EN BANC

G.R. No. L-11390

March 26, 1918

EL
BANCO
vs.
VICENTE PALANCA, administrator
Tanquinyeng, defendant-appellant.

ESPAOL-FILIPINO, plaintiff-appellant,
of

the

estate

of

Engracio

Palanca

STREET, J.:
This action was instituted upon March 31, 1908, by "El Banco Espanol-Filipino" to
foreclose a mortgage upon various parcels of real property situated in the city of Manila.
The mortgage in question is dated June 16, 1906, and was executed by the original
defendant herein, Engracio Palanca Tanquinyeng y Limquingco, as security for a debt
owing by him to the bank. Upon March 31, 1906, the debt amounted to P218,294.10
and was drawing interest at the rate of 8 per centum per annum, payable at the end of
each quarter. It appears that the parties to this mortgage at that time estimated the
value of the property in question at P292,558, which was about P75,000 in excess of
the indebtedness. After the execution of this instrument by the mortgagor, he returned to
China which appears to have been his native country; and he there died, upon January
29, 1810, without again returning to the Philippine Islands.
As the defendant was a nonresident at the time of the institution of the present action, it
was necessary for the plaintiff in the foreclosure proceeding to give notice to the
defendant by publication pursuant to section 399 of the Code of Civil Procedure. An
order for publication was accordingly obtained from the court, and publication was made
in due form in a newspaper of the city of Manila. At the same time that the order of the
court should deposit in the post office in a stamped envelope a copy of the summons
and complaint directed to the defendant at his last place of residence, to wit, the city of
Amoy, in the Empire of China. This order was made pursuant to the following provision
contained in section 399 of the Code of Civil Procedure:
In case of publication, where the residence of a nonresident or absent defendant is
known, the judge must direct a copy of the summons and complaint to be forthwith
deposited by the clerk in the post-office, postage prepaid, directed to the person to be
served, at his place of residence
Whether the clerk complied with this order does not affirmatively appear. There is,
however, among the papers pertaining to this case, an affidavit, dated April 4, 1908,
signed by Bernardo Chan y Garcia, an employee of the attorneys of the bank, showing
that upon that date he had deposited in the Manila post-office a registered letter,
addressed to Engracio Palanca Tanquinyeng, at Manila, containing copies of the
complaint, the plaintiff's affidavit, the summons, and the order of the court directing
publication as aforesaid. It appears from the postmaster's receipt that Bernardo
probably used an envelope obtained from the clerk's office, as the receipt purports to
show that the letter emanated from the office.

The cause proceeded in usual course in the Court of First Instance; and the defendant
not having appeared, judgment was, upon July 2, 1908, taken against him by default.
Upon July 3, 1908, a decision was rendered in favor of the plaintiff. In this decision it
was recited that publication had been properly made in a periodical, but nothing was
said about this notice having been given mail. The court, upon this occasion, found that
the indebtedness of the defendant amounted to P249,355. 32, with interest from March
31, 1908. Accordingly it was ordered that the defendant should, on or before July 6,
1908, deliver said amount to the clerk of the court to be applied to the satisfaction of the
judgment, and it was declared that in case of the failure of the defendant to satisfy the
judgment within such period, the mortgage property located in the city of Manila should
be exposed to public sale. The payment contemplated in said order was never made;
and upon July 8, 1908, the court ordered the sale of the property. The sale took place
upon July 30, 1908, and the property was bought in by the bank for the sum of
P110,200. Upon August 7, 1908, this sale was confirmed by the court.
About seven years after the confirmation of this sale, or to the precise, upon June 25,
1915, a motion was made in this cause by Vicente Palanca, as administrator of the
estate of the original defendant, Engracio Palanca Tanquinyeng y Limquingco, wherein
the applicant requested the court to set aside the order of default of July 2, 1908, and
the judgment rendered upon July 3, 1908, and to vacate all the proceedings subsequent
thereto. The basis of this application, as set forth in the motion itself, was that the order
of default and the judgment rendered thereon were void because the court had never
acquired jurisdiction over the defendant or over the subject of the action.
At the hearing in the court below the application to vacate the judgment was denied,
and from this action of the court Vicente Planca, as administrator of the estate of the
original defendant, has appealed. No other feature of the case is here under
consideration than such as related to the action of the court upon said motion.
The case presents several questions of importance, which will be discussed in what
appears to be the sequence of most convenient development. In the first part of this
opinion we shall, for the purpose of argument, assume that the clerk of the Court of First
Instance did not obey the order of the court in the matter of mailing the papers which he
was directed to send to the defendant in Amoy; and in this connection we shall consider,
first, whether the court acquired the necessary jurisdiction to enable it to proceed with
the foreclosure of the mortgage and, secondly, whether those proceedings were
conducted in such manner as to constitute due process of law.
The word "jurisdiction," as applied to the faculty of exercising judicial power, is used in
several different, though related, senses since it may have reference (1) to the authority
of the court to entertain a particular kind of action or to administer a particular kind of
relief, or it may refer to the power of the court over the parties, or (2) over the property
which is the subject to the litigation.
The sovereign authority which organizes a court determines the nature and extent of its
powers in general and thus fixes its competency or jurisdiction with reference to the
actions which it may entertain and the relief it may grant.
CONSTILAW 2-SEC. I | 1

Jurisdiction over the person is acquired by the voluntary appearance of a party in court
and his submission to its authority, or it is acquired by the coercive power of legal
process exerted over the person.
Jurisdiction over the property which is the subject of the litigation may result either from
a seizure of the property under legal process, whereby it is brought into the actual
custody of the law, or it may result from the institution of legal proceedings wherein,
under special provisions of law, the power of the court over the property is recognized
and made effective. In the latter case the property, though at all times within the
potential power of the court, may never be taken into actual custody at all. An illustration
of the jurisdiction acquired by actual seizure is found in attachment proceedings, where
the property is seized at the beginning of the action, or some subsequent stage of its
progress, and held to abide the final event of the litigation. An illustration of what we
term potential jurisdiction over the res, is found in the proceeding to register the title of
land under our system for the registration of land. Here the court, without taking actual
physical control over the property assumes, at the instance of some person claiming to
be owner, to exercise a jurisdiction in rem over the property and to adjudicate the title in
favor of the petitioner against all the world.
In the terminology of American law the action to foreclose a mortgage is said to be a
proceeding quasi in rem, by which is expressed the idea that while it is not strictly
speaking an action in rem yet it partakes of that nature and is substantially such. The
expression "action in rem" is, in its narrow application, used only with reference to
certain proceedings in courts of admiralty wherein the property alone is treated as
responsible for the claim or obligation upon which the proceedings are based. The
action quasi rem differs from the true action in rem in the circumstance that in the
former an individual is named as defendant, and the purpose of the proceeding is to
subject his interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the property of
the defendant, whether by attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these proceedings is conclusive
only between the parties.
In speaking of the proceeding to foreclose a mortgage the author of a well known
treaties, has said:
Though nominally against person, such suits are to vindicate liens; they proceed upon
seizure; they treat property as primarily indebted; and, with the qualification abovementioned, they are substantially property actions. In the civil law, they are styled
hypothecary actions, and their sole object is the enforcement of the lien against the res;
in the common law, they would be different in chancery did not treat the conditional
conveyance as a mere hypothecation, and the creditor's right ass an equitable lien; so,
in both, the suit is real action so far as it is against property, and seeks the judicial
recognition of a property debt, and an order for the sale of the res. (Waples,
Proceedings In Rem. sec. 607.)

It is true that in proceedings of this character, if the defendant for whom publication is
made appears, the action becomes as to him a personal action and is conducted as
such. This, however, does not affect the proposition that where the defendant fails to
appear the action is quasi in rem; and it should therefore be considered with reference
to the principles governing actions in rem.
There is an instructive analogy between the foreclosure proceeding and an action of
attachment, concerning which the Supreme Court of the United States has used the
following language:
If the defendant appears, the cause becomes mainly a suit in personam, with the added
incident, that the property attached remains liable, under the control of the court, to
answer to any demand which may be established against the defendant by the final
judgment of the court. But, if there is no appearance of the defendant, and no service of
process on him, the case becomes, in its essential nature, a proceeding in rem, the only
effect of which is to subject the property attached to the payment of the defendant which
the court may find to be due to the plaintiff. (Cooper vs. Reynolds, 10 Wall., 308.)
In an ordinary attachment proceeding, if the defendant is not personally served, the
preliminary seizure is to, be considered necessary in order to confer jurisdiction upon
the court. In this case the lien on the property is acquired by the seizure; and the
purpose of the proceedings is to subject the property to that lien. If a lien already exists,
whether created by mortgage, contract, or statute, the preliminary seizure is not
necessary; and the court proceeds to enforce such lien in the manner provided by law
precisely as though the property had been seized upon attachment. (Roller vs. Holly,
176 U. S., 398, 405; 44 L. ed., 520.) It results that the mere circumstance that in an
attachment the property may be seized at the inception of the proceedings, while in the
foreclosure suit it is not taken into legal custody until the time comes for the sale, does
not materially affect the fundamental principle involved in both cases, which is that the
court is here exercising a jurisdiction over the property in a proceeding directed
essentially in rem.
Passing now to a consideration of the jurisdiction of the Court of First Instance in a
mortgage foreclosure, it is evident that the court derives its authority to entertain the
action primarily from the statutes organizing the court. The jurisdiction of the court, in
this most general sense, over the cause of action is obvious and requires no comment.
Jurisdiction over the person of the defendant, if acquired at all in such an action, is
obtained by the voluntary submission of the defendant or by the personal service of
process upon him within the territory where the process is valid. If, however, the
defendant is a nonresident and, remaining beyond the range of the personal process of
the court, refuses to come in voluntarily, the court never acquires jurisdiction over the
person at all. Here the property itself is in fact the sole thing which is impleaded and is
the responsible object which is the subject of the exercise of judicial power. It follows
that the jurisdiction of the court in such case is based exclusively on the power which,
under the law, it possesses over the property; and any discussion relative to the
jurisdiction of the court over the person of the defendant is entirely apart from the case.
CONSTILAW 2-SEC. I | 2

The jurisdiction of the court over the property, considered as the exclusive object of
such action, is evidently based upon the following conditions and considerations,
namely: (1) that the property is located within the district; (2) that the purpose of the
litigation is to subject the property by sale to an obligation fixed upon it by the mortgage;
and (3) that the court at a proper stage of the proceedings takes the property into
custody, if necessary, and expose it to sale for the purpose of satisfying the mortgage
debt. An obvious corollary is that no other relief can be granted in this proceeding than
such as can be enforced against the property.
We may then, from what has been stated, formulated the following proposition relative
to the foreclosure proceeding against the property of a nonresident mortgagor who fails
to come in and submit himself personally to the jurisdiction of the court: (I) That the
jurisdiction of the court is derived from the power which it possesses over the property;
(II) that jurisdiction over the person is not acquired and is nonessential; (III) that the
relief granted by the court must be limited to such as can be enforced against the
property itself.
It is important that the bearing of these propositions be clearly apprehended, for there
are many expressions in the American reports from which it might be inferred that the
court acquires personal jurisdiction over the person of the defendant by publication and
notice; but such is not the case. In truth the proposition that jurisdiction over the person
of a nonresident cannot be acquired by publication and notice was never clearly
understood even in the American courts until after the decision had been rendered by
the Supreme Court of the United States in the leading case of Pennoyer vs. Neff (95 U.
S. 714; 24 L. ed., 565). In the light of that decision, and of other decisions which have
subsequently been rendered in that and other courts, the proposition that jurisdiction
over the person cannot be thus acquired by publication and notice is no longer open to
question; and it is now fully established that a personal judgment upon constructive or
substituted service against a nonresident who does not appear is wholly invalid. This
doctrine applies to all kinds of constructive or substituted process, including service by
publication and personal service outside of the jurisdiction in which the judgment is
rendered; and the only exception seems to be found in the case where the nonresident
defendant has expressly or impliedly consented to the mode of service. (Note to Raher
vs. Raher, 35 L. R. A. [N. S. ], 292; see also 50 L .R. A., 585; 35 L. R. A. [N. S.], 312
The idea upon which the decision in Pennoyer vs. Neff (supra) proceeds is that the
process from the tribunals of one State cannot run into other States or countries and
that due process of law requires that the defendant shall be brought under the power of
the court by service of process within the State, or by his voluntary appearance, in order
to authorize the court to pass upon the question of his personal liability. The doctrine
established by the Supreme Court of the United States on this point, being based upon
the constitutional conception of due process of law, is binding upon the courts of the
Philippine Islands. Involved in this decision is the principle that in proceedings in rem or
quasi in rem against a nonresident who is not served personally within the state, and
who does not appear, the relief must be confined to the res, and the court cannot
lawfully render a personal judgment against him. (Dewey vs. Des Moines, 173 U. S.,

193; 43 L. ed., 665; Heidritter vs. Elizabeth Oil Cloth Co., 112 U. S., 294; 28 L. ed.,
729.) Therefore in an action to foreclose a mortgage against a nonresident, upon whom
service has been effected exclusively by publication, no personal judgment for the
deficiency can be entered. (Latta vs. Tutton, 122 Cal., 279; Blumberg vs. Birch, 99 Cal.,
416.)
It is suggested in the brief of the appellant that the judgment entered in the court below
offends against the principle just stated and that this judgment is void because the court
in fact entered a personal judgment against the absent debtor for the full amount of the
indebtedness secured by the mortgage. We do not so interpret the judgment.
In a foreclosure proceeding against a nonresident owner it is necessary for the court, as
in all cases of foreclosure, to ascertain the amount due, as prescribed in section 256 of
the Code of Civil Procedure, and to make an order requiring the defendant to pay the
money into court. This step is a necessary precursor of the order of sale. In the present
case the judgment which was entered contains the following words:
Because it is declared that the said defendant Engracio Palanca Tanquinyeng y
Limquingco, is indebted in the amount of P249,355.32, plus the interest, to the 'Banco
Espanol-Filipino' . . . therefore said appellant is ordered to deliver the above amount
etc., etc.
This is not the language of a personal judgment. Instead it is clearly intended merely as
a compliance with the requirement that the amount due shall be ascertained and that
the evidence of this it may be observed that according to the Code of Civil Procedure a
personal judgment against the debtor for the deficiency is not to be rendered until after
the property has been sold and the proceeds applied to the mortgage debt. (sec. 260).
The conclusion upon this phase of the case is that whatever may be the effect in other
respects of the failure of the clerk of the Court of First Instance to mail the proper
papers to the defendant in Amoy, China, such irregularity could in no wise impair or
defeat the jurisdiction of the court, for in our opinion that jurisdiction rest upon a basis
much more secure than would be supplied by any form of notice that could be given to a
resident of a foreign country.
Before leaving this branch of the case, we wish to observe that we are fully aware that
many reported cases can be cited in which it is assumed that the question of the
sufficiency of publication or notice in a case of this kind is a question affecting the
jurisdiction of the court, and the court is sometimes said to acquire jurisdiction by virtue
of the publication. This phraseology was undoubtedly originally adopted by the court
because of the analogy between service by the publication and personal service of
process upon the defendant; and, as has already been suggested, prior to the decision
of Pennoyer vs. Neff (supra) the difference between the legal effects of the two forms of
service was obscure. It is accordingly not surprising that the modes of expression which
had already been molded into legal tradition before that case was decided have been
brought down to the present day. But it is clear that the legal principle here involved is
not effected by the peculiar language in which the courts have expounded their ideas.
CONSTILAW 2-SEC. I | 3

We now proceed to a discussion of the question whether the supposed irregularity in

the proceedings was of such gravity as to amount to a denial of that "due process of
law" which was secured by the Act of Congress in force in these Islands at the time this
mortgage was foreclosed. (Act of July 1, 1902, sec. 5.) In dealing with questions
involving the application of the constitutional provisions relating to due process of law
the Supreme Court of the United States has refrained from attempting to define with
precision the meaning of that expression, the reason being that the idea expressed
therein is applicable under so many diverse conditions as to make any attempt ay
precise definition hazardous and unprofitable. As applied to a judicial proceeding,
however, it may be laid down with certainty that the requirement of due process is
satisfied if the following conditions are present, namely; (1) There must be a court or
tribunal clothed with judicial power to hear and determine the matter before it; (2)
jurisdiction must be lawfully acquired over the person of the defendant or over the
property which is the subject of the proceeding; (3) the defendant must be given an
opportunity to be heard; and (4) judgment must be rendered upon lawful hearing.
Passing at once to the requisite that the defendant shall have an opportunity to be
heard, we observe that in a foreclosure case some notification of the proceedings to the
nonresident owner, prescribing the time within which appearance must be made, is
everywhere recognized as essential. To answer this necessity the statutes generally
provide for publication, and usually in addition thereto, for the mailing of notice to the
defendant, if his residence is known. Though commonly called constructive, or
substituted service of process in any true sense. It is merely a means provided by law
whereby the owner may be admonished that his property is the subject of judicial
proceedings and that it is incumbent upon him to take such steps as he sees fit to
protect it. In speaking of notice of this character a distinguish master of constitutional
law has used the following language:
. . . if the owners are named in the proceedings, and personal notice is provided for, it is
rather from tenderness to their interests, and in order to make sure that the opportunity
for a hearing shall not be lost to them, than from any necessity that the case shall
assume that form. (Cooley on Taxation [2d. ed.], 527, quoted in Leigh vs. Green, 193 U.
S., 79, 80.)
It will be observed that this mode of notification does not involve any absolute
assurance that the absent owner shall thereby receive actual notice. The periodical
containing the publication may never in fact come to his hands, and the chances that he
should discover the notice may often be very slight. Even where notice is sent by mail
the probability of his receiving it, though much increased, is dependent upon the
correctness of the address to which it is forwarded as well as upon the regularity and
security of the mail service. It will be noted, furthermore, that the provision of our law
relative to the mailing of notice does not absolutely require the mailing of notice
unconditionally and in every event, but only in the case where the defendant's residence
is known. In the light of all these facts, it is evident that actual notice to the defendant in
cases of this kind is not, under the law, to be considered absolutely necessary.

The idea upon which the law proceeds in recognizing the efficacy of a means of
notification which may fall short of actual notice is apparently this: Property is always
assumed to be in the possession of its owner, in person or by agent; and he may be
safely held, under certain conditions, to be affected with knowledge that proceedings
have been instituted for its condemnation and sale.
It is the duty of the owner of real estate, who is a nonresident, to take measures that in
some way he shall be represented when his property is called into requisition, and if he
fails to do this, and fails to get notice by the ordinary publications which have usually
been required in such cases, it is his misfortune, and he must abide the consequences.
(6 R. C. L., sec. 445 [p. 450]).
It has been well said by an American court:
If property of a nonresident cannot be reached by legal process upon the constructive
notice, then our statutes were passed in vain, and are mere empty legislative
declarations, without either force, or meaning; for if the person is not within the
jurisdiction of the court, no personal judgment can be rendered, and if the judgment
cannot operate upon the property, then no effective judgment at all can be rendered, so
that the result would be that the courts would be powerless to assist a citizen against a
nonresident. Such a result would be a deplorable one. (Quarl vs. Abbett, 102 Ind., 233;
52 Am. Rep., 662, 667.)
It is, of course universally recognized that the statutory provisions relative to publication
or other form of notice against a nonresident owner should be complied with; and in
respect to the publication of notice in the newspaper it may be stated that strict
compliance with the requirements of the law has been held to be essential. In Guaranty
Trust etc. Co. vs. Green Cove etc., Railroad Co. (139 U. S., 137, 138), it was held that
where newspaper publication was made for 19 weeks, when the statute required 20, the
publication was insufficient.
With respect to the provisions of our own statute, relative to the sending of notice by
mail, the requirement is that the judge shall direct that the notice be deposited in the
mail by the clerk of the court, and it is not in terms declared that the notice must be
deposited in the mail. We consider this to be of some significance; and it seems to us
that, having due regard to the principles upon which the giving of such notice is
required, the absent owner of the mortgaged property must, so far as the due process
of law is concerned, take the risk incident to the possible failure of the clerk to perform
his duty, somewhat as he takes the risk that the mail clerk or the mail carrier might
possibly lose or destroy the parcel or envelope containing the notice before it should
reach its destination and be delivered to him. This idea seems to be strengthened by
the consideration that placing upon the clerk the duty of sending notice by mail, the
performance of that act is put effectually beyond the control of the plaintiff in the
litigation. At any rate it is obvious that so much of section 399 of the Code of Civil
Procedure as relates to the sending of notice by mail was complied with when the court
made the order. The question as to what may be the consequences of the failure of the
CONSTILAW 2-SEC. I | 4

record to show the proof of compliance with that requirement will be discussed by us
further on.
The observations which have just been made lead to the conclusion that the failure of
the clerk to mail the notice, if in fact he did so fail in his duty, is not such an irregularity,
as amounts to a denial of due process of law; and hence in our opinion that irregularity,
if proved, would not avoid the judgment in this case. Notice was given by publication in
a newspaper and this is the only form of notice which the law unconditionally requires.
This in our opinion is all that was absolutely necessary to sustain the proceedings.
It will be observed that in considering the effect of this irregularity, it makes a difference
whether it be viewed as a question involving jurisdiction or as a question involving due
process of law. In the matter of jurisdiction there can be no distinction between the
much and the little. The court either has jurisdiction or it has not; and if the requirement
as to the mailing of notice should be considered as a step antecedent to the acquiring of
jurisdiction, there could be no escape from the conclusion that the failure to take that
step was fatal to the validity of the judgment. In the application of the idea of due
process of law, on the other hand, it is clearly unnecessary to be so rigorous. The
jurisdiction being once established, all that due process of law thereafter requires is an
opportunity for the defendant to be heard; and as publication was duly made in the
newspaper, it would seem highly unreasonable to hold that failure to mail the notice was
fatal. We think that in applying the requirement of due process of law, it is permissible to
reflect upon the purposes of the provision which is supposed to have been violated and
the principle underlying the exercise of judicial power in these proceedings. Judge in the
light of these conceptions, we think that the provision of Act of Congress declaring that
no person shall be deprived of his property without due process of law has not been
infringed.
In the progress of this discussion we have stated the two conclusions; (1) that the failure
of the clerk to send the notice to the defendant by mail did not destroy the jurisdiction of
the court and (2) that such irregularity did not infringe the requirement of due process of
law. As a consequence of these conclusions the irregularity in question is in some
measure shorn of its potency. It is still necessary, however, to consider its effect
considered as a simple irregularity of procedure; and it would be idle to pretend that
even in this aspect the irregularity is not grave enough. From this point of view,
however, it is obvious that any motion to vacate the judgment on the ground of the
irregularity in question must fail unless it shows that the defendant was prejudiced by
that irregularity. The least, therefore, that can be required of the proponent of such a
motion is to show that he had a good defense against the action to foreclose the
mortgage. Nothing of the kind is, however, shown either in the motion or in the affidavit
which accompanies the motion.
An application to open or vacate a judgment because of an irregularity or defect in the
proceedings is usually required to be supported by an affidavit showing the grounds on
which the relief is sought, and in addition to this showing also a meritorious defense to
the action. It is held that a general statement that a party has a good defense to the

action is insufficient. The necessary facts must be averred. Of course if a judgment is

void upon its face a showing of the existence of a meritorious defense is not necessary.
(10 R. C. L., 718.)
The lapse of time is also a circumstance deeply affecting this aspect of the case. In this
connection we quote the following passage from the encyclopedic treatise now in
course of publication:
Where, however, the judgment is not void on its face, and may therefore be enforced if
permitted to stand on the record, courts in many instances refuse to exercise their quasi
equitable powers to vacate a judgement after the lapse of the term ay which it was
entered, except in clear cases, to promote the ends of justice, and where it appears that
the party making the application is himself without fault and has acted in good faith and
with ordinary diligence. Laches on the part of the applicant, if unexplained, is deemed
sufficient ground for refusing the relief to which he might otherwise be entitled.
Something is due to the finality of judgments, and acquiescence or unnecessary delay
is fatal to motions of this character, since courts are always reluctant to interfere with
judgments, and especially where they have been executed or satisfied. The moving
party has the burden of showing diligence, and unless it is shown affirmatively the court
will not ordinarily exercise its discretion in his favor. (15 R. C. L., 694, 695.)
It is stated in the affidavit that the defendant, Engracio Palanca Tanquinyeng y
Limquingco, died January 29, 1910. The mortgage under which the property was sold
was executed far back in 1906; and the proceedings in the foreclosure were closed by
the order of court confirming the sale dated August 7, 1908. It passes the rational
bounds of human credulity to suppose that a man who had placed a mortgage upon
property worth nearly P300,000 and had then gone away from the scene of his life
activities to end his days in the city of Amoy, China, should have long remained in
ignorance of the fact that the mortgage had been foreclosed and the property sold, even
supposing that he had no knowledge of those proceedings while they were being
conducted. It is more in keeping with the ordinary course of things that he should have
acquired information as to what was transpiring in his affairs at Manila; and upon the
basis of this rational assumption we are authorized, in the absence of proof to the
contrary, to presume that he did have, or soon acquired, information as to the sale of his
property.
The Code of Civil Procedure, indeed, expressly declares that there is a presumption
that things have happened according to the ordinary habits of life (sec. 334 [26]); and
we cannot conceive of a situation more appropriate than this for applying the
presumption thus defined by the lawgiver. In support of this presumption, as applied to
the present case, it is permissible to consider the probability that the defendant may
have received actual notice of these proceedings from the unofficial notice addressed to
him in Manila which was mailed by an employee of the bank's attorneys. Adopting
almost the exact words used by the Supreme Court of the United States in Grannis vs.
Ordeans (234 U. S., 385; 58 L. ed., 1363), we may say that in view of the well-known
skill of postal officials and employees in making proper delivery of letters defectively
CONSTILAW 2-SEC. I | 5

addressed, we think the presumption is clear and strong that this notice reached the
defendant, there being no proof that it was ever returned by the postal officials as
undelivered. And if it was delivered in Manila, instead of being forwarded to Amoy,
China, there is a probability that the recipient was a person sufficiently interested in his
affairs to send it or communicate its contents to him.
Of course if the jurisdiction of the court or the sufficiency of the process of law
depended upon the mailing of the notice by the clerk, the reflections in which we are
now indulging would be idle and frivolous; but the considerations mentioned are
introduced in order to show the propriety of applying to this situation the legal
presumption to which allusion has been made. Upon that presumption, supported by the
circumstances of this case, ,we do not hesitate to found the conclusion that the
defendant voluntarily abandoned all thought of saving his property from the obligation
which he had placed upon it; that knowledge of the proceedings should be imputed to
him; and that he acquiesced in the consequences of those proceedings after they had
been accomplished. Under these circumstances it is clear that the merit of this motion
is, as we have already stated, adversely affected in a high degree by the delay in asking
for relief. Nor is it an adequate reply to say that the proponent of this motion is an
administrator who only qualified a few months before this motion was made. No
disability on the part of the defendant himself existed from the time when the foreclosure
was effected until his death; and we believe that the delay in the appointment of the
administrator and institution of this action is a circumstance which is imputable to the
parties in interest whoever they may have been. Of course if the minor heirs had
instituted an action in their own right to recover the property, it would have been
different.
It is, however, argued that the defendant has suffered prejudice by reason of the fact
that the bank became the purchaser of the property at the foreclosure sale for a price
greatly below that which had been agreed upon in the mortgage as the upset price of
the property. In this connection, it appears that in article nine of the mortgage which was
the subject of this foreclosure, as amended by the notarial document of July 19, 1906,
the parties to this mortgage made a stipulation to the effect that the value therein placed
upon the mortgaged properties should serve as a basis of sale in case the debt should
remain unpaid and the bank should proceed to a foreclosure. The upset price stated in
that stipulation for all the parcels involved in this foreclosure was P286,000. It is said in
behalf of the appellant that when the bank bought in the property for the sum of
P110,200 it violated that stipulation.
It has been held by this court that a clause in a mortgage providing for a tipo, or upset
price, does not prevent a foreclosure, nor affect the validity of a sale made in the
foreclosure proceedings. (Yangco vs. Cruz Herrera and Wy Piaco, 11 Phil. Rep., 402;
Banco-Espaol Filipino vs. Donaldson, Sim and Co., 5 Phil. Rep., 418.) In both the
cases here cited the property was purchased at the foreclosure sale, not by the creditor
or mortgagee, but by a third party. Whether the same rule should be applied in a case
where the mortgagee himself becomes the purchaser has apparently not been decided
by this court in any reported decision, and this question need not here be considered,

since it is evident that if any liability was incurred by the bank by purchasing for a price
below that fixed in the stipulation, its liability was a personal liability derived from the
contract of mortgage; and as we have already demonstrated such a liability could not be
the subject of adjudication in an action where the court had no jurisdiction over the
person of the defendant. If the plaintiff bank became liable to account for the difference
between the upset price and the price at which in bought in the property, that liability
remains unaffected by the disposition which the court made of this case; and the fact
that the bank may have violated such an obligation can in no wise affect the validity of
the judgment entered in the Court of First Instance.
In connection with the entire failure of the motion to show either a meritorious defense
to the action or that the defendant had suffered any prejudice of which the law can take
notice, we may be permitted to add that in our opinion a motion of this kind, which
proposes to unsettle judicial proceedings long ago closed, can not be considered with
favor, unless based upon grounds which appeal to the conscience of the court. Public
policy requires that judicial proceedings be upheld. The maximum here applicable is
non quieta movere. As was once said by Judge Brewer, afterwards a member of the
Supreme Court of the United States:
Public policy requires that judicial proceedings be upheld, and that titles obtained in
those proceedings be safe from the ruthless hand of collateral attack. If technical
defects are adjudged potent to destroy such titles, a judicial sale will never realize that
value of the property, for no prudent man will risk his money in bidding for and buying
that title which he has reason to fear may years thereafter be swept away through some
occult and not readily discoverable defect. (Martin vs. Pond, 30 Fed., 15.)
In the case where that language was used an attempt was made to annul certain
foreclosure proceedings on the ground that the affidavit upon which the order of
publication was based erroneously stated that the State of Kansas, when he was in fact
residing in another State. It was held that this mistake did not affect the validity of the
proceedings.
In the preceding discussion we have assumed that the clerk failed to send the notice by
post as required by the order of the court. We now proceed to consider whether this is a
proper assumption; and the proposition which we propose to establish is that there is a
legal presumption that the clerk performed his duty as the ministerial officer of the court,
which presumption is not overcome by any other facts appearing in the cause.
In subsection 14 of section 334 of the Code of Civil Procedure it is declared that there is
a presumption "that official duty has been regularly performed;" and in subsection 18 it
is declared that there is a presumption "that the ordinary course of business has been
followed." These presumptions are of course in no sense novelties, as they express
ideas which have always been recognized. Omnia presumuntur rite et solemniter esse
acta donec probetur in contrarium. There is therefore clearly a legal presumption that
the clerk performed his duty about mailing this notice; and we think that strong
considerations of policy require that this presumption should be allowed to operate with
full force under the circumstances of this case. A party to an action has no control over
CONSTILAW 2-SEC. I | 6

the clerk of the court; and has no right to meddle unduly with the business of the clerk in
the performance of his duties. Having no control over this officer, the litigant must
depend upon the court to see that the duties imposed on the clerk are performed.
Other considerations no less potent contribute to strengthen the conclusion just stated.
There is no principle of law better settled than that after jurisdiction has once been
required, every act of a court of general jurisdiction shall be presumed to have been
rightly done. This rule is applied to every judgment or decree rendered in the various
stages of the proceedings from their initiation to their completion (Voorhees vs. United
States Bank, 10 Pet., 314; 35 U. S., 449); and if the record is silent with respect to any
fact which must have been established before the court could have rightly acted, it will
be presumed that such fact was properly brought to its knowledge. (The Lessee of
Grignon vs. Astor, 2 How., 319; 11 L. ed., 283.)
In making the order of sale [of the real state of a decedent] the court are presumed to
have adjudged every question necessary to justify such order or decree, viz: The death
of the owners; that the petitioners were his administrators; that the personal estate was
insufficient to pay the debts of the deceased; that the private acts of Assembly, as to the
manner of sale, were within the constitutional power of the Legislature, and that all the
provisions of the law as to notices which are directory to the administrators have been
complied with. . . . The court is not bound to enter upon the record the evidence on
which any fact was decided. (Florentine vs. Barton, 2 Wall., 210; 17 L. ed., 785.)
Especially does all this apply after long lapse of time.
Applegate vs. Lexington and Carter County Mining Co. (117 U. S., 255) contains an
instructive discussion in a case analogous to that which is now before us. It there
appeared that in order to foreclose a mortgage in the State of Kentucky against a
nonresident debtor it was necessary that publication should be made in a newspaper for
a specified period of time, also be posted at the front door of the court house and be
published on some Sunday, immediately after divine service, in such church as the
court should direct. In a certain action judgment had been entered against a
nonresident, after publication in pursuance of these provisions. Many years later the
validity of the proceedings was called in question in another action. It was proved from
the files of an ancient periodical that publication had been made in its columns as
required by law; but no proof was offered to show the publication of the order at the
church, or the posting of it at the front door of the court-house. It was insisted by one of
the parties that the judgment of the court was void for lack of jurisdiction. But the
Supreme Court of the United States said:
The court which made the decree . . . was a court of general jurisdiction. Therefore
every presumption not inconsistent with the record is to be indulged in favor of its
jurisdiction. . . . It is to be presumed that the court before making its decree took care of
to see that its order for constructive service, on which its right to make the decree
depended, had been obeyed.
It is true that in this case the former judgment was the subject of collateral , or indirect
attack, while in the case at bar the motion to vacate the judgment is direct proceeding

for relief against it. The same general presumption, however, is indulged in favor of the
judgment of a court of general jurisdiction, whether it is the subject of direct or indirect
attack the only difference being that in case of indirect attack the judgment is
conclusively presumed to be valid unless the record affirmatively shows it to be void,
while in case of direct attack the presumption in favor of its validity may in certain cases
be overcome by proof extrinsic to the record.
The presumption that the clerk performed his duty and that the court made its decree
with the knowledge that the requirements of law had been complied with appear to be
amply sufficient to support the conclusion that the notice was sent by the clerk as
required by the order. It is true that there ought to be found among the papers on file in
this cause an affidavit, as required by section 400 of the Code of Civil Procedure,
showing that the order was in fact so sent by the clerk; and no such affidavit appears.
The record is therefore silent where it ought to speak. But the very purpose of the law in
recognizing these presumptions is to enable the court to sustain a prior judgment in the
face of such an omission. If we were to hold that the judgment in this case is void
because the proper affidavit is not present in the file of papers which we call the record,
the result would be that in the future every title in the Islands resting upon a judgment
like that now before us would depend, for its continued security, upon the presence of
such affidavit among the papers and would be liable at any moment to be destroyed by
the disappearance of that piece of paper. We think that no court, with a proper regard
for the security of judicial proceedings and for the interests which have by law been
confided to the courts, would incline to favor such a conclusion. In our opinion the
proper course in a case of this kind is to hold that the legal presumption that the clerk
performed his duty still maintains notwithstanding the absence from the record of the
proper proof of that fact.
In this connection it is important to bear in mind that under the practice prevailing in the
Philippine Islands the word "record" is used in a loose and broad sense, as indicating
the collective mass of papers which contain the history of all the successive steps taken
in a case and which are finally deposited in the archives of the clerk's office as a
memorial of the litigation. It is a matter of general information that no judgment roll, or
book of final record, is commonly kept in our courts for the purpose of recording the
pleadings and principal proceedings in actions which have been terminated; and in
particular, no such record is kept in the Court of First Instance of the city of Manila.
There is, indeed, a section of the Code of Civil Procedure which directs that such a
book of final record shall be kept; but this provision has, as a matter of common
knowledge, been generally ignored. The result is that in the present case we do not
have the assistance of the recitals of such a record to enable us to pass upon the
validity of this judgment and as already stated the question must be determined by
examining the papers contained in the entire file.
But it is insisted by counsel for this motion that the affidavit of Bernardo Chan y Garcia
showing that upon April 4, 1908, he sent a notification through the mail addressed to the
defendant at Manila, Philippine Islands, should be accepted as affirmative proof that the
clerk of the court failed in his duty and that, instead of himself sending the requisite
CONSTILAW 2-SEC. I | 7

notice through the mail, he relied upon Bernardo to send it for him. We do not think that
this is by any means a necessary inference. Of course if it had affirmatively appeared
that the clerk himself had attempted to comply with this order and had directed the
notification to Manila when he should have directed it to Amoy, this would be conclusive
that he had failed to comply with the exact terms of the order; but such is not this case.
That the clerk of the attorneys for the plaintiff erroneously sent a notification to the
defendant at a mistaken address affords in our opinion very slight basis for supposing
that the clerk may not have sent notice to the right address.
There is undoubtedly good authority to support the position that when the record states
the evidence or makes an averment with reference to a jurisdictional fact, it will not be
presumed that there was other or different evidence respecting the fact, or that the fact
was otherwise than stated. If, to give an illustration, it appears from the return of the
officer that the summons was served at a particular place or in a particular manner, it
will not be presumed that service was also made at another place or in a different
manner; or if it appears that service was made upon a person other than the defendant,
it will not be presumed, in the silence of the record, that it was made upon the defendant
also (Galpin vs. Page, 18 Wall., 350, 366; Settlemier vs. Sullivan, 97 U. S., 444, 449).
While we believe that these propositions are entirely correct as applied to the case
where the person making the return is the officer who is by law required to make the
return, we do not think that it is properly applicable where, as in the present case, the
affidavit was made by a person who, so far as the provisions of law are concerned, was
a mere intermeddler.
The last question of importance which we propose to consider is whether a motion in
the cause is admissible as a proceeding to obtain relief in such a case as this. If the
motion prevails the judgment of July 2, 1908, and all subsequent proceedings will be set
aside, and the litigation will be renewed, proceeding again from the date mentioned as if
the progress of the action had not been interrupted. The proponent of the motion does
not ask the favor of being permitted to interpose a defense. His purpose is merely to
annul the effective judgment of the court, to the end that the litigation may again resume
its regular course.
There is only one section of the Code of Civil Procedure which expressly recognizes the
authority of a Court of First Instance to set aside a final judgment and permit a renewal
of the litigation in the same cause. This is as follows:
SEC. 113. Upon such terms as may be just the court may relieve a party or legal
representative from the judgment, order, or other proceeding taken against him through
his mistake, inadvertence, surprise, or excusable neglect; Provided, That application
thereof be made within a reasonable time, but in no case exceeding six months after
such judgment, order, or proceeding was taken.
An additional remedy by petition to the Supreme Court is supplied by section 513 of the
same Code. The first paragraph of this section, in so far as pertinent to this discussion,
provides as follows:

When a judgment is rendered by a Court of First Instance upon default, and a party
thereto is unjustly deprived of a hearing by fraud, accident, mistake or excusable
negligence, and the Court of First Instance which rendered the judgment has finally
adjourned so that no adequate remedy exists in that court, the party so deprived of a
hearing may present his petition to the Supreme Court within sixty days after he first
learns of the rendition of such judgment, and not thereafter, setting forth the facts and
praying to have judgment set aside. . . .
It is evident that the proceeding contemplated in this section is intended to supplement
the remedy provided by section 113; and we believe the conclusion irresistible that there
is no other means recognized by law whereby a defeated party can, by a proceeding in
the same cause, procure a judgment to be set aside, with a view to the renewal of the
litigation.
The Code of Civil Procedure purports to be a complete system of practice in civil
causes, and it contains provisions describing with much fullness the various steps to be
taken in the conduct of such proceedings. To this end it defines with precision the
method of beginning, conducting, and concluding the civil action of whatever species;
and by section 795 of the same Code it is declared that the procedure in all civil action
shall be in accordance with the provisions of this Code. We are therefore of the opinion
that the remedies prescribed in sections 113 and 513 are exclusive of all others, so far
as relates to the opening and continuation of a litigation which has been once
concluded.
The motion in the present case does not conform to the requirements of either of these
provisions; and the consequence is that in our opinion the action of the Court of First
Instance in dismissing the motion was proper.
If the question were admittedly one relating merely to an irregularity of procedure, we
cannot suppose that this proceeding would have taken the form of a motion in the
cause, since it is clear that, if based on such an error, the came to late for relief in the
Court of First Instance. But as we have already seen, the motion attacks the judgment
of the court as void for want of jurisdiction over the defendant. The idea underlying the
motion therefore is that inasmuch as the judgment is a nullity it can be attacked in any
way and at any time. If the judgment were in fact void upon its face, that is, if it were
shown to be a nullity by virtue of its own recitals, there might possibly be something in
this. Where a judgment or judicial order is void in this sense it may be said to be a
lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever
and whenever it exhibits its head.
But the judgment in question is not void in any such sense. It is entirely regular in form,
and the alleged defect is one which is not apparent upon its face. It follows that even if
the judgment could be shown to be void for want of jurisdiction, or for lack of due
process of law, the party aggrieved thereby is bound to resort to some appropriate
proceeding to obtain relief. Under accepted principles of law and practice, long
recognized in American courts, a proper remedy in such case, after the time for appeal
or review has passed, is for the aggrieved party to bring an action to enjoin the
CONSTILAW 2-SEC. I | 8

judgment, if not already carried into effect; or if the property has already been disposed
of he may institute suit to recover it. In every situation of this character an appropriate
remedy is at hand; and if property has been taken without due process, the law
concedes due process to recover it. We accordingly old that, assuming the judgment to
have been void as alleged by the proponent of this motion, the proper remedy was by
an original proceeding and not by motion in the cause. As we have already seen our
Code of Civil Procedure defines the conditions under which relief against a judgment
may be productive of conclusion for this court to recognize such a proceeding as proper
under conditions different from those defined by law. Upon the point of procedure here
involved, we refer to the case of People vs. Harrison (84 Cal., 607) wherein it was held
that a motion will not lie to vacate a judgment after the lapse of the time limited by
statute if the judgment is not void on its face; and in all cases, after the lapse of the time
limited by statute if the judgment is not void on its face; and all cases, after the lapse of
such time, when an attempt is made to vacate the judgment by a proceeding in court for
that purpose an action regularly brought is preferable, and should be required. It will be
noted taken verbatim from the California Code (sec. 473).
The conclusions stated in this opinion indicate that the judgment appealed from is
without error, and the same is accordingly affirmed, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Avancea, JJ., concur.
Separate Opinions
MALCOLM, J., dissenting:
I dissent. It will not make me long to state my reasons. An immutable attribute the
fundamental idea of due process of law is that no man shall be condemned in his
person or property without notice and an opportunity of being heard in his defense.
Protection of the parties demands a strict and an exact compliance with this
constitutional provision in our organic law and of the statutory provisions in
amplification. Literally hundreds of precedents could be cited in support of these
axiomatic principles. Where as in the instant case the defendant received no notice and
had no opportunity to be heard, certainly we cannot say that there is due process of law.
Resultantly, "A judgment which is void upon its face, and which requires only an
inspection of the judgment roll to demonstrate its want of vitality is a dead limb upon the
judicial tree, which should be lopped off, if the power so to do exists. It can bear no fruit
to the plaintiff, but is a constant menace to the defendant." (Mills vs. Dickons, 6 Rich [S.
C.], 487.)
________________________________________

CONSTILAW 2-SEC. I | 9

On December 7, 1992 Bistro filed before the trial court a petition5 for mandamus and
prohibition, with prayer for temporary restraining order or writ of preliminary injunction,
against Lim in his capacity as Mayor of the City of Manila. Bistro filed the case because
policemen under Lims instructions inspected and investigated Bistros license as well
as the work permits and health certificates of its staff. This caused the stoppage of work
in Bistros night club and restaurant operations. 6 Lim also refused to accept Bistros
application for a business license, as well as the work permit applications of Bistros
staff, for the year 1993.7
In its petition, Bistro argued that Lims refusal to issue the business license and work
permits violated the doctrine laid down this Court in De la Cruz vs. Paras,8 to wit:
"Municipal corporations cannot prohibit the operation of nightclubs. They may be
regulated, but not prevented from carrying on their business."
Acting on Bistros application for injunctive relief, the trial court issued the first assailed
temporary restraining order on December 29, 1992, the dispositive portion of which
reads:

G.R. No. 111397

August 12, 2002

"WHEREFORE, respondent and/or his agents and representatives are ordered to

refrain from inspecting or otherwise interfering in the operation of the establishments of
petitioner (Bistro Pigalle, Inc.)."9

HON.
ALFREDO
LIM
and
RAFAELITO
GARAYBLAS, petitioners,
vs.
THE COURT OF APPEALS, HON. WILFREDO REYES and BISTRO PIGALLE,
INC., respondents.

At the hearing, the parties submitted their evidence in support of their respective
positions. On January 20, 1993, the trial court granted Bistros application for a writ of
prohibitory preliminary injunction. The dispositive portion of the trial courts order
declared:

CARPIO, J.:

"WHEREFORE, in view of all the foregoing, Petitioners application for a writ of

prohibitory preliminary injunction is granted, and Respondent, and any/all persons
acting under his authority, are and (sic) ordered to cease and desist from inspecting,
investigating and otherwise closing or impeding the business operations of Petitioner
Corporations establishments while the petition here is pending resolution on the merits.

The Case
Before us is a petition for review on certiorari 1 of the Decision of the Court of Appeals
dated March 25, 1993,2 and its Resolution dated July 13, 1993 3 which denied
petitioners motion for reconsideration. The assailed Decision sustained the orders
dated December 29, 1992, January 20, 1993 and March 2, 1993,4 issued by Branch 36
of the Regional Trial Court of Manila. The trial courts orders enjoined petitioner Alfredo
Lim ("Lim" for brevity), then Mayor of Manila, from investigating, impeding or closing
down the business operations of the New Bangkok Club and the Exotic Garden
Restaurant owned by respondent Bistro Pigalle Inc. ("Bistro" for brevity).

Considering that the Respondent is a government official and this injunction relates to
his official duties, the posting of an injunction bond by the Petitioners is not required.
On the other hand, Petitioners application for a writ of mandatory injunction is hereby
denied, for to grant the same would amount to granting the writ of mandamus prayed
for. The Court reserves resolution thereof until the parties shall have been heard on the
merits."10

The Antecedent Facts

CONSTILAW 2-SEC. I | 10

However, despite the trial courts order, Lim still issued a closure order on Bistros
operations effective January 23, 1993, even sending policemen to carry out his closure
order.

On March 25, 1993, the Court of Appeals rendered the assailed decision. 12 In a
resolution dated July 13, 1993, the Court of Appeals denied Lims motion for
reconsideration.13

On January 25, 1993, Bistro filed an "Urgent Motion for Contempt" against Lim and the
policemen who stopped Bistros operations on January 23, 1993. At the hearing of the
motion for contempt on January 29, 1993, Bistro withdrew its motion on condition that
Lim would respect the courts injunction.

On July 1, 1993, Manila City Ordinance No. 778314 took effect. On the same day, Lim
ordered the Western Police District Command to permanently close down the
operations of Bistro, which order the police implemented at once.15
The Ruling of the Court of Appeals

However, on February 12, 13, 15, 26 and 27, and on March 1 and 2, 1993, Lim, acting
through his agents and policemen, again disrupted Bistros business operations.
Meanwhile, on February 17, 1993, Lim filed a motion to dissolve the injunctive order of
January 20, 1993 and to dismiss the case. Lim insisted that the power of a mayor to
inspect and investigate commercial establishments and their staff is implicit in the
statutory power of the city mayor to issue, suspend or revoke business permits and
licenses. This statutory power is expressly provided for in Section 11 (l), Article II of the
Revised Charter of the City of Manila and in Section 455, paragraph 3 (iv) of the Local
Government Code of 1991.
The trial court denied Lims motion to dissolve the injunction and to dismiss the case in
an order dated March 2, 1993, the dispositive portion of which stated:
"WHEREFORE, premises considered, the Court hereby orders:
(1) The denial of respondents motion to dissolve the writ of preliminary prohibitory
injunction or the dismissal of the instant case;
(2) Petitioner-corporation is authorized to remove the wooden cross-bars or any other
impediments which were placed at its establishments, namely, New Bangkok Club and
Exotic Garden Restaurant on February 12, 1993 and February 15, 1993, respectively,
and thereafter said establishments are allowed to resume their operations;

In denying Lims petition, the Court of Appeals held that the trial court did not commit
grave abuse of discretion since it issued the writ after hearing on the basis of the
evidence adduced.
The Court of Appeals reasoned thus:
"x x x. A writ of preliminary injunction may issue if the act sought to be enjoined will
cause irreparable injury to the movant or destroy the status quo before a full hearing
can be had on the merits of the case.
A writ of preliminary injunction, as an ancillary or preventive remedy, may only be
resorted to by a litigant to protect or preserve his rights or interests and for no other
purpose during the pendency of the principal action. It is primarily intended to maintain
the status quo between the parties existing prior to the filing of the case.
In the case at bar, We find that the respondent Judge did not act improvidently in
issuing the assailed orders granting the writ of preliminary injunction in order to maintain
the status quo, while the petition is pending resolution on the merits. The private
respondent correctly points out that the questioned writ was regularly issued after
several hearings, in which the parties were allowed to adduce evidence, and argue their
respective positions.

(3) All the other petitioners are allowed to continue working in the aforenamed
establishments of petitioner-corporation if they have not yet reported; and

The issuance of a writ of preliminary injunction is within the limits of the sound exercise
of discretion of the court and the appellate court will not interfere, except, in a clear case
of abuse thereof. x x x.

(4) The hearing on the contempt proceedings is deferred to give sufficient time to
respondent to elevate the matters assailed herein to the Supreme Court."11

WHEREFORE,
DISMISSED."16

On March 10, 1993, Lim filed with the Court of Appeals a petition for certiorari,
prohibition and mandamus against Bistro and Judge Wilfredo Reyes. Lim claimed that
the trial judge committed grave abuse of discretion amounting to lack of jurisdiction in
issuing the writ of prohibitory preliminary injunction.

Hence, this petition.

the

petition

is

DENIED

DUE

COURSE

and

is

accordingly

The Issues
CONSTILAW 2-SEC. I | 11

In their Memorandum, petitioners raise the following issues:

1. "DID RESPONDENT JUDGE COMMIT GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING HIS SAID
ASSAILED ORDERS OF DECEMBER 29, 1992, JANUARY 20, 1993 AND MARCH 2,
1993?"
2. "DID RESPONDENT COURT OF APPEALS COMMIT REVERSIBLE ERRORS IN
RENDERING ITS ASSAILED DECISION OF MARCH 25, 1993 AND ITS ASSAILED
RESOLUTION OF JULY 13, 1993?"
3. "DID SAID CIVIL CASE NO. 92-63712 AND SAID CA-G.R. SP NO. 30381 BECOME
MOOT AND ACADEMIC WHEN THE NEW BANGKOK CLUB AND THE EXOTIC
GARDEN RESTAURANT OF PRIVATE RESPONDENT WERE CLOSED ON JULY 1,
1993 PURSUANT TO ORDINANCE NO. 7783?"
The Ruling of the Court
The petition is without merit.
Considering that the constitutionality of Ordinance No. 7783 was not raised before the
trial court or the Court of Appeals, and this issue is still under litigation in another
case,17 the Court will deal only with the first two issues raised by petitioner.
Validity of the Preliminary Injunction
Bistros cause of action in the mandamus and prohibition proceedings before the trial
court is the violation of its property right under its license to operate. The violation
consists of the work disruption in Bistros operations caused by Lim and his
subordinates as well as Lims refusal to issue a business license to Bistro and work
permits to its staff for the year 1993. The primary relief prayed for by Bistro is the
issuance of writs of mandatory and prohibitory injunction. The mandatory injunction
seeks to compel Lim to accept Bistros 1993 business license application and to issue
Bistros business license. Also, the mandatory injunction seeks to compel Lim to accept
the applications of Bistros staff for work permits. The writ of prohibitory injunction seeks
to enjoin Lim from interfering, impeding or otherwise closing down Bistros operations.

Lim contends that the Court of Appeals erred in upholding the prohibitory injunction. Lim
relies primarily on his power, as Mayor of the City of Manila, to grant and refuse
municipal licenses and business permits as expressly provided for in the Local
Government Code and the Revised Charter of the City of Manila. Lim argues that the
powers granted by these laws implicitly include the power to inspect, investigate and
close down Bistros operations for violation of the conditions of its licenses and permits.
On the other hand, Bistro asserts that the legal provisions relied upon by Lim do not
apply to the instant case. Bistro maintains that the Local Government Code and the
Revised Charter of the City of Manila do not expressly or impliedly grant Lim any power
to prohibit the operation of night clubs. Lim failed to specify any violation by Bistro of the
conditions of its licenses and permits. In refusing to accept Bistros business license
application for the year 1993, Bistro claims that Lim denied Bistro due process of law.
The Court of Appeals held that the trial court did not commit grave abuse of discretion in
issuing the prohibitory preliminary injunction.
We uphold the findings of the Court of Appeals.
The authority of mayors to issue business licenses and permits is beyond question. The
law expressly provides for such authority. Section 11 (l), Article II of the Revised Charter
of the City of Manila, reads:
"Sec. 11. General duties and powers of the mayor. The general duties and powers of
the mayor shall be:
x x x.
(l) To grant and refuse municipal licenses or permits of all classes and to revoke
the same for violation of the conditions upon which they were granted, or if acts
prohibited by law or municipal ordinances are being committed under the protection of
such licenses or in the premises in which the business for which the same have been
granted is carried on, or for any other reason of general interest." (Emphasis supplied)
On the other hand, Section 455 (3) (iv) of the Local Government Code provides:
"Sec. 455. Chief Executive, Powers, Duties and Compensation: xxx.

The trial court granted only the prohibitory injunction. This enjoined Lim from interfering,
impeding or otherwise closing down Bistros operations pending resolution of whether
Lim can validly refuse to issue Bistros business license and its staffs work permits for
the year 1993.

(b) For efficient, effective and economical governance the purpose of which is the
general welfare of the City and its inhabitants pursuant to Section 16 of this Code, the
City Mayor shall:

CONSTILAW 2-SEC. I | 12

(3) x x x.
(iv) Issue licenses and permits and suspend or revoke the same for any violation
of the condition upon which said licenses or permits had been issued, pursuant
to law or ordinance." (Emphasis supplied)
From the language of the two laws, it is clear that the power of the mayor to issue
business licenses and permits necessarily includes the corollary power to suspend,
revoke or even refuse to issue the same. However, the power to suspend or revoke
these licenses and permits is expressly premised on the violation of the conditions of
these permits and licenses. The laws specifically refer to the "violation of the
condition(s)" on which the licenses and permits were issued. Similarly, the power to
refuse to issue such licenses and permits is premised on non-compliance with the
prerequisites for the issuance of such licenses and permits. The mayor must observe
due process in exercising these powers, which means that the mayor must give the
applicant or licensee notice and opportunity to be heard.
True, the mayor has the power to inspect and investigate private commercial
establishments for any violation of the conditions of their licenses and permits. However,
the mayor has no power to order a police raid on these establishments in the guise of
inspecting or investigating these commercial establishments. Lim acted beyond his
authority when he directed policemen to raid the New Bangkok Club and the Exotic
Garden Restaurant. Such act of Lim violated Ordinance No. 771618 which expressly
prohibits police raids and inspections, to wit:
"Section 1. No member of the Western Police District shall conduct inspection of food
and other business establishments for the purpose of enforcing sanitary rules and
regulations, inspecting licenses and permits, and/or enforcing internal revenue and
customs laws and regulations. This responsibility should be properly exercised by Local
Government Authorities and other concerned agencies." (Emphasis supplied)
These local government officials include the City Health Officer or his representative,
pursuant to the Revised City Ordinances of the City of Manila, 19 and the City Treasurer
pursuant to Section 470 of the Local Government Code.20

The regulatory powers granted to municipal corporations must always be exercised in

accordance with law, with utmost observance of the rights of the people to due process
and equal protection of the law.21 Such power cannot be exercised whimsically,
arbitrarily or despotically. In the instant case, we find that Lims exercise of this power
violated Bistros property rights that are protected under the due process clause of the
Constitution.
Lim did not charge Bistro with any specific violation of the conditions of its business
license or permits. Still, Lim closed down Bistros operations even before the expiration
of its business license on December 31, 1992. Lim also refused to accept Bistros
license application for 1993, in effect denying the application without examining whether
it complies with legal prerequisites.
Lims zeal in his campaign against prostitution is commendable. The presumption is that
he acted in good faith and was motivated by his concern for his constituents when he
implemented his campaign against prostitution in the Ermita-Malate area. However,
there is no excusing Lim for arbitrarily closing down, without due process of law, the
business operations of Bistro. For this reason, the trial court properly restrained the acts
of Lim.
Consequently, the Court of Appeals did not err in upholding the trial courts orders. The
sole objective of a writ of preliminary injunction is to preserve the status quo until the
merits of the case can be heard fully. It is generally availed of to prevent actual or
threatened acts, until the merits of the case can be disposed of. 22 In the instant case,
the issuance of the writ of prohibitory preliminary injunction did not dispose of the main
case for mandamus. The trial court issued the injunction in view of the disruptions and
stoppage in Bistros operations as a consequence of Lims closure orders. The
injunction was intended to maintain the status quo while the petition has not been
resolved on the merits.
WHEREFORE, the petition is denied for lack of merit. The assailed Decision of the
Court of Appeals in CA-G.R. SP NO. 30381 is AFFIRMED in toto.
SO ORDERED.

Lim has no authority to close down Bistros business or any business establishment in
Manila without due process of law. Lim cannot take refuge under the Revised Charter of
the City of Manila and the Local Government Code. There is no provision in these laws
expressly or impliedly granting the mayor authority to close down private commercial
establishments without notice and hearing, and even if there is, such provision would be
void. The due process clause of the Constitution requires that Lim should have given
Bistro an opportunity to rebut the allegations that it violated the conditions of its licenses
and permits.
CONSTILAW 2-SEC. I | 13

CONSTILAW 2-SEC. I | 14

Plant was noted unoperational and the combined wastewater generated from its
operation was about 30 gallons per minute and 80% of the wastewater was being
directly discharged into a drainage canal leading to the Tullahan-Tinejeros River by
means of a by-pass and the remaining 20% was channelled into the plant's existing
Wastewater Treatment Plant (WTP). Result of the analyses of the sample taken from
the by-pass showed that the wastewater is highly pollutive in terms of Color units, BOD
and Suspended Solids, among others. These acts of respondent in spite of directives to
comply with the requirements are clearly in violation of Section 8 of Presidential Decree
No. 984 and Section 103 of its Implementing Rules and Regulations and the 1982
Effluent Regulations.

_____________________________________________
THIRD DIVISION
G.R. No. 93891 March 11, 1991
POLLUTION
ADJUDICATION
vs.
COURT
OF
APPEALS
and
SOLAR
CORPORATION, respondents.

BOARD, petitioner
TEXTILE

FINISHING

WHEREFORE, pursuant to Section 7 of P.D. 984 and Section 38 of its Implementing

Rules and Regulations, respondent is hereby ordered to cease and desist from utilizing
its wastewater pollution source installation and discharging its untreated wastewater
directly into the canal leading to the Tullahan-Tinejeros River effective immediately upon
receipt hereof and until such time when it has fully complied with all the requirements
and until further orders from this Board.

RESOLUTION

SO ORDERED. 1

FELICIANO, J.:p

We note that the above Order was based on findings of several inspections of Solar's
plant:

Petitioner Pollution Adjudication Board ("Board") asks us to review the Decision and
Resolution promulgated on 7 February 1990 and 10 May 1990, respectively, by the
Court of Appeals in C.A.-G R. No. SP 18821 entitled "Solar Textile Finishing Corporation
v. Pollution Adjudication Board." In that Decision and Resolution, the Court of Appeals
reversed an order of the Regional Trial Court, Quezon City, Branch 77, in Civil Case No.
Q-89-2287 dismissing private respondent Solar Textile Finishing Corporation's ("Solar")
petition for certiorari and remanded the case to the trial court for further proceedings.
On 22 September 1988, petitioner Board issued an ex parte Order directing Solar
immediately to cease and desist from utilizing its wastewater pollution source
installations which were discharging untreated wastewater directly into a canal leading
to the adjacent Tullahan-Tinejeros River. The Order signed by Hon. Fulgencio Factoran,
Jr., as Board Chairman, reads in full as follows:
Respondent, Solar Textile Finishing Corporation with plant and place of business at 999
General Pascual Avenue, Malabon, Metro Manila is involved in bleaching, rinsing and
dyeing textiles with wastewater of about 30 gpm. being directly discharged untreated
into the sewer. Based on findings in the Inspections conducted on 05 November 1986
and 15 November 1986, the volume of untreated wastewater discharged in the final out
fall outside of the plant's compound was even greater. The result of inspection
conducted on 06 September 1988 showed that respondent's Wastewater Treatment

a. inspections conducted on 5 November 1986 and 12 November 1986 by the National

Pollution Control Commission ("NPCC"), the predecessor of the Board ; 2 and
b. the inspection conducted on 6 September 1988 by the Department of Environment
and Natural Resources ("DENR").
The findings of these two (2) inspections were that Solar's wastewater treatment plant
was non-operational and that its plant generated about 30 gallons per minute of
wastewater, 80% of which was being directly discharged into a drainage canal leading
to the Tullahan-Tinejeros River. The remaining 20% of the wastewater was being
channeled through Solar's non-operational wastewater treatment plant. Chemical
analysis of samples of Solar's effluents showed the presence of pollutants on a level in
excess of what was permissible under P.D. No. 984 and its Implementing Regulations.
A copy of the above Order was received by Solar on 26 September 1988. A Writ of
Execution issued by the Board was received by Solar on 31 March 1989.
Meantime, Solar filed a motion for reconsideration/appeal with prayer for stay of
execution of the Order dated 22 September 1988. Acting on this motion, the Board
issued an Order dated 24 April 1989 allowing Solar to operate temporarily, to enable the
CONSTILAW 2-SEC. I | 15

Board to conduct another inspection and evaluation of Solar's wastewater treatment

facilities. In the same Order, the Board directed the Regional Executive Director of the
DENR/ NCR to conduct the inspection and evaluation within thirty (30) days.
On 21 April 1989, however, Solar went to the Regional Trial Court of Quezon City,
Branch 77, on petition for certiorari with preliminary injunction against the Board, the
petition being docketed as Civil Case No. Q-89-2287.

Petitioner Board claims that under P.D. No. 984, Section 7(a), it has legal authority to
issue ex parte orders to suspend the operations of an establishment when there
is prima facie evidence that such establishment is discharging effluents or wastewater,
the pollution level of which exceeds the maximum permissible standards set by the
NPCC (now, the Board). Petitioner Board contends that the reports before it concerning
the effluent discharges of Solar into the Tullahan-Tinejeros River provided prima
facie evidence of violation by Solar of Section 5 of the 1982 Effluent Code.

On 21 July 1989, the Regional Trial Court dismissed Solar's petition upon two (2)
grounds, i.e., that appeal and not certiorari from the questioned Order of the Board as
well as the Writ of Execution was the proper remedy, and that the Board's subsequent
Order allowing Solar to operate temporarily had rendered Solar's petition moot and
academic.

Solar, on the other hand, contends that under the Board's own rules and regulations,
an ex parte order may issue only if the effluents discharged pose an "immediate threat
to life, public health, safety or welfare, or to animal and plant life." In the instant case,
according to Solar, the inspection reports before the Board made no finding that Solar's
wastewater discharged posed such a threat.

Dissatisfied, Solar went on appeal to the Court of Appeals which, in the Decision here
assailed, reversed the Order of dismissal of the trial court and remanded the case to
that court for further proceedings. In addition, the Court of Appeals declared the Writ of
Execution null and void. At the same time, the Court of Appeals said in the dispositive
portion of its Decision that:

The Court is not persuaded by Solar's contention. Section 7(a) of P.D. No. 984
authorized petitioner Board to issue ex parte cease and desist orders under the
following circumstances:

. . .. Still and all, this decision is without prejudice to whatever action the appellee
[Board] may take relative to the projected 'inspection and evaluation' of appellant's
[Solar's] water treatment facilities. 3

(a) Public Hearing. . . . Provided, That whenever the Commission finds prima facie
evidence that the discharged sewage or wastes are of immediate threat to life, public
health, safety or welfare, or to animal or plant life, or exceeds the allowable standards
set by the Commission, the Commissioner may issue an ex-parte order directing the
discontinuance of the same or the temporary suspension or cessation of operation of
the establishment or person generating such sewage or wastes without the necessity of
a prior public hearing. The said ex-parte order shall be immediately executory and shall
remain in force until said establishment or person prevents or abates the said pollution
within the allowable standards or modified or nullified by a competent court. (Emphasis
supplied)

The Court of Appeals, in so ruling, held that certiorari was a proper remedy since the
Orders of petitioner Board may result in great and irreparable injury to Solar; and that
while the case might be moot and academic, "larger issues" demanded that the
question of due process be settled. Petitioner Board moved for reconsideration, without
success.
The Board is now before us on a Petition for Review basically arguing that:
1. its ex parte Order dated 22 September 1988 and the Writ of Execution were issued in
accordance with law and were not violative of the requirements of due process; and
2. the ex parte Order and the Writ of Execution are not the proper subjects of a petition
for certiorari.
The only issue before us at this time is whether or not the Court of Appeals erred in
reversing the trial court on the ground that Solar had been denied due process by the
Board.

P.D. 984, Section 7, paragraph (a), provides:

We note that under the above-quoted portion of Section 7(a) of P.D. No. 984, an ex
parte cease and desist order may be issued by the Board (a) whenever the wastes
discharged by an establishment pose an "immediate threat to life, public health, safety
or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed
"the allowable standards set by the [NPCC]." On the one hand, it is not essential that
the Board prove that an "immediate threat to life, public health, safety or welfare, or to
animal or plant life" exists before an ex parte cease and desist order may be issued. It is
enough if the Board finds that the wastes discharged do exceed "the allowable
standards set by the [NPCC]." In respect of discharges of wastes as to which allowable
standards have been set by the Commission, the Board may issue an ex parte cease
and desist order when there is prima facieevidence of an establishment exceeding such
allowable standards. Where, however, the effluents or discharges have not yet been the
CONSTILAW 2-SEC. I | 16

subject matter of allowable standards set by the Commission, then the Board may act
on anex parte basis when it finds at least prima facie proof that the wastewater or
material involved presents an "immediate threat to life, public health, safety or welfare
or to animal or plant life." Since the applicable standards set by the Commission
existing at any given time may well not cover every possible or imaginable kind of
effluent or waste discharge, the general standard of an "immediate threat to life, public
health, safety or welfare, or to animal and plant life" remains necessary.
Upon the other hand, the Court must assume that the extant allowable standards have
been set by the Commission or Board precisely in order to avoid or neutralize an
"immediate threat to life, public health, safety or welfare, or to animal or plant life.''
Section 5 of the Effluent Regulations of 1982 4 sets out the maximum permissible levels
of physical and chemical substances which effluents from domestic wastewater
treatment plants and industrial plants" must not exceed "when discharged into bodies of
water classified as Class A, B, C, D, SB and SC in accordance with the 1978 NPCC
Rules and Regulations." The waters of Tullahan-Tinejeros River are classified as inland
waters Class D under Section 68 of the 1978 NPCC Rules and Regulations 5 which in
part provides that:
Sec. 68. Water Usage and Classification. The quality of Philippine waters shall be
maintained in a safe and satisfactory condition according to their best usages. For this
purpose, all water shall be classified according to the following beneficial usages:

a. For legal action in [view of] implementing rules and regulations of P.D. No. 984 and
Section 5 of the Effluent Regulations of 1982. 6
Placing the maximum allowable standards set in Section 5 of the Effluent Regulations of
1982 alongside the findings of the November 1986 and September 1988 inspection
reports, we get the following results:
"Inland
Waters
(Class
C
Station 1 Station 1

&

November
1986
D7

Report 8

September
1988
Report 9

a) Color in 100 a) Color units 250 125

platinum (Apparent
cobalt Color)
b) pH 6-8.5 b) pH 9.3 8.7
c) Tempera- 40 c) Temperature
ture in C (C)

(a) Fresh Surface Water

d) Phenols in 0.1 d) Phenols in
Classification Best usage
mg./1. mg.1
xxx xxx xxx
e) Suspended 75 e) Suspended 340 80
Class D For agriculture, irrigation, livestock
solids in solids in
watering and industrial cooling and
mg./1. mg./1.
processing.
f) BOD in 80 f) BOD (5-day) 1,100 152
xxx xxx xxx
mg./1. mg./1
(Emphases supplied)
g) oil/Grease 10 g) Oil/Grease
The reports on the inspections carried on Solar's wastewater treatment facilities on 5
and 12 November 1986 and 6 September 1988 set forth the following Identical finding:

h) Detergents 5 h) Detergents 2.93

CONSTILAW 2-SEC. I | 17

in mg./1/" mg./1. MBAS

connection, it is recommended that appropriate legal action be instituted immediately

against the firm. . . . 10

i) Dissolved 0
The September 1988 inspection report's conclusions were:
oxygen, mg./1.
j) Settleable 0.4 1.5
Matter, mg./1.
k) Total Dis 800 610
solved Solids
mg./1.

1. The plant was undertaking dyeing, bleaching and rinsing operations during the
inspection. The combined wastewater generated from the said operations was
estimated at about 30 gallons per minute. About 80% of the wastewater was traced
directly discharged into a drainage canal leading to the Tullahan-Tinejeros river by
means of a bypass. The remaining 20% was channeled into the plant's existing
wastewater treatment plant (WTP).
2. The WTP was noted not yet fully operational- some accessories were not yet
installed. Only the sump pit and the holding/collecting tank are functional but appeared
seldom used. The wastewater mentioned channeled was noted held indefinitely into the
collection tank for primary treatment. There was no effluent discharge [from such
collection tank].

l) Total Solids 1,400 690

mg./1.

3. A sample from the bypass wastewater was collected for laboratory analyses. Result
of the analyses show that the bypass wastewater is polluted in terms of color units,
BOD and suspended solids, among others. (Please see attached laboratory resul .) 11

m) Turbidity
NTU / ppm, SiO 3 70
The November 1986 inspections report concluded that:
Records of the Commission show that the plant under its previous owner, Fine Touch
Finishing Corporation, was issued a Notice of Violation on 20 December 1985 directing
same to cease and desist from conducting dyeing operation until such time the waste
treatment plant is already completed and operational. The new owner Solar Textile
Corporation informed the Commission of the plant acquisition thru its letter dated March
1986 (sic).
The new owner was summoned to a hearing held on 13 October 1986 based on the
adverse findings during the inspection/water sampling test conducted on 08 August
1986. As per instruction of the Legal Division a re- inspection/sampling text should be
conducted first before an appropriate legal action is instituted; hence, this inspection.
Based on the above findings, it is clear that the new owner continuously violates the
directive of the Commission by undertaking dyeing operation without completing first
and operating its existing WTP. The analysis of results on water samples taken showed
that the untreated wastewater from the firm pollutes our water resources. In this

From the foregoing reports, it is clear to this Court that there was at least prima
facie evidence before the Board that the effluents emanating from Solar's plant
exceeded the maximum allowable levels of physical and chemical substances set by
the NPCC and that accordingly there was adequate basis supporting the ex parte cease
and desist order issued by the Board. It is also well to note that the previous owner of
the plant facility Fine Touch Finishing Corporation had been issued a Notice of Violation
on 20 December 1985 directing it to cease and refrain from carrying out dyeing
operations until the water treatment plant was completed and operational. Solar, the
new owner, informed the NPCC of the acquisition of the plant on March 1986. Solar was
summoned by the NPCC to a hearing on 13 October 1986 based on the results of the
sampling test conducted by the NPCC on 8 August 1986. Petitioner Board refrained
from issuing an ex parte cease and desist order until after the November 1986 and
September 1988 re-inspections were conducted and the violation of applicable
standards was confirmed. In other words, petitioner Board appears to have been
remarkably forbearing in its efforts to enforce the applicable standards vis-a-vis Solar.
Solar, on the other hand, seemed very casual about its continued discharge of
untreated, pollutive effluents into the Tullahan- Tinerejos River, presumably loath to
spend the money necessary to put its Wastewater Treatment Plant ("WTP") in an
operating condition.

