. 32

The aforesaid provision states:

SEC. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully and knowingly vote for
or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in
directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty
as such directors, or trustees shall be liable jointly and severally for all damages resulting therefrom suffered
by the corporation, its stockholders or members and other persons.

The situation of petitioner, as a director of Impact Corporation when said corporation failed to remit the SSS
premium contributions falls exactly under the fourth situation. Section 28(f) of the Social Security Law imposes
a civil liability for any act or omission pertaining to the violation of the Social Security Law, to wit:
(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or
any other institution, its managing head, directors or partners shall be liable to the penalties provided in this
Act for the offense.

In fact, criminal actions for violations of the Social Security Law are also provided under the Revised Penal
Code. The Social Security Law provides, in Section 28 thereof, to wit:
(h) Any employer who, after deducting the monthly contributions or loan amortizations from his employees
compensation, fails to remit the said deductions to the SSS within thirty (30) days from the date they
became due shall be presumed to have misappropriated such contributions or loan amortizations and shall
suffer the penalties provided in Article Three hundred fifteen of the Revised Penal Code.
(i) Criminal action arising from a violation of the provisions of this Act may be commenced by the SSS or the
employee concerned either under this Act or in appropriate cases under the Revised Penal Code: x x x.

Respondents would like this Court to apply another exception to the rule that the persons comprising a
corporation are not personally liable for acts done in the performance of their duties.
The Court of Appeals in the appealed Decision stated:
Anent the unpaid SSS contributions of Impact Corporations employees, the officers of a corporation are
liable in behalf of a corporation, which no longer exists or has ceased operations. Although as a rule, the
officers and members of a corporation are not personally liable for acts done in performance of their duties,
this rule admits of exception, one of which is when the employer corporation is no longer existing and is
unable to satisfy the judgment in favor of the employee, the officers should be held liable for acting on behalf
of the corporation. Following the foregoing pronouncement, petitioner, as one of the directors of Impact
Corporation, together with the other directors of the defunct corporation, are liable for the unpaid SSS
contributions of their employees.33

On the other hand, the SSC, in its Resolution, presented this discussion:
Although as a rule, the officers and members of a corporation are not personally liable for acts done in the
performance of their duties, this rule admits of exceptions, one of which is when the employer corporation is
no longer existing and is unable to satisfy the judgment in favor of the employee, the officers should be held
liable for acting on behalf of the corporation. x x x.34

The rationale cited by respondents in the two preceding paragraphs need not have been applied because the
personal liability for the unremitted SSS premium contributions and the late penalty thereof attaches to the
petitioner as a director of Impact Corporation during the period the amounts became due and demandable by
virtue of a direct provision of law.
Petitioners defense that since Impact Corporation suffered irreversible economic losses, and by reason of
fortuitous events, she should be absolved from liability, is also untenable. The evidence adduced totally belies
this claim. A reference to the copy of the Petition for Suspension of Payments filed by Impact Corporation on
18 March 1983 before the SEC contained an admission that:
"[I]t has been and still is engaged in business" and "has been and still is engaged in the business of
manufacturing aluminum tube containers" and "in brief, it is an on-going, viable, and profitable enterprise"
which has "sufficient assets" and "actual and potential income-generation capabilities."

The foregoing document negates petitioners assertion and supports the contention that during the period
involved Impact Corporation was still engaged in business and was an ongoing, viable, profitable enterprise. In
fact, the latest SSS form RIA submitted by Impact Corporation is dated 7 May 1984. The assessed SSS
premium contributions and penalty are obligations imposed upon Impact Corporation by law, and should have

been remitted to the SSS within the first 10 days of each calendar month following the month for which they
are applicable or within such time as the SSC prescribes.35
This Court also notes the evident failure on the part of SSS to issue a judgment in default against Ricardo de
Leon, who was the vice-president and officer of the corporation, upon his non-filing of a responsive pleading
after summons was served on him. As can be gleaned from Section 11 of the SSS Revised Rules of
Procedure, the Commissioner is mandated to render a decision either granting or denying the petition. Under
the aforesaid provision, if respondent fails to answer within the time prescribed, the Hearing Commissioner
may, upon motion of petitioner, or motu proprio, declare respondent in default and proceed to receive
petitioners evidence ex parteand thereafter recommend to the Commission either the granting or denial of the
petition as the evidence may warrant.36
On a final note, this Court sees it proper to quote verbatim respondents prefatory statement in their Comment:
The Social Security System is a government agency imbued with a salutary purpose to carry out the policy
of the State to establish, develop, promote and perfect a sound and viable tax exempt social security system
suitable to the needs of the people throughout the Philippines which shall promote social justice and provide
meaningful protection to members and their beneficiaries against the hazards of disability, sickness,
maternity, old-age, death and other contingencies resulting in loss of income or financial burden.
The soundness and viability of the funds of the SSS in turn depends on the contributions of its covered
employee and employer members, which it invests in order to deliver the basic social benefits and privileges
to its members. The entitlement to and amount of benefits and privileges of the covered members are
contribution-based. Both the soundness and viability of the funds of the SSS as well as the entitlement and
amount of benefits and privileges of its members are adversely affected to a great extent by the nonremittance of the much-needed contributions.37

The sympathy of the law on social security is toward its beneficiaries. This Court will not turn a blind eye on the
perpetration of injustice. This Court cannot and will not allow itself to be made an instrument nor be privy to any
attempt at the perpetration of injustice.
Following the doctrine laid down in Laguna Transportation Co., Inc. v. Social Security System,38 this Court rules
that although a corporation once formed is conferred a juridical personality separate and distinct from the
persons comprising it, it is but a legal fiction introduced for purposes of convenience and to subserve the ends
of justice. The concept cannot be extended to a point beyond its reasons and policy, and when invoked in
support of an end subversive of this policy, will be disregarded by the courts.
WHEREFORE, pursuant to the foregoing, the Decision of the Court of Appeals dated 2 June 2005 in CA-G.R.
SP No. 85923 is hereby AFFIRMED WITH FINALITY. Petitioner Immaculada L. Garcia, as sole surviving
director of Impact Corporation is hereby ORDERED to pay for the collected and unremitted SSS contributions
of Impact Corporation. The case is REMANDED to the SSS for computation of the exact amount and collection
thereof.
SO ORDERED.

[G.R. No. L-22301. August 30, 1967.]

THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. MARIO MAPA Y MAPULONG,Defendant-Appellant.
Francisco P. Cabigao for defendant and Appellant.
Solicitor General Arturo A. Alafriz, Asst. Solicitor General F .R. Rosete and Solicitor O. C . Hernandez for plaintiff
and appellee.

SYLLABUS
1. STATUTORY CONSTRUCTION; DUTY OF COURTS TO APPLY THE LAW; WHEN A LAW SHOULD BE CONSTRUED
AND INTERPRETED. The first and fundamental duty of courts is to apply the law. Construction and interpretation come
only after it has been demonstrated that application is impossible or inadequate without them.
2. ILLEGAL POSSESSION OF FIREARMS; LICENSE REQUIREMENT; SECRET AGENT NOT EXEMPT; CASE AT BAR.