CONSTILAW 2-SEC. I | 18

In this connection, we note that in Technology Developers, Inc. v. Court of appeals, et

al., 12 the Court very recently upheld the summary closure ordered by the Acting Mayor
of Sta. Maria, Bulacan, of a pollution-causing establishment, after finding that the
records showed that:
1. No mayor's permit had been secured. While it is true that the matter of determining
whether there is a pollution of the environment that requires control if not prohibition of
the operation of a business is essentially addressed to the then National Pollution
Control Commission of the Ministry of Human Settlements, now the Environmental
Management Bureau of the Department of Environment and Natural Resources, it must
be recognized that the mayor of a town has as much responsibility to protect its
inhabitants from pollution, and by virtue of his police power, he may deny the application
for a permit to operate a business or otherwise close the same unless appropriate
measures are taken to control and/or avoid injury to the health of the residents of the
community from the emission in the operation of the business.
2. The Acting Mayor, in a letter of February l6, 1989, called the attention of petitioner to
the pollution emitted by the fumes of its plant whose offensive odor "not only pollute the
air in the locality but also affect the health of the residents in the area," so that petitioner
was ordered to stop its operation until further orders and it was required to bring the
following:
xxx xxx xxx
(3) Region III-Department of Environment and Natural Resources Anti-Pollution permit.
(Annex A-2, petition)
3. This action of the Acting Mayor was in response to the complaint of the residents of
Barangay Guyong, Sta. Maria, Bulacan, directed to the Provincial Governor through
channels (Annex A-B, petition).. . .
4. The closure order of the Acting Mayor was issued only after an investigation was
made by Marivic Guina who in her report of December 8, 1988 observed that the fumes
emitted by the plant of petitioner goes directly to the surrounding houses and that no
proper air pollution device has been installed. (Annex A-9, petition)
xxx xxx xxx
6. While petitioner was able to present a temporary permit to operate by the then
National Pollution Control Commission on December 15,1987, the permit was good only
up to May 25,1988 (Annex A-12, petition). Petitioner had not exerted any effort to
extend or validate its permit much less to install any device to control the pollution and
prevent any hazard to the health of the residents of the community."

In the instant case, the ex parte cease and desist Order was issued not by a local
government official but by the Pollution Adjudication Board, the very agency of the
Government charged with the task of determining whether the effluents of a particular
industrial establishment comply with or violate applicable anti-pollution statutory and
regulatory provisions.
Ex parte cease and desist orders are permitted by law and regulations in situations like
that here presented precisely because stopping the continuous discharge of pollutive
and untreated effluents into the rivers and other inland waters of the Philippines cannot
be made to wait until protracted litigation over the ultimate correctness or propriety of
such orders has run its full course, including multiple and sequential appeals such as
those which Solar has taken, which of course may take several years. The relevant
pollution control statute and implementing regulations were enacted and promulgated in
the exercise of that pervasive, sovereign power to protect the safety, health, and
general welfare and comfort of the public, as well as the protection of plant and animal
life, commonly designated as the police power. It is a constitutional commonplace that
the ordinary requirements of procedural due process yield to the necessities of
protecting vital public interests like those here involved, through the exercise of police
power. The Board's ex parte Order and Writ of Execution would, of course, have
compelled Solar temporarily to stop its plant operations, a state of affairs Solar could in
any case have avoided by simply absorbing the bother and burden of putting its WTP
on an operational basis. Industrial establishments are not constitutionally entitled to
reduce their capitals costs and operating expenses and to increase their profits by
imposing upon the public threats and risks to its safety, health, general welfare and
comfort, by disregarding the requirements of anti- pollution statutes and their
implementing regulations.
It should perhaps be made clear the Court is not here saying that the correctness of
the ex parte Order and Writ of Execution may not be contested by Solar in a hearing
before the Board itself. Where the establishment affected by an ex parte cease and
desist order contests the correctness of the prima facie findings of the Board, the Board
must hold a public hearing where such establishment would have an opportunity to
controvert the basis of such ex parte order. That such an opportunity is subsequently
available is really all that is required by the due process clause of the Constitution in
situations like that we have here. The Board's decision rendered after the public hearing
may then be tested judicially by an appeal to the Court of Appeals in accordance with
Section 7(c) of P.D. No. 984 and Section 42 of the Implementing Rules and Regulations.
A subsequent public hearing is precisely what Solar should have sought instead of
going to court to seek nullification of the Board's Order and Writ of Execution and
instead of appealing to the Court of Appeals. It will be recalled the at the Board in fact
gave Solar authority temporarily to continue operations until still another inspection of its
wastewater treatment facilities and then another analysis of effluent samples could be
taken and evaluated.
CONSTILAW 2-SEC. I | 19

Solar claims finally that the petition for certiorari was the proper remedy as the
questioned Order and Writ of Execution issued by the Board were patent nullities. Since
we have concluded that the Order and Writ of Execution were entirely within the lawful
authority of petitioner Board, the trial court did not err when it dismissed Solar's petition
for certiorari. It follows that the proper remedy was an appeal from the trial court to the
Court of Appeals, as Solar did in fact appeal.
ACCORDINGLY, the Petition for Review is given DUE COURSE and the Decision of the
Court of Appeals dated 7 February 1990 and its Resolution dated 10 May 1990 in A.C.G.R. No. SP 18821 are hereby SET ASIDE. The Order of petitioner Board dated 22
September 1988 and the Writ of Execution, as well as the decision of the trial court
dated 21 July 1989, are hereby REINSTATED, without prejudice to the right of Solar to
contest the correctness of the basis of the Board's Order and Writ of Execution at a
public hearing before the Board.
__________________________________________

CONSTILAW 2-SEC. I | 20

EN BANC
G.R. No. L-46496

records of the Bureau of Customs and the Books of Accounts of native dealers in
leather.
February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and

NATIONAL
WORKERS
BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION,
INC., respondents.
LAUREL, J.:
The Solicitor-General in behalf of the respondent Court of Industrial Relations in the
above-entitled case has filed a motion for reconsideration and moves that, for the
reasons stated in his motion, we reconsider the following legal conclusions of the
majority opinion of this Court:
1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion
o que no sea para una determinada, termina o bien por voluntad de cualquiera de las
partes o cada vez que ilega el plazo fijado para el pago de los salarios segun
costumbre en la localidad o cunado se termine la obra;
2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya
colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus
tarbajos por haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de
ser empleados u obreros de la misma;
3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con
sus osbreros sin tiempo fijo de duracion y sin ser para una obra determiminada y que
se niega a readmitir a dichos obreros que cesaron como consecuencia de un paro
forzoso, no es culpable de practica injusta in incurre en la sancion penal del articulo 5
de la Ley No. 213 del Commonwealth, aunque su negativa a readmitir se deba a que
dichos obreros pertenecen a un determinado organismo obrero, puesto que tales ya
han dejado deser empleados suyos por terminacion del contrato en virtud del paro.
The respondent National Labor Union, Inc., on the other hand, prays for the vacation of
the judgement rendered by the majority of this Court and the remanding of the case to
the Court of Industrial Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of
leather soles in ANG TIBAY making it necessary for him to temporarily lay off the
members of the National Labor Union Inc., is entirely false and unsupported by the

2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a
scheme to systematically prevent the forfeiture of this bond despite the breach of his
CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re
supposed delay of leather soles from the States) was but a scheme to systematically
prevent the forfeiture of this bond despite the breach of his CONTRACT with the
Philippine Army.
4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer
union dominated by Toribio Teodoro, the existence and functions of which are illegal.
(281 U.S., 548, petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to collective bargaining, majority
rule and elective representation are highly essential and indispensable. (Sections 2 and
5, Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had been (the) principal source of
dissensions and continuous civil war in Spain cannot and should not be made
applicable in interpreting and applying the salutary provisions of a modern labor
legislation of American origin where the industrial peace has always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating
against the National Labor Union, Inc., and unjustly favoring the National Workers'
Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the respondents that even
with the exercise of due diligence they could not be expected to have obtained them
and offered as evidence in the Court of Industrial Relations.
9. That the attached documents and exhibits are of such far-reaching importance and
effect that their admission would necessarily mean the modification and reversal of the
judgment rendered herein.
The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration
of the respondent National Labor Union, Inc.
In view of the conclusion reached by us and to be herein after stead with reference to
the motion for a new trial of the respondent National Labor Union, Inc., we are of the
opinion that it is not necessary to pass upon the motion for reconsideration of the
CONSTILAW 2-SEC. I | 21

Solicitor-General. We shall proceed to dispose of the motion for new trial of the
respondent labor union. Before doing this, however, we deem it necessary, in the
interest of orderly procedure in cases of this nature, in interest of orderly procedure in
cases of this nature, to make several observations regarding the nature of the powers of
the Court of Industrial Relations and emphasize certain guiding principles which should
be observed in the trial of cases brought before it. We have re-examined the entire
record of the proceedings had before the Court of Industrial Relations in this case, and
we have found no substantial evidence that the exclusion of the 89 laborers here was
due to their union affiliation or activity. The whole transcript taken contains what
transpired during the hearing and is more of a record of contradictory and conflicting
statements of opposing counsel, with sporadic conclusion drawn to suit their own views.
It is evident that these statements and expressions of views of counsel have no
evidentiary value.
The Court of Industrial Relations is a special court whose functions are specifically
stated in the law of its creation (Commonwealth Act No. 103). It is more an
administrative than a part of the integrated judicial system of the nation. It is not
intended to be a mere receptive organ of the Government. Unlike a court of justice
which is essentially passive, acting only when its jurisdiction is invoked and deciding
only cases that are presented to it by the parties litigant, the function of the Court of
Industrial Relations, as will appear from perusal of its organic law, is more active,
affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the
determination of disputes between employers and employees but its functions in the
determination of disputes between employers and employees but its functions are far
more comprehensive and expensive. It has jurisdiction over the entire Philippines, to
consider, investigate, decide, and settle any question, matter controversy or dispute
arising between, and/or affecting employers and employees or laborers, and regulate
the relations between them, subject to, and in accordance with, the provisions of
Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of
prevention, arbitration, decision and settlement, of any industrial or agricultural dispute
causing or likely to cause a strike or lockout, arising from differences as regards wages,
shares or compensation, hours of labor or conditions of tenancy or employment,
between landlords and tenants or farm-laborers, provided that the number of
employees, laborers or tenants of farm-laborers involved exceeds thirty, and such
industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by
any or both of the parties to the controversy and certified by the Secretary of labor as
existing and proper to be by the Secretary of Labor as existing and proper to be dealth
with by the Court for the sake of public interest. (Section 4, ibid.) It shall, before hearing
the dispute and in the course of such hearing, endeavor to reconcile the parties and
induce them to settle the dispute by amicable agreement. (Paragraph 2, section 4, ibid.)
When directed by the President of the Philippines, it shall investigate and study all
industries established in a designated locality, with a view to determinating the necessity
and fairness of fixing and adopting for such industry or locality a minimum wage or
share of laborers or tenants, or a maximum "canon" or rental to be paid by the

"inquilinos" or tenants or less to landowners. (Section 5, ibid.) In fine, it may appeal to

voluntary arbitration in the settlement of industrial disputes; may employ mediation or
conciliation for that purpose, or recur to the more effective system of official
investigation and compulsory arbitration in order to determine specific controversies
between labor and capital industry and in agriculture. There is in reality here a mingling
of executive and judicial functions, which is a departure from the rigid doctrine of the
separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673,
promulgated September 13, 1939, we had occasion to joint out that the Court of
Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had
occasion to point out that the Court of Industrial Relations is not narrowly constrained by
technical rules of procedure, and the Act requires it to "act according to justice and
equity and substantial merits of the case, without regard to technicalities or legal forms
and shall not be bound by any technicalities or legal forms and shall not be bound by
any technical rules of legal evidence but may inform its mind in such manner as it may
deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be
restricted to the specific relief claimed or demands made by the parties to the industrial
or agricultural dispute, but may include in the award, order or decision any matter or
determination which may be deemed necessary or expedient for the purpose of settling
the dispute or of preventing further industrial or agricultural disputes. (section 13, ibid.)
And in the light of this legislative policy, appeals to this Court have been especially
regulated by the rules recently promulgated by the rules recently promulgated by this
Court to carry into the effect the avowed legislative purpose. The fact, however, that the
Court of Industrial Relations may be said to be free from the rigidity of certain
procedural requirements does not mean that it can, in justifiable cases before it, entirely
ignore or disregard the fundamental and essential requirements of due process in trials
and investigations of an administrative character. There are primary rights which must
be respected even in proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof.
In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82
Law. ed. 1129, "the liberty and property of the citizen shall be protected by the
rudimentary requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to adduce
evidence tending to establish the rights which he asserts but the tribunal must
consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S.
468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this court inEdwards vs.
McCoy, 22 Phil., 598, "the right to adduce evidence, without the corresponding duty on
the part of the board to consider it, is vain. Such right is conspicuously futile if the
person or persons to whom the evidence is presented can thrust it aside without notice
or consideration."
CONSTILAW 2-SEC. I | 22

(3) "While the duty to deliberate does not impose the obligation to decide right, it does
imply a necessity which cannot be disregarded, namely, that of having something to
support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This
principle emanates from the more fundamental is contrary to the vesting of unlimited
power anywhere. Law is both a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion (City of
Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G.
1335), but the evidence must be "substantial." (Washington, Virginia and Maryland
Coach Co. v. national labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81
Law. ed. 965.) It means such relevant evidence as a reasonable mind accept as
adequate to support a conclusion." (Appalachian Electric Power v. National Labor
Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson
Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v. National Labor
Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the rules of
evidence prevailing in courts of law and equity shall not be controlling.' The obvious
purpose of this and similar provisions is to free administrative boards from the
compulsion of technical rules so that the mere admission of matter which would be
deemed incompetent inn judicial proceedings would not invalidate the administrative
order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568,
48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R. Co.,
227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and
Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable
flexibility in administrative procedure does not go far as to justify orders without a basis
in evidence having rational probative force. Mere uncorroborated hearsay or rumor does
not constitute substantial evidence. (Consolidated Edison Co. v. National Labor
Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. (Interstate Commence
Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by
confining the administrative tribunal to the evidence disclosed to the parties, can the
latter be protected in their right to know and meet the case against them. It should not,
however, detract from their duty actively to see that the law is enforced, and for that
purpose, to use the authorized legal methods of securing evidence and informing itself
of facts material and relevant to the controversy. Boards of inquiry may be appointed for
the purpose of investigating and determining the facts in any given case, but their report
and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of
Industrial Relations may refer any industrial or agricultural dispute or any matter under
its consideration or advisement to a local board of inquiry, a provincial fiscal. a justice of
the peace or any public official in any part of the Philippines for investigation, report and
recommendation, and may delegate to such board or public official such powers and
functions as the said Court of Industrial Relations may deem necessary, but such

delegation shall not affect the exercise of the Court itself of any of its powers. (Section
10, ibid.)
(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his
own independent consideration of the law and facts of the controversy, and not simply
accept the views of a subordinate in arriving at a decision. It may be that the volume of
work is such that it is literally Relations personally to decide all controversies coming
before them. In the United States the difficulty is solved with the enactment of statutory
authority authorizing examiners or other subordinates to render final decision, with the
right to appeal to board or commission, but in our case there is no such statutory
authority.
(7) The Court of Industrial Relations should, in all controversial questions, render its
decision in such a manner that the parties to the proceeding can know the various
issues involved, and the reasons for the decision rendered. The performance of this
duty is inseparable from the authority conferred upon it.
In the right of the foregoing fundamental principles, it is sufficient to observe here that,
except as to the alleged agreement between the Ang Tibay and the National Worker's
Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a
factual basis upon which to predicate, in a national way, a conclusion of law.
This result, however, does not now preclude the concession of a new trial prayed for the
by respondent National Labor Union, Inc., it is alleged that "the supposed lack of
material claimed by Toribio Teodoro was but a scheme adopted to systematically
discharged all the members of the National Labor Union Inc., from work" and this
avernment is desired to be proved by the petitioner with the "records of the Bureau of
Customs and the Books of Accounts of native dealers in leather"; that "the National
Workers Brotherhood Union of Ang Tibay is a company or employer union dominated by
Toribio Teodoro, the existence and functions of which are illegal." Petitioner further
alleges under oath that the exhibits attached to the petition to prove his substantial
avernments" are so inaccessible to the respondents that even within the exercise of due
diligence they could not be expected to have obtained them and offered as evidence in
the Court of Industrial Relations", and that the documents attached to the petition "are of
such far reaching importance and effect that their admission would necessarily mean
the modification and reversal of the judgment rendered herein." We have considered the
reply of Ang Tibay and its arguments against the petition. By and large, after
considerable discussions, we have come to the conclusion that the interest of justice
would be better served if the movant is given opportunity to present at the hearing the
documents referred to in his motion and such other evidence as may be relevant to the
main issue involved. The legislation which created the Court of Industrial Relations and
under which it acts is new. The failure to grasp the fundamental issue involved is not
entirely attributable to the parties adversely affected by the result. Accordingly, the
motion for a new trial should be and the same is hereby granted, and the entire record
CONSTILAW 2-SEC. I | 23

of this case shall be remanded to the Court of Industrial Relations, with instruction that it
reopen the case, receive all such evidence as may be relevant and otherwise proceed
in accordance with the requirements set forth hereinabove. So ordered.

certain Peng Villas, a news editor of the Philippine Weekly Newspaper, referred to then
BI Commissioner Rufus Rodriguez the complaints of private respondent Julie Buenaflor,
Amy Cosino and Manuelito Lao, against petitioner.

_________________________________________

According to Villas, private respondent Buenaflor complained of having been convinced

by petitioner into paying the total amount of P79,000.00 in exchange for the processing
of her visa, passport and other travel documents for Japan. Private respondent
delivered to petitioner Security Bank (SB) Check Nos. 0014797 and 0014798 in the
amounts of P30,000.00 and P20,000.00, respectively, and cash worth P29,000.00.
However, no visa was delivered. Private respondent insisted that petitioner return her
money, to no avail.

SECOND DIVISION

Villas also referred to Commissioner Rodriguez the complaint of Lao who allegedly told
him that he paidP60,000.00 to petitioner in exchange for a Chinese Visa and a passport
for Taiwan. Likewise, Villas referred Cosinos complaint that the latter collected from
Virfinia Dumbrique, Jaime Santos Flores and Mariano Evangelista, the amounts
of P20,000.00 each, upon petitioner's word that they would be in exchange for tourist
visas. Both Lao and Cosino claimed that the promised passport and visas did not
materialize and despite many requests for the return of the amounts paid to petitioner,
she refused to comply. Allegedly, "Vertudez threatened them that they cannot force her
to pay back the said amount as she has the back up [of] higher BID officials."

G.R. No. 153166 December 16, 2005

TERESITA
L.
VERTUDES,1 Petitioner,
vs.
JULIE BUENAFLOR and BUREAU OF IMMIGRATION, Respondents.
DECISION
PUNO, J.:
Before us is a petition for review by certiorari under Rule 45 of the Rules of Court,
seeking to review and set aside the decision 2 and resolution3 of the Court of Appeals
(CA), which affirmed the decision of the Civil Service Commission (CSC) finding
petitioner guilty of grave misconduct and dismissing her from government service.
Petitioner Teresita L. Vertudes was a fingerprint examiner at the Alien Registration
Division of the Bureau of Immigration (BI). In a facsimile letter 4 dated July 27, 1998, a

Acting upon Villas' letter, Commissioner Rodriguez issued a memorandum,5 directing

the petitioner to submit a sworn written explanation. In her sworn written
memorandum,6 petitioner assailed the credibility of Villas. She alleged that Villas was
not a member of the National Press Club as he claimed to be. She averred that the sum
ofP50,000.00, as evidenced by SB Check Nos. 0014797 and 0014798, was extended to
her by private respondent Buenaflor as a loan. She was constrained to borrow money
from private respondent and other close friends when her brother became seriously ill.
However, she claimed that she had fully settled her obligation to private respondent
through installment. She also claimed that private respondent was the one engaged in
illegal recruitment through the use of falsified or forged passports. Private respondent
was allegedly using petitioners name in dealing with some immigration officials and
employees to expedite the processing of the documents of her (private respondents)
clients. Petitioner allegedly informed said officers and employees that she was not
connected to private respondent in any way. Private respondent allegedly resented this
"abrupt disassociation." Also, her repeated refusal to "escort" private respondent's
clients who were leaving for abroad using falsified travel documents allegedly led
private respondent to threaten her that she could easily use SB Check Nos. 0014797
and 0014798 as evidence to file charges against petitioner by making it appear that she
(private respondent) gave the money because of petitioner's promise to facilitate her
travel to Japan. Petitioner denied having received the sum of P29,000.00 from private
respondent, contending that such claim is "pure falsehood because of the absence of
CONSTILAW 2-SEC. I | 24

document to prove the alleged receipt." As regards the complaints of Lao and Cosino,
petitioner denied having met or known said persons.
Finding petitioners explanation "unsatisfactory and [her] defense weak," Commissioner
Rodriguez issued Personnel Order No. RBR 98-60,7 preventively suspending her for
sixty (60) days pending the investigation of the case. The instant case was assigned to
Special Prosecutor Norberto dela Cruz, who issued a subpoena8 ordering private
respondent and petitioner to appear before him on October 15, 1998 for the formal
investigation of the case. It appears that in the meantime, Villas died and private
respondent personally took on the instant complaint with the BI for Grave Misconduct
against petitioner, docketed as Administrative Charge No. 0004. Lao and Cosino filed
their respective complaint-affidavits9 with the BI which became the subject of another
administrative case against petitioner.10

5. That she even added that she has a brother in Japan who could also help me find a
job and I will be going there along with her son, Jimmy V[e]rtudes Santos. She showed
to me her son's passport and application for a Visa, copies of which are attached and
marked as Annexes "A", "B" and "C";
6. That according to Ms. Vertudes I will be receiving a salary of one lapad per day as a
factory worker and that should I accept to her offer, all that will be required of me is to
give her the amount of P80,000.00;
7. That on December 24, 1997 Ms. Vertudes received from me Security Bank Check
No. 0014797 in the amount ofP30,000.00 which she was able to encash and likewise
Security Bank Check No. 0014798 in the amount ofP20,000.00 x x x Annexes "D" and
"E";

On August 21, 1998, petitioner filed a Motion for Reconsideration (Re: Personnel Order
No. RBR-98-60) with Motion to Dismiss.11 On September 2, 1998, petitioner filed a
Manifestation with Urgent Prayer to Resolve Motion to Dismiss, 12 averring that the
complaint instituted by Villas in behalf of private respondent was a harassment case
against her. Petitioner sought the dismissal of the instant action on the ground that in
addition to the instant administrative case, private respondent had personally filed her
complaint-affidavit "of similar nature and character" with the Manila City Prosecutor's
Office, docketed as 98-H-44000-1, and with the Office of the Ombudsman, docketed as
OMB-98-1701.

8. That on February 8, 1998, because of her insistence and persistence that I should
deliver the balance ofP30,000.00 to her so that I could leave in a week's time, I was
forced to produce the said amount by requesting a friend to pawn my jewelry in the
amount of P29,000.00 and the aforesaid amount was handed to Ms. Vertudes in the
presence of Ms. Joy Gutierrez at her office in (BID), Intramuros, Manila;

Private respondent narrated the pertinent events in her complaint-affidavit13 as follows:

10. That upon the advi[c]e of a lawyer and to be able to know once and for all whether I
could still leave, I requested my lawyer to write a letter to Ms. Vertudes for her to refund
the sums of money which I delivered to her in the total amount of P79,000.00 for the
processing of my Passport and Visa for job deployment abroad but she did not even
answer the letter and neither called up my lawyer to explain her side; letter is attached
as Annex "E";

1. That I met Ms. Teresita Vertudes, an employee of the Bureau of Immigration and
Deportation, Intramuros, Manila sometime in the middle part of 1996;
2. That from that time on, we became friends because we come from the same region
and that she used to tell us that she is capable of deploying job applicants to Japan;
3. That during one of those times that I dropped by her office, she intimated to me that a
group of Immigration Officers are scheduled to leave for Japan for training and that she
was the one who received a call from a Japanese Consul;
4. That Ms. Teresita Vertudes asked me if I am interested in going to Japan because
she will find a way to accommodate me and I told her that I am deeply interested but my
problem was that my passport was left in Bacolod City and she volunteered to work-out
[and] facilitate the processing of my passport and visa and that [all] I need to do is give
her my picture which I did;

9. That after that last payment, I have been asking her as to when I am suppose[d] to
leave because I was already prepared to leave and have in fact told my relatives and
friends that I will be leaving soon for Japan but she did not stop making promises;

11. That for Ms. Teresita Vertudes' failure to make good her promise to deploy me after
receiving the amount ofP79,000.00 in consideration of a job placement in Japan, I
hereby charge her for the crime of Illegal Recruitment and Estafa; x x x
Annexed to private respondent's complaint-affidavit were: a) the affidavit of a certain
Jessilyn Gutierrez14 who attested that she accompanied private respondent in going to
the office of petitioner and she was with private respondent when the latter delivered to
petitioner the checks amounting to P50,000.00 and cash worthP29,000.00 for private
respondent's job placement to Japan; b) copies of the passport and application for a
visa of petitioner's son, to prove that petitioner showed these documents to her so she
would believe that she would be going to Japan with petitioner's son; c) copies of SB
Check Nos. 0014797 and 0014798, to prove petitioner's receipt of the total amount
CONSTILAW 2-SEC. I | 25

of P50,000.00 from private respondent; and d) letter of private respondent's counsel to

petitioner demanding the refund of P79,000.00 from petitioner.

4.9. We further agreed that I would pay my financial obligation to Ms. Buenaflor on or
before the last day of May 1998 from December 1997 on installment basis;

On October 15, 1998, petitioner, accompanied by her counsel, and private respondent
appeared before Special Prosecutor dela Cruz for the formal investigation of the
case.15 The second hearing took place on October 27, 1998, during which, petitioner
submitted her Counter-Affidavit16 and the affidavits of her witnesses. Her version was:

4.10. With the aforementioned amount of P50,000.00 loaned to me by Julie Buenaflor

and the other amounts x x x from other friends, I was able to contribute the total amount
of P100,000.00 for the treatment and hospitalization of my brother. It was, however, to
no avail because my brother died on January 6, 1998;

4.1. I first met Ms. Buenaflor sometime in 1996 when I was still assigned at the General
Services Division of the Bureau of Immigration;

4.11. Pursuant to our agreement, I was able to pay Ms. Buenaflor on installment basis
the total amount ofP60,000.00 at my earlier indicated address on the following dates:

4.2. At that time, Ms. Buenaflor represented to me that she was connected with a travel
agency assigned to process/facilitate documents of their clients in the Buereau of
Immigration;

DATE AMOUNT

4.3. Indeed, I saw Ms. Buenaflor processing and making follow-ups of documents in the
different Divisions/Departments of the Bureau of Immigration similar to what were being
done by the representatives of other travel agencies transacting business therewith;

March 31, 1998 15,000.00

4.4. During that period, Ms. Buenaflor and me became close friends because she
frequently visited me in my office at General Services Division and would even stay
thereat while processing documents and waiting for their release. In fact, she often took
her lunch and merienda with me and sometimes, with the other employees of our
division;

May 30, 1998 15,000.00

4.5. Sometime in the third week of December 1997, I was informed by my relatives in
our hometown that my brother, Mariano "Dido" Vertudes was seriously ill and was
thereafter confined on December 22, 1997 at Gingoog General Hospital located at
Gingoog City, Misamis Oriental;
4.6. The type of illness of my brother required extensive treatment and medication; and
for this reason, they requested for financial assistance to defray the expenses therefor;
4.7. Since I was then in financial distress, I was constrained to borrow money with
interests from Ms. Buenaflor and other close friends of mine. As a kind gesture on the
part of Ms. Buenaflor she extended to me a loan in the total amount of P50,000.00 as
represented by Security Bank check nos. 0014797 and 0014798 in the respective
amounts of P30,000.00 and P20,000.00 (citation omitted);
4.8. It is however our agreement that I would pay the amount of P50,000.00 with the
additional amount ofP10,000.00 representing the interests therefore for a total
of P60,000.00;

February 28, 1998 P15,000.00

April 30, 1998 15,000.00

4.12. I tendered the said payments to Ms. Buenaflor at my residence on the dates
earlier enumerated in the presence of my housemaids, Eliza Compo and Jocelyn
Reyes; x x x
Petitioner averred that private respondent misrepresented to her (petitioner's) son,
Jimmy Santos, Jr., that she (private respondent) would facilitate his travel to and
employment in Japan. She also assailed the credibility of private respondent by
accusing her of using several passports under different names. Attached to petitioner's
counter-affidavit were: a) a copy of a passport application in the name of Honna
Sumadia Araneta showing the photographs of private respondent; b) referral slip of the
Pasay City Police Station and the sworn statement of a certain Armando Gambala
charging private respondent with Estafa and Illegal Recruitment;17 c) affidavits of
petitioner's son, Jimmy Santos, Jr.,18 and a certain Enrico Tuazon, showing that they
likewise filed a case for Estafa and Illegal Recruitment against private respondent; and
d) a copy of the Certificate of Business Name and Certification 19 issued by Prudential
Bank, to prove that private respondent misstated the address of her business
establishment. Petitioner also submitted to Special Prosecutor dela Cruz
the Pinagsamang Sinumpaang Salaysay20 of her two housemaids, Eliza Compo and
Jocelyn Reyes, to prove that she had fully paid her obligation to private respondent.
Likewise, she submitted the handwritten joint sworn statement 21 of Ernesto V. Cloma
and Jhun M. Romero, media practitioners, to prove that Villas asked for petitioners
CONSTILAW 2-SEC. I | 26

forgiveness before he died, admitting that he only sent his letter dated July 27, 1998 to
Commissioner Rodriguez in consideration of the amount given by private respondent.

of P79,000.00 on the promise of the respondent that she would secure a passport and
visa for the complainant to Japan.

On the same hearing, the parties agreed to submit the instant case for
resolution.22 Thus, in his Resolution dated November 12, 1998, 23 Special Prosecutor
dela Cruz found petitioner guilty of grave misconduct and recommended her dismissal
from the service.

Respondent's alibi that the said amount was a loan from the complainant, who is her
friend, is highly unbelievable. Complainant does not appear to be a rich person who
would so easily part with such big amount of money without any security without any
hope or assurance of being re-paid.

Meantime, the case instituted by private respondent with the Office of the Ombudsman
was referred to the Office of the City Prosecutor, thus:

The fact that complainant paid P79,000.00 to the respondent so she could get a
passport and a visa to work in Japan as a factory worker clearly showed that she was
desperately in need of a job. For her to give such amount to the respondent as an
unsecured loan is extremely incredulous.

After evaluation, the undersigned finds that the charges imputed against the respondent
are not office relatedand that the administrative aspect of the case had already been
undertaken by the Bureau of Immigration.
In view thereof, it is respectfully recommended that the instant complaint be referred to
the Office of the City Prosecutor of Manila for appropriate action.
24

SO ORDERED. (emphases supplied)

Petitioner filed a Motion to Re-open 25 with the BI, contending that the finding of the
Ombudsman that "the charges imputed against [petitioner] are not office related" clearly
shows that she is not administratively liable for grave misconduct. She moved for the reopening of the case "to allow her to adduce further evidence mainly based on the
findings of the Ombudsman." The motion, however, was denied for lack of merit.26
On January 12, 1999, Commissioner Rodriguez issued an order, adopting the resolution
of Special Prosecutor dela Cruz, viz:
WHEREFORE, respondent Teresita L. Vertudez is hereby found liable for grave
misconduct under PD No. 807 and the Administrative Code of 1987. Accordingly, she is
ordered dismissed from the service effective immediately with forfeiture of all benefits
under the law, with prejudice to her reinstatement in this Bureau and all its branches.
SO ORDERED.27
The order quoted the pertinent portion of Special Prosecutor dela Cruz's resolution, viz:
After carefully weighing and evaluating the versions of the complainant and the
respondent, this Office is more incline[d] to give credence to complainant's declarations
that she was indeed duped by the respondent into parting with the hard-earned money

Respondent's claim that the present complaint is pure harassment by the complainant is
completely bereft of credence. What benefit or advantage would the complainant
achieve in fabricating charges against the respondent?
If the complainant filed this complaint, it was because she was wronged by the
respondent.
Likewise, respondent's allegation that the P50,000.00 she received from the
complainant was a loan because she (respondent) was then in a financial distress and
she needed money to help her sick brother in the province was belied by her own son,
Jimmy V. Santos, Jr., who declared in his Affidavit that sometime in December 1997, he
gave P50,000.00 to the complainant so that the latter could obtain a tourist visa for him
to Japan. Why should the respondent bother to get a P50,000.00 loan from the
complainant to assist her ailing brother when she could readily obtain this amount from
her own son?
As to respondent's assertion that she was able to pay the P50,000.00 to the
complainant, there is nothing to support such payment. The statements of her two (2)
maids -- Eliza C[o]mpo and Jocelyn Reyes -- in theirSinumpaang Salaysay that
respondent paid to the complainant the total amount of P60,000.00 during the months of
February 1998 to May 1998 cannot be believed. Being the housemaids of the
respondent, it is but natural and to be expected of these persons to come to the aid of
their employe[r].28
Petitioner filed a Motion for Reconsideration and/or New Trial, 29 reiterating her argument
in her Motion to Re-open. Again, the motion was denied.30 Subsequently, the assailed
order of dismissal was affirmed by then Department of Justice Secretary Serafin
Cuevas.31

CONSTILAW 2-SEC. I | 27

Petitioner appealed to the CSC, 32 raising the issues of lack of due process and lack of
substantial evidence. On November 19, 1999, the CSC dismissed petitioner's appeal. It
held, in part, that:

being nothing in record to show that witnesses were actuated by any improper motive,
their testimony shall be entitled to full faith and credit." (People v. Flores, 252 SCRA
31)35

A careful study of the records in the light of the arguments of appellant reveals that the
requirements of due process have been duly observed in the proceedings had in this
case.

Thereafter, petitioner filed a petition for review before the CA, raising the issues of: a)
whether or not the BI and CSC violated petitioner's right to due process; b) whether or
not respondents erred in finding that the alleged illegal recruitment activity of the
petitioner had a direct relation to and connected with the performance of her duties and
responsibilities as an employee of the BI; and c) whether or not there is substantial
evidence to support the finding that petitioner is an illegal recruiter, thus, warranting her
removal from public service.36

xxx
As to the second issue, the Commission finds substantial evidence to prove that
respondent receive[d] money in exchange for her services in facilitating the issuance of
passport and visa of Julie Bernardo (sic).
The complaint-affidavit of Julie Buenaflor is reproduced in part as follows: x x x
In the absence of any improper motive or malice on the part of the witness to foist said
charges on respondent, the Commission is inclined to give credence to the statements
of witness Bernardo (sic). In fact Vertudez has admitted that she received money from
Buenaflor but argued that the money was a mere loan. However, if this were true,
Buenaflor should have demanded for a collateral, considering the amount involved.
Vertudez failed to present any evidence that she gave any security in return for said
loan which makes her version highly incredible. x x x33
Petitioner filed a motion for reconsideration34 of the CSC's Resolution, to no avail. The
CSC held:
In so far as Vertudez'[s] illegal recruitment activities are concerned, the Commission
finds the existence of clear substantial evidence to establish the same. Evidence
presented all point to the fact that Vertudez solicited money from BI clients in return for
a visa to Japan. The witnesses against Vertudez include Peng Villas (Deceased), Julie
Buenflor (sic), Amy Cosino, Virginia Lubriano, Manuelito Lao and Jaime Santos Flores.
The affidavits of said witnesses all speak of the modus operandi of Vertudez at the BI,
where she approaches BI clients and offers them a visa, passport and an employment
contract in exchange for P120,000.00. In the case of witness Julie Buenaflor, she
testified that respondent assured her of a visa, a passport and a job in Japan for a fee
of P80,000.00 and that Vertudez after getting paid failed to fulfill her promise.
It is observed that Vertudez seeks to destroy the credibility of witness Buenaflor by
implying that the former has a pending case for illegal recruitment and estafa. Records,
however, show that the charges against witness Buenaflor all came up after Vertudez
was formally charged by the BI and that such charges have no reasonable connection
with her administrative case pending before the Commission. In this regard, "There

On February 12, 2002, the CA dismissed the petition for lack of merit. The CA found that
"petitioner was given more than ample opportunity to ventilate her defense and disprove
the charges leveled against her, hence, there can be no denial of her right to due
process."37 Moreover, it held that "there is more than substantial evidence proving the
charge of grave misconduct against petitioner."38 The CA ratiocinated that:
In the proceedings a quo, it was established that petitioner, indeed, received and
encashed the two (2) checks given by private respondent in the total amount of
Php50,000.00. This fact, therefore, gives credence to the claim of private respondent
that she gave petitioner two (2) checks in consideration of the latter's promise to
facilitate her employment abroad. This being the case, the burden was shifted to
petitioner to refute this established fact through equally weighty and competent
evidence.
Now, petitioner admitted having received, and encashed, the two checks from private
respondent but offered the excuse that the same was extended to her as a loan. Aside
from her testimony and that of her household helpers to prove this assertion, no other
independent and unbiased evidence was offered to prove the fact of loan. As it is, her
theory of loan stands on flimsy ground and is not sufficient enough to overthrow the fact
established by complainant. This considering that it is highly improbable and even
contrary to human experience for a person to loan a huge amount of money as
Php50,000.00 without any document evidencing such loan nor a collateral to secure its
payment. Note even that the two checks were made payable to "cash," a bearer
instrument, and was not even crossed on its face, hence, can be encashed by any
person holding the negotiable instrument. If, indeed, private respondent gave the two
checks to petitioner as a clean loan (without any collateral) without any separate
document embodying their loan agreement, the latter should have at least been made
the payee of the checks and a memorandum written at the back of the check to the
effect that it is being extended as a loan, in order to protect the interest of the lender.
This is conventional business practice which is altogether absent in the case at bar,
hence, petitioner's theory of loan must necessarily crumble.39
CONSTILAW 2-SEC. I | 28

Petitioner filed a Motion for Reconsideration,40 contending that the CA failed to resolve
the issue of whether petitioner's alleged illegal recruitment activities are directly
connected with her duties and responsibilities as a Fingerprint Examiner of the BI. This
motion was denied.41
Undaunted, petitioner filed this petition, summing up the issues as follows:
1. WHETHER OR NOT THE HONORABLE SUPREME COURT MAY REVIEW THE
DECISION OF THE COURT OF APPEALS IN CA-G.R. SP NO. 58766;
2. WHETHER OR NOT THE COURT OF APPEALS RESOLVED THE SECOND ISSUE
RAISED IN THE PETITION FOR REVIEW FILED BEFORE IT;
3. WHETHER OR NOT THERE IS SUBSTANTIAL EVIDENCE TO SUPPORT THE
FINDINGS THAT PETITIONER IS GUILTY OF GRAVE MISCONDUCT;
4. WHETHER OR NOT A PROMISE TO FACILITATE EMPLOYMENT OF ANOTHER
ABROAD CONSTITUTES GRAVE MISCONDUCT[;]
5. WHETHER OR NOT PETITIONER WAS ACCORDED DUE PROCESS;
6. WHETHER OR NOT THE ACT CONSTITUTING GRAVE MISCONDUCT MUST
HAVE A DIRECT RELATION TO THE FUNCTION OF THE PUBLIC OFFICE HELD BY
RESPONDENTS IN ADMINISTRATIVE CASES; AND
7. WHETHER OR NOT THE ALLEGED ACT COMMITTED BY THE PETITIONER IS
DIRECTLY RELATED TO ANY OF HER FUNCTIONS AS FINGERPRINT EXAMINER
AT THE BUREAU OF IMMIGRATION.42
The petition is denied.
We shall first resolve the issue of due process. Petitioner contends that the essential
requirements of due process as laid down in Ang Tibay v. Court of Industrial
Relations43 and Doruelo v. COMELEC44 were violated in the case at bar. First, she
contends that she was denied of her right to a full hearing when she was not accorded
the opportunity to cross-examine the witnesses against her, as provided under Section
48, par. 5, Title I, Book V of the Administrative Code of 1987. She allegedly raised this
issue in her appeal before the CSC.45
The argument is unmeritorious.

We have explained the meaning of the right to cross-examination as a vital element of

due process as follows:
The right of a party to confront and cross-examine opposing witnesses in a judicial
litigation, be it criminal or civil in nature, or in proceedings before administrative tribunals
with quasi-judicial powers, is a fundamental right which is part of due process.
However, the right is a personal one which may be waived expressly or impliedly
by conduct amounting to a renunciation of the right of cross-examination. Thus,
where a party has had the opportunity to cross-examine a witness but failed to
avail himself of it, he necessarily forfeits the right to cross-examine and the
testimony given on direct examination of the witness will be received or allowed to
remain in the record.46 (emphasis supplied)
In the case at bar, petitioner cannot argue that she was deprived of due process simply
because no cross-examination took place. Nothing on record shows that petitioner
asked for cross-examination during the formal investigation conducted by Special
Prosecutor dela Cruz. Notably, two hearings were conducted, during which, both private
respondent and petitioner appeared. During the hearing dated October 27, 1998, both
parties agreed to submit the case for resolution after petitioner submitted her counteraffidavit and the affidavits of her witnesses. In fact, when petitioner filed her Motion to
Re-open the case with the BI, she did not question the lack of cross-examination during
the investigation proceedings. She merely based her motion on the order of the Office
of the Ombudsman finding the charge against her as "not office related." In the same
pleading, she admitted that "[a]s early as October 27, 1998, the instant administrative
action has been submitted for resolution after the contending parties have submitted
their respective evidence" and that her move for the re-opening of the administrative
case was merely "to allow her to adduce further evidence mainly based on the
findings of the Office of the Ombudsman." Again, in her Motion for Reconsideration
and/or New Trial of Commissioner Rodriguez's order of dismissal, she merely reiterated
her arguments in her Motion to Re-open. She never complained that she was deprived
of her right to cross-examination during the investigation of Special Prosecutor dela
Cruz. The right to cross-examination being a personal right, petitioner must be deemed
to have waived this right by agreeing to submit the case for resolution and not
questioning the lack of it in the proceedings before the BI.
More importantly, it is well-settled that the essence of due process in administrative
proceedings is an opportunity to explain one's side or an opportunity to seek
reconsideration of the action or ruling complained of. 47 This was clearly satisfied in the
case at bar. Records show that petitioner not only gave her sworn written explanation of
the charges against her during the initial stage of the investigation, she also submitted:
a) a sworn counter-affidavit refuting the charges against her, with all the attached
annexes as evidence; b) a Motion to Re-open the case with the BI; c) a Motion for
Reconsideration and/or New Trial with the BI; d) an Appeal to the CSC; e) a Motion for
CONSTILAW 2-SEC. I | 29

Reconsideration with the CSC; f) an Appeal to the CA; g) a Motion for Reconsideration
with the CA; and h) the instant petition for review.
Second, petitioner contends that Commissioner Rodriguez violated the principle that
"the tribunal or body or any of its judges must act on its or his own independent
consideration of the law and facts of the controversy and not simply accept the views of
a subordinate in arriving at a decision" when his denial of her Motion to Re-open and his
order finding her guilty of grave misconduct were based exclusively on the resolution of
Special Prosecutor dela Cruz.48
This argument is likewise unavailing.
There is nothing essentially wrong in the head of a bureau adopting the
recommendation of a subordinate. Section 47, Book V of the Administrative Code of
1987 gives the chief of bureau or office or department the power to delegate the task of
investigating a case to a subordinate. 49 What due process demands is for the chief of
the bureau to personally weigh and assess the evidence which the subordinate has
gathered and not merely to rely on the recommendation of said investigating officer.50
In the case at bar, the order of Commissioner Rodriguez enjoys the disputable
presumption that official duties have been regularly performed. That his decision quotes
the resolution of Special Prosecutor dela Cruz does not necessarily imply that he did not
personally examine the affidavits and evidence presented by the parties. Petitioner's
bare assertion that Commissioner Rodriguez did not personally examine the evidence,
without more, is not sufficient to overcome this presumption.
Third, petitioner contends that the CSC did not have basis in finding: a) that the
affidavits of "Peng Villas (Deceased), Julie Buenaflor, Amy Cosino, Virginia Lubriano,
Manuelito Lao and Jaime Santos Flores x x x all speak of the modus operandi of
Vertudez at the BI" as these affidavits were not submitted to the CSC; and b) that
petitioner "solicited money from BI clients" inasmuch as private respondent never
alleged that she was a BI client. Moreover, the CSC's finding that private respondent
"testified that respondent assured her of a visa, a passport and a job in Japan for a fee
of P80,000.00 and that Vertudez, after getting paid, failed to fulfill her promise" is not
supported by the complaint-affidavit of private respondent which merely stated that
petitioner "volunteered to work-out and facilitate the processing of [private respondent's]
passport and visa" and that petitioner "has a brother in Japan who could also help
[private respondent] find a job."51 Petitioner also assails the failure of the BI and CSC to
consider the handwritten joint sworn statement of media practitioners Cloma and
Romero and the joint affidavit of the housemaids of petitioner, Compo and Reyes.52
Again, these arguments fail to impress.

It is settled that only questions of law are entertained in petitions for review
on certiorari under Rule 45 of the Rules of Court. 53 It is not the function of this Court, in
a petition under Rule 45, to scrutinize, weigh and analyze evidence all over
again.54 Well-settled is the rule that the findings of fact of quasi-judicial agencies, like the
BI and the CSC, are accorded not only respect but even finality if such findings are
supported by substantial evidence.55Substantial evidence is such amount of relevant
evidence which a reasonable mind might accept as adequate to support a conclusion,
even if other equally reasonable minds might conceivably opine otherwise.56
In the case at bar, we note that contrary to petitioner's stance, the affidavits of Lao and
Cosino do appear in the records of the CSC. 57 In any case, the affidavits of Villas,
Cosino, Lubriano, Lao and Flores are of little relevance to the case at bar. If any, they
are merely corroborating evidence. Note that it was only in the CSC's resolution on
petitioner's Motion for Reconsideration that said affidavits were mentioned. These
affidavits were not used as basis for the decision rendered by the BI, the main decision
of the CSC denying the appeal of petitioner and the decision of the CA. We find the
unanimous finding of guilt of the BI, the CSC and the CA amply supported by the
following evidence on record: a) the complaint-affidavit of private respondent; b) the
affidavit of Jessilyn Gutierrez; c) copies of the passport and application for a visa of
petitioner's son; d) copies of SB Check Nos. 0014797 and 0014798; and e) letter of
private respondent's counsel to petitioner demanding from petitioner the refund of
theP79,000.00 that private respondent paid to petitioner.
As to the other contentions, we note that in addition to the self-serving quotations of
petitioner from the complaint-affidavit of private respondent, said complaint-affidavit
categorically alleged that petitioner told private respondent that the latter would "be
receiving a salary of one lapad per day as a factory worker and that should [she] accept
[petitioner's] offer, all that [would] be required of [her was] to give [petitioner] the amount
of P80,000.00." Private respondent also categorically alleged that she was charging
petitioner for her "failure to make good her promise to deploy [her] after receiving the
amount of P79,000.00 in consideration of a job placement in Japan." Thus, contrary to
petitioner's stance, the assailed findings of the CSC are supported by private
respondent's complaint-affidavit.
Moreover, it is well-settled that it is not for the appellate court to substitute its own
judgment for that of the administrative agency on the sufficiency of the evidence and the
credibility of the witnesses. Administrative decisions on matters within their jurisdiction
are entitled to respect and can only be set aside on proof of grave abuse of discretion,
fraud or error of law. None of these vices has been shown in this case.58
We shall now proceed to the other issue: whether petitioner is guilty of grave
misconduct warranting her removal from government service.

CONSTILAW 2-SEC. I | 30

Citing Sarigumba v. Pasok,59 petitioner contends that "[m]isconduct, warranting

removal from office of a public officer, must have a direct relation to and connected with
the performance of official duties, amounting either to maladministration or willful,
intentional neglect and failure to discharge the duties of the office." Since the BI is a
government agency principally responsible for the administration and enforcement of
immigration, citizenship and alien admission and registration laws, "by no stretch of
imagination" can there be a direct relation between the function of a fingerprint
examiner and the alleged promise to facilitate private respondent's employment
abroad.60Petitioner also capitalizes on the allegation of private respondent in her
complaint-affidavit that she and petitioner "became friends" to contend that the acts
being imputed against her are personal and not office-related.61
These arguments lack merit.
The allegations in private respondents complaint-affidavit indicate that petitioner used
her position as a BI employee to assure private respondent that she could facilitate
petitioner's deployment to Japan. Private respondent alleged that "during one of those
times that [she] dropped by [petitioner's] office, [petitioner] intimated to [her] that a
group of Immigration officers [were] scheduled to leave for Japan for training and
that [petitioner] was the one who received a call from a Japanese Consul."
Petitioner "asked [private respondent] if [she was] interested in going to Japan
because [petitioner] will find a way to accommodate [her]."
Even petitioner's own admissions show that her position as an employee of the BI may
be utilized in connection with illegal recruitment. In her memorandum to Commissioner
Rodriguez, as reiterated in her counter-affidavit, petitioner alleged that private
respondent was engaged in illegal recruitment and "was using [petitioner's] name in
her dealings with some immigration officials and employees, presumably to
expedite the processing of the documents belonging to her clients." Petitioner
likewise claimed that she "declined [private respondent's] proposal that [she]
'escort' some of [private respondent's] clients who would be leaving for foreign
countries but with falsified travel documents." Private respondent even told her that
the "proposed scheme could easily be done because being an employee of this
Bureau, [petitioner has] several connections not only at the Ninoy Aquino
International Airport (NAIA) but also in Mactan International Airport."
That her position is designated as "fingerprint examiner" is not determinative of the
issue of whether the charge against her is work-related. The allegations in the complaint
against petitioner and her own admissions show that her duties go beyond her job title
and that the charge against her is connected with her position as an employee of the BI.
Finally, petitioner contends that "a promise to find a way to accommodate private
respondent and a representation that petitioner has a brother who could help private

respondent find a job are not misconduct warranting the dismissal of petitioner from
office" but, "[a]t most," only "entitle[s] private respondent to civil indemnity." Petitioner
contends that the CA's finding that petitioner merely made a "promise to facilitate"
private respondent's employment abroad, as distinguished from the CSC's finding that
petitioner committed "shameful illegal recruitment activities," practically absolved
petitioner from the charge of grave misconduct.
This argument deserves scant consideration.
Misconduct has been defined as an intentional wrongdoing or deliberate violation of a
rule
of
law
or
standard
of
behavior,
especially
by
a
government official.62 As distinguished from simple misconduct, the elements of
corruption, clear intent to violate the law or flagrant disregard of established rule, must
be manifest in a charge of grave misconduct. 63 Corruption, as an element of grave
misconduct, consists in the act of an official or fiduciary person who unlawfully and
wrongfully uses his station or character to procure some benefit for himself or for
another person, contrary to duty and the rights of others.64 An act need not be
tantamount to a crime for it to be considered as grave misconduct as in fact, crimes
involving moral turpitude are treated as a separate ground for dismissal under the
Administrative Code.65
In the case at bar, petitioner cannot downplay the charges against her. Whether the
charges against petitioner satisfy the elements of illegal recruitment to make her
criminally liable for such crime is not the issue at bar. At the very least, petitioner was
found to have taken advantage of her position as an employee of the BI to falsely
promise, for pecuniary gain, the facilitation of private respondent's travel to Japan,
including the processing of her passport, visa and other travel documents. Worse, she
was found to have refused to reimburse the amounts paid to her by private respondent
even when the promised passport, visa, and travel documents did not materialize.
Undoubtedly, these acts involve "corruption, clear intent to violate the law or flagrant
disregard of established rule." Under Section 23(c), Rule XIV the Omnibus Civil Service
Rules and Regulations, these acts constitute a grave offense for which petitioner must
suffer the penalty of dismissal.
IN VIEW WHEREOF, the petition is DENIED. The Court of Appeals Decision dated
February 12, 2002 and Resolution dated April 16, 2002 in CA-G.R. SP No. 58766
are AFFIRMED.
SO ORDERED.
____________________________________________

CONSTILAW 2-SEC. I | 31

1) that respondent University's avowed reason for its refusal to re-enroll them in their
respective courses is "the latter's participation in peaceful mass actions within the
premises of the University.
2) that this "attitude of the (University) is simply a continuation of its cavalier if not
hostile attitude to the student's exercise of their basic constitutional and human rights
already recorded in Rockie C. San Juan vs. National University, S.C. G.R. No. 65443
(1983) and its utter contempt for the principle of due process of law to the prejudice of
petitioners;" and
3) that "in effect petitioners are subjected to the extreme penalty of expulsion without
cause or if there be any, without being informed of such cause and without being
afforded the opportunity to defend themselves. Berina v. Philippine Maritime Institute
(117 SCRA 581 [1983]).
In the comment filed on September 24, 1986 for respondent University and its President
pursuant to this Court's requirement therefor 1 , respondents make the claim:
1) that "petitioners' failure to enroll for the first semester of the school year 1984-1985 is
due to their own fault and not because of their allegedexercise of their constitutional and
human rights;"

EN BANC
G.R. No. L-68288 July 11, 1986
DIOSDADO
GUZMAN,
ULYSSES
URBIZTONDO,
and
ARIEL
RAMACULA, petitioners,
vs.
NATIONAL UNIVERSITY and DOMINGO L. JHOCSON in his capacity as President
of National University,respondents.
NARVASA, J.:
Petitioners Diosdado Guzman, Ulysses Urbiztondo and Ariel Ramacula, students of
respondent National University, have come to this Court to seek relief from what they
describe as their school's "continued and persistent refusal to allow them to enrol." In
their petition "for extraordinary legal and equitable remedies with prayer for preliminary
mandatory injunction" dated August 7, 1984, they allege:

2) that petitioner Urbiztondo, sought to re-enroll only on July 5, 1986 "when the
enrollment period was already closed;"
3) that as regards petitioner Guzman, his "academic showing" was "poor", "due to his
activities in leading boycotts of classes"; that when his father was notified of this
development sometime in August, 1982, the latter had demanded that his son "reform
or else we will recall him to the province"; that Guzman was one of the petitioners in
G.R. No. 65443 entitled "Rockie San Juan, et al. vs. National University, et al.," at the
hearing of which on November 23, 1983 this Court had admonished "the students
involved (to) take advantage and make the most of the opportunity given to them to
study;" that Guzman "however continued to lead or actively participate in activities
within the university premises, conducted without prior permit from school authorities,
that disturbed or disrupted classes therein;" that moreover, Guzman "is facing criminal
charges for malicious mischief before the Metropolitan Trial Court of Manila (Crim. Case
No. 066446) in connection with the destruction of properties of respondent University on
September 12, 1983 ", and "is also one of the defendants in Civil Case No. 8320483 of
the Regional Trial Court of Manila entitled 'National University, Inc. vs. Rockie San Juan
et al.' for damages arising from destruction of university properties
4) that as regards petitioner Ramacula, like Guzman "he continued to lead or actively
participate, contrary to the spirit of the Resolution dated November 23, 1983 of this ...
CONSTILAW 2-SEC. I | 32

Court (in G.R. No. 65443 in which he was also one of the petitioners) and to university
rules and regulations, within university premises but without permit from university
officials in activities that disturbed or disrupted classes;" and
5) that petitioners have "failures in their records, (and) are not of good scholastic
standing. "
Respondents close their comment with the following assertions, to wit:
1) By their actuations, petitioners must be deemed to have forfeited their privilege, if
any, to seek enrollment in respondent university. The rights of respondent university, as
an institution of higher learning, must also be respected. It is also beyond
comprehension why petitioners, who continually despise and villify respondent
university and its officials and faculty members, should persist in seeking enrollment in
an institution that they hate.
2) Under the circumstances, and without regard to legal technicalities, it is not to the
best interest of all concerned that petitioners be allowed to enroll in respondent
university.
3) In any event, petitioners' enrollment being on the semestral basis, respondents
cannot be compelled to enroll them after the end of the semester.
On October 2, 1984 this Court issued a resolution reading as follows:
... Acting on the Comment submitted by respondent, the Court Resolved to NOTE the
same and to require a REPLY to such Comment. The Court further Resolved to ISSUE
a MANDATORY INJUNCTION, enjoining respondent to allow the enrolment of
petitioners for the coming semester without prejudice to any disciplinary proceeding to
which any or all of them may be subjected with their right to lawful defense recognized
and respected. As regards petitioner Diosdado Guzman, even if it be a fact that there is
a pending criminal charge against him for malicious mischief, the Court nonetheless is
of the opinion that, as above-noted, without prejudice to the continuation of any
disciplinary proceeding against him, that he be allowed to resume his studies in the
meanwhile. As shown in Annex 2 of the petition itself, Mr. Juan P. Guzman, father of
said petitioner, is extending full cooperation with petitioners to assure that whatever
protest or grievance petitioner Guzman may have would be ventilated in a lawful and
peaceful manner.
Petitioners' REPLY inter alia
1) denied that Urbiztondo attempted to enroll only on July 5, 1984 (when enrollment was
already closed), it being alleged that "while he did try to enroll that day, he also

attempted to do so several times before that date, all to no avail, because

respondents ... persistently refused to allow him to do so" respondents' ostensible
reason being that Urbiztondo (had) participated in mass actions ... within the school
premises," although there were no existing disciplinary charge against petitioner
Urbiztondo" at the time;
2) asserted that "neither the text nor the context of the resolution 2 justifies the
conclusion that "petitioners' right to exercise their constitutional freedoms" had thereby
been restricted or limited; and
3) alleged that "the holding of activities (mass action) in the school premises without the
permission of the school ... can be explained by the fact that the respondents
persistently refused to issue such permit repeatedly sought by the students. "
On November 23, 1984, this Court promulgated another resolution, this time reading as
follows:
... The Court, after considering the pleadings filed and deliberating on the issues raised
in the petition for extraordinary legal and equitable remedies with prayer for preliminary
mandatory injunction as well as the respondents' comment on the petition and the reply
of counsel for petitioners to the respondents' comment, Resolved to (a) give DUE
COURSE to the petition; (b) consider the respondents' comment as ANSWER to the
petition; and (c) require the parties to file their respective MEMORANDA within twenty
(20) days from notice. ... .
Immediately apparent from a reading of respondents' comment and memorandum is the
fact that they had never conducted proceedings of any sort to determine whether or not
petitioners-students had indeed led or participated "in activities within the university
premises, conducted without prior permit from school authorities, that disturbed or
disrupted classes therein" 3 or perpetrated acts of "vandalism, coercion and intimidation,
slander, noise barrage and other acts showing disdain for and defiance of University
authority." 4 Parenthetically, the pendency of a civil case for damages and a criminal
case for malicious mischief against petitioner Guzman, cannot, without more, furnish
sufficient warrant for his expulsion or debarment from re-enrollment. Also apparent is
the omission of respondents to cite this Court to any duly published rule of theirs by
which students may be expelled or refused re-enrollment for poor scholastic standing.
Under the Education Act of 1982, 5 the petitioners, as students, have the right among
others "to freely choose their field of study subject to existing curricula and to continue
their course therein up to graduation, except in case of academic deficiency, or violation
of disciplinary regulations." 6Petitioners were being denied this right, or being
disciplined, without due process, in violation of the admonition in the Manual of
Regulations for Private Schools 7 that "(n)o penalty shall be imposed upon any student
CONSTILAW 2-SEC. I | 33

except for cause as defined in ... (the) Manual and/or in the school rules and regulations
as duly promulgated and only after due investigation shall have been conducted." 8 This
Court is therefore constrained, as in Berina v. Philippine Maritime Institute, 9 to declare
illegal this act of respondents of imposing sanctions on students without due
investigation.
Educational institutions of course have the power to "adopt and enforce such rules as
may be deemed expedient for ... (its) government, ... (this being)" incident to the very
object of incorporation, and indispensable to the successful management of the
college." 10 The rules may include those governing student discipline. Indeed, the
maintenance of "good school discipline" is a duty specifically enjoined on "every private
school" by the Manual of Regulations for Private Schools; 11 and in this connection, the
Manual further provides that... The school rules governing discipline and the corresponding sanctions therefor must
be clearly specified and defined in writing and made known to the students and/or their
parents or guardians. Schools shall have the authority and prerogative to promulgate
such rules and regulations as they may deem necessary from time to time effective as
of the date of their promulgation unless otherwise specified. 12
But, to repeat, the imposition of disciplinary sanctions requires observance of
procedural due process. And it bears stressing that due process in disciplinary cases
involving students does not entail proceedings and hearings similar to those prescribed
for actions and proceedings in courts of justice. The proceedings in student discipline
cases may be summary; and cross-examination is not, 'contrary to petitioners' view, an
essential part thereof. There are withal minimum standards which must be met to satisfy
the demands of procedural due process; and these are, that (1) the students must be
informed in writing of the nature and cause of any accusation against them; (2) they
shag have the right to answer the charges against them, with the assistance of counsel,
if desired; (3) they shall be informed of the evidence against them; (4) they shall have
the right to adduce evidence in their own behalf; and (5) the evidence must be duly
considered by the investigating committee or official designated by the school
authorities to hear and decide the case.
WHEREFORE, the petition is granted and the respondents are directed to allow the
petitioners to re-enroll or otherwise continue with their respective courses, without
prejudice to any disciplinary proceedings to which any or all of them may be subjected
in accordance with the standards herein set forth.
SO ORDERED.
______________________________________

THIRD DIVISION
G.R. No. 127980

December 19, 2007

DE LA SALLE UNIVERSITY, INC., EMMANUEL SALES, RONALD HOLMES, JUDE

DELA TORRE, AMPARO RIO, CARMELITA QUEBENGCO, AGNES YUHICO and
JAMES
YAP, petitioners,
vs.
THE COURT OF APPEALS, HON. WILFREDO D. REYES, in his capacity as
Presiding Judge of Branch 36, Regional Trial Court of Manila, THE COMMISSION
ON HIGHER EDUCATION, THE DEPARTMENT OF EDUCATION CULTURE AND
SPORTS, ALVIN AGUILAR, JAMES PAUL BUNGUBUNG, RICHARD REVERENTE
and ROBERTO VALDES, JR., respondents.
DECISION
REYES, R.T., J.:
NAGTATAGIS sa kasong ito ang karapatang mag-aral ng apat na estudyante na
nasangkot sa away ng dalawang fraternity at ang karapatang akademiko ng isang
pamantasan.
PRIVATE respondents Alvin Aguilar, James Paul Bungubung, Richard Reverente and
Roberto Valdes, Jr. are members of Tau Gamma Phi Fraternity who were expelled by
the De La Salle University (DLSU) and College of Saint Benilde (CSB) 1 Joint Discipline
Board because of their involvement in an offensive action causing injuries to petitioner
James Yap and three other student members of Domino Lux Fraternity. This is the
backdrop of the controversy before Us pitting private respondents' right to
education vis-a-vis the University's right to academic freedom.
ASSAILED in this Petition for Certiorari, Prohibition and Mandamus under Rule 65 of
the Rules of Court are the following: (1) Resolution of the Court of Appeals (CA) dated
July 30, 1996 dismissing DLSU's petition for certiorariagainst respondent Judge and
private respondents Aguilar, Bungubung, Reverente, and Valdes, Jr.; 2 (2) Resolution of
the CA dated October 15, 1996 denying the motion for reconsideration;3 (3) Order dated
January 7, 1997 of the Regional Trial Court (RTC), Branch 36 Manila granting private
respondent Aguilar's motion to reiterate writ of preliminary injunction;4 and (4)
CONSTILAW 2-SEC. I | 34

Resolution No. 181-96 dated May 14, 1996 of the Commission on Higher Education
(CHED) exonerating private respondent Aguilar and lowering the penalties for the other
private respondents from expulsion to exclusion.5

Mr. Yap could not recognize the other members of the group who attacked him. With
respect to respondent Papio, Mr. Yap said "hindi ko nakita ang mukha niya, hindi ko
nakita sumuntok siya." What Mr. Yap saw was a long haired guy also running with the
group.

Factual Antecedents
Gleaned from the May 3, 1995 Decision of the DLSU-CSB Joint Discipline Board, two
violent incidents on March 29, 1995 involving private respondents occurred:
x x x From the testimonies of the complaining witnesses, it appears that one week prior
to March 29, 1995, Mr. James Yap was eating his dinner alone in Manang's Restaurant
near La Salle, when he overheard two men bad-mouthing and apparently angry at
Domino Lux. He ignored the comments of the two. When he arrived at his boarding
house, he mentioned the remarks to his two other brods while watching television.
These two brods had earlier finished eating their dinner at Manang's. Then, the three,
together with four other persons went back to Manang's and confronted the two who
were still in the restaurant. By admission of respondent Bungubung in his testimony,
one of the two was a member of the Tau Gamma Phi Fraternity. There was no rumble or
physical violence then.
After this incident, a meeting was conducted between the two heads of the fraternity
through the intercession of the Student Council. The Tau Gamma Phi Fraternity was
asking for an apology. "Kailanganng apology" in the words of respondent Aguilar. But no
apology was made.
Then, 5 members of the Tau Gamma Phi Fraternity went to the tambayan of the Domino
Lux Fraternity in the campus. Among them were respondents Bungubung, Reverente
and Papio. They were looking for a person whose description matched James Yap.
According to them, this person supposedly "nambastos ng brod." As they could not find
Mr. Yap, one of them remarked "Paano ba iyan. Pasensiya na lang."
Came March 29, 1995 and the following events.
Ten minutes before his next class at 6:00 p.m., Mr. James Yap went out of the campus
using the Engineering Gate to buy candies across Taft Avenue. As he was about to recross Taft Avenue, he heard heavy footsteps at his back. Eight to ten guys were running
towards him. He panicked. He did not know what to do. Then, respondent Bungubung
punched him in the head with something heavy in his hands "parangknuckles."
Respondents Reverente and Lee were behind Yap, punching him. Respondents
Bungubung and Valdes who were in front of him, were also punching him. As he was
lying on the street, respondent Aguilar kicked him. People shouted; guards arrived; and
the group of attackers left.

Two guards escorted Mr. Yap inside the campus. At this point, Mr. Dennis Pascual was
at the Engineering Gate. Mr. Pascual accompanied Yap to the university clinic; reported
the incident to the Discipline Office; and informed his fraternity brods at their tambayan.
According to Mr. Pascual, their head of the Domino Lux Fraternity said: "Walang
gagalaw. Uwian na lang."
Mr. Ericson Cano, who was supposed to hitch a ride with Dennis Pascual, saw him
under the clock in Miguel Building. However, they did not proceed directly for home.
With a certain Michael Perez, they went towards the direction of Dagonoy Street
because Mr. Pascual was supposed to pick up a book for his friend from another friend
who lives somewhere in the area.
As they were along Dagonoy Street, and before they could pass the Kolehiyo ng Malate
Restaurant, Mr. Cano first saw several guys inside the restaurant. He said not to mind
them and just keep on walking. However, the group got out of the restaurant, among
them respondents Reverente, Lee and Valdes. Mr. Cano told Mr. Lee: "Ayaw namin ng
gulo." But, respondent Lee hit Mr. Cano without provocation. Respondent Reverente
kicked Mr. Pascual and respondent Lee also hit Mr. Pascual. Mr. Cano and Mr. Perez
managed to run from the mauling and they were chased by respondent Lee and two
others.
Mr. Pascual was left behind. After respondent Reverente first kicked him, Mr. Pascual
was ganged-upon by the rest. He was able to run, but the group was able to catch up
with him. His shirt was torn and he was hit at the back of his head with a lead pipe.
Respondent Lee who was chasing Cano and Perez, then returned to Mr. Pascual.
Mr. Pascual identified respondents Reverente and Lee, as among those who hit him.
Although Mr. Pascual did not see respondent Valdes hit him, he identified respondent
Valdez (sic) as also one of the members of the group.
In fact, Mr. Cano saw respondent Valdes near Mr. Pascual. He was almost near the
corner of Leon Guinto and Estrada; while respondent Pascual who managed to run was
stopped at the end of Dagonoy along Leon Guinto. Respondent Valdes shouted: "Mga
putang-ina niyo." Respondent Reverente hit Mr. Pascual for the last time. Apparently
being satisfied with their handiwork, the group left. The victims, Cano, Perez and
Pascual proceeded to a friend's house and waited for almost two hours, or at around
8:00 in the evening before they returned to the campus to have their wounds treated.
Apparently, there were three cars roaming the vicinity.6
CONSTILAW 2-SEC. I | 35

The mauling incidents were a result of a fraternity war. The victims, namely: petitioner
James Yap and Dennis Pascual, Ericson Cano, and Michael Perez, are members of the
"Domino Lux Fraternity," while the alleged assailants, private respondents Alvin Aguilar,
James Paul Bungubung, Richard Reverente and Roberto Valdes, Jr. are members of
"Tau Gamma Phi Fraternity," a rival fraternity.
The next day, March 30, 1995, petitioner Yap lodged a complaint7 with the Discipline
Board of DLSU charging private respondents with "direct assault." Similar
complaints8 were also filed by Dennis Pascual and Ericson Cano against Alvin Lee and
private respondents Valdes and Reverente. Thus, cases entitled "De La Salle University
and College of St. Benilde v. Alvin Aguilar (AB-BSM/9152105), James Paul Bungubung
(AB-PSM/9234403), Robert R. Valdes, Jr. (BS-BS-APM/9235086), Alvin Lee
(EDD/9462325), Richard Reverente (AB-MGT/9153837) and Malvin A. Papio (ABMGT/9251227)" were docketed as Discipline Case No. 9495-3-25121.
The Director of the DLSU Discipline Office sent separate notices to private respondents
Aguilar, Bungubung and Valdes, Jr. and Reverente informing them of the complaints
and requiring them to answer. Private respondents filed their respective answers.9
As it appeared that students from DLSU and CSB10 were involved in the mauling
incidents, a joint DLSU-CSB Discipline Board 11 was formed to investigate the incidents.
Thus, petitioner Board Chairman Emmanuel Sales sent notices of hearing 12 to private
respondents on April 12, 1995. Said notices uniformly stated as follows:
Please be informed that a joint and expanded Discipline Board had been constituted to
hear and deliberate the charge against you for violation of CHED Order No. 4 arising
from the written complaints of James Yap, Dennis C. Pascual, and Ericson Y. Cano.
You are directed to appear at the hearing of the Board scheduled on April 19, 1995 at
9:00 a.m. at the Bro. Connon Hall for you and your witnesses to give testimony and
present evidence in your behalf. You may be assisted by a lawyer when you give your
testimony or those of your witnesses.
On or before April 18, 1995, you are further directed to provide the Board, through the
Discipline Office, with a list of your witnesses as well as the sworn statement of their
proposed testimony.
Your failure to appear at the scheduled hearing or your failure to submit the list of
witnesses and the sworn statement of their proposed testimony will be considered a
waiver on your part to present evidence and as an admission of the principal act
complained of.

During the proceedings before the Board on April 19 and 28, 1995, private respondents
interposed the common defense of alibi, summarized by the DLSU-CSB Joint Discipline
Board as follows:
First, in the case of respondent Bungubung, March 29, 1995 was one of the few
instances when he was picked-up by a driver, a certain Romeo S. Carillo. Most of the
time, respondent Bungubung goes home alone sans driver. But on this particular date,
respondent Bungubung said that his dad asked his permission to use the car and thus,
his dad instructed this driver Carillo to pick-up his son. Mr. Carillo is not a family driver,
but works from 8:00 a.m. to 5:00 p.m. for the Philippine Ports Authority where the elder
Bungubung is also employed.
Thus, attempting to corroborate the alibi of respondent Bungubung, Mr. Carillo said that
he arrived at La Salle at 4:56 p.m.; picked-up respondent at 5:02 p.m.; took the Roxas
Blvd. route towards respondent's house in BF Paraaque (on a Wednesday in
Baclaran); and arrived at the house at 6:15 p.m. Respondent Bungubung was droppedoff in his house, and taking the same route back, Mr. Carillo arrived at the South Harbor
at 6:55 p.m. the Philippine Ports Authority is located at the South Harbor.14
xxxx
Secondly, respondent Valdes said that he was with his friends at McDonald's Taft just
before 6:00 p.m. of March 29, 1995. He said that he left McDonald at 5:50 p.m. together
to get some medicine at the university clinic for his throat irritation. He said that he was
at the clinic at 5:52 p.m. and went back to McDonald, all within a span of 3 or even 4
minutes.
Two witnesses, a certain Sharon Sia and the girlfriend of respondent Valdes, a certain
Jorgette Aquino, attempted to corroborate Valdez' alibi.15
xxxx
Third, respondent Reverente told that (sic) the Board that he was at his home at 5:00
p.m. of March 29, 1995. He said that he was given the responsibility to be the
paymaster of the construction workers who were doing some works in the apartment of
his parents. Although he had classes in the evening, the workers according to him
would wait for him sometimes up to 9:00 p.m. when he arrives from his classes. The
workers get paid everyday.
Respondent Reverente submitted an affidavit, unsigned by the workers listed there,
supposedly attesting to the fact that he paid the workers at the date and time in
question.16

For your strict compliance.13

CONSTILAW 2-SEC. I | 36

xxxx
Fourth, respondent Aguilar "solemnly sw[ore] that [he] left DLSU at 5:00 p.m. for Camp
Crame for a meeting with some of the officers that we were preparing."17
18

On May 3, 1995, the DLSU-CSB Joint Discipline Board issued a Resolution finding
private respondents guilty. They were meted the supreme penalty of automatic
expulsion,19 pursuant to CHED Order No. 4.20 The dispositive part of the resolution
reads:
WHEREFORE, considering all the foregoing, the Board finds respondents ALVIN
AGUILAR (AB-BSM/9152105), JAMES PAUL BUNGUBUNG (AB-PSM/9234403),
ALVIN LEE (EDD/94623250) and RICHARD V. REVERENTE (AB-MGT/9153837) guilty
of having violated CHED Order No. 4 and thereby orders their automatic expulsion.
In the case of respondent MALVIN A. PAPIO (AB-MGT/9251227), the Board acquits him
of the charge.
SO ORDERED.21
Private respondents separately moved for reconsideration 22 before the Office of the
Senior Vice-President for Internal Operations of DLSU. The motions were all denied in a
Letter-Resolution23 dated June 1, 1995.
On June 5, 1995, private respondent Aguilar filed with the RTC, Manila, against
petitioners a petition for certiorariand injunction under Rule 65 of the Rules of Court with
prayer for temporary restraining order (TRO) and/or writ of preliminary injunction. It was
docketed as Civil Case No. 95-74122 and assigned to respondent Judge of Branch 36.
The petition essentially sought to annul the May 3, 1995 Resolution of the DLSU-CSB
Joint Discipline Board and the June 1, 1995 Letter-Resolution of the Office of the Senior
Vice-President for Internal Affairs.
The following day, June 6, 1995, respondent Judge issued a TRO24 directing DLSU, its
subordinates, agents, representatives and/or other persons acting for and in its behalf to
refrain and desist from implementing Resolution dated May 3, 1995 and LetterResolution dated June 1, 1995 and to immediately desist from barring the enrollment of
Aguilar for the second term of school year (SY) 1995.
Subsequently, private respondent Aguilar filed an ex parte motion to amend his petition
to correct an allegation in paragraph 3.2125 of his original petition. Respondent Judge
amended the TRO26 to conform to the correction made in the amended petition.27

On June 7, 1995, the CHED directed DLSU to furnish it with copies of the case records
of Discipline Case No. 9495-3-25121,28 in view of the authority granted to it under
Section 77(c) of the Manual of Regulations for Private Schools (MRPS).
On the other hand, private respondents Bungubung and Reverente, and later, Valdes,
filed petitions-in-intervention29 in Civil Case No. 95-74122. Respondent Judge also
issued corresponding temporary restraining orders to compel petitioner DLSU to admit
said private respondents.
On June 19, 1995, petitioner Sales filed a motion to dismiss 30 in behalf of all petitioners,
except James Yap. On June 20, 1995, petitioners filed a supplemental motion to
dismiss31 the petitions-in-intervention.
On September 20, 1995, respondent Judge issued an Order32 denying petitioners'
(respondents there) motion to dismiss and its supplement, and granted private
respondents' (petitioners there) prayer for a writ of preliminary injunction. The pertinent
part of the Order reads:
For this purpose, respondent, its agents, representatives or any and all other persons
acting for and in its behalf is/are restrained and enjoined from
1. Implementing and enforcing the Resolution dated May 3, 1995 ordering the automatic
expulsion of petitioner and the petitioners-in-intervention from the De La Salle University
and the letter-resolution dated June 1, 1995, affirming the Resolution dated May 3,
1995; and
2. Barring the enrolment of petitioner and petitioners-in-intervention in the courses
offered at respondent De La Salle University and to immediately allow them to enroll
and complete their respective courses/degrees until their graduation thereat in
accordance with the standards set by the latter.
WHEREFORE, the ancillary remedy prayed for is granted. Respondent, its agents,
representatives, or any and all persons acting for and its behalf are hereby restrained
and enjoyed from:
1. Implementing and enforcing the Resolution dated May 3, 1995 ordering the automatic
expulsion of petitioner and petitioners-in-intervention and the Letter-Resolution dated
June 1, 1995; and
2. Barring the enrollment of petitioner and petitioners-in-intervention in the courses
offered at respondent (De La Salle University) and to forthwith allow all said petitioner
and petitioners-in-intervention to enroll and complete their respective courses/degrees
until their graduation thereat.
CONSTILAW 2-SEC. I | 37

The Writ of Preliminary Injunction shall take effect upon petitioner and petitioners-inintervention posting an injunctive bond in the amount of P15,000.00 executed in favor of
respondent to the effect that petitioner and petitioners-in-intervention will pay to
respondent all damages that the latter may suffer by reason of the injunction if the Court
will finally decide that petitioner and petitioners-in-intervention are not entitled thereto.
The motion to dismiss and the supplement thereto is denied for lack of merit.
Respondents are directed to file their Answer to the Petition not later than fifteen (15)
days from receipt thereof.
SO ORDERED.33
Despite the said order, private respondent Aguilar was refused enrollment by petitioner
DLSU when he attempted to enroll on September 22, 1995 for the second term of SY
1995-1996. Thus, on September 25, 1995, Aguilar filed with respondent Judge an
urgent motion to cite petitioners (respondents there) in contempt of court. 34 Aguilar also
prayed that petitioners be compelled to enroll him at DLSU in accordance with
respondent Judge's Order dated September 20, 1995. On September 25, 1995,
respondent Judge issued35 a writ of preliminary injunction, the relevant portion of which
reads:
IT IS HEREBY ORDERED by the undersigned of the REGIONAL TRIAL COURT OF
MANILA that until further orders, you the said DE LA SALLE University as well as your
subordinates, agents, representatives, employees and any other person assisting or
acting for or on your behalf, to immediately desist from implementing the Resolution
dated May 3, 1995 ordering the automatic expulsion of petitioner and the intervenors in
DLSU, and the letter-resolution dated June 1, 1995 affirming the said Resolution of May
3, 1995 and to immediately desist from barring the enrolment of petitioner and
intervenors in the courses offered at DLSU and to allow them to enroll and complete
their degree courses until their graduation from said school.36
On October 16, 1995, petitioner DLSU filed with the CA a petition for certiorari 37 (CAG.R. SP No. 38719) with prayer for a TRO and/or writ of preliminary injunction to enjoin
the enforcement of respondent Judge's September 20, 1995 Order and writ of
preliminary injunction dated September 25, 1995.
On April 12, 1996, the CA granted petitioners' prayer for preliminary injunction.
On May 14, 1996, the CHED issued its questioned Resolution No. 181-96,
summarily disapproving the penalty of expulsion for all private respondents. As
for Aguilar, he was to be reinstated, while other private respondents were to be
excluded.38 The Resolution states:

RESOLUTION 181-96
RESOLVED THAT THE REQUEST OF THE DE LA SALLE UNIVERSITY (DLSU), TAFT
AVENUE, MANILA FOR THE APPROVAL OF THE PENALTY OF EXPULSION
IMPOSED ON MR. ALVIN AGUILAR, JAMES PAUL BUNGUBUNG, ROBERT R.
VALDES, JR., ALVIN LEE AND RICHARD V. REVERENTE BE, AS IT IS HEREBY IS,
DISAPPROVED.
RESOLVED FURTHER, THAT THE COMMISSION DIRECT THE DLSU TO
IMMEDIATELY EFFECT THE REINSTATEMENT OF MR. AGUILAR AND THE
LOWERING OF THE PENALTY OF MR. JAMES PAUL BUNGUBUNG, MR. ROBER R.
VALDEZ, JR., (sic) MR. ALVIN LEE AND MR. RICHARD V. REVERENTE FROM
EXPULSION TO EXCLUSION.39
Despite the directive of CHED, petitioner DLSU again prevented private respondent
Aguilar from enrolling and/or attending his classes, prompting his lawyer to write several
demand letters40 to petitioner DLSU. In view of the refusal of petitioner DLSU to enroll
private respondent Aguilar, CHED wrote a letter dated June 26, 1996 addressed to
petitioner Quebengco requesting that private respondent Aguilar be allowed to continue
attending his classes pending the resolution of its motion for reconsideration of
Resolution No. 181-96. However, petitioner Quebengco refused to do so, prompting
CHED to promulgate an Order dated September 23, 1996 which states:
Acting on the above-mentioned request of Mr. Aguilar through counsel enjoining De La
Salle University (DLSU) to comply with CHED Resolution 181-96 (Re: Expulsion Case
of Alvin Aguilar, et al. v. DLSU) directing DLSU to reinstate Mr. Aguilar and finding the
urgent request as meritorious, there being no other plain and speedy remedy available,
considering the set deadline for enrollment this current TRIMESTER, and in order to
prevent further prejudice to his rights as a student of the institution, DLSU, through the
proper school authorities, is hereby directed to allow Mr. Alvin Aguilar to provisionally
enroll, pending the Commission's Resolution of the instant Motion for Reconsideration
filed by DLSU.
SO ORDERED.41
Notwithstanding the said directive, petitioner DLSU, through petitioner Quebengco, still
refused to allow private respondent Aguilar to enroll. Thus, private respondent Aguilar's
counsel wrote another demand letter to petitioner DLSU.42
Meanwhile, on June 3, 1996, private respondent Aguilar, using CHED Resolution No.
181-96, filed a motion to dismiss43 in the CA, arguing that CHED Resolution No. 181-96
rendered the CA case moot and academic.
CONSTILAW 2-SEC. I | 38

On July 30, 1996, the CA issued its questioned resolution granting the motion to
dismiss of private respondent Aguilar, disposing thus:

Accordingly, private respondent Aguilar was allowed to conditionally enroll in petitioner

DLSU, subject to the continued effectivity of the writ of preliminary injunction dated
September 25, 1995 and to the outcome of Civil Case No. 95-74122.

THE FOREGOING CONSIDERED, dismissal of herein petition is hereby directed.

On February 17, 1997, petitioners filed the instant petition.
SO ORDERED.

44

On October 15, 1996, the CA issued its resolution denying petitioners' motion for
reconsideration, as follows:
It is obvious to Us that CHED Resolution No. 181-96 is immediately executory in
character, the pendency of a Motion for Reconsideration notwithstanding.
After considering the Opposition and for lack of merit, the Motion for Reconsideration is
hereby denied.
SO ORDERED.45
On October 28, 1996, petitioners requested transfer of case records to the Department
of Education, Culture and Sports (DECS) from the CHED. 46 Petitioners claimed that it is
the DECS, not CHED, which has jurisdiction over expulsion cases, thus, necessitating
the transfer of the case records of Discipline Case No. 9495-3-25121 to the DECS.
On November 4, 1996, in view of the dismissal of the petition for certiorari in CA-G.R.
SP No. 38719 and the automatic lifting of the writ of preliminary injunction, private
respondent Aguilar filed an urgent motion to reiterate writ of preliminary injunction dated
September 25, 1995 before respondent RTC Judge of Manila.47

On June 15, 1998, We issued a TRO49 as prayed for by the urgent motion for the
issuance of a TRO50 dated June 4, 1998 of petitioners, and enjoined respondent Judge
from implementing the writ of preliminary injunction dated September 25, 1995 issued in
Civil Case No. 95-74122, effective immediately and until further orders from this Court.
On March 27, 2006, private respondent Aguilar filed his manifestation 51 stating that he
has long completed his course at petitioner DLSU. He finished and passed all his
enrolled subjects for the second trimester of 1997-1998, as indicated in his transcript of
records52 issued by DLSU. However, despite having completed all the academic
requirements for his course, DLSU has not issued a certificate of completion/graduation
in his favor.
Issues
We are tasked to resolve the following issues:
1. Whether it is the DECS or the CHED which has legal authority to review decisions of
institutions of higher learning that impose disciplinary action on their students found
violating disciplinary rules.
2. Whether or not petitioner DLSU is within its rights in expelling private respondents.

On January 7, 1997, respondent Judge issued its questioned order granting

private respondent Aguilar's urgent motion to reiterate preliminary injunction. The
pertinent portion of the order reads:

2.a Were private respondents accorded due process of law?

In light of the foregoing, petitioner Aguilar's urgent motion to reiterate writ of preliminary
injunction is hereby granted, and respondents' motion to dismiss is denied.

2.c Was the guilt of private respondents proven by substantial evidence?

The writ of preliminary injunction dated September 25, 1995 is declared to be in force
and effect.

2.b Can petitioner DLSU invoke its right to academic freedom?

3. Whether or not the penalty imposed by DLSU on private respondents is proportionate

to their misdeed.
Our Ruling

Let a copy of this Order and the writ be served personally by the Court's sheriff upon the
respondents at petitioners' expense.
SO ORDERED.48

Prefatorily, there is merit in the observation of petitioners 53 that while CHED Resolution
No. 181-96 disapproved the expulsion of other private respondents, it nonetheless
authorized their exclusion from petitioner DLSU. However, because of the dismissal of
CONSTILAW 2-SEC. I | 39

the CA case, petitioner DLSU is now faced with the spectacle of having two different
directives from the CHED and the respondent Judge CHED ordering the exclusion of
private respondents Bungubung, Reverente, and Valdes, Jr., and the Judge ordering
petitioner DLSU to allow them to enroll and complete their degree courses until their
graduation.

On May 18, 1994, Congress approved R.A. No. 7722, otherwise known as "An Act
Creating the Commission on Higher Education, Appropriating Funds Thereof and for
other purposes."

This is the reason We opt to decide the whole case on the merits, brushing aside
technicalities, in order to settle the substantial issues involved. This Court has the power
to take cognizance of the petition at bar due to compelling reasons, and the nature and
importance of the issues raised warrant the immediate exercise of Our
jurisdiction.54 This is in consonance with our case law now accorded near-religious
reverence that rules of procedure are but tools designed to facilitate the attainment of
justice, such that when its rigid application tends to frustrate rather than promote
substantial justice, this Court has the duty to suspend their operation.55

Section 3. Creation of the Commission on Higher Education. In pursuance of the

abovementioned policies, the Commission on Higher Education is hereby created,
hereinafter referred to as Commission.

I. It is the CHED, not DECS, which has the power of supervision and review over
disciplinary cases decided by institutions of higher learning.
Ang CHED, hindi ang DECS, ang may kapangyarihan ng pagsubaybay at
pagrepaso sa mga desisyong pandisiplina ng mga institusyon ng mas mataas na
pag-aaral.
Petitioners posit that the jurisdiction and duty to review student expulsion cases, even
those involving students in secondary and tertiary levels, is vested in the DECS not in
the CHED. In support of their stance, petitioners cite Sections 4, 56 15(2) &
(3),57 54,58 57(3)59 and 7060 of Batas Pambansa (B.P.) Blg. 232, otherwise known as the
"Education Act of 1982."
According to them, Republic Act (R.A.) No. 7722 did not transfer to the CHED the
DECS' power of supervision/review over expulsion cases involving institutions of higher
learning. They say that unlike B.P. Blg. 232, R.A. No. 7722 makes no reference to the
right and duty of learning institutions to develop moral character and instill discipline
among its students. The clear concern of R.A. No. 7722 in the creation of the CHED
was academic, i.e., the formulation, recommendation, setting, and development of
academic plans, programs and standards for institutions of higher learning. The
enumeration of CHED's powers and functions under Section 8 does not include
supervisory/review powers in student disciplinary cases. The reference in Section 3 to
CHED's "coverage" of institutions of higher education is limited to the powers and
functions specified in Section 8. The Bureau of Higher Education, which the CHED has
replaced and whose functions and responsibilities it has taken over, never had any
authority over student disciplinary cases.
We cannot agree.

Section 3 of the said law, which paved the way for the creation of the CHED, provides:

The Commission shall be independent and separate from the Department of Education,
Culture and Sports (DECS) and attached to the office of the President for administrative
purposes only. Its coverage shall be both public and private institutions of higher
education as well as degree-granting programs in all post secondary educational
institutions, public and private.
The powers and functions of the CHED are enumerated in Section 8 of R.A. No. 7722.
They include the following:
Sec. 8. Powers and functions of the Commission. The Commission shall have the
following powers and functions:
xxxx
n) promulgate such rules and regulations and exercise such other powers and functions
as may be necessary to carry out effectively the purpose and objectives of this Act; and
o) perform such other functions as may be necessary for its effective operations and for
the continued enhancement of growth or development of higher education.
Clearly, there is no merit in the contention of petitioners that R.A. No. 7722 did not
transfer to the CHED the DECS' power of supervision/review over expulsion cases
involving institutions of higher learning.
First, the foregoing provisions are all-embracing. They make no reservations of powers
to the DECS insofar as institutions of higher learning are concerned. They show that the
authority and supervision over all public and private institutions of higher education, as
well as degree-granting programs in all post-secondary educational institutions, public
and private, belong to the CHED, not the DECS.
Second, to rule that it is the DECS which has authority to decide disciplinary cases
involving students on the tertiary level would render nugatory the coverage of the
CONSTILAW 2-SEC. I | 40

CHED, which is "both public and private institutions of higher education as well as
degree granting programs in all post secondary educational institutions, public and
private." That would be absurd.

DECS might have possessed by virtue of B.P. Blg. 232 or any other law or rule for that
matter.
IIa. Private respondents were accorded due process of law.

It is of public knowledge that petitioner DLSU is a private educational institution which

offers tertiar
y degree programs. Hence, it is under the CHED authority.
Third, the policy of R.A. No. 7722 61 is not only the protection, fostering and promotion
of the right of all citizens to affordable quality education at all levels and the taking of
appropriate steps to ensure that education shall be accessible to all. The law
is likewise concerned with ensuring and protecting academic freedom and with
promoting its exercise and observance for the continued intellectual growth of students,
the advancement of learning and research, the development of responsible and
effective leadership, the education of high-level and middle-level professionals, and the
enrichment of our historical and cultural heritage.
It is thus safe to assume that when Congress passed R.A. No. 7722, its members were
aware that disciplinary cases involving students on the tertiary level would continue to
arise in the future, which would call for the invocation and exercise of institutions of
higher learning of their right to academic freedom.
Fourth, petitioner DLSU cited no authority in its bare claim that the Bureau of Higher
Education, which CHED replaced, never had authority over student disciplinary cases.
In fact, the responsibilities of other government entities having functions similar to those
of the CHED were transferred to the CHED.62
Section 77 of the MRPS63 on the process of review in student discipline cases should
therefore be read in conjunction with the provisions of R.A. No. 7722.
Fifth, Section 18 of R.A. No. 7722 is very clear in stating that "[j]urisdiction over
DECS-supervised or chartered state-supported post-secondary degree-granting
vocational and tertiary institutions shall be transferred to the Commission [On
Higher Education]." This provision does not limit or distinguish that what is being
transferred to the CHED is merely the formulation, recommendation, setting and
development of academic plans, programs and standards for institutions of higher
learning, as what petitioners would have us believe as the only concerns of R.A. No.
7722. Ubi lex non distinguit nec nos distinguere debemus: Where the law does not
distinguish, neither should we.
To Our mind, this provision, if not an explicit grant of jurisdiction to the
CHED, necessarily includes the transfer to the CHED of any jurisdiction which the

Ang mga private respondents ay nabigyan ng tamang proseso ng batas.

The Due Process Clause in Article III, Section 1 of the Constitution embodies a system
of rights based on moral principles so deeply imbedded in the traditions and feelings of
our people as to be deemed fundamental to a civilized society as conceived by our
entire history.64 The constitutional behest that no person shall be deprived of life, liberty
or property without due process of law is solemn and inflexible.65
In administrative cases, such as investigations of students found violating school
discipline, "[t]here are withal minimum standards which must be met before to satisfy
the demands of procedural due process and these are: that (1) the students must be
informed in writing of the nature and cause of any accusation against them; (2) they
shall have the right to answer the charges against them and with the assistance if
counsel, if desired; (3) they shall be informed of the evidence against them; (4) they
shall have the right to adduce evidence in their own behalf; and (5) the evidence must
be duly considered by the investigating committee or official designated by the school
authorities to hear and decide the case."66
Where a party was afforded an opportunity to participate in the proceedings but failed to
do so, he cannot complain of deprivation of due process. 67 Notice and hearing is the
bulwark of administrative due process, the right to which is among the primary rights
that must be respected even in administrative proceedings. 68 The essence of due
process is simply an opportunity to be heard, or as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek
reconsideration of the action or ruling complained of.69So long as the party is given the
opportunity to advocate her cause or defend her interest in due course, it cannot be said
that there was denial of due process.70
A formal trial-type hearing is not, at all times and in all instances, essential to due
process it is enough that the parties are given a fair and reasonable opportunity to
explain their respective sides of the controversy and to present supporting evidence on
which a fair decision can be based. 71 "To be heard" does not only mean presentation of
testimonial evidence in court one may also be heard through pleadings and where the
opportunity to be heard through pleadings is accorded, there is no denial of due
process.72
Private respondents were duly informed in writing of the charges against them by the
DLSU-CSB Joint Discipline Board through petitioner Sales. They were given the
CONSTILAW 2-SEC. I | 41

opportunity to answer the charges against them as they, in fact, submitted their
respective answers. They were also informed of the evidence presented against them
as they attended all the hearings before the Board. Moreover, private respondents were
given the right to adduce evidence on their behalf and they did. Lastly, the Discipline
Board considered all the pieces of evidence submitted to it by all the parties before
rendering its resolution in Discipline Case No. 9495-3-25121.
Private respondents cannot claim that they were denied due process when they were
not allowed to cross-examine the witnesses against them. This argument was already
rejected in Guzman v. National University73 where this Court held that "x x x the
imposition of disciplinary sanctions requires observance of procedural due process. And
it bears stressing that due process in disciplinary cases involving students does not
entail proceedings and hearings similar to those prescribed for actions and proceedings
in courts of justice. The proceedings in student discipline cases may be summary; and
cross examination is not, x x x an essential part thereof."
IIb. Petitioner DLSU, as an institution of higher learning, possesses academic
freedom which includes determination of who to admit for study.
Ang petitioner DLSU, bilang institusyon ng mas mataas na pag-aaral, ay
nagtataglay ng kalayaang akademiko na sakop ang karapatang pumili ng mga
mag-aaral dito.
Section 5(2), Article XIV of the Constitution guaranties all institutions of higher learning
academic freedom. This institutional academic freedom includes the right of the school
or college to decide for itself, its aims and objectives, and how best to attain them free
from outside coercion or interference save possibly when the overriding public interest
calls for some restraint.74 According to present jurisprudence, academic freedom
encompasses the independence of an academic institution to determine for itself (1)
who may teach, (2) what may be taught, (3) how it shall teach, and (4) who may be
admitted to study.75
It cannot be gainsaid that "the school has an interest in teaching the student discipline,
a necessary, if not indispensable, value in any field of learning. By instilling discipline,
the school teaches discipline. Accordingly, the right to discipline the student likewise
finds basis in the freedom "what to teach." 76 Indeed, while it is categorically stated under
the Education Act of 1982 that students have a right "to freely choose their field of study,
subject to existing curricula and to continue their course therein up to
graduation,"77 such right is subject to the established academic and disciplinary
standards laid down by the academic institution. Petitioner DLSU, therefore, can very
well exercise its academic freedom, which includes its free choice of students for
admission to its school.

IIc. The guilt of private respondents Bungubung, Reverente and Valdes, Jr. was
proven by substantial evidence.
Ang pagkakasala ng private respondents na sina Bungubung, Reverente at
Valdes, Jr. ay napatunayan ng ebidensiyang substansyal.
As has been stated earlier, private respondents interposed the common defense of alibi.
However, in order that alibi may succeed as a defense, "the accused must establish by
clear and convincing evidence (a) his presence at another place at the time of the
perpetration of the offense and (b) the physical impossibility of his presence at the
scene of the crime."78
On the other hand, the defense of alibi may not be successfully invoked where the
identity of the assailant has been established by witnesses. 79 Positive identification of
accused where categorical and consistent, without any showing of ill motive on the part
of the eyewitness testifying, should prevail over the alibi and denial of appellants whose
testimonies are not substantiated by clear and convincing evidence.80 Well-settled is the
rule that denial and alibi, being weak defenses, cannot overcome the positive
testimonies of the offended parties.81
Courts reject alibi when there are credible eyewitnesses to the crime who can positively
identify the accused.82Alibi is an inherently weak defense and courts must receive it with
caution because one can easily fabricate an alibi.83 Jurisprudence holds that denial, like
alibi, is inherently weak and crumbles in light of positive declarations of truthful
witnesses who testified on affirmative matters that accused were at the scene of the
crime and were the victim's assailants. As between categorical testimonies that ring of
truth on one hand and a bare denial on the other, the former must prevail. 84 Alibi is the
weakest of all defenses for it is easy to fabricate and difficult to disprove, and it is for
this reason that it cannot prevail over the positive identification of accused by the
witnesses.85
The required proof in administrative cases, such as in student discipline cases, is
neither proof beyond reasonable doubt nor preponderance of evidence but only
substantial evidence. According to Ang Tibay v. Court of Industrial Relations,86 it means
"such reasonable evidence as a reasonable mind might accept as adequate to support
a conclusion."
Viewed from the foregoing, We reject the alibi of private respondents Bungubung,
Valdes Jr., and Reverente.1awphi1They were unable to show convincingly that they
were not at the scene of the crime on March 29, 1995 and that it was impossible for
them to have been there. Moreover, their alibi cannot prevail over their positive
identification by the victims.
CONSTILAW 2-SEC. I | 42

We hark back to this Court's pronouncement affirming the expulsion of several students
found guilty of hazing:
No one can be so myopic as to doubt that the immediate reinstatement of respondent
students who have been investigated and found guilty by the Disciplinary Board to have
violated petitioner university's disciplinary rules and standards will certainly undermine
the authority of the administration of the school. This we would be most loathe to do.
More importantly, it will seriously impair petitioner university's academic freedom which
has been enshrined in the 1935, 1973 and the present 1987 Constitution.87
Certainly, private respondents Bungubung, Reverente and Valdes, Jr. do not deserve to
claim a venerable institution as their own, for they may foreseeably cast a malevolent
influence on the students currently enrolled, as well as those who come after them. 88 It
must be borne in mind that universities are established, not merely to develop the
intellect and skills of the studentry, but to inculcate lofty values, ideals and attitudes; nay,
the development, or flowering if you will, of the total man.89
As for private respondent Aguilar, however, We are inclined to give credence to his alibi
that he was at Camp Crame in Quezon City at the time of the incident in question on
March 29, 1995. This claim was amply corroborated by the certification that he
submitted before the DLSU-CSB Joint Discipline Board, to wit:
C E R T I F I CAT I O N
TO WHOM THIS MAY CONCERN:
We, the undersigned, hereby declare and affirm by way of this Certification that
sometime on March 29, 1995, at about and between 4:30 P.M. and 5:30 P.M., we were
together with Alvin A. Aguilar, at Kiangan Hall, inside Camp Crame, Quezon City,
meeting in connection with an affair of our class known as Class 7, Batch 89 of the
Philippine Constabulary discussing on the proposed sponsorship of TAU GAMMA PHI
from said Batch '89 affair.
That the meeting was terminated at about 6:30 P.M. that evening and Alvin Aguilar had
asked our permission to leave and we saw him leave Camp Crame, in his car with the
driver.
April 18, 1995, Camp Crame, Quezon City.90
The said certification was duly signed by PO3 Nicanor R. Faustino (Anti-Organized
Crime CIC, NCR), PO3 Alejandro D. Deluviar (ODITRM, Camp Crame, Quezon City),
PO2 Severino C. Filler (TNTSC, Camp Crame, Quezon City), and PO3 Ireneo M.

Desesto (Supply Center, PNPLSS). The rule is that alibi assumes significance or
strength when it is amply corroborated by credible and disinterested witnesses. 91 It is
true that alibi is a weak defense which an accused can easily fabricate to escape
criminal liability. But where the prosecution evidence is weak, and betrays lack of
credibility as to the identification of defendant, alibi assumes commensurate strength.
This is but consistent with the presumption of innocence in favor of accused.92
Alibi is not always undeserving of credit, for there are times when accused has no other
possible defense for what could really be the truth as to his whereabouts at the crucial
time, and such defense may, in fact, tilt the scales of justice in his favor.93
III. The penalty of expulsion imposed by DLSU on private respondents is
disproportionate to their misdeed.
Ang parusang expulsion na ipinataw ng DLSU sa private respondents ay hindi
angkop sa kanilang pagkakasala.
It is true that schools have the power to instill discipline in their students as subsumed in
their academic freedom and that "the establishment of rules governing universitystudent relations, particularly those pertaining to student discipline, may be regarded as
vital, not merely to the smooth and efficient operation of the institution, but to its very
survival."94 This power, however, does not give them the untrammeled discretion to
impose a penalty which is not commensurate with the gravity of the misdeed. If the
concept of proportionality between the offense committed and the sanction imposed is
not followed, an element of arbitrariness intrudes. That would give rise to a due process
question.95
We agree with respondent CHED that under the circumstances, the penalty of expulsion
is grossly disproportionate to the gravity of the acts committed by private respondents
Bungubung, Reverente, and Valdes, Jr. Each of the two mauling incidents lasted only
for few seconds and the victims did not suffer any serious injury. Disciplinary measures
especially where they involve suspension, dismissal or expulsion, cut significantly into
the future of a student. They attach to him for life and become a mortgage of his future,
hardly redeemable in certain cases. Officials of colleges and universities must be
anxious to protect it, conscious of the fact that, appropriately construed, a disciplinary
action should be treated as an educational tool rather than a punitive measure.96
Accordingly, We affirm the penalty of exclusion 97 only, not expulsion,98 imposed on them
by the CHED. As such, pursuant to Section 77(b) of the MRPS, petitioner DLSU may
exclude or drop the names of the said private respondents from its rolls for being
undesirable, and transfer credentials immediately issued.

CONSTILAW 2-SEC. I | 43

WHEREFORE, the petition is PARTIALLY GRANTED. The Court of Appeals

Resolutions dated July 30, 1996 and dated October 15, 1996, and Regional Trial Court
of Manila, Branch 36, Order dated January 7, 1997 areANNULLED AND SET ASIDE,
while CHED Resolution 181-96 dated May 14, 1996 is AFFIRMED.
Petitioner DLSU is ordered to issue a certificate of completion/graduation in favor of
private respondent Aguilar. On the other hand, it may exclude or drop the names of
private respondents Bungubung, Reverente, and Valdes, Jr. from its rolls, and their
transfer credentials immediately issued.
SO ORDERED.
______________________________________

CONSTILAW 2-SEC. I | 44

REGALADO P. SAMARTINO, petitioner, vs. LEONOR B. RAON, AGUSTIN G.

CRISOSTOMO, THE MUNICIPAL TRIAL COURT OF NOVELETA, CAVITE,
HON. MANUEL A. MAYO, REGIONAL TRIAL COURT, BRANCH 16,
CAVITE CITY, HON. ROLANDO D. DIAZ, REGIONAL TRIAL COURT,
BRANCH 17, CAVITE CITY, SHERIFF DANILO G. LAPUZ, CAVITE CITY
and THE HON. COURT OF APPEALS, respondents.
DECISION
YNARES-SANTIAGO, J.:
Respondents Leonor Bernardo-Raon and Agustin G. Crisostomo are the
surviving sister and spouse, respectively, of the late Filomena Bernardo-Crisostomo,
who passed away on May 17, 1994. Among the properties left by the deceased was
her one-half share in a parcel of land in Noveleta, Cavite, registered under Transfer
Certificate of Title No. T- 131898 in the name of co-owners Lido Beach Corporation
and Filomena Bernardo.
On January 25, 1996, respondents instituted against petitioner Regalado P.
Samartino a complaint for ejectment, docketed as Civil Case No. 744 of the Municipal
Trial Court of Noveleta, Cavite.[1] They alleged that during the lifetime of Filomena
Bernardo, she leased her share in the property to petitioner for a period of five years
counted from 1986; that the said lease expired and was not extended thereafter; and
that petitioner refused to vacate the property despite demands therefor.
Summons was served on Roberto Samartino, brother of petitioner.[2] At the time
of service of summons at petitioners house, he was not at home as he was then
confined at the National Bureau of Investigation Treatment and Rehabilitation Center
(NBI-TRC), Tagaytay City since January 19, 1996, where he was undergoing treatment
and rehabilitation for drug dependency. Thus, on February 2, 1996, a liaison officer of
the NBI-TRC appeared before the trial court with a certification that petitioner will be
unable to comply with the directive to answer the complaint within the reglementary
period, inasmuch as it will take six months for him to complete the rehabilitation
program and before he can be recommended for discharge by the Rehabilitation
Committee.[3]
The trial court, despite the written certification from NBI-TRC, granted
respondents motion to declare petitioner in default and ordered them to present
evidence ex-parte. On March 21, 1996, the trial court rendered judgment in favor of
respondents as follows:

FROM THE FOREGOING CONSIDERATIONS, judgment is hereby rendered in favor

of the plaintiffs and against the defendant ordering the latter and other person/s
claiming rights under him:
1. To vacate immediately the land in question after the finality of the
decision.
2. For the defendant to pay the plaintiffs the sum of P5,000.00 monthly
from January, 1992 up to the time he surrenders the premises
considered as damages for the use of the subject land.
3. For the defendant to pay the plaintiffs P 10,000.00 as and for
attorneys fees with an additional P800.00 as appearance fees.
4. To pay the plaintiffs P 100.00 as filing fee.
SO ORDERED.[4]
After learning of the adverse decision against him, petitioners counsel filed with
the Regional Trial Court of Cavite City, Branch 16, a motion to set aside judgment. The
motion was treated as an appeal and docketed as Civil Case No. N-6281. On July 18,
1996, the RTC affirmed the decision of the MTC.[5]
The aforesaid decision became final. Accordingly, the court of origin issued on
September 17, 1996 a writ of execution. [6] Petitioner was given a grace period of one
month within which to vacate the premises. His real property situated in Noveleta,
Cavite, covered by Transfer Certificate of Title No. T-283572, was levied and sold at
public auction to respondents in full satisfaction of the monetary award.[7]
On November 25, 1996, petitioner filed with the Regional Trial Court of Cavite
City, a petition for relief from judgment, docketed as Civil Case No. N-6393. [8] In
support thereof, petitioner submitted an affidavit of merit, [9] alleging in fine that the
parcel of land from which he was being evicted had been sold to him by Filomena
Bernardo-Crisostomo, as evidenced by the Deed of Absolute Sale dated December 13,
1988.[10]
The following day, November 26, 1996, the RTC issued an Order dismissing the
petition for relief from judgment.[11] Petitioners Motion for Reconsideration was denied
on December 12, 1996. A second Motion for Reconsideration was likewise denied on
January 14, 1997.[12] On the same day, a writ of demolition was issued commanding
the sheriff to remove the building and improvements made by petitioner on the subject
premises and to deliver the possession thereof to respondents.[13]
CONSTILAW 2-SEC. I | 45

Petitioner thus filed a petition for certiorari with the Court of Appeals, docketed as
CA-G.R. SP No. 432O2.[14] On August 29, 1997, the Court of Appeals dismissed the
petition.[15]Petitioners Motion for Reconsideration was denied on November 14, 1997.
[16]
Hence this petition for review.
The petition is impressed with merit.
In actions in personam, summons on the defendant must be served by handing a
copy thereof to the defendant in person, or, if he refuses to receive it, by tendering it to
him. If efforts to serve the summons personally to defendant is impossible, service may
be effected by leaving copies of the summons at the defendants dwelling house or
residence with some person of suitable age and discretion residing therein, or by
leaving the copies at the defendants office or regular place of business with some
competent person in charge thereof. Otherwise stated, service of summons upon the
defendant shall be by personal service first and only when the defendant cannot be
promptly served in person will substituted service be availed of.[17]
Rule 14 of the 1997 Rules of Civil Procedure clearly provides:
Sec. 6. Service in person on defendant. - Whenever practicable, the summons shall be
served by handing a copy thereof to the defendant in person, or, if he refuses to
receive and sign for it, by tendering it to him.
Sec. 7. Substituted service. - If, for justifiable causes, the defendant cannot be served
within a reasonable time as provided in the preceding section, service may be effected
(a) by leaving copies of the summons at the defendants residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at
defendants office or regular place of business with some competent person in charge
thereof.
We have long held that the impossibility of personal service justifying availment of
substituted service should be explained in the proof of service; why efforts exerted
towards personal service failed. The pertinent facts and circumstances attendant to the
service of summons must be stated in the proof of service or Officers Return;
otherwise, the substituted service cannot be upheld. It is only under exceptional terms
that the circumstances warranting substituted service of summons may be proved by
evidence aliunde. It bears stressing that since service of summons, especially for
actions in personam, is essential for the acquisition of jurisdiction over the person of
the defendant, the resort to a substituted service must be duly justified. Failure to do so
would invalidate all subsequent proceedings on jurisdictional grounds.[18]

In this connection, Supreme Court Administrative Circular No. 59 was issued on

November 19, 1989 to stress the importance of strict compliance with the requisites for
a valid substituted service, to wit:
Delays in court proceedings have been caused by faulty and erroneous
implementation of Section 8, Rule 14, Rules of Court on Substituted Service of
Summons.
The Trial Judges of all lower courts, as well as the Clerks of Court in their capacity as
Ex-Officio Sheriffs together with the Deputy Sheriffs are reminded of the provision of
Section 8, Rule 14, Rules of Court on substituted service as follows:
xxx xxx xxx
The manner of effecting substituted service as prescribed in Venturanza vs. Court of
Appeals, 156 SCRA 305, must be strictly complied with, thus:
The substituted service should be availed only when the defendant cannot be served
promptly in person. Impossibility of prompt service should be shown by stating the
efforts made to find the defendant personally and the failure of such efforts. The
statement should be made in the proof of service. This is necessary because
substituted service is in derogation of the usual method of service.
Substituted service is a method extraordinary in character, and hence may be used
only as prescribed in the circumstances authorized by statute. Thus, the statutory
requirements of substituted service must be followed strictly, faithfully and any
substituted service other than authorized by the statute is considered ineffective.
For immediate compliance.
In the case at bar, the sheriffs Return of Summons simply states:
This is to certify that on this date: 26th day of January I have caused the service of
summons, together with the attached complaint and its annexes issued in the above
entitled case upon defendant REGALADO SAMARTINO thru ROBERTO
SAMARTINO, Brother of the defendant acknowledge receipt of said court processes
by affixing his signature at the lower left portion of the original summons hereto
attached.
WHEREFORE, the attached original summons is hereby respectfully returned to the
court of origin duly served for information and record purposes.

CONSTILAW 2-SEC. I | 46

Noveleta, Cavite, February 9, 1996.[19]

Clearly, the above return failed to show the reason why personal service could
not be made. It failed to state that prompt and personal service on the defendant was
rendered impossible. It was not shown that efforts were made to find the defendant
personally and that said efforts failed; hence the resort to substituted service. As stated
above, these requirements are indispensable because substituted service is in
derogation of the usual method of service. It is an extraordinary method since it seeks
to bind the defendant to the consequences of a suit even though notice of such action
is served not upon him but upon another whom law could only presume would notify
him of the pending proceedings. For this reason, failure to faithfully, strictly, and fully
comply with the requirements of substituted service renders said service ineffective.[20]
Furthermore, nowhere in the return of summons or in the records of this case is it
shown that petitioners brother, on whom substituted service of summons was effected,
was a person of suitable age and discretion residing at petitioners residence.
There being no valid substituted service of summons, the trial court did not
acquire jurisdiction over the person of petitioner. It should be emphasized that the
service of summons is not only required to give the court jurisdiction over the person of
the defendant, but also to afford the latter an opportunity to be heard on the claim
made against him. Thus, compliance with the rules regarding the service of summons
is as much an issue of due process as of jurisdiction. The essence of due process is to
be found in the reasonable opportunity to be heard and submit any evidence one may
have in support of his defense. It is elementary that before a person can be deprived of
his property, he should first be informed of the claim against him and the theory on
which such claim is premised.[21]
By reason of the ineffective service of summons, petitioner was not duly apprised
of the action against him. Consequently, he was prevented from answering the claims
against him. He was not given a chance to be heard on his defenses. What made
matters worse was that the trial court had actual knowledge that petitioner was then
indisposed and unable to file his answer to the complaint, as he was then confined at
the NBI-TRC. The trial courts failure to give petitioner a reasonable opportunity to file
his answer violated his right to due process. Perforce, the judgment rendered against
petitioner is nugatory and without effect.
The trial court should not have been too rash in declaring petitioner in default,
considering it had actual notice of valid reasons that prevented him from answering.
Well-settled is the rule that courts should be liberal in setting aside orders of default for
default judgments are frowned upon, unless in cases where it clearly appears that the
reopening of the case is intended for delay. The issuance of orders of default should

be the exception rather than the rule, to be allowed only in clear cases of obstinate
refusal by the defendant to comply with the orders of the trial court.[22]
Suits should as much as possible be decided on the merits and not on technicalities. In
this regard, we have often admonished courts to be liberal in setting aside orders of
default as default judgments are frowned upon and not looked upon with favor for they
may amount to a positive and considerable injustice to the defendant and the
possibility of such serious consequences necessitates a careful examination of the
grounds upon which the defendant asks that it be set aside. Since rules of procedure
are mere tools designed to facilitate the attainment of justice, it is well recognized that
this Court is empowered to suspend its operation, or except a particular case from its
operation, when the rigid application thereof tends to frustrate rather than promote the
ends of justice. We are not unmindful of the fact that during the pendency of the instant
petition, the trial court has rendered judgment against petitioners. However, being the
court of last resort, we deem it in the best interest that liberality and relaxation of the
Rules be extended to petitioners by setting aside the order of default issued by the trial
court and the consequent default judgment; otherwise, great injustice would result if
petitioners are not afforded an opportunity to prove their claims.[23]
In addition, the Regional Trial Court committed reversible error in dismissing the
petition for relief from judgment for having been filed out of time. According to the
Regional Trial Court, the petition for relief, filed on November 25, 1996, was late
because petitioner had actual knowledge of the judgment in the ejectment case since
March 1996. The period within which to file a petition for relief should have been
reckoned from the date petitioner learned of the judgment of the Regional Trial Court. It
should not have been counted from the date of the Municipal Trial Courts decision
because, precisely, petitioner appealed the same. It was the Regional Trial Courts
decision that became final and, hence, was the proper subject of the petition for relief
from judgment. It is axiomatic that a petition for relief is only available against a final
and executory judgment.[24]
Section 3, Rule 38, of the 1997 Rules of Civil Procedure provides that a verified
petition for relief must be filed within sixty (60) days after the petitioner learns of the
judgment, final order, or other proceeding to be set aside and not more than six (6)
months after such judgment or final order has been entered or such proceeding has
been taken. It must be accompanied with affidavits showing the fraud, accident,
mistake, or excusable negligence relied upon, and the facts constituting petitioners
good and substantial cause of action or defense.[25]
It is not clear from the records of the case at bar when petitioner learned of the
decision of the Regional Trial Court affirming the judgment of the Municipal Trial Court.
What appears is that the said decision became final only on August 15, 1996, and
must have been entered sometime thereafter. Hence, the petition for relief filed on
November 25, 1996 was well within the six-month period prescribed by the Rules.
CONSTILAW 2-SEC. I | 47

Finally, the records show that petitioner raised a meritorious defense in his
affidavit of merit. He alleged therein that the property from which he was being ejected
had been sold to him by its registered owner. Ownership is a valid defense in unlawful
detainer cases. While possession is the main issue in ejectment, it is also one of the
essential attributes of ownership. It follows that an owner of real property is entitled to
possession of the same. Petitioner can, therefore, properly plead his right of
possession to defeat that of respondents. Indeed, an owner who cannot exercise the
seven "juses or attributes of ownership - the right to possess, to use and enjoy, to
abuse or consume, to accessories, to dispose or alienate, to recover or vindicate and
to the fruits - is a crippled owner.[26]
All told, the Municipal Trial Court of Noveleta and the Regional Trial Court of
Cavite City did not have jurisdiction over the person of petitioner. Hence, all
proceedings had as regards petitioner were null and void. Necessarily, the
enforcement of the writ of execution as well as the sale at public auction of petitioners
real property to satisfy the void judgment must also be declared of no legal effect.
There is a real need to resolve the issue of ownership over the premises in order
to determine who, as between petitioner and respondents, has a better right to
possess the property in dispute. This can only be done in the proper proceeding before
the trial court wherein petitioner will be afforded every right to present evidence in his
behalf.
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision
of the Court of Appeals in CA-G.R. SP No. 43202 is REVERSED and SET ASIDE. This
case is REMANDED to the Municipal Trial Court of Noveleta, Cavite, which is directed
to continue proceedings in Civil Case No. 744 by affording petitioner Regalado P.
Samartino a chance to file his answer and present evidence in his defense, and
thereafter to hear and decide the case. The Writ of Execution dated September 17,
1996, the Writ of Demolition dated January 14, 1997, and the certificate of sale over
Transfer Certificate of Title No. T-283572, as well as all acts and deeds incidental to
the judgment in Civil Case No. 744, are declared NULL AND VOID.
SO ORDERED.

G.R. No. L-61689 June 20, 1988

RURAL BANK OF BUHI, INC., and HONORABLE JUDGE CARLOS R.
BUENVIAJE, petitioners,
vs.
HONORABLE COURT OF APPEALS, CENTRAL BANK OF THE PHILIPPINES and
CONSOLACION ODRA,respondents.
Manuel B. Tomacruz and Rustico Pasilavan for petitioners.
I.B. Regalado, Jr. and Pacifica T. Torres for respondents.

PARAS, J.:
This is a petition for review on certiorari with preliminary mandatory injunction seeking
the reversal of the orders of the Court of Appeals dated March 19, 1982 and March 24,
1982 and its decision * (HATOL) promulgated on June 17,1982 in CA-G.R. No. 13944
entitled "Banko Central ng Pilipinas at Consolacion Odra Laban Kina Rural Bank of
Buhi (Camarines Sur), Inc." and praying for a restraining order or a preliminary
mandatory injunction to restrain respondents from enforcing aforesaid orders and
decision of the respondent Court, and to give due course to the petitioners' complaint
in IR-428, pending before Hon. Judge Carlos R. Buenviaje of Branch VII, CFI,
Camarines Sur.
The decretal portion of the appealed decision reads:
DAHIL DITO, ang utos ng pinasasagot sa Hukom noong ika-9 ng
Marso, 1982, ay isinasang-tabi. Kapalit nito, isang utos and
ipinalabas na nag-uutos sa pinasasagot sa Hukom na itigil ang
CONSTILAW 2-SEC. I | 48

anumang pagpapatuloy o pagdidinig kaugnay sa usaping IR-428 na

pinawawalang saysay din ng Hukumang ito.
SIYANG IPINAG-UUTOS.
The antecedent facts of the case are as follows:
The petitioner Rural Bank of Buhi, Inc. (hereinafter referred to as Buhi) is a juridical
entity existing under the laws of the Philippines. Buhi is a rural bank that started its
operations only on December 26,1975 (Rollo, p. 86).
In 1980, an examination of the books and affairs of Buhi was ordered conducted by the
Rural Banks and Savings and Loan Association (DRBSLA), Central Bank of the
Philippines, which by law, has charge of the supervision and examination of rural
banks and savings and loan associations in the Philippines. However, said petitioner
refused to be examined and as a result thereof, financial assistance was suspended.
On January 10, 1980, a general examination of the bank's affairs and operations was
conducted and there were found by DRBSLA represented by herein respondent,
Consolacion V. Odra, Director of DRBSLA, among others, massive irregularities in its
operations consisting of loans to unknown and fictitious borrowers, where the sum of P
1,704,782.00 was past due and another sum of P1,130,000.00 was also past due in
favor of the Central Bank (Rollo, p. 86). The promissory notes evidencing these loans
were rediscounted with the Central Bank for cash. As a result thereof, the bank
became insolvent and prejudiced its depositors and creditors.
Respondent, Consolacion V. Odra, submitted a report recommending to the Monetary
Board of the Central Bank the placing of Buhi under receivership in accordance with
Section 29 of Republic Act No. 265, as amended, the designation of the Director,
DRBSLA, as receiver thereof. On March 28, 1980, the Monetary Board, finding the
report to be true, adopted Resolution No. 583 placing Buhi, petitioner herein, under
receivership and designated respondent, Consolacion V. Odra, as Receiver, pursuant
to the provisions of Section 29 of Republic Act No. 265 as amended (Rollo, p. 111).
In a letter dated April 8, 1980, respondent Consolacion V. Odra, as receiver,
implemented and carried out said Monetary Board Resolution No. 583 by authorizing
deputies of the receiver to take control, possession and charge of Buhi, its assets and
liabilities (Rollo, p. 109).
Imelda del Rosario, Manager of herein petitioner Buhi, filed a petition for injunction with
Restraining Order dated April 23, 1980, docketed as Special Proceedings IR-428
against respondent Consolacion V. Odra and DRBSLA deputies in the Court of First
Instance of Camarines Sur, Branch VII, Iriga City, entitled Rural Bank of Buhi vs.

Central Bank, which assailed the action of herein respondent Odra in recommending
the receivership over Buhias a violation of the provisions of Sections 28 and 29 of
Republic Act No. 265 as amended, and Section 10 of Republic Act No. 720 (The Rural
Banks Act) and as being ultra vires and done with grave abuse of discretion and in
excess of jurisdiction (Rollo, p. 120).
Respondents filed their motion to dismiss dated May 27, 1980 alleging that the petition
did not allege a cause of action and is not sufficient in form and substance and that it
was filed in violation of Section 29, Republic Act No. 265 as amended by Presidential
Decree No. 1007 (Rollo, p. 36).
Petitioners, through their counsel, filed an opposition to the motion to dismiss dated
June 17, 1980 averring that the petition alleged a valid cause of action and that
respondents have violated the due process clause of the Constitution (Rollo, p. 49).
Later, respondents filed a reply to the opposition dated July 1, 1980, claiming that the
petition is not proper; that Imelda del Rosario is not the proper representative of the
bank; that the petition failed to state a cause of action; and, that the provisions of
Section 29 of Republic Act No. 265 had been faithfully observed (Rollo, p. 57).
On August 22, 1980, the Central Bank Monetary Board issued a Resolution No. 1514
ordering the liquidation of the Rural Bank of Buhi (Rollo, p. 108).
On September 1, 1981, the Office of the Solicitor General, in accordance with Republic
Act No. 265, Section 29, filed in the same Court of First Instance of Camarines Sur,
Branch VII, a petition for Assistance in the Liquidation of Buhi, which petition was
docketed as SP-IR-553, pursuant to the Monetary Board Resolution No. 1514 (Rollo,
pp. 89; 264).
Meanwhile, respondent Central Bank filed on September 15, 1981, in Civil Case No.
IR-428 a Supplemental Motion To Dismiss on the ground that the receivership
of Buhi, in view of the issuance of the Monetary Board Resolution No. 1514 had
completely become moot and academic (Rollo, p. 68) and the fact that Case SP-IR553 for the liquidation of Buhi was already pending with the same Court (Rollo, p. 69).
On October 16, 1981, petitioners herein filed their amended complaint in Civil Case
No. IR-428 alleging that the issuance of Monetary Board Resolution No. 583 was
plainly arbitrary and in bad faith under aforequoted Section 29 of Republic Act No. 265
as amended, among others (Rollo, p. 28). On the same day, petitioner herein filed a
rejoinder to its opposition to the motion to dismiss (Rollo, p. 145).
On March 9,1982, herein petitioner Judge Buenviaje, issued an order denying the
respondents' motion to dismiss, supplemental motion to dismiss and granting a
CONSTILAW 2-SEC. I | 49

temporary restraining order enjoining respondents from further managing and

administering the Rural Bank of Buhi and to deliver the possession and control thereof
to the petitioner Bank under the same conditions and with the same financial status as
when the same was taken over by herein respondents (defendants) on April 16, 1980
and further enjoining petitioner to post a bond in the amount of three hundred thousand
pesos (P300,000.00) (Rollo, p. 72).
The dispositive portion of said decision reads:
WHEREFORE, premises considered, the motion to dismiss and
supplemental motion to dismiss, in the light of petitioners' opposition,
for want of sufficient merit is denied. Respondents are hereby
directed to file their answer within ten (10) days from receipt of a
copy of this order. (Rollo, p. 4).
On March 11, 1982, petitioner Buhi through counsel, conformably with the abovementioned order, filed a Motion to Admit Bond in the amount of P300,220.00 (Rollo, pp.
78-80).
On March 15,1982, herein petitioner Judge issued the order admitting the bond of
P300,220.00 filed by the petitioner, and directing the respondents to surrender the
possession of the Rural Bank of Buhi, together with all its equipments, accessories,
etc. to the petitioners (Rollo, p. 6).
Consequently, on March 16, 1982, herein petitioner Judge issued the writ of execution
directing the Acting Provincial Sheriff of Camarines Sur to implement the Court's order
of March 9, 1982 (Rollo, p. 268). Complying with the said order of the Court, the
Deputy Provincial Sheriff went to the Buhi premises to implement the writ of execution
but the vault of the petitioner bank was locked and no inventory was made, as
evidenced by the Sheriffs Report (Rollo, pp. 83-84). Thus, the petitioner herein filed
with the Court an "Urgent Ex-Parte Motion to Allow Sheriff Calope to Force Open Bank
Vault" on the same day (Rollo, p. 268). Accordingly, on March 17, 1982, herein
petitioner Judge granted the aforesaid Ex-Parte Motion to Force Open the Bank Vault
(Rollo, p. 269).
On March 18, 1982, counsel for petitioner filed another "Urgent Ex-Parte Motion to
Order Manager of City Trust to Allow Petitioner to Withdraw Rural Bank Deposits" while
a separate "Urgent Ex-Parte Motion to Order Manager of Metrobank to Release
Deposits of Petitioners" was filed on the same date. The motion was granted by the
Court in an order directing the Manager of Metro Bank-Naga City (Rollo, p. 269) to
comply as prayed for.

In view thereof, herein respondents filed in the Court of Appeals a petition for certiorari
and prohibition with preliminary injunction docketed as CA-G.R. No. 13944 against
herein petitioners, seeking to set aside the restraining order and reiterating therein that
petitioner Buhi's complaint in the lower court be dismissed (Rollo, p. 270).
On March 19, 1982, the Court of Appeals issued a Resolution (KAPASIYAHAN) in
tagalog, restraining the Hon. Judge Carlos R. Buenviaje, from enforcing his order of
March 9,1982 and suspending further proceedings in Sp. Proc. No. IR-428 pending
before him while giving the Central Bank counsel, Atty. Ricardo Quintos, authority to
carry out personally said orders and directing the "Punong Kawani" of the Court of
Appeals to send telegrams to the Office of the President and the Supreme Court
(Rollo, p. 168).
Herein petitioners did not comply with the Court of Appeals' order of March 19, 1982,
but filed instead on March 21, 1982 a motion for reconsideration of said order of the
Court of Appeals, claiming that the lower court's order of March 9, 1982 referred only
to the denial of therein respondents' motion to dismiss and supplemental motion to
dismiss and that the return of Buhi to the petitioners was already an accomplished fact.
The motion was denied by the respondent court in a resolution dated June 1, 1982
(Rollo, p. 301).
In view of petitioners' refusal to obey the Court of Appeals' Order of March 19, 1982,
herein respondents filed with the Court of Appeals a Motion to Cite Petitioners in
Contempt, dated April 22, 1982 (Rollo, p. 174).
The Court of Appeals issued on May 24, 1982 an order requiring herein petitioner
Rural Bank of Buhi, Inc., through its then Acting Manager, Imelda del Rosario and
herein petitioner Judge Carlos Buenviaje, as well as Manuel Genova and Rodolfo
Sosa, to show cause within ten (10) days from notice why they should not be held in
contempt of court and further directing the Ministry of National Defense or its
representative to cause the return of possession and management of the Rural Bank
to the respondents Central Bank and Consolacion Odra (Rollo, p. 180).
On June 9, 1982, petitioners filed their objection to respondents' motion for contempt
dated June 5, 1982 claiming that the properties, subject of the order, had already been
returned to the herein petitioners who are the lawful owners thereof and that the
returning could no longer be undone (Rollo, p. 181).
Later, petitioners filed another motion dated June 17, 1982 for the reconsideration of
the resolution of June 1, 1982 of the Court of Appeals alleging that the same
contravened and departed from the rulings of the Supreme Court that consummated
acts or acts already done could no longer be the subject of mandatory injunction and
that the respondent Court of Appeals had no jurisdiction to issue the order unless it
CONSTILAW 2-SEC. I | 50

was in aid of its appellate jurisdiction, claiming that the case (CA-G.R. No. 13944) did
not come to it on appeal (Rollo, p. 302).
As aforestated, on June 17, 1982, respondent Court of Appeals rendered its decision
(HATOL) setting aside the lower court's restraining order dated March 9,1982 and
ordering the dismissal of herein petitioners' amended complaint in Civil Case No. IR428 (Rollo, p. 186).
On July 9, 1982, petitioners (respondents in CA-G.R. No. 13944) filed a Motion for
Reconsideration of the Decision dated June 17, 1982 insofar as the complaint with the
lower court (Civil Case No. IR-428 was ordered dismissed (Rollo, p. 305).
On August 23, 1982, the respondent Court of Appeals issued its Resolution denying for
lack of merit, herein petitioners' motion for reconsideration of the resolution issued by
the respondent Court of Appeals on June 1, 1982 and set on August 31, 1982 the
hearing of the motion to cite the respondents in CA-G.R. No. SP-13944 (herein
petitioner) for contempt (Rollo, p. 193).
At said hearing, counsel for Rural Bank of Buhi agreed and promised in open court to
restore and return to the Central Bank the possession and control of the Bank within
three (3) days from August 31, 1982.
However on September 3,1982, Rosalia Guevara, Manager thereof, vigorously and
adamantly refused to surrender the premises unless she received a written order from
the Court.
In a subsequent hearing of the contempt incident, the Court of Appeals issued its
Order dated October 13,1982, but Rosalia Guevara still refused to obey, whereupon
she was placed under arrest and the Court of Appeals ordered her to be detained until
she decided to obey the Court's Order (Rollo, pp. 273-274).
Earlier, on September 14, 1982 petitioners had filed this petition even while a motion
for reconsideration of the decision of June 17,1982 was still pending consideration in
the Court of Appeals.
In the resolution of October 20, 1982, the Second Division of this Court without giving
due course to the petition required respondents to COMMENT (Rollo, p. 225).
Counsel for respondents manifested (Rollo, p. 226) that they could not file the required
comment because they were not given a copy of the petition. Meanwhile, they filed an
urgent motion dated October 28, 1982 with the Court of Appeals to place the bank
through its representatives in possession of the Rural Bank of Buhi (Camarines Sur),
Inc. (Rollo, p. 237).

On December 9, 1982, petitioners filed a Supplemental Petition with urgent motion for
the issuance of a restraining order dated December 2, 1982 praying that the
restraining order be issued against respondent court (Rollo, p. 229).
In the resolution of December 15,1982, the Court resolved to require petitioners to
furnish the respondents with a copy of the petition and to require the respondents to
comment on both the original and the supplemental petitions (Rollo, p. 243).
In a resolution of February 21, 1983, the Court NOTED Rosalia V. Guevara's letter
dated February 4, 1983 (Rollo, p. 252) addressed to Hon. Chief Justice Enrique M.
Fernando, requesting that she be allowed to file a petition for the issuance of a writ
of habeas corpus (Rollo, p. 256).
At the hearing of the said petition on February 23, 1983 where the counsel of both
parties appeared, this Court noted the Return of the Writ of Habeas Corpus as well as
the release of petitioner Rosalia V. Guevara from detention by the National Bureau of
Investigation. After hearing aforesaid counsel and petitioner herself, and it appearing
that the latter had resigned since January 18,1983 as Manager of the Rural Bank of
Buhi, Inc. and that the Central Bank might avail of more than adequate legal measures
to take over the management, possession and control of the said bank (and not
through contempt proceedings and detention and confinement of petitioner), with
Assistant Solicitor General Andin manifesting that respondents were not insisting on
the continued detention of petitioner, the Court Resolved to SET the petitioner at liberty
and to consider the contempt incident closed (Rollo, p. 339).
On April 11, 1983, respondents filed their comment on the original and supplemental
petitions.
Meanwhile, the Court of Appeals, acting on respondents' urgent motion filed on
October 28, 1982 ordered on April 13, 1983 the return to the petitioners (herein
respondents) or their duly authorized representatives of the possession, management
and control of subject Rural Bank (Rollo, p. 319), together with its properties.
On April 28, 1983, petitioner filed an urgent motion: (1) to give due course to the
petition and (2) for immediate issuance of a Restraining Order against the respondent
court to prevent it from enforcing its aforesaid resolution dated April 13, 1983 and from
further proceeding in AC-G.R. No. 13944-SP (Rollo, p. 315).
On May 16, 1983, this Court resolved to deny the petition for lack of merit (Rollo, p.
321). On July 25, 1983, petitioners filed their verified Motion for Reconsideration
(Rollo, p. 337) praying that the HATOL dated June 17, 1982 of the Court of Appeals be
set aside as null and void and that Special Proceedings No. IR-428 of CFI-Camarines
CONSTILAW 2-SEC. I | 51

Sur, Iriga City, Branch VII, be ordered remanded to the RTC of Camarines Sur, Iriga
City, for further proceedings.
A Motion for Early Resolution was filed by herein petitioners on March 12,1984 (Rollo,
p. 348).
Petitioners raised the following legal issues in their motion for reconsideration:
I. UNDER SEC. 29, R.A. 265, AS AMENDED, MAY THE MONETARY BOARD (MB)
OF THE CENTRAL BANK (CB) PLACE A RURAL BANK UNDER RECEIVERSHIP
WITHOUT PRIOR NOTICE TO SAID RURAL BANK TO ENABLE IT TO BE HEARD
ON THE GROUND RELIED UPON FOR SUCH RECEIVERSHIP?
II. UNDER THE SAME SECTION OF SAID LAW, WHERE THE MONETARY BOARD
(MB) OF THE CENTRAL BANK (CB) HAS PLACED A RURAL BANK UNDER
RECEIVERSHIP, IS SUCH ACTION OF THE MONETARY BOARD (MB) SUBJECT TO
JUDICIAL REVIEW? IF SO, WHICH COURT MAY EXERCISE SUCH POWER AND
WHEN MAY IT EXERCISE THE SAME?
III. UNDER THE SAID SECTION OF THE LAW, SUPPOSE A CIVIL CASE IS
INSTITUTED SEEKING ANNULMENT OF THE RECEIVERSHIP ON THE GROUND
OF ARBITRARINESS AND BAD FAITH ON THE PART OF THE MONETARY BOARD
(MB), MAY SUCH CASE BE DISMISSED BY THE IAC (THEN CA) ON THE GROUND
OF INSUFFICIENCY OF EVIDENCE EVEN IF THE TRIAL COURT HAS NOT HAD A
CHANCE YET TO RECEIVE EVIDENCE AND THE PARTIES HAVE NOT YET
PRESENTED EVIDENCE EITHER IN THE TRIAL COURT OR IN SAID APPELLATE
COURT? (Rollo, pp. 330-331).
I. Petitioner Rural Bank's position is to the effect that due process was not observed by
the Monetary Board before said bank was placed under receivership. Said Rural Bank
claimed that it was not given the chance to deny and disprove such claim of insolvency
and/or any other ground which the Monetary Board used in justification of its action.
Relative thereto, the provision of Republic Act No. 265 on the proceedings upon
insolvency reads:
SEC. 29. Proceedings upon insolvency. Whenever, upon
examination by the head of the appropriate supervising and
examining department or his examiners or agents into the condition
of any banking institution, it shall be disclosed that the condition of
the same is one of insolvency, or that its continuance in business
would involve probable loss to its depositors or creditors, it shall be
the duty of the department head concerned forthwith, in writing, to

inform the Monetary Board of the facts, and the Board may, upon
finding the statements of the department head to be true, forbid the
institution to do business in the Philippines and shall designate an
official of the Central Bank, or a person of recognized competence in
banking, as receiver to immediately take charge of its assets and
liabilities, as expeditiously as possible collect and gather all the
assets and administer the same for the benefit of its creditors,
exercising all the powers necessary for these purposes including,
but not limited to, bringing suits and foreclosing mortgages in the
name of the banking institution.
The Monetary Board shall thereupon determine within sixty days
whether the institution may be recognized or otherwise placed in
such a condition so that it may be permitted to resume business with
safety to its depositors and creditors and the general public and shall
prescribe the conditions under which such redemption of business
shall take place as the time for fulfillment of such conditions. In such
case, the expenses and fees in the collection and administration of
the assets of the institution shall be determined by the Board and
shall be paid to the Central Bank out of the assets of such banking
institution.
If the Monetary Board shall determine and confirm within the said
period that the banking institution is insolvent or cannot resume
business with safety to its depositors, creditors and the general
public, it shall, if the public interest requires, order its liquidation,
indicate the manner of its liquidation and approve a liquidation plan.
The Central Bank shall, by the Solicitor General, file a petition in the
Court of First Instance reciting the proceedings which have been
taken and praying the assistance of the court in the liquidation of the
banking institution. The Court shall have jurisdiction in the same
proceedings to adjudicate disputed claims against the bank and
enforce individual liabilities of the stockholders and do all that is
necessary to preserve the assets of the banking institution and to
implement the liquidation plan approved by the Monetary Board. The
Monetary Board shall designate an official of the Central Bank or a
person of recognized competence in banking, as liquidator who shall
take over the functions of the receiver previously appointed by the
Monetary Board under this Section. The liquidator shall, with all
convenient speed, convert the assets of the banking institution to
money or sell, assign or otherwise dispose of the same to creditors
and other parties for the purpose of paying the debts of such bank
and he may, in the name of the banking institution, institute such
CONSTILAW 2-SEC. I | 52

actions as may be necessary in the appropriate court to collect and

recover accounts and assets of the banking institution.
The provisions of any law to the contrary notwithstanding the actions
of the Monetary Board under this Section and the second paragraph
of Section 34 of this Act shall be final and executory, and can be set
aside by the court only if there is convincing proof that the action is
plainly arbitrary and made in bad faith. No restraining order or
injunction shall be issued by the court enjoining the Central Bank
from implementing its actions under this Section and the second
paragraph of Section 34 of this Act, unless there is convincing proof
that the action of the Monetary Board is plainly arbitrary and made in
bad faith and the petitioner or plaintiff files with the clerk or judge of
the court in which the action is pending a bond executed in favor of
the Central Bank, in an amount to be fixed by the court. The
restraining order or injunction shall be refused or, if granted, shall be
dissolved upon filing by the Central Bank of a bond, which shall be in
the form of cash or Central Bank cashier's check, in an amount twice
the amount of the bond of the petitioner, or plaintiff conditioned that it
will pay the damages which the petitioner or plaintiff may suffer by
the refusal or the dissolution of the injunction. The provisions of Rule
58 of the New Rules of Court insofar as they are applicable and not
inconsistent with the provisions of this Section shall govern the
issuance and dissolution of the restraining order or injunction
contemplated in this Section.
Insolvency, under this Act, shall be understood to mean the inability
of a banking institution to pay its liabilities as they fall due in the
usual and ordinary course of business: Provided, however, that this
shall not include the inability to pay of an otherwise non-insolvent
bank caused by extraordinary demands induced by financial panic
commonly evidenced by a run on the banks in the banking
community.
The appointment of a conservator under Section 28-A of this Act or
the appointment of receiver under this Section shall be vested
exclusively with the Monetary Board, the provision of any law,
general or special, to the contrary not withstanding.
It will be observed from the foregoing provision of law, that there is no requirement
whether express or implied, that a hearing be first conducted before a banking
institution may be placed under receivership. On the contrary, the law is explicit as to
the conditions prerequisite to the action of the Monetary Board to forbid the institution
to do business in the Philippines and to appoint a receiver to immediately take charge

of the bank's assets and liabilities. They are: (a) an

examining department of the Central Bank; (b) report
Monetary Board; and (c) prima facie showing that the
insolvency or so situated that its continuance in business
to its depositors or creditors.

examination made by the

by said department to the
bank is in a condition of
would involve probable loss

Supportive of this theory is the ruling of this Court, which established the authority of
the Central Bank under the foregoing circumstances, which reads:
As will be noted, whenever it shall appear prima facie that a banking
institution is in "a condition of insolvency" or so situated "that its
continuance in business would involved probable loss to its
depositors or creditors," the Monetary Board has authority:
First, to forbid the institution to do business and appoint a receiver
therefor; and
Second, to determine, within 60 days, whether or not:
1) the institution may be reorganized and
rehabilitated to such an extent as to be permitted
to resume business with safety to depositors,
creditors and the general public; or
2) it is indeed insolvent or cannot resume business
with safety to depositors, creditors and the general
public, and public interest requires that it be
liquidated.
In this latter case (i.e., the bank can no longer resume business with safety to
depositors, creditors and the public, etc.) its liquidation will be ordered and a liquidator
appointed by the Monetary Board. The Central Bank shall thereafter file a petition in
the Regional Trial Court praying for the Court's assistance in the liquidation of the
bank." ... (Salud vs. Central Bank, 143 SCRA 590 [1986]).
Petitioner further argues, that there is also that constitutional guarantee that no
property shall be taken without due process of law, so that Section 29, R.A. 265, as
amended, could not have intended to disregard and do away with such constitutional
requirement when it conferred upon the Monetary Board the power to place Rural
Banks under receivership (Rollo, p. 333).
The contention is without merit. It has long been established and recognized in this
jurisdiction that the closure and liquidation of a bank may be considered as an exercise
CONSTILAW 2-SEC. I | 53

of police power. Such exercise may, however, be subject to judicial inquiry and could
be set aside if found to be capricious, discriminatory, whimsical, arbitrary, unjust or a
denial of the due process and equal protection clauses of the Constitution (Central
Bank vs. Court of Appeals, 106 SCRA 155 [1981]).

Central Bank's exercise of discretion in determining whether or not a distressed bank

shall be supported or liquidated. Discretion has its limits and has never been held to
include arbitrariness, discrimination or bad faith (Ramos vs. Central Bank of the
Philippines, 41 SCRA 567 [1971]).

The evident implication of the law, therefore, is that the appointment of a receiver may
be made by the Monetary Board without notice and hearing but its action is subject to
judicial inquiry to insure the protection of the banking institution. Stated otherwise, due
process does not necessarily require a prior hearing; a hearing or an opportunity to be
heard may be subsequent to the closure. One can just imagine the dire consequences
of a prior hearing: bank runs would be the order of the day, resulting in panic and
hysteria. In the process, fortunes may be wiped out, and disillusionment will run the
gamut of the entire banking community.