 As secret agent is not included in the enumeration in Section 897 of the Revised Administrative Code of persons who
are not prohibited in Section 878, Revised Administrative Code, as amended by Republic Act No. 4, from possessing "any
firearm, detached parts of firearms or ammunition therefor, or any instrument or implement used or intended to be used in
the manufacture of firearms, parts of firearms, or ammunition," appellant is not exempt from the requirement of license.
3. ID.; ID.; DOCTRINE IN PEOPLE V. MACARANDANG OVERRULED. Reliance of the accused in the case at bar on
People v. Macarandang, 106 Phil. 713, where a secret agent was acquitted on appeal on the assumption that the
appointment "of the accused as a secret agent to assist in the maintenance of peace and order campaigns and detection
of crimes, sufficiently put him within the category of a `peace officer equivalent even to a member of the municipal police
expressly covered by section 897," is misplaced. It is not within the power of the Supreme Court to set aside the clear and
explicit mandate of a statutory provision.

DECISION
FERNANDO, J.:

The sole question in this appeal from a judgment of conviction by the lower court is whether or not the appointment to and
the holding of the position of a secret agent to the provincial governor would constitute a sufficient defense to a
prosecution for the crime of illegal possession of firearm and ammunition. We hold that it does not.
The accused in this case was indicted for the above offense in an information dated August 14, 1962 reading as follows:
"The undersigned accuses MARIO MAPA Y MAPULONG of a violation of Section 878 in connection with Section 2692 of
the Revised Administrative Code, as amended by Commonwealth Act No. 56 and as further amended by Republic Act No.
4, committed as follows: That on or about the 13th day of August, 1962, in the City of Manila, Philippines, the said
accused did then and there wilfully and unlawfully have in his possession and under his custody and control one homemade revolver (Paltik), Cal. 22, without serial number, with six (6) rounds of ammunition, without first having secured the
necessary license or permit therefor from the corresponding authorities. Contrary to law."cralaw virtua1aw library
When the case was called for hearing on September 3, 1963, the lower court at the outset asked the counsel for the
accused: "May counsel stipulate that the accused was found in possession of the gun involved in this case, that he has
neither a permit or license to possess the same and that we can submit the same on a question of law whether or not an
agent of the governor can hold a firearm without a permit issued by the Philippine Constabulary." After counsel sought
from the fiscal an assurance that he would not question the authenticity of his exhibits, the understanding being that only a
question of law would be submitted for decision, he explicitly specified such question to be "whether or not a secret agent
is not required to get a license for his firearm."cralaw virtua1aw library
Upon the lower court stating that the fiscal should examine the documents so that he could pass on their authenticity, the
fiscal asked the following question: "Does the accused admit that this pistol cal. 22 revolver with six rounds of ammunition
mentioned in the information was found in his possession on August 13, 1962, in the City of Manila without first having
secured the necessary license or permit thereof from the correspondent authority?" The accused now the appellant,
answered categorically: "Yes, Your Honor." Upon which, the lower court made a statement: "The accused admits, Yes, and
his counsel Atty. Cabigao also affirms that the accused admits."cralaw virtua1aw library
Forthwith, the fiscal announced that he was "willing to submit the same for decision." Counsel for the accused on his part
presented four (4) exhibits consisting of his appointment as secret agent of the Hon. Feliciano Leviste, then Governor of
Batangas, dated June 2, 1962; 1 another document likewise issued by Gov. Leviste also addressed to the accused
directing him to proceed to Manila, Pasay and Quezon City on a confidential mission; 2 the oath of office of the accused
as such secret agent; 3 a certificate dated March 11, 1963, to the effect that the accused "is a secret agent" of Gov.
Leviste. 4 Counsel for the accused then stated that with the presentation of the above exhibits he was "willing to submit
the case on the question of whether or not a secret agent duly appointed and qualified as such of the provincial governor
is exempt from the requirement of having a license of firearm." The exhibits were admitted and the parties were given time
to file their respective memoranda.
Thereafter on November 27, 1963, the lower court rendered a decision convicting the accused "of the crime of illegal
possession of firearms and sentenced to an indeterminate penalty of from one year and one day to two years and to pay
the costs. The firearm and ammunition confiscated from him are forfeited in favor of the Government."cralaw virtua1aw
library
The only question being one of law, the appeal was taken to this Court. The decision must be affirmed.
The law is explicit that except as thereafter specially allowed, "it shall be unlawful for any person to . . . possess any
firearm, detached parts of firearms or ammunition therefor, or any instrument or implement used or intended to be used in
the manufacture of firearms, parts of firearms, or ammunition." 5 The next section provides that "firearms and ammunition
regularly and lawfully issued to officers, soldiers, sailors, or marines [of the Armed Forces of the Philippines, the Philippine
Constabulary, guards in the employment of the Bureau of Prisons, municipal police, provincial governors, lieutenant
governors, provincial treasurers, municipal treasurers, municipal mayors, and guards of provincial prisoners and jails," are
not covered" when such firearms are in possession of such officials and public servants for use in the performance of their
official duties." 6
The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. Our task is equally
clear. The first and fundamental duty of courts is to apply the law. "Construction and interpretation come only after it has
been demonstrated that application is impossible or inadequate without them." 7 The conviction of the accused must
stand. It cannot be set aside. Accused however would rely on People v. Macarandang, 8 where a secret agent was
acquitted on appeal on the assumption that the appointment "of the accused as a secret agent to assist in the
maintenance of peace and order campaigns and detection of crimes, sufficiently put him within the category of a peace
officer equivalent even to a member of the municipal police expressly covered by section 879." Such reliance is

misplaced. It is not within the power of this Court to set aside the clear and explicit mandate of a statutory provision. To the
extent therefore that this decision conflicts with what was held in People v. Macarandang, it no longer speaks with
authority.
Wherefore, the judgment appealed from is affirmed.
Concepcion, C.J., Reyes, J .B.L., Dizon, Makalintal, Bengzon, J .P., Zaldivar, Sanchez, Castro and Angeles, JJ., concur

NATIONAL FOOD AUTHORITY (NFA), and JUANITO M. DAVID, in his capacity as Regional Director, NFA
Regional Office No. 1, San Juan, La Union,petitioners, vs. MASADA SECURITY AGENCY, INC.,
represented by its Acting President & General Manager, COL. EDWIN S. ESPEJO
(RET.),respondents.

DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review under Rule 45 of the Rules of Court is the February 12, 2004 decision [1] of the
Court of Appeals in CA-G.R. CV No. 76677, which dismissed the appeal filed by petitioner National Food Authority (NFA)
and its April 30, 2004 resolution denying petitioners motion for reconsideration.
The antecedent facts show that on September 17, 1996, respondent MASADA Security Agency, Inc., entered into a
one year[2] contract[3] to provide security services to the various offices, warehouses and installations of NFA within the
scope of the NFA Region I, comprised of the provinces of Pangasinan, La Union, Abra, Ilocos Sur and Ilocos Norte. Upon
the expiration of said contract, the parties extended the effectivity thereof on a monthly basis under same terms and
condition.[4]
Meanwhile, the Regional Tripartite Wages and Productivity Board issued several wage orders mandating increases in
the daily wage rate. Accordingly, respondent requested NFA for a corresponding upward adjustment in the monthly
contract rate consisting of the increases in the daily minimum wage of the security guards as well as the corresponding
raise in their overtime pay, holiday pay, 13 th month pay, holiday and rest day pay. It also claimed increases in Social
Security System (SSS) and Pag-ibig premiums as well as in the administrative costs and margin. NFA, however, granted
the request only with respect to the increase in the daily wage by multiplying the amount of the mandated increase by 30
days and denied the same with respect to the adjustments in the other benefits and remunerations computed on the basis
of the daily wage.
Respondent sought the intervention of the Office of the Regional Director, Regional Office No. I, La Union, as
Chairman of the Regional Tripartite Wages and Productivity Board and the DOLE Secretary through the Executive
Director of the National Wages and Productivity Commission. Despite the advisory [5] of said offices sustaining the claim of
respondent that the increase mandated by Republic Act No. 6727 (RA 6727) and the wage orders issued by the RTWPB
is not limited to the daily pay, NFA maintained its stance that it is not liable to pay the corresponding adjustments in the
wage related benefits of respondents security guards.
On May 4, 2001, respondent filed with the Regional Trial Court of Quezon, City, Branch 83, a case for recovery of
sum of money against NFA. Docketed as Civil Case No. Q-01-43988, the complaint [6] sought reimbursement of the
following amounts allegedly paid by respondent to the security guards, to wit: P2,949,302.84, for unpaid wage related
benefits brought about by the effectivity of Wage Order Nos. RB 1-05 and RB CAR-04; [7] RB 1-06 and RB CAR-05;[8] RB 107 and RB CAR-06;[9] and P975,493.04 for additional cost and margin, plus interest. It also prayed for damages and
litigation expenses.[10]
In its answer with counterclaim, [11] NFA denied that respondent paid the security guards their wage related benefits
and that it shouldered the additional costs and margin arising from the implementation of the wage orders. It admitted,
however, that it heeded respondents request for adjustment only with respect to increase in the minimum wage and not
with respect to the other wage related benefits. NFA argued that respondent cannot demand an adjustment on said salary
related benefits because it is bound by their contract expressly limiting NFAs obligation to pay only the increment in the
daily wage.
At the pre-trial, the only issue raised was whether or not respondent is entitled to recover from NFA the wage related
benefits of the security guards.[12]
On September 19, 2002, the trial court rendered a decision [13] in favor of respondent holding that NFA is liable to pay
the security guards wage related benefits pursuant to RA 6727, because the basis of the computation of said benefits, like
overtime pay, holiday pay, SSS and Pag-ibig premium, is the increased minimum wage. It also found NFA liable for the
consequential adjustments in administrative costs and margin. The trial court absolved defendant Juanito M. David having
been impleaded in his official capacity as Regional Director of NFA Regional Office No. 1, San Juan, La Union. The
dispositive portion thereof, reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff MASADA Security Agency, Inc., and against defendant National
Food Authority ordering said defendant to make the corresponding adjustment in the contract price in accordance with the increment
mandated under the various wage orders, particularly Wage Order Nos. RBI-05, RBCAR-04, RBI-06, RBCAR-05, RBI-07 and
RBCAR-06 and to pay plaintiff the amounts representing the adjustments in the wage-related benefits of the security guards and
consequential increase in its administrative cost and margin upon presentment by plaintiff of the corresponding voucher claims.

Plaintiffs claims for damages and attorneys fees and defendants counterclaim for damages are hereby DENIED.
Defendant Juanito M. David is hereby absolved from any liability.
SO ORDERED.[14]
NFA appealed to the Court of Appeals but the same was dismissed on February 12, 2004. The appellate court held
that the proper recourse of NFA is to file a petition for review under Rule 45 with this Court, considering that the appeal
raised a pure question of law. Nevertheless, it proceeded to discuss the merits of the case for purposes of academic
discussion and eventually sustained the ruling of the trial court that NFA is under obligation to pay the administrative costs
and margin and the wage related benefits of the respondents security guards. [15]
On April 30, 2004, the Court of Appeals denied NFAs motion for reconsideration. [16] Hence, the instant petition.
The issue for resolution is whether or not the liability of principals in service contracts under Section 6 of RA 6727
and the wage orders issued by the Regional Tripartite Wages and Productivity Board is limited only to the increment in the
minimum wage.
At the outset, it should be noted that the proper remedy of NFA from the adverse decision of the trial court is a
petition for review under Rule 45 directly with this Court because the issue involved a question of law. However, in the
interest of justice we deem it wise to overlook the procedural technicalities if only to demonstrate that despite the
procedural infirmity, the instant petition is impressed with merit. [17]
RA 6727[18] (Wage Rationalization Act), which took effect on July 1, 1989, [19] declared it a policy of the State to
rationalize the fixing of minimum wages and to promote productivity-improvement and gain-sharing measures to ensure a
decent standard of living for the workers and their families; to guarantee the rights of labor to its just share in the fruits of
production; to enhance employment generation in the countryside through industrial dispersal; and to allow business and
industry reasonable returns on investment, expansion and growth. [20]
In line with its declared policy, RA 6727, created the National Wages and Productivity Commission (NWPC),
vested, inter alia, with the power to prescribe rules and guidelines for the determination of appropriate minimum wage
and productivity measures at the regional, provincial or industry levels; [22] and the Regional Tripartite Wages and
Productivity Boards (RTWPB) which, among others, determine and fix the minimum wage rates applicable in their
respective region, provinces, or industries therein and issue the corresponding wage orders, subject to the guidelines
issued by the NWPC.[23] Pursuant to its wage fixing authority, the RTWPB issue wage orders which set the daily minimum
wage rates.[24]
[21]

Payment of the increases in the wage rate of workers is ordinarily shouldered by the employer. Section 6 of RA 6727,
however, expressly lodged said obligation to the principals or indirect employers in construction projects and
establishments providing security, janitorial and similar services. Substantially the same provision is incorporated in the
wage orders issued by the RTWPB.[25] Section 6 of RA 6727, provides:
SEC. 6. In the case of contracts for construction projects and for security, janitorial and similar services, the prescribed increases in
the wage rates of the workers shall be borne by the principals or clients of the construction/service contractors and the contract shall
be deemed amended accordingly. In the event, however, that the principal or client fails to pay the prescribed wage rates, the
construction/service contractor shall be jointly and severally liable with his principal or client. (Emphasis supplied)
NFA claims that its additional liability under the aforecited provision is limited only to the payment of the increment in
the statutory minimum wage rate, i.e., the rate for a regular eight (8) hour work day.
The contention is meritorious.
In construing the word wage in Section 6 of RA 6727, reference must be had to Section 4 (a) of the same Act. It
states:
SEC. 4. (a) Upon the effectivity of this Act, the statutory minimum wage rates for all workers and employees in the private sector,
whether agricultural or non-agricultural, shall be increased by twenty-five pesos (P25) per day (Emphasis supplied)
The term wage as used in Section 6 of RA 6727 pertains to no other than the statutory minimum wage which is
defined under the Rules Implementing RA 6727 as the lowest wage rate fixed by law that an employer can pay his worker.
[26]
The basis thereof under Section 7 of the same Rules is the normal working hours, which shall not exceed eight hours a
day. Hence, the prescribed increases or the additional liability to be borne by the principal under Section 6 of RA 6727 is
the increment or amount added to the remuneration of an employee for an 8-hour work.
Expresio unius est exclusio alterius. Where a statute, by its terms, is expressly limited to certain matters, it may not,
by interpretation or construction, be extended to others. [27] Since the increase in wage referred to in Section 6 pertains to
the statutory minimum wage as defined herein, principals in service contracts cannot be made to pay the corresponding