It has likewise been held that resolutions of the Monetary Board under Section 29 of
the Central Bank Act, such as: forbidding bank institutions to do business on account
of a "condition of insolvency" or because its continuance in business would involve
probable loss to depositors or creditors; or appointing a receiver to take charge of the
bank's assets and liabilities, or determining whether the bank may be rehabilitated or
should be liquidated and appointing a liquidator for that purpose, are under the law
"final and executory" and may be set aside only on one ground, that is "if there is
convincing proof that the action is plainly arbitrary and made in bad faith" (Salud vs.
Central Bank, supra).

In Mendiola vs. Court of Appeals, (106 SCRA 130), the Supreme Court held:
The pivotal issue raised by petitioner is whether or not the
appointment of a receiver by the Court of First Instance on January
14, 1969 was in order.
Respondent Court correctly stated that the appointment of a receiver
pendente lite is a matter principally addressed to and resting largely
on the sound discretion of the court to which the application is made.
This Tribunal has so held in a number of cases. However,
receivership being admittedly a harsh remedy, it should be granted
with extreme caution. Sound reasons for receivership must appear
of record, and there should be a clear showing of a necessity
therefor. Before granting the remedy, the court is advised to consider
the consequence or effects thereof in order to avoid irreparable
injustice or injury to others who are entitled to as much consideration
as those seeking it.
xxx xxx xxx
This is not to say that a hearing is an indispensable requirement for
the appointment of a receiver. As petitioner correctly contends in his
first assignment of error, courts may appoint receivers without prior
presentation of evidence and solely on the basis of the averments of
the pleadings. Rule 59 of the Revised Rules of Court allows the
appointment of a receiver upon an ex parte application.

There is no dispute that under the above-quoted Section 29 of the Central Bank Act,
the Regional Trial Court has jurisdiction to adjudicate the question of whether or not
the action of the Monetary Board directing the dissolution of the subject Rural Bank is
attended by arbitrariness and bad faith. Such position has been sustained by this Court
in Salud vs. Central Bank of the Philippines (supra).
In the same case, the Court ruled further that a banking institution's claim that a
resolution of the Monetary Board under Section 29 of the Central Bank Act should be
set aside as plainly arbitrary and made in bad faith, may be asserted as an affirmative
defense (Sections 1 and 4[b], Rule 6, Rules of Court) or a counterclaim (Section 6,
Rule 6; Section 2, Rule 72 of the Rules of Court) in the proceedings for assistance in
liquidation or as a cause of action in a separate and distinct action where the latter was
filed ahead of the petition for assistance in liquidation (ibid; Central Bank vs. Court of
Appeals, 106 SCRA 143 [1981]).
III. It will be noted that in the issuance of the Order of the Court of First Instance of
Camarines Sur, Branch VII, Iriga City, dated March 9, 1982 (Rollo, pp. 72-77), there
was no trial on the merits. Based on the pleadings filed, the Court merely acted on the
Central Bank's Motion to Dismiss and Supplemental Motion to Dismiss, denying both
for lack of sufficient merit. Evidently, the trial court merely acted on an incident and has
not as yet inquired, as mandated by Section 29 of the Central Bank Act, into the merits
of the claim that the Monetary Board's action is plainly arbitrary and made in bad faith.
It has not appreciated certain facts which would render the remedy of liquidation
proper and rehabilitation improper, involving as it does an examination of the probative
value of the evidence presented by the parties properly belonging to the trial court and
not properly cognizable on appeal (Central Bank vs. Court of Appeals, supra, p. 156).

There is no question that the action of the Monetary Board in this regard may be
subject to judicial review. Thus, it has been held that the courts may interfere with the
CONSTILAW 2-SEC. I | 54

Still further, without a hearing held for both parties to substantiate their allegations in
their respective pleadings, there is lacking that "convincing proof" prerequisite to justify
the temporary restraining order (mandatory injunction) issued by the trial court in its
Order of March 9, 1982.
PREMISES CONSIDERED, the decision of the Court of Appeals is MODIFIED; We
hereby order the remand of this case to the Regional Trial Court for further
proceedings, but We LIFT the temporary restraining order issued by the trial court in its
Order dated March 9, 1982.
SO ORDERED.

HON. RENATO C. CORONA, in his capacity as Assistant Secretary for Legal

Affairs, HON. JESUS B. GARCIA, in his capacity as Acting Secretary, Department
of Transportation and Communications, and ROGELIO A. DAYAN, in his capacity
as
General
Manager
of
Philippine
Ports
Authority, petitioners,
vs.
UNITED HARBOR PILOTS ASSOCIATION OF THE PHILIPPINES and MANILA
PILOTS ASSOCIATION,respondents.
ROMERO, J.:
In issuing Administrative Order No. 04-92 (PPA-AO No. 04-92), limiting the term of
appointment of harbor pilots to one year subject to yearly renewal or cancellation, did
the Philippine Ports Authority (PPA) violate respondents' right to exercise their
profession and their right to due process of law?
The PPA was created on July 11, 1974, by virtue of Presidential Decree No. 505. On
December 23, 1975, Presidential Decree No. 857 was issued revising the PPA's charter.
Pursuant to its power of control, regulation, and supervision of pilots and the pilotage
profession, 1 the PPA promulgated PPA-AO-03-85 2 on March 21, 1985, which embodied
the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and
Pilotage Fees in Philippine Ports." These rules mandate, inter alia, that aspiring pilots
must be holders of pilot licenses 3 and must train as probationary pilots in outports for
three months and in the Port of Manila for four months. It is only after they have
achieved satisfactory performance 4 that they are given permanent and regular
appointments by the PPA itself 5 to exercise harbor pilotage until they reach the age of
70, unless sooner removed by reason of mental or physical unfitness by the PPA
General Manager. 6 Harbor pilots in every harbor district are further required to organize
themselves into pilot associations which would make available such equipment as may
be required by the PPA for effective pilotage services. In view of this mandate, pilot
associations invested in floating, communications, and office equipment. In fact, every
new pilot appointed by the PPA automatically becomes a member of a pilot association
and is required to pay a proportionate equivalent equity or capital before being allowed
to assume his duties, as reimbursement to the association concerned of the amount it
paid to his predecessor.

EN BANC
G.R. No. 111953 December 12, 1997

Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO No. 0492 7 on July 15, 1992, whose avowed policy was to "instill effective discipline and
thereby afford better protection to the port users through the improvement of pilotage
services." This was implemented by providing therein that "all existing regular
appointments which have been previously issued either by the Bureau of Customs or
the PPA shall remain valid up to 31 December 1992 only" and that "all appointments to
harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one
(1) year from date of effectivity subject to yearly renewal or cancellation by the Authority
after conduct of a rigid evaluation of performance."
CONSTILAW 2-SEC. I | 55

On August 12, 1992, respondents United Harbor Pilots Association and the Manila
Pilots Association, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92
before the Department of Transportation and Communication, but they were informed
by then DOTC Secretary Jesus B. Garcia that "the matter of reviewing, recalling or
annulling PPA's administrative issuances lies exclusively with its Board of Directors as
its governing body."
Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 08-92 8 which
laid down the criteria or factors to be considered in the reappointment of harbor
pilot, viz.: (1) Qualifying Factors: 9 safety record and physical/mental medical exam
report and (2) Criteria for Evaluation: 10 promptness in servicing vessels, compliance
with PPA Pilotage Guidelines, number of years as a harbor pilot, average GRT of
vessels serviced as pilot, awards/commendations as harbor pilot, and age.
Respondents reiterated their request for the suspension of the implementation of PPAAO No. 04-92, but Secretary Garcia insisted on his position that the matter was within
the jurisdiction of the Board of Directors of the PPA. Compas appealed this ruling to the
Office of the President (OP), reiterating his arguments before the DOTC.
On December 23, 1992, the OP issued an order directing the PPA to hold in abeyance
the implementation of PPA-AO No. 04-92. In its answer, the PPA countered that said
administrative order was issued in the exercise of its administrative control and
supervision over harbor pilots under Section 6-a (viii), Article IV of P.D. No. 857, as
amended, and it, along with its implementing guidelines, was intended to restore order
in the ports and to improve the quality of port services.
On March 17, 1993, the OP, through then Assistant Executive Secretary for Legal Affairs
Renato C. Corona, dismissed the appeal/petition and lifted the restraining order issued
earlier. 11 He concluded that PPA-AO No. 04-92 applied to all harbor pilots and, for all
intents and purposes, was not the act of Dayan, but of the PPA, which was merely
implementing Section 6 of P.D. No. 857, mandating it "to control, regulate and supervise
pilotage and conduct of pilots in any port district."
On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its
implementing memoranda and circulars, Secretary Corona opined that:
The exercise of one's profession falls within the constitutional guarantee against
wrongful deprivation of, or interference with, property rights without due process. In the
limited context of this case. PPA-AO 04-92 does not constitute a wrongful interference
with, let alone a wrongful deprivation of, the property rights of those affected thereby. As
may be noted, the issuance aims no more than to improve pilotage services by limiting
the appointment to harbor pilot positions to one year, subject to renewal or cancellation
after a rigid evaluation of the appointee's performance.

PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of
their profession in PPA's jurisdictional area. (Emphasis supplied)
Finally, as regards the alleged "absence of ample prior consultation" before the
issuance of the administrative order, Secretary Corona cited Section 26 of P.D. No. 857,
which merely requires the PPA to consult with "relevant Government agencies." Since
the PPA Board of Directors is composed of the Secretaries of the DOTC, the
Department of Public Works and Highways, the Department of Finance, and the
Department of Environment and Natural Resources, as well as the Director-General of
the National Economic Development Agency, the Administrator of the Maritime Industry
Authority (MARINA), and the private sector representative who, due to his knowledge
and expertise, was appointed by the President to the Board, he concluded that the law
has been sufficiently complied with by the PPA in issuing the assailed administrative
order.
Consequently, respondents filed a petition for certiorari, prohibition and injunction with
prayer for the issuance of a temporary restraining order and damages, before Branch 6
of the Regional Trial Court of Manila, which was docketed as Civil Case No. 93-65673.
On September 6, 1993, the trial court rendered the following judgment: 12
WHEREFORE, for all the foregoing, this Court hereby rules that:
1. Respondents (herein petitioners) have acted excess jurisdiction and with grave abuse
of discretion and in a capricious, whimsical and arbitrary manner in promulgating PPA
Administrative Order 04-92 including all its implementing Memoranda, Circulars and
Orders;
2. PPA Administrative Order 04-92 and its implementing Circulars and Orders are
declared null and void;
3. The respondents are permanently enjoined from implementing PPA Administrative
Order 04-92 and its implementing Memoranda, Circulars and Orders.
No costs.
SO ORDERED.
The court a quo pointed out that the Bureau of Customs, the precursor of the PPA,
recognized pilotage as a profession and, therefore, a property right under Callanta
v. Carnation Philippines, Inc. 13 Thus, abbreviating the term within which that privilege
may be exercised would be an interference with the property rights of the harbor pilots.
Consequently, any "withdrawal or alteration" of such property right must be strictly made
in accordance with the constitutional mandate of due process of law. This was
CONSTILAW 2-SEC. I | 56

apparently not followed by the PPA when it did not conduct public hearings prior to the
issuance of PPA-AO No. 04-92; respondents allegedly learned about it only after its
publication in the newspapers. From this decision, petitioners elevated their case to this
Court on certiorari.
After carefully examining the records and deliberating on the arguments of the parties,
the Court is convinced that PPA-AO No. 04-92 was issued in stark disregard of
respondents' right against deprivation of property without due process of law.
Consequently, the instant petition must be denied.
Section 1 of the Bill of Rights lays down what is known as the "due process clause" of
the Constitution, viz.:
Sec. 1. No person shall be deprived of life, liberty, or property without due process of
law, . . .
In order to fall within the aegis of this provision, two conditions must concur, namely,
that there is a deprivation and that such deprivation is done without proper observance
of due process. When one speaks of due process of law, however, a distinction must be
made between matters of procedure and matters of substance. In essence, procedural
due process "refers to the method or manner by which the law is enforced," while
substantive due process "requires that the law itself, not merely the procedures by
which the law would be enforced, is fair, reasonable, and just." 14 PPA-AO No. 04-92
must be examined in light of this distinction.
Respondents argue that due process was not observed in the adoption of PPA-AO No.
04-92 allegedly because no hearing was conducted whereby "relevant government
agencies" and the pilots themselves could ventilate their views. They are obviously
referring to the procedural aspect of the enactment. Fortunately, the Court has
maintained a clear position in this regard, a stance it has stressed in the recent case
of Lumiqued v. Hon. Exevea,15 where it declared that "(a)s long as a party was given the
opportunity to defend his interests in due course, he cannot be said to have been
denied due process of law, for this opportunity to be heard is the very essence of due
process. Moreover, this constitutional mandate is deemed satisfied if a person is
granted an opportunity to seek reconsideration of the action or ruling complained of."
In the case at bar, respondents questioned PPA-AO No. 04-92 no less than four
times 16 before the matter was finally elevated to this Tribunal. Their arguments on this
score, however, fail to persuade. While respondents emphasize that the Philippine
Coast Guard, "which issues the licenses of pilots after administering the pilots'
examinations," was not consulted, 17 the facts show that the MARINA, which took over
the licensing function of the Philippine Coast Guard, was duly represented in the Board
of Directors of the PPA. Thus, petitioners correctly argued that, there being no matters

of naval defense involved in the issuance of the administrative order, the Philippine
Coast Guard need not be consulted. 18
Neither does the fact that the pilots themselves were not consulted in any way taint the
validity of the administrative order. As a general rule, notice and hearing, as the
fundamental requirements of procedural due process, are essential only when an
administrative body exercises its quasi-judicial function. In the performance of its
executive or legislative functions, such as issuing rules and regulations, an
administrative body need not comply with the requirements of notice and hearing. 19
Upon the other hand, it is also contended that the sole and exclusive right to the
exercise of harbor pilotage by pilots is a settled issue. Respondents aver that said right
has become vested and can only be "withdrawn or shortened" by observing the
constitutional mandate of due process of law. Their argument has thus shifted from the
procedural to one of substance. It is here where PPA-AO No. 04-92 fails to meet the
condition set by the organic law.
There is no dispute that pilotage as a profession has taken on the nature of a property
right. Even petitioner Corona recognized this when he stated in his March 17, 1993,
decision that "(t)he exercise of one's profession falls within the constitutional guarantee
against wrongful deprivation of, or interference with, property rights without due
process." 20 He merely expressed the opinion the "(i)n the limited context of this case,
PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful
deprivation of, the property rights of those affected thereby, and that "PPA-AO 04-95
does not forbid, but merely regulates, the exercise by harbor pilots of their profession."
As will be presently demonstrated, such supposition is gravely erroneous and tends to
perpetuate an administrative order which is not only unreasonable but also superfluous.
Pilotage, just like other professions, may be practiced only by duly licensed individuals.
Licensure is "the granting of license especially to practice a profession." It is also "the
system of granting licenses (as for professional practice) in accordance with
establishment standards." 21 A license is a right or permission granted by some
competent authority to carry on a business or do an act which, without such license,
would be illegal. 22
Before harbor pilots can earn a license to practice their profession, they literally have to
pass through the proverbial eye of a needle by taking, not one but five examinations,
each followed by actual training and practice. Thus, the court a quo observed:
Petitioners (herein respondents) contend, and the respondents (herein petitioners) do
not deny, the here (sic) in this jurisdiction, before a person can be a harbor pilot, he
must pass five (5) government professional examinations, namely, (1) For Third Mate
and after which he must work, train and practice on board a vessel for at least a year;
CONSTILAW 2-SEC. I | 57

(2) For Second Mate and after which he must work, train and practice for at least a year;
(3) For Chief Mate and after which he must work, train and practice for at least a year;
(4) For a Master Mariner and after which he must work as Captain of vessel for at least
two (2) years to qualify for an examination to be a pilot; and finally, of course, that given
for pilots.

between private respondents and Dayan, including cases which have reached this
Court, cannot certainly be considered the primordial reason for the issuance of PPA-AO
No. 04-92. In the absence of proof to the contrary, Dayan should be presumed to have
acted in accordance with law and the best of professional motives. In any event, his
actions are certainly always subject to scrutiny by higher administrative authorities.

Their license is granted in the form of an appointment which allows them to engage in
pilotage until they retire at the age 70 years. This is a vested right. Under the terms of
PPA-AO No. 04-92, "(a)ll existing regular appointments which have been previously
issued by the Bureau of Customs or the PPA shall remain valid up to 31 December
1992 only," and "(a)ll appointments to harbor pilot positions in all pilotage districts shall,
henceforth, be only for a term of one (1) year from date of effectivity subject to renewal
or cancellation by the Authority after conduct of a rigid evaluation of performance."

WHEREFORE, the instant petition is hereby DISMISSED and the assailed decision of
the court a quo dated September 6, 1993, in Civil Case No. 93-65673 is AFFIRMED. No
pronouncement as to costs.

It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor pilots to
enjoy their profession before their compulsory retirement. In the past, they enjoyed a
measure of security knowing that after passing five examinations and undergoing years
of on-the-job training, they would have a license which they could use until their
retirement, unless sooner revoked by the PPA for mental or physical unfitness. Under
the new issuance, they have to contend with an annual cancellation of their license
which can be temporary or permanent depending on the outcome of their performance
evaluation. Veteran pilots and neophytes alike are suddenly confronted with one-year
terms which ipso facto expire at the end of that period. Renewal of their license is now
dependent on a "rigid evaluation of performance" which is conducted only after the
license has already been cancelled. Hence, the use of the term "renewal." It is this preevaluation cancellation which primarily makes PPA-AO No. 04-92 unreasonable and
constitutionally infirm. In a real sense, it is a deprivation of property without due process
of law.
The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already covered by
PPA-AO No. 03-85, which is still operational. Respondents are correct in pointing out
that PPA-AO No. 04-92 is a "surplusage" 23 and, therefore, an unnecessary enactment.
PPA-AO 03-85 is a comprehensive order setting forth the "Rules and Regulations
Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine
Ports." It provides, inter alia, for the qualification, appointment, performance evaluation,
disciplining and removal of harbor pilots matters which are duplicated in PPA-AO No.
04-92 and its implementing memorandum order. Since it adds nothing new or
substantial, PPA-AO No. 04-92 must be struck down.
Finally, respondents' insinuation that then PPA General Manager Dayan was
responsible for the issuance of the questioned administrative order may have some
factual basis; after all, power and authority were vested in his office to propose rules
and regulations. The trial court's finding of animosity between him and private
respondents might likewise have a grain of truth. Yet the number of cases filed in court

SO ORDERED.
____________________________

_____________________________________
EN BANC
G.R. No. L-5060

January 26, 1910

THE
UNITED
vs.
LUIS TORIBIO, defendant-appellant.

STATES, plaintiff-appellee,

CARSON, J.:
The evidence of record fully sustains the findings of the trial court that the appellant
slaughtered or caused to be slaughtered for human consumption, the carabao
described in the information, without a permit from the municipal treasure of the
municipality wherein it was slaughtered, in violation of the provisions of sections 30 and
33 of Act No. 1147, an Act regulating the registration, branding, and slaughter of large
cattle.
It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was
slaughtered there is no municipal slaughterhouse, and counsel for appellant contends
that under such circumstances the provisions of Act No. 1147 do not prohibit nor
penalize the slaughter of large cattle without a permit of the municipal treasure.
Sections 30, 31, 32, and 33 of the Act are as follows:
CONSTILAW 2-SEC. I | 58

SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal
slaughterhouse except upon permit secured from the municipal treasure. Before issuing
the permit for the slaughter of large cattle for human consumption, the municipal
treasurer shall require for branded cattle the production of the original certificate of
ownership and certificates of transfer showing title in the person applying for the permit,
and for unbranded cattle such evidence as may satisfy said treasurer as to the
ownership of the animals for which permit to slaughter has been requested.
SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal
treasurer unless such animals are unfit for agricultural work or for draft purposes, and in
no event shall a permit be given to slaughter for food any animal of any kind which is
not fit for human consumption.
SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued
by him, and such record shall show the name and residence of the owner, and the
class, sex, age, brands, knots of radiated hair commonly know as remolinos or cowlicks,
and other marks of identification of the animal for the slaughter of which permit is issued
and the date on which such permit is issued. Names of owners shall be alphabetically
arranged in the record, together with date of permit.
A copy of the record of permits granted for slaughter shall be forwarded monthly to the
provincial treasurer, who shall file and properly index the same under the name of the
owner, together with date of permit.
SEC. 33. Any person slaughtering or causing to be slaughtered for human consumption
or killing for food at the municipal slaughterhouse any large cattle except upon permit
duly secured from the municipal treasurer, shall be punished by a fine of not less than
ten nor more than five hundred pesos, Philippine currency, or by imprisonment for not
less than one month nor more than six months, or by both such fine and imprisonment,
in the discretion of the court.
It is contended that the proper construction of the language of these provisions limits the
prohibition contained in section 30 and the penalty imposed in section 33 to cases (1) of
slaughter of large cattle for human consumptionin a municipal slaughter without a permit
duly secured from the municipal treasurer, and (2) cases of killing of large cattle for
food in a municipal slaughterhouse without a permit duly secured from the municipal
treasurer; and it is urged that the municipality of Carmen not being provided with a
municipal slaughterhouse, neither the prohibition nor the penalty is applicable to cases
of slaughter of large cattle without a permit in that municipality.
We are of opinion, however, that the prohibition contained in section 30 refers (1) to the
slaughter of large cattle for human consumption, anywhere, without a permit duly
secured from the municipal treasurer, and (2) expressly and specifically to the killing for

food of large cattle at a municipal slaughterhouse without such permit; and that the
penalty provided in section 33 applies generally to the slaughter of large cattle for
human consumption, anywhere, without a permit duly secured from the municipal
treasurer, and specifically to the killing for food of large cattle at a municipal
slaughterhouse without such permit.
It may be admitted at once, that the pertinent language of those sections taken by itself
and examined apart from the context fairly admits of two constructions: one whereby the
phrase "at the municipal slaughterhouse" may be taken as limiting and restricting both
the word "slaughtered" and the words "killed for food" in section 30, and the words
"slaughtering or causing to be slaughtered for human consumption" and the words
"killing for food" in section 33; and the other whereby the phrase "at the municipal
slaughterhouse" may be taken as limiting and restricting merely the words "killed for
food" and "killing for food" as used in those sections. But upon a reading of the whole
Act, and keeping in mind the manifest and expressed purpose and object of its
enactment, it is very clear that the latter construction is that which should be adopted.
The Act primarily seeks to protect the "large cattle" of the Philippine Islands against theft
and to make easy the recovery and return of such cattle to their proper owners when
lost, strayed, or stolen. To this end it provides an elaborate and compulsory system for
the separate branding and registry of ownership of all such cattle throughout the
Islands, whereby owners are enabled readily and easily to establish their title; it
prohibits and invalidates all transfers of large cattle unaccompanied by certificates of
transfer issued by the proper officer in the municipality where the contract of sale is
made; and it provides also for the disposition of thieves or persons unlawfully in
possession, so as to protect the rights of the true owners. All this, manifestly, in order to
make it difficult for any one but the rightful owner of such cattle to retain them in his
possession or to dispose of them to others. But the usefulness of this elaborate and
compulsory system of identification, resting as it does on the official registry of the
brands and marks on each separate animal throughout the Islands, would be largely
impaired, if not totally destroyed, if such animals were requiring proof of ownership and
the production of certificates of registry by the person slaughtering or causing them to
be slaughtered, and this especially if the animals were slaughtered privately or in a
clandestine manner outside of a municipal slaughterhouse. Hence, as it would appear,
sections 30 and 33 prohibit and penalize the slaughter for human consumption or killing
for food at a municipal slaughterhouse of such animals without a permit issued by the
municipal treasurer, and section 32 provides for the keeping of detailed records of all
such permits in the office of the municipal and also of the provincial treasurer.
If, however, the construction be placed on these sections which is contended for by the
appellant, it will readily be seen that all these carefully worked out provisions for the
registry and record of the brands and marks of identification of all large cattle in the
Islands would prove in large part abortion, since thieves and persons unlawfully in
possession of such cattle, and naturally would, evade the provisions of the law by
CONSTILAW 2-SEC. I | 59

slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of
their wrongdoing without exposing themselves to the danger of detection incident to the
bringing of the animals to the public slaughterhouse, where the brands and other
identification marks might be scrutinized and proof of ownership required.
Where the language of a statute is fairly susceptible of two or more constructions, that
construction should be adopted which will most tend to give effect to the manifest intent
of the lawmaker and promote the object for which the statute was enacted, and a
construction should be rejected which would tend to render abortive other provisions of
the statute and to defeat the object which the legislator sought to attain by its
enactment. We are of opinion, therefore, that sections 30 and 33 of the Act prohibit and
penalize the slaughtering or causing to be slaughtered for human consumption of large
cattle at any place without the permit provided for in section 30.
It is not essential that an explanation be found for the express prohibition in these
sections of the "killing for food at a municipal slaughterhouse" of such animals, despite
the fact that this prohibition is clearly included in the general prohibition of the slaughter
of such animals for human consumption anywhere; but it is not improbable that the
requirement for the issue of a permit in such cases was expressly and specifically
mentioned out of superabundance of precaution, and to avoid all possibility of
misunderstanding in the event that some of the municipalities should be disposed to
modify or vary the general provisions of the law by the passage of local ordinances or
regulations for the control of municipal slaughterhouse.
Similar reasoning applied to the specific provisions of section 31 of the Act leads to the
same conclusion. One of the secondary purposes of the law, as set out in that section,
is to prevent the slaughter for food of carabaos fit for agricultural and draft purposes,
and of all animals unfit for human consumption. A construction which would limit the
prohibitions and penalties prescribed in the statute to the killing of such animals in
municipal slaughterhouses, leaving unprohibited and unpenalized their slaughter
outside of such establishments, so manifestly tends to defeat the purpose and object of
the legislator, that unless imperatively demanded by the language of the statute it
should be rejected; and, as we have already indicated, the language of the statute is
clearly susceptible of the construction which we have placed upon it, which tends to
make effective the provisions of this as well as all the other sections of the Act.
It appears that the defendant did in fact apply for a permit to slaughter his carabao, and
that it was denied him on the ground that the animal was not unfit "for agricultural work
or for draft purposes." Counsel for appellant contends that the statute, in so far as it
undertakes to penalize the slaughter of carabaos for human consumption as food,
without first obtaining a permit which can not be procured in the event that the animal is
not unfit "for agricultural work or draft purposes," is unconstitutional and in violation of
the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which

provides that "no law shall be enacted which shall deprive any person of life, liberty, or
property without due process of law."
It is not quite clear from the argument of counsel whether his contention is that this
provision of the statute constitutes a taking of property for public use in the exercise of
the right of eminent domain without providing for the compensation of the owners, or
that it is an undue and unauthorized exercise of the police power of the State. But
whatever may be the basis of his contention, we are of opinion, appropriating, with
necessary modifications understood, the language of that great jurist, Chief Justice
Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55, where the question involved was
the constitutionality of a statute prohibiting and penalizing the taking or carrying away by
any person, including the owner, of any stones, gravel, or sand, from any of the
beaches in the town of Chesea,) that the law in question "is not a taking of the property
for public use, within the meaning of the constitution, but is a just and legitimate
exercise of the power of the legislature to regulate and restrain such particular use of
the property as would be inconsistent with or injurious to the rights of the public. All
property is acquired and held under the tacit condition that it shall not be so used as to
injure the equal rights of others or greatly impair the public rights and interest of the
community."
It may be conceded that the benificial use and exclusive enjoyment of the property of all
carabao owners in these Islands is to a greater or less degree interfered with by the
provisions of the statute; and that, without inquiring what quantum of interest thus
passes from the owners of such cattle, it is an interest the deprivation of which detracts
from their right and authority, and in some degree interferes with their exclusive
possession and control of their property, so that if the regulations in question were
enacted for purely private purpose, the statute, in so far as these regulations are
concerned, would be a violation of the provisions of the Philippine Bill relied on be
appellant; but we are satisfied that it is not such a taking, such an interference with the
right and title of the owners, as is involved in the exercise by the State of the right of
eminent domain, so as to entitle these owners to compensation, and that it is no more
than "a just restrain of an injurious private use of the property, which the legislature had
authority to impose."
In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in
Com. vs. Tewksbury (supra) was reviewed and affirmed, the same eminent jurist who
wrote the former opinion, in distinguishing the exercise of the right of eminent domain
from the exercise of the sovereign police powers of the State, said:
We think it is settled principle, growing out of the nature of well-ordered civil society, that
every holder of property, however absolute and unqualified may be his title, holds it
under the implied liability that his use of it may be so regulated that is shall not be
injurious to the equal enjoyment of others having an equal right to the enjoyment of their
property, nor injurious to the rights of the community. . . . Rights of property, like all other
CONSTILAW 2-SEC. I | 60

social and conventional rights, are subject to such reasonable limitations in their
enjoyment as shall prevent them from being injurious, and to such reasonable restrain
and regulations establish by law, as the legislature, under the governing and controlling
power vested in them by the constitution, may think necessary and expedient.
This is very different from the right of eminent domain, the right of a government to take
and appropriate private property to public use, whenever the public exigency requires it;
which can be done only on condition of providing a reasonable compensation therefor.
The power we allude to is rather the police power, the power vested in the legislature by
the constitution, to make, ordain, and establish all manner of wholesome and
reasonable laws, statutes, and ordinances, either with penalties or without, not
repugnant to the constitution, as they shall judge to be for the good and welfare of the
commonwealth, and of the subjects of the same.
It is much easier to perceive and realize the existence and sources of this power than to
mark its boundaries or prescribe limits to its exercise.
Applying these principles, we are opinion that the restrain placed by the law on the
slaughter for human consumption of carabaos fit for agricultural work and draft purpose
is not an appropriation of property interests to a "public use," and is not, therefore,
within the principle of the exercise by the State of the right of eminent domain. It is fact a
mere restriction or limitation upon a private use, which the legislature deemed to be
determental to the public welfare. And we think that an examination of the general
provisions of the statute in relation to the public interest which it seeks to safeguard and
the public necessities for which it provides, leaves no room for doubt that the limitations
and restraints imposed upon the exercise of rights of ownership by the particular
provisions of the statute under consideration were imposed not for private purposes but,
strictly, in the promotion of the "general welfare" and "the public interest" in the exercise
of the sovereign police power which every State possesses for the general public
welfare and which "reaches to every species of property within the commonwealth."
For several years prior to the enactment of the statute a virulent contagious or infectious
disease had threatened the total extinction of carabaos in these Islands, in many
sections sweeping away seventy, eighty, and in some cases as much as ninety and
even one hundred per cent of these animals. Agriculture being the principal occupation
of the people, and the carabao being the work animal almost exclusively in use in the
fields as well as for draft purposes, the ravages of the disease with which they were
infected struck an almost vital blow at the material welfare of the country. large areas of
productive land lay waste for years, and the production of rice, the staple food of the
inhabitants of the Islands, fell off to such an extent that the impoverished people were
compelled to spend many millions of pesos in its importation, notwithstanding the fact
that with sufficient work animals to cultivate the fields the arable rice lands of the
country could easily be made to produce a supply more that sufficient for its own needs.
The drain upon the resources of the Islands was such that famine soon began to make

itself felt, hope sank in the breast of the people, and in many provinces the energies of
the breadwinners seemed to be paralyzed by the apparently hopeless struggle for
existence with which they were confronted.
To meet these conditions, large sums of money were expended by the Government in
relieving the immediate needs of the starving people, three millions of dollars were
voted by the Congress of the United States as a relief or famine fund, public works were
undertaken to furnish employment in the provinces where the need was most pressing,
and every effort made to alleviate the suffering incident to the widespread failure of the
crops throughout the Islands, due in large measure to the lack of animals fit for
agricultural work and draft purposes.
Such measures, however, could only temporarily relieve the situation, because in an
agricultural community material progress and permanent prosperity could hardly be
hoped for in the absence of the work animals upon which such a community must
necessarily rely for the cultivation of the fields and the transportation of the products of
the fields to market. Accordingly efforts were made by the Government to increase the
supply of these animals by importation, but, as appears from the official reports on this
subject, hope for the future depended largely on the conservation of those animals
which had been spared from the ravages of the diseased, and their redistribution
throughout the Islands where the need for them was greatest.
At large expense, the services of experts were employed, with a view to the discovery
and applications of preventive and curative remedies, and it is hoped that these
measures have proved in some degree successful in protecting the present inadequate
supply of large cattle, and that the gradual increase and redistribution of these animals
throughout the Archipelago, in response to the operation of the laws of supply and
demand, will ultimately results in practically relieving those sections which suffered most
by the loss of their work animals.
As was to be expected under such conditions, the price of carabaos rapidly increase
from the three to five fold or more, and it may fairly be presumed that even if the
conservative measures now adopted prove entirely successful, the scant supply will
keep the price of these animals at a high figure until the natural increase shall have
more nearly equalized the supply to the demand.
Coincident with and probably intimately connected with this sudden rise in the price of
cattle, the crime of cattle stealing became extremely prevalent throughout the Islands,
necessitating the enactment of a special law penalizing with the severest penalties the
theft of carabaos and other personal property by roving bands; and it must be assumed
from the legislative authority found that the general welfare of the Islands necessitated
the enactment of special and somewhat burdensome provisions for the branding and
registration of large cattle, and supervision and restriction of their slaughter for food. It
CONSTILAW 2-SEC. I | 61

will hardly be questioned that the provisions of the statute touching the branding and
registration of such cattle, and prohibiting and penalizing the slaughter of diseased
cattle for food were enacted in the due and proper exercise of the police power of the
State; and we are of opinion that, under all the circumstances, the provision of the
statute prohibiting and penalizing the slaughter for human consumption of carabaos fit
for work were in like manner enacted in the due and proper exercise of that power,
justified by the exigent necessities of existing conditions, and the right of the State to
protect itself against the overwhelming disaster incident to the further reduction of the
supply of animals fit for agricultural work or draft purposes.
It is, we think, a fact of common knowledge in these Islands, and disclosed by the
official reports and records of the administrative and legislative departments of the
Government, that not merely the material welfare and future prosperity of this
agricultural community were threatened by the ravages of the disease which swept
away the work animals during the years prior to the enactment of the law under
consideration, but that the very life and existence of the inhabitants of these Islands as
a civilized people would be more or less imperiled by the continued destruction of large
cattle by disease or otherwise. Confronted by such conditions, there can be no doubt of
the right of the Legislature to adopt reasonable measures for the preservation of work
animals, even to the extent of prohibiting and penalizing what would, under ordinary
conditions, be a perfectly legitimate and proper exercise of rights of ownership and
control of the private property of the citizen. The police power rests upon necessity and
the right of self-protection and if ever the invasion of private property by police
regulation can be justified, we think that the reasonable restriction placed upon the use
of carabaos by the provision of the law under discussion must be held to be authorized
as a reasonable and proper exercise of that power.
As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S.,
133, 136):
The extent and limits of what is known as the police power have been a fruitful subject
of discussion in the appellate courts of nearly every State in the Union. It is universally
conceded to include everything essential to the public safely, health, and morals, and to
justify the destruction or abatement, by summary proceedings, of whatever may be
regarded as a public nuisance. Under this power it has been held that the State may
order the destruction of a house falling to decay or otherwise endangering the lives of
passers-by; the demolition of such as are in the path of a conflagration; the slaughter of
diseased cattle; the destruction of decayed or unwholesome food; the prohibition of
wooden buildings in cities; the regulation of railways and other means of public
conveyance, and of interments in burial grounds; the restriction of objectionable trades
to certain localities; the compulsary vaccination of children; the confinement of the
insane or those afficted with contagious deceases; the restraint of vagrants, beggars,
and habitual drunkards; the suppression of obscene publications and houses of ill fame;
and the prohibition of gambling houses and places where intoxicating liquors are

sold. Beyond this, however, the State may interfere wherever the public interests
demand it, and in this particular a large discretion is necessarily vested in the legislature
to determine, not only what the interests of the public require, but what measures are
necessary for the protection of such interests. (Barbier vs. Connolly, 113 U. S., 27;
Kidd vs. Pearson, 128 U. S., 1.) To justify the State in thus interposing its authority in
behalf of the public, it must appear, first, that the interests of the public generally, as
distinguished from those of a particular class, require such interference; and, second,
that the means are reasonably necessary for the accomplishment of the purpose, and
not unduly oppressive upon individuals. The legislature may not, under the guise of
protecting the public interests, arbitrarily interfere with private business, or impose
unusual and unnecessary restrictions upon lawful occupations. In other words, its
determination as to what is a proper exercise of its police powers is not final or
conclusive, but is subject to the supervision of the court.
From what has been said, we think it is clear that the enactment of the provisions of the
statute under consideration was required by "the interests of the public generally, as
distinguished from those of a particular class;" and that the prohibition of the slaughter
of carabaos for human consumption, so long as these animals are fit for agricultural
work or draft purposes was a "reasonably necessary" limitation on private ownership, to
protect the community from the loss of the services of such animals by their slaughter
by improvident owners, tempted either by greed of momentary gain, or by a desire to
enjoy the luxury of animal food, even when by so doing the productive power of the
community may be measurably and dangerously affected.
Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said
(p. 149) that by this "general police power of the State, persons and property are
subjected to all kinds of restraints and burdens, in order to secure the general comfort,
health, and prosperity of the State; of the perfect right in the legislature to do which no
question ever was, or, upon acknowledge and general principles, ever can be made, so
far as natural persons are concerned."
And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:
It would be quite impossible to enumerate all the instances in which the police power is
or may be exercised, because the various cases in which the exercise by one individual
of his rights may conflict with a similar exercise by others, or may be detrimental to the
public order or safety, are infinite in number and in variety. And there are other cases
where it becomes necessary for the public authorities to interfere with the control by
individuals of their property, and even to destroy it, where the owners themselves have
fully observed all their duties to their fellows and to the State, but where, nevertheless,
some controlling public necessity demands the interference or destruction. A strong
instance of this description is where it becomes necessary to take, use, or destroy the
private property of individuals to prevent the spreading of a fire, the ravages of a
pestilence, the advance of a hostile army, or any other great public calamity. Here the
CONSTILAW 2-SEC. I | 62

individual is in no degree in fault, but his interest must yield to that "necessity" which
"knows no law." The establishment of limits within the denser portions of cities and
villages within which buildings constructed of inflammable materials shall not be erected
or repaired may also, in some cases, be equivalent to a destruction of private property;
but regulations for this purpose have been sustained notwithstanding this result. Wharf
lines may also be established for the general good, even though they prevent the
owners of water-fronts from building out on soil which constitutes private property. And,
whenever the legislature deem it necessary to the protection of a harbor to forbid the
removal of stones, gravel, or sand from the beach, they may establish regulations to
that effect under penalties, and make them applicable to the owners of the soil equally
with other persons. Such regulations are only "a just restraint of an injurious use of
property, which the legislature have authority" to impose.
So a particular use of property may sometimes be forbidden, where, by a change of
circumstances, and without the fault of the power, that which was once lawful, proper,
and unobjectionable has now become a public nuisance, endangering the public health
or the public safety. Milldams are sometimes destroyed upon this grounds; and
churchyards which prove, in the advance of urban population, to be detrimental to the
public health, or in danger of becoming so, are liable to be closed against further use for
cemetery purposes.
These citations from some of the highest judicial and text-book authorities in the United
States clearly indicate the wide scope and extent which has there been given to the
doctrine us in our opinion that the provision of the statute in question being a proper
exercise of that power is not in violation of the terms of section 5 of the Philippine Bill,
which provide that "no law shall be enacted which shall deprive any person of life,
liberty, or property without due process of law," a provision which itself is adopted from
the Constitution of the United States, and is found in substance in the constitution of
most if not all of the States of the Union.
The judgment of conviction and the sentence imposed by the trial court should be
affirmed with the costs of this instance against the appellant. So ordered.

CONSTILAW 2-SEC. I | 63

WHEREAS, the President has given orders prohibiting the interprovincial movement of
carabaos and the slaughtering of carabaos not complying with the requirements of
Executive Order No. 626 particularly with respect to age;
WHEREAS, it has been observed that despite such orders the violators still manage to
circumvent the prohibition against inter-provincial movement of carabaos by
transporting carabeef instead; and
WHEREAS, in order to achieve the purposes and objectives of Executive Order No. 626
and the prohibition against interprovincial movement of carabaos, it is necessary to
strengthen the said Executive Order and provide for the disposition of the carabaos and
carabeef subject of the violation;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution, do hereby promulgate the
following:

EN BANC
G.R. No. 74457 March 20, 1987
RESTITUTO
YNOT, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, THE STATION COMMANDER, INTEGRATED
NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR,
BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents.

SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no
carabao regardless of age, sex, physical condition or purpose and no carabeef shall be
transported from one province to another. The carabao or carabeef transported in
violation of this Executive Order as amended shall be subject to confiscation and
forfeiture by the government, to be distributed to charitable institutions and other similar
institutions as the Chairman of the National Meat Inspection Commission may ay see fit,
in the case of carabeef, and to deserving farmers through dispersal as the Director of
Animal Industry may see fit, in the case of carabaos.
SECTION 2. This Executive Order shall take effect immediately.
Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen
hundred and eighty.

Ramon A. Gonzales for petitioner.

(SGD.) FERDINAND E. MARCOS

CRUZ, J.:

President

The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades
"Strike but hear me first!" It is this cry that the petitioner in effect repeats here as he
challenges the constitutionality of Executive Order No. 626-A.

Republic of the Philippines

The said executive order reads in full as follows:

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on
January 13, 1984, when they were confiscated by the police station commander of
Barotac Nuevo, Iloilo, for violation of the above measure. 1The petitioner sued for
recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his
filing of a supersedeas bond of P12,000.00. After considering the merits of the case, the
court sustained the confiscation of the carabaos and, since they could no longer be
CONSTILAW 2-SEC. I | 64

produced, ordered the confiscation of the bond. The court also declined to rule on the
constitutionality of the executive order, as raise by the petitioner, for lack of authority
and also for its presumed validity. 2

Judicial power authorizes this; and when the exercise is demanded, there should be no
shirking of the task for fear of retaliation, or loss of favor, or popular censure, or any
other similar inhibition unworthy of the bench, especially this Court.

The petitioner appealed the decision to the Intermediate Appellate Court,* 3 which
upheld the trial court, ** and he has now come before us in this petition for review
on certiorari.

The challenged measure is denominated an executive order but it is really presidential

decree, promulgating a new rule instead of merely implementing an existing law. It was
issued by President Marcos not for the purpose of taking care that the laws were
faithfully executed but in the exercise of his legislative authority under Amendment No.
6. It was provided thereunder that whenever in his judgment there existed a grave
emergency or a threat or imminence thereof or whenever the legislature failed or was
unable to act adequately on any matter that in his judgment required immediate action,
he could, in order to meet the exigency, issue decrees, orders or letters of instruction
that were to have the force and effect of law. As there is no showing of any exigency to
justify the exercise of that extraordinary power then, the petitioner has reason, indeed,
to question the validity of the executive order. Nevertheless, since the determination of
the grounds was supposed to have been made by the President "in his judgment, " a
phrase that will lead to protracted discussion not really necessary at this time, we
reserve resolution of this matter until a more appropriate occasion. For the nonce, we
confine ourselves to the more fundamental question of due process.

The thrust of his petition is that the executive order is unconstitutional insofar as it
authorizes outright confiscation of the carabao or carabeef being transported across
provincial boundaries. His claim is that the penalty is invalid because it is imposed
without according the owner a right to be heard before a competent and impartial court
as guaranteed by due process. He complains that the measure should not have been
presumed, and so sustained, as constitutional. There is also a challenge to the improper
exercise of the legislative power by the former President under Amendment No. 6 of the
1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v. Angeles 5 is not
applicable here. The question raised there was the necessity of the previous publication
of the measure in the Official Gazette before it could be considered enforceable. We
imposed the requirement then on the basis of due process of law. In doing so, however,
this Court did not, as contended by the Solicitor General, impliedly affirm the
constitutionality of Executive Order No. 626-A. That is an entirely different matter.
This Court has declared that while lower courts should observe a becoming modesty in
examining constitutional questions, they are nonetheless not prevented from resolving
the same whenever warranted, subject only to review by the highest tribunal. 6 We have
jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal
or certiorari, as the law or rules of court may provide," final judgments and orders of
lower courts in, among others, all cases involving the constitutionality of certain
measures. 7 This simply means that the resolution of such cases may be made in the
first instance by these lower courts.
And while it is true that laws are presumed to be constitutional, that presumption is not
by any means conclusive and in fact may be rebutted. Indeed, if there be a clear
showing of their invalidity, and of the need to declare them so, then "will be the time to
make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant warning. Stated
otherwise, courts should not follow the path of least resistance by simply presuming the
constitutionality of a law when it is questioned. On the contrary, they should probe the
issue more deeply, to relieve the abscess, paraphrasing another distinguished
jurist, 9 and so heal the wound or excise the affliction.

It is part of the art of constitution-making that the provisions of the charter be cast in
precise and unmistakable language to avoid controversies that might arise on their
correct interpretation. That is the Ideal. In the case of the due process clause, however,
this rule was deliberately not followed and the wording was purposely kept ambiguous.
In fact, a proposal to delineate it more clearly was submitted in the Constitutional
Convention of 1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the
Committee on the Bill of Rights, who forcefully argued against it. He was sustained by
the body. 10
The due process clause was kept intentionally vague so it would remain also
conveniently resilient. This was felt necessary because due process is not, like some
provisions of the fundamental law, an "iron rule" laying down an implacable and
immutable command for all seasons and all persons. Flexibility must be the best virtue
of the guaranty. The very elasticity of the due process clause was meant to make it
adapt easily to every situation, enlarging or constricting its protection as the changing
times and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific description of
due process lest they confine themselves in a legal straitjacket that will deprive them of
the elbow room they may need to vary the meaning of the clause whenever indicated.
Instead, they have preferred to leave the import of the protection open-ended, as it
were, to be "gradually ascertained by the process of inclusion and exclusion in the
course of the decision of cases as they arise." 11 Thus, Justice Felix Frankfurter of the
U.S. Supreme Court, for example, would go no farther than to define due process
CONSTILAW 2-SEC. I | 65

and in so doing sums it all up as nothing more and nothing less than "the
embodiment of the sporting Idea of fair play." 12
When the barons of England extracted from their sovereign liege the reluctant promise
that that Crown would thenceforth not proceed against the life liberty or property of any
of its subjects except by the lawful judgment of his peers or the law of the land, they
thereby won for themselves and their progeny that splendid guaranty of fairness that is
now the hallmark of the free society. The solemn vow that King John made at
Runnymede in 1215 has since then resounded through the ages, as a ringing reminder
to all rulers, benevolent or base, that every person, when confronted by the stern visage
of the law, is entitled to have his say in a fair and open hearing of his cause.
The closed mind has no place in the open society. It is part of the sporting Idea of fair
play to hear "the other side" before an opinion is formed or a decision is made by those
who sit in judgment. Obviously, one side is only one-half of the question; the other half
must also be considered if an impartial verdict is to be reached based on an informed
appreciation of the issues in contention. It is indispensable that the two sides
complement each other, as unto the bow the arrow, in leading to the correct ruling after
examination of the problem not from one or the other perspective only but in its totality.
A judgment based on less that this full appraisal, on the pretext that a hearing is
unnecessary or useless, is tainted with the vice of bias or intolerance or ignorance, or
worst of all, in repressive regimes, the insolence of power.
The minimum requirements of due process are notice and hearing 13 which, generally
speaking, may not be dispensed with because they are intended as a safeguard against
official arbitrariness. It is a gratifying commentary on our judicial system that the
jurisprudence of this country is rich with applications of this guaranty as proof of our
fealty to the rule of law and the ancient rudiments of fair play. We have consistently
declared that every person, faced by the awesome power of the State, is entitled to "the
law of the land," which Daniel Webster described almost two hundred years ago in the
famous Dartmouth College Case, 14 as "the law which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial." It has to be so if the rights
of every person are to be secured beyond the reach of officials who, out of mistaken
zeal or plain arrogance, would degrade the due process clause into a worn and empty
catchword.
This is not to say that notice and hearing are imperative in every case for, to be sure,
there are a number of admitted exceptions. The conclusive presumption, for example,
bars the admission of contrary evidence as long as such presumption is based on
human experience or there is a rational connection between the fact proved and the fact
ultimately presumed therefrom. 15 There are instances when the need for expeditions
action will justify omission of these requisites, as in the summary abatement of a
nuisance per se, like a mad dog on the loose, which may be killed on sight because of
the immediate danger it poses to the safety and lives of the people. Pornographic

materials, contaminated meat and narcotic drugs are inherently pernicious and may be
summarily destroyed. The passport of a person sought for a criminal offense may be
cancelled without hearing, to compel his return to the country he has fled. 16Filthy
restaurants may be summarily padlocked in the interest of the public health and bawdy
houses to protect the public morals. 17 In such instances, previous judicial hearing may
be omitted without violation of due process in view of the nature of the property involved
or the urgency of the need to protect the general welfare from a clear and present
danger.
The protection of the general welfare is the particular function of the police power which
both restraints and is restrained by due process. The police power is simply defined as
the power inherent in the State to regulate liberty and property for the promotion of the
general welfare. 18 By reason of its function, it extends to all the great public needs and
is described as the most pervasive, the least limitable and the most demanding of the
three inherent powers of the State, far outpacing taxation and eminent domain. The
individual, as a member of society, is hemmed in by the police power, which affects him
even before he is born and follows him still after he is dead from the womb to beyond
the tomb in practically everything he does or owns. Its reach is virtually limitless. It is
a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the
property has some relevance to the public welfare, its regulation under the police power
is not only proper but necessary. And the justification is found in the venerable Latin
maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which
call for the subordination of individual interests to the benefit of the greater number.
It is this power that is now invoked by the government to justify Executive Order No.
626-A, amending the basic rule in Executive Order No. 626, prohibiting the slaughter of
carabaos except under certain conditions. The original measure was issued for the
reason, as expressed in one of its Whereases, that "present conditions demand that the
carabaos and the buffaloes be conserved for the benefit of the small farmers who rely
on them for energy needs." We affirm at the outset the need for such a measure. In the
face of the worsening energy crisis and the increased dependence of our farms on
these traditional beasts of burden, the government would have been remiss, indeed, if it
had not taken steps to protect and preserve them.
A similar prohibition was challenged in United States v. Toribio, 19 where a law
regulating the registration, branding and slaughter of large cattle was claimed to be a
deprivation of property without due process of law. The defendant had been convicted
thereunder for having slaughtered his own carabao without the required permit, and he
appealed to the Supreme Court. The conviction was affirmed. The law was sustained as
a valid police measure to prevent the indiscriminate killing of carabaos, which were then
badly needed by farmers. An epidemic had stricken many of these animals and the
reduction of their number had resulted in an acute decline in agricultural output, which in
turn had caused an incipient famine. Furthermore, because of the scarcity of the
animals and the consequent increase in their price, cattle-rustling had spread
CONSTILAW 2-SEC. I | 66

alarmingly, necessitating more effective measures for the registration and branding of
these animals. The Court held that the questioned statute was a valid exercise of the
police power and declared in part as follows:
To justify the State in thus interposing its authority in behalf of the public, it must appear,
first, that the interests of the public generally, as distinguished from those of a particular
class, require such interference; and second, that the means are reasonably necessary
for the accomplishment of the purpose, and not unduly oppressive upon individuals. ...
From what has been said, we think it is clear that the enactment of the provisions of the
statute under consideration was required by "the interests of the public generally, as
distinguished from those of a particular class" and that the prohibition of the slaughter of
carabaos for human consumption, so long as these animals are fit for agricultural work
or draft purposes was a "reasonably necessary" limitation on private ownership, to
protect the community from the loss of the services of such animals by their slaughter
by improvident owners, tempted either by greed of momentary gain, or by a desire to
enjoy the luxury of animal food, even when by so doing the productive power of the
community may be measurably and dangerously affected.
In the light of the tests mentioned above, we hold with the Toribio Case that the
carabao, as the poor man's tractor, so to speak, has a direct relevance to the public
welfare and so is a lawful subject of Executive Order No. 626. The method chosen in
the basic measure is also reasonably necessary for the purpose sought to be achieved
and not unduly oppressive upon individuals, again following the above-cited doctrine.
There is no doubt that by banning the slaughter of these animals except where they are
at least seven years old if male and eleven years old if female upon issuance of the
necessary permit, the executive order will be conserving those still fit for farm work or
breeding and preventing their improvident depletion.
But while conceding that the amendatory measure has the same lawful subject as the
original executive order, we cannot say with equal certainty that it complies with the
second requirement, viz., that there be a lawful method. We note that to strengthen the
original measure, Executive Order No. 626-A imposes an absolute ban not on
theslaughter of the carabaos but on their movement, providing that "no carabao
regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be
transported from one province to another." The object of the prohibition escapes us. The
reasonable connection between the means employed and the purpose sought to be
achieved by the questioned measure is missing
We do not see how the prohibition of the inter-provincial transport of carabaos can
prevent their indiscriminate slaughter, considering that they can be killed anywhere, with
no less difficulty in one province than in another. Obviously, retaining the carabaos in
one province will not prevent their slaughter there, any more than moving them to

another province will make it easier to kill them there. As for the carabeef, the
prohibition is made to apply to it as otherwise, so says executive order, it could be easily
circumvented by simply killing the animal. Perhaps so. However, if the movement of the
live animals for the purpose of preventing their slaughter cannot be prohibited, it should
follow that there is no reason either to prohibit their transfer as, not to be flippant dead
meat.
Even if a reasonable relation between the means and the end were to be assumed, we
would still have to reckon with the sanction that the measure applies for violation of the
prohibition. The penalty is outright confiscation of the carabao or carabeef being
transported, to be meted out by the executive authorities, usually the police only. In the
Toribio Case, the statute was sustained because the penalty prescribed was fine and
imprisonment, to be imposed by the court after trial and conviction of the accused.
Under the challenged measure, significantly, no such trial is prescribed, and the
property being transported is immediately impounded by the police and declared, by the
measure itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by the police station
commander, were returned to the petitioner only after he had filed a complaint for
recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated
upon his failure to produce the carabaos when ordered by the trial court. The executive
order defined the prohibition, convicted the petitioner and immediately imposed
punishment, which was carried out forthright. The measure struck at once and pounced
upon the petitioner without giving him a chance to be heard, thus denying him the
centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice and hearing may be
validly dispensed with notwithstanding the usual requirement for these minimum
guarantees of due process. It is also conceded that summary action may be validly
taken in administrative proceedings as procedural due process is not necessarily
judicial only. 20 In the exceptional cases accepted, however. there is a justification for the
omission of the right to a previous hearing, to wit, the immediacy of the problem sought
to be corrected and the urgency of the need to correct it.
In the case before us, there was no such pressure of time or action calling for the
petitioner's peremptory treatment. The properties involved were not even inimical per
se as to require their instant destruction. There certainly was no reason why the offense
prohibited by the executive order should not have been proved first in a court of justice,
with the accused being accorded all the rights safeguarded to him under the
Constitution. Considering that, as we held in Pesigan v. Angeles, 21 Executive Order No.
626-A is penal in nature, the violation thereof should have been pronounced not by the
police only but by a court of justice, which alone would have had the authority to impose
the prescribed penalty, and only after trial and conviction of the accused.
CONSTILAW 2-SEC. I | 67

We also mark, on top of all this, the questionable manner of the disposition of the
confiscated property as prescribed in the questioned executive order. It is there
authorized that the seized property shall "be distributed to charitable institutions and
other similar institutions as the Chairman of the National Meat Inspection
Commissionmay see fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industrymay see fit, in the case of carabaos."
(Emphasis supplied.) The phrase "may see fit" is an extremely generous and dangerous
condition, if condition it is. It is laden with perilous opportunities for partiality and abuse,
and even corruption. One searches in vain for the usual standard and the reasonable
guidelines, or better still, the limitations that the said officers must observe when they
make their distribution. There is none. Their options are apparently boundless. Who
shall be the fortunate beneficiaries of their generosity and by what criteria shall they be
chosen? Only the officers named can supply the answer, they and they alone may
choose the grantee as they see fit, and in their own exclusive discretion. Definitely,
there is here a "roving commission," a wide and sweeping authority that is not
"canalized within banks that keep it from overflowing," in short, a clearly profligate and
therefore invalid delegation of legislative powers.
To sum up then, we find that the challenged measure is an invalid exercise of the police
power because the method employed to conserve the carabaos is not reasonably
necessary to the purpose of the law and, worse, is unduly oppressive. Due process is
violated because the owner of the property confiscated is denied the right to be heard in
his defense and is immediately condemned and punished. The conferment on the
administrative authorities of the power to adjudge the guilt of the supposed offender is a
clear encroachment on judicial functions and militates against the doctrine of separation
of powers. There is, finally, also an invalid delegation of legislative powers to the officers
mentioned therein who are granted unlimited discretion in the distribution of the
properties arbitrarily taken. For these reasons, we hereby declare Executive Order No.
626-A unconstitutional.

obviousness, would have been perpetrated, allowed without protest, and soon forgotten
in the limbo of relinquished rights.
The strength of democracy lies not in the rights it guarantees but in the courage of the
people to invoke them whenever they are ignored or violated. Rights are but weapons
on the wall if, like expensive tapestry, all they do is embellish and impress. Rights, as
weapons, must be a promise of protection. They become truly meaningful, and fulfill the
role assigned to them in the free society, if they are kept bright and sharp with use by
those who are not afraid to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except
as affirmed above, the decision of the Court of Appeals is reversed.
The supersedeas bond is cancelled and the amount thereof is ordered restored to the
petitioner. No costs.
SO ORDERED.
FIRST DIVISION

We agree with the respondent court, however, that the police station commander who
confiscated the petitioner's carabaos is not liable in damages for enforcing the executive
order in accordance with its mandate. The law was at that time presumptively valid, and
it was his obligation, as a member of the police, to enforce it. It would have been
impertinent of him, being a mere subordinate of the President, to declare the executive
order unconstitutional and, on his own responsibility alone, refuse to execute it. Even
the trial court, in fact, and the Court of Appeals itself did not feel they had the
competence, for all their superior authority, to question the order we now annul.
The Court notes that if the petitioner had not seen fit to assert and protect his rights as
he saw them, this case would never have reached us and the taking of his property
under the challenged measure would have become afait accompli despite its invalidity.
We commend him for his spirit. Without the present challenge, the matter would have
ended in that pump boat in Masbate and another violation of the Constitution, for all its
CONSTILAW 2-SEC. I | 68

CONSTILAW 2-SEC. I | 69

G.R. No. 77372 April 29, 1988

LUPO L. LUPANGCO, RAYMOND S. MANGKAL, NORMAN A. MESINA,
ALEXANDER R. REGUYAL, JOCELYN P. CATAPANG, ENRICO V. REGALADO,
JEROME O. ARCEGA, ERNESTOC. BLAS, JR., ELPEDIO M. ALMAZAN, KARL
CAESAR
R.
RIMANDO, petitioner,
vs.
COURT
OF
APPEALS
and
PROFESSIONAL
REGULATION
COMMISSION, respondent.
GANCAYCO, J.:
Is the Regional Trial Court of the same category as the Professional Regulation
Commission so that it cannot pass upon the validity of the administrative acts of the
latter? Can this Commission lawfully prohibit the examiness from attending review
classes, receiving handout materials, tips, or the like three (3) days before the date of
the examination? Theses are the issues presented to the court by this petition for
certiorari to review the decision of the Court of Appeals promulagated on January 13,
1987, in CA-G.R. SP No. 10598, * declaring null and void the other dated Ocober 21,
1986 issued by the Regional Trial Court of Manila, Branch 32 in Civil Case No. 8637950 entitled " Lupo L. Lupangco, et al. vs. Professional Regulation Commission."

On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure
examinations in accountancy schedule on October 25 and November 2 of the same
year, filed on their own behalf of all others similarly situated like them, with the Regional
Trial Court of Manila, Branch XXXII, a complaint for injuction with a prayer with the
issuance of a writ of a preliminary injunction against respondent PRC to restrain the
latter from enforcing the above-mentioned resolution and to declare the same
unconstitution.
Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the
lower court had no jurisdiction to review and to enjoin the enforcement of its resolution.
In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try
the case and enjoined the respondent commission from enforcing and giving effect to
Resolution No. 105 which it found to be unconstitutional.
Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of
Appeals a petition for the nullification of the above Order of the lower court. Said petiton
was granted in the Decision of the Court of Appeals promulagated on January 13, 1987,
to wit:
WHEREFORE, finding the petition meritorious the same is hereby GRANTED and the
other dated October 21, 1986 issued by respondent court is declared null and void. The
respondent court is further directed to dismiss with prejudice Civil Case No. 86-37950
for want of jurisdiction over the subject matter thereof. No cost in this instance.
SO ORDERED. 2

The records shows the following undisputed facts:

Hence, this petition.

On or about October 6, 1986, herein respondent Professional Regulation Commission

(PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examiness,"
to all those applying for admission to take the licensure examinations in accountancy.
The resolution embodied the following pertinent provisions:

The Court of Appeals, in deciding that the Regional Trial Court of Manila had no
jurisdiction to entertain the case and to enjoin the enforcement of the Resolution No.
105, stated as its basis its conclusion that the Professional Regulation Commission and
the Regional Trial Court are co-equal bodies. Thus it held

No examinee shall attend any review class, briefing, conference or the like conducted
by, or shall receive any hand-out, review material, or any tip from any school, college or
university, or any review center or the like or any reviewer, lecturer, instructor official or
employee of any of the aforementioned or similars institutions during the three days
immediately proceeding every examination day including examination day.

That the petitioner Professional Regulatory Commission is at least a co-equal body with
the Regional Trial Court is beyond question, and co-equal bodies have no power to
control each other or interfere with each other's acts. 3

Any examinee violating this instruction shall be subject to the sanctions prescribed by
Sec. 8, Art. III of the Rules and Regulations of the Commission. 1

To strenghten its position, the Court of Appeals relied heavily on National Electrification
Administration vs. Mendoza, 4 which cites Pineda vs. Lantin 5 and Philippine Pacific
Fishing, Inc. vs. Luna, 6 where this Court held that a Court of First Instance cannot
interfere with the orders of the Securities and Exchange Commission, the two being coequal bodies.
CONSTILAW 2-SEC. I | 70

After a close scrutiny of the facts and the record of this case,
We rule in favor of the petitioner.
The cases cited by respondent court are not in point. It is glaringly apparent that the
reason why this Court ruled that the Court of First Instance could not interfere with the
orders of the Securities and Exchange Commission was that this was so provided for by
the law. In Pineda vs. Lantin, We explained that whenever a party is aggrieved by or
disagree with an order or ruling of the Securities and Exchange Commission, he cannot
seek relief from courts of general jurisdiction since under the Rules of Court and
Commonwealth Act No. 83, as amended by Republic Act No. 635, creating and setting
forth the powers and functions of the old Securities and Exchange Commission, his
remedy is to go the Supreme Court on a petition for review. Likewise, in Philippine
Pacific Fishing Co., Inc. vs. Luna, it was stressed that if an order of the Securities and
Exchange Commission is erroneous, the appropriate remedy take is first, within the
Commission itself, then, to the Supreme Court as mandated in Presidential Decree No.
902-A, the law creating the new Securities and Exchange Commission. Nowhere in the
said cases was it held that a Court of First Instance has no jurisdiction over all other
government agencies. On the contrary, the ruling was specifically limited to the
Securities and Exchange Commission.
The respondent court erred when it place the Securities and Exchange Commission and
the Professional Regulation Commsision in the same category. As alraedy mentioned,
with respect to the Securities and Exchange Commission, the laws cited explicitly
provide with the procedure that need be taken when one is aggrieved by its order or
ruling. Upon the other hand, there is no law providing for the next course of action for a
party who wants to question a ruling or order of the Professional Regulation
Commission. Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A,
there is no provision in Presidential Decree No. 223, creating the Professional
Regulation Commission, that orders or resolutions of the Commission are appealable
either to the Court of Appeals or to theSupreme Court. Consequently, Civil Case No. 8637950, which was filed in order to enjoin the enforcement of a resolution of the
respondent Professional Regulation Commission alleged to be unconstitutional, should
fall within the general jurisdiction of the Court of First Instance, now the Regional Trial
Court. 7
What is clear from Presidential Decree No. 223 is that the Professional Regulation
Commission is attached to the Office of the President for general direction and
coordination. 8 Well settled in our jurisprudence is the view that even acts of the Office
of the President may be reviewed by the Court of First Instance (now the Regional Trial
Court). In Medalla vs. Sayo, 9 this rule was thoroughly propounded on, to wit:

In so far as jurisdiction of the Court below to review by certiorari decisions and/or

resolutions of the Civil Service Commission and of the residential Executive Asssistant
is concerned, there should be no question but that the power of judicial review should
be upheld. The following rulings buttress this conclusion:
The objection to a judicial review of a Presidential act arises from a failure to recognize
the most important principle in our system of government, i.e., the separation of powers
into three co-equal departments, the executives, the legislative and the judicial, each
supreme within its own assigned powers and duties. When a presidential act is
challenged before the courts of justice, it is not to be implied therefrom that the
Executive is being made subject and subordinate to the courts. The legality of his acts
are under judicial review, not because the Executive is inferior to the courts, but
because the law is above the Chief Executive himself, and the courts seek only to
interpret, apply or implement it (the law). A judicial review of the President's decision on
a case of an employee decided by the Civil Service Board of Appeals should be viewed
in this light and the bringing of the case to the Courts should be governed by the same
principles as govern the jucucial review of all administrative acts of all administrative
officers. 10
Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II, 11 is another case in point.
Here, "the Executive Office"' of the Department of Education and Culture issued
Memorandum Order No. 93 under the authority of then Secretary of Education Juan
Manuel. As in this case, a complaint for injunction was filed with the Court of First
Instance of Lanao del Norte because, allegedly, the enforcement of the circular would
impair some contracts already entered into by public school teachers. It was the
contention of petitioner therein that "the Court of First Instance is not empowered to
amend, reverse and modify what is otherwise the clear and explicit provision of the
memorandum circular issued by the Executive Office which has the force and effect of
law." In resolving the issue, We held:
... We definitely state that respondent Court lawfully acquired jurisdiction in Civil Case
No. II-240 (8) because the plaintiff therein asked the lower court for relief, in the form of
injunction, in defense of a legal right (freedom to enter into contracts) . . . . .
Hence there is a clear infringement of private respondent's constitutional right to enter
into agreements not contrary to law, which might run the risk of being violated by the
threatened implementation of Executive Office Memorandum Circular No. 93, dated
February 5, 1968, which prohibits, with certain exceptions, cashiers and disbursing
officers from honoring special powers of attorney executed by the payee
employees. The respondent Court is not only right but duty bound to take cognizance of
cases of this nature wherein a constitutional and statutory right is allegedly infringed by
the administrative action of a government office. Courts of first Instance have original
jurisdiction over all civil actions in which the subject of the litigation is not capable of
pecuniary estimation (Sec. 44, Republic Act 296, as amended). 12 (Emphasis supplied.)
CONSTILAW 2-SEC. I | 71

In San Miguel Corporation vs. Avelino, 13 We ruled that a judge of the Court of First
Instance has the authority to decide on the validity of a city tax ordinance even after its
validity had been contested before the Secretary of Justice and an opinion thereon had
been rendered.
In view of the foregoing, We find no cogent reason why Resolution No. 105, issued by
the respondent Professional Regulation Commission, should be exempted from the
general jurisdiction of the Regional Trial Court.

awarding a contract to a private party which originated from an invitation to bid. The said
issue came about because under the laws then in force, final awards, judgments,
decisions or orders of the Commission on Elections fall within the exclusive jurisdiction
of the Supreme Court by way of certiorari. Hence, it has been consistently held that "it is
the Supreme Court, not the Court of First Instance, which has exclusive jurisdiction to
review on certiorari final decisions, orders, or rulings of the Commission on Elections
relative to the conduct of elections and the enforcement of election laws." 16
As to whether or not the Court of First Instance had jurisdiction in saidcase, We said:

Respondent PRC, on the other hand, contends that under Section 9, paragraph 3 of
B.P. Blg. 129, it is the Court of Appeals which has jurisdiction over the case. The said
law provides:
SEC. 9. Jurisdiction. The Intermediate Appellate Court shall exercise:
xxx xxx xxx
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948.
The contention is devoid of merit.
In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as
provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a final order or
ruling which resulted from proceedings wherein the administrative body involved
exercised its quasi-judicial functions. In Black's Law Dictionary, quasi-judicial is defined
as a term applied to the action, discretion, etc., of public administrative officers or
bodies required to investigate facts, or ascertain the existence of facts, hold hearings,
and draw conclusions from them, as a basis for their official action, and to exercise
discretion of a judicial nature. To expound thereon, quasi-judicial adjudication would
mean a determination of rights, privileges and duties resulting in a decision or order
which applies to a specific situation . 14 This does not cover rules and regulations of
general applicability issued by the administrative body to implement its purely
administrative policies and functions like Resolution No. 105 which was adopted by the
respondent PRC as a measure to preserve the integrity of licensure examinations.
The above rule was adhered to in Filipinas Engineering and Machine Shop vs.
Ferrer. 15 In this case, the issue presented was whether or not the Court of First
Instance had jurisdiction over a case involving an order of the Commission on Elections

We are however, far from convinced that an order of the COMELEC awarding a contract
to a private party, as a result of its choice among various proposals submitted in
response to its invitation to bid comes within the purview of a "final order" which is
exclusively and directly appealable to this court on certiorari. What is contemplated by
the term "final orders, rulings and decisions, of the COMELEC reviewable by certiorari
by the Supreme Court as provided by law are those rendered in actions or proceedings
before the COMELEC and taken cognizance of by the said body in the exercise of its
adjudicatory or quasi-judicial powers. (Emphasis supplied.)
xxx xxx xxx
We agree with petitioner's contention that the order of the Commission granting the
award to a bidder is not an order rendered in a legal controversy before it wherein the
parties filed their respective pleadings and presented evidence after which the
questioned order was issued; and that this order of the commission was issued
pursuant to its authority to enter into contracts in relation to election purposes. In short,
the COMELEC resolution awarding the contract in favor of Acme was not issued
pursuant to its quasi-judicial functions but merely as an incident of its inherent
administrative functions over the conduct of elections, and hence, the said resolution
may not be deemed as a "final order reviewable by certiorari by the Supreme
Court. Being non-judicial in character, no contempt order may be imposed by the
COMELEC from said order, and no direct and exclusive appeal by certiorari to this
Tribunal lie from such order. Any question arising from said order may be well taken in
an ordinary civil action before the trial courts. (Emphasis supplied.) 17
One other case that should be mentioned in this regard is Salud vs. Central Bank of the
Philippines. 18 Here, petitioner Central Bank, like respondent in this case, argued that
under Section 9, paragraph 3 of B.P. Blg. 129, orders of the Monetary Board are
appealable only to the Intermediate Appellate Court. Thus:
The Central Bank and its Liquidator also postulate, for the very first time, that the
Monetary Board is among the "quasi-judicial ... boards" whose judgments are within the
CONSTILAW 2-SEC. I | 72

exclusive appellate jurisdiction of the IAC; hence, it is only said Court, "to the exclusion
of the Regional Trial Courts," that may review the Monetary Board's resolutions. 19
Anent the posture of the Central Bank, We made the following pronouncement:
The contention is utterly devoid of merit. The IAC has no appellate jurisdiction over
resolution or orders of the Monetary Board. No law prescribes any mode of appeal from
the Monetary Board to the IAC. 20
In view of the foregoing, We hold that the Regional Trial Court has jurisdiction to
entertain Civil Case No. 86-37950 and enjoin the respondent PRC from enforcing its
resolution.
Although We have finally settled the issue of jurisdiction, We find it imperative to decide
once and for all the validity of Resolution No. 105 so as to provide the much awaited
relief to those who are and will be affected by it.
Of course, We realize that the questioned resolution was adopted for a commendable
purpose which is "to preserve the integrity and purity of the licensure examinations."
However, its good aim cannot be a cloak to conceal its constitutional infirmities. On its
face, it can be readily seen that it is unreasonable in that an examinee cannot
even attend any review class, briefing, conference or the like, or receive any hand-out,
review material, or any tip from any school, collge or university, or any review center or
the like or any reviewer, lecturer, instructor, official or employee of any of the
aforementioned or similar institutions . ... 21
The unreasonableness is more obvious in that one who is caught committing the
prohibited acts even without any ill motives will be barred from taking future
examinations conducted by the respondent PRC. Furthermore, it is inconceivable how
the Commission can manage to have a watchful eye on each and every examinee
during the three days before the examination period.
It is an aixiom in administrative law that administrative authorities should not act
arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such
rules and regulations must be reasonable and fairly adapted to the end in view. If shown
to bear no reasonable relation to the purposes for which they are authorized to be
issued, then they must be held to be invalid. 22
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the
examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no
authority to dictate on the reviewees as to how they should prepare themselves for the
licensure examinations. They cannot be restrained from taking all the lawful steps
needed to assure the fulfillment of their ambition to become public accountants. They

have every right to make use of their faculties in attaining success in their endeavors.
They should be allowed to enjoy their freedom to acquire useful knowledge that will
promote their personal growth. As defined in a decision of the United States Supreme
Court:
The term "liberty" means more than mere freedom from physical restraint or the bounds
of a prison. It means freedom to go where one may choose and to act in such a manner
not inconsistent with the equal rights of others, as his judgment may dictate for the
promotion of his happiness, to pursue such callings and vocations as may be most
suitable to develop his capacities, and giv to them their highest enjoyment. 23
Another evident objection to Resolution No. 105 is that it violates the academic freedom
of the schools concerned. Respondent PRC cannot interfere with the conduct of review
that review schools and centers believe would best enable their enrolees to meet the
standards required before becoming a full fledged public accountant. Unless the means
or methods of instruction are clearly found to be inefficient, impractical, or riddled with
corruption, review schools and centers may not be stopped from helping out their
students. At this juncture, We call attention to Our pronouncement in Garcia vs. The
Faculty Admission Committee, Loyola School of Theology, 24 regarding academic
freedom to wit:
... It would follow then that the school or college itself is possessed of such a right. It
decides for itself its aims and objectives and how best to attain them. It is free from
outside coercion or interference save possibly when the overriding public welfare calls
for some restraint. It has a wide sphere of autonomy certainly extending to the choice of
students. This constitutional provision is not to be construed in a niggardly manner or in
a grudging fashion.
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the
alleged leakages in the licensure examinations will be eradicated or at least minimized.
Making the examinees suffer by depriving them of legitimate means of review or
preparation on those last three precious days-when they should be refreshing
themselves with all that they have learned in the review classes and preparing their
mental and psychological make-up for the examination day itself-would be like uprooting
the tree to get ride of a rotten branch. What is needed to be done by the respondent is
to find out the source of such leakages and stop it right there. If corrupt officials or
personnel should be terminated from their loss, then so be it. Fixers or swindlers should
be flushed out. Strict guidelines to be observed by examiners should be set up and if
violations are committed, then licenses should be suspended or revoked. These are all
within the powers of the respondent commission as provided for in Presidential Decree
No. 223. But by all means the right and freedom of the examinees to avail of all
legitimate means to prepare for the examinations should not be curtailed.