wage increase in the overtime pay, night shift differential, holiday and rest day pay, premium pay and other benefits
granted to workers. While basis of said remuneration and benefits is the statutory minimum wage, the law cannot be
unduly expanded as to include those not stated in the subject provision.
The settled rule in statutory construction is that if the statute is clear, plain and free from ambiguity, it must be given
its literal meaning and applied without interpretation. This plain meaning rule or verba legis derived from the maxim index
animi sermo est (speech is the index of intention) rests on the valid presumption that the words employed by the
legislature in a statute correctly express its intention or will and preclude the court from construing it differently. The
legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent
by use of such words as are found in the statute. Verba legis non est recedendum, or from the words of a statute there
should be no departure.[28]
The presumption therefore is that lawmakers are well aware that the word wage as used in Section 6 means the
statutory minimum wage. If their intention was to extend the obligation of principals in service contracts to the payment of
the increment in the other benefits and remuneration of workers, it would have so expressly specified. In not so doing, the
only logical conclusion is that the legislature intended to limit the additional obligation imposed on principals in service
contracts to the payment of the increment in the statutory minimum wage.
The general rule is that construction of a statute by an administrative agency charged with the task of interpreting or
applying the same is entitled to great weight and respect. The Court, however, is not bound to apply said rule where such
executive interpretation, is clearly erroneous, or when there is no ambiguity in the law interpreted, or when the language
of the words used is clear and plain, as in the case at bar. Besides, administrative interpretations are at best advisory for it
is the Court that finally determines what the law means. [29] Hence, the interpretation given by the labor agencies in the
instant case which went as far as supplementing what is otherwise not stated in the law cannot bind this Court.
It is not within the province of this Court to inquire into the wisdom of the law for indeed, we are bound by the words
of the statute.[30] The law is applied as it is. At any rate, the interest of the employees will not be adversely affected if the
obligation of principals under the subject provision will be limited to the increase in the statutory minimum wage. This is so
because all remuneration and benefits other than the increased statutory minimum wage would be shouldered and paid
by the employer or service contractor to the workers concerned. Thus, in the end, all allowances and benefits as
computed under the increased rate mandated by RA 6727 and the wage orders will be received by the workers.
Moreover, the law secures the welfare of the workers by imposing a solidary liability on principals and the service
contractors. Under the second sentence of Section 6 of RA 6727, in the event that the principal or client fails to pay the
prescribed wage rates, the service contractor shall be held solidarily liable with the former. Likewise, Articles 106, 107 and
109 of the Labor Code provides:
ART. 106. Contractor or Subcontractor. Whenever an employer enters into contract with another person for the performance of the
formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions
of this Code.
In the event that the contractor or subcontractor fails to pay the wage of his employees in accordance with this Code, the employer
shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under
the contract, in the same manner and extent that he is liable to employees directly employed by him.
ART. 107. Indirect Employer. The provisions of the immediately preceding Article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work,
task, job or project.
ART. 109. Solidary Liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer
shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of
determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
Based on the foregoing interpretation of Section 6 of RA 6727, the parties may enter into stipulations increasing the
liability of the principal. So long as the minimum obligation of the principal,i.e., payment of the increased statutory
minimum wage is complied with, the Wage Rationalization Act is not violated.
In the instant case, Article IV.4 of the service contract provides:
IV.4. In the event of a legislated increase in the minimum wage of security guards and/or in the PADPAO rate, the AGENCY may
negotiate for an adjustment in the contract price. Any adjustment shall be applicable only to the increment, based on published and
circulated rates and not on mere certification.[31]
In the same vein, paragraph 3 of NFA Memorandum AO-98-03- states:

3. For purposes of wage adjustments, consider only the rate based on the wage Order issued by the Regional
Tripartite Wage Productivity Board (RTWPB). Unless otherwise provided in the Wage Order issued by the
RTWPB, the wage adjustment shall be limited to the increment in the legislated minimum wage; [32]
The parties therefore acknowledged the application to their contract of the wage orders issued by the RTWPB
pursuant to RA 6727. There being no assumption by NFA of a greater liability than that mandated by Section 6 of the Act,
its obligation is limited to the payment of the increased statutory minimum wage rates which, as admitted by respondent,
had already been satisfied by NFA. [33] Under Article 1231 of the Civil Code, one of the modes of extinguishing an
obligation is by payment. Having discharged its obligation to respondent, NFA no longer have a duty that will give rise to a
correlative legal right of respondent. The latters complaint for collection of remuneration and benefits other than the
increased minimum wage rate, should therefore be dismissed for lack of cause of action.
The same goes for respondents claim for administrative cost and margin. Considering that respondent failed to
establish a clear obligation on the part of NFA to pay the same as well as to substantiate the amount thereof with
documentary evidence, the claim should be denied.
WHEREFORE, the petition is GRANTED. The February 12, 2004 decision and the April 30, 2004 resolution of the
Court of Appeals which dismissed petitioner National Food Authoritys appeal and motion for reconsideration, respectively,
in CA-G.R. CV No. 76677, are REVERSED and SET ASIDE. The complaint filed by respondent MASADA Security
Agency, Inc., docketed as Civil Case No. Q-01-43988, before the Regional Trial Court of Quezon, City, Branch 83, is
ordered DISMISSED.
SO ORDERED.

[G.R. No. 141314. November 15, 2002]

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY ENERGY REGULATORY BOARD petitioner, vs. MANILA
ELECTRIC COMPANY, respondent.

[G.R. No. 141369. November 15, 2002]

LAWYERS AGAINST MONOPOLY AND POVERTY (LAMP) consisting of CEFERINO PADUA, Chairman, G. FULTON
ACOSTA,GALILEO BRION, ANATALIA BUENAVENTURA, PEDRO CASTILLO, NAPOLEON CORONADO, ROMEO
ECHAUZ, FERNANDO GAITE, ALFREDO DE GUZMAN, ROGELIO KARAGDAG, JR., MA. LUZ ARZAGA-MENDOZA,
ANSBERTO PAREDES, AQUILINO PIMENTEL III, MARIO REYES, EMMANUEL SANTOS, RUDEGELIO TACORDA,
members, and ROLANDO ARZAGA, Secretary-General, JUSTICE ABRAHAM SARMIENTO, SENATOR AQUILINO
PIMENTEL, JR. and COMMISSIONER BARTOLOME FERNANDEZ, JR., Board of Consultants, and Lawyer
GENARO LUALHATI,petitioners, vs. MANILA ELECTRIC COMPANY (MERALCO), respondent.

DECISION
PUNO, J.:
In third world countries like the Philippines, equal justice will have a synthetic ring unless the economic rights of the
people, especially the poor, are protected with the same resoluteness as their right to liberty. The cases at bar are of
utmost significance for they concern the right of our people to electricity and to be reasonably charged for their
consumption. In configuring the contours of this economic right to a basic necessity of life, the Court shall define the limits
of the power of respondent MERALCO, a giant public utility and a monopoly, to charge our people for their electric
consumption. The question is: should public interest prevail over private profits?

The facts are brief and undisputed. On December 23, 1993, MERALCO filed with the ERB an application for the
revision of its rate schedules. The application reflected an average increase of 21 centavos per kilowatthour (kwh) in its
distribution charge. The application also included a prayer for provisional approval of the increase pursuant to Section
16(c) of the Public Service Act and Section 8 of Executive Order No. 172.
On January 28, 1994, the ERB issued an Order granting a provisional increase of P0.184 per kwh, subject to the
following condition:
In the event, however, that the Board finds, after hearing and submission by the Commission on Audit of an audit report on the books
and records of the applicant that the latter is entitled to a lesser increase in rates, all excess amounts collected from the applicants
customers as a result of this Order shall either be refunded to them or correspondingly credited in their favor for application to electric
bills covering future consumptions.[1]
In the same Order, the ERB requested the Commission on Audit (COA) to conduct an audit and examination of the
books and other records of account of the applicant for such period of time, which in no case shall be less than 12
consecutive months, as it may deem appropriate and to submit a copy thereof to the ERB immediately upon completion. [2]
On February 11, 1997, the COA submitted its Audit Report SAO No. 95-07 (the COA Report) which contained, among
others, the recommendation not to include income taxes paid by MERALCO as part of its operating expenses for
purposes of rate determination and the use of the net average investment method for the computation of the proportionate
value of the properties used by MERALCO during the test year for the determination of the rate base. [3]
Subsequently, the ERB rendered its decision adopting the above recommendations and authorized MERALCO to
implement a rate adjustment in the average amount of P0.017 per kwh, effective with respect to MERALCOs billing cycles
beginning February 1994. The ERB further ordered that the provisional relief in the amount of P0.184 per kilowatthour
granted under the Boards Order dated January 28, 1994 is hereby superseded and modified and the excess average
amount of P0.167 per kilowatthour starting with [MERALCOs] billing cycles beginning February 1994 until its billing cycles
beginning February 1998, be refunded to [MERALCOs] customers or correspondingly credited in their favor for future
consumption.[4]
The ERB held that income tax should not be treated as operating expense as this should be borne by the
stockholders who are recipients of the income or profits realized from the operation of their business hence, should not be
passed on to the consumers.[5] Further, in applying the net average investment method, the ERB adopted the
recommendation of COA that in computing the rate base, only the proportionate value of the property should be included,
determined in accordance with the number of months the same was actually used in service during the test year. [6]
On appeal, the Court of Appeals set aside the ERB decision insofar as it directed the reduction of the MERALCO
rates by an average of P0.167 per kwh and the refund of such amount to MERALCOs customers beginning February
1994 and until its billing cycle beginning February 1998. [7] Separate Motions for Reconsideration filed by the petitioners
were denied by the Court of Appeals.[8]
Petitioners are now before the Court seeking a reversal of the decision of the Court of Appeals by arguing primarily
that the Court of Appeals erred: a) in ruling that income tax paid by MERALCO should be treated as part of its operating
expenses and thus considered in determining the amount of increase in rates imposed by MERALCO and b) in rejecting
the net average investment method used by the COA and the ERB and instead adopted the average investment method
used by MERALCO.
We grant the petition.
The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes
prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used
for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation.
The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by
discontinuing use; but as long as use of the property is continued, the same is subject to public regulation. [9]
In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while
maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State
the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the
rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property
performing the service and one that is reasonable to the public for the services rendered. [10] The fixing of just and
reasonable rates involves a balancing of the investor and the consumer interests. [11]
[12]

In his famous dissenting opinion in the 1923 case of Southwestern Bell Tel. Co. v. Public Service Commission,
Mr. Justice Brandeis wrote:

The thing devoted by the investor to the public use is not specific property, tangible and intangible, but capital embarked in an
enterprise. Upon the capital so invested, the Federal Constitution guarantees to the utility the opportunity to earn a fair return The
Constitution does not guarantee to the utility the opportunity to earn a return on the value of all items of property used by the utility, or
of any of them.
.
The investor agrees, by embarking capital in a utility, that its charges to the public shall be reasonable. His company is the
substitute for the State in the performance of the public service, thus becoming a public servant. The compensation which the
Constitution guarantees an opportunity to earn is the reasonable cost of conducting the business.
While the power to fix rates is a legislative function, whether exercised by the legislature itself or delegated through
an administrative agency, a determination of whether the rates so fixed are reasonable and just is a purely judicial
question and is subject to the review of the courts.[13]

The ERB was created under Executive Order No. 172 to regulate, among others, the distribution of energy resources
and to fix rates to be charged by public utilities involved in the distribution of electricity. In the fixing of rates, the only
standard which the legislature is required to prescribe for the guidance of the administrative authority is that the rate be
reasonable and just. It has been held that even in the absence of an express requirement as to reasonableness, this
standard may be implied.[14] What is a just and reasonable rate is a question of fact calling for the exercise of
discretion, good sense, and a fair, enlightened and independent judgment. The requirement of reasonableness
comprehends such rates which must not be so low as to be confiscatory, or too high as to be oppressive. In determining
whether a rate is confiscatory, it is essential also to consider the given situation, requirements and opportunities of the
utility.[15]
Settled jurisprudence holds that factual findings of administrative bodies on technical matters within their area of
expertise should be accorded not only respect but even finality if they are supported by substantial evidence even if not
overwhelming or preponderant.[16] In one case, [17] we cautioned that courts should "refrain from substituting their discretion
on the weight of the evidence for the discretion of the Public Service Commission on questions of fact and will only
reverse or modify such orders of the Public Service Commission when it really appears that the evidence is insufficient to
support their conclusions."[18]
In the cases at bar, findings and conclusions of the ERB on the rate that can be charged by MERALCO to the public
should be respected.[19] The function of the court, in exercising its power of judicial review, is to determine whether under
the facts and circumstances, the final order entered by the administrative agency is unlawful or unreasonable. [20] Thus, to
the extent that the administrative agency has not been arbitrary or capricious in the exercise of its power, the timehonored principle is that courts should not interfere. The principle of separation of powers dictates that courts should
hesitate to review the acts of administrative officers except in clear cases of grave abuse of discretion. [21]
In determining the just and reasonable rates to be charged by a public utility, three major factors are
considered by the regulating agency: a) rate of return; b) rate base and c) the return itself or the computed
revenue to be earned by the public utility based on the rate of return and rate base. [22] The rate of return is a
judgment percentage which, if multiplied with the rate base, provides a fair return on the public utility for the use of its
property for service to the public. [23] The rate of return of a public utility is not prescribed by statute but by administrative
and judicial pronouncements. This Court has consistently adopted a 12% rate of return for public utilities. [24] The rate base,
on the other hand, is an evaluation of the property devoted by the utility to the public service or the value of invested
capital or property which the utility is entitled to a return. [25]
In the cases at bar, the resolution of the issues involved hinges on the determination of the kind and the amount
of operating expenses that should be allowed to a public utility to generate a fair return and the proper valuation
of the rate base or the value of the property entitled to a return.
I

Income Tax as Operating Expense Cannot be Allowed For Rate-Determination Purposes