CONSTILAW 2-SEC. I | 73

In the light of the above, We hereby REVERSE and SET ASIDE, the decision of the
Court of Appeals in CA-G.R. SP No. 10591 and another judgment is hereby rendered
declaring Resolution No. 105 null and void and of no force and effect for being
unconstitutional. This decision is immediately executory. No costs.
SO ORDERED.
_________________________________________

EN BANC
G.R. No. L-24693

July 31, 1967

ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC., HOTEL

DEL
MAR
INC.
and
GO
CHIU, petitioners-appellees,
vs.
THE
HONORABLE
CITY
MAYOR
OF
MANILA, respondent-appellant.
VICTOR ALABANZA, intervenor-appellee.
FERNANDO, J.:
The principal question in this appeal from a judgment of the lower court in an action for
prohibition is whether Ordinance No. 4760 of the City of Manila is violative of the due
process clause. The lower court held that it is and adjudged it "unconstitutional, and,
therefore, null and void." For reasons to be more specifically set forth, such judgment
must be reversed, there being a failure of the requisite showing to sustain an attack
against its validity.
The petition for prohibition against Ordinance No. 4760 was filed on July 5, 1963 by the
petitioners, Ermita-Malate Hotel and Motel Operators Association, one of its members,
Hotel del Mar Inc., and a certain Go Chiu, who is "the president and general manager of
the second petitioner" against the respondent Mayor of the City of Manila who was sued
in his capacity as such "charged with the general power and duty to enforce ordinances
of the City of Manila and to give the necessary orders for the faithful execution and
enforcement of such ordinances." (par. 1). It was alleged that the petitioner non-stock
corporation is dedicated to the promotion and protection of the interest of its eighteen
(18) members "operating hotels and motels, characterized as legitimate businesses
CONSTILAW 2-SEC. I | 74

duly licensed by both national and city authorities, regularly paying taxes, employing
and giving livelihood to not less than 2,500 person and representing an investment of
more than P3 million."1 (par. 2). It was then alleged that on June 13, 1963, the Municipal
Board of the City of Manila enacted Ordinance No. 4760, approved on June 14, 1963 by
the then Vice-Mayor Herminio Astorga, who was at the time acting as Mayor of the City
of Manila. (par. 3).
After which the alleged grievances against the ordinance were set forth in detail. There
was the assertion of its being beyond the powers of the Municipal Board of the City of
Manila to enact insofar as it would regulate motels, on the ground that in the revised
charter of the City of Manila or in any other law, no reference is made to motels; that
Section 1 of the challenged ordinance is unconstitutional and void for being
unreasonable and violative of due process insofar as it would impose P6,000.00 fee per
annum for first class motels and P4,500.00 for second class motels; that the provision in
the same section which would require the owner, manager, keeper or duly authorized
representative of a hotel, motel, or lodging house to refrain from entertaining or
accepting any guest or customer or letting any room or other quarter to any person or
persons without his filling up the prescribed form in a lobby open to public view at all
times and in his presence, wherein the surname, given name and middle name, the
date of birth, the address, the occupation, the sex, the nationality, the length of stay and
the number of companions in the room, if any, with the name, relationship, age and sex
would be specified, with data furnished as to his residence certificate as well as his
passport number, if any, coupled with a certification that a person signing such form has
personally filled it up and affixed his signature in the presence of such owner, manager,
keeper or duly authorized representative, with such registration forms and records kept
and bound together, it also being provided that the premises and facilities of such
hotels, motels and lodging houses would be open for inspection either by the City
Mayor, or the Chief of Police, or their duly authorized representatives is unconstitutional
and void again on due process grounds, not only for being arbitrary, unreasonable or
oppressive but also for being vague, indefinite and uncertain, and likewise for the
alleged invasion of the right to privacy and the guaranty against self-incrimination; that
Section 2 of the challenged ordinance classifying motels into two classes and requiring
the maintenance of certain minimum facilities in first class motels such as a telephone in
each room, a dining room or, restaurant and laundry similarly offends against the due
process clause for being arbitrary, unreasonable and oppressive, a conclusion which
applies to the portion of the ordinance requiring second class motels to have a dining
room; that the provision of Section 2 of the challenged ordinance prohibiting a person
less than 18 years old from being accepted in such hotels, motels, lodging houses,
tavern or common inn unless accompanied by parents or a lawful guardian and making
it unlawful for the owner, manager, keeper or duly authorized representative of such
establishments to lease any room or portion thereof more than twice every 24 hours,
runs counter to the due process guaranty for lack of certainty and for its unreasonable,
arbitrary and oppressive character; and that insofar as the penalty provided for in
Section 4 of the challenged ordinance for a subsequent conviction would, cause the

automatic cancellation of the license of the offended party, in effect causing the
destruction of the business and loss of its investments, there is once again a
transgression of the due process clause.
There was a plea for the issuance of preliminary injunction and for a final judgment
declaring the above ordinance null and void and unenforceable. The lower court on July
6, 1963 issued a writ of preliminary injunction ordering respondent Mayor to refrain from
enforcing said Ordinance No. 4760 from and after July 8, 1963.
In the a answer filed on August 3, 1963, there was an admission of the personal
circumstances regarding the respondent Mayor and of the fact that petitioners are
licensed to engage in the hotel or motel business in the City of Manila, of the provisions
of the cited Ordinance but a denial of its alleged nullity, whether on statutory or
constitutional grounds. After setting forth that the petition did fail to state a cause of
action and that the challenged ordinance bears a reasonable relation, to a proper
purpose, which is to curb immorality, a valid and proper exercise of the police power
and that only the guests or customers not before the court could complain of the alleged
invasion of the right to privacy and the guaranty against self incrimination, with the
assertion that the issuance of the preliminary injunction ex parte was contrary to law,
respondent Mayor prayed for, its dissolution and the dismissal of the petition.
Instead of evidence being offered by both parties, there was submitted a stipulation of
facts dated September 28, 1964, which reads:
1. That the petitioners Ermita-Malate Hotel and Motel Operators Association, Inc. and
Hotel del Mar Inc. are duly organized and existing under the laws of the Philippines,
both with offices in the City of Manila, while the petitioner Go Chin is the president and
general manager of Hotel del Mar Inc., and the intervenor Victor Alabanza is a resident
of Baguio City, all having the capacity to sue and be sued;
2. That the respondent Mayor is the duly elected and incumbent City Mayor and chief
executive of the City of Manila charged with the general power and duty to enforce
ordinances of the City of Manila and to give the necessary orders for the faithful
execution and enforcement of such ordinances;
3. That the petitioners are duly licensed to engage in the business of operating hotels
and motels in Malate and Ermita districts in Manila;
4. That on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance
No. 4760, which was approved on June 14, 1963, by Vice-Mayor Herminio Astorga,
then the acting City Mayor of Manila, in the absence of the respondent regular City
Mayor, amending sections 661, 662, 668-a, 668-b and 669 of the compilation of the
ordinances of the City of Manila besides inserting therein three new sections. This
CONSTILAW 2-SEC. I | 75

ordinance is similar to the one vetoed by the respondent Mayor (Annex A) for the
reasons stated in its 4th Indorsement dated February 15, 1963 (Annex B);
5. That the explanatory note signed by then Councilor Herminio Astorga was submitted
with the proposed ordinance (now Ordinance 4760) to the Municipal Board, copy of
which is attached hereto as Annex C;
6. That the City of Manila derived in 1963 an annual income of P101,904.05 from
license fees paid by the 105 hotels and motels (including herein petitioners) operating in
the City of Manila.1wph1.t
Thereafter came a memorandum for respondent on January 22, 1965, wherein stress
was laid on the presumption of the validity of the challenged ordinance, the burden of
showing its lack of conformity to the Constitution resting on the party who assails it,
citing not only U.S. v. Salaveria, but likewise applicable American authorities. Such a
memorandum likewise refuted point by point the arguments advanced by petitioners
against its validity. Then barely two weeks later, on February 4, 1965, the memorandum
for petitioners was filed reiterating in detail what was set forth in the petition, with
citations of what they considered to be applicable American authorities and praying for a
judgment declaring the challenged ordinance "null and void and unenforceable" and
making permanent the writ of preliminary injunction issued.
After referring to the motels and hotels, which are members of the petitioners
association, and referring to the alleged constitutional questions raised by the party, the
lower court observed: "The only remaining issue here being purely a question of law,
the parties, with the nod of the Court, agreed to file memoranda and thereafter, to
submit the case for decision of the Court." It does appear obvious then that without any
evidence submitted by the parties, the decision passed upon the alleged infirmity on
constitutional grounds of the challenged ordinance, dismissing as is undoubtedly right
and proper the untenable objection on the alleged lack of authority of the City of Manila
to regulate motels, and came to the conclusion that "the challenged Ordinance No.
4760 of the City of Manila, would be unconstitutional and, therefore, null and void." It
made permanent the preliminary injunction issued against respondent Mayor and his
agents "to restrain him from enforcing the ordinance in question." Hence this appeal.
As noted at the outset, the judgment must be reversed. A decent regard for
constitutional doctrines of a fundamental character ought to have admonished the lower
court against such a sweeping condemnation of the challenged ordinance. Its decision
cannot be allowed to stand, consistently with what has hitherto been the accepted
standards of constitutional adjudication, in both procedural and substantive aspects.
Primarily what calls for a reversal of such a decision is the absence of any evidence to
offset the presumption of validity that attaches to a challenged statute or ordinance. As

was expressed categorically by Justice Malcolm: "The presumption is all in favor of

validity x x x . The action of the elected representatives of the people cannot be lightly
set aside. The councilors must, in the very nature of things, be familiar with the
necessities of their particular municipality and with all the facts and circumstances which
surround the subject and necessitate action. The local legislative body, by enacting the
ordinance, has in effect given notice that the regulations are essential to the well being
of the people x x x . The Judiciary should not lightly set aside legislative action when
there is not a clear invasion of personal or property rights under the guise of police
regulation.2
It admits of no doubt therefore that there being a presumption of validity, the necessity
for evidence to rebut it is unavoidable, unless the statute or ordinance is void on its face
which is not the case here. The principle has been nowhere better expressed than in
the leading case of O'Gorman & Young v. Hartford Fire Insurance Co.,3 where the
American Supreme Court through Justice Brandeis tersely and succinctly summed up
the matter thus: The statute here questioned deals with a subject clearly within the
scope of the police power. We are asked to declare it void on the ground that the
specific method of regulation prescribed is unreasonable and hence deprives the
plaintiff of due process of law. As underlying questions of fact may condition the
constitutionality of legislation of this character, the resumption of constitutionality must
prevail in the absence of some factual foundation of record for overthrowing the
statute." No such factual foundation being laid in the present case, the lower court
deciding the matter on the pleadings and the stipulation of facts, the presumption of
validity must prevail and the judgment against the ordinance set aside.
Nor may petitioners assert with plausibility that on its face the ordinance is fatally
defective as being repugnant to the due process clause of the Constitution. The mantle
of protection associated with the due process guaranty does not cover petitioners. This
particular manifestation of a police power measure being specifically aimed to
safeguard public morals is immune from such imputation of nullity resting purely on
conjecture and unsupported by anything of substance. To hold otherwise would be to
unduly restrict and narrow the scope of police power which has been properly
characterized as the most essential, insistent and the least limitable of
powers,4 extending as it does "to all the great public needs." 5 It would be, to paraphrase
another leading decision, to destroy the very purpose of the state if it could be deprived
or allowed itself to be deprived of its competence to promote public health, public
morals, public safety and the genera welfare. 6 Negatively put, police power is "that
inherent and plenary power in the State which enables it to prohibit all that is hurt full to
the comfort, safety, and welfare of society.7
There is no question but that the challenged ordinance was precisely enacted to
minimize certain practices hurtful to public morals. The explanatory note of the
Councilor Herminio Astorga included as annex to the stipulation of facts, speaks of the
alarming increase in the rate of prostitution, adultery and fornication in Manila traceable
CONSTILAW 2-SEC. I | 76

in great part to the existence of motels, which "provide a necessary atmosphere for
clandestine entry, presence and exit" and thus become the "ideal haven for prostitutes
and thrill-seekers." The challenged ordinance then proposes to check the clandestine
harboring of transients and guests of these establishments by requiring these transients
and guests to fill up a registration form, prepared for the purpose, in a lobby open to
public view at all times, and by introducing several other amendatory provisions
calculated to shatter the privacy that characterizes the registration of transients and
guests." Moreover, the increase in the licensed fees was intended to discourage
"establishments of the kind from operating for purpose other than legal" and at the same
time, to increase "the income of the city government." It would appear therefore that the
stipulation of facts, far from sustaining any attack against the validity of the ordinance,
argues eloquently for it.
It is a fact worth noting that this Court has invariably stamped with the seal of its
approval, ordinances punishing vagrancy and classifying a pimp or procurer as a
vagrant;8 provide a license tax for and regulating the maintenance or operation of public
dance halls;9 prohibiting gambling;10 prohibiting jueteng;11 and monte;12prohibiting
playing of panguingui on days other than Sundays or legal holidays; 13 prohibiting the
operation of pinball machines;14 and prohibiting any person from keeping, conducting or
maintaining an opium joint or visiting a place where opium is smoked or otherwise
used,15 all of which are intended to protect public morals.
On the legislative organs of the government, whether national or local, primarily rest the
exercise of the police power, which, it cannot be too often emphasized, is the power to
prescribe regulations to promote the health, morals, peace, good order, safety and
general welfare of the people. In view of the requirements of due process, equal
protection and other applicable constitutional guaranties however, the exercise of such
police power insofar as it may affect the life, liberty or property of any person is subject
to judicial inquiry. Where such exercise of police power may be considered as either
capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of
any other applicable constitutional guaranty may call for correction by the courts.
We are thus led to considering the insistent, almost shrill tone, in which the objection is
raised to the question of due process. 16 There is no controlling and precise definition of
due process. It furnishes though a standard to which the governmental action should
conform in order that deprivation of life, liberty or property, in each appropriate case, be
valid. What then is the standard of due process which must exist both as a procedural
and a substantive requisite to free the challenged ordinance, or any governmental
action for that matter, from the imputation of legal infirmity sufficient to spell its doom? It
is responsiveness to the supremacy of reason, obedience to the dictates of justice.
Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due
process requirement, official action, to paraphrase Cardozo, must not outrun the bounds
of reason and result in sheer oppression. Due process is thus hostile to any official
action marred by lack of reasonableness. Correctly it has been identified as freedom

from arbitrariness. It is the embodiment of the sporting idea of fair play. 17 It exacts fealty
"to those strivings for justice" and judges the act of officialdom of whatever branch "in
the light of reason drawn from considerations of fairness that reflect [democratic]
traditions of legal and political thought."18 It is not a narrow or "technical conception with
fixed content unrelated to time, place and circumstances,"19 decisions based on such a
clause requiring a "close and perceptive inquiry into fundamental principles of our
society."20 Questions of due process are not to be treated narrowly or pedantically in
slavery to form or phrases.21
It would thus be an affront to reason to stigmatize an ordinance enacted precisely to
meet what a municipal lawmaking body considers an evil of rather serious proportion an
arbitrary and capricious exercise of authority. It would seem that what should be
deemed unreasonable and what would amount to an abdication of the power to govern
is inaction in the face of an admitted deterioration of the state of public morals. To be
more specific, the Municipal Board of the City of Manila felt the need for a remedial
measure. It provided it with the enactment of the challenged ordinance. A strong case
must be found in the records, and, as has been set forth, none is even attempted here
to attach to an ordinance of such character the taint of nullity for an alleged failure to
meet the due process requirement. Nor does it lend any semblance even of deceptive
plausibility to petitioners' indictment of Ordinance No. 4760 on due process grounds to
single out such features as the increased fees for motels and hotels, the curtailment of
the area of freedom to contract, and, in certain particulars, its alleged vagueness.
Admittedly there was a decided increase of the annual license fees provided for by the
challenged ordinance for hotels and motels, 150% for the former and over 200% for the
latter, first-class motels being required to pay a P6,000 annual fee and second-class
motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that
municipal license fees could be classified into those imposed for regulating occupations
or regular enterprises, for the regulation or restriction of non-useful occupations or
enterprises and for revenue purposes only.22 As was explained more in detail in the
above Cu Unjieng case: (2) Licenses for non-useful occupations are also incidental to
the police power and the right to exact a fee may be implied from the power to license
and regulate, but in fixing amount of the license fees the municipal corporations are
allowed a much wider discretion in this class of cases than in the former, and aside from
applying the well-known legal principle that municipal ordinances must not be
unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to
interfere with such discretion. The desirability of imposing restraint upon the number of
persons who might otherwise engage in non-useful enterprises is, of course, generally
an important factor in the determination of the amount of this kind of license fee. Hence
license fees clearly in the nature of privilege taxes for revenue have frequently been
upheld, especially in of licenses for the sale of liquors. In fact, in the latter cases the
fees have rarely been declared unreasonable.23

CONSTILAW 2-SEC. I | 77

Moreover in the equally leading case of Lutz v. Araneta24 this Court affirmed the doctrine
earlier announced by the American Supreme Court that taxation may be made to
implement the state's police power. Only the other day, this Court had occasion to affirm
that the broad taxing authority conferred by the Local Autonomy Act of 1959 to cities
and municipalities is sufficiently plenary to cover a wide range of subjects with the only
limitation that the tax so levied is for public purposes, just and uniform.25
As a matter of fact, even without reference to the wide latitude enjoyed by the City of
Manila in imposing licenses for revenue, it has been explicitly held in one case that
"much discretion is given to municipal corporations in determining the amount," here the
license fee of the operator of a massage clinic, even if it were viewed purely as a police
power measure.26 The discussion of this particular matter may fitly close with this
pertinent citation from another decision of significance: "It is urged on behalf of the
plaintiffs-appellees that the enforcement of the ordinance could deprive them of their
lawful occupation and means of livelihood because they can not rent stalls in the public
markets. But it appears that plaintiffs are also dealers in refrigerated or cold storage
meat, the sale of which outside the city markets under certain conditions is permitted x x
x . And surely, the mere fact, that some individuals in the community may be deprived of
their present business or a particular mode of earning a living cannot prevent the
exercise of the police power. As was said in a case, persons licensed to pursue
occupations which may in the public need and interest be affected by the exercise of the
police power embark in these occupations subject to the disadvantages which may
result from the legal exercise of that power."27
Nor does the restriction on the freedom to contract, insofar as the challenged ordinance
makes it unlawful for the owner, manager, keeper or duly authorized representative of
any hotel, motel, lodging house, tavern, common inn or the like, to lease or rent room or
portion thereof more than twice every 24 hours, with a proviso that in all cases full
payment shall be charged, call for a different conclusion. Again, such a limitation cannot
be viewed as a transgression against the command of due process. It is neither
unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for the
immoral or illegitimate use to which such premises could be, and, according to the
explanatory note, are being devoted. How could it then be arbitrary or oppressive when
there appears a correspondence between the undeniable existence of an undesirable
situation and the legislative attempt at correction. Moreover, petitioners cannot be
unaware that every regulation of conduct amounts to curtailment of liberty which as
pointed out by Justice Malcolm cannot be absolute. Thus: "One thought which runs
through all these different conceptions of liberty is plainly apparent. It is this: 'Liberty' as
understood in democracies, is not license; it is 'liberty regulated by law.' Implied in the
term is restraint by law for the good of the individual and for the greater good of the
peace and order of society and the general well-being. No man can do exactly as he
pleases. Every man must renounce unbridled license. The right of the individual is
necessarily subject to reasonable restraint by general law for the common good x x x

The liberty of the citizen may be restrained in the interest of the public health, or of the
public order and safety, or otherwise within the proper scope of the police power."28
A similar observation was made by Justice Laurel: "Public welfare, then, lies at the
bottom of the enactment of said law, and the state in order to promote the general
welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state x x x
To this fundamental aim of our Government the rights of the individual are subordinated.
Liberty is a blessing without which life is a misery, but liberty should not be made to
prevail over authority because then society will fall into anarchy. Neither should authority
be made to prevail over liberty because then the individual will fall into slavery. The
citizen should achieve the required balance of liberty and authority in his mind through
education and personal discipline, so that there may be established the resultant
equilibrium, which means peace and order and happiness for all.29
It is noteworthy that the only decision of this Court nullifying legislation because of
undue deprivation of freedom to contract, People v. Pomar,30 no longer "retains its
virtuality as a living principle. The policy of laissez faire has to some extent given way to
the assumption by the government of the right of intervention even in contractual
relations affected with public interest.31 What may be stressed sufficiently is that if the
liberty involved were freedom of the mind or the person, the standard for the validity of
governmental acts is much more rigorous and exacting, but where the liberty curtailed
affects at the most rights of property, the permissible scope of regulatory measure is
wider.32 How justify then the allegation of a denial of due process?
Lastly, there is the attempt to impugn the ordinance on another due process ground by
invoking the principles of vagueness or uncertainty. It would appear from a recital in the
petition itself that what seems to be the gravamen of the alleged grievance is that the
provisions are too detailed and specific rather than vague or uncertain. Petitioners,
however, point to the requirement that a guest should give the name, relationship, age
and sex of the companion or companions as indefinite and uncertain in view of the
necessity for determining whether the companion or companions referred to are those
arriving with the customer or guest at the time of the registry or entering the room With
him at about the same time or coming at any indefinite time later to join him; a proviso in
one of its sections which cast doubt as to whether the maintenance of a restaurant in a
motel is dependent upon the discretion of its owners or operators; another proviso
which from their standpoint would require a guess as to whether the "full rate of
payment" to be charged for every such lease thereof means a full day's or merely a halfday's rate. It may be asked, do these allegations suffice to render the ordinance void on
its face for alleged vagueness or uncertainty? To ask the question is to answer it.
From Connally v. General Construction Co.33 toAdderley v. Florida,34 the principle has
been consistently upheld that what makes a statute susceptible to such a charge is an
enactment either forbidding or requiring the doing of an act that men of common
CONSTILAW 2-SEC. I | 78

intelligence must necessarily guess at its meaning and differ as to its application. Is this
the situation before us? A citation from Justice Holmes would prove illuminating: "We
agree to all the generalities about not supplying criminal laws with what they omit but
there is no canon against using common sense in construing laws as saying what they
obviously mean."35
That is all then that this case presents. As it stands, with all due allowance for the
arguments pressed with such vigor and determination, the attack against the validity of
the challenged ordinance cannot be considered a success. Far from it. Respect for
constitutional law principles so uniformly held and so uninterruptedly adhered to by this
Court compels a reversal of the appealed decision.
Wherefore, the judgment of the lower court is reversed and the injunction issued lifted
forthwith. With costs.
_______________________________________

CONSTILAW 2-SEC. I | 79

With another city ordinance of Manila also principally involving the tourist district as
subject, the Court is confronted anew with the incessant clash between government
power and individual liberty in tandem with the archetypal tension between law and
morality.
In City of Manila v. Laguio, Jr., 1 the Court affirmed the nullification of a city ordinance
barring the operation of motels and inns, among other establishments, within the
Ermita-Malate area. The petition at bar assails a similarly-motivated city ordinance that
prohibits those same establishments from offering short-time admission, as well as prorated or "wash up" rates for such abbreviated stays. Our earlier decision tested the city
ordinance against our sacred constitutional rights to liberty, due process and equal
protection of law. The same parameters apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the
reversal of the Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals,
challenges the validity of Manila City Ordinance No. 7774 entitled, "An Ordinance
Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate
Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar
Establishments in the City of Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the
Ordinance.4 The Ordinance is reproduced in full, hereunder:
EN BANC
G.R. No. 122846

January 20, 2009

WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA

TOURIST
&
DEVELOPMENT
CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S.
LIM, Respondent.
DECISION
Tinga, J.:

SECTION 1. Declaration of Policy. It is hereby the declared policy of the City

Government to protect the best interest, health and welfare, and the morality of its
constituents in general and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time
admission in hotels, motels, lodging houses, pension houses and similar establishments
in the City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate
or other similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging
houses, pension houses and similar establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging
of room rate for less than twelve (12) hours at any given time or the renting out of rooms
more than twice a day or any other term that may be concocted by owners or managers
of said establishments but would mean the same or would bear the same meaning.
CONSTILAW 2-SEC. I | 80

SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of
this ordinance shall upon conviction thereof be punished by a fine of Five Thousand
(P5,000.00) Pesos or imprisonment for a period of not exceeding one (1) year or both
such fine and imprisonment at the discretion of the court; Provided, That in case of [a]
juridical person, the president, the manager, or the persons in charge of the operation
thereof shall be liable: Provided, further, That in case of subsequent conviction for the
same offense, the business license of the guilty party shall automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with
or contrary to this measure or any portion hereof are hereby deemed repealed.

On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to
desist from the enforcement of the Ordinance.15 A month later, on March 8, 1993, the
Solicitor General filed his Comment arguing that the Ordinance is constitutional.
During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for
decision without trial as the case involved a purely legal question. 16 On October 20,
1993, the RTC rendered a decision declaring the Ordinance null and void. The
dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is
hereby declared null and void.

SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval.
Accordingly, the preliminary injunction heretofor issued is hereby made permanent.
Enacted by the city Council of Manila at its regular session today, November 10, 1992.
SO ORDERED.17
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed
a complaint for declaratory relief with prayer for a writ of preliminary injunction and/or
temporary restraining order ( TRO)5 with the Regional Trial Court (RTC) of Manila,
Branch 9 impleading as defendant, herein respondent City of Manila (the City)
represented by Mayor Lim.6 MTDC prayed that the Ordinance, insofar as it includes
motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional. MTDC claimed that as owner and operator of the Victoria Court in
Malate, Manila it was authorized by Presidential Decree (P.D.) No. 259 to admit
customers on a short time basis as well as to charge customers wash up rates for stays
of only three hours.
On December 21, 1992, petitioners White Light Corporation (WLC), Titanium
Corporation (TC) and Sta. Mesa Tourist and Development Corporation (STDC) filed a
motion to intervene and to admit attached complaint-in-intervention 7 on the ground that
the Ordinance directly affects their business interests as operators of drive-in-hotels and
motels in Manila.8 The three companies are components of the Anito Group of
Companies which owns and operates several hotels and motels in Metro Manila.9

The RTC noted that the ordinance "strikes at the personal liberty of the individual
guaranteed and jealously guarded by the Constitution." 18 Reference was made to the
provisions of the Constitution encouraging private enterprises and the incentive to
needed investment, as well as the right to operate economic enterprises. Finally, from
the observation that the illicit relationships the Ordinance sought to dissuade could
nonetheless be consummated by simply paying for a 12-hour stay, the RTC likened the
law to the ordinance annulled in Ynot v. Intermediate Appellate Court, 19 where the
legitimate purpose of preventing indiscriminate slaughter of carabaos was sought to be
effected through an inter-province ban on the transport of carabaos and carabeef.
The City later filed a petition for review on certiorari with the Supreme Court.20 The
petition was docketed as G.R. No. 112471. However in a resolution dated January 26,
1994, the Court treated the petition as a petition forcertiorari and referred the petition to
the Court of Appeals.21
Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of
police power pursuant to Section 458 (4)(iv) of the Local Government Code which
confers on cities, among other local government units, the power:

On December 23, 1992, the RTC granted the motion to intervene.10 The RTC also
notified the Solicitor General of the proceedings pursuant to then Rule 64, Section 4 of
the Rules of Court. On the same date, MTDC moved to withdraw as plaintiff.11

[To] regulate the establishment, operation and maintenance of cafes, restaurants,

beerhouses, hotels, motels, inns, pension houses, lodging houses and other similar
establishments, including tourist guides and transports.22

On December 28, 1992, the RTC granted MTDC's motion to withdraw.12 The RTC
issued a TRO on January 14, 1993, directing the City to cease and desist from
enforcing the Ordinance.13 The City filed an Answer dated January 22, 1993 alleging
that the Ordinance is a legitimate exercise of police power.14

The Ordinance, it is argued, is also a valid exercise of the power of the City under
Article III, Section 18(kk) of the Revised Manila Charter, thus:

CONSTILAW 2-SEC. I | 81

"to enact all ordinances it may deem necessary and proper for the sanitation and safety,
the furtherance of the prosperity and the promotion of the morality, peace, good order,
comfort, convenience and general welfare of the city and its inhabitants, and such
others as be necessary to carry into effect and discharge the powers and duties
conferred by this Chapter; and to fix penalties for the violation of ordinances which shall
not exceed two hundred pesos fine or six months imprisonment, or both such fine and
imprisonment for a single offense.23

The requirement of standing is a core component of the judicial system derived directly
from the Constitution.27The constitutional component of standing doctrine incorporates
concepts which concededly are not susceptible of precise definition. 28 In this jurisdiction,
the extancy of "a direct and personal interest" presents the most obvious cause, as well
as the standard test for a petitioner's standing. 29 In a similar vein, the United States
Supreme Court reviewed and elaborated on the meaning of the three constitutional
standing requirements of injury, causation, and redressability in Allen v. Wright.30

Petitioners argued that the Ordinance is unconstitutional and void since it violates the
right to privacy and the freedom of movement; it is an invalid exercise of police power;
and it is an unreasonable and oppressive interference in their business.

Nonetheless, the general rules on standing admit of several exceptions such as the
overbreadth doctrine, taxpayer suits, third party standing and, especially in the
Philippines, the doctrine of transcendental importance.31

The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality
of the Ordinance.24 First, it held that the Ordinance did not violate the right to privacy or
the freedom of movement, as it only penalizes the owners or operators of
establishments that admit individuals for short time stays. Second, the virtually limitless
reach of police power is only constrained by having a lawful object obtained through a
lawful method. The lawful objective of the Ordinance is satisfied since it aims to curb
immoral activities. There is a lawful method since the establishments are still allowed to
operate. Third, the adverse effect on the establishments is justified by the well-being of
its constituents in general. Finally, as held in Ermita-Malate Motel Operators Association
v. City Mayor of Manila, liberty is regulated by law.

For this particular set of facts, the concept of third party standing as an exception and
the overbreadth doctrine are appropriate. In Powers v. Ohio,32 the United States
Supreme Court wrote that: "We have recognized the right of litigants to bring actions on
behalf of third parties, provided three important criteria are satisfied: the litigant must
have suffered an injury-in-fact, thus giving him or her a "sufficiently concrete interest" in
the outcome of the issue in dispute; the litigant must have a close relation to the third
party; and there must exist some hindrance to the third party's ability to protect his or
her own interests."33 Herein, it is clear that the business interests of the petitioners are
likewise injured by the Ordinance. They rely on the patronage of their customers for
their continued viability which appears to be threatened by the enforcement of the
Ordinance. The relative silence in constitutional litigation of such special interest groups
in our nation such as the American Civil Liberties Union in the United States may also
be construed as a hindrance for customers to bring suit.34

TC, WLC and STDC come to this Court via petition for review on certiorari. 25 In their
petition and Memorandum, petitioners in essence repeat the assertions they made
before the Court of Appeals. They contend that the assailed Ordinance is an invalid
exercise of police power.
II.
We must address the threshold issue of petitioners standing. Petitioners allege that as
owners of establishments offering "wash-up" rates, their business is being unlawfully
interfered with by the Ordinance. However, petitioners also allege that the equal
protection rights of their clients are also being interfered with. Thus, the crux of the
matter is whether or not these establishments have the requisite standing to plead for
protection of their patrons' equal protection rights.
Standing or locus standi is the ability of a party to demonstrate to the court sufficient
connection to and harm from the law or action challenged to support that party's
participation in the case. More importantly, the doctrine of standing is built on the
principle of separation of powers, 26 sparing as it does unnecessary interference or
invalidation by the judicial branch of the actions rendered by its co-equal branches of
government.

American jurisprudence is replete with examples where parties-in-interest were allowed

standing to advocate or invoke the fundamental due process or equal protection claims
of other persons or classes of persons injured by state action. In Griswold v.
Connecticut,35 the United States Supreme Court held that physicians had standing to
challenge a reproductive health statute that would penalize them as accessories as well
as to plead the constitutional protections available to their patients. The Court held that:
"The rights of husband and wife, pressed here, are likely to be diluted or adversely
affected unless those rights are considered in a suit involving those who have this kind
of confidential relation to them."36
An even more analogous example may be found in Craig v. Boren,37 wherein the United
States Supreme Court held that a licensed beverage vendor has standing to raise the
equal protection claim of a male customer challenging a statutory scheme prohibiting
the sale of beer to males under the age of 21 and to females under the age of 18. The
United States High Court explained that the vendors had standing "by acting as
advocates of the rights of third parties who seek access to their market or function."38
CONSTILAW 2-SEC. I | 82

Assuming arguendo that petitioners do not have a relationship with their patrons for the
former to assert the rights of the latter, the overbreadth doctrine comes into play. In
overbreadth analysis, challengers to government actionare in effect permitted to raise
the rights of third parties. Generally applied to statutes infringing on the freedom of
speech, the overbreadth doctrine applies when a statute needlessly restrains even
constitutionally guaranteed rights.39 In this case, the petitioners claim that the Ordinance
makes a sweeping intrusion into the right to liberty of their clients. We can see that
based on the allegations in the petition, the Ordinance suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the constitutional rights of
their clients to patronize their establishments for a "wash-rate" time frame.
III.
To students of jurisprudence, the facts of this case will recall to mind not only the
recent City of Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel
Operations Association, Inc., v. Hon. City Mayor of Manila.40Ermita-Malate concerned
the City ordinance requiring patrons to fill up a prescribed form stating personal
information such as name, gender, nationality, age, address and occupation before they
could be admitted to a motel, hotel or lodging house. This earlier ordinance was
precisely enacted to minimize certain practices deemed harmful to public morals. A
purpose similar to the annulled ordinance in City of Manila which sought a blanket ban
on motels, inns and similar establishments in the Ermita-Malate area. However, the
constitutionality of the ordinance in Ermita-Malate was sustained by the Court.
The common thread that runs through those decisions and the case at bar goes beyond
the singularity of the localities covered under the respective ordinances. All three
ordinances were enacted with a view of regulating public morals including particular
illicit activity in transient lodging establishments. This could be described as the middle
case, wherein there is no wholesale ban on motels and hotels but the services offered
by these establishments have been severely restricted. At its core, this is another case
about the extent to which the State can intrude into and regulate the lives of its citizens.
The test of a valid ordinance is well established. A long line of decisions including City
of Manila has held that for an ordinance to be valid, it must not only be within the
corporate powers of the local government unit to enact and pass according to the
procedure prescribed by law, it must also conform to the following substantive
requirements: (1) must not contravene the Constitution or any statute; (2) must not be
unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but
may regulate trade; (5) must be general and consistent with public policy; and (6) must
not be unreasonable.41

The Ordinance prohibits two specific and distinct business practices, namely wash rate
admissions and renting out a room more than twice a day. The ban is evidently sought
to be rooted in the police power as conferred on local government units by the Local
Government Code through such implements as the general welfare clause.
A.
Police power, while incapable of an exact definition, has been purposely veiled in
general terms to underscore its comprehensiveness to meet all exigencies and provide
enough room for an efficient and flexible response as the conditions warrant. 42 Police
power is based upon the concept of necessity of the State and its corresponding right to
protect itself and its people.43 Police power has been used as justification for numerous
and varied actions by the State. These range from the regulation of dance halls, 44 movie
theaters,45 gas stations46 and cockpits.47 The awesome scope of police power is best
demonstrated by the fact that in its hundred or so years of presence in our nations legal
system, its use has rarely been denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the
covered establishments for illicit sex, prostitution, drug use and alike. These goals, by
themselves, are unimpeachable and certainly fall within the ambit of the police power of
the State. Yet the desirability of these ends do not sanctify any and all means for their
achievement. Those means must align with the Constitution, and our emerging
sophisticated analysis of its guarantees to the people. The Bill of Rights stands as a
rebuke to the seductive theory of Macchiavelli, and, sometimes even, the political
majorities animated by his cynicism.
Even as we design the precedents that establish the framework for analysis of due
process or equal protection questions, the courts are naturally inhibited by a due
deference to the co-equal branches of government as they exercise their political
functions. But when we are compelled to nullify executive or legislative actions, yet
another form of caution emerges. If the Court were animated by the same passing
fancies or turbulent emotions that motivate many political decisions, judicial integrity is
compromised by any perception that the judiciary is merely the third political branch of
government. We derive our respect and good standing in the annals of history by acting
as judicious and neutral arbiters of the rule of law, and there is no surer way to that end
than through the development of rigorous and sophisticated legal standards through
which the courts analyze the most fundamental and far-reaching constitutional
questions of the day.
B.
The primary constitutional question that confronts us is one of due process, as
guaranteed under Section 1, Article III of the Constitution. Due process evades a
CONSTILAW 2-SEC. I | 83

precise definition.48 The purpose of the guaranty is to prevent arbitrary governmental

encroachment against the life, liberty and property of individuals. The due process
guaranty serves as a protection against arbitrary regulation or seizure. Even
corporations and partnerships are protected by the guaranty insofar as their property is
concerned.
The due process guaranty has traditionally been interpreted as imposing two related but
distinct restrictions on government, "procedural due process" and "substantive due
process." Procedural due process refers to the procedures that the government must
follow before it deprives a person of life, liberty, or property.49 Procedural due process
concerns itself with government action adhering to the established process when it
makes an intrusion into the private sphere. Examples range from the form of notice
given to the level of formality of a hearing.
If due process were confined solely to its procedural aspects, there would arise absurd
situation of arbitrary government action, provided the proper formalities are followed.
Substantive due process completes the protection envisioned by the due process
clause. It inquires whether the government has sufficient justification for depriving a
person of life, liberty, or property.50
The question of substantive due process, moreso than most other fields of law, has
reflected dynamism in progressive legal thought tied with the expanded acceptance of
fundamental freedoms. Police power, traditionally awesome as it may be, is now
confronted with a more rigorous level of analysis before it can be upheld. The vitality
though of constitutional due process has not been predicated on the frequency with
which it has been utilized to achieve a liberal result for, after all, the libertarian ends
should sometimes yield to the prerogatives of the State. Instead, the due process
clause has acquired potency because of the sophisticated methodology that has
emerged to determine the proper metes and bounds for its application.
C.
The general test of the validity of an ordinance on substantive due process grounds is
best tested when assessed with the evolved footnote 4 test laid down by the U.S.
Supreme Court in U.S. v. Carolene Products. 51 Footnote 4 of the Carolene Products
case acknowledged that the judiciary would defer to the legislature unless there is a
discrimination against a "discrete and insular" minority or infringement of a "fundamental
right."52 Consequently, two standards of judicial review were established: strict scrutiny
for laws dealing with freedom of the mind or restricting the political process, and the
rational basis standard of review for economic legislation.
A third standard, denominated as heightened or immediate scrutiny, was later adopted
by the U.S. Supreme Court for evaluating classifications based on gender 53 and

legitimacy.54 Immediate scrutiny was adopted by the U.S. Supreme Court in

Craig,55 after the Court declined to do so in Reed v. Reed. 56 While the test may have first
been articulated in equal protection analysis, it has in the United States since been
applied in all substantive due process cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal
protection challenges.57 Using the rational basis examination, laws or ordinances are
upheld if they rationally further a legitimate governmental interest. 58 Under intermediate
review, governmental interest is extensively examined and the availability of less
restrictive measures is considered.59 Applying strict scrutiny, the focus is on the
presence of compelling, rather than substantial, governmental interest and on the
absence of less restrictive means for achieving that interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard
for determining the quality and the amount of governmental interest brought to justify
the regulation of fundamental freedoms.60 Strict scrutiny is used today to test the validity
of laws dealing with the regulation of speech, gender, or race as well as other
fundamental rights as expansion from its earlier applications to equal protection. 61 The
United States Supreme Court has expanded the scope of strict scrutiny to protect
fundamental rights such as suffrage,62 judicial access63 and interstate travel.64
If we were to take the myopic view that an Ordinance should be analyzed strictly as to
its effect only on the petitioners at bar, then it would seem that the only restraint
imposed by the law which we are capacitated to act upon is the injury to property
sustained by the petitioners, an injury that would warrant the application of the most
deferential standard the rational basis test. Yet as earlier stated, we recognize the
capacity of the petitioners to invoke as well the constitutional rights of their patrons
those persons who would be deprived of availing short time access or wash-up rates to
the lodging establishments in question.
Viewed cynically, one might say that the infringed rights of these customers were are
trivial since they seem shorn of political consequence. Concededly, these are not the
sort of cherished rights that, when proscribed, would impel the people to tear up their
cedulas. Still, the Bill of Rights does not shelter gravitas alone. Indeed, it is those
"trivial" yet fundamental freedoms which the people reflexively exercise any day
without the impairing awareness of their constitutional consequence that accurately
reflect the degree of liberty enjoyed by the people. Liberty, as integrally incorporated as
a fundamental right in the Constitution, is not a Ten Commandments-style enumeration
of what may or what may not be done; but rather an atmosphere of freedom where the
people do not feel labored under a Big Brother presence as they interact with each
other, their society and nature, in a manner innately understood by them as inherent,
without doing harm or injury to others.

CONSTILAW 2-SEC. I | 84

D.
The rights at stake herein fall within the same fundamental rights to liberty which we
upheld in City of Manila v. Hon. Laguio, Jr. We expounded on that most primordial of
rights, thus:
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include
"the right to exist and the right to be free from arbitrary restraint or servitude. The term
cannot be dwarfed into mere freedom from physical restraint of the person of the citizen,
but is deemed to embrace the right of man to enjoy the facilities with which he has been
endowed by his Creator, subject only to such restraint as are necessary for the common
welfare."[65] In accordance with this case, the rights of the citizen to be free to use his
faculties in all lawful ways; to live and work where he will; to earn his livelihood by any
lawful calling; and to pursue any avocation are all deemed embraced in the concept of
liberty.[66]
The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the
meaning of "liberty." It said:
While the Court has not attempted to define with exactness the liberty . . . guaranteed
[by the Fifth and Fourteenth Amendments], the term denotes not merely freedom from
bodily restraint but also the right of the individual to contract, to engage in any of the
common occupations of life, to acquire useful knowledge, to marry, establish a home
and bring up children, to worship God according to the dictates of his own conscience,
and generally to enjoy those privileges long recognized . . . as essential to the orderly
pursuit of happiness by free men. In a Constitution for a free people, there can be no
doubt that the meaning of "liberty" must be broad indeed.67[Citations omitted]
It cannot be denied that the primary animus behind the ordinance is the curtailment of
sexual behavior. The City asserts before this Court that the subject establishments
"have gained notoriety as venue of prostitution, adultery and fornications in Manila
since they provide the necessary atmosphere for clandestine entry, presence and exit
and thus became the ideal haven for prostitutes and thrill-seekers." 68 Whether or not
this depiction of a mise-en-scene of vice is accurate, it cannot be denied that legitimate
sexual behavior among willing married or consenting single adults which is
constitutionally protected69 will be curtailed as well, as it was in the City of Manila case.
Our holding therein retains significance for our purposes:
The concept of liberty compels respect for the individual whose claim to privacy and
interference demands respect. As the case of Morfe v. Mutuc, borrowing the words of
Laski, so very aptly stated:

Man is one among many, obstinately refusing reduction to unity. His separateness, his
isolation, are indefeasible; indeed, they are so fundamental that they are the basis on
which his civic obligations are built. He cannot abandon the consequences of his
isolation, which are, broadly speaking, that his experience is private, and the will built
out of that experience personal to himself. If he surrenders his will to others, he
surrenders himself. If his will is set by the will of others, he ceases to be a master of
himself. I cannot believe that a man no longer a master of himself is in any real sense
free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the
invasion of which should be justified by a compelling state interest. Morfe accorded
recognition to the right to privacy independently of its identification with liberty; in itself it
is fully deserving of constitutional protection. Governmental powers should stop short of
certain intrusions into the personal life of the citizen.70
We cannot discount other legitimate activities which the Ordinance would proscribe or
impair. There are very legitimate uses for a wash rate or renting the room out for more
than twice a day. Entire families are known to choose pass the time in a motel or hotel
whilst the power is momentarily out in their homes. In transit passengers who wish to
wash up and rest between trips have a legitimate purpose for abbreviated stays in
motels or hotels. Indeed any person or groups of persons in need of comfortable private
spaces for a span of a few hours with purposes other than having sex or using illegal
drugs can legitimately look to staying in a motel or hotel as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a
product and the petitioners of lucrative business ties in with another constitutional
requisite for the legitimacy of the Ordinance as a police power measure. It must appear
that the interests of the public generally, as distinguished from those of a particular
class, require an interference with private rights and the means must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive of private
rights.71 It must also be evident that no other alternative for the accomplishment of the
purpose less intrusive of private rights can work. More importantly, a reasonable relation
must exist between the purposes of the measure and the means employed for its
accomplishment, for even under the guise of protecting the public interest, personal
rights and those pertaining to private property will not be permitted to be arbitrarily
invaded.72
Lacking a concurrence of these requisites, the police measure shall be struck down as
an arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police
power is subject to judicial review when life, liberty or property is affected. 73 However,

CONSTILAW 2-SEC. I | 85

this is not in any way meant to take it away from the vastness of State police power
whose exercise enjoys the presumption of validity.74

rashly equates wash rates and renting out a room more than twice a day with immorality
without accommodating innocuous intentions.

Similar to the Comelec resolution requiring newspapers to donate advertising space to

candidates, this Ordinance is a blunt and heavy instrument. 75 The Ordinance makes no
distinction between places frequented by patrons engaged in illicit activities and patrons
engaged in legitimate actions. Thus it prevents legitimate use of places where illicit
activities are rare or even unheard of. A plain reading of section 3 of the Ordinance
shows it makes no classification of places of lodging, thus deems them all susceptible to
illicit patronage and subject them without exception to the unjustified prohibition.

The promotion of public welfare and a sense of morality among citizens deserves the
full endorsement of the judiciary provided that such measures do not trample rights this
Court is sworn to protect.77 The notion that the promotion of public morality is a function
of the State is as old as Aristotle. 78 The advancement of moral relativism as a school of
philosophy does not de-legitimize the role of morality in law, even if it may foster wider
debate on which particular behavior to penalize. It is conceivable that a society with
relatively little shared morality among its citizens could be functional so long as the
pursuit of sharply variant moral perspectives yields an adequate accommodation of
different interests.79

The Court has professed its deep sentiment and tenderness of the Ermita-Malate area,
its longtime home,76 and it is skeptical of those who wish to depict our capital city the
Pearl of the Orient as a modern-day Sodom or Gomorrah for the Third World set.
Those still steeped in Nick Joaquin-dreams of the grandeur of Old Manila will have to
accept that Manila like all evolving big cities, will have its problems. Urban decay is a
fact of mega cities such as Manila, and vice is a common problem confronted by the
modern metropolis wherever in the world. The solution to such perceived decay is not to
prevent legitimate businesses from offering a legitimate product. Rather, cities revive
themselves by offering incentives for new businesses to sprout up thus attracting the
dynamism of individuals that would bring a new grandeur to Manila.
The behavior which the Ordinance seeks to curtail is in fact already prohibited and could
in fact be diminished simply by applying existing laws. Less intrusive measures such as
curbing the proliferation of prostitutes and drug dealers through active police work would
be more effective in easing the situation. So would the strict enforcement of existing
laws and regulations penalizing prostitution and drug use. These measures would have
minimal intrusion on the businesses of the petitioners and other legitimate merchants.
Further, it is apparent that the Ordinance can easily be circumvented by merely paying
the whole day rate without any hindrance to those engaged in illicit activities. Moreover,
drug dealers and prostitutes can in fact collect "wash rates" from their clientele by
charging their customers a portion of the rent for motel rooms and even apartments.
IV.
We reiterate that individual rights may be adversely affected only to the extent that may
fairly be required by the legitimate demands of public interest or public welfare. The
State is a leviathan that must be restrained from needlessly intruding into the lives of its
citizens. However well-intentioned the Ordinance may be, it is in effect an arbitrary and
whimsical intrusion into the rights of the establishments as well as their patrons. The
Ordinance needlessly restrains the operation of the businesses of the petitioners as well
as restricting the rights of their patrons without sufficient justification. The Ordinance

To be candid about it, the oft-quoted American maxim that "you cannot legislate
morality" is ultimately illegitimate as a matter of law, since as explained by Calabresi,
that phrase is more accurately interpreted as meaning that efforts to legislate morality
will fail if they are widely at variance with public attitudes about right and wrong. 80 Our
penal laws, for one, are founded on age-old moral traditions, and as long as there are
widely accepted distinctions between right and wrong, they will remain so oriented.
Yet the continuing progression of the human story has seen not only the acceptance of
the right-wrong distinction, but also the advent of fundamental liberties as the key to the
enjoyment of life to the fullest. Our democracy is distinguished from non-free societies
not with any more extensive elaboration on our part of what is moral and immoral, but
from our recognition that the individual liberty to make the choices in our lives is innate,
and protected by the State. Independent and fair-minded judges themselves are under
a moral duty to uphold the Constitution as the embodiment of the rule of law, by reason
of their expression of consent to do so when they take the oath of office, and because
they are entrusted by the people to uphold the law.81
Even as the implementation of moral norms remains an indispensable complement to
governance, that prerogative is hardly absolute, especially in the face of the norms of
due process of liberty. And while the tension may often be left to the courts to relieve, it
is possible for the government to avoid the constitutional conflict by employing more
judicious, less drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals
is REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9,
is REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No
pronouncement as to costs. SO ORDERED.

CONSTILAW 2-SEC. I | 86

DECISION
EN BANC

AZCUNA, J.:

G.R. No. 133640 November 25, 2005

Before this Court are petitions assailing primarily the constitutionality of Section 7 of
Republic Act No. 7719, otherwise known as the "National Blood Services Act of 1994,"
and the validity of Administrative Order (A.O.) No. 9, series of 1995 or the Rules and
Regulations Implementing Republic Act No. 7719.

RODOLFO S. BELTRAN, doing business under the name and style, OUR LADY OF
FATIMA BLOOD BANK, FELY G. MOSALE, doing business under the name and
style, MOTHER SEATON BLOOD BANK; PEOPLES BLOOD BANK, INC.; MARIA
VICTORIA T. VITO, M.D., doing business under the name and style, AVENUE
BLOOD BANK; JESUS M. GARCIA, M.D., doing business under the name and
style, HOLY REDEEMER BLOOD BANK, ALBERT L. LAPITAN, doing business
under the name and style, BLUE CROSS BLOOD TRANSFUSION SERVICES;
EDGARDO R. RODAS, M.D., doing business under the name and style, RECORD
BLOOD BANK, in their individual capacities and for and in behalf of PHILIPPINE
ASSOCIATION
OF
BLOOD
BANKS, Petitioners,
vs.
THE SECRETARY OF HEALTH, Respondent.

G.R. No. 133640,1 entitled "Rodolfo S. Beltran, doing business under the name and
style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of Health" and G.R. No.
133661,2 entitled "Doctors Blood Bank Center vs. Department of Health" are petitions
for certiorari and mandamus, respectively, seeking the annulment of the following: (1)
Section 7 of Republic Act No. 7719; and, (2) Administrative Order (A.O.) No. 9, series of
1995. Both petitions likewise pray for the issuance of a writ of prohibitory injunction
enjoining the Secretary of Health from implementing and enforcing the aforementioned
law and its Implementing Rules and Regulations; and, for a mandatory injunction
ordering and commanding the Secretary of Health to grant, issue or renew petitioners
license to operate free standing blood banks (FSBB).

x ------------------------------------------------ x
The above cases were consolidated in a resolution of the Court En Banc dated June 2,
1998.3

G.R. No. 133661

DOCTORS
BLOOD
vs.
DEPARTMENT OF HEALTH, Respondent.

CENTER, Petitioner,

x --------------------------------------------- x
G.R. No. 139147
RODOLFO S. BELTRAN, doing business under the name and style, OUR LADY OF
FATIMA BLOOD BANK, FELY G. MOSALE, doing business under the name and
style, MOTHER SEATON BLOOD BANK; PEOPLES BLOOD BANK, INC.; MARIA
VICTORIA T. VITO, M.D., doing business under the name and style, AVENUE
BLOOD BANK; JESUS M. GARCIA, M.D., doing business under the name and
style, HOLY REDEEMER BLOOD BANK, ALBERT L. LAPITAN, doing business
under the name and style, BLUE CROSS BLOOD TRANSFUSION SERVICES;
EDGARDO R. RODAS, M.D., doing business under the name and style, RECORD
BLOOD BANK, in their Individual capacities and for and in behalf of PHILIPPINE
ASSOCIATION
OF
BLOOD
BANKS, Petitioners,
vs.
THE SECRETARY OF HEALTH, Respondent.

G.R. No. 139147,4 entitled "Rodolfo S. Beltran, doing business under the name and
style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of Health," on the other
hand, is a petition to show cause why respondent Secretary of Health should not be
held in contempt of court.
This case was originally assigned to the Third Division of this Court and later
consolidated with G.R. Nos. 133640 and 133661 in a resolution dated August 4, 1999.5
Petitioners comprise the majority of the Board of Directors of the Philippine Association
of Blood Banks, a duly registered non-stock and non-profit association composed of
free standing blood banks.
Public respondent Secretary of Health is being sued in his capacity as the public official
directly involved and charged with the enforcement and implementation of the law in
question.
The facts of the case are as follows:
Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law
on
April
2,
1994.
The
Act
seeks
to
provide
CONSTILAW 2-SEC. I | 87

an adequate supply of safe blood by promoting voluntary blood donation and by

regulating blood banks in the country. It was approved by then President Fidel V. Ramos
on May 15, 1994 and was subsequently published in the Official Gazette on August 18,
1994. The law took effect on August 23, 1994.
On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the
Implementing Rules and Regulations of said law was promulgated by respondent
Secretary of the Department of Health (DOH).6
Section 7 of R.A. 7719 7 provides:
"Section 7. Phase-out of Commercial Blood Banks - All commercial blood banks
shall be phased-out over a period of two (2) years after the effectivity of this Act,
extendable to a maximum period of two (2) years by the Secretary."
Section 23 of Administrative Order No. 9 provides:
"Section 23. Process of Phasing Out. -- The Department shall effect the phasing-out
of all commercial blood banks over a period of two (2) years, extendible for a maximum
period of two (2) years after the effectivity of R.A. 7719. The decision to extend shall be
based on the result of a careful study and review of the blood supply and demand and
public safety."8
Blood banking and blood transfusion services in the country have been arranged in four
(4) categories: blood centers run by the Philippine National Red Cross (PNRC),
government-run blood services, private hospital blood banks, and commercial blood
services.
Years prior to the passage of the National Blood Services Act of 1994, petitioners have
already been operating commercial blood banks under Republic Act No. 1517, entitled
"An Act Regulating the Collection, Processing and Sale of Human Blood, and the
Establishment and Operation of Blood Banks and Blood Processing Laboratories." The
law, which was enacted on June 16, 1956, allowed the establishment and operation by
licensed physicians of blood banks and blood processing laboratories. The Bureau of
Research and Laboratories (BRL) was created in 1958 and was given the power to
regulate clinical laboratories in 1966 under Republic Act No. 4688. In 1971, the
Licensure Section was created within the BRL. It was given the duty to enforce the
licensure requirements for blood banks as well as clinical laboratories. Due to this
development, Administrative Order No. 156, Series of 1971, was issued. The new rules
and regulations triggered a stricter enforcement of the Blood Banking Law, which was
characterized by frequent spot checks, immediate suspension and communication of
such suspensions to hospitals, a more systematic record-keeping and frequent

communication with blood banks through monthly information bulletins. Unfortunately,

by the 1980s, financial difficulties constrained the BRL to reduce the frequency of its
supervisory visits to the blood banks.9
Meanwhile, in the international scene, concern for the safety of blood and blood
products intensified when the dreaded disease Acute Immune Deficiency Syndrome
(AIDS) was first described in 1979. In 1980, the International Society of Blood
Transfusion (ISBT) formulated the Code of Ethics for Blood Donation and Transfusion.
In 1982, the first case of transfusion-associated AIDS was described in an infant.
Hence, the ISBT drafted in 1984, a model for a national blood policy outlining certain
principles that should be taken into consideration. By 1985, the ISBT had disseminated
guidelines requiring AIDS testing of blood and blood products for transfusion.10
In 1989, another revision of the Blood Banking Guidelines was made. The DOH issued
Administrative Order No. 57, Series of 1989, which classified banks into primary,
secondary and tertiary depending on the services they provided. The standards were
adjusted according to this classification. For instance, floor area requirements varied
according to classification level. The new guidelines likewise required Hepatitis B and
HIV testing, and that the blood bank be headed by a pathologist or a hematologist.11
In 1992, the DOH issued Administrative Order No. 118-A institutionalizing the National
Blood Services Program (NBSP). The BRL was designated as the central office
primarily responsible for the NBSP. The program paved the way for the creation of a
committee that will implement the policies of the program and the formation of the
Regional Blood Councils.
In August 1992, Senate Bill No. 1011, entitled "An Act Promoting Voluntary Blood
Donation, Providing for an Adequate Supply of Safe Blood, Regulating Blood Banks and
Providing Penalties for Violations Thereof, and for other Purposes" was introduced in
the Senate.12
Meanwhile, in the House of Representatives, House Bills No. 384, 546, 780 and 1978
were being deliberated to address the issue of safety of the Philippine blood bank
system. Subsequently, the Senate and House Bills were referred to the appropriate
committees and subsequently consolidated.13
In January of 1994, the New Tropical Medicine Foundation, with the assistance of the
U.S. Agency for International Development (USAID) released its final report of a study
on the Philippine blood banking system entitled "Project to Evaluate the Safety of the
Philippine Blood Banking System." It was revealed that of the blood units collected in
1992, 64.4 % were supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by
government hospital-based blood banks, and 7.4% by private hospital-based blood
banks. During the time the study was made, there were only twenty-four (24) registered
CONSTILAW 2-SEC. I | 88

or licensed free-standing or commercial blood banks in the country. Hence, with these
numbers in mind, the study deduced that each commercial blood bank produces five
times more blood than the Red Cross and fifteen times more than the government-run
blood banks. The study, therefore, showed that the Philippines heavily relied on
commercial sources of blood. The study likewise revealed that 99.6% of the donors of
commercial blood banks and 77.0% of the donors of private-hospital based blood banks
are paid donors. Paid donors are those who receive remuneration for donating their
blood. Blood donors of the PNRC and government-run hospitals, on the other hand, are
mostly voluntary.14
It was further found, among other things, that blood sold by persons to blood
commercial banks are three times more likely to have any of the four (4) tested
infections or blood transfusion transmissible diseases, namely, malaria, syphilis,
Hepatitis B and Acquired Immune Deficiency Syndrome (AIDS) than those donated to
PNRC.15
Commercial blood banks give paid donors varying rates around P50 to P150, and
because of this arrangement, many of these donors are poor, and often they are
students, who need cash immediately. Since they need the money, these donors are not
usually honest about their medical or social history. Thus, blood from healthy, voluntary
donors who give their true medical and social history are about three times much safer
than blood from paid donors.16
What the study also found alarming is that many Filipino doctors are not yet fully trained
on the specific indications for blood component transfusion. They are not aware of the
lack of blood supply and do not feel the need to adjust their practices and use of blood
and blood products. It also does not matter to them where the blood comes from.17

On May 20, 1998, prior to the expiration of the licenses granted to petitioners, they filed
a petition for certiorari with application for the issuance of a writ of preliminary injunction
or temporary restraining order under Rule 65 of the Rules of Court assailing the
constitutionality and validity of the aforementioned Act and its Implementing Rules and
Regulations. The case was entitled "Rodolfo S. Beltran, doing business under the name
and style, Our Lady of Fatima Blood Bank," docketed as G.R. No. 133640.
On June 1, 1998, petitioners filed an Amended Petition for Certiorari with Prayer for
Issuance of a Temporary Restraining Order, writ of preliminary mandatory injunction
and/or status quo ante order.18
In the aforementioned petition, petitioners assail the constitutionality of the questioned
legal provisions, namely, Section 7 of Republic Act No. 7719 and Section 23 of
Administrative Order No. 9, Series of 1995, on the following grounds: 19
1. The questioned legal provisions of the National Blood Services Act and its
Implementing Rules violate the equal protection clause for irrationally discriminating
against free standing blood banks in a manner which is not germane to the purpose of
the law;
2. The questioned provisions of the National Blood Services Act and its Implementing
Rules represent undue delegation if not outright abdication of the police power of the
state; and,
3. The questioned provisions of the National Blood Services Act and its Implementing
Rules are unwarranted deprivation of personal liberty.

On August 23, 1994, the National Blood Services Act providing for the phase out of
commercial blood banks took effect. On April 28, 1995, Administrative Order No. 9,
Series of 1995, constituting the Implementing Rules and Regulations of said law was
promulgated by DOH.

On May 22, 1998, the Doctors Blood Center filed a similar petition for mandamus with a
prayer for the issuance of a temporary restraining order, preliminary prohibitory and
mandatory injunction before this Court entitled "Doctors Blood Center vs. Department of
Health," docketed as G.R. No. 133661. 20 This was consolidated with G.R. No.
133640.21

The phase-out period was extended for two years by the DOH pursuant to Section 7 of
Republic Act No. 7719 and Section 23 of its Implementing Rules and Regulations.
Pursuant to said Act, all commercial blood banks should have been phased out by May
28, 1998. Hence, petitioners were granted by the Secretary of Health their licenses to
open and operate a blood bank only until May 27, 1998.

Similarly, the petition attacked the constitutionality of Republic Act No. 7719 and its
implementing rules and regulations, thus, praying for the issuance of a license to
operate commercial blood banks beyond May 27, 1998. Specifically, with regard to
Republic Act No. 7719, the petition submitted the following questions22 for resolution:
1. Was it passed in the exercise of police power, and was it a valid exercise of such
power?
2. Does it not amount to deprivation of property without due process?
CONSTILAW 2-SEC. I | 89

3. Does it not unlawfully impair the obligation of contracts?

4. With the commercial blood banks being abolished and with no ready machinery to
deliver the same supply and services, does R.A. 7719 truly serve the public welfare?

blood. This goes to the very heart of my amendment which seeks to put into law the
principle that blood should not be subject of commerce of man.

On June 2, 1998, this Court issued a Resolution directing respondent DOH to file a
consolidated comment. In the same Resolution, the Court issued a temporary
restraining order (TRO) for respondent to cease and desist from implementing and
enforcing Section 7 of Republic Act No. 7719 and its implementing rules and regulations
until further orders from the Court.23

The Presiding Officer [Senator Aquino]: What does the sponsor say?

On August 26, 1998, respondent Secretary of Health filed a Consolidated Comment on

the petitions for certiorari and mandamus in G.R. Nos. 133640 and 133661, with
opposition to the issuance of a temporary restraining order.24

Senator Mercado: We have a definition, I believe, in the measure, Mr. President.

In the Consolidated Comment, respondent Secretary of Health submitted that blood

from commercial blood banks is unsafe and therefore the State, in the exercise of its
police power, can close down commercial blood banks to protect the public. He cited the
record of deliberations on Senate Bill No. 1101 which later became Republic Act No.
7719, and the sponsorship speech of Senator Orlando Mercado.

Senator Mercado: If the Chairman of the Committee would accept it, we can put a
provision on Section 3, a definition of a commercial blood bank, which, as defined in this
law, exists for profit and engages in the buying and selling of blood or its components.

The rationale for the closure of these commercial blood banks can be found in the
deliberations of Senate Bill No. 1011, excerpts of which are quoted below:
Senator Mercado: I am providing over a period of two years to phase out all
commercial blood banks. So that in the end, the new section would have a provision
that states:
"ALL COMMERCIAL BLOOD BANKS SHALL BE PHASED OUT OVER A PERIOD OF
TWO YEARS AFTER THE EFFECTIVITY OF THIS ACT. BLOOD SHALL BE
COLLECTED FROM VOLUNTARY DONORS ONLY AND THE SERVICE FEE TO BE
CHARGED FOR EVERY BLOOD PRODUCT ISSUED SHALL BE LIMITED TO THE
NECESSARY EXPENSES ENTAILED IN COLLECTING AND PROCESSING OF
BLOOD. THE SERVICE FEE SHALL BE MADE UNIFORM THROUGH GUIDELINES
TO BE SET BY THE DEPARTMENTOF HEALTH."

Senator Webb: Mr. President, just for clarity, I would like to find out how the Gentleman
defines a commercial blood bank. I am at a loss at times what a commercial blood bank
really is.

The Presiding Officer [Senator Aquino]: It is a business where profit is considered.

Senator Webb: That is a good description, Mr. President.

Senator Mercado: I refer, Mr. President, to a letter written by Dr. Jaime Galvez-Tan, the
Chief of Staff, Undersecretary of Health, to the good Chairperson of the Committee on
Health.
In recommendation No. 4, he says:
"The need to phase out all commercial blood banks within a two-year period will give
the Department of Health enough time to build up governments capability to provide an
adequate supply of blood for the needs of the nation...the use of blood for transfusion is
a medical service and not a sale of commodity."

I am supporting Mr. President, the finding of a study called "Project to Evaluate the
Safety of the Philippine Blood Banking System." This has been taken note of. This is a
study done with the assistance of the USAID by doctors under the New Tropical
Medicine Foundation in Alabang.

Taking into consideration the experience of the National Kidney Institute, which has
succeeded in making the hospital 100 percent dependent on voluntary blood donation,
here is a success story of a hospital that does not buy blood. All those who are operated
on and need blood have to convince their relatives or have to get volunteers who would
donate blood

Part of the long-term measures proposed by this particular study is to improve laws,
outlaw buying and selling of blood and legally define good manufacturing processes for

If we give the responsibility of the testing of blood to those commercial blood banks,
they will cut corners because it will protect their profit.
CONSTILAW 2-SEC. I | 90

In the first place, the people who sell their blood are the people who are normally in the
high-risk category. So we should stop the system of selling and buying blood so that we
can go into a national voluntary blood program.
It has been said here in this report, and I quote:
"Why is buying and selling of blood not safe? This is not safe because a donor who
expects payment for his blood will not tell the truth about his illnesses and will deny any
risky social behavior such as sexual promiscuity which increases the risk of having
syphilis or AIDS or abuse of intravenous addictive drugs. Laboratory tests are of limited
value and will not detect early infections. Laboratory tests are required only for four
diseases in the Philippines. There are other blood transmissible diseases we do not yet
screen for and there could be others where there are no tests available yet.
A blood bank owner expecting to gain profit from selling blood will also try his best to
limit his expenses. Usually he tries to increase his profit by buying cheaper reagents or
test kits, hiring cheaper manpower or skipping some tests altogether. He may also try to
sell blood even though these have infections in them. Because there is no existing
system of counterchecking these, the blood bank owner can usually get away with
many unethical practices.
The experience of Germany, Mr. President is illustrative of this issue. The reason why
contaminated blood was sold was that there were corners cut by commercial blood
banks in the testing process. They were protecting their profits.25
The sponsorship speech of Senator Mercado further elucidated his stand on the issue:

Senator Mercado: Today, across the country, hundreds of poverty-stricken, sickly and
weak Filipinos, who, unemployed, without hope and without money to buy the next
meal, will walk into a commercial blood bank, extend their arms and plead that their
blood be bought. They will lie about their age, their medical history. They will lie about
when they last sold their blood. For doing this, they will receive close to a hundred
pesos. This may tide them over for the next few days. Of course, until the next
bloodletting.
This same blood will travel to the posh city hospitals and urbane medical centers. This
same blood will now be bought by the rich at a price over 500% of the value for which it
was sold. Between this buying and selling, obviously, someone has made a very fast
buck.

Every doctor has handled at least one transfusion-related disease in an otherwise

normal patient. Patients come in for minor surgery of the hand or whatever and they
leave with hepatitis B. A patient comes in for an appendectomy and he leaves with
malaria. The worst nightmare: A patient comes in for a Caesarian section and leaves
with AIDS.
We do not expect good blood from donors who sell their blood because of poverty. The
humane dimension of blood transfusion is not in the act of receiving blood, but in the act
of giving it
For years, our people have been at the mercy of commercial blood banks that lobby
their interests among medical technologists, hospital administrators and sometimes
even physicians so that a proactive system for collection of blood from healthy donors
becomes difficult, tedious and unrewarding.
The Department of Health has never institutionalized a comprehensive national program
for safe blood and for voluntary blood donation even if this is a serious public health
concern and has fallen for the linen of commercial blood bankers, hook, line and sinker
because it is more convenient to tell the patient to buy blood.
Commercial blood banks hold us hostage to their threat that if we are to close them
down, there will be no blood supply. This is true if the Government does not step in to
ensure that safe supply of blood. We cannot allow commercial interest groups to dictate
policy on what is and what should be a humanitarian effort. This cannot and will never
work because their interest in blood donation is merely monetary. We cannot expect
commercial blood banks to take the lead in voluntary blood donation. Only the
Government can do it, and the Government must do it."26
On May 5, 1999, petitioners filed a Motion for Issuance of Expanded Temporary
Restraining Order for the Court to order respondent Secretary of Health to cease and
desist from announcing the closure of commercial blood banks, compelling the public to
source the needed blood from voluntary donors only, and committing similar acts "that
will ultimately cause the shutdown of petitioners blood banks."27
On July 8, 1999, respondent Secretary filed his Comment and/or Opposition to the
above motion stating that he has not ordered the closure of commercial blood banks on
account of the Temporary Restraining Order (TRO) issued on June 2, 1998 by the
Court. In compliance with the TRO, DOH had likewise ceased to distribute the health
advisory leaflets, posters and flyers to the public which state that "blood banks are
closed or will be closed." According to respondent Secretary, the same were printed and
circulated in anticipation of the closure of the commercial blood banks in accordance
with R.A. No. 7719, and were printed and circulated prior to the issuance of the TRO.28
CONSTILAW 2-SEC. I | 91

On July 15, 1999, petitioners in G.R. No. 133640 filed a Petition to Show Cause Why
Public Respondent Should Not be Held in Contempt of Court, docketed as G.R. No.
139147, citing public respondents willful disobedience of or resistance to the restraining
order issued by the Court in the said case. Petitioners alleged that respondents act
constitutes circumvention of the temporary restraining order and a mockery of the
authority of the Court and the orderly administration of justice.29 Petitioners added that
despite the issuance of the temporary restraining order in G.R. No. 133640, respondent,
in his effort to strike down the existence of commercial blood banks, disseminated
misleading information under the guise of health advisories, press releases, leaflets,
brochures and flyers stating, among others, that "this year [1998] all commercial blood
banks will be closed by 27 May. Those who need blood will have to rely on government
blood banks."30 Petitioners further claimed that respondent Secretary of Health
announced in a press conference during the Blood Donors Week that commercial blood
banks are "illegal and dangerous" and that they "are at the moment protected by a
restraining order on the basis that their commercial interest is more important than the
lives of the people." These were all posted in bulletin boards and other conspicuous
places in all government hospitals as well as other medical and health centers.31
In respondent Secretarys Comment to the Petition to Show Cause Why Public
Respondent Should Not Be Held in Contempt of Court, dated January 3, 2000, it was
explained that nothing was issued by the department ordering the closure of commercial
blood banks. The subject health advisory leaflets pertaining to said closure pursuant to
Republic Act No. 7719 were printed and circulated prior to the Courts issuance of a
temporary restraining order on June 21, 1998.32
Public respondent further claimed that the primary purpose of the information campaign
was "to promote the importance and safety of voluntary blood donation and to educate
the public about the hazards of patronizing blood supplies from commercial blood
banks."33 In doing so, he was merely performing his regular functions and duties as the
Secretary of Health to protect the health and welfare of the public. Moreover, the DOH is
the main proponent of the voluntary blood donation program espoused by Republic Act
No. 7719, particularly Section 4 thereof which provides that, in order to ensure the
adequate supply of human blood, voluntary blood donation shall be promoted through
public education, promotion in schools, professional education, establishment of blood
services network, and walking blood donors.
Hence, by authority of the law, respondent Secretary contends that he has the duty to
promote the program of voluntary blood donation. Certainly, his act of encouraging the
public to donate blood voluntarily and educating the people on the risks associated with
blood coming from a paid donor promotes general health and welfare and which should
be given more importance than the commercial businesses of petitioners.34
On July 29, 1999, interposing personal and substantial interest in the case as taxpayers
and citizens, a Petition-in-Intervention was filed interjecting the same arguments and

issues as laid down by petitioners in G.R. No. 133640 and 133661, namely, the
unconstitutionality of the Acts, and, the issuance of a writ of prohibitory injunction. The
intervenors are the immediate relatives of individuals who had died allegedly because of
shortage of blood supply at a critical time.35
The intervenors contended that Republic Act No. 7719 constitutes undue delegation of
legislative powers and unwarranted deprivation of personal liberty.36
In a resolution, dated September 7, 1999, and without giving due course to the
aforementioned petition, the Court granted the Motion for Intervention that was filed by
the above intervenors on August 9, 1999.
In his Comment to the petition-in-intervention, respondent Secretary of Health stated
that the sale of blood is contrary to the spirit and letter of the Act that "blood donation is
a humanitarian act" and "blood transfusion is a professional medical service and not a
sale of commodity (Section 2[a] and [b] of Republic Act No. 7719). The act of selling
blood or charging fees other than those allowed by law is even penalized under Section
12."37
Thus, in view of these, the Court is now tasked to pass upon the constitutionality of
Section 7 of Republic Act No. 7719 or the National Blood Services Act of 1994 and its
Implementing Rules and Regulations.
In resolving the controversy, this Court deems it necessary to address the issues and/or
questions raised by petitioners concerning the constitutionality of the aforesaid Act in
G.R. No. 133640 and 133661 as summarized hereunder:
I
WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION
OF LEGISLATIVE POWER;
II
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS VIOLATE THE EQUAL PROTECTION CLAUSE;
III
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS VIOLATE THE NON-IMPAIRMENT CLAUSE;
CONSTILAW 2-SEC. I | 92

IV
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS CONSTITUTE DEPRIVATION OF PERSONAL LIBERTY AND
PROPERTY;
V
WHETHER OR NOT R.A. 7719 IS A VALID EXERCISE OF POLICE POWER; and,
VI
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES
AND REGULATIONS TRULY SERVE PUBLIC WELFARE.
As to the first ground upon which the constitutionality of the Act is being challenged, it is
the contention of petitioners that the phase out of commercial or free standing blood
banks is unconstitutional because it is an improper and unwarranted delegation of
legislative power. According to petitioners, the Act was incomplete when it was passed
by the Legislature, and the latter failed to fix a standard to which the Secretary of Health
must conform in the performance of his functions. Petitioners also contend that the twoyear extension period that may be granted by the Secretary of Health for the phasing
out of commercial blood banks pursuant to Section 7 of the Act constrained the
Secretary to legislate, thus constituting undue delegation of legislative power.
In testing whether a statute constitutes an undue delegation of legislative power or not,
it is usual to inquire whether the statute was complete in all its terms and provisions
when it left the hands of the Legislature so that nothing was left to the judgment of the
administrative body or any other appointee or delegate of the Legislature. 38 Except as to
matters of detail that may be left to be filled in by rules and regulations to be adopted or
promulgated by executive officers and administrative boards, an act of the Legislature,
as a general rule, is incomplete and hence invalid if it does not lay down any rule or
definite standard by which the administrative board may be guided in the exercise of the
discretionary powers delegated to it.39

Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It
is clear from the provisions of the Act that the Legislature intended primarily to
safeguard the health of the people and has mandated several measures to attain this
objective. One of these is the phase out of commercial blood banks in the country. The
law has sufficiently provided a definite standard for the guidance of the Secretary of
Health in carrying out its provisions, that is, the promotion of public health by providing a
safe and adequate supply of blood through voluntary blood donation. By its provisions, it
has conferred the power and authority to the Secretary of Health as to its execution, to
be exercised under and in pursuance of the law.
Congress may validly delegate to administrative agencies the authority to promulgate
rules and regulations to implement a given legislation and effectuate its policies. 40 The
Secretary of Health has been given, under Republic Act No. 7719, broad powers to
execute the provisions of said Act. Section 11 of the Act states:
"SEC. 11. Rules and Regulations. The implementation of the provisions of the Act
shall be in accordance with the rules and regulations to be promulgated by the
Secretary, within sixty (60) days from the approval hereof"
This is what respondent Secretary exactly did when DOH, by virtue of the administrative
bodys authority and expertise in the matter, came out with Administrative Order No.9,
series of 1995 or the Rules and Regulations Implementing Republic Act No. 7719.
Administrative Order. No. 9 effectively filled in the details of the law for its proper
implementation.
Specifically, Section 23 of Administrative Order No. 9 provides that the phase-out period
for commercial blood banks shall be extended for another two years until May 28, 1998
"based on the result of a careful study and review of the blood supply and demand and
public safety." This power to ascertain the existence of facts and conditions upon which
the Secretary may effect a period of extension for said phase-out can be delegated by
Congress. The true distinction between the power to make laws and discretion as to its
execution is illustrated by the fact that the delegation of power to make the law, which
necessarily involves a discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The
first cannot be done; to the latter no valid objection can be made.41
In this regard, the Secretary did not go beyond the powers granted to him by the Act
when said phase-out period was extended in accordance with the Act as laid out in
Section 2 thereof:
"SECTION 2. Declaration of Policy In order to promote public health, it is hereby
declared the policy of the state:
CONSTILAW 2-SEC. I | 93

a) to promote and encourage voluntary blood donation by the citizenry and to instill
public consciousness of the principle that blood donation is a humanitarian act;

discriminates against commercial or free standing blood banks in a manner that is not
germane to the purpose of the law.42

b) to lay down the legal principle that the provision of blood for transfusion is a medical
service and not a sale of commodity;

What may be regarded as a denial of the equal protection of the laws is a question not
always easily determined. No rule that will cover every case can be formulated. Class
legislation, discriminating against some and favoring others is prohibited but
classification on a reasonable basis and not made arbitrarily or capriciously is permitted.
The classification, however, to be reasonable: (a) must be based on substantial
distinctions which make real differences; (b) must be germane to the purpose of the law;
(c) must not be limited to existing conditions only; and, (d) must apply equally to each
member of the class.43

c) to provide for adequate, safe, affordable and equitable distribution of blood supply
and blood products;
d) to inform the public of the need for voluntary blood donation to curb the hazards
caused by the commercial sale of blood;
e) to teach the benefits and rationale of voluntary blood donation in the existing health
subjects of the formal education system in all public and private schools as well as the
non-formal system;
f) to mobilize all sectors of the community to participate in mechanisms for voluntary
and non-profit collection of blood;
g) to mandate the Department of Health to establish and organize a National Blood
Transfusion Service Network in order to rationalize and improve the provision of
adequate and safe supply of blood;
h) to provide for adequate assistance to institutions promoting voluntary blood donation
and providing non-profit blood services, either through a system of reimbursement for
costs from patients who can afford to pay, or donations from governmental and nongovernmental entities;
i) to require all blood collection units and blood banks/centers to operate on a non-profit
basis;
j) to establish scientific and professional standards for the operation of blood collection
units and blood banks/centers in the Philippines;
k) to regulate and ensure the safety of all activities related to the collection, storage and
banking of blood; and,

Republic Act No. 7719 or The National Blood Services Act of 1994, was enacted for the
promotion of public health and welfare. In the aforementioned study conducted by the
New Tropical Medicine Foundation, it was revealed that the Philippine blood banking
system is disturbingly primitive and unsafe, and with its current condition, the spread of
infectious diseases such as malaria, AIDS, Hepatitis B and syphilis chiefly from blood
transfusion is unavoidable. The situation becomes more distressing as the study
showed that almost 70% of the blood supply in the country is sourced from paid blood
donors who are three times riskier than voluntary blood donors because they are
unlikely to disclose their medical or social history during the blood screening.44
The above study led to the passage of Republic Act No. 7719, to instill public
consciousness of the importance and benefits of voluntary blood donation, safe blood
supply and proper blood collection from healthy donors. To do this, the Legislature
decided to order the phase out of commercial blood banks to improve the Philippine
blood banking system, to regulate the supply and proper collection of safe blood, and so
as not to derail the implementation of the voluntary blood donation program of the
government. In lieu of commercial blood banks, non-profit blood banks or blood centers,
in strict adherence to professional and scientific standards to be established by the
DOH, shall be set in place.45
Based on the foregoing, the Legislature never intended for the law to create a situation
in which unjustifiable discrimination and inequality shall be allowed. To effectuate its
policy, a classification was made between nonprofit blood banks/centers and
commercial blood banks.
We deem the classification to be valid and reasonable for the following reasons:

l) to require upgrading of blood banks/centers to include preventive services and

education to control spread of blood transfusion transmissible diseases."
Petitioners also assert that the law and its implementing rules and regulations violate
the equal protection clause enshrined in the Constitution because it unduly

One, it was based on substantial distinctions. The former operates for purely
humanitarian reasons and as a medical service while the latter is motivated by profit.
Also, while the former wholly encourages voluntary blood donation, the latter treats
blood as a sale of commodity.
CONSTILAW 2-SEC. I | 94

Two, the classification, and the consequent phase out of commercial blood banks is
germane to the purpose of the law, that is, to provide the nation with an adequate
supply of safe blood by promoting voluntary blood donation and treating blood
transfusion as a humanitarian or medical service rather than a commodity. This
necessarily involves the phase out of commercial blood banks based on the fact that
they operate as a business enterprise, and they source their blood supply from paid
blood donors who are considered unsafe compared to voluntary blood donors as shown
by the USAID-sponsored study on the Philippine blood banking system.
Three, the Legislature intended for the general application of the law. Its enactment was
not solely to address the peculiar circumstances of the situation nor was it intended to
apply only to the existing conditions.
Lastly, the law applies equally to all commercial blood banks without exception.
Having said that, this Court comes to the inquiry as to whether or not Republic Act No.
7719 constitutes a valid exercise of police power.
The promotion of public health is a fundamental obligation of the State. The health of
the people is a primordial governmental concern. Basically, the National Blood Services
Act was enacted in the exercise of the States police power in order to promote and
preserve public health and safety.
Police power of the state is validly exercised if (a) the interest of the public generally, as
distinguished from those of a particular class, requires the interference of the State;
and, (b) the means employed are reasonably necessary to the attainment of the
objective sought to be accomplished and not unduly oppressive upon individuals.46
In the earlier discussion, the Court has mentioned of the avowed policy of the law for
the protection of public health by ensuring an adequate supply of safe blood in the
country through voluntary blood donation. Attaining this objective requires the
interference of the State given the disturbing condition of the Philippine blood banking
system.
In serving the interest of the public, and to give meaning to the purpose of the law, the
Legislature deemed it necessary to phase out commercial blood banks. This action may
seriously affect the owners and operators, as well as the employees, of commercial
blood banks but their interests must give way to serve a higher end for the interest of
the public.
The Court finds that the National Blood Services Act is a valid exercise of the States
police power. Therefore, the Legislature, under the circumstances, adopted a course of
action that is both necessary and reasonable for the common good. Police power is the

State authority to enact legislation that may interfere with personal liberty or property in
order to promote the general welfare.47
It is in this regard that the Court finds the related grounds and/or issues raised by
petitioners, namely, deprivation of personal liberty and property, and violation of the
non-impairment clause, to be unmeritorious.
Petitioners are of the opinion that the Act is unconstitutional and void because it
infringes on the freedom of choice of an individual in connection to what he wants to do
with his blood which should be outside the domain of State intervention. Additionally,
and in relation to the issue of classification, petitioners asseverate that, indeed, under
the Civil Code, the human body and its organs like the heart, the kidney and the liver
are outside the commerce of man but this cannot be made to apply to human blood
because the latter can be replenished by the body. To treat human blood equally as the
human organs would constitute invalid classification. 48
Petitioners likewise claim that the phase out of the commercial blood banks will be
disadvantageous to them as it will affect their businesses and existing contracts with
hospitals and other health institutions, hence Section 7 of the Act should be struck down
because it violates the non-impairment clause provided by the Constitution.
As stated above, the State, in order to promote the general welfare, may interfere with
personal liberty, with property, and with business and occupations. Thus, persons may
be subjected to certain kinds of restraints and burdens in order to secure the general
welfare of the State and to this fundamental aim of government, the rights of the
individual may be subordinated.49
Moreover, in the case of Philippine Association of Service Exporters, Inc. v.
Drilon,50 settled is the rule that the non-impairment clause of the Constitution must yield
to the loftier purposes targeted by the government. The right granted by this provision
must submit to the demands and necessities of the States power of regulation. While
the Court understands the grave implications of Section 7 of the law in question, the
concern of the Government in this case, however, is not necessarily to maintain profits
of business firms. In the ordinary sequence of events, it is profits that suffer as a result
of government regulation.
Furthermore, the freedom to contract is not absolute; all contracts and all rights are
subject to the police power of the State and not only may regulations which affect them
be established by the State, but all such regulations must be subject to change from
time to time, as the general well-being of the community may require, or as the
circumstances may change, or as experience may demonstrate the necessity.51 This
doctrine was reiterated in the case of Vda. de Genuino v. Court of Agrarian
CONSTILAW 2-SEC. I | 95

Relations52 where the Court held that individual rights to contract and to property have
to give way to police power exercised for public welfare.
As for determining whether or not the shutdown of commercial blood banks will truly
serve the general public considering the shortage of blood supply in the country as
proffered by petitioners, we maintain that the wisdom of the Legislature in the lawful
exercise of its power to enact laws cannot be inquired into by the Court. Doing so would
be in derogation of the principle of separation of powers.53
That, under the circumstances, proper regulation of all blood banks without distinction in
order to achieve the objective of the law as contended by petitioners is, of course,
possible; but, this would be arguing on what the lawmay be or should be and not what
the law is. Between is and ought there is a far cry. The wisdom and propriety of
legislation is not for this Court to pass upon.54

WHEREFORE, premises considered, the Court renders judgment as follows:

1. In G.R. Nos. 133640 and 133661, the Court UPHOLDS THE VALIDITY of Section 7
of Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994,
and Administrative Order No. 9, Series of 1995 or the Rules and Regulations
Implementing Republic Act No. 7719. The petitions are DISMISSED. Consequently, the
Temporary Restraining Order issued by this Court on June 2, 1998, is LIFTED.
2. In G.R. No. 139147, the petition seeking to cite the Secretary of Health in contempt of
court is DENIED for lack of merit.
No costs.
SO ORDERED.

Finally, with regard to the petition for contempt in G.R. No. 139147, on the other hand,
the Court finds respondent Secretary of Healths explanation satisfactory. The
statements in the flyers and posters were not aimed at influencing or threatening the
Court in deciding in favor of the constitutionality of the law.
Contempt of court presupposes a contumacious attitude, a flouting or arrogant
belligerence in defiance of the court.55 There is nothing contemptuous about the
statements and information contained in the health advisory that were distributed by
DOH before the TRO was issued by this Court ordering the former to cease and desist
from distributing the same.
In sum, the Court has been unable to find any constitutional infirmity in the questioned
provisions of the National Blood Services Act of 1994 and its Implementing Rules and
Regulations.
The fundamental criterion is that all reasonable doubts should be resolved in favor of
the constitutionality of a statute. Every law has in its favor the presumption of
constitutionality. For a law to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution. The ground for nullity must be clear and beyond
reasonable doubt.56 Those who petition this Court to declare a law, or parts thereof,
unconstitutional must clearly establish the basis therefor. Otherwise, the petition must
fail.
Based on the grounds raised by petitioners to challenge the constitutionality of the
National Blood Services Act of 1994 and its Implementing Rules and Regulations, the
Court finds that petitioners have failed to overcome the presumption of constitutionality
of the law. As to whether the Act constitutes a wise legislation, considering the issues
being raised by petitioners, is for Congress to determine.57
CONSTILAW 2-SEC. I | 96

The petitioner Philippine Blooming Mills Employees Organization (hereinafter referred to

as PBMEO) is a legitimate labor union composed of the employees of the respondent
Philippine Blooming Mills Co., Inc., and petitioners Nicanor Tolentino, Florencio
Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna,
Benjamin Pagcu and Rodulfo Munsod are officers and members of the petitioner Union.
Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at
Malacaang on March 4, 1969, in protest against alleged abuses of the Pasig police, to
be participated in by the workers in the first shift (from 6 A.M. to 2 P.M.) as well as those
in the regular second and third shifts (from 7 A.M. to 4 P.M. and from 8 A.M. to 5 P.M.,
respectively); and that they informed the respondent Company of their proposed
demonstration.
The questioned order dated September 15, 1969, of Associate Judge Joaquin M.
Salvador of the respondent Court reproduced the following stipulation of facts of the
parties parties
3. That on March 2, 1969 complainant company learned of the projected mass
demonstration at Malacaang in protest against alleged abuses of the Pasig Police
Department to be participated by the first shift (6:00 AM-2:00 PM) workers as well as
those working in the regular shifts (7:00 A.M. to 4:00 PM and 8:00 AM to 5:00 PM) in the
morning of March 4, 1969;
4. That a meeting was called by the Company on March 3, 1969 at about 11:00 A.M. at
the Company's canteen, and those present were: for the Company: (1) Mr. Arthur L. Ang
(2) Atty. S. de Leon, Jr., (3) and all department and section heads. For the PBMEO (1)
Florencio Padrigano, (2) Rufino Roxas, (3) Mariano de Leon, (4) Asencion Paciente, (5)
Bonifacio Vacuna and (6) Benjamin Pagcu.

EN BANC
G.R. No. L-31195 June 5, 1973
PHILIPPINE BLOOMING MILLS EMPLOYMENT ORGANIZATION, NICANOR
TOLENTINO, FLORENCIO, PADRIGANO RUFINO, ROXAS MARIANO DE LEON,
ASENCION PACIENTE, BONIFACIO VACUNA, BENJAMIN PAGCU and RODULFO
MUNSOD, petitioners,
vs.
PHILIPPINE BLOOMING MILLS CO., INC. and COURT OF INDUSTRIAL
RELATIONS, respondents.
MAKASIAR, J.:

5. That the Company asked the union panel to confirm or deny said projected mass
demonstration at Malacaang on March 4, 1969. PBMEO thru Benjamin Pagcu who
acted as spokesman of the union panel, confirmed the planned demonstration and
stated that the demonstration or rally cannot be cancelled because it has already been
agreed upon in the meeting. Pagcu explained further that the demonstration has nothing
to do with the Company because the union has no quarrel or dispute with Management;
6. That Management, thru Atty. C.S. de Leon, Company personnel manager, informed
PBMEO that the demonstration is an inalienable right of the union guaranteed by the
Constitution but emphasized, however, that any demonstration for that matter should
not unduly prejudice the normal operation of the Company. For which reason, the
Company, thru Atty. C.S. de Leon warned the PBMEO representatives that workers who
belong to the first and regular shifts, who without previous leave of absence approved
by the Company, particularly , the officers present who are the organizers of the
CONSTILAW 2-SEC. I | 97

demonstration, who shall fail to report for work the following morning (March 4, 1969)
shall be dismissed, because such failure is a violation of the existing CBA and,
therefore, would be amounting to an illegal strike;
7. That at about 5:00 P.M. on March 3, 1969, another meeting was convoked Company
represented by Atty. C.S. de Leon, Jr. The Union panel was composed of: Nicanor
Tolentino, Rodolfo Munsod, Benjamin Pagcu and Florencio Padrigano. In this afternoon
meeting of March 3, 1969, Company reiterated and appealed to the PBMEO
representatives that while all workers may join the Malacaang demonstration, the
workers for the first and regular shift of March 4, 1969 should be excused from joining
the demonstration and should report for work; and thus utilize the workers in the 2nd
and 3rd shifts in order not to violate the provisions of the CBA, particularly Article XXIV:
NO LOCKOUT NO STRIKE'. All those who will not follow this warning of the
Company shall be dismiss; De Leon reiterated the Company's warning that the officers
shall be primarily liable being the organizers of the mass demonstration. The union
panel countered that it was rather too late to change their plans inasmuch as the
Malacaang demonstration will be held the following morning; and
8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a cablegram to the
Company which was received 9:50 A.M., March 4, 1969, the contents of which are as
follows: 'REITERATING REQUEST EXCUSE DAY SHIFT EMPLOYEES JOINING
DEMONSTRATION MARCH 4, 1969.' (Pars. 3-8, Annex "F", pp. 42-43, rec.)
Because the petitioners and their members numbering about 400 proceeded with the
demonstration despite the pleas of the respondent Company that the first shift workers
should not be required to participate in the demonstration and that the workers in the
second and third shifts should be utilized for the demonstration from 6 A.M. to 2 P.M. on
March 4, 1969, respondent Company prior notice of the mass demonstration on March
4, 1969, with the respondent Court, a charge against petitioners and other employees
who composed the first shift, charging them with a "violation of Section 4(a)-6 in relation
to Sections 13 and 14, as well as Section 15, all of Republic Act No. 875, and of the
CBA providing for 'No Strike and No Lockout.' " (Annex "A", pp. 19-20, rec.). The charge
was accompanied by the joint affidavit of Arthur L. Ang and Cesareo de Leon, Jr. (Annex
"B", pp. 21-24, rec.). Thereafter, a corresponding complaint was filed, dated April 18,
1969, by Acting Chief Prosecutor Antonio T. Tirona and Acting Prosecutor Linda P.
Ilagan (Annex "C", pp. 25-30, rec.)
In their answer, dated May 9, 1969, herein petitioners claim that they did not violate the
existing CBA because they gave the respondent Company prior notice of the mass
demonstration on March 4, 1969; that the said mass demonstration was a valid exercise
of their constitutional freedom of speech against the alleged abuses of some Pasig
policemen; and that their mass demonstration was not a declaration of strike because it
was not directed against the respondent firm (Annex "D", pp. 31-34, rec.)

After considering the aforementioned stipulation of facts submitted by the parties, Judge
Joaquin M. Salvador, in an order dated September 15, 1969, found herein petitioner
PBMEO guilty of bargaining in bad faith and herein petitioners Florencio Padrigano,
Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin
Pagcu, Nicanor Tolentino and Rodulfo Munsod as directly responsible for perpetrating
the said unfair labor practice and were, as a consequence, considered to have lost their
status as employees of the respondent Company (Annex "F", pp. 42-56, rec.)
Herein petitioners claim that they received on September 23, 1969, the aforesaid order
(p. 11, rec.); and that they filed on September 29, 1969, because September 28, 1969
fell on Sunday (p. 59, rec.), a motion for reconsideration of said order dated September
15, 1969, on the ground that it is contrary to law and the evidence, as well as asked for
ten (10) days within which to file their arguments pursuant to Sections 15, 16 and 17 of
the Rules of the CIR, as amended (Annex "G", pp. 57-60, rec. )
In its opposition dated October 7, 1969, filed on October 11, 1969 (p. 63, rec.),
respondent Company averred that herein petitioners received on September 22, 1969,
the order dated September 17 (should be September 15), 1969; that under Section 15
of the amended Rules of the Court of Industrial Relations, herein petitioners had five (5)
days from September 22, 1969 or until September 27, 1969, within which to file their
motion for reconsideration; and that because their motion for reconsideration was two
(2) days late, it should be accordingly dismissed, invoking Bien vs. Castillo, 1 which held
among others, that a motion for extension of the five-day period for the filing of a motion
for reconsideration should be filed before the said five-day period elapses (Annex "M",
pp. 61-64, rec.).
Subsequently, herein petitioners filed on October 14, 1969 their written arguments dated
October 11, 1969, in support of their motion for reconsideration (Annex "I", pp. 65-73,
rec.).
In a resolution dated October 9, 1969, the respondent en banc dismissed the motion for
reconsideration of herein petitioners for being pro forma as it was filed beyond the
reglementary period prescribed by its Rules (Annex "J", pp. 74-75, rec.), which herein
petitioners received on October 28, 196 (pp. 12 & 76, rec.).
At the bottom of the notice of the order dated October 9, 1969, which was released on
October 24, 1969 and addressed to the counsels of the parties (pp. 75-76, rec.), appear
the requirements of Sections 15, 16 and 17, as amended, of the Rules of the Court of
Industrial Relations, that a motion for reconsideration shall be filed within five (5) days
from receipt of its decision or order and that an appeal from the decision, resolution or
order of the C.I.R., sitting en banc, shall be perfected within ten (10) days from receipt
thereof (p. 76, rec.).

CONSTILAW 2-SEC. I | 98

On October 31, 1969, herein petitioners filed with the respondent court a petition for
relief from the order dated October 9, 1969, on the ground that their failure to file their
motion for reconsideration on time was due to excusable negligence and honest
mistake committed by the president of the petitioner Union and of the office clerk of their
counsel, attaching thereto the affidavits of the said president and clerk (Annexes "K",
"K-1" and "K-2", rec.).
Without waiting for any resolution on their petition for relief from the order dated October
9, 1969, herein petitioners filed on November 3, 1969, with the Supreme Court, a notice
of appeal (Annex "L", pp. 88-89, rec.).
I
There is need of briefly restating basic concepts and principles which underlie the
issues posed by the case at bar.
(1) In a democracy, the preservation and enhancement of the dignity and worth of the
human personality is the central core as well as the cardinal article of faith of our
civilization. The inviolable character of man as an individual must be "protected to the
largest possible extent in his thoughts and in his beliefs as the citadel of his person." 2
(2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security
"against the assaults of opportunism, the expediency of the passing hour, the erosion of
small encroachments, and the scorn and derision of those who have no patience with
general principles." 3
In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights is
to withdraw "certain subjects from the vicissitudes of political controversy, to place them
beyond the reach of majorities and officials, and to establish them as legal principles to
be applied by the courts. One's rights to life, liberty and property, to free speech, or free
press, freedom of worship and assembly, and other fundamental rights may not be
submitted to a vote; they depend on the outcome of no elections." 4 Laski proclaimed
that "the happiness of the individual, not the well-being of the State, was the criterion by
which its behaviour was to be judged. His interests, not its power, set the limits to the
authority it was entitled to exercise." 5
(3) The freedoms of expression and of assembly as well as the right to petition are
included among the immunities reserved by the sovereign people, in the rhetorical
aphorism of Justice Holmes, to protect the ideas that we abhor or hate more than the
ideas we cherish; or as Socrates insinuated, not only to protect the minority who want to
talk, but also to benefit the majority who refuse to listen. 6 And as Justice Douglas
cogently stresses it, the liberties of one are the liberties of all; and the liberties of one
are not safe unless the liberties of all are protected. 7

(4) The rights of free expression, free assembly and petition, are not only civil rights but
also political rights essential to man's enjoyment of his life, to his happiness and to his
full and complete fulfillment. Thru these freedoms the citizens can participate not merely
in the periodic establishment of the government through their suffrage but also in the
administration of public affairs as well as in the discipline of abusive public officers. The
citizen is accorded these rights so that he can appeal to the appropriate governmental
officers or agencies for redress and protection as well as for the imposition of the lawful
sanctions on erring public officers and employees.
(5) While the Bill of Rights also protects property rights, the primacy of human rights
over property rights is recognized. 8 Because these freedoms are "delicate and
vulnerable, as well as supremely precious in our society" and the "threat of sanctions
may deter their exercise almost as potently as the actual application of sanctions," they
"need breathing space to survive," permitting government regulation only "with narrow
specificity." 9
Property and property rights can be lost thru prescription; but human rights are
imprescriptible. If human rights are extinguished by the passage of time, then the Bill of
Rights is a useless attempt to limit the power of government and ceases to be an
efficacious shield against the tyranny of officials, of majorities, of the influential and
powerful, and of oligarchs political, economic or otherwise.
In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a
preferred position as they are essential to the preservation and vitality of our civil and
political institutions; 10 and such priority "gives these liberties the sanctity and the
sanction not permitting dubious intrusions." 11
The superiority of these freedoms over property rights is underscored by the fact that a
mere reasonable or rational relation between the means employed by the law and its
object or purpose that the law is neither arbitrary nor discriminatory nor oppressive
would suffice to validate a law which restricts or impairs property rights. 12 On the other
hand, a constitutional or valid infringement of human rights requires a more stringent
criterion, namely existence of a grave and immediate danger of a substantive evil which
the State has the right to prevent. So it has been stressed in the main opinion of Mr.
Justice Fernando in Gonzales vs. Comelec and reiterated by the writer of the opinion
inImbong vs. Ferrer. 13 It should be added that Mr. Justice Barredo in Gonzales vs.
Comelec, supra, like Justices Douglas, Black and Goldberg in N.Y. Times Co. vs.
Sullivan, 14 believes that the freedoms of speech and of the press as well as of peaceful
assembly and of petition for redress of grievances are absolute when directed against
public officials or "when exercised in relation to our right to choose the men and women
by whom we shall be governed," 15 even as Mr. Justice Castro relies on the balancingof-interests test. 16 Chief Justice Vinson is partial to the improbable danger rule
formulated by Chief Judge Learned Hand, viz. whether the gravity of the evil,
CONSTILAW 2-SEC. I | 99

discounted by its improbability, justifies such invasion of free expression as is necessary

to avoid the danger. 17
II
The respondent Court of Industrial Relations, after opining that the mass demonstration
was not a declaration of strike, concluded that by their "concerted act and the
occurrence temporary stoppage of work," herein petitioners are guilty bargaining in bad
faith and hence violated the collective bargaining agreement with private respondent
Philippine Blooming Mills Co., inc.. Set against and tested by foregoing principles
governing a democratic society, such conclusion cannot be sustained. The
demonstration held petitioners on March 4, 1969 before Malacaang was against
alleged abuses of some Pasig policemen, not against their employer, herein private
respondent firm, said demonstrate was purely and completely an exercise of their
freedom expression in general and of their right of assembly and petition for redress of
grievances in particular before appropriate governmental agency, the Chief Executive,
again the police officers of the municipality of Pasig. They exercise their civil and
political rights for their mutual aid protection from what they believe were police
excesses. As matter of fact, it was the duty of herein private respondent firm to protect
herein petitioner Union and its members fro the harassment of local police officers. It
was to the interest herein private respondent firm to rally to the defense of, and take up
the cudgels for, its employees, so that they can report to work free from harassment,
vexation or peril and as consequence perform more efficiently their respective tasks
enhance its productivity as well as profits. Herein respondent employer did not even
offer to intercede for its employees with the local police. Was it securing peace for itself
at the expenses of its workers? Was it also intimidated by the local police or did it
encourage the local police to terrorize or vex its workers? Its failure to defend its own
employees all the more weakened the position of its laborers the alleged oppressive
police who might have been all the more emboldened thereby subject its lowly
employees to further indignities.
In seeking sanctuary behind their freedom of expression well as their right of assembly
and of petition against alleged persecution of local officialdom, the employees and
laborers of herein private respondent firm were fighting for their very survival, utilizing
only the weapons afforded them by the Constitution the untrammelled enjoyment of
their basic human rights. The pretension of their employer that it would suffer loss or
damage by reason of the absence of its employees from 6 o'clock in the morning to 2
o'clock in the afternoon, is a plea for the preservation merely of their property rights.
Such apprehended loss or damage would not spell the difference between the life and
death of the firm or its owners or its management. The employees' pathetic situation
was a stark reality abused, harassment and persecuted as they believed they were
by the peace officers of the municipality. As above intimated, the condition in which the
employees found themselves vis-a-vis the local police of Pasig, was a matter that vitally
affected their right to individual existence as well as that of their families. Material loss

can be repaired or adequately compensated. The debasement of the human being

broken in morale and brutalized in spirit-can never be fully evaluated in monetary terms.
The wounds fester and the scars remain to humiliate him to his dying day, even as he
cries in anguish for retribution, denial of which is like rubbing salt on bruised tissues.
As heretofore stated, the primacy of human rights freedom of expression, of peaceful
assembly and of petition for redress of grievances over property rights has been
sustained. 18 Emphatic reiteration of this basic tenet as a coveted boon at once the
shield and armor of the dignity and worth of the human personality, the all-consuming
ideal of our enlightened civilization becomes Our duty, if freedom and social justice
have any meaning at all for him who toils so that capital can produce economic goods
that can generate happiness for all. To regard the demonstration against police officers,
not against the employer, as evidence of bad faith in collective bargaining and hence a
violation of the collective bargaining agreement and a cause for the dismissal from
employment of the demonstrating employees, stretches unduly the compass of the
collective bargaining agreement, is "a potent means of inhibiting speech" and therefore
inflicts a moral as well as mortal wound on the constitutional guarantees of free
expression, of peaceful assembly and of petition. 19
The collective bargaining agreement which fixes the working shifts of the employees,
according to the respondent Court Industrial Relations, in effect imposes on the workers
the "duty ... to observe regular working hours." The strain construction of the Court of
Industrial Relations that a stipulated working shifts deny the workers the right to stage
mass demonstration against police abuses during working hours, constitutes a virtual
tyranny over the mind and life the workers and deserves severe condemnation.
Renunciation of the freedom should not be predicated on such a slender ground.
The mass demonstration staged by the employees on March 4, 1969 could not have
been legally enjoined by any court, such an injunction would be trenching upon the
freedom expression of the workers, even if it legally appears to be illegal picketing or
strike. 20 The respondent Court of Industrial Relations in the case at bar concedes that
the mass demonstration was not a declaration of a strike "as the same not rooted in any
industrial dispute although there is concerted act and the occurrence of a temporary
stoppage work." (Annex "F", p. 45, rec.).
The respondent firm claims that there was no need for all its employees to participate in
the demonstration and that they suggested to the Union that only the first and regular
shift from 6 A.M. to 2 P.M. should report for work in order that loss or damage to the firm
will be averted. This stand failed appreciate the sine qua non of an effective
demonstration especially by a labor union, namely the complete unity of the Union
members as well as their total presence at the demonstration site in order to generate
the maximum sympathy for the validity of their cause but also immediately action on the
part of the corresponding government agencies with jurisdiction over the issues they
raised against the local police. Circulation is one of the aspects of freedom of
CONSTILAW 2-SEC. I | 100

expression. 21 If demonstrators are reduced by one-third, then by that much the

circulation of the issues raised by the demonstration is diminished. The more the
participants, the more persons can be apprised of the purpose of the rally. Moreover,
the absence of one-third of their members will be regarded as a substantial indication of
disunity in their ranks which will enervate their position and abet continued alleged
police persecution. At any rate, the Union notified the company two days in advance of
their projected demonstration and the company could have made arrangements to
counteract or prevent whatever losses it might sustain by reason of the absence of its
workers for one day, especially in this case when the Union requested it to excuse only
the day-shift employees who will join the demonstration on March 4, 1969 which request
the Union reiterated in their telegram received by the company at 9:50 in the morning of
March 4, 1969, the day of the mass demonstration (pp. 42-43, rec.). There was a lack of
human understanding or compassion on the part of the firm in rejecting the request of
the Union for excuse from work for the day shifts in order to carry out its mass
demonstration. And to regard as a ground for dismissal the mass demonstration held
against the Pasig police, not against the company, is gross vindictiveness on the part of
the employer, which is as unchristian as it is unconstitutional.
III. The respondent company is the one guilty of unfair labor practice. Because the
refusal on the part of the respondent firm to permit all its employees and workers to join
the mass demonstration against alleged police abuses and the subsequent separation
of the eight (8) petitioners from the service constituted an unconstitutional restraint on
the freedom of expression, freedom of assembly and freedom petition for redress of
grievances, the respondent firm committed an unfair labor practice defined in Section
4(a-1) in relation to Section 3 of Republic Act No. 875, otherwise known as the Industrial
Peace Act. Section 3 of Republic Act No. 8 guarantees to the employees the right "to
engage in concert activities for ... mutual aid or protection"; while Section 4(a-1) regards
as an unfair labor practice for an employer interfere with, restrain or coerce employees
in the exercise their rights guaranteed in Section Three."
We repeat that the obvious purpose of the mass demonstration staged by the workers
of the respondent firm on March 4, 1969, was for their mutual aid and protection against
alleged police abuses, denial of which was interference with or restraint on the right of
the employees to engage in such common action to better shield themselves against
such alleged police indignities. The insistence on the part of the respondent firm that the
workers for the morning and regular shift should not participate in the mass
demonstration, under pain of dismissal, was as heretofore stated, "a potent means of
inhibiting speech." 22
Such a concerted action for their mutual help and protection deserves at least equal
protection as the concerted action of employees in giving publicity to a letter complaint
charging bank president with immorality, nepotism, favoritism an discrimination in the
appointment and promotion of ban employees. 23 We further ruled in the Republic
Savings Bank case, supra, that for the employees to come within the protective mantle

of Section 3 in relation to Section 4(a-1) on Republic Act No. 875, "it is not necessary
that union activity be involved or that collective bargaining be contemplated," as long as
the concerted activity is for the furtherance of their interests. 24
As stated clearly in the stipulation of facts embodied in the questioned order of
respondent Court dated September 15, 1969, the company, "while expressly
acknowledging, that the demonstration is an inalienable right of the Union guaranteed
by the Constitution," nonetheless emphasized that "any demonstration for that matter
should not unduly prejudice the normal operation of the company" and "warned the
PBMEO representatives that workers who belong to the first and regular shifts, who
without previous leave of absence approved by the Company, particularly the officers
present who are the organizers of the demonstration, who shall fail to report for work the
following morning (March 4, 1969) shall be dismissed, because such failure is a
violation of the existing CBA and, therefore, would be amounting to an illegal strike (;)"
(p. III, petitioner's brief). Such threat of dismissal tended to coerce the employees from
joining the mass demonstration. However, the issues that the employees raised against
the local police, were more important to them because they had the courage to proceed
with the demonstration, despite such threat of dismissal. The most that could happen to
them was to lose a day's wage by reason of their absence from work on the day of the
demonstration. One day's pay means much to a laborer, more especially if he has a
family to support. Yet, they were willing to forego their one-day salary hoping that their
demonstration would bring about the desired relief from police abuses. But
management was adamant in refusing to recognize the superior legitimacy of their right
of free speech, free assembly and the right to petition for redress.
Because the respondent company ostensibly did not find it necessary to demand from
the workers proof of the truth of the alleged abuses inflicted on them by the local police,
it thereby concedes that the evidence of such abuses should properly be submitted to
the corresponding authorities having jurisdiction over their complaint and to whom such
complaint may be referred by the President of the Philippines for proper investigation
and action with a view to disciplining the local police officers involved.
On the other hand, while the respondent Court of Industrial Relations found that the
demonstration "paralyzed to a large extent the operations of the complainant company,"
the respondent Court of Industrial Relations did not make any finding as to the fact of
loss actually sustained by the firm. This significant circumstance can only mean that the
firm did not sustain any loss or damage. It did not present evidence as to whether it lost
expected profits for failure to comply with purchase orders on that day; or that penalties
were exacted from it by customers whose orders could not be filled that day of the
demonstration; or that purchase orders were cancelled by the customers by reason of
its failure to deliver the materials ordered; or that its own equipment or materials or
products were damaged due to absence of its workers on March 4, 1969. On the
contrary, the company saved a sizable amount in the form of wages for its hundreds of
workers, cost of fuel, water and electric consumption that day. Such savings could have
CONSTILAW 2-SEC. I | 101

amply compensated for unrealized profits or damages it might have sustained by

reason of the absence of its workers for only one day.
IV. Apart from violating the constitutional guarantees of free speech and assembly as
well as the right to petition for redress of grievances of the employees, the dismissal of
the eight (8) leaders of the workers for proceeding with the demonstration and
consequently being absent from work, constitutes a denial of social justice likewise
assured by the fundamental law to these lowly employees. Section 5 of Article II of the
Constitution imposes upon the State "the promotion of social justice to insure the wellbeing and economic security of all of the people," which guarantee is emphasized by
the other directive in Section 6 of Article XIV of the Constitution that "the State shall
afford protection to labor ...". Respondent Court of Industrial Relations as an agency of
the State is under obligation at all times to give meaning and substance to these
constitutional guarantees in favor of the working man; for otherwise these constitutional
safeguards would be merely a lot of "meaningless constitutional patter." Under the
Industrial Peace Act, the Court of Industrial Relations is enjoined to effect the policy of
the law "to eliminate the causes of industrial unrest by encouraging and protecting the
exercise by employees of their right to self-organization for the purpose of collective
bargaining and for the promotion of their moral, social and economic well-being." It is
most unfortunate in the case at bar that respondent Court of Industrial Relations, the
very governmental agency designed therefor, failed to implement this policy and failed
to keep faith with its avowed mission its raison d'etre as ordained and directed by
the Constitution.
V. It has been likewise established that a violation of a constitutional right divests the
court of jurisdiction; and as a consequence its judgment is null and void and confers no
rights. Relief from a criminal conviction secured at the sacrifice of constitutional liberties,
may be obtained through habeas corpus proceedings even long after the finality of the
judgment. Thus, habeas corpus is the remedy to obtain the release of an individual, who
is convicted by final judgment through a forced confession, which violated his
constitutional right against self-incrimination; 25or who is denied the right to present
evidence in his defense as a deprivation of his liberty without due process of law, 26even
after the accused has already served sentence for twenty-two years. 27
Both the respondents Court of Industrial Relations and private firm trenched upon these
constitutional immunities of petitioners. Both failed to accord preference to such rights
and aggravated the inhumanity to which the aggrieved workers claimed they had been
subjected by the municipal police. Having violated these basic human rights of the
laborers, the Court of Industrial Relations ousted itself of jurisdiction and the questioned
orders it issued in the instant case are a nullity. Recognition and protection of such
freedoms are imperative on all public offices including the courts 28 as well as private
citizens and corporations, the exercise and enjoyment of which must not be nullified by
mere procedural rule promulgated by the Court Industrial Relations exercising a purely
delegate legislative power, when even a law enacted by Congress must yield to the

untrammelled enjoyment of these human rights. There is no time limit to the exercise of
the freedoms. The right to enjoy them is not exhausted by the delivery of one speech,
the printing of one article or the staging of one demonstration. It is a continuing
immunity to be invoked and exercised when exigent and expedient whenever there are
errors to be rectified, abuses to be denounced, inhumanities to be condemned.
Otherwise these guarantees in the Bill of Rights would be vitiated by rule on procedure
prescribing the period for appeal. The battle then would be reduced to a race for time.
And in such a contest between an employer and its laborer, the latter eventually loses
because he cannot employ the best an dedicated counsel who can defend his interest
with the required diligence and zeal, bereft as he is of the financial resources with which
to pay for competent legal services. 28-a
VI. The Court of Industrial Relations rule prescribes that motion for reconsideration of
its order or writ should filed within five (5) days from notice thereof and that the
arguments in support of said motion shall be filed within ten (10) days from the date of
filing of such motion for reconsideration (Sec. 16). As above intimated, these rules of
procedure were promulgated by the Court of Industrial Relations pursuant to a
legislative delegation. 29
The motion for reconsideration was filed on September 29, 1969, or seven (7) days
from notice on September 22, 1969 of the order dated September 15, 1969 or two (2)
days late. Petitioners claim that they could have filed it on September 28, 1969, but it
was a Sunday.
Does the mere fact that the motion for reconsideration was filed two (2) days late defeat
the rights of the petitioning employees? Or more directly and concretely, does the
inadvertent omission to comply with a mere Court of Industrial Relations procedural rule
governing the period for filing a motion for reconsideration or appeal in labor cases,
promulgated pursuant to a legislative delegation, prevail over constitutional rights? The
answer should be obvious in the light of the aforecited cases. To accord supremacy to
the foregoing rules of the Court of Industrial Relations over basic human rights sheltered
by the Constitution, is not only incompatible with the basic tenet of constitutional
government that the Constitution is superior to any statute or subordinate rules and
regulations, but also does violence to natural reason and logic. The dominance and
superiority of the constitutional right over the aforesaid Court of Industrial Relations
procedural rule of necessity should be affirmed. Such a Court of Industrial Relations rule
as applied in this case does not implement or reinforce or strengthen the constitutional
rights affected,' but instead constrict the same to the point of nullifying the enjoyment
thereof by the petitioning employees. Said Court of Industrial Relations rule,
promulgated as it was pursuant to a mere legislative delegation, is unreasonable and
therefore is beyond the authority granted by the Constitution and the law. A period of
five (5) days within which to file a motion for reconsideration is too short, especially for
the aggrieved workers, who usually do not have the ready funds to meet the necessary
expenses therefor. In case of the Court of Appeals and the Supreme Court, a period of
CONSTILAW 2-SEC. I | 102

fifteen (15) days has been fixed for the filing of the motion for re hearing or
reconsideration (See. 10, Rule 51; Sec. 1, Rule 52; Sec. 1, Rule 56, Revised Rules of
Court). The delay in the filing of the motion for reconsideration could have been only
one day if September 28, 1969 was not a Sunday. This fact accentuates the
unreasonableness of the Court of Industrial are concerned.
It should be stressed here that the motion for reconsideration dated September 27,
1969, is based on the ground that the order sought to be reconsidered "is not in
accordance with law, evidence and facts adduced during the hearing," and likewise
prays for an extension of ten (10) days within which to file arguments pursuant to
Sections 15, 16 and 17 of the Rules of the Court of Industrial Relations (Annex "G", pp.
57-60, rec.); although the arguments were actually filed by the herein petitioners on
October 14, 1969 (Annex "I", pp. 70-73, rec.), long after the 10-day period required for
the filing of such supporting arguments counted from the filing of the motion for
reconsideration. Herein petitioners received only on October 28, 1969 the resolution
dated October 9, 1969 dismissing the motion for reconsideration for being pro
forma since it was filed beyond the reglementary period (Annex "J", pp. 74-75, rec.)
It is true that We ruled in several cases that where a motion to reconsider is filed out of
time, or where the arguments in suppf such motion are filed beyond the 10 day
reglementary period provided for by the Court of Industrial Relations rules, the order or
decision subject of 29-a reconsideration becomes final and unappealable. But in all these
cases, the constitutional rights of free expression, free assembly and petition were not
involved.
It is a procedural rule that generally all causes of action and defenses presently
available must be specifically raised in the complaint or answer; so that any cause of
action or defense not raised in such pleadings, is deemed waived. However, a
constitutional issue can be raised any time, even for the first time on appeal, if it
appears that the determination of the constitutional issue is necessary to a decision of
the case, the very lis mota of the case without the resolution of which no final and
complete determination of the dispute can be made. 30 It is thus seen that a procedural
rule of Congress or of the Supreme Court gives way to a constitutional right. In the
instant case, the procedural rule of the Court of Industrial Relations, a creature of
Congress, must likewise yield to the constitutional rights invoked by herein petitioners
even before the institution of the unfair labor practice charged against them and in their
defense to the said charge.
In the case at bar, enforcement of the basic human freedoms sheltered no less by the
organic law, is a most compelling reason to deny application of a Court of Industrial
Relations rule which impinges on such human rights.30-a

It is an accepted principle that the Supreme Court has the inherent power to "suspend
its own rules or to except a particular case from its operation, whenever the purposes of
justice require." 30-b Mr. Justice Barredo in his concurring opinion in Estrada vs. Sto.
Domingo. 30-c reiterated this principle and added that
Under this authority, this Court is enabled to cove with all situations without concerning
itself about procedural niceties that do not square with the need to do justice, in any
case, without further loss of time, provided that the right of the parties to a full day in
court is not substantially impaired. Thus, this Court may treat an appeal as a certiorari
and vice-versa. In other words, when all the material facts are spread in the records
before Us, and all the parties have been duly heard, it matters little that the error of the
court a quo is of judgment or of jurisdiction. We can then and there render the
appropriate judgment. Is within the contemplation of this doctrine that as it is perfectly
legal and within the power of this Court to strike down in an appeal acts without or in
excess of jurisdiction or committed with grave abuse of discretion, it cannot be beyond
the admit of its authority, in appropriate cases, to reverse in a certain proceed in any
error of judgment of a court a quo which cannot be exactly categorized as a flaw of
jurisdiction. If there can be any doubt, which I do not entertain, on whether or not the
errors this Court has found in the decision of the Court of Appeals are short of being
jurisdiction nullities or excesses, this Court would still be on firm legal grounds should it
choose to reverse said decision here and now even if such errors can be considered as
mere mistakes of judgment or only as faults in the exercise of jurisdiction, so as to avoid
the unnecessary return of this case to the lower court for the sole purpose of pursuing
the ordinary course of an appeal. (Emphasis supplied). 30-d
Insistence on the application of the questioned Court industrial Relations rule in this
particular case at bar would an unreasoning adherence to "Procedural niceties" which
denies justice to the herein laborers, whose basic human freedoms, including the right
to survive, must be according supremacy over the property rights of their employer firm
which has been given a full hearing on this case, especially when, as in the case at bar,
no actual material damage has be demonstrated as having been inflicted on its property
rights.
If We can disregard our own rules when justice requires it, obedience to the Constitution
renders more imperative the suspension of a Court of Industrial Relations rule that clash
with the human rights sanctioned and shielded with resolution concern by the specific
guarantees outlined in the organic law. It should be stressed that the application in the
instant case Section 15 of the Court of Industrial Relations rules relied upon by herein
respondent firm is unreasonable and therefore such application becomes
unconstitutional as it subverts the human rights of petitioning labor union and workers in
the light of the peculiar facts and circumstances revealed by the record.
The suspension of the application of Section 15 of the Court of Industrial Relations rules
with reference to the case at is also authorized by Section 20 of Commonwealth Act No.
CONSTILAW 2-SEC. I | 103

103, the C.I.R. charter, which enjoins the Court of Industrial Relations to "act according
to justice and equity and substantial merits of the case, without regard to technicalities
or legal forms ..."
On several occasions, We emphasized this doctrine which was re-stated by Mr. Justice
Barredo, speaking for the Court, in the 1970 case of Kapisanan, etc. vs. Hamilton, etc.,
et. al., 30-e thus:
As to the point that the evidence being offered by the petitioners in the motion for new
trial is not "newly discovered," as such term is understood in the rules of procedure for
the ordinary courts, We hold that such criterion is not binding upon the Court of
Industrial Relations. Under Section 20 of Commonwealth Act No. 103, 'The Court of
Industrial Relations shall adopt its, rules or procedure and shall have such other powers
as generally pertain to a court of justice: Provided, however, That in the hearing,
investigation and determination of any question or controversy and in exercising any
duties and power under this Act, the Court shall act according to justice and equity and
substantial merits of the case, without regard to technicalities or legal forms and shall
not be bound by any technical rules of legal evidence but may inform its mind in such
manner as it may deem just and equitable.' By this provision the industrial court is
disengaged from the rigidity of the technicalities applicable to ordinary courts. Said
court is not even restricted to the specific relief demanded by the parties but may issue
such orders as may be deemed necessary or expedient for the purpose of settling the
dispute or dispelling any doubts that may give rise to future disputes. (Ang Tibay v.
C.I.R., G.R. No. 46496, Feb. 17, 1940; Manila Trading & Supply Co. v. Phil. Labor, 71
Phil. 124.) For these reasons, We believe that this provision is ample enough to have
enabled the respondent court to consider whether or not its previous ruling that
petitioners constitute a minority was founded on fact, without regard to the technical
meaning of newly discovered evidence. ... (Alonso v. Villamor, 16 Phil. 315; Chua Kiong
v. Whitaker, 46 Phil. 578). (emphasis supplied.)
To apply Section 15 of the Court of Industrial Relations rules with "pedantic rigor" in the
instant case is to rule in effect that the poor workers, who can ill-afford an alert
competent lawyer, can no longer seek the sanctuary of human freedoms secured to
them by the fundamental law, simply because their counsel erroneously believing
that he received a copy of the decision on September 23, 1969, instead of September
22, 1969 - filed his motion for reconsideration September 29, 1969, which practically is
only one day late considering that September 28, 1969 was a Sunday.
Many a time, this Court deviated from procedure technicalities when they ceased to be
instruments of justice, for the attainment of which such rules have been devised.
Summarizing the jurisprudence on this score, Mr. Justice Fernando, speaking for a
unanimous Court in Palma vs. Oreta, 30-f Stated:

As was so aptly expressed by Justice Moreland in Alonso v. Villamor (16 Phil. 315
[1910]. The Villamor decision was cited with approval in Register of Deeds v. Phil. Nat.
Bank, 84 Phil. 600 [1949]; Potenciano v. Court of Appeals, 104 Phil. 156 [1958] and Uy
v. Uy, 14243, June 30, 1961, 2 SCRA 675.), decided as far back as 1910, "technicality.
when it deserts its proper-office as an aid to justice and becomes its great hindrance
and chief enemy, deserves scant consideration from courts." (Ibid., p, 322.) To that
norm, this Court has remained committed. The late Justice Recto in Blanco v. Bernabe,
(63 Phil. 124 [1936]) was of a similar mind. For him the interpretation of procedural rule
should never "sacrifice the ends justice." While "procedural laws are no other than
technicalities" view them in their entirety, 'they were adopted not as ends themselves for
the compliance with which courts have organized and function, but as means conducive
to the realization the administration of the law and of justice (Ibid., p.,128). We have
remained steadfastly opposed, in the highly rhetorical language Justice Felix, to "a
sacrifice of substantial rights of a litigant in altar of sophisticated technicalities with
impairment of the sacred principles of justice." (Potenciano v. Court of Appeals, 104
Phil. 156, 161 [1958]). As succinctly put by Justice Makalintal, they "should give way to
the realities of the situation." (Urbayan v. Caltex, L-15379, Aug. 31, 1962, 5 SCRA 1016,
1019). In the latest decision in point promulgated in 1968, (Udan v. Amon, (1968, 23
SCRA citing McEntee v. Manotok, L-14968, Oct. 27, 1961, 3 SCRA 272.) Justice
Zaldivar was partial to an earlier formulation of Justice Labrador that rules of procedure
"are not to be applied in a very rigid, technical sense"; but are intended "to help secure
substantial justice." (Ibid., p. 843) ... 30-g
Even if the questioned Court of Industrial Relations orders and rule were to be given
effect, the dismissal or termination of the employment of the petitioning eight (8) leaders
of the Union is harsh for a one-day absence from work. The respondent Court itself
recognized the severity of such a sanction when it did not include the dismissal of the
other 393 employees who are members of the same Union and who participated in the
demonstration against the Pasig police. As a matter of fact, upon the intercession of the
Secretary of Labor, the Union members who are not officers, were not dismissed and
only the Union itself and its thirteen (13) officers were specifically named as
respondents in the unfair labor practice charge filed against them by the firm (pp. 16-20,
respondent's Brief; Annexes "A", "B" and "C", pp. 20-30, rec.). Counsel for respondent
firm insinuates that not all the 400 or so employee participated in the demonstration, for
which reason only the Union and its thirteen (13) officers were specifically named in the
unfair labor practice charge (p. 20, respondent's brief). If that were so, then many, if not
all, of the morning and regular shifts reported for work on March 4, 1969 and that, as a
consequence, the firm continued in operation that day and did not sustain any damage.
The appropriate penalty if it deserves any penalty at all should have been simply
to charge said one-day absence against their vacation or sick leave. But to dismiss the
eight (8) leaders of the petitioner Union is a most cruel penalty, since as aforestated the
Union leaders depend on their wages for their daily sustenance as well as that of their
CONSTILAW 2-SEC. I | 104

respective families aside from the fact that it is a lethal blow to unionism, while at the
same time strengthening the oppressive hand of the petty tyrants in the localities.

discrimination in the promotion of bank employees." Therein, thru Mr. Justice Castro,
We ruled:

Mr. Justice Douglas articulated this pointed reminder:

It will avail the Bank none to gloat over this admission of the respondents. Assuming
that the latter acted in their individual capacities when they wrote the letter-charge they
were nonetheless protected for they were engaged in concerted activity, in the exercise
of their right of self organization that includes concerted activity for mutual aid and
protection, (Section 3 of the Industrial Peace Act ...) This is the view of some members
of this Court. For, as has been aptly stated, the joining in protests or demands, even by
a small group of employees, if in furtherance of their interests as such, is a concerted
activity protected by the Industrial Peace Act. It is not necessary that union activity be
involved or that collective bargaining be contemplated. (Annot., 6 A.L.R. 2d 416 [1949]).

The challenge to our liberties comes frequently not from those who consciously seek to
destroy our system of Government, but from men of goodwill good men who allow
their proper concerns to blind them to the fact that what they propose to accomplish
involves an impairment of liberty.
... The Motives of these men are often commendable. What we must remember,
however, is thatpreservation of liberties does not depend on motives. A suppression of
liberty has the same effect whether the suppress or be a reformer or an outlaw. The
only protection against misguided zeal is a constant alertness of the infractions of the
guarantees of liberty contained in our Constitution. Each surrender of liberty to the
demands of the moment makes easier another, larger surrender. The battle over the Bill
of Rights is a never ending one.

xxx xxx xxx

Instead of stifling criticism, the Bank should have allowed the respondents to air their
grievances.

... The liberties of any person are the liberties of all of us.

xxx xxx xxx

... In short, the Liberties of none are safe unless the liberties of all are protected.

The Bank defends its action by invoking its right to discipline for what it calls the
respondents' libel in giving undue publicity to their letter-charge. To be sure, the right of
self-organization of employees is not unlimited (Republic Aviation Corp. vs. NLRB 324
U.S. 793 [1945]), as the right of the employer to discharge for cause (Philippine
Education Co. v. Union of Phil. Educ. Employees, L-13773, April 29, 1960) is undenied.
The Industrial Peace Act does not touch the normal exercise of the right of the employer
to select his employees or to discharge them. It is directed solely against the abuse of
that right by interfering with the countervailing right of self organization (Phelps Dodge
Corp. v. NLRB 313 U.S. 177 [1941])...

... But even if we should sense no danger to our own liberties, even if we feel secure
because we belong to a group that is important and respected, we must recognize that
our Bill of Rights is a code of fair play for the less fortunate that we in all honor and
good conscience must be observe. 31
The case at bar is worse.
Management has shown not only lack of good-will or good intention, but a complete lack
of sympathetic understanding of the plight of its laborers who claim that they are being
subjected to indignities by the local police, It was more expedient for the firm to
conserve its income or profits than to assist its employees in their fight for their
freedoms and security against alleged petty tyrannies of local police officers. This is
sheer opportunism. Such opportunism and expediency resorted to by the respondent
company assaulted the immunities and welfare of its employees. It was pure and
implement selfishness, if not greed.
Of happy relevance is the 1967 case of Republic Savings Bank vs. C.I.R., 32 where the
petitioner Bank dismissed eight (8) employees for having written and published "a
patently libelous letter ... to the Bank president demanding his resignation on the
grounds of immorality, nepotism in the appointment and favoritism as well as

xxx xxx xxx

In the final sum and substance, this Court is in unanimity that the Bank's conduct,
identified as an interference with the employees' right of self-organization or as a
retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair labor
practice within the meaning and intendment of section 4(a) of the Industrial Peace Act.
(Emphasis supplied.) 33
If free expression was accorded recognition and protection to fortify labor unionism in
the Republic Savings case, supra, where the complaint assailed the morality and
integrity of the bank president no less, such recognition and protection for free speech,
free assembly and right to petition are rendered all the more justifiable and more
CONSTILAW 2-SEC. I | 105

imperative in the case at bar, where the mass demonstration was not against the
company nor any of its officers.
WHEREFORE, judgement is hereby rendered:
(1) setting aside as null and void the orders of the respondent Court of Industrial
Relations dated September 15 and October 9, 1969; and
(2) directing the re instatement of the herein eight (8) petitioners, with full back pay from
the date of their separation from the service until re instated, minus one day's pay and
whatever earnings they might have realized from other sources during their separation
from the service.
With costs against private respondent Philippine Blooming Company, Inc.
_____________________________________

CONSTILAW 2-SEC. I | 106

vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President,
HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the
President , MELQUIADES P. DE LA CRUZ, in his capacity as Director, Malacaang
Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of
Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters of public concern, a right
recognized in Section 6, Article IV of the 1973 Philippine Constitution, 1 as well as the
principle that laws to be valid and enforceable must be published in the Official Gazette
or otherwise effectively promulgated, petitioners seek a writ of mandamus to compel
respondent public officials to publish, and/or cause the publication in the Official Gazette
of various presidential decrees, letters of instructions, general orders, proclamations,
executive orders, letter of implementation and administrative orders.
Specifically, the publication of the following presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234,
265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406,
415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594,
599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030,
1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644,
1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153,
155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224,
226-228, 231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289,
291, 293, 297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358, 362,
367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498, 501,
399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665,
702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940, 964,997,1149-1178,11801278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF
ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.
[MABINI], petitioners,

d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529,
1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 16061609, 1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 17371742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800, 18021804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836, 18391840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889,
CONSTILAW 2-SEC. I | 107

1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 20302044, 2046-2145, 2147-2161, 2163-2244.
e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507,
509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568,
570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81,
92, 94, 95, 107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would have this case dismissed outright
on the ground that petitioners have no legal personality or standing to bring the instant
petition. The view is submitted that in the absence of any showing that petitioners are
personally and directly affected or prejudiced by the alleged non-publication of the
presidential issuances in question 2 said petitioners are without the requisite legal
personality to institute this mandamus proceeding, they are not being "aggrieved
parties" within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.When any tribunal, corporation, board or person
unlawfully neglects the performance of an act which the law specifically enjoins as a
duty resulting from an office, trust, or station, or unlawfully excludes another from the
use a rd enjoyment of a right or office to which such other is entitled, and there is no
other plain, speedy and adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper court alleging the facts with
certainty and praying that judgment be rendered commanding the defendant,
immediately or at some other specified time, to do the act required to be done to Protect
the rights of the petitioner, and to pay the damages sustained by the petitioner by
reason of the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of the petition concerns
a public right and its object is to compel the performance of a public duty, they need not
show any specific interest for their petition to be given due course.
The issue posed is not one of first impression. As early as the 1910 case of Severino
vs. Governor General, 3 this Court held that while the general rule is that "a writ of
mandamus would be granted to a private individual only in those cases where he has
some private or particular interest to be subserved, or some particular right to be
protected, independent of that which he holds with the public at large," and "it is for the
public officers exclusively to apply for the writ when public rights are to be subserved
[Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of

public right and the object of the mandamus is to procure the enforcement of a public
duty, the people are regarded as the real party in interest and the relator at whose
instigation the proceedings are instituted need not show that he has any legal or special
interest in the result, it being sufficient to show that he is a citizen and as such
interested in the execution of the laws [High, Extraordinary Legal Remedies, 3rd ed.,
sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino, a private individual,
as a proper party to the mandamus proceedings brought to compel the Governor
General to call a special election for the position of municipal president in the town of
Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:
We are therefore of the opinion that the weight of authority supports the proposition that
the relator is a proper party to proceedings of this character when a public right is
sought to be enforced. If the general rule in America were otherwise, we think that it
would not be applicable to the case at bar for the reason 'that it is always dangerous to
apply a general rule to a particular case without keeping in mind the reason for the rule,
because, if under the particular circumstances the reason for the rule does not exist, the
rule itself is not applicable and reliance upon the rule may well lead to error'
No reason exists in the case at bar for applying the general rule insisted upon by
counsel for the respondent. The circumstances which surround this case are different
from those in the United States, inasmuch as if the relator is not a proper party to these
proceedings no other person could be, as we have seen that it is not the duty of the law
officer of the Government to appear and represent the people in cases of this character.
The reasons given by the Court in recognizing a private citizen's legal personality in the
aforementioned case apply squarely to the present petition. Clearly, the right sought to
be enforced by petitioners herein is a public right recognized by no less than the
fundamental law of the land. If petitioners were not allowed to institute this proceeding, it
would indeed be difficult to conceive of any other person to initiate the same,
considering that the Solicitor General, the government officer generally empowered to
represent the people, has entered his appearance for respondents in this case.
Respondents further contend that publication in the Official Gazette is not a sine qua
non requirement for the effectivity of laws where the laws themselves provide for their
own effectivity dates. It is thus submitted that since the presidential issuances in
question contain special provisions as to the date they are to take effect, publication in
the Official Gazette is not indispensable for their effectivity. The point stressed is
anchored on Article 2 of the Civil Code:
Art. 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided, ...
CONSTILAW 2-SEC. I | 108

The interpretation given by respondent is in accord with this Court's construction of said
article. In a long line of decisions, 4 this Court has ruled that publication in the Official
Gazette is necessary in those cases where the legislation itself does not provide for its
effectivity date-for then the date of publication is material for determining its date of
effectivity, which is the fifteenth day following its publication-but not when the law itself
provides for the date when it goes into effect.
Respondents' argument, however, is logically correct only insofar as it equates the
effectivity of laws with the fact of publication. Considered in the light of other statutes
applicable to the issue at hand, the conclusion is easily reached that said Article 2 does
not preclude the requirement of publication in the Official Gazette, even if the law itself
provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638
provides as follows:
Section 1. There shall be published in the Official Gazette [1] all important legisiative
acts and resolutions of a public nature of the, Congress of the Philippines; [2] all
executive and administrative orders and proclamations, except such as have no general
applicability; [3] decisions or abstracts of decisions of the Supreme Court and the Court
of Appeals as may be deemed by said courts of sufficient importance to be so
published; [4] such documents or classes of documents as may be required so to be
published by law; and [5] such documents or classes of documents as the President of
the Philippines shall determine from time to time to have general applicability and legal
effect, or which he may authorize so to be published. ...
The clear object of the above-quoted provision is to give the general public adequate
notice of the various laws which are to regulate their actions and conduct as citizens.
Without such notice and publication, there would be no basis for the application of the
maxim "ignorantia legis non excusat." It would be the height of injustice to punish or
otherwise burden a citizen for the transgression of a law of which he had no notice
whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the Philippine Republic has the
publication of laws taken so vital significance that at this time when the people have
bestowed upon the President a power heretofore enjoyed solely by the legislature.
While the people are kept abreast by the mass media of the debates and deliberations
in the Batasan Pambansaand for the diligent ones, ready access to the legislative
recordsno such publicity accompanies the law-making process of the President.
Thus, without publication, the people have no means of knowing what presidential
decrees have actually been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees. As the Supreme Court of
Spain ruled: "Bajo la denominacion generica de leyes, se comprenden tambien los
reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordines dictadas de
conformidad con las mismas por el Gobierno en uso de su potestad. 5

The very first clause of Section I of Commonwealth Act 638 reads: "There shall be
published in the Official Gazette ... ." The word "shall" used therein imposes upon
respondent officials an imperative duty. That duty must be enforced if the Constitutional
right of the people to be informed on matters of public concern is to be given substance
and reality. The law itself makes a list of what should be published in the Official
Gazette. Such listing, to our mind, leaves respondents with no discretion whatsoever as
to what must be included or excluded from such publication.
The publication of all presidential issuances "of a public nature" or "of general
applicability" is mandated by law. Obviously, presidential decrees that provide for fines,
forfeitures or penalties for their violation or otherwise impose a burden or. the people,
such as tax and revenue measures, fall within this category. Other presidential
issuances which apply only to particular persons or class of persons such as
administrative and executive orders need not be published on the assumption that they
have been circularized to all concerned. 6
It is needless to add that the publication of presidential issuances "of a public nature" or
"of general applicability" is a requirement of due process. It is a rule of law that before a
person may be bound by law, he must first be officially and specifically informed of its
contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC 7:
In a time of proliferating decrees, orders and letters of instructions which all form part of
the law of the land, the requirement of due process and the Rule of Law demand that
the Official Gazette as the official government repository promulgate and publish the
texts of all such decrees, orders and instructions so that the people may know where to
obtain their official and specific contents.
The Court therefore declares that presidential issuances of general application, which
have not been published, shall have no force and effect. Some members of the Court,
quite apprehensive about the possible unsettling effect this decision might have on acts
done in reliance of the validity of those presidential decrees which were published only
during the pendency of this petition, have put the question as to whether the Court's
declaration of invalidity apply to P.D.s which had been enforced or implemented prior to
their publication. The answer is all too familiar. In similar situations in the past this Court
had taken the pragmatic and realistic course set forth in Chicot County Drainage District
vs. Baxter Bank 8 to wit:
The courts below have proceeded on the theory that the Act of Congress, having been
found to be unconstitutional, was not a law; that it was inoperative, conferring no rights
and imposing no duties, and hence affording no basis for the challenged decree. Norton
v. Shelby County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559,
566. It is quite clear, however, that such broad statements as to the effect of a
determination of unconstitutionality must be taken with qualifications. The actual
CONSTILAW 2-SEC. I | 109

existence of a statute, prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a
new judicial declaration. The effect of the subsequent ruling as to invalidity may have to
be considered in various aspects-with respect to particular conduct, private and official.
Questions of rights claimed to have become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of public policy in the light of the
nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those which have engaged the attention of
courts, state and federal and it is manifest from numerous decisions that an all-inclusive
statement of a principle of absolute retroactive invalidity cannot be justified.

Relova, J., concurs.

Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the
right of a party under the Moratorium Law, albeit said right had accrued in his favor
before said law was declared unconstitutional by this Court.

Separate Opinions

Similarly, the implementation/enforcement of presidential decrees prior to their

publication in the Official Gazette is "an operative fact which may have consequences
which cannot be justly ignored. The past cannot always be erased by a new judicial
declaration ... that an all-inclusive statement of a principle of absolute retroactive
invalidity cannot be justified."