In determining whether or not a rate yields a fair return to the utility, the operating expenses of the utility must be
considered. The return allowed to a public utility in accordance with the prescribed rate must be sufficient to provide for
the payment of such reasonable operating expenses incurred by the public utility in the provision of its services to the
public. Thus, the public utility is allowed a return on capital over and above operating expenses. However, only such
expenses and in such amounts as are reasonable for the efficient operation of the utility should be allowed for
determination of the rates to be charged by a public utility.
The ERB correctly ruled that income tax should not be included in the computation of operating expenses of a
public utility. Income tax paid by a public utility is inconsistent with the nature of operating expenses. In general,
operating expenses are those which are reasonably incurred in connection with business operations to yield revenue or
income. They are items of expenses which contribute or are attributable to the production of income or revenue. As
correctly put by the ERB, operating expenses should be a requisite of or necessary in the operation of a utility, recurring,
and that it redounds to the service or benefit of customers. [26]
Income tax, it should be stressed, is imposed on an individual or entity as a form of excise tax or a tax on the
privilege of earning income.[27] In exchange for the protection extended by the State to the taxpayer, the government
collects taxes as a source of revenue to finance its activities. Clearly, by its nature, income tax payments of a public utility
are not expenses which contribute to or are incurred in connection with the production of profit of a public utility. Income
tax should be borne by the taxpayer alone as they are payments made in exchange for benefits received by the taxpayer
from the State. No benefit is derived by the customers of a public utility for the taxes paid by such entity and no direct
contribution is made by the payment of income tax to the operation of a public utility for purposes of generating revenue or
profit. Accordingly, the burden of paying income tax should be Meralcos alone and should not be shifted to the consumers
by including the same in the computation of its operating expenses.
The principle behind the inclusion of operating expenses in the determination of a just and reasonable rate is to allow
the public utility to recoup the reasonable amount of expenses it has incurred in connection with the services it provides. It
does not give the public utility the license to indiscriminately charge any and all types of expenses incurred without regard
to the nature thereof, i.e., whether or not the expense is attributable to the production of services by the public utility. To
charge consumers for expenses incurred by a public utility which are not related to the service or benefit derived by the
customers from the public utility is unjustified and inequitable.
While the public utility is entitled to a reasonable return on the fair value of the property being used for the service of
the public, no less than the Federal Supreme Court of the United States emphasized: [t]he public cannot properly be
subjected to unreasonable rates in order simply that stockholders may earn dividends If a corporation cannot maintain
such a [facility] and earn dividends for stockholders, it is a misfortune for it and them which the Constitution does not
require to be remedied by imposing unjust burdens on the public. [28]
We are not impressed by the reliance by MERALCO on some American case law allowing the treatment of income
tax paid by a public utility as operating expense for rate-making purposes. Suffice to state that with regard to rate-

determination, the government is not hidebound to apply any particular method or formula. [29] The question of what
constitutes a reasonable return for the public utility is necessarily determined and controlled by its peculiar environmental
milieu. Aside from the financial condition of the public utility, there are other critical factors to consider for purposes of rate
regulation. Among others, they are: particular reasons involved for the request of the rate increase, the quality of services
rendered by the public utility, the existence of competition, the element of risk or hazard involved in the investment, the
capacity of consumers, etc.[30] Rate regulation is the art of reaching a result that is good for the public utility and is best for
the public.
For these reasons, the Court cannot give in to the importunings of MERALCO that we blindly apply the rulings of
American courts on the treatment of income tax as operating expenses in rate regulation cases. An approach allowing the
indiscriminate inclusion of income tax payments as operating expenses may create an undesirable precedent and serve
as a blanket authority for public utilities to charge their income tax payments to operating expenses and unjustly shift the
tax burden to the customer. To be sure, public utility taxation in the United States is going through the eye of criticism.
Some commentators are of the view that by allowing the public utility to collect its income tax payment from its customers,
a form of sales tax is, in effect, imposed on the public for consumption of public utility services. By charging their income
tax payments to their customers, public utilities virtually become tax collectors rather than taxpayers. [31] In the cases at bar,
MERALCO has not justified why its income tax should be treated as an operating expense to enable it to derive a fair
return for its services.
It is also noteworthy that under American laws, public utilities are taxed differently from other types of corporations
and thus carry a heavier tax burden. Moreover, different types of taxes, charges, tolls or fees are assessed on a public
utility depending on the state or locality where it operates. At a federal level, public utilities are subject to corporate income
taxes and Social Security taxesin the same manner as other business corporations. At the state and local levels, public
utilities are subject to a wide variety of taxes, not all of which are imposed on each state. Thus, it is not unusual to find
different taxes or combinations of taxes applicable to respective utility industries within a particular state. [32] A significant
aspect of state and local taxation of public utilities in the United States is that they have been singled out for special
taxation, i.e., they are required to pay one or more taxes that are not levied upon other industries. In contrast, in this
jurisdiction, public utilities are subject to the same tax treatment as any other corporation and local taxes paid by it to
various local government units are substantially the same. The reason for this is that the power to tax resides in our
legislature which may prescribe the limits of both national and local taxation, unlike in the federal system of the United
States where state legislature may prescribe taxes to be levied in their respective jurisdictions.
MERALCO likewise cites decisions of the ERB [33] allowing the application of a tax recovery clause for the imposition
of an additional charge on consumers for taxes paid by the public utility. A close look at these decisions will show they
are inappropos. In the said cases, the ERB approved the adoption of a formula which will allow the public utility to recover
from its customers taxes already paid by it. However, in the cases at bar, the income tax component added to the
operating expenses of a public utility is based on an estimate or approximate figure of income tax to be paid by the public
utility. It is this estimated amount of income tax to be paid by MERALCO which is included in the amount of operating
expenses and used as basis in determining the reasonable rate to be charged to the customers. Accordingly, the varying
factual circumstances in the said cases prohibit a square application of the rule under the previous ERB decisions.
II

Use of Net Average Investment Method is Not Unreasonable

In the determination of the rate base, property used in the operation of the public utility must be subject to appraisal
and evaluation to determine the fair value thereof entitled to a fair return. With respect to those properties which have not
been used by the public utility for the entire duration of the test year, i.e., the year subject to audit examination for ratemaking purposes, a valuation method must be adopted to determine the proportionate value of the property. Petitioners
maintain that the net average investment method (also known as actual number of months use method) recommended by
COA and adopted by the ERB should be used, while MERALCO argues that the average investment method (also known
as the trending method) to determine the proportionate value of properties should be applied.
Under the net average investment method, properties and equipment used in the operation of a public utility are
entitled to a return only on the actual number of months they are in service during the period. [34] In contrast, the average
investment method computes the proportionate value of the property by adding the value of the property at the beginning
and at the end of the test year with the resulting sum divided by two. [35]
The ERB did not abuse its discretion when it applied the net average investment method. The reasonableness of net
average investment method is borne by the records of the case. In its report, the COA explained that the computation of
the proportionate value of the property and equipment in accordance with the actual number of months such property or
equipment is in service for purposes of determining the rate base is favored, as against the trending method employed by
MERALCO, to reflect the real status of the property.[36] By using the net average investment method, the ERB and the
COA considered for determination of the rate base the value of properties and equipment used by MERALCO in
proportion to the period that the same were actually used during the period in question. This treatment is consistent with
the settled rule in rate regulation that the determination of the rate base of a public utility entitled to a return must be
based on properties and equipment actually being used or are useful to the operations of the public utility. [37]
MERALCO does not seriously contest this treatment of actual usage of property but opposes the method of
computation or valuation thereof adopted by the ERB and the COA on the ground that the net average investment method
assumes an ideal situation where a utility, like MERALCO, is able to record in its books within any given month the value
of all the properties actually placed in service during that month. [38] MERALCO contends that immediate recordal in its
books of the property or equipment is not possible as MERALCOs franchise covers a wide area and that due to the
volume of properties and equipment put into service and the amount of paper work required to be accomplished for
recording in the books of the company, it takes three to six months (often longer) before an asset placed in service is
recorded in the books of MERALCO. [39] Hence, MERALCO adopted the average investment method or the trending
method which computes the average value of the property at the beginning and at the end of the test year to compensate
for the irregular recording in its books.

MERALCOS stance is belied by the COA Report which states that the verification of the records, as confirmed by the
Management Staff, disclosed that properties are recorded in the books as these are actually placed in service.
[40]
Moreover, while the case was pending trial before the ERB, the ERB conducted an ocular inspection to examine the
assets in service, records and books of accounts of MERALCO to ascertain the physical existence, ownership, valuation
and usefulness of the assets contained in the COA Report. [41] Thus, MERALCOs contention that the date of recordal in the
books does not reflect the date when the asset is placed in service is baseless.
Further, computing the proportionate value of assets used in service in accordance with the actual number of months
the same is used during the test year is a more accurate method of determining the value of the properties of a public
utility entitled to a return. If, as determined by COA, the date of recordal in the books of MERALCO reflects the actual date
the equipment or property is used in service, there is no reason for the ERB to adopt the trending method applied by
MERALCO if a more precise method is available for determining the proportionate value of the assets placed in service.
If we were to sustain the application of the trending method, the public utility may easily manipulate the valuation of
its property entitled to a return (rate base) by simply including a highly capitalized asset in the computation of the rate
base even if the same was used for a limited period of time during the test year. With the inexactness of the trending
method and the possibility that the valuation of certain properties may be subject to the control of and abuse by the public
utility, the Court finds no reasonable basis to overturn the recommendation of COA and the decision of the ERB.
MERALCO further insists that the Court should sustain the trending method in view of previous decisions by the
Public Service Commission and of this Court which upheld the use of this method. By refusing to adopt the trending
method, MERALCO argues that the ERB violated the rule on stare decisis.
Again, we are not impressed. It is a settled rule that the goal of rate-making is to arrive at a just and reasonable rate
for both the public utility and the public which avails of the formers products and services. [42] However, what is a just and
reasonable rate cannot be fixed by any immutable method or formula. Hence, it has been held that no public utility has a
vested right to any particular method of valuation. [43] Accordingly, with respect to a determination of the proper method to
be used in the valuation of property and equipment used by a public utility for rate-making purposes, the administrative
agency is not bound to apply any one particular formula or method simply because the same method has been previously
used and applied. In fact, nowhere in the previous decisions cited by MERALCO which applied the trending method did
the Court rule that the same should be the only method to be applied in all instances.
At any rate, MERALCO has not adequately shown that the rates prescribed by the ERB are unjust or confiscatory as
to deprive its stockholders a reasonable return on investment. In the early case of Ynchausti S.S. Co. v. Public Utility
Commissioner, this Court held: [t]here is a legal presumption that the rates fixed by an administrative agency are
reasonable, and it must be conceded that the fixing of rates by the Government, through its authorized agents, involves
the exercise of reasonable discretion and, unless there is an abuse of that discretion, the courts will not interfere. [44] Thus,
the burden is upon the oppositor, MERALCO, to prove that the rates fixed by the ERB are unreasonable or otherwise
confiscatory as to merit the reversal of the ERB. In the instant cases, MERALCO was unable to discharge this burden.
WHEREFORE, in view of the foregoing, the instant petitions are GRANTED and the decision of the Court of Appeals
in C.A. G.R. SP No. 46888 is REVERSED. Respondent MERALCO is authorized to adopt a rate adjustment in the amount
of P0.017 per kilowatthour, effective with respect to MERALCOs billing cycles beginning February 1994. Further, in
accordance with the decision of the ERB dated February 16, 1998, the excess average amount of P0.167 per kilwatthour
starting with the applicants billing cycles beginning February 1998 is ordered to be refunded to MERALCOs customers or
correspondingly credited in their favor for future consumption.
SO ORDERED.

[G.R. No. 137571. September 21, 2000]

TUNG CHIN HUI, petitioner, vs. RUFUS B. RODRIGUEZ, Commissioner of Immigration; and the BOARD
OF COMMISSIONERS, Bureau of Immigration and Deportation, respondents.

DECISION
PANGANIBAN, J.:
Provisions that were not reproduced in the 1997 Rules of Civil Procedure are deemed repealed. Hence, having been
omitted from the 1997 Rules, deemed already repealed is Section 18, Rule 41 of the pre-1997 Rules of Court, which had
theretofore provided for a 48-hour reglementary period within which to appeal habeas corpus cases. Accordingly, the
period for perfecting appeals in said cases and ordinary civil actions is now uniform -- 15 days from notice of the judgment
or order.
The Case

Before us is a Petition for Certiorari under Rule 65 of the Rules of Court, assailing the March 2, 1999 Order [1]of the
Regional Trial Court (RTC) of Manila (Branch 26) in Special Proceedings No. 98-92014. The challenged Order reads in
full as follows:[2]
For resolution is a Motion For Reconsideration filed by petitioner thru counsel with comment/opposition thereto filed by respondents
thru counsel.

After careful consideration of the grounds relied upon by both parties, this Court finds for the respondents. The Notice of Appeal filed
by the respondents is actually fo[r] the Court Decision dated January 7, 1999 and not for [the] Court Order dated January 29, 1999.
In view of the foregoing, the Motion for Reconsideration filed by petitioner is hereby DENIED for lack of merit.
Meanwhile, the Branch Clerk of Court is hereby ordered to immediately transmit the record of the instant case to the Honorable Court
of Appeals within ten (10) days from today.
The Facts

From the records and the pleadings of the parties, the following facts appear undisputed.
After obtaining a visa at the Philippine Embassy in Singapore, petitioner, a Taiwanese citizen, [3] arrived in this country
on November 5, 1998.
On November 15, 1998, he was arrested by several policemen, who subsequently turned him over to the Bureau of
Immigration and Deportation (BID). Thereafter, on November 25, 1998, the BID Board of Commissioners, after finding him
guilty of possessing a tampered passport earlier canceled by Taiwanese authorities, ordered his summary deportation.
On December 11, 1998, petitioner filed before the RTC of Manila a Petition for Habeas Corpus on the ground that his
detention was illegal. After respondents filed a Return of Writ controverting his claim, the trial court issued a Decision
dated January 7, 1999, granting his Petition and ordering his release from custody.
On January 11, 1999, respondents filed a Motion for Reconsideration, which was denied by the trial court in an Order
dated January 29, 1999.
Respondents then filed a [N]otice of [A]ppeal from the judgment of the Honorable Court in the above-stated case,
dated January 29, 1999, a copy of which was received by the Bureau on February 11, 1999 and was received by the
undersigned counsel on February 15, 1999 x x x. [4] Dated February 15, 1999, it was received by the RTC on February 16,
1999 at 9:45 a.m.
Petitioner filed an Opposition, claiming that the Notice had been filed beyond the 48-hour reglementary period for
filing appeals in habeas corpus cases as prescribed by the pre-1997 Rules of Court. Although respondents alleged that
they had received the said Order on February 15, 1999, petitioner contended that they had in fact received it on February
11, 1999, as evidenced by the receipt of the service thereof and by the Sheriffs Return. [5]
In an Order dated February 18, 1999, the RTC rejected petitioners contention and granted due course to the Notice
of Appeal.
Petitioner then filed a Motion for Reconsideration, arguing this time that the Notice should be rejected because it had
referred not to the RTC Decision but to the January 29, 1999 Order denying reconsideration. In its assailed March 2, 1999
Order, the trial court denied his Motion.
Hence, this Petition raising pure questions of law. [6] In a Resolution dated March 22, 1999, this Court issued a
Temporary Restraining Order directing the respondents to cease and desist from deporting the petitioner x x x until further
orders.[7]
The Issues