FERNANDO, C.J., concurring (with qualification):

From the report submitted to the Court by the Clerk of Court, it appears that of the
presidential decrees sought by petitioners to be published in the Official Gazette, only
Presidential Decrees Nos. 1019 to 1030, inclusive, 1278, and 1937 to 1939, inclusive,
have not been so published. 10 Neither the subject matters nor the texts of these PDs
can be ascertained since no copies thereof are available. But whatever their subject
matter may be, it is undisputed that none of these unpublished PDs has ever been
implemented or enforced by the government. In Pesigan vs. Angeles, 11 the Court,
through Justice Ramon Aquino, ruled that "publication is necessary to apprise the public
of the contents of [penal] regulations and make the said penalties binding on the
persons affected thereby. " The cogency of this holding is apparently recognized by
respondent officials considering the manifestation in their comment that "the
government, as a matter of policy, refrains from prosecuting violations of criminal laws
until the same shall have been published in the Official Gazette or in some other
publication, even though some criminal laws provide that they shall take effect
immediately.
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette
all unpublished presidential issuances which are of general application, and unless so
published, they shall have no binding force and effect.
SO ORDERED.

Aquino, J., took no part.

Concepcion, Jr., J., is on leave.

There is on the whole acceptance on my part of the views expressed in the ably written
opinion of Justice Escolin. I am unable, however, to concur insofar as it would
unqualifiedly impose the requirement of publication in the Official Gazette for
unpublished "presidential issuances" to have binding force and effect.
I shall explain why.
1. It is of course true that without the requisite publication, a due process question
would arise if made to apply adversely to a party who is not even aware of the existence
of any legislative or executive act having the force and effect of law. My point is that
such publication required need not be confined to the Official Gazette. From the
pragmatic standpoint, there is an advantage to be gained. It conduces to certainty. That
is too be admitted. It does not follow, however, that failure to do so would in all cases
and under all circumstances result in a statute, presidential decree or any other
executive act of the same category being bereft of any binding force and effect. To so
hold would, for me, raise a constitutional question. Such a pronouncement would lend
itself to the interpretation that such a legislative or presidential act is bereft of the
attribute of effectivity unless published in the Official Gazette. There is no such
requirement in the Constitution as Justice Plana so aptly pointed out. It is true that what
is decided now applies only to past "presidential issuances". Nonetheless, this
clarification is, to my mind, needed to avoid any possible misconception as to what is
required for any statute or presidential act to be impressed with binding force or
effectivity.
2. It is quite understandable then why I concur in the separate opinion of Justice Plana.
Its first paragraph sets forth what to me is the constitutional doctrine applicable to this
CONSTILAW 2-SEC. I | 110

case. Thus: "The Philippine Constitution does not require the publication of laws as a
prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said
though that the guarantee of due process requires notice of laws to affected Parties
before they can be bound thereby; but such notice is not necessarily by publication in
the Official Gazette. The due process clause is not that precise. 1 I am likewise in
agreement with its closing paragraph: "In fine, I concur in the majority decision to the
extent that it requires notice before laws become effective, for no person should be
bound by a law without notice. This is elementary fairness. However, I beg to disagree
insofar as it holds that such notice shall be by publication in the Official Gazette. 2
3. It suffices, as was stated by Judge Learned Hand, that law as the command of the
government "must be ascertainable in some form if it is to be enforced at all. 3 It would
indeed be to reduce it to the level of mere futility, as pointed out by Justice Cardozo, "if it
is unknown and unknowable. 4 Publication, to repeat, is thus essential. What I am not
prepared to subscribe to is the doctrine that it must be in the Official Gazette. To be sure
once published therein there is the ascertainable mode of determining the exact date of
its effectivity. Still for me that does not dispose of the question of what is the jural effect
of past presidential decrees or executive acts not so published. For prior thereto, it
could be that parties aware of their existence could have conducted themselves in
accordance with their provisions. If no legal consequences could attach due to lack of
publication in the Official Gazette, then serious problems could arise. Previous
transactions based on such "Presidential Issuances" could be open to question. Matters
deemed settled could still be inquired into. I am not prepared to hold that such an effect
is contemplated by our decision. Where such presidential decree or executive act is
made the basis of a criminal prosecution, then, of course, its ex post facto character
becomes evident. 5 In civil cases though, retroactivity as such is not conclusive on the
due process aspect. There must still be a showing of arbitrariness. Moreover, where the
challenged presidential decree or executive act was issued under the police power, the
non-impairment clause of the Constitution may not always be successfully invoked.
There must still be that process of balancing to determine whether or not it could in such
a case be tainted by infirmity. 6 In traditional terminology, there could arise then a
question of unconstitutional application. That is as far as it goes.
4. Let me make therefore that my qualified concurrence goes no further than to affirm
that publication is essential to the effectivity of a legislative or executive act of a general
application. I am not in agreement with the view that such publication must be in the
Official Gazette. The Civil Code itself in its Article 2 expressly recognizes that the rule as
to laws taking effect after fifteen days following the completion of their publication in the
Official Gazette is subject to this exception, "unless it is otherwise provided." Moreover,
the Civil Code is itself only a legislative enactment, Republic Act No. 386. It does not
and cannot have the juridical force of a constitutional command. A later legislative or
executive act which has the force and effect of law can legally provide for a different
rule.

5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin
that presidential decrees and executive acts not thus previously published in the Official
Gazette would be devoid of any legal character. That would be, in my opinion, to go too
far. It may be fraught, as earlier noted, with undesirable consequences. I find myself
therefore unable to yield assent to such a pronouncement.
I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay
concur in this separate opinion.
Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.
TEEHANKEE, J., concurring:
I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme.
Justice Herrera. The Rule of Law connotes a body of norms and laws published and
ascertainable and of equal application to all similarly circumstances and not subject to
arbitrary change but only under certain set procedures. The Court has consistently
stressed that "it is an elementary rule of fair play and justice that a reasonable
opportunity to be informed must be afforded to the people who are commanded to obey
before they can be punished for its violation, 1 citing the settled principle based on due
process enunciated in earlier cases that "before the public is bound by its contents,
especially its penal provisions, a law, regulation or circular must first be published and
the people officially and specially informed of said contents and its penalties.
Without official publication in the Official Gazette as required by Article 2 of the Civil
Code and the Revised Administrative Code, there would be no basis nor justification for
the corollary rule of Article 3 of the Civil Code (based on constructive notice that the
provisions of the law are ascertainable from the public and official repository where they
are duly published) that "Ignorance of the law excuses no one from compliance
therewith.
Respondents' contention based on a misreading of Article 2 of the Civil Code that "only
laws which are silent as to their effectivity [date] need be published in the Official
Gazette for their effectivity" is manifestly untenable. The plain text and meaning of the
Civil Code is that "laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise provided, " i.e. a different
effectivity date is provided by the law itself. This proviso perforce refers to a law that has
been duly published pursuant to the basic constitutional requirements of due process.
The best example of this is the Civil Code itself: the same Article 2 provides otherwise
that it "shall take effect [only] one year [not 15 days] after such publication. 2 To sustain
respondents' misreading that "most laws or decrees specify the date of their effectivity
and for this reason, publication in the Official Gazette is not necessary for their
effectivity 3 would be to nullify and render nugatory the Civil Code's indispensable and
CONSTILAW 2-SEC. I | 111

essential requirement of prior publication in the Official Gazette by the simple expedient
of providing for immediate effectivity or an earlier effectivity date in the law
itself before the completion of 15 days following its publication which is the period
generally fixed by the Civil Code for its proper dissemination.
MELENCIO-HERRERA, J., concurring:
I agree. There cannot be any question but that even if a decree provides for a date of
effectivity, it has to be published. What I would like to state in connection with that
proposition is that when a date of effectivity is mentioned in the decree but the decree
becomes effective only fifteen (15) days after its publication in the Official Gazette, it will
not mean that the decree can have retroactive effect to the date of effectivity mentioned
in the decree itself. There should be no retroactivity if the retroactivity will run counter to
constitutional rights or shall destroy vested rights.

"important" ones "of a public nature." Moreover, the said law does not provide that
publication in the Official Gazette is essential for the effectivity of laws. This is as it
should be, for all statutes are equal and stand on the same footing. A law, especially an
earlier one of general application such as Commonwealth Act No. 638, cannot nullify or
restrict the operation of a subsequent statute that has a provision of its own as to when
and how it will take effect. Only a higher law, which is the Constitution, can assume that
role.
In fine, I concur in the majority decision to the extent that it requires notice before laws
become effective, for no person should be bound by a law without notice. This is
elementary fairness. However, I beg to disagree insofar as it holds that such notice shall
be by publication in the Official Gazette.
Cuevas and Alampay, JJ., concur.

PLANA, J., concurring (with qualification):

GUTIERREZ, Jr., J., concurring:

The Philippine Constitution does not require the publication of laws as a prerequisite for
their effectivity, unlike some Constitutions elsewhere. * It may be said though that the
guarantee of due process requires notice of laws to affected parties before they can be
bound thereby; but such notice is not necessarily by publication in the Official Gazette.
The due process clause is not that precise. Neither is the publication of laws in
the Official Gazette required by any statute as a prerequisite for their effectivity, if said
laws already provide for their effectivity date.

I concur insofar as publication is necessary but reserve my vote as to the necessity of

such publication being in the Official Gazette.

Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following
the completion of their publication in the Official Gazette, unless it is otherwise
provided " Two things may be said of this provision: Firstly, it obviously does not apply to
a law with a built-in provision as to when it will take effect. Secondly, it clearly
recognizes that each law may provide not only a different period for reckoning its
effectivity date but also a different mode of notice. Thus, a law may prescribe that it shall
be published elsewhere than in the Official Gazette.

________________________

DE LA FUENTE, J., concurring:

I concur insofar as the opinion declares the unpublished decrees and issuances of a
public nature or general applicability ineffective, until due publication thereof.

EN BANC

Commonwealth Act No. 638, in my opinion, does not support the proposition that for
their effectivity, laws must be published in the Official Gazette. The said law is simply
"An Act to Provide for the Uniform Publication and Distribution of the Official Gazette."
Conformably therewith, it authorizes the publication of the Official Gazette, determines
its frequency, provides for its sale and distribution, and defines the authority of the
Director of Printing in relation thereto. It also enumerates what shall be published in the
Official Gazette, among them, "important legislative acts and resolutions of a public
nature of the Congress of the Philippines" and "all executive and administrative orders
and proclamations, except such as have no general applicability." It is noteworthy that
not all legislative acts are required to be published in the Official Gazette but only
CONSTILAW 2-SEC. I | 112

On cross-examination, this witness declared:

G.R. No. L-44143 August 31, 1988
THE
PEOPLE
OF
vs.
EUSEBIO NAZARIO, accused-appellant.

I worked with the accused up to March 1964.

THE

PHILIPPINES, plaintiff,

SARMIENTO, J.:
The petitioner was charged with violation of certain municipal ordinances of the
municipal council of Pagbilao, in Quezon province. By way of confession and
avoidance, the petitioner would admit having committed the acts charged but would
claim that the ordinances are unconstitutional, or, assuming their constitutionality, that
they do not apply to him in any event.

NICOLAS MACAROLAY, 65 years of age, married, copra maker and resident of

Pinagbayanan, Pagbilao, Quezon
I resided at Pinagbayanan, Pagbilao, Quezon since 1959 up to the present. I know the
accused since 1959 when he opened a fishpond at Pinagbayanan, Pagbilao, Quezon.
He still operates the fishpond up to the present and I know this fact as I am the barrio
captain of Pinagbayanan.
On cross-examination, this witness declared:
I came to know the accused when he first operated his fishpond since 1959.

The facts are not disputed:

On re-direct examination, this witness declared:

This defendant is charged of the crime of Violation of Municipal Ordinance in an

information filed by the provincial Fiscal, dated October 9, 1968, as follows:

I was present during the catching of fish in 1967 and the accused was there.

That in the years 1964, 1965 and 1966, in the Municipality of Pagbilao, Province of
Quezon, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed accused, being then the owner and operator of a fishpond situated in the barrio
of Pinagbayanan, of said municipality, did then and there willfully, unlawfully and
feloniously refuse and fail to pay the municipal taxes in the total amount of THREE
HUNDRED SIXTY TWO PESOS AND SIXTY TWO CENTAVOS (P362.62), required of
him as fishpond operator as provided for under Ordinance No. 4, series of 1955, as
amended, inspite of repeated demands made upon him by the Municipal Treasurer of
Pagbilao, Quezon, to pay the same.
Contrary to law.
For the prosecution the following witnesses testified in substance as follows;
MIGUEL FRANCIA, 39 years of age, married, farmer and resident of Lopez, Quezon
In 1962 to 1967, I resided at Pinagbayanan, Pagbilao, Quezon. I know the accused as I
worked in his fishpond in 1962 to 1964. The fishpond of Nazario is at Pinagbayanan,
Pagbilao, Quezon. I worked in the clearing of the fishpond, the construction of the dikes
and the catching of fish.

On re-cross examination, this witness declared:

I do not remember the month in 1962 when the accused caught fish.
RODOLFO R. ALVAREZ, 45 years old, municipal treasurer of Pagbilao, Quezon,
married
As Municipal Treasurer I am in charge of tax collection. I know the accused even before
I was Municipal Treasurer of Pagbilao. I have written the accused a letter asking him to
pay his taxes (Exhibit B). Said letter was received by the accused as per registry return
receipt, Exhibit B-1. The letter demanded for payment of P362.00, more or less, by way
of taxes which he did not pay up to the present. The former Treasurer, Ceferino
Caparros, also wrote a letter of demand to the accused (Exhibit C). On June 28, 1967, I
sent a letter to the Fishery Commission (Exhibit D), requesting information if accused
paid taxes with that office. The Commission sent me a certificate (Exhibits D-1, D-2 & D3). The accused had a fishpond lease agreement. The taxes unpaid were for the years
1964, 1965 and 1966.
On cross-examination, this witness declared:
I have demanded the taxes for 38.10 hectares.
CONSTILAW 2-SEC. I | 113

On question of the court, this witness declared:

The defense presented as part of their evidence Exhibits 1, 2, 3, 3-A, 4, 4-B, 4-B, 4-C,
5, 5-A, 6, 6-A, 6-B, 6-C, 7, 7-A, 8 and 8-A and the same were admitted by the court.

What I was collecting from the accused is the fee on fishpond operation, not rental.
The prosecution presented as part of their evidence Exhibits A, A-1, A-2, B, B-2, C, D,
D-1, D-2, D-3, E, F, F-1 and the same were admitted by the court, except Exhibits D, D1, D-2 and D-3 which were not admitted for being immaterial.
For the defense the accused EUSEBIO NAZARIO, 48 years of age, married, owner and
general manager of the ZIP Manufacturing Enterprises and resident of 4801 Old Sta.
Mesa, Sampaloc, Manila, declared in substance as follows:
I have lived in Sta. Mesa, Manila, since 1949. I buy my Residence Certificates at Manila
or at San Juan. In 1964, 1965 and 1966, I was living in Manila and my business is in
Manila and my family lives at Manila. I never resided at Pagbilao, Quezon. I do not own
a house at Pagbilao. I am a lessee of a fishpond located at Pagbilao, Quezon, and I
have a lease agreement to that effect with the Philippine Fisheries Commission marked
as Exhibit 1. In 1964, 1965 and 1966, the contract of lease, Exhibit 1, was still existing
and enforceable. The Ordinances Nos. 4, 15 and 12, series of 1955, 1965 and 1966,
were translated into English by the Institute of National Language to better understand
the ordinances. There were exchange of letters between me and the Municipal
Treasurer of Pagbilao regarding the payment of the taxes on my leased fishpond
situated at Pagbilao. There was a letter of demand for the payment of the taxes by the
treasurer (Exhibit 3) which I received by mail at my residence at Manila. I answered the
letter of demand, Exhibit 3, with Exhibit 3-A. I requested an inspection of my fishpond to
determine its condition as it was not then in operation. The Municipal Treasurer Alvarez
went there once in 1967 and he found that it was destroyed by the typhoon and there
were pictures taken marked as Exhibits 4, 4-A, 4-B and 4C. I received another letter of
demand, Exhibit 5, and I answered the same (Exhibit 5-A). I copied my reference
quoted in Exhibit 5-A from Administrative Order No. 6, Exhibit 6. I received another letter
of demand from Tomas Ornedo, Acting Municipal Treasurer of Pagbilao, dated February
16, 1966, Exhibit 7, and I answered the same with the letter marked as Exhibit 7-A,
dated February 26, 1966. I received another letter of demand from Treasurer Alvarez of
Pagbilao, Exhibit 8, and I answered the same (Exhibit 8-A). In 1964, I went to Treasurer
Caparros to ask for an application for license tax and he said none and he told me just
to pay my taxes. I did not pay because up to now I do not know whether I am covered
by the Ordinance or not. The letters of demand asked me to pay different amounts for
taxes for the fishpond. Because under Sec. 2309 of the Revised Administrative Code,
municipal taxes lapse if not paid and they are collecting on a lapsed ordinance.
Because under the Tax Code, fishermen are exempted from percentage tax and
privilege tax. There is no law empowering the municipality to pass ordinance taxing
fishpond operators.

From their evidence the prosecution would want to show to the court that the accused,
as lessee or operator of a fishpond in the municipality of Pagbilao, refused, and still
refuses, to pay the municipal taxes for the years 1964, 1965 and 1966, in violation of
Municipal Ordinance No. 4, series of 1955, as amended by Municipal Ordinance No. 15,
series of 1965, and finally amended by Municipal Ordinance No. 12, series of 1966.
On the other hand, the accused, by his evidence, tends to show to the court that the
taxes sought to be collected have already lapsed and that there is no law empowering
municipalities to pass ordinances taxing fishpond operators. The defense, by their
evidence, tried to show further that, as lessee of a forest land to be converted into a
fishpond, he is not covered by said municipal ordinances; and finally that the accused
should not be taxed as fishpond operator because there is no fishpond yet being
operated by him, considering that the supposed fishpond was under construction during
the period covered by the taxes sought to be collected.
Finally, the defendant claims that the ordinance in question is ultra vires as it is outside
of the power of the municipal council of Pagbilao, Quezon, to enact; and that the
defendant claims that the ordinance in question is ambiguous and uncertain.
There is no question from the evidences presented that the accused is a lessee of a
parcel of forest land, with an area of 27.1998 hectares, for fishpond purposes, under
Fishpond Lease Agreement No. 1066, entered into by the accused and the government,
through the Secretary of Agriculture and Natural Resources on August 21, 1959.
There is no question from the evidences presented that the 27.1998 hectares of land
leased by the defendant from the government for fishpond purposes was actually
converted into fishpond and used as such, and therefore defendant is an operator of a
fishpond within the purview of the ordinance in question. 1
The trial Court 2 returned a verdict of guilty and disposed as follows:
VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Court finds the accused guilty
beyond reasonable doubt of the crime of violation of Municipal Ordinance No. 4, series
of 1955, as amended by Ordinance No. 15, series of 1965 and further amended by
Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao, Quezon; and
hereby sentences him to pay a fine of P50.00, with subsidiary imprisonment in case of
insolvency at the rate of P8.00 a day, and to pay the costs of this proceeding.
SO ORDERED. 3
CONSTILAW 2-SEC. I | 114

In this appeal, certified to this Court by the Court of Appeals, the petitioner alleges that:
I. THE LOWER COURT ERRED IN NOT DECLARING THAT ORDINANCE NO. 4,
SERIES OF 1955, AS AMENDED BY ORDINANCE NO. 15, SERIES OF 1965, AND AS
FURTHER AMENDED BY ORDINANCE NO. 12, SERIES OF 1966, OF THE
MUNICIPALITY OF PAGBILAO, QUEZON, IS NULL AND VOID FOR BEING
AMBIGUOUS AND UNCERTAIN.
II. THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN
QUESTION, AS AMENDED, IS UNCONSTITUTIONAL FOR BEING EX POST FACTO.
III. THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN
QUESTION COVERS ONLY OWNERS OR OVERSEER OF FISHPONDS OF PRIVATE
OWNERSHIP AND NOT TO LESSEES OF PUBLIC LANDS.
IV. THE LOWER COURT ERRED IN NOT FINDING THAT THE QUESTIONED
ORDINANCE, EVEN IF VALID, CANNOT BE ENFORCED BEYOND THE
TERRITORIAL LIMITS OF PAGBILAO AND DOES NOT COVER NONRESIDENTS. 4
The ordinances in question are Ordinance No. 4, series of 1955, Ordinance No. 15,
series of 1965, and Ordinance No. 12, series of 1966, of the Municipal Council of
Pagbilao. Insofar as pertinent to this appeal, the salient portions thereof are hereinbelow
quoted:
Section 1. Any owner or manager of fishponds in places within the territorial limits of
Pagbilao, Quezon, shall pay a municipal tax in the amount of P3.00 per hectare of
fishpond on part thereof per annum. 5
xxx xxx xxx
Sec. l (a). For the convenience of those who have or owners or managers of fishponds
within the territorial limits of this municipality, the date of payment of municipal tax
relative thereto, shall begin after the lapse of three (3) years starting from the date said
fishpond is approved by the Bureau of Fisheries. 6
xxx xxx xxx
Section 1. Any owner or manager of fishponds in places within the territorial limits of
Pagbilao shall pay a municipal tax in the amount of P3.00 per hectare or any fraction
thereof per annum beginning and taking effect from the year 1964, if the fishpond
started operating before the year 1964. 7

The first objection refers to the ordinances being allegedly "ambiguous and
uncertain." 8 The petitioner contends that being a mere lessee of the fishpond, he is not
covered since the said ordinances speak of "owner or manager." He likewise maintains
that they are vague insofar as they reckon the date of payment: Whereas Ordinance
No. 4 provides that parties shall commence payment "after the lapse of three (3) years
starting from the date said fishpond is approved by the Bureau of
Fisheries." 9 Ordinance No. 12 states that liability for the tax accrues "beginning and
taking effect from the year 1964 if the fishpond started operating before the year
1964." 10
As a rule, a statute or act may be said to be vague when it lacks comprehensible
standards that men "of common intelligence must necessarily guess at its meaning and
differ as to its application." 11 It is repugnant to the Constitution in two respects: (1) it
violates due process for failure to accord persons, especially the parties targetted by it,
fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in
carrying out its provisions and becomes an arbitrary flexing of the Government muscle.
But the act must be utterly vague on its face, that is to say, it cannot be clarified by
either a saving clause or by construction. Thus, in Coates v. City of Cincinnati, 12 the
U.S. Supreme Court struck down an ordinance that had made it illegal for "three or
more persons to assemble on any sidewalk and there conduct themselves in a manner
annoying to persons passing by." 13 Clearly, the ordinance imposed no standard at all
"because one may never know in advance what 'annoys some people but does not
annoy others.' " 14
Coates highlights what has been referred to as a "perfectly vague" 15 act whose
obscurity is evident on its face. It is to be distinguished, however, from legislation
couched in imprecise language but which nonetheless specifies a standard though
defectively phrased in which case, it may be "saved" by proper construction.
It must further be distinguished from statutes that are apparently ambiguous yet fairly
applicable to certain types of activities. In that event, such statutes may not be
challenged whenever directed against such activities. In Parker v. Levy, 16 a prosecution
originally under the U.S. Uniform Code of Military Justice (prohibiting, specifically,
"conduct unbecoming an officer and gentleman"), the defendant, an army officer who
had urged his men not to go to Vietnam and called the Special Forces trained to fight
there thieves and murderers, was not allowed to invoke the void for vagueness doctrine
on the premise that accepted military interpretation and practice had provided enough
standards, and consequently, a fair notice that his conduct was impermissible.
It is interesting that in Gonzales v. Commission on Elections, 17 a divided Court
sustained an act of Congress (Republic Act No. 4880 penalizing "the too early
nomination of candidates" 18 limiting the election campaign period, and prohibiting
CONSTILAW 2-SEC. I | 115

"partisan political activities"), amid challenges of vagueness and overbreadth on the

ground that the law had included an "enumeration of the acts deemed included in the
terms 'election campaign' or 'partisan political activity" 19 that would supply the
standards. "As thus limited, the objection that may be raised as to vagueness has been
minimized, if not totally set at rest." 20 In his opinion, however, Justice Sanchez would
stress that the conduct sought to be prohibited "is not clearly defined at all." 21 "As
worded in R.A 4880, prohibited discussion could cover the entire spectrum of
expression relating to candidates and political parties." 22 He was unimpressed with the
"restrictions" Fernando's opinion had relied on: " 'Simple expressions of opinions and
thoughts concerning the election' and expression of 'views on current political problems
or issues' leave the reader conjecture, to guesswork, upon the extent of protection
offered, be it as to the nature of the utterance ('simple expressions of opinion and
thoughts') or the subject of the utterance ('current political problems or issues')." 23
The Court likewise had occasion to apply the "balancing-of-interests" test, 24 insofar as
the statute's ban on early nomination of candidates was concerned: "The rational
connection between the prohibition of Section 50-A and its object, the indirect and
modest scope of its restriction on the rights of speech and assembly, and the embracing
public interest which Congress has found in the moderation of partisan political activity,
lead us to the conclusion that the statute may stand consistently with and does not
offend the Constitution." 25 In that case, Castro would have the balance achieved in
favor of State authority at the "expense" of individual liberties.
In the United States, which had ample impact on Castro's separate opinion, the
balancing test finds a close kin, referred to as the "less restrictive alternative
" 26 doctrine, under which the court searches for alternatives available to the
Government outside of statutory limits, or for "less drastic means" 27 open to the State,
that would render the statute unnecessary. In United States v. Robel, 28 legislation was
assailed, banning members of the (American) Communist Party from working in any
defense facility. The U.S. Supreme Court, in nullifying the statute, held that it impaired
the right of association, and that in any case, a screening process was available to the
State that would have enabled it to Identify dangerous elements holding defense
positions. 29 In that event, the balance would have been struck in favor of individual
liberties.
It should be noted that it is in free expression cases that the result is usually close. It is
said, however, that the choice of the courts is usually narrowed where the controversy
involves say, economic rights, 30 or as in the Levycase, military affairs, in which less
precision in analysis is required and in which the competence of the legislature is
presumed.
In no way may the ordinances at bar be said to be tainted with the vice of vagueness. It
is unmistakable from their very provisions that the appellant falls within its coverage. As
the actual operator of the fishponds, he comes within the term " manager." He does not

deny the fact that he financed the construction of the fishponds, introduced fish fries into
the fishponds, and had employed laborers to maintain them. 31 While it appears that it is
the National Government which owns them, 32 the Government never shared in the
profits they had generated. It is therefore only logical that he shoulders the burden of tax
under the said ordinances.
We agree with the trial court that the ordinances are in the character of revenue
measures 33 designed to assist the coffers of the municipality of Pagbilao. And
obviously, it cannot be the owner, the Government, on whom liability should attach, for
one thing, upon the ancient principle that the Government is immune from taxes and for
another, since it is not the Government that had been making money from the venture.
Suffice it to say that as the actual operator of the fishponds in question, and as the
recipient of profits brought about by the business, the appellant is clearly liable for the
municipal taxes in question. He cannot say that he did not have a fair notice of such a
liability to make such ordinances vague.
Neither are the said ordinances vague as to dates of payment. There is no merit to the
claim that "the imposition of tax has to depend upon an uncertain date yet to be
determined (three years after the 'approval of the fishpond' by the Bureau of Fisheries,
and upon an uncertain event (if the fishpond started operating before 1964), also to be
determined by an uncertain individual or individuals." 34 Ordinance No. 15, in making the
tax payable "after the lapse of three (3) years starting from the date said fishpond is
approved by the Bureau of Fisheries," 35 is unequivocal about the date of payment, and
its amendment by Ordinance No. 12, reckoning liability thereunder "beginning and
taking effect from the year 1964 if the fishpond started operating before the year
1964 ," 36 does not give rise to any ambiguity. In either case, the dates of payment have
been definitely established. The fact that the appellant has been allegedly uncertain
about the reckoning dates as far as his liability for the years 1964, 1965, and 1966 is
concerned presents a mere problem in computation, but it does not make the
ordinances vague. In addition, the same would have been at most a difficult piece of
legislation, which is not unfamiliar in this jurisdiction, but hardly a vague law.
As it stands, then, liability for the tax accrues on January 1, 1964 for fishponds in
operation prior thereto (Ordinance No. 12), and for new fishponds, three years after
their approval by the Bureau of Fisheries (Ordinance No. 15). This is so since the
amendatory act (Ordinance No. 12) merely granted amnesty unto old, delinquent
fishpond operators. It did not repeal its mother ordinances (Nos. 4 and 15). With respect
to new operators, Ordinance No. 15 should still prevail.
To the Court, the ordinances in question set forth enough standards that clarify
imagined ambiguities. While such standards are not apparent from the face thereof,
they are visible from the intent of the said ordinances.
CONSTILAW 2-SEC. I | 116

The next inquiry is whether or not they can be said to be ex post facto measures. The
appellant argues that they are: "Amendment No. 12 passed on September 19, 1966,
clearly provides that the payment of the imposed tax shall "beginning and taking effect
from the year 1964, if the fishpond started operating before the year 1964.' In other
words, it penalizes acts or events occurring before its passage, that is to say, 1964 and
even prior thereto."37
The Court finds no merit in this contention. As the Solicitor General notes, "Municipal
Ordinance No. 4 was passed on May 14, 1955. 38 Hence, it cannot be said that the
amendment (under Ordinance No. 12) is being made to apply retroactively (to 1964)
since the reckoning period is 1955 (date of enactment). Essentially, Ordinances Nos. 12
and 15 are in the nature of curative measures intended to facilitate and enhance the
collection of revenues the originally act, Ordinance No. 4, had prescribed. 39 Moreover,
the act (of non-payment of the tax), had been, since 1955, made punishable, and it
cannot be said that Ordinance No. 12 imposes a retroactive penalty. As we have noted,
it operates to grant amnesty to operators who had been delinquent between 1955 and
1964. It does not mete out a penalty, much less, a retrospective one.
The appellant assails, finally, the power of the municipal council of Pagbilao to tax
"public forest land." 40 In Golden Ribbon Lumber Co., Inc. v. City of Butuan 41 we held
that local governments' taxing power does not extend to forest products or concessions
under Republic Act No. 2264, the Local Autonomy Act then in force. (Republic Act No.
2264 likewise prohibited municipalities from imposing percentage taxes on sales.)
First of all, the tax in question is not a tax on property, although the rate thereof is based
on the area of fishponds ("P3.00 per hectare" 42). Secondly, fishponds are not forest
lands, although we have held them to the agricultural lands. 43By definition, "forest" is "a
large tract of land covered with a natural growth of trees and underbush; a large
wood." 44(Accordingly, even if the challenged taxes were directed on the fishponds, they
would not have been taxes on forest products.)
They are, more accurately, privilege taxes on the business of fishpond maintenance.
They are not charged against sales, which would have offended the doctrine enshrined
by Golden Ribbon Lumber, 45 but rather on occupation, which is allowed under Republic
Act No. 2264. 46 They are what have been classified as fixed annual taxes and this is
obvious from the ordinances themselves.
There is, then, no merit in the last objection.

G.R. No. 160025

April 23, 2014

SANGGUNIANG
PANLUNGSOD
NG
BAGUIO
vs.
JADEWELL PARKING SYSTEMS CORPORATION, Respondent.

CITY, Petitioner,

x-----------------------x
G.R. No. 163052
JADEWELL
PARKING
SYSTEMS
CORPORATION, Petitioner,
vs.
MAYOR BERNARDO M. VERGARA, CITY MAYOR OF BAGUIO, VICE MAYOR
BETTY LOURDES F. TABANDA, VICE MAYOR OF BAGUIO, COUNCILOR
BRAULIO D. YARANON, COUNCILOR ELMER O. DATUIN, COUNCILOR ANTONIO
R. TABORA, JR., COUNCILOR GALO D. WEYGAN, COUNCILOR EDILBERTO B.
TENEFRANCIA, COUNCILOR FEDERICO J. MANDAPAT, JR., COUNCILOR
RICHARD A. CARINO, COUNCILOR FAUSTINO A. OLOWAN, COUNCILOR
DELFIN V. BALAJADIA, COUNCILOR RUFINO M. PANAGAN, CITY SECRETARY
RONALDO B. PEREZ, SANGGUNIANG PANLUNGSOD NG BAGUIO,Respondents.
x-----------------------x
G.R. No. 164107
JADEWELL
PARKING
SYSTEMS
vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.

CORPORATION, Petitioner,

x-----------------------x
G.R. No. 165564
JADEWELL
PARKING
SYSTEMS
vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.

CORPORATION, Petitioner,

WHEREFORE, the appeal is DISMISSED. Costs against the appellant.

x-----------------------x
G.R. No. 172215
CONSTILAW 2-SEC. I | 117

JADEWELL
PARKING
SYSTEMS
CORPORATION, Petitioner,
vs.
JUDGE FERNANDO VIL PAMINTUAN, PRESIDING JUDGE OF BRANCH 3 OF THE
REGIONAL TRIAL COURT OF BAGUIO CITY, BENEDICTO BALAJADIA, PATERNO
AQUINO, RICHARD LABERINTO, ROLANDO ABELLERA, FERNANDO
SANGALANG, ALLAN ATOS, ANGELINO SANGALANG, CITY OF BAGUIO, AND
CITY MAYOR BRAULIO D. YARANON, Respondents.

G.R. No. 181488

CITY
MAYOR
BRAULIO
D.
YARANON, Petitioner,
vs.
JADEWELL PARKING SYSTEMS CORPORATION, HON. EXECUTIVE SECRETARY
EDUARDO R. ERMITA, ACTING BY AUTHORITY OF THE PRESIDENT, AND HON.
RONALDO V. PUNO, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT
OF INTERIOR AND LOCAL GOVERNMENT, Respondents.

x-----------------------x
DECISION
G.R. No. 172216
SERENO, CJ:
JADEWELL
PARKING
SYSTEMS
CORPORATION, Petitioner,
vs.
JUDGE FERNANDO VIL PAMINTUAN, PRESIDING JUDGE, BRANCH 03
REGIONAL TRIAL COURT OF BAGUIO CITY, Respondent.

Before this Court are nine (9) Petitions involving essentially the same parties - officials
of the City Government of Baguio and Jadewell Parking Systems Corporation
(Jadewell). The only party here that is neither an official of the City Government of
Baguio nor an officer of Jadewell is former Judge Fernando Vil Pamintuan.

x-----------------------x
G.R. No. 173043
JADEWELL
PARKING
SYSTEMS
vs.
CITY MAYOR BRAULIO D. YARANON, Respondent.

CORPORATION, Petitioner,

x-----------------------x
G.R. No. 174879
JADEWELL
PARKING
SYSTEMS
CORPORATION, Petitioner,
vs.
ACTING CITY MAYOR AND FORMERLY VICE MAYOR AND PRESIDING OFFICER
OF THE SANGGUNIANG PANLUNGSOD NG BAGUIO, REINALDO A. BAUTISTA,
JR., MEMBERS OF THE SANGGUNIANG PANLUNGSOD NG BAGUIO,
LEONARDO B. YANGOT, JR., ROCKY THOMAS A. BALISONG, EDILBERTO B.
TENEFRANCIA, FAUSTINO A. OLOWAN, GALO P. WEYGAN, FEDERICO J.
MANDAP AT, PERLITA L. CHAN-RONDEZ, ANTONIO R. TABORA, JOSE M.
MOLINTAS AND RUFINO M. PANAGAN AND CITY LEGAL OFFICER MELCHOR
CARLOS R. RABANES, Respondents.
x-----------------------x

The two principal parties executed a Memorandum of Agreement (MOA) on 26 June

2000, whereby the City of Baguio authorized Jadewell to regulate and collect parking
fees for on-street parking in the city, as well as to implement the installation of modern
parking meters.
The legal disputes embodied in the nine Petitions began when the Sangguniang
Panlungsod of Baguio City (Sanggunian) revoked the MOA through City Resolution
No. 037, Series of 2002 (Resolution 37), alleging substantial breach of the MOA on the
part of Jadewell. Then Mayor Alfredo Vergara vetoed the Resolution. The Sanggunian
Panlungsod overrode the veto through an unnumbered Resolution dated 17 April 2002.
These twin Resolutions constitute what we call here as the first act of Rescission 1 of
the MOA by the city officials of Baguio. Jadewell denied the breach and commenced
an action before the Regional Trial Court (RTC) of Baguio, 2questioning the validity of
the MOAs revocation and the Sanggunians capacity to pass a resolution revoking the
MOA.
There was a second act of rescission that the city officials of Baguio performed in
2006, the circumstances of which will be narrated later on.
While the main case was under litigation, and then under appeal, the parties filed
contempt charges against each other. Six of these cases are part of the consolidated
Petitions before us.
These nine highly-voluminous cases, however, all boil down essentially to just these
five sets of legal questions requiring resolution:
CONSTILAW 2-SEC. I | 118

(a) The validity or invalidity and legal efficacy of Saggunians two distinct acts
of rescission of the MOA;
(b) The duty of a trial judge to dismiss a case assailing the validity of the MOA
and the city resolution approving it in view of the pendency of the various
petitions before this Court;
(c) the liability of : (i) respondent city officials of Baguio, for various counts of
indirect contempt of this court, (ii) some respondents, who are lawyers at the
same time, for acts that require the disciplinary action of disbarment, (iii)
respondent Judge Pamintuan, for taking cognizance of a civil case allegedly
in defiance of this Courts authority;

city streets of Baguio.8 For this purpose, the City of Baguio authorized the intervention
of a private operator for the regulation, charging and collection of parking fees and the
installation of modern parking meters, among others.
On 10 April 2000, the City Legal Officer of Baguio City advised the City Mayor that the
project for the regulation of on-street parking and installation of parking meters was not
an infrastructure. Hence, the project was not covered by the Build-Operate-Transfer
Law9 and did not require publication of a notice for its validity.10

(d) the validity of the administrative suspension of one of the respondents

herein, former Mayor Braulio Yaranon, by the Office of the President in
relation to his acts of non-recognition of the MOA; and

Nevertheless, for the sake of transparency, the City Legal Officer recommended the
publication of the appropriate notice on the project and an invitation to bid. An invitation
to bid for the proposed regulation of on-street parking and installation of parking
meters on Baguio Citys streets was published in the Philippine Daily Inquirer on 8, 9
and 10 May 2000. Four interested bidders submitted their proposals, but three were
disqualified. The bid of Jadewell was the only one not disqualified; hence, it was
awarded the project.11

(e) the nullification of certain acts of officials of Baguio City directed against
Jadewell pursuant to their belief that the latter had no authority to continue
implementing the terms of the MOA.

On 26 June 2000, the MOA was finally executed between Jadewell and the City of
Baguio through its then City Mayor, Mauricio G. Domogan for the installation,
management and operation of the DG4S P&D parking meters.12

THE ANTECEDENT FACTS

On 17 July 2000, the Sanggunian confirmed the MOA through its Resolution No. 2052000.13

On 1 March 1999, Jadewell proposed the privatization3 of the administration of onstreet parking in Baguio City using Schlumbergers DG4S Pay and Display Parking
Meter (hereinafter "DG4S P&D"), which it touted as "technologically advanced, up to
the level of more progressive countries and which would make the city as the first and
only city in the Philippines, if not in Asia, to have metered parking as an important part
of its traffic and parking system."4

On 31 August 2000, the parties executed a supplemental MOA to include the

Ganza/Burnham parking space, owned by the Philippine Tourism Authority and
managed by the City of Baguio, in the project.14 This supplemental agreement was
neither confirmed nor ratified by the Sanggunian.

Respondent Sanggunian acted favorably on the proposal. On 31 May 2000, it passed

Resolution No. 159, Series of 1999, authorizing the City Mayor of Baguio to negotiate
and enter into a Memorandum of Agreement with Jadewell for the installation of its
proposed DG4S parking technology.6
On 16 July 1999, the City Mayor of Baguio wrote to Jadewell, transmitting to it the
finalized draft of the MOA, with amendments emanating from his office. The City Mayor
informed Jadewell that the finalization of the MOA would be subject to the appropriate
action of the Sanggunian and the passage of an enabling ordinance.7
On 27 March 2000, respondent Sanggunian enacted City Ordinance No. 003, Series of
2000 (Ordinance No. 003-2000) amending Ordinance No. 13, Series of 1983, outlining
the rules and policy on the privatization of the administration of on-street parking in the

In September of 2000, Jadewell began to mobilize and take over the parking facilities
at the Ganza/Burnham Park area.15 Around this time, questions arose regarding the
compliance by Jadewell with the provisions of the MOA, notably on matters such as
obtaining the recommendation from the Department of Public Works and Highways
(DPWH) for the installation of the parking meters and the legality of the collection of
parking fees being done by its parking attendants prior to the installation of the parking
meters at Burnham Park.16
On 20 December 2000, Jadewell wrote then Vice-Mayor Daniel T. Farias to inform
him of the progress of the deputization by the Department of Transportation and
CommunicationsLand Transportation Office (DOTC-LTO) of parking attendants
required for the implementation of the MOA. Jadewell explained that they were still
working on the required deputization of Jadewells parking attendants. Nevertheless, it
claimed that its parking attendants were authorized to collect parking fees pending the
CONSTILAW 2-SEC. I | 119

actual installation of the parking meters. It also claimed that the parking meters had not
yet been installed because the necessary civil works were yet to be completed.17

complaints being raised against Jadewell by the Sanggunian for the following alleged
violations:

Shortly thereafter, a case was filed by Edgar M. Avila, et al. with the RTC-Baguio City
(Branch 61), assailing Ordinance No. 003-2000 as unconstitutional and seeking to
restrain the City Government of Baguio from implementing the provisions of the MOA.
It further alleged that the City Government could not delegate the designation of pay
parking zones to Jadewell, that the parking attendants deployed by Jadewell were not
deputized, and that the questioned ordinance creates class legislation as the
designated taxi and jeepney stands were discriminatorily removed. The case was
docketed as Civil Case No. 4892-R.18 This was dismissed on motion by Jadewell
joined by the City Government of Baguio. The lower court declared that Ordinance No.
003-2000 is constitutional and that all acts emanating from it are deemed "reasonable
and non-discriminatory...having been enacted in accordance with the powers granted
to Baguio City by law."19 Complainants Motion for Reconsideration (MR) was denied.

a. Failure to install parking meters for each parking space as specified in

Section 3-F of Ordinance No. 003-2000;25

On 24 August 2001, Edgar Avila, et al., filed a Rule 65 Petition for Certiorari,
Prohibition and Mandamus with the Supreme Court assailing the RTCs dismissal of
their Complaint. The case was docketed as G.R. No. 149642. On 10 October 2001,
this Court issued a Resolution dismissing the petition of Avila, et al. for failure to state
in their petition the material dates when they received the appealed resolution and
order, and to append the original or certified true copies of the questioned resolution
and order subject of their petition.20 There was no resolution on the merits. The
Resolution became final and executory on 2 April 2002.21
A case was also filed by Nelia G. Cid against then Mayor Bernardo Vergara, et al.
when her vehicle was clamped, towed away, and impounded by Jadewell after the
latter found her car to be illegally parked. She refused to pay the corresponding fees to
Jadewell and as a result, the latter refused to release her vehicle. 22 Cid filed a case for
replevin and questioned the validity of Ordinance No. 003-2000 and the MOA, as well
as the authority of Jadewell to clamp down/tow away vehicles whose owners refuse to
pay parking fees. The case was docketed as Civil Case No. 5165-R and was assigned
to Branch 7 of RTC-Baguio. On 24 May 2002, an Omnibus Order was issued by this
RTC that addressed several pending incidents related to the authority of Jadewell to
clamp down/tow away vehicles. The Omnibus Order upheld Jadewells authority to
retain the vehicle of petitioner Nelia G. Cid pending her payment of the parking and
towage fees to Jadewell, and held that the authority of Jadewell was lawfully provided
in Ordinance No. 003-2000 and the MOA. Also, the RTC-Baguio took cognizance of
the ruling by this Court in G.R. No. 149642 which, in its mistaken view, upheld the
validity of the questioned ordinance and the MOA.23
Ultimately, Jadewell was able to install no more than 14 parking meters in three (3)
areas of Baguio City: six (6) on Session Road, five (5) on Harrison Road and three (3)
on Lake Drive.24 At the time that these meters were installed, there were already verbal

b. Failure to install a convenient and technologically advanced parking device

that is solar-powered and can measure the time a vehicle stays in a parking
slot;26
c. Failure to give the City of Baguio the latter's share of the collected parking
fee;27
d. Failure to post a performance bond in the amount of P1 million after its
previous bond expired.28
The Sanggunian passed Resolution No. 395, Series of 2000, directing Jadewell to
comply with its obligations under the MOA for the installation of the necessary number
of parking meters.29
On 15 March 2001, Jadewell wrote to the City Mayor in response to the mentioned
Resolution, informing the said office that the former had started operation of the offstreet parking on 2 December 2000 and of the on-street parking on 15 December
2000.30 On 27 January 2001, Jadewell also wrote the City Treasurer that the former
had completed installation of the parking meters.31
In response to the letter of Jadewell, the City Treasurer demanded the remittance of
Baguios share of the parking fees collected by Jadewell since it started operations.
Jadewell responded by saying that it had complied with this obligation.32
On 19 February 2002, the Sanggunian passed Resolution 37,33 expressing its intent to
rescind the MOA with Jadewell. The said Resolution enumerated in the "Whereas"
clauses the alleged violations of Jadewell prompting it to rescind the MOA. It reads:
xxxx
WHEREAS, it now appears from verified facts that:
1. contrary to its commitment to install a technologically based P & D parking
system, at no cost to the City, including "such equipment and paraphernalia to
meter the length of usage of the affected parking spaces for purposes of
payment of the parking fees", Jadewell has installed only fourteen (14)
CONSTILAW 2-SEC. I | 120

parking meters (only 12 of which are working) in only three (3) streets, and
Jadewell does not intend to install anymore [sic]; instead it has resorted as a
rule to an exceptional circumstance of manual collection of parking fees by
parking attendants who, despite express provisions of the Ordinance, are not
duly deputized by the DOTC-LTO. Despite assurances to the Honorable City
Mayor that Jadewell would stop collection of parking fees until the parking
meters have been duly installed, Jadewell continues to collect parking fees
manually by using undeputized parking attendants to do the collection;
2. contrary to its commitment to install a technologically based P & D parking
system, at no cost to the City, Jadewell has charged the cost of such and
similar equipment as direct costs, thus substantially eroding the share of the
City in the parking fees;
3. contrary to its obligation to post a performance bond, Jadewell has not fully
complied, and when required to update its performance bond Jadewell
refused to do so rationalizing its non-compliance by the assertion that they
are already performing and therefore are no longer obligated to post a
performance bond;
4. contrary to its obligation to remit the share of the City within the first ten
(10) days of the following month, Jadewell had initially resisted making
payments to the City on the pretext that the profits cannot be determined until
after the end of the fiscal year and initially failed to have their tickets prenumbered and registered with the Office of the City Treasurer;
5. contrary to its promise that the City would derive substantial revenue from
the on-street pay parking system, Jadewell has not paid a single centavo of
the City share in on-street parking operation; whatever Jadewell has remitted
to the City are properly chargeable against the share of the City in the MOA
on off-street parking (the Burnham Parking Area near Ganza), and it appears
less than what the City is entitled thereto; and
6. contrary to its representations that the P & D System which it proposed
would eliminate fraud in the collection of parking fees, Jadewell has
perpetrated fraud on the City by, according to the affidavit of its former
bookkeeper, Mr. Adonis Cabungan, doctoring the financial statements before
the same are submitted to City authorities.34
WHEREAS, there has been no substantial improvement of the traffic situation in the
City even with the introduction of the P & D Parking System and thus it increasingly
appears that the system introduced by Jadewell is more for revenue raising than for
regulatory purposes. As a consequence the legal principle applies that the collection of

taxes cannot be let to any person. In other words, government cannot allow private
persons to collect public funds for themselves with the agreement that part thereof or
as it turned out in this case no part thereof is shared with the City;
WHEREAS, in its financial reports to the City showing substantial loses [sic] and in its
statement to other persons that it is losing money on the project, the kindest thing that
the City can do for Jadewell is to prevent Jadewell from incurring anymore [sic] loses.
NOW THEREFORE, on motion of Hon. Bautista, and Hon. Cario, seconded by Hon.
Yaranon, Hon. Weygan and Hon. Tabora, be it RESOLVED, as it is hereby resolved, to
rescind the Memorandum of Agreement (MOA) executed between the City of Baguio
and Jadewell Parking System Corporation dated 26 June 2000 on the basis of the
foregoing premises and exercising its rights under Section 12 of the MOA on the
subject of On-Street Parking executed between the City of Baguio and Jadewell
Parking Systems Corporation dated 26 June 2000 and, more importantly, performing
its duty to protect and promote the general welfare of the people of Baguio City.
RESOLVED FURTHER, to direct the City Legal Officer to cause the proper notice of
rescission to Jadewell Parking Systems Corporation forthwith and to take all
appropriate steps to implement and enforce the intent of this Resolution.
RESOLVED FURTHERMORE, to inform all City officials and employees and all other
persons concerned to be guided accordingly.35
On 1 March 2002, the then City Mayor of Baguio, Bernardo M. Vergara, vetoed
Resolution 37, through a letter dated 1 March 2002 addressed to the Vice-Mayor, as
Presiding Officer of the Sanggunian, and its members. Mayor Vergara reasoned that it
was premature for the Sangguniang Panlungsod to rescind the MOA, because the
latter provides for a minimum period of five years before the right of rescission can be
exercised; and, that the right of Jadewell to due process was violated due to the lack of
opportunity to hear the latters side. The City Mayor proposed a re-negotiation of the
MOA with Jadewell as a solution to the problem.36
Meanwhile, on 13 March 2002, the DOTCCordillera Autonomous Region (DOTCCAR) issued a cease and desist order to Jadewell prohibiting it from clamping down
and/or towing away vehicles in Baguio City for violation of traffic rules and
regulations.37
On 17 April 2002, the Sanggunian resolved through a Resolution of the same date, to
override the veto of the City Mayor, worded thus:
NOW THEREFORE, the Sangguniang Panlungsod (City Council) in Regular Session
assembled, by twelve affirmative votes constituting more that [sic] a two-thirds vote of
CONSTILAW 2-SEC. I | 121

all its Members, has resolved to override, as it hereby overrides, the veto of His Honor,
Mayor Bernardo M. Vergara, of City Resolution Numbered 037, Series of 2002, entitled
"Rescinding the Memorandum of Agreement (MOA) Executed Between the City of
Baguio and Jadewell Parking Systems Corporation Dated 26 June 2000."38
Also at this time, Braulio D. Yaranon, who was then a member of the Sanggunian,
requested a special audit from the Commission on AuditCordillera Autonomous
Region (COA-CAR) on the operations of Jadewell as regards the pay parking project
embodied in the MOA.
On 27 May 2002, Jadewell filed with the RTC of Baguio City a Rule 65 Petition for
Certiorari, Prohibition and Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction, assailing the validity of Resolution No. 037-2002, which
rescinded the MOA between the Sangguniang Panlungsod and Jadewell.39 The case
was docketed as Civil Case No. 5285-R and was raffled off to RTC-Baguio (Branch
61).
On 8 October 2002, the RTC Br. 61 promulgated its Decision 40 finding the
Sanggunians rescission of the MOA unlawful. The Sanggunian then filed an appeal
assailing the RTCs decision with the Court of Appeals; the case was docketed as CAG.R. SP No. 74756.
Meanwhile, pending resolution of CA-G.R. SP No. 74756 before the CA, the
Sanggunian passed Resolution No. 089, Series of 2003. The resolution sought the
assistance of the DOTC-CAR specifically, for it to take immediate action against the
officers and personnel of Jadewell for defying the 13 March 2002 cease-and-desist
Order it issued prohibiting the latter from clamping down and/or towing away
vehicles.41 On 27 May 2003, City Mayor Vergara approved and signed Resolution No.
089-2003. In response, Jadewell filed a Petition for Indirect Contempt with the CA
against Mayor Vergara, the Sanggunian and other local government officers. The case
was docketed as CA-G.R. SP No. 77341. The original petition was followed by three
(3) supplemental petitions filed by Jadewell in the same case.
On 7 July 2003, the CA rendered a Decision 42 in CA G.R. SP No. 74756, affirming the
assailed Decision of the trial court which declared as invalid the Sanggunians
rescission of the MOA. The Sanggunian filed a Motion For Reconsideration, but this
was denied by the CA through a Resolution dated 4 September 2003. 43 Aggrieved by
the denial of their appeal, the Sanggunian filed a Rule 45 Petition for Review on
Certiorari with this Court, seeking to reverse and set aside the 7 July 2003 Decision
and its Resolution dated 04 September 2003 of the CA. The petition was docketed as
G.R. No. 160025, the first of the consolidated petitions herein.44

In CA-G.R. SP No. 77341, the CA dismissed in a Decision45 promulgated on 28 July

2004 the contempt petitions filed by Jadewell for lack of merit. The latters Motion For
Reconsideration was likewise denied by the CA.46Jadewell elevated the dismissal of its
contempt petitions to this Court on 8 December 2004 by filing a Rule 45 Petition for
Review on Certiorari. The case was docketed as G.R. No. 166094. This is not among
the consolidated petitions herein.
On 13 July 2003, the COA-CAR promulgated the requested Report.47 The Reports
objective was to ascertain compliance by the contracting parties the City of Baguio
and Jadewell with Ordinance No. 003-2000 and the MOA. The COA-CAR Report has
12 findings, essentially as follows:
1) The provisions of the MOA and its Supplement as regards the sharing of
the fees are contradicting, hence the share of the City Government cannot be
determined;48
2) There was no proper segregation by area of the parking fees collected,
hence the proper share of Baguio City cannot be determined;49
3) The City Government did not strictly implement the collection of penalties
arising from the late remittances of Jadewell, hence additional revenues were
not collected;50
4) The City Treasurer did not conduct an audit of the books and accounts of
Jadewell, thus the City Governments share from parking fees cannot be
ascertained;51
5) The use of the P&D parking meters were [sic] not maximized due to
Jadewells non-compliance with Ordinance No. 003-2000 and the MOA,
resulting in the collection of meager income from its use;52
6) The MOA does not specify the guidelines for determining the economic
viability of installing the parking meters and the period within which to install it
[sic];53
7) The Supplemental MOA was not confirmed by the City Council of Baguio in
violation of R.A. No. 7160 (the Local Government Code);54
8) The coverage of the parking operations contained in Annex "A" of the MOA
was not confirmed by the City Council in violation of R.A. No. 7160;55
9) The City Government failed to ensure proper compliance by Jadewell with
the MOA provisions;56
CONSTILAW 2-SEC. I | 122

10) The pay parking project was awarded to a bidder who did not have all the
qualifications as stated in the "Invitation to Bid" in violation of R.A. No. 7160
and Audit Circular No. 92-386;57
11) The provisions on deputization in Ordinance No. 003-2000 and the MOA
are contrary to R.A. No. 4136 (the Land Transportation and Traffic Code),
thus rendering it invalid;58
12) The monthly minimum amount to be remitted to the City Government is
doubtful due to the discrepancy in the amounts collected and expenses for
the year 1999 provided by the City Government to Jadewell as against the
amount certified by the Office of the City Architect and Parks SuperintendentBurnham Parks Office for the City Government overseeing the GanzaBurnham parking spaces.59
On 11 February 2004, after G.R. No. 160025 was filed and pending resolution by this
Court, the Sangguniang Panlungsod adopted Resolution No. 056, Series of 2004. The
said Resolution informs the general public that Jadewell had neither the authority nor
the police power to clamp, tow, or impound vehicles at any place in the City of
Baguio.60 Also, on the same date, the Sangguniang Panlungsod passed Resolution
No. 059, Series of 2004, in which it made a formal demand upon Jadewell to restore to
it possession of the Ganza Parking Area.61
With these developments, Jadewell filed directly with this Court its first indirect
contempt case against Bernardo M. Vergara (then City Mayor of Baguio), its ViceMayor, and the entire City Council for enacting Resolution Nos. 056 & 059, Series of
2004 pending resolution by this Court of G.R. 160025. The case was docketed as G.R.
No. 163052.
On 23 June 2004, this Court through its First Division, ordered G.R. No. 163052
consolidated with G.R. No. 160025.62
On 1 July 2004, then Baguio City Mayor Braulio D. Yaranon issued Executive Order
No. 001-04,63 the decretal portion of which reads:
NOW, THEREFORE, the undersigned City Mayor, pursuant to his authority to enforce
all laws and ordinances relative to the governance of the City, and to issue executive
orders for the faithful and appropriate enforcement and execution of such laws and
ordinances (Sec. 455 (b) (2) and (iii), R.A. 7160) hereby affirms and gives protection to
the right of the citizenry, particularly affected motor vehicle owners, operators, and
drivers, to refuse to submit to the enforcement of Ordinance 003-2000, by the Jadewell
Parking Systems Corporation, and further to refuse to pay public revenue in the form of
fees, charges, impositions, fines, and penalties provided for in the said ordinance, to

the said entity, such acts being patently illegal and prohibited by law; this Executive
Order shall be in force and effect until the City Council, as the legislative arm of the
City of Baguio, shall have adopted appropriate remedial or corrective measures on the
matters and concerns specified hereinabove.
On 8 July 2004, Mayor Yaranon issued a Memorandum 64 to the City Director of the
Baguio City Police Department, directing the department to stop and prevent Jadewell
from clamping, towing, and impounding vehicles; to arrest and file criminal charges
against Jadewell personnel who would execute the proscribed acts specified in the
said Memorandum; and to confiscate the equipment used by Jadewell to clamp, tow,
or impound vehicles under the authority of the rescinded MOA.
On 12 July 2004, Jadewell filed its second Petition for indirect contempt again with this
Court, this time against Mayor Yaranon for having issued the above-cited Order also
for the same reasons given in its first contempt petition with this Court. The Petition
was docketed as G.R. No. 164107.
Furthermore, on 15 July 2004, Jadewell filed an administrative case against Mayor
Yaranon before the Office of the President (OP). Docketed as Case No. OP 04-G-294,
it sought the mayors suspension and removal from office. The case against Mayor
Yaranon was for his issuance of the following: (1) Executive Order No. 001-04 dated 1
July 2004; (2) the Memorandum dated 7 July 2004 limiting the pay parking business of
Jadewell to certain parts of Baguio City;; and (3) Memorandum dated 8 July 2004
directing the Baguio City Police Department to prevent Jadewell from apprehending,
towing and impounding vehicles. A supplemental petition filed by Jadewell on 19
January 2005, complaining of Executive Order No. 005-2004, which was issued on 15
October 2004, was also included in administrative case OP 04-G-294.
On the following day, 16 July 2004, Jadewell filed a Supplemental Petition with Motion
for Leave of this Court65 in the second contempt petition before this Court, G.R. No.
164107, alleging as a supplemental fact, Mayor Yaranons Memorandum of 08 July
2004.
On 15 October 2004, Mayor Yaranon issued Executive Order No. 005-2004. 66 This was
a cease and desist order against Jadewell to prevent it from performing the following
acts: (1) charging and collecting from motorists, parking fees without their
consent;67 (2) seizing and detaining vehicles of motorists who refuse to pay parking
fees to Jadewell;68 and (3) using yellow-colored heavy wreckers or tow trucks bearing
the name "City of Baguio".69
In addition to Executive Order No. 005-2004, Mayor Yaranon issued Executive Order
No. 005-2004-A, which is essentially a rehash of Executive Order No. 005-2004.70
CONSTILAW 2-SEC. I | 123

On 25 October 2004, Jadewell filed a third Petition with this Court, praying that Mayor
Yaranon be cited for contempt and that Executive Order No. 005-2004 be
nullified.71 This case was docketed as G.R. No. 165564. On 16 November 2004,
Jadewell filed a Supplemental Petition to this Petition alleging as a supplemental
ground the issuance of Executive Order No. 005-2004-A.72
On 20 December 2004, Mayor Yaranon issued Administrative Order No. 622, Series of
2004, which declared that Jadewell exceeded its area of operations for the
administration of on-street parking and was thus required to show lawful cause why its
business permit should not be revoked. In response to this Order, Jadewell filed a
Second Supplemental Petition for contempt against Mayor Yaranon in G.R. No.
165564 on 25 January 2005.
On 10 January 2005, this Court through a Resolution 73 ordered the consolidation of
G.R. No. 160025 with G.R. Nos. 163052, 164107, and 165564.
On 17 January 2005, this Court denied Jadewells petition in G.R. No. 166094 for
failure to show any reversible error on the part of the CA in dismissing its petition for
contempt in CA-G.R. SP No. 77341. 74 Its Motion For Reconsideration was likewise
denied with finality.75
In the beginning of the year 2005, Jadewell attempted to renew its business permit
from the City of Baguio and tendered the fees required. However, the Office of the City
Mayor refused to renew the business permit and returned the amount
tendered.76 Because of these actions of Mayor Yaranon, Jadewell filed on 15 April
2005 its Third Supplemental Petition in G.R. No. 164107, which had been consolidated
with G.R. Nos. 160025, 163052, and 165564. Aside from its main prayer to cite the
mayor for contempt, Jadewell also prayed that Mayor Yaranon, a lawyer, be
disbarred.77 On 25 April 2005, this Court, through its Third Division, admitted the Third
Supplemental Petition of Jadewell.78
On 9 February 2005, this Court, in G.R. No. 160025, issued a Writ of preliminary
mandatory injunction ordering Mayor Yaranon to immediately reopen the streets and
premises occupied and/or operated by Jadewell. The Court also required Jadewell to
post a cash or surety bond in the amount of P100,000 within five days from receipt of
the order.79
The order, in part, reads:
Acting on the urgent motion dated January 26, 2005 of respondent Jadewell Parking
Systems Corporation for the issuance of a temporary mandatory/preventive order
and/or for writ of preliminary mandatory/prohibitory injunction pending appeal in G.R.
No. 160025, alleging that the effects of the acts of City Mayor Yaranon, unless stayed,

would also make effective what the petitioner Sangguniang Panglungsod ng Baguio
failed to obtain in the instant case, the net effect of which would not only be grave
damage and injury to the respondent but also to the City of Baguio, the Court further
Resolved:
(a) to ISSUE, the WRIT OF PRELIMINARY MANDATORY INJUNCTION
prayed for, effective immediately, commanding City Mayor Yaranon to
immediately reopen the streets and/or premises operated and/or occupied by
the respondent and to let them remain open, until further orders of this Court;
and
(b) to require petitioner to POST a CASH BOND or a SURETY BOND from a
reputable bonding company of indubitable solvency in the amount of ONE
HUNDRED THOUSAND PESOS (P100,000.00), with terms and conditions to
be approved by the Court, within five (5) days from notice, otherwise, the writ
of preliminary mandatory injunction herein issued shall AUTOMATICALLY be
lifted.
NOW THEREFORE, You, [City Mayor Braulio D. Yaranon], your agents,
representatives and/or any person or persons acting upon your orders or in your place
or stead, are hereby DIRECTED to IMMEDIATELY REOPEN the streets and/or
premises operated and/or occupied by the respondents and to let the said streets and
premises remain OPEN, until further orders from this Court.
On 8 April 2005, Mayor Yaranon issued a Memorandum 80 directing Col. Isagani Nerez,
Director of the Baguio City Police District, to create a special task force to stop
Jadewell from clamping, towing, and impounding vehicles in violation of parking rules
in Baguio City; to impound the wrecker/tow trucks used by Jadewell.
On 20 April 2005, this Court promulgated a Resolution in G.R. No. 160025, finding
Mayor Yaranon guilty of direct and indirect contempt. He was cited for direct contempt
when it was proven that he had submitted pleadings before this Court containing
falsehoods. Mayor Yaranon had stated in his Compliance that the streets were opened
for Jadewell to resume operations, but upon inspection these were found to be
closed.81 He was also cited for indirect contempt, for having continuously refused to
carry out the writ issued by this Court to reopen the streets so Jadewell could resume
operations.82 This Court likewise fined Mayor Yaranon the amount of P10,000, which
he paid. The Court further ordered the National Bureau of Investigation (NBI) to
immediately arrest and detain Mayor Yaranon pending his compliance with the 9
February 2005 writ of preliminary mandatory injunction issued by this Court, which
ordered the reopening of some streets so Jadewell could continue its operations.83

CONSTILAW 2-SEC. I | 124

On 10 August 2005, Benedicto Balajadia, et al. filed Civil Case No. 6089-R against
Jadewell before the RTCBaguio City. The case was subsequently raffled to Branch 3
of the RTC presided by Judge Fernando Vil Pamintuan.84 Balajadia, et al. sought to
nullify the MOA between Jadewell and the City Government of Baguio and its enabling
ordinance, Ordinance No. 003-2000. The complainants also prayed for the issuance of
a Temporary Restraining Order (TRO) and for a writ of preliminary injunction against
Jadewell.
On 19 April 2006, Judge Pamintuan issued an Order in Civil Case No. 6089-R granting
the prayer of complainants Balajadia et al. for the issuance of a Writ of Preliminary
Prohibitory Injunction. The injunction was meant to restrain Jadewell from proceeding
with the supervision and collection of parking, towing, and impounding fees on the
streets of Baguio City. Further, Judge Pamintuan ordered the holding in abeyance of
the implementation of City Ordinance No. 003-2000 and the MOA.85
On 27 April 2006, Jadewell filed with this Court a Rule 65 Petition for Certiorari,
Prohibition, and Mandamus against Judge Pamintuan86 for refusing to dismiss Civil
Case No. 6089-R. The case was docketed as G.R. No. 172215. On the same day,
Jadewell filed a Petition asking this Court to cite Judge Pamintuan for contempt. This
fourth contempt case, albeit primarily against a member of the judiciary, was docketed
as G.R. No. 172216.
On 19 June 2006, G.R. No. 172215 was ordered consolidated with G.R. Nos. 160025,
163052, 164107, and 165564.87
On 23 June 2006, Mayor Yaranon wrote Jadewell a letter demanding that it desist from
operating the pay parking system in Baguio City. Simultaneously, he wrote the
Sanggunian, requesting it to cancel Ordinance No. 003-2000, the enabling ordinance
for the MOA.
On 26 June 2006, Jadewell filed a Supplemental Petition 88 in G.R. No. 172215
complaining of Judge Pamintuans issuance of the following Orders in Civil Case No.
6089-R: (a) Order dated 24 April 200689 directing the parties to file a pre-trial brief and
setting the pre-trial of the case; (b) Order dated 01 June 200690 informing Jadewell that
public respondent was not suspending the proceedings, because he believed he was
not covered by the writ issued by this Court; (c) Order dated 14 June 2006 91 upholding
the writ he issued in the civil case despite his receipt of a copy of the writ of preliminary
injunction issued by this Court; and (d) Order dated 16 June 200692directing Jadewell
to comply with the writ of preliminary prohibitory injunction under pain of direct
contempt.
On the same day, 26 June 2006, the Office of the President (OP) rendered a Decision
in OP 04-G-294, the administrative case Jadewell had filed against Mayor Yaranon,

finding him guilty of grave misconduct, abuse of authority, and oppression. Mayor
Yaranon was meted out a penalty totalling 12 months suspension from office. 93This
suspension was implemented by the Department of Interior and Local Government
(DILG). Aggrieved by his suspension, Mayor Yaranon filed his Motion For
Reconsideration, which was denied on 22 August 2006 by the OP.
On 29 June 2006, in response to Mayor Yaranons letters of 23 June 2006, Jadewell
filed before this Court yet another case for contempt its fifth contempt case, and the
third one specifically against Mayor Yaranon. In addition to its prayer to cite the mayor
for contempt, Jadewell also prayed that Mayor Yaranon, a lawyer, be disbarred. 94 The
case was docketed as G.R. No. 173043.
On 31 July 2006, G.R. No. 173043 was ordered consolidated with G.R. Nos. 160025,
163052, 164107, 165564, and 172215.95 On 27 September 2006, G.R. No. 172216
was consolidated with G.R. Nos. 160025, 163052, 164107, 165564.96
On 23 August 2006, while the consolidated cases were pending resolution before this
Court, the Sangguniang Panlungsod enacted Resolution No. 204, Series of 2006. The
Resolution directed the City Legal Officer to notify Jadewell of the Baguio City
Governments intention to rescind the MOA, and to inform Jadewell to stop its
operations under the MOA 60 days after receipt of the Notice.97
On 28 August 2006, the legal counsel for Jadewell wrote to Baguio City Vice-Mayor
Bautista, Jr., informing him that the OP had denied the Motion for Reconsideration of
Mayor Yaranon assailing the OP resolution ordering the latters suspension as City
Mayor of Baguio City.98 The counsel for Jadewell likewise stated in his letter that they
were aware that the Sanggunian was planning to issue a resolution to repeal
Ordinance No. 003-2000 and rescind the MOA. The letter requested the Vice-Mayor to
veto the measure in light of the pending petitions with the Supreme Court. 99 The said
counsel likewise sent a similar letter to the Sanggunian, urging it to desist from
implementing the repeal of Ordinance No. 003-2000 and the rescission of the MOA
pending the resolution of the cases with the Supreme Court.100
On 13 September 2006, Mayor Yaranon appealed to the CA, in a case docketed as CA
G.R. CV SP No. 96116, praying for the lifting of the penalty of suspension meted him in
OP 04-G-294, but this appeal was denied. Mayor Yaranon moved for
reconsideration.101
On 22 September 2006, City Legal Officer Rabanes wrote a letter to Jadewell, through
its President, Mr. Rogelio Tan, informing Jadewell of Resolution No. 204, Series of
2006, which rescinded the MOA, and ordering it to stop operations within 60 days from
notice.102 This letter was received on the same day it was issued; 103 hence, the 60-day
CONSTILAW 2-SEC. I | 125

period lapsed on 22 November 2006. This notice, together with the resolution,
constitute the second act of rescission of the MOA by the city officials of Baguio.
On 19 October 2006, Jadewell filed the sixth contempt case with this Court against the
acting City Mayor of Baguio, Reinaldo A. Bautista, Jr., and the members of the
Sanggunian, including City Legal Officer Melchor Carlos R. Rabanes, for the second
act of rescission of the MOA.104 The case was docketed as G.R. No. 174879.
On 9 October 2007, the CA dismissed Mayor Yaranons Petition in CA G.R. CV SP No.
96116 on the ground that it had become moot and academic due to Mayor Yaranons
failure to be re-elected in the 17 May 2007 elections. Mayor Yaranon filed a Motion for
Reconsideration on 07 November 2007, but this was also denied by the CA on 24
January 2008. Thus, on 17 March 2008, Mayor Yaranon filed a Rule 45 Petition before
this Court seeking to reverse and set aside the CA Decision and Resolution. It was
docketed as G.R. No. 181488.
On 12 November 2008, G.R. No. 181488 was ordered consolidated with the cases
already mentioned.105
THE ISSUES
1.
On
claim
in
act
of
rescission.