Petitioner submits the following issues for our consideration: [8]

(a) Is the reglementary period to appeal [a] habeas corpus [case] now 15 days from notice of judgment as contended by [the] lower
court?
(b) Is the reglementary period to appeal [a] habeas corpus [case] still 48 hours from notice of judgment as provided for in Section 18,
Rule 41 of the Revised Rules of Court? or
(c) Is the provision of Sec. 1, sub-paragraph (a) of Rule 41 of the 1997 Rules of Civil Procedure -- prohibiting appeal from an Order
denying a motion for reconsideration - mandatory or merely discretionary on the part of the lower courts?
(d) Are petitions for writs of habeas corpus already brought down to the level of ordinary cases despite the fact that in habeas corpus
the liberty of persons illegally detained is involved?
In the main, the Court will resolve whether the Notice of Appeal was seasonably filed. In the process, it will determine
the applicable reglementary period for filing an appeal in habeas corpuscases.
The Courts Ruling

The Petition is not meritorious.

Main Issue: Reglementary Period for Appealing

Habeas Corpus Cases

Petitioner contends that the Notice of Appeal was late because respondents filed it only on February 16, 1999, five
days after they had received the Order denying the Motion for Reconsideration on February 11, 1999. [9] He argues that the
reglementary period for filing an appeal is 48 hours, as prescribed in Section 18 of Rule 41 of the pre-1997 Rules of Court,
which reads as follows:
SEC. 18. Appeal in habeas corpus cases, how taken. - An appeal in habeas corpus cases shall be perfected by filing with the clerk of
court or the judge who rendered the judgment, within forty-eight (48) hours from notice of such judgment, a statement that the person
making it appeals therefrom.
The argument is devoid of merit, because the foregoing provision was omitted from and thereby repealed by the
1997 Revised Rules of Court, which completely replaced Rules 1 to 71. The well-settled rule of statutory construction is
that provisions of an old law that were not reproduced in the revision thereof covering the same subject are deemed
repealed and discarded.[10] The omission shows the intention of the rule-making body, the Supreme Court in this case, [11] to
abrogate those provisions of the old laws that are not reproduced in the revised statute or code. [12]
Clearly then, the reglementary period for filing an appeal in a habeas corpus case is now similar to that in ordinary
civil actions[13] and is governed by Section 3, Rule 41 of the 1997 Rules of Court, which provides:
SEC. 3. Period of ordinary appeal. -- The appeal shall be taken within fifteen (15) days from notice of the judgment or final order
appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record on appeal within thirty
(30) days from notice of the judgment or final order.
The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension of time to file a
motion for new trial or reconsideration shall be allowed.
In this light, the appeal was seasonably filed within the 15-day reglementary period.
Stare Decisis

Petitioner insists, however, that the application of Section 18, Rule 41 under the Revised Rules of Court must be
maintained under the doctrine of stare decisis.[14], Thus he urges the Court to apply precedents that held that the 48-hour
period for perfecting an appeal was mandatory and jurisdictional. He specifically cites Saulo v. Cruz,[15] Garcia v.
Echiverri[16] and Elepante v. Madayag.[17]
The principle cited by petitioner is an abbreviated form of the maxim Stare decisis, et non quieta movere. [18] That is,
When the court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle
and apply it to all future cases where the facts are substantially the same. [19] This principle assures certainty and stability
in our legal system.[20]It should be stressed that stare decisis presupposes that the facts of the precedent and the case to
which it is applied are substantially the same. In this case, there is one crucial difference. All the incidents of the present
controversy occurred when the 1997 Revised Rules of Court was already in effect. On the other hand, all the cited
precedents had been resolved under the pre-1997 Rules. Accordingly, stare decisis cannot compel this Court to apply to
the present case the alleged precedents decided during the regime of the pre-1997 Rules. The cited cases applied a
specific provision of the Rules in effect at the time. But because that provision had already been repealed when the facts
under present consideration occurred, the Court can no longer rely on those cases. Indeed, to rule otherwise is to bar the
effectivity of the 1997 amendments, which conflict with jurisprudence decided under an old and repealed
rule. Verily, petitioners contention effectively precludes changes and freezes our procedural rules.
Subject of the Notice of Appeal

As earlier observed, the Notice of Appeal referred to the judgment of the Honorable Court in the above-stated case,
dated January 29, 1999. Petitioner now argues that the Notice was improper because it referred to the Order denying
respondents Motion for Reconsideration, not the Decision itself which was dated January 7, 1999. He cites Section 1 of
Rule 41 of the 1997 Rules, which provides that an order denying a motion for a new trial or a reconsideration may not be
appealed.[21]
Respondents, on the other hand, claim that because the Notice of Appeal contained the word judgment, their clear
intent was to appeal the Decision.
We agree with respondents. In referring to the trial courts judgment, respondents were clearly appealing the January
7, 1999 Decision. Had they thought otherwise, they would have referred to the Order. Indeed, judgment is normally
synonymous with decision.[22] Furthermore, the wrong date of the appealed judgment may be attributed merely to

inadvertence. Such error should not, by itself, deprive respondents of their right to appeal. Time and time again, it has
been held that courts should proceed with caution so as not to deprive a party of this right. [23] They are encouraged to hear
the merits of appealed cases; hence, the dismissal of an appeal on grounds of technicality is generally frowned upon.
[24]
Indeed, the postulates of justice and fairness demand that all litigants be afforded the opportunity for a full disposition of
their disputes, free as much as legally possible from the constraints of technicalities. [25] To rule otherwise is to let
technicality triumph over substantial justice. Indeed, the real essence of justice does not emanate from quibblings over
patchwork legal technicality.[26]
Other Matters

Petitioner insists that the Order deporting him is invalid, as he was not given notice or hearing. [27] We reject this
argument because it properly pertains to the appeal before the CA, not in these proceedings instituted merely to
determine the timeliness of the Notice of Appeal.
Likewise, we reject the submission of the Office of the Solicitor General that the promulgation of the CA Decision
resolving the appeal rendered the present case moot and academic. [28] It should be stressed that the validity of the
proceedings before the appellate court ultimately hinges on the issue before us: whether the Notice of Appeal was
seasonably filed.
WHEREFORE, the Petition is DENIED and the assailed Order AFFIRMED. The Temporary Restraining Order issued
by the Court is hereby immediately LIFTED. No pronouncement as to costs.
SO ORDERED.