G.R.
No.
160025
G.R.
No.
174879
rescission
was
a

and
that
valid

on
the
act

the
second
of

Whilst the issues are spread out among the nine cases, we have grouped these
according to what are common to the specific cases.
In our effort to simplify the issues and provide forms of relief to the parties that are not
purely academic, it is necessary to examine the operative effects that may result from
any resolution of this Court. Such examination may also help guide the parties in their
future actions, and perhaps the overly-litigated matters brought before us in the
consolidated petitions may finally be put to rest.
We note at the outset that on 22 November 2006, 60 days had lapsed from receipt of
the letter dated 22 September 2006, informing Jadewell of the decision of the City of
Baguio to rescind the MOA under Section 12 thereof. It may be recalled that Section
12 requires that notice of the intention to rescind be given 60 days prior to the
effectivity of the rescission. Jadewell has not questioned the legal efficacy of this
notice. It has brought this matter of a second rescission to the Courts attention only as
a matter of contumacious behavior on the part of the respondents in G.R. No. 174879,
in the same way that it brought various actions of the public respondents before the

Court in its other contempt petitions. Since the legal efficacy of the rescission in 2006
has not been contested by Jadewell in any of the petitions before us, we thus consider
this notice of rescission to have taken legal effect and therefore, at the latest, the MOA
between the City of Baguio and Jadewell has ceased to legally exist as of 22
November 2006.
Parenthetically, we note that while the validity of the second act of rescission described
in G.R. No. 174879 is not principally determinative of the respondents liability for
indirect contempt therein, a conclusion that the second act of rescission was
undertaken competently and appropriately will to a certain degree impact our
appreciation of such possible liability. We will discuss this issue in our subsequent
discussion on the charges of contempt.
Inasmuch as there is no longer any existing MOA, no order of this Court can have the
effect of directing the City of Baguio to enforce any of the terms of the MOA, which
brings us to the matter of G.R. No. 160025. In whatever direction we rule on the
question of the validity of the first act of rescission, such ruling will only have the effect
of either providing Jadewell a basis to seek damages from the City of Baguio for the
wrongful termination of the MOA, should we find wrongful termination to have taken
place, or, deny Jadewell that right. The possible susceptibility of the City of Baguio and
its officials to an action for damages on a finding of wrongful termination is why we do
not consider G.R. No. 160025 as having been rendered moot by the lawful rescission
of the MOA on 22 November 2006. Thus, we will proceed to rule on the issues in G.R.
No. 160025.
The fallo of the RTC Decision upheld by the CA, which affirmance is the lis mota in
G.R. No. 160025, reads as follows:
WHEREFORE, judgment is rendered declaring both Sangguniang Panlungsod
Resolution No. 037, Series of 2002 and the April 17, 2002 Resolution overriding the
Mayors veto as NULL and VOID. The Writ of Preliminary Injunction earlier issued by
this Court is made PERMANENT, with costs against respondents.106
The RTC did not order the respondents therein to comply with the MOA. An order to
perform a contract is not necessarily subsumed in an order not to terminate the same.
Contrast this legal point with the fact that the prayer of Jadewell in its original petition
asked the RTC, in relevant part:
...that the writ of preliminary injunction be made permanent and the writs applied for be
issued against the respondents nullifying and voiding Resolution No. 037, series of
2002 and the resolution over-riding the veto and instead, directing them to perform
what the memorandum of agreement requires them to do. (Emphasis supplied)107
CONSTILAW 2-SEC. I | 126

This latter part, which is effectively a prayer for a permanent mandatory injunction
against respondents therein to perform the terms of the MOA, are not in the fallo of the
RTC decision. We consider therefore that the RTC deliberately withheld granting the
specific prayer to order Baguio City to perform the MOA. No motion to correct or clarify
the said fallo having been filed by Jadewell, the prayer to order the city officials of
Baguio to perform the MOA is hereby deemed abandoned.
We further note three things:
1. Jadewell has not questioned - in its Petition, Reply to Comment, and
Memorandum before this Court - the implication of the RTC and CA Decisions
to the effect that the Sanggunian had the authority to perform acts of
contractual rescission on behalf of the City of Baguio when both these courts
ignored the issue raised by Jadewell in its Petition before the RTC, and we
therefore do not consider this to be a genuine issue in this Petition before us;
2. While the Sangguniang Panlungsod has insinuated that there was fraud
and excess of authority on the part of the mayor in the execution 108 of the
MOA - because the latter provided for a smaller sharing of "20 % from the
gross profit of the operation or 50% of the net profit whichever is higher"
instead of the intended "20% of gross receipts,"109- petitioners in G.R. No.
160025 conceded even at the RTC level that they are not assailing the MOA
for being defective but for having been breached in the performance. We thus
disregard all arguments in G.R. No. 160025 regarding the validity of the
execution of the MOA, for being a non-issue in this case;110
3. We also immediately set aside claims of Jadewell in its Petition before the
RTC that an alternative relief should be provided by the courts in the form of
compensation for terminated Build-Operate-Transfer (BOT) contracts under
the BOT Law (Republic Act No. 6957) as there is not the slightest basis on
record that the administration of on-street parking can be classified as an
infrastructure contract, a basic element that must be present for any contract
to come within the terms of the BOT Law.
Having preliminarily screened out the non-issues in this case, we proceed to examine
the rulings of the courts a quo in G.R. 160025.
The CA affirmed the RTC Decision in toto, along the following points:
1. On the sole procedural issue. - The RTC was correct in treating the Petition
as one for permanent injunction with a prayer for a preliminary injunction,
instead of treating it by its formal title: "Petition for Certiorari, Prohibition and
Mandamus with a Prayer for a Writ of Preliminary Injunction." It was correct in

holding that if the Petition had been treated by its formal denomination, then it
would have been dismissed for failing to satisfy the requirement that the act
sought to be nullified was rendered in a judicial or quasi-judicial capacity by
the respondents, but then this formal denomination could be disregarded and
the nature of the Petition should be determined by its allegations and prayers.
Since there was a prayer to permanently enjoin respondents from enforcing
the questioned resolutions, the RTC was correct in treating it as one for
permanent injunction.
2. On the substantive issues:
a. On the lack of due process afforded Jadewell. The RTC was
correct in ruling that Jadewell was denied the right to be heard
before the Sanggunian rescinded the MOA. There is no evidence on
record that the Sanggunian afforded Jadewell an opportunity to
present its side or refute the charges of the latters violation
committed under the MOA.111
b. On the authority of the RTC to consider the effect of Section 9 of
the MOA112 when Jadewell never raised the matter of Section 9 in
any of its pleadings. The RTC correctly considered Jadewells
letter dated 24 November 2001, addressed to the Sanggunian and
offered during the trial, which introduced the subject matter of the
five (5) year guarantee against rescission provided in Section 9 of
the MOA. The CA regarded the RTCs consideration of said letter as
judicious and added that even without it, the MOA, and its
provisions, form part of the case records.113
c. On the failure to observe the 60-day notice requirement. The
RTC correctly found that the Sanggunian cannot validly and
unilaterally rescind the MOA without observing the provisions in
Section 12 of the MOA requiring that a 60-day notice be given before
rescission can take place. To allow the Sanggunian to unilaterally
rescind the MOA without giving Jadewell an opportunity to present
its side is to render the right to rescission provided in the MOA
legally vulnerable.114
d. On the lack of substantiveness of the alleged breach of
performance of the MOA by Jadewell. The CA reviewed the
records of the case and upheld the findings of the RTC that the
violations of Jadewell were not substantial to merit the consequence
of rescission under the MOA.115

CONSTILAW 2-SEC. I | 127

We elucidate on the arguments of the parties, the RTC, and the CA.
In its Petition before the RTC, Jadewell argues that the rescission of the MOA was not
valid, on due process grounds, and also because there was no substantial breach on
its part to justify a rescission of the MOA. 116 It also asserts that the Sanggunian had no
authority to rescind the MOA, because the latter was not a party thereto.117
Jadewell sought a writ of preliminary injunction to prevent the implementation of the
questioned Resolution, and prayed that after hearing, the preliminary injunction be
made permanent. It further prayed for the issuance of a writ of certiorari to nullify the
assailed Resolution; and for a mandatory injunction to compel the City Government to
perform the latters obligations under the MOA. 118 Jadewell alternatively invoked the
provisions of Section 18 of the Implementing Rules and Regulations (IRR) of the BOT
Law,119 in the event the RTC would uphold the validity of the questioned Resolution.
The trial court ruled that the rescission violated the due process clause of the
Constitution and failed to meet the requirements for rescission under the Civil Code
and the MOA itself. In the Sanggunians Memorandum, on appeal before the CA, the
Sanggunian assigned three errors to the Decision of the trial court: (1) the RTC
ignored the evidence on record and the requirements of Rule 65 when it declared the
subject Resolution void; (2) Jadewell was not denied due process when the MOA was
rescinded; and (3) by ruling that the Sangguniang Panlungsod had no right of
rescission for the first 5 years of the MOA an issue not raised in the pleadings the
trial court improperly took up the cudgels for Jadewell in the case.120
As earlier stated, the CA upheld the RTCs Decision in toto.
The Sanggunian filed its Motion for Reconsideration arguing that the CA had erred as
follows: (1) treating Jadewells petition as an original action for injunction; 121 (2) ruling
that Jadewell was deprived of due process122when it rescinded the MOA; and (3)
finding that the MOA stipulated for a five-year minimum guarantee against
rescission.123 This was denied, and this denial and the CA Decision are the subjects of
G. R. 160025.
2.
G.R.
No.
172215
Prohibition
and
Mandamus,
Jadewell
against
Judge
for not dismissing Civil Case No. 6089-R

filed

Certiorari,
by
Pamintuan

Jadewell directly filed the instant Rule 65 Petition for Certiorari before this Court to
nullify the denial by the trial court of its Motion to Dismiss and its Motion for
Reconsideration of the same order,124 and for ordering Jadewell to cease collecting
parking fees, and from towing and impounding vehicles on the streets of Baguio City. It

also seeks to nullify the proceedings in Civil Case No. 6089-R, invoking both res
judicata and litis pendentia.125 It contends that, since the issue on the validity of the
questioned city ordinance and the MOA was favorably ruled upon previously by RTC
Branches 7 and 61 of Baguio City in separate cases, Branch 3 of the same RTC
presided by Judge Pamintuan is bound by the rulings of the other branches.126 Litis
pendentia is being invoked in relation to the petitions already before this Court.
Mayor Yaranon is impleaded in this case on the basis of the order of Judge Pamintuan
to the city mayor to perform his duty to supervise the roads, streets and park of Baguio
City, in coordination with the police and the LTO during the validity of the Writ of
Injunction that Judge Pamintuan issued.127
The main issue to be resolved in Jadewells Petition for certiorari is whether Judge
Pamintuans rulings in Civil Case No. 6089-R violated the res judicata/litis pendentia
doctrines.
3.
G.R.
No.
181488

Certiorari
petition
filed
by
seeking
to
reverse
Resolutions
9
October
2008
and
24
January
in
CA-G.R.
SP
No.
96116
upheld
the
validity
of
his
as City Mayor of Baguio.

The
Yaranon
dated
2008
which
suspension

Mayor Yaranons instant Petition before this Court raises the following issues: (1) that
his failed re-election bid was not a supervening event in the final determination by the
CA of whether he was guilty of grave misconduct, abuse of authority, and oppression;
and (2) that the CA should rule on the substantive validity of his suspension.
4. The Petitions for Contempt
a. G.R. No. 163052 This is the first contempt petition filed by Jadewell directly with
this Court against City Mayor Vergara, the Vice Mayor, and the entire Sanggunian, for
enacting Resolution Nos. 056 & 059, Series of 2004. To recall, Resolution No. 056,
Series of 2004 informs the general public that Jadewell had neither the authority nor
the police power to clamp, tow or impound vehicles at any place in the City of
Baguio.128 In Resolution No. 059, Series of 2004, the City of Baguio made a formal
demand upon Jadewell to surrender the Ganza and Burnham Park Parking Areas
within thirty days. In the same Resolution, the City of Baguio also directed the City
Legal Officer to file the appropriate legal actions necessary to recover the said parking
areas and to ask for damages against Jadewell.129

CONSTILAW 2-SEC. I | 128

The core issue to be resolved in this case is whether the Sanggunian Panlungsod is
guilty of indirect contempt for enacting the above resolutions, pending resolution of
G.R. No. 160025.
b. G.R. No. 164107 This contempt petition was filed directly with this Court against
then Baguio City Mayor Braulio D. Yaranon after he issued Executive Order No. 00104 announcing that, as City Mayor, he would give protection to motor vehicle owners,
operators, and drivers who would refuse to submit to the enforcement of traffic rules by
Jadewell such as by refusing to pay the parking fees or fines the latter imposes.
Yaranon also issued a Memorandum dated 8 July 2004, ordering the arrest and filing
of criminal charges against Jadewell personnel who would clamp, tow, or impound
motor vehicles in defiance of Executive Order No. 001-04. This was followed by a
Memorandum on 8 April 2005 directing the Baguio City Police District to create a
special task force to prevent Jadewell from clamping, towing, and impounding vehicles
found to be in violation of the parking rules in Baguio City.
The issue to be resolved in this petition is whether Mayor Yaranon could be cited for
contempt for the above, pending resolution of the issue of the validity of the rescission
of the MOA in G.R. Nos. 160025 and 163052.
c. G.R. No. 165564 Jadewell filed this third contempt petition against Mayor Yaranon
for issuing Executive Order No. 005-2004 dated 15 October 2004. The order directs
Jadewell to cease and desist from: (a) charging and collecting parking fees on the
streets of Baguio City without the consent of the City Government; 130 (b) seizing and
detaining vehicles of motorists who refuse to pay the parking fees to Jadewell 131 and
(c) using yellow-colored tow trucks bearing the name "City of Baguio". 132 Jadewells
petition also seeks to nullify Executive Order No. 005-2004.
On 16 November 2004, Jadewell filed a Supplemental Petition. The act complained of
this time was the issuance of Executive Order No. 005-2004-A which is a mere rehash
of Executive Order No. 005-2004.133 On 25 January 2005, Jadewell filed a Second
Supplemental Petition in connection with Mayor Yaranons issuance of Administrative
Order No. 622, Series of 2004. The said administrative order declared that Jadewell
exceeded its area of operations for the administration of on-street parking and it
required to show lawful cause why its business permit should not be revoked.
Like in the earlier contempt petitions, Jadewell alleges that these issuances by Mayor
Yaranon are contumacious because they were made while the main petition, G.R. No.
160025 questioning the rescission of the MOA by the Sanggunian, is still pending
resolution with this Court.

d. G.R. No. 172216 On 27 April 2006, Jadewell filed a petition for contempt against
Judge Fernando Vil Pamintuan, Presiding Judge of RTC-Branch 3 of Baguio City, in
relation to Civil Case No. 6089-R pending before his sala. 134 In the said civil case,
Judge Pamintuan issued an Order directing Jadewell to desist from the collection of
parking fees, from towing and impounding vehicles on the streets of Baguio City and to
hold in abeyance the implementation of City Ordinance 003-2000 and the MOA. The
validity of the Order of Judge Pamintuan is the subject of a Petition for Certiorari,
Prohibition, and Mandamus instituted by Jadewell in G.R. No. 172215.
The main issue to be resolved in this case is whether Judge Pamintuan should be
cited for indirect contempt by this Court for issuing the assailed Orders.
e. G.R. No. 173043 On 29 June 2006, Jadewell filed yet another contempt case
against Mayor Yaranon. In addition to its prayer to cite him for contempt, Jadewell also
prays that Mayor Yaranon, as a lawyer, be disbarred. 135 Jadewell instituted this fifth
contempt case after it received a letter from Mayor Yaranon demanding that it stop its
business operations in Baguio City, at the same time directing the Sangguniang
Panlungsod to cancel Ordinance 003-2000.
The issue to be resolved in this case is whether Mayor Yaranon was guilty of indirect
contempt and professional misconduct for the above acts pending resolution of G.R.
Nos. 160025, 163052,164107, 165564 and 172215.136
f. G.R. No. 174879 - On 19 October 2006, Jadewell filed a contempt case against the
acting City Mayor of Baguio, Reinaldo A. Bautista, Jr., and the members of the
Sangguniang Panlungsod, including City Legal Officer Melchor Carlos R. Rabanes, in
connection with the second act of rescission.137 Jadewell also asks that the
respondents who are lawyers, namely: Rocky Thomas A. Balisong, Edilberto B.
Tenefrancia, Faustino A. Olowan, Federico J. Mandapat, Perlita L. Chan-Rondez, and
Jose M. Molintas, be disbarred.
These acts, in Jadewells view, are contumacious in light of the pending G.R. No.
160025 before this Court.
OUR RULINGS
1. On G.R. No. 160025
a.
On
Jadewells
Permanent Injunction.

the
Petition

as

Treatment
one

of
for

CONSTILAW 2-SEC. I | 129

The CA sustained the position of the Sanggunian that certiorari could not prosper
because when the latter enacted Resolution 37, the Sanggunian was exercising its
legislative function and not its judicial or quasi-judicial function. The writ of certiorari
under Rule 65 requires: (a) that it is directed against a tribunal, a board or an officer
exercising judicial or quasi-judicial functions; (b) that such tribunal, board, or officer has
acted without or in excess of jurisdiction or with grave abuse of discretion; and (c) that
there is no appeal nor any plain, speedy and adequate remedy in the ordinary course
of law.138

In Lee, Jr. v. Court of Appeals,142 the controversy to be resolved was whether the
appeal filed by the petitioner was one under Rule 65 or Rule 42. The determination of
the issue was crucial, because the appellate court had dismissed the appeal of the
petitioner, saying that the wrong mode of appeal had been used. The CA had ruled that
petitioner should have filed a certiorari petition under Rule 65 instead of a petition
under Rule 42 to appeal the assailed decision rendered by the RTC in the exercise
of its appellate jurisdiction.
We held:

The CA nevertheless proceeded to treat the Petition as an original action for injunction,
ruling in this wise:
xxxx
Although in the trial court, Jadewell filed said petition for Certiorari, Prohibition and
Mandamus under Rule 65, it is essentially one for Injunction under Rule 58. Said
petitions form and substance satisfied all the requirements of a civil action for
Injunction, which is the proper remedy under the attendant circumstances.
The rules of procedure ought not to be applied in a very rigid technical sense, rules of
procedure are used only to help secure, not override substantial justice. If a technical
and rigid enforcement of the rules is made, their aim would be defeated.
Considering the clear and patent denial of due process committed by the Sanggunian
in precipitately rescinding the MOA and in the interest of substantial justice, WE deem
it more prudent to treat the petition filed below as an action for Injunction under Rule
58, which is well within the jurisdiction of the trial court. Consequently, the present
appeal shall be considered as an appeal from the permanent injunction ordered by the
trial court, which is properly appealable to this Court, as held in Casilan vs. Ybaez.139
xxxx
We sustain the ruling of the appellate court treating Jadewells original action for
certiorari as one for injunction based on the allegations in the latters pleadings.
In Ramon Jimenez, Jr. v. Juan Jose Jordana, 140 the issue to be resolved was whether
the nature of the action was one for specific performance or for recovery of real
property. In determining that the case was one for the recovery of real property, the
Court characterized the suit on the basis of the allegations in the Complaint. We
restated the rule that the nature of an action is determined by the material averments
in the complaint and the character of the relief sought. In the recent case of Reyes v.
Alsons Development and Investment Corporation,141we likewise ruled that the nature of
an action is determined by the allegations in the pleadings.

Our perusal of the petition filed before the Court of Appeals clearly shows that it is a
petition for review under Rule 42, and not a special civil action for certiorari under Rule
65. We note that in the Court of Appeals petition, under the heading "Nature of the
Petition," petitioner stated that it was a "petition for review on certiorari to set aside,
invalidate and reverse the Decision dated December 14, 2001 of public respondent
Judge Victor T. Llamas, Jr." Also, the reversal sought was premised on the ground that
the decision was issued in gross error. The statement under the heading "Nature of the
Petition" that the trial courts decisions were issued with grave abuse of discretion
amounting to lack of jurisdiction, and even the caption impleading the lower courts,
would not automatically bring the petition within the coverage of Rule 65. It is hornbook
doctrine that it is not the caption of the pleading but the allegations therein that
determine the nature of the action. (Emphasis supplied)
In the original action filed by Jadewell before the RTC of Baguio City, although the
action was clearly denominated as a Petition for Certiorari, Prohibition and Mandamus
against the Sangguniang Panlungsod, the allegations actually supported an action for
injunction under Rule 58 of the Revised Rules on Civil Procedure. As can be gleaned
from its allegations and especially in its prayers, Jadewell filed the case with the trial
court with the ultimate end of restraining the implementation of Resolution No. 037,
Series of 2002.
We agree with the CA when it ruled that Jadewell sought permanent injunction aside
from the auxiliary remedy of preliminary injunction, thus:
An action for injunction is a recognized remedy in this jurisdiction. It is a suit for the
purpose of enjoining the defendant, perpetually or for a particular time, from
committing or continuing to commit a specific act, or compelling the defendant to
continue performing a particular act. It has an independent existence. The action for
injunction is distinct from the ancillary remedy of preliminary injunction, which cannot
exist except only as part or an incident of an independent action or
proceeding.143 xxxx...

CONSTILAW 2-SEC. I | 130

In Garcia v. Adeva,144 this Court had the opportunity to clarify that while injunction can
be a provisional remedy, it can also be a main case. The Court had to make this
preliminary distinction in order to find out whether the SEC had the jurisdiction to
prevent, on a permanent basis, the commission of certain acts by the respondents.
Thus, the necessity to make the distinction between injunction as a provisional remedy
and injunction as a main case. It found guidance from Garayblas v. Atienza, Jr., 145 and
quoting from the latter:
Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or
refrain from doing a certain act. It may be the main action or merely a provisional
remedy for and as an incident in the main action. The Court has distinguished the main
action for injunction from the provisional or ancillary remedy of preliminary injunction,
thus:
The main action for injunction is distinct from the provisional or ancillary remedy of
preliminary injunction which cannot exist except only as part or an incident of an
independent action or proceeding. As a matter of course, in an action for injunction, the
auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may
issue. Under the law, the main action for injunction seeks a judgment embodying a
final injunction which is distinct from, and should not be confused with, the provisional
remedy of preliminary injunction, the sole object of which is to preserve the status quo
until the merits can be heard. A preliminary injunction is granted at any stage of an
action or proceeding prior to the judgment or final order. It persists until it is dissolved
or until the termination of the action without the court issuing a final injunction.
We, therefore, rule that the CA did not commit any error in treating Jadewells Petition
for Certiorari as an original action for injunction.
b. On the denial of due process.
The second issue in this Petition is the correctness of the CAs ruling that Jadewell was
deprived of due process when the Sangguniang Panlungsod rescinded the MOA. The
findings of the CA are as follows:
In the instant case, evidence on record does not show that before the Sanggunian
passed the disputed Resolution it gave Jadewell an opportunity to present its side.
Neither did the Sanggunian convene an investigatory body to inquire into Jadewells
alleged violations nor at least invite Jadewell to a conference to discuss the alleged
violations, if only to give Jadewell the chance to refute any evidence gathered by it
against the latter. As it is, the Sanggunian arrogated upon itself the role of a
prosecutor, judge and executioner in rescinding the MOA, all in clear violation of
Jadewells constitutionally embedded right to due process.146

x x x.
Both courts held that Jadewell was denied due process. When the denial of due
process argument is raised, it is directed primarily against the exercise of
governmental authority that "deprives life, liberty and property" without observance
what is, in the circumstances, the applicable standards of "due process." It is not an
argument that is relevant in situations of contractual breach between two purely private
entities, nor is it available against the government when the latter is not discharging a
governmental function, but merely pursuing a purely commercial activity in a
proprietary capacity. In order to consider the due process argument, this Court must
first determine whether the MOA was entered into by the City of Baguio in a
governmental capacity, or in a purely proprietary capacity.
The regulation of on-street and off-street parking is a governmental function that can
be exercised by local governments. It is important to understand the objective of the
Baguio City Government in: (1) privatizing the administration of on-street and off-street
parking; and (2) its execution of a MOA with Jadewell. This can be gleaned from the
Explanatory Note and other provisions of the agreement, to wit:
The City of Baguio has earned the reputation of the CLEANEST AND GREENEST
HIGHLY URBANIZED CITY for the previous years. This has become possible due to
the collective effort of both the Citizens of Baguio and the City Government. However,
the increase in population, volume of vehicles and the absence of a regulatory
measure to address this concern gradually tainted what used to be a reputation we
were proud of.
The ever increasing problems, specifically those relevant to the Traffic situation is at
this point the biggest contributor to environmental degradation. Other Salient points we
must consider relevant to this matter are the problems on OBSTRUCTION AND
DOUBLE PARKING which are very rampant. We further add to these the problems on
DISORGANIZED PARKING, LACK OF DEPUTIZED AGENTS to monitor, supervise
and enforce traffic rules and regulations.
At this point in time, we feel the immediate need of focusing on these problems. There
is an urgent need to adopt measures that would alleviate these matters. This we
recommend that PARKING SPACES should be REGULATED in such a manner that it
would bring advantage both to the City Government and the Citizens of Baguio. We
further propose the collection of REGULATORY FEES that would be used in
maintaining our roads and to hire people that would de deputized to help ease the
problems as stated above.
Finally, we believe that our roads are beyond the Commerce of Man. To convert our
roads into PAY PARKING SPACES, would be violative of this principle. However to
CONSTILAW 2-SEC. I | 131

REGULATE its use and its eventual effect would redound to the GENERAL WELFARE
will be an appreciated gesture to help preserve our image as the CLEANEST AND
GREENEST HIGHLY URBANIZED CITY.
xxxx
SECTION 4. Parking spaces. A parking place may be divided into parking spaces and
for the purposes of this Ordinance, each space or for a number of spaces as
determined by the private parking operator in consultation with the concerned Official
of the City of Baguio.
xxxx
SECTION 5. Prohibitions against parking outside the parking spaces. No spaces shall
park any motor vehicle on the sidewalk or cause or permit any motor vehicle to wait to
any road or length of road on which in any place in which or adjacent to or in close
proximity to which there is a parking place.
xxxx
SECTION 7. Payment of Prescribed Charges. (1) No person shall park any motor
vehicle in a parking place or parking space during the times specified in this Ordinance
without paying the prescribed charge for the required parking period; (2) The
prescribed charge payable in respect to the parking of a motor vehicle in a parking
space shall be paid by the insertion into the parking meter provided for that parking
space a coin/coins of Philippine Currency or by using cards in order to obtain the
payment ticket to evidence the payment of the prescribed charge; (3) The payment
ticket shall be displayed at a conspicuous part of a motor vehicle in a parking place or
parking space; (4) The payment ticket shall be valid to be used on any parking space
within the authorized period indicated in the payment ticket.
xxxx
SECTION 22. Rules. The Memorandum of Agreement (MOA) to be entered into by the
City Mayor shall be governed by this Ordinance.
From the above, the following are clear: (1) that the City of Baguio decided on the
privatization of the administration of parking for environmental and peace and safety
reasons, both of which are within its powers under Section 458(A)(5)(v) and (vi) of the
Local Government Code; and (2) that the terms of agreement between the City of
Baguio and Jadewell involve the delegation of governmental functions in terms of
regulating the designation and use of parking spaces as well as the collection of fees
for such use. These are indicators that any privatization contract pursuant to the above

Resolution takes the essential character of a franchise because what is being

privatized is a government-monopolized function.
It would thus be relevant to ask if there is a provision in the applicable laws or the
franchise (MOA) that grants the City of Baguio the right to revoke the latter either at
will, or upon the satisfaction of certain conditions, such that ordinary due process
protection can be considered to have been waived by the franchisee. We must caution
that when we refer to revocation at will here, we are referring to the revocation of
resolutory, not suspensive, obligations.147
We have looked closely at Resolution No. 003-2000 and the MOA and have
additionally reflected on the applicable provision under the Civil Code. We have come
to the conclusion that:
(a) There is only one provision that allows for unilateral revocation of the
MOA, which can be found in Section 9 thereof:
9. Minimum Guaranty The FIRST PARTY guaranties (sic) a minimum period
of five (5) years against rescission; provided that after such period, the parties
may agree to increase to a reasonable rate the parking fees and the share of
the city from the parking fees collected as provided for in the guidelines,
(Annex "B");
(b) This Section 9 requires that five years must have lapsed presumably
from the date of execution of the MOA before the unilateral right to revoke
the MOA can be exercised;
(c) Therefore, before the five year period has lapsed, the right to revoke the
MOA arises only under Article 1191 of the Civil Code, which reads:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of
the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek rescission,
even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing
the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.
CONSTILAW 2-SEC. I | 132

From the above, it appears that in order to effect a valid revocation of the MOA prior to
the lapse of the 5-year period provided for in Section 9, the City of Baguio had to
approach the problem from one or both of two perspectives: one, negotiate the
termination of the MOA with Jadewell, or two, exercise its option under Article 1191 of
the Civil Code.
The first option, a negotiated pretermination of the contract, is an inherent right of
every party in a contract. This can be inferred from the freedom of the parties to
contract and modify their previous covenants provided it would not be contrary to law,
morals, good customs, public order or public policy.148 Despite the provision on the
minimum warranty against rescission stipulated in the MOA, the parties were not
constrained to mutually modify such restriction. The Sanggunian could have proposed
to Jadewell the possibility of lifting the warranty against rescission subject to the
condition that the latter will comply with its obligations under the MOA.

warranted.155 Thus, in an extrajudicial decree of rescission, revocation cannot be

completely exercised solely on a partys own judgment that the other has committed a
breach of the obligation156but always subject to the right of the other party to judicially
impugn such decision.
It is important to contextualize that the agreement entered into by the City of Baguio
with Jadewell is the embodiment of a grant of franchise imbued with public interest and
is not merely an agreement between two private parties.
It is our view that the first act of rescission by the City of Baguio may be valid even if
there is a stipulation against it within the first five years of the MOAs existence. Article
1191 of the New Civil Code provides a party the right to rescind the agreement and
clearly overrides any stipulation to the contrary. However, the grounds that would serve
as basis to the application of the said article must be clearly established.

This scenario could have impressed upon Jadewell that its contractual relations with
the city government of Baguio were less than ideal. The suggested approach for the
Sanggunian could have been legally sound and practical. Obviously, this was not done
in this case; thus, Jadewells Complaint before the RTC of Baguio City.

In the exercise of this option under Article 1191, was it necessary for the City of Baguio
to provide Jadewell an opportunity to air its side on the matter before the former
implemented the rescission of the MOA? In the instant case, was Jadewell deprived of
procedural due process?

The second option is the exercise of the unilateral right to rescind a bilateral contract
on the part of a party who believes that it has been injured by a breach substantial
enough to warrant revocation. Where one party allegedly failed to comply with his
obligations under a contract, the injured party may rescind the obligation if the other
does not perform or is not ready and willing to perform.149 We will examine the acts of
Baguio City in relation to what is allowed under Article 1191.

We answer in the negative. We disagree with the rulings of the RTC and the CA that
Jadewell was deprived of due process. In Taxicab Operators of Metro Manila v. The
Board of Transportation,157 we confronted the issue of whether the petitioners were
denied procedural due process when the respondent Board of Transportation issued a
circular ordering the phasing out of old vehicles to be used as taxicabs. In the said
case, the phase-out was embodied in a circular that was promulgated without holding
a public hearing or at least requiring those affected to submit their position papers on
the policy to be implemented. We held for the respondent Board, and ruled in this wise:

Rescission under Article 1191 takes place through either of two modes: (1) through an
extrajudicial declaration of rescission; or (2) upon the grant of a judicial decree of
rescission.
Extrajudicial declaration of rescission is recognized as a power which does not require
judicial intervention.150 If the rescission is not opposed, extrajudicial declaration of
rescission produces legal effect151 such that the injured party is already relieved from
performing the undertaking.152
However, the power of declaring extrajudicial rescission conferred upon the injured
party is regulated by the Civil Code. If the extrajudicial rescission is impugned by the
other party, it shall be subject to a judicial determination 153where court action must be
taken, and the function of the court is to declare the rescission as having been properly
or improperly made, or to give a period within which the debtor must perform the
obligation alleged to be breached.154 A unilateral cancellation of a contract may be
questioned in courts by the affected party to determine whether or not cancellation is

Dispensing with a public hearing prior to the issuance of the Circulars is neither
violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and
Banco Filipino, 44 SCRA 307 (1972):
Previous notice and hearing as elements of due process, are constitutionally required
for the protection of life or vested property rights, as well as of liberty, when its
limitation or loss takes place in consequence of a judicial or quasi-judicial proceeding,
generally dependent upon a past act or event which has to be established or
ascertained. It is not essential to the validity of general rules or regulations
promulgated to govern future conduct of a class or persons or enterprises, unless the
law provides otherwise.
In the instant case, the assailed act by the Sanggunian Panlungsod in rescinding the
MOA be it first or second act of rescission was clearly in the exercise of its
CONSTILAW 2-SEC. I | 133

legislative or administrative functions and was not an exercise of a judicial or quasijudicial function. The Sanggunian Panlungsod does not possess any judicial or quasijudicial functions. The preamble of the MOA lends support to this view. Evidently, the
foremost reason why the agreement was entered into by the parties was to provide
order, given Baguio Citys parking problems in identified areas, as well as to generate
income.
The objectives of the Sanggunian Panlungsod, as well as its intention to rescind the
MOA; because it deems to no longer serve the interest of the City of Baguio, are
clearly an exercise of its legislative or administrative function. However, it is another
matter as to whether the City of Baguio was able to clearly establish the grounds as
basis for the exercise of its right to rescind.
c.
On
the
substantial breach of the MOA.

allegation

of

Jadewells

The Baguio City government has repeatedly mentioned that Jadewell had so far
installed only 14 parking meters, with only 12 functioning. The COA-CAR Report dated
13 July 2003 enumerated 12 findings, 158 a majority of which indicates that Jadewell
was remiss in the fulfilment of its obligations under the MOA. While Finding Nos. (1),
(2), (3), (4), (5), (8) and (12) of the COA-CAR Report state that Jadewell collected
parking fees, Jadewell failed to properly remit the same. Finding No. (11) of the COACAR Report states that Jadewell failed to have its parking attendants deputized, 159 a
condition under the MOA that is also important to the overall objective of the endeavor.
The MOA does not specifically provide for the exact number of parking meters to be
installed by Jadewell pursuant to the parties objective in regulating parking in the city.
Nevertheless, 100 parking spaces were allotted as mentioned in Annex A of the
MOA.160 The agreement also obligates Jadewell to have its parking attendants
deputized by the DOTC-LTO so that they shall have the authority to enforce traffic
rules and regulations in the regulated areas.161 To the Courts mind, these are two of
the most important obligations that Jadewell had to comply with, considering the nature
and objective of the agreement it had entered into.
Despite the enumeration of the above-mentioned faults of Jadewell, we do not make a
categorical finding that there was substantial breach committed by Jadewell to justify a
unilateral rescission of the MOA. We find, however, that the RTC had not properly
received evidence that would allow it to determine the extent of the claimed violations
of the MOA. Had these violations by Jadewell been proven in a proper hearing, the
finding of a substantial breach of the MOA would have been a distinct probability.
Unfortunately, neither the RTC nor the CA provided a clear basis for their rulings on the
extent of the breach of the MOA by Jadewell. Save from reiterating the Sanggunians

litany of violations said to be committed by Jadewell, there was no testimony on record

to prove such facts and no indication as to whether the RTC or CA dismissed them or
took them at face value.
Whatever the extent of breach of contract that Jadewell may have committed and the
enumeration of Jadewells alleged faults in Resolution 37 is quite extensive the City
of Baguio was still duty-bound to establish the alleged breach.
Matters became complicated when the RTC and the CA lumped the issues on the due
process violation of Baguio City with Jadewells alleged substantial breaches under the
MOA, instead of making a clear finding on the existence and extent of such breach.
The facts and legal issues were thus muddled.
We find fault in the lower and appellate courts lapse in examining the issue on
Jadewells alleged substantial breach. Evidence-taking had to be undertaken by these
courts before they could arrive at a judicial conclusion on the presence of substantial
breach.
We thus DENY the Petition of the Sanggunian Panlungsod in G.R. No. 160025 and
AFFIRM the questioned CA Decision. However, we reject the ruling made by the
appellate court that the violations of Jadewell under the MOA were not substantial. We
hold that there is no sufficient evidence on record to make such determination.
While Jadewell prays for damages against the public respondent, and while ordinarily
we could grant the same, the context of this case prevents us from giving any form of
recompense to Jadewell even if the rescission of the MOA did not follow the required
legal procedure. This is because it would be appalling to grant Jadewell any award of
damages, considering (1) it installed only 14 out of the apparently 100 contemplated
parking meters; (2) its employees, private citizens who did not possess any authority
from the LTO, were manually collecting parking fees from the public, and (3) it did not,
apparently properly remit any significant amount of money to the City of Baguio. These
three facts are uncontested, these omissions are offensive to the concept of public
service that the residents of Baguio were promised through Jadewell. From its
ambiguous responses extant in the records, it is clear that Jadewell does not appear to
be an investor who has lost in its investments in the Baguio City project. Thus, we do
not award any damages to Jadewell.
2.
On
G.R.
165564,
172216,
(The Contempt Petitions)

Nos.
173043

163052,
and

164107,
174879

Section 3 of Rule 71 of the Revised Rules of Civil Procedure enumerates the acts
constituting indirect contempt, thus:
CONSTILAW 2-SEC. I | 134

(a) Misbehavior of an officer of a court in the performance of his official duties

or in his official transactions;

resist attempts of Jadewell to collect parking fees or clamp/tow vehicles that do not
observe the parking regulations.

(b) Disobedience of or resistance to a lawful writ, process, order, or judgment

of a court, including the act of a person who, after being dispossessed or
ejected from any real property by the judgment or process of any court of
competent jurisdiction, enters or attempts or induces another to enter into or
upon such real property, for the purpose of executing acts of ownership or
possession, or in any manner disturbs the possession given to the person
adjudged to be entitled thereto;

We find scant jurisprudence to guide us on this matter. The closest situation is that
presented in Southern Broadcasting Network v. Davao Light and Power,162 penned by
Justice Felix Makasiar. In that case, petitioners representative, Carmen Pacquing,
wrote a letter to President Marcos asking for his intervention so that her Motion for
Reconsideration (MR) of the resolution of this Court denying her Petition could be
favorably granted. Respondent Davao Light asked that petitioner Pacquing be cited for
contempt, arguing that her act in writing to the President asking him to intervene in the
case showed disrespect to and disregard for the authority of this Court as the final
arbiter of all cases. We found petitioner Pacquing guilty of contempt, thus:

(c) Any abuse of or any unlawful interference with the processes or

proceedings of a court not constituting direct contempt under Section 1 of this
Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or
degrade the administration of justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such
without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody of
an officer by virtue of an order or process of a court held by him.
But nothing in this section shall be so construed as to prevent the court from issuing
process to bring the respondent into court, or from holding him in custody pending
such proceedings.
The rule alerts us to three possible situations, wherein, in the context of the facts of
these petitions, contumacious behaviour could have been committed by public
respondents. First, disobedience or resistance to a lawful order of this Court under
paragraph (b). Second, unlawful interference with the proceedings of this Court under
paragraph (c). Third, improper conduct tending, directly or indirectly, to impeded,
obstruct, or degrade the administration of justice by this Court under paragraph (d).
Jadewell, in G.R. Nos. 163052, 164107, 165564, 172216, 173043, and 174879, bases
its charges of indirect contempt against public respondents on a claim that any action
that tends to stop the implementation of the MOA is contumacious. Such actions
include desistance orders to desist against Jadewell itself, the second act of unilateral
rescission of the MOA; orders to other public officers to prevent Jadewell from
exercising its authority under the MOA; and the official encouragement for motorists to

x x x. WE hold that such actuation of herein petitioners representative only bespeaks

more of her contumacious attempt to trifle with the orderly administration of justice
because if she know that this Court will ultimately decide the case "regardless of the
Presidents intervention," then she should have desisted from writing to the President.
In the light of the foregoing, there is no doubt that Mrs. Pacquing committed an
"improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the
administration of justice" (Section 3, par. [d] Rule 71, Rules of Court) and impair the
respect due to the courts of justice in general, and the Supreme Court, in particular.
In the above case, respondent Carmen Pacquing was clearly asking the President to
commit an improper act to influence the Supreme Court that obstructs the orderly
administration of justice, as the Court is constitutionally required to act independently
free from the promptings of the President. Pacquing clearly violated both Sections (c)
and (d) of Section 3, Rule 71.
No such similar situation occurred here. Public respondents never asked anyone to
employ pressure or influence on this Court for the formers benefit.
Instead, the acts that have been allegedly committed by public respondents are acts
done pursuant to their belief that: (a) the MOA has been validly voided, and more
importantly, (b) that Jadewells personnel do not have the legal authority to perform the
governmental function of administering the regulation of on-street and off-street
parking, of towing or clamping vehicles that violate such regulation, and of collecting
parking fees from motorists.
It is important to note that the Court never gave a mandatory injunction that is couched
in a way that requires public respondents to fully comply with the terms of the MOA.
The writ of preliminary mandatory injunction (WPMI) issued on 9 February 2005 is
directed to Mayor Yaranon only, and it directs him to perform only one specific act: to
CONSTILAW 2-SEC. I | 135

reopen, and maintain open, the street and premises then being occupied and operated
by Jadewell.

cannot be held in contempt therefor. We deny the prayer in the petitions to disbar the
respondents therein who are lawyers.

Mayor Yaranon did not immediately comply with this WPMI. Thus, this Court fined
him P10,000 on 20 April 2005, and ordered the NBI to arrest him if he further failed to
comply with the WPMI. Subsequently, Mayor Yaranon paid the fine, and there is
nothing on record to show that he has, since April of 2005, further defied this Court on
that score.

We also do not find Judge Fernando Vil Pamintuan liable for contempt in G.R. No.
172216.

The Court did not issue a WPMI specifically ordering the parties to observe the terms
of the MOA. Thus, public respondents were not expressly prohibited to act on their
beliefs regarding the validity or invalidity of the MOA, or, the authority or lack of
authority of Jadewell personnel to perform governmental functions in the streets of
Baguio.
This is an important result, because to hold otherwise is to effectively grant one of the
parties a mandatory injunction even without an express resolution to this effect from
the Court. Without an express order, the pendency of a suit before the Supreme Court
is not a prima facie entitlement of provisional relief to either party.
Public respondents therefore were, at liberty to question and inform the public of their
belief regarding the lack of authority of Jadewell and its personnel to regulate public
parking in Baguio. They were certainly free to formally write Jadewell on their beliefs
and pass the corresponding resolutions to this effect. The mayor was also not under
legal compulsion to renew Jadewells business permit in view of his opinion that
Jadewell was exceeding its allowable area of operation, which Jadewell was not able
to fully disprove. This is especially true for two important reasons: (1) there is an
uncontested cease and desist order that was issued by the DOTC-CAR on 13 March
2002 which Jadewell defied well into 2005, and (2) public respondents are city officials
of Baguio who have the legal duty to ensure the laws are being followed, including
laws that define who may enforce regulations on public parking.
That Jadewell personnel do not have the legal authority to enforce regulations on
public parking is categorical from the Letter dated 1 February 2001 by the Regional
Director of the DOTC-CAR denying the request of Jadewell for the deputation of its
personnel.163
We therefore do not find any of the public respondents who were then officials of the
City of Baguio, liable for indirect contempt, and thereby dismiss G.R. Nos. 163052,
164107, 165564, 173043 and 174879. In G.R. 174879, we have already pronounced
that the Sanggunian was within its full right to perform the second act of rescission,
and thus, it is even with more reason, that its members and the City Legal Officer

Jadewell wants this Court to cite Judge Pamintuan for contempt for issuing a writ of
preliminary prohibitory injunction ordering Jadewell to stop collecting parking fees; to
refrain from supervising the parking in Baguio City; as well as to hold in abeyance the
implementation of the MOA and its enabling ordinance.164
It was only on 5 June 2006 that this Court, in G.R. No. 172215, issued a Temporary
Restraining Order (TRO)165directing the trial court to discontinue the proceedings in
Civil Case No. 6089-R. Upon receipt by Judge Pamintuan of the TRO, he immediately
ordered the cancellation of the 29 June 2006 hearing.166
We do not consider the promulgation of the assailed writ of preliminary prohibitory
injunction against Jadewell as a defiance of our writ issued on 9 February 2005,
considering, it was directed against Mayor Yaranon only. We have held in Leonidas v.
Supnet that "a party cannot be held in indirect contempt for disobeying a court order
which is not addressed to him."167 We note that Judge Pamintuan observed deference
to the Orders of this Court when he immediately suspended the proceedings in Civil
Case No. 6089-R upon receipt of the TRO.
G.R. No. 172215
In this Petition for certiorari, prohibition, and mandamus under Rule 65 of the Rules of
Civil Procedure, Jadewell assails the Orders of RTC-Branch 3 (Baguio City) denying its
motion to dismiss and motion for reconsideration in Civil Case No. 6089-R.
We deny the petition of Jadewell in this case.
In Manuel Camacho v. Atty. Jovito Coresis, Jr., 168 we described the nature of special
civil action for certiorari under Rule 65, as follows:
A special civil action for certiorari under Rule 65 of the Rules of Court is an
extraordinary remedy for the correction of errors of jurisdiction. To invoke the Courts
power of judicial review under this Rule, it must first be shown that respondent tribunal,
board or officer exercising judicial or quasi- judicial functions has indeed acted without
or in excess of its or his jurisdiction, and that there is no appeal, or any plain, speedy
and adequate remedy in the ordinary course of law. Conversely, absent a showing of
lack or excess of jurisdiction or grave abuse of discretion amounting to lack or excess
CONSTILAW 2-SEC. I | 136

of jurisdiction, the acts of the respondents may not be subjected to our review under
Rule 65.
In Indiana Aerospace University v. Commission on Higher Education, 169 this Court ruled
thus:
An order denying a motion to dismiss is interlocutory, and so the proper remedy in
such a case is to appeal after a decision has been rendered. A writ of certiorari is not
intended to correct every controversial interlocutory ruling; it is resorted to only to
correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to
lack of jurisdiction. Its function is limited to keeping an inferior court within its
jurisdiction and to relieve persons from arbitrary acts -- acts which courts or judges
have no power or authority in law to perform. It is not designed to correct erroneous
findings and conclusions made by the court.
In East Asia Traders, Inc. v. Republic of the Philippines, et al.,170 we decreed:
The petition for certiorari and prohibition filed by petitioner with the Court of Appeals is
not the proper remedy to assail the denial by the RTC of the motion to dismiss. The
Order of the RTC denying the motion to dismiss is merely interlocutory. An interlocutory
order does not terminate nor finally dispose of the case, but leaves something to be
done by the court before the case is finally decided on the merits. It is always under
the control of the court and may be modified or rescinded upon sufficient grounds
shown at any time before final judgment. This proceeds from the courts inherent
power to control its process and orders so as to make them conformable to law and
justice. The only limitation is that the judge cannot act with grave abuse of discretion,
or that no injustice results thereby.
East Asia Trader also reiterated our ruling in Indiana Aerospace. Further, in Bonifacio
Construction Management Corporation v. Hon. Perlas Bernabe,171 we reiterated our
rulings in East Asia Traders and Indiana Aerospace. We had ruled in these earlier
cases that an order of the trial court denying a motion to dismiss is an interlocutory
order, and to use a writ of certiorari to assail it is improper.
The procedural policy in the cited cases was again referred to in Bernas v. Sovereign
Ventures, Inc.,172highlighting the following:
Let it be stressed at this point the basic rule that when a motion to dismiss is denied by
the trial court, the remedy is not to file a petition for certiorari, but to appeal after a
decision has been rendered. (Emphasis supplied)
G.R. No. 181488

The question of law raised by petitioner Yaranon in this Petition for Review on
Certiorari is whether the CA correctly dismissed his appeal questioning the validity of
his suspension from office as City Mayor, on the ground that his suit had become moot
and academic due to his non-re-election to office. The CA cited Crespo v. Provincial
Board of Nueva Ecija173 as basis for the dismissal.
For his part, Mayor Yaranon contends that the appellate court should have ruled on the
validity of his suspension from office despite his failure to get re-elected as City Mayor.
He argues that he has the right to know whether his suspension was valid or not and,
in the event his suspension is declared invalid, Mayor Yaranon believes he is entitled
to the salaries and benefits accruing during the period he was suspended.
We deny the Petition of Mayor Yaranon.
The appeal of Mayor Yaranon has been rendered moot and academic. We hold that
the resolution of the issue raised herein would serve no practical purpose.
In Miriam College v. Court of Appeals, 174 we ruled that a case becomes moot and
academic when there is no more actual controversy between the parties, or when no
useful purpose can be served in passing upon the merits. Further, courts will not
determine a moot question in which no practical relief can be granted.175
Mayor Yaranon has already served his suspension. We find no practical value in
remanding his case to the appellate court for the determination of the factual basis and
legal issues of his appeal pertaining to the validity of his suspension as then City
Mayor of Baguio City.
We have held in Nicart, Jr. v. Sandiganbayan (Third Division), 176 that an issue becomes
moot when a petitioner is not entitled to substantial relief:
x x x [T]he propriety of the preventive suspension of petitioner effected through the
assailed Resolution of February 15, 2001 has become a moot issue, it appearing that
he has already served his suspension. An issue becomes moot and academic when it
ceases to present a justifiable controversy so that a determination thereof would be of
no practical use and value. In such cases, there is no actual substantial relief to which
petitioner would be entitled to and which would be negated by the dismissal of the
petition.
We cannot sustain Mayor Yaranons argument that his appeal should not have been
dismissed because, in the event that the finding of the Office of the President to
suspend him is reversed, he is still entitled to the salaries accruing during the period he
was suspended. We take note of the cases cited by Mayor Yaranon such as Crespo v.
Provincial Board of Nueva Ecija, 177 Baquerfo v. Sanchez178 and Reyes v.
CONSTILAW 2-SEC. I | 137

Cristi,179 among others. These cases involve substantial issues such as denial of due
process and procedural irregularities other than a mere claim for entitlement to
salaries. The factual background and the legal issues for resolution in the cases
mentioned are not similar to the case at bar.
In Triste v. Leyte State College Board of Trustees 180 the Court elucidated on the nature
of the salary of a public official:

Pamintuan for indirect contempt and to disbar Sangguniang Panlungsod

members Rocky Thomas A. Balisong, Edilberto B. Tenefrancia, Faustino A.
Olowan, Federico J. Mandapat, Perlita L. Chan-Rondez, Jose M. Molintas,
Melchor Carlos B. Rabanes and Mayor Braulio D. Yaranon are all hereby
DISMISSED for lack of merit. No pronouncement as to costs.
c.) We DENY the Petition of Jadewell for lack of merit in G.R. No. 172215. We
likewise DENY its prayer for the issuance of a temporary restraining order
and/or writ of preliminary injunction for being moot and academic. No
pronouncement as to costs.

Mechem states that "(l)ike the requirement of an oath, the fact of the payment of a
salary and/or fees may aid in determining the nature of a position, but it is not
conclusive, for while a salary or fees are usually annexed to the office, it is not
necessarily so. As in the case of the oath, the salary or fees are mere incidents and
form no part of the office. Where a salary or fees are annexed, the office is often said
to be coupled with an interest; where neither is provided for it is a naked or honorary
office, and is supposed to be accepted merely for the public good." (Emphasis
supplied)

G.R. No. 84818 December 18, 1989

Given the circumstances of this case, we find that Mayor Yaranons claim for unpaid
salaries, in case of exoneration, does not constitute such substantial relief that would
justify the revival of his appeal. Even if we did sustain his Petition, we nevertheless find
that it has been mooted by our resolution in the main petition.

PHILIPPINE
COMMUNICATIONS
SATELLITE
CORPORATION, petitioner,
vs.
JOSE LUIS A. ALCUAZ, as NTC Commissioner, and NATIONAL
TELECOMMUNICATIONS COMMISSION,respondents.

WHEREFORE, we hereby rule as follows:

Rilloraza, Africa, De Ocampo & Africa for petitioner.

a.) In G.R. No. 160025, the Petition of the Sangguniang Panlungsod of

Baguio City is DENIED. The CA Decision dated 7 July 2003 in CA G.R. SP
No. 74756 is hereby AFFIRMED with modification. There is not enough
evidence on record to conclude that Jadewells violations were sufficient to
justify the unilateral cancellation of the MOA by the Sangguniang Panlungsod
of Baguio City; at the same time, neither the RTC nor the CA provided a clear
finding whether the breach of the MOA by Jadewell was substantial. We affirm
the CA as to the rest of its dispositions in its assailed Decision. Nevertheless,
no award of damages is hereby made in favour of Jadewell and neither is
there any pronouncement as to costs.
b.) G.R. Nos. 163052, 164107, 165564, 172216, 173043 and 174879, the
Petitions of Jadewell to cite Mayor Braulio D. Yaranon, Mayor Bernardo M.
Vergara, Acting City Mayor Reinaldo A. Bautista, Vice Mayor Betty Lourdes F.
Tabanda, the members of the Sangguniang Panlungsod of Baguio City
namely: Elmer O. Datuin, Antonio R. Tabora, Edilberto B. Tenefrancia,
Federico J. Mandapat, Jr., Richard A. Carino, Faustino A. Olowan, Rufino M.
Panagan, Leonardo B. Yangot, Jr., Rocky Thomas A. Balisong, Galo P.
Weygan, Perlita L. Chan-Rondez, Jose M. Molintas, and Judge Fernando Vil

d.) We DENY the Petition of Mayor Braulio D. Yaranon in G.R. No. 181488,
for lack of merit and AFFIRM the CA Decision CA-G.R. SP No. 96116. No
pronouncement as to costs.

Victor de la Serna for respondent Alcuaz.

REGALADO, J.:
This case is posed as one of first impression in the sense that it involves the public
utility services of the petitioner Philippine Communications Satellite Corporation
(PHILCOMSAT, for short) which is the only one rendering such services in the
Philippines.
The petition before us seeks to annul and set aside an Order 1 issued by respondent
Commissioner Jose Luis Alcuaz of the National Telecommunications Commission
(hereafter, NTC), dated September 2, 1988, which directs the provisional reduction of
the rates which may be charged by petitioner for certain specified lines of its services
by fifteen percent (15%) with the reservation to make further reductions later, for being
violative of the constitutional prohibition against undue delegation of legislative power
and a denial of procedural, as well as substantive, due process of law.
CONSTILAW 2-SEC. I | 138

The antecedental facts as summarized by petitioner 2 are not in dispute. By virtue of

Republic Act No. 5514, PHILCOMSAT was granted "a franchise to establish, construct,
maintain and operate in the Philippines, at such places as the grantee may select,
station or stations and associated equipment and facilities for international satellite
communications." Under this franchise, it was likewise granted the authority to
"construct and operate such ground facilities as needed to deliver telecommunications
services from the communications satellite system and ground terminal or terminals."

member nations, as well as in the Convention and the Operating Agreement of the
International Maritime Satellite Organization (INMARSAT) of 53 member nations,
which two global commercial telecommunications satellite corporations were
collectively established by various states in line with the principles set forth in
Resolution 1721 (XVI) of the General Assembly of the United Nations.

Pursuant to said franchise, petitioner puts on record that it undertook the following
activities and established the following installations:

1. Philippine Long Distance Telephone Company;

1. In 1967, PHILCOMSAT established its provisional earth station in

Pinugay, Rizal.
2. In 1968, earth station standard "A" antenna (Pinugay I) was
established. Pinugay I provided direct satellite communication links
with the Pacific Ocean Region (the United States, Australia, Canada,
Hawaii, Guam, Korea, Thailand, China [PROC], New Zealand and
Brunei) thru the Pacific Ocean INTELSAT satellite.
3. In 1971, a second earth station standard "A" antenna(Pinugay III)
was established. Pinugay II provided links with the Indian Ocean
Region (major cities in Europe, Middle East, Africa, and other Asia
Pacific countries operating within the region) thru the Indian Ocean
INTELSAT satellite.
4. In 1983, a third earth station standard "B" antenna (Pinugay III)
was established to temporarily assume the functions of Pinugay I
and then Pinugay II while they were being refurbished. Pinugay III
now serves as spare or reserved antenna for possible contingencies.
5. In 1983, PHILCOMSAT constructed and installed a standard "B"
antenna at Clark Air Field, Pampanga as a television receive-only
earth station which provides the U.S. Military bases with a 24-hour
television service.
6. In 1989, petitioner completed the installation of a third standard
"A" earth station (Pinugay IV) to take over the links in Pinugay I due
to obsolescence. 3
By designation of the Republic of the Philippines, the petitioner is also the sole
signatory for the Philippines in the Agreement and the Operating Agreement relating to
the International Telecommunications Satellite Organization (INTELSAT) of 115

Since 1968, the petitioner has been leasing its satellite circuits to:

2. Philippine Global Communications, Inc.;

3. Eastern Telecommunications Phils., Inc.;
4. Globe Mackay Cable and Radio Corp. ITT; and
5. Capitol Wireless, Inc.
or their predecessors-in-interest. The satellite services thus provided by petitioner
enable said international carriers to serve the public with indispensable communication
services, such as overseas telephone, telex, facsimile, telegrams, high speed data, live
television in full color, and television standard conversion from European to American
or vice versa.
Under Section 5 of Republic Act No. 5514, petitioner was exempt from the jurisdiction
of the then Public Service Commission, now respondent NTC. However, pursuant to
Executive Order No. 196 issued on June 17, 1987, petitioner was placed under the
jurisdiction, control and regulation of respondent NTC, including all its facilities and
services and the fixing of rates. Implementing said Executive Order No. 196,
respondents required petitioner to apply for the requisite certificate of public
convenience and necessity covering its facilities and the services it renders, as well as
the corresponding authority to charge rates therefor.
Consequently, under date of September 9, 1987, petitioner filed with respondent NTC
an application 4 for authority to continue operating and maintaining the same facilities it
has been continuously operating and maintaining since 1967, to continue providing the
international satellite communications services it has likewise been providing since
1967, and to charge the current rates applied for in rendering such services. Pending
hearing, it also applied for a provisional authority so that it can continue to operate and
maintain the above mentioned facilities, provide the services and charge therefor the
aforesaid rates therein applied for.

CONSTILAW 2-SEC. I | 139

On September 16, 1987, petitioner was granted a provisional authority to continue

operating its existing facilities, to render the services it was then offering, and to charge
the rates it was then charging. This authority was valid for six (6) months from the date
of said order. 5 When said provisional authority expired on March 17, 1988, it was
extended for another six (6) months, or up to September 16, 1988.
The NTC order now in controversy had further extended the provisional authority of the
petitioner for another six (6) months, counted from September 16, 1988, but it directed
the petitioner to charge modified reduced rates through a reduction of fifteen percent
(15%) on the present authorized rates. Respondent Commissioner ordered said
reduction on the following ground:
The Commission in its on-going review of present service rates
takes note that after an initial evaluation by the Rates Regulation
Division of the Common Carriers Authorization Department of the
financial statements of applicant, there is merit in a REDUCTION in
some of applicant's rates, subject to further reductions, should the
Commission finds (sic) in its further evaluation that more reduction
should be effected either on the basis of a provisional authorization
or in the final consideration of the case. 6
PHILCOMSAT assails the above-quoted order for the following reasons:
1. The enabling act (Executive Order No. 546) of respondent NTC empowering it to fix
rates for public service communications does not provide the necessary standards
constitutionally required, hence there is an undue delegation of legislative power,
particularly the adjudicatory powers of NTC;
2. Assuming arguendo that the rate-fixing power was properly and constitutionally
conferred, the same was exercised in an unconstitutional manner, hence it is ultra
vires, in that (a) the questioned order violates procedural due process for having been
issued without prior notice and hearing; and (b) the rate reduction it imposes is unjust,
unreasonable and confiscatory, thus constitutive of a violation of substantive due
process.

I. Petitioner asseverates that nowhere in the provisions of Executive Order No. 546,
providing for the creation of respondent NTC and granting its rate-fixing powers, nor of
Executive Order No. 196, placing petitioner under the jurisdiction of respondent NTC,
can it be inferred that respondent NTC is guided by any standard in the exercise of its
rate-fixing and adjudicatory powers. While petitioner in its petition-in-chief raised the
issue of undue delegation of legislative power, it subsequently clarified its said
submission to mean that the order mandating a reduction of certain rates is undue
delegation not of legislative but of quasi-judicial power to respondent NTC, the
exercise of which allegedly requires an express conferment by the legislative body.
Whichever way it is presented, petitioner is in effect questioning the constitutionality of
Executive Orders Nos. 546 and 196 on the ground that the same do not fix a standard
for the exercise of the power therein conferred.
We hold otherwise.
Fundamental is the rule that delegation of legislative power may be sustained only
upon the ground that some standard for its exercise is provided and that the legislature
in making the delegation has prescribed the manner of the exercise of the delegated
power. Therefore, when the administrative agency concerned, respondent NTC in this
case, establishes a rate, its act must both be non- confiscatory and must have been
established in the manner prescribed by the legislature; otherwise, in the absence of a
fixed standard, the delegation of power becomes unconstitutional. In case of a
delegation of rate-fixing power, the only standard which the legislature is required to
prescribe for the guidance of the administrative authority is that the rate be reasonable
and just. However, it has been held that even in the absence of an express
requirement as to reasonableness, this standard may be implied. 7
It becomes important then to ascertain the nature of the power delegated to
respondent NTC and the manner required by the statute for the lawful exercise thereof.
Pursuant to Executive Orders Nos. 546 and 196, respondent NTC is empowered,
among others, to determine and prescribe rates pertinent to the operation of public
service communications which necessarily include the power to promulgate rules and
regulations in connection therewith. And, under Section 15(g) of Executive Order No.
546, respondent NTC should be guided by the requirements of public safety, public
interest and reasonable feasibility of maintaining effective competition of private
entities in communications and broadcasting facilities. Likewise, in Section 6(d)
thereof, which provides for the creation of the Ministry of Transportation and
Communications with control and supervision over respondent NTC, it is specifically
provided that the national economic viability of the entire network or components of the
communications systems contemplated therein should be maintained at reasonable
rates. We need not go into an in-depth analysis of the pertinent provisions of the law in
CONSTILAW 2-SEC. I | 140

order to conclude that respondent NTC, in the exercise of its rate-fixing power, is
limited by the requirements of public safety, public interest, reasonable feasibility and
reasonable rates, which conjointly more than satisfy the requirements of a valid
delegation of legislative power.
II. On another tack, petitioner submits that the questioned order violates procedural
due process because it was issued motu proprio, without notice to petitioner and
without the benefit of a hearing. Petitioner laments that said order was based merely
on an "initial evaluation," which is a unilateral evaluation, but had petitioner been given
an opportunity to present its side before the order in question was issued, the
confiscatory nature of the rate reduction and the consequent deterioration of the public
service could have been shown and demonstrated to respondents. Petitioner argues
that the function involved in the rate fixing-power of NTC is adjudicatory and hence
quasi-judicial, not quasi- legislative; thus, notice and hearing are necessary and the
absence thereof results in a violation of due process.
Respondents admit that the application of a policy like the fixing of rates as exercised
by administrative bodies is quasi-judicial rather than quasi-legislative: that where the
function of the administrative agency is legislative, notice and hearing are not required,
but where an order applies to a named person, as in the instant case, the function
involved is adjudicatory. 8 Nonetheless, they insist that under the facts obtaining the
order in question need not be preceded by a hearing, not because it was issued
pursuant to respondent NTC's legislative function but because the assailed order is
merely interlocutory, it being an incident in the ongoing proceedings on petitioner's
application for a certificate of public convenience; and that petitioner is not the only
primary source of data or information since respondent is currently engaged in a
continuing review of the rates charged.
We find merit in petitioner's contention.
In Vigan Electric Light Co., Inc. vs. Public Service Commission, 9 we made a
categorical classification as to when the rate-filing power of administrative bodies is
quasi-judicial and when it is legislative, thus:
Moreover, although the rule-making power and even the power to fix
rates- when such rules and/or rates are meant to apply to all
enterprises of a given kind throughout the Philippines-may partake of
a legislative character, such is not the nature of the order
complained of. Indeed, the same applies exclusively to petitioner
herein. What is more, it is predicated upon the finding of fact-based
upon a report submitted by the General Auditing Office-that
petitioner is making a profit of more than 12% of its invested capital,
which is denied by petitioner. Obviously, the latter is entitled to cross-

examine the maker of said report, and to introduce evidence to

disprove the contents thereof and/or explain or complement the
same, as well as to refute the conclusion drawn therefrom by the
respondent. In other words, in making said finding of fact,
respondent performed a function partaking of a quasi-judicial
character, the valid exercise of which demands previous notice and
hearing.
This rule was further explained in the subsequent case of The Central Bank of the
Philippines vs. Cloribel, et al. 10to wit:
It is also clear from the authorities that where the function of the
administrative body is legislative, notice of hearing is not required by
due process of law (See Oppenheimer, Administrative Law, 2 Md.
L.R. 185, 204, supra, where it is said: 'If the nature of the
administrative agency is essentially legislative, the requirements of
notice and hearing are not necessary. The validity of a rule of future
action which affects a group, if vested rights of liberty or property are
not involved, is not determined according to the same rules which
apply in the case of the direct application of a policy to a specific
individual) ... It is said in 73 C.J.S. Public Administrative Bodies and
Procedure, sec. 130, pages 452 and 453: 'Aside from statute, the
necessity of notice and hearing in an administrative proceeding
depends on the character of the proceeding and the circumstances
involved. In so far as generalization is possible in view of the great
variety of administrative proceedings, it may be stated as a general
rule that notice and hearing are not essential to the validity of
administrative action where the administrative body acts in the
exercise of executive, administrative, or legislative functions; but
where a public administrative body acts in a judicial or quasi-judicial
matter, and its acts are particular and immediate rather than general
and prospective, the person whose rights or property may be
affected by the action is entitled to notice and hearing. 11
The order in question which was issued by respondent Alcuaz no doubt contains all the
attributes of a quasi-judicial adjudication. Foremost is the fact that said order pertains
exclusively to petitioner and to no other. Further, it is premised on a finding of fact,
although patently superficial, that there is merit in a reduction of some of the rates
charged- based on an initial evaluation of petitioner's financial statements-without
affording petitioner the benefit of an explanation as to what particular aspect or aspects
of the financial statements warranted a corresponding rate reduction. No rationalization
was offered nor were the attending contingencies, if any, discussed, which prompted
respondents to impose as much as a fifteen percent (15%) rate reduction. It is not farfetched to assume that petitioner could be in a better position to rationalize its rates
CONSTILAW 2-SEC. I | 141

vis-a-vis the viability of its business requirements. The rates it charges result from an
exhaustive and detailed study it conducts of the multi-faceted intricacies attendant to a
public service undertaking of such nature and magnitude. We are, therefore, inclined to
lend greater credence to petitioner's ratiocination that an immediate reduction in its
rates would adversely affect its operations and the quality of its service to the public
considering the maintenance requirements, the projects it still has to undertake and the
financial outlay involved. Notably, petitioner was not even afforded the opportunity to
cross-examine the inspector who issued the report on which respondent NTC based its
questioned order.
At any rate, there remains the categorical admission made by respondent NTC that the
questioned order was issued pursuant to its quasi-judicial functions. It, however, insists
that notice and hearing are not necessary since the assailed order is merely incidental
to the entire proceedings and, therefore, temporary in nature. This postulate is bereft of
merit.
While respondents may fix a temporary rate pending final determination of the
application of petitioner, such rate-fixing order, temporary though it may be, is not
exempt from the statutory procedural requirements of notice and hearing, as well as
the requirement of reasonableness. Assuming that such power is vested in NTC, it
may not exercise the same in an arbitrary and confiscatory manner. Categorizing such
an order as temporary in nature does not perforce entail the applicability of a different
rule of statutory procedure than would otherwise be applied to any other order on the
same matter unless otherwise provided by the applicable law. In the case at bar, the
applicable statutory provision is Section 16(c) of the Public Service Act which provides:
Section 16. Proceedings of the Commission, upon notice and
hearing the Commission shall have power, upon proper notice and
hearing in accordance with the rules and provisions of this Act,
subject to the limitations and exceptions mentioned and saving
provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, ... which shall be
imposed, observed and followed thereafter by any public service; ...
There is no reason to assume that the aforesaid provision does not apply to
respondent NTC, there being no limiting, excepting, or saving provisions to the
contrary in Executive Orders Nos. 546 and 196.

permanent, and it is immaterial whether the same is made upon a complaint, a

summary investigation, or upon the commission's own motion as in the present case.
That such a hearing is required is evident in respondents' order of September 16, 1987
in NTC Case No. 87-94 which granted PHILCOMSAT a provisional authority "to
continue operating its existing facilities, to render the services it presently offers, and to
charge the rates as reduced by them "under the condition that "(s)ubject to hearing
and the final consideration of the merit of this application, the Commission may modify,
revise or amend the rates ..." 12
While it may be true that for purposes of rate-fixing respondents may have other
sources of information or data, still, since a hearing is essential, respondent NTC
should act solely on the basis of the evidence before it and not on knowledge or
information otherwise acquired by it but which is not offered in evidence or, even if so
adduced, petitioner was given no opportunity to controvert.
Again, the order requires the new reduced rates to be made effective on a specified
date. It becomes a final legislative act as to the period during which it has to remain in
force pending the final determination of the case.13 An order of respondent NTC
prescribing reduced rates, even for a temporary period, could be unjust, unreasonable
or even confiscatory, especially if the rates are unreasonably low, since the utility
permanently loses its just revenue during the prescribed period. In fact, such order is in
effect final insofar as the revenue during the period covered by the order is concerned.
Upon a showing, therefore, that the order requiring a reduced rate is confiscatory, and
will unduly deprive petitioner of a reasonable return upon its property, a declaration of
its nullity becomes inductible, which brings us to the issue on substantive due process.
III. Petitioner contends that the rate reduction is confiscatory in that its implementation
would virtually result in a cessation of its operations and eventual closure of business.
On the other hand, respondents assert that since petitioner is operating its
communications satellite facilities through a legislative franchise, as such grantee it
has no vested right therein. What it has is merely a privilege or license which may be
revoked at will by the State at any time without necessarily violating any vested
property right of herein petitioner. While petitioner concedes this thesis of respondent,
it counters that the withdrawal of such privilege should nevertheless be neither
whimsical nor arbitrary, but it must be fair and reasonable.
There is no question that petitioner is a mere grantee of a legislative franchise which is
subject to amendment, alteration, or repeal by Congress when the common good so
requires. 14 Apparently, therefore, such grant cannot be unilaterally revoked absent a
showing that the termination of the operation of said utility is required by the common
good.

It is thus clear that with regard to rate-fixing, respondent has no authority to make such
order without first giving petitioner a hearing, whether the order be temporary or
CONSTILAW 2-SEC. I | 142

The rule is that the power of the State to regulate the conduct and business of public
utilities is limited by the consideration that it is not the owner of the property of the
utility, or clothed with the general power of management incident to ownership, since
the private right of ownership to such property remains and is not to be destroyed by
the regulatory power. The power to regulate is not the power to destroy useful and
harmless enterprises, but is the power to protect, foster, promote, preserve, and
control with due regard for the interest, first and foremost, of the public, then of the
utility and of its patrons. Any regulation, therefore, which operates as an effective
confiscation of private property or constitutes an arbitrary or unreasonable infringement
of property rights is void, because it is repugnant to the constitutional guaranties of due
process and equal protection of the laws. 15
Hence, the inherent power and authority of the State, or its authorized agent, to
regulate the rates charged by public utilities should be subject always to the
requirement that the rates so fixed shall be reasonable and just. A commission has no
power to fix rates which are unreasonable or to regulate them arbitrarily. This basic
requirement of reasonableness comprehends such rates which must not be so low as
to be confiscatory, or too high as to be oppressive. 16
What is a just and reasonable rate is not a question of formula but of sound business
judgment based upon the evidence 17 it is a question of fact calling for the exercise of
discretion, good sense, and a fair, enlightened and independent judgment. 18 In
determining whether a rate is confiscatory, it is essential also to consider the given
situation, requirements and opportunities of the utility. A method often employed in
determining reasonableness is the fair return upon the value of the property to the
public utility. Competition is also a very important factor in determining the
reasonableness of rates since a carrier is allowed to make such rates as are
necessary to meet competition. 19
A cursory perusal of the assailed order reveals that the rate reduction is solely and
primarily based on the initial evaluation made on the financial statements of petitioner,
contrary to respondent NTC's allegation that it has several other sources of information
without, however, divulging such sources. Furthermore, it did not as much as make an
attempt to elaborate on how it arrived at the prescribed rates. It just perfunctorily
declared that based on the financial statements, there is merit for a rate reduction
without any elucidation on what implications and conclusions were necessarily inferred
by it from said statements. Nor did it deign to explain how the data reflected in the
financial statements influenced its decision to impose a rate reduction.
On the other hand, petitioner may likely suffer a severe drawback, with the consequent
detriment to the public service, should the order of respondent NTC turn out to be
unreasonable and improvident. The business in which petitioner is engaged is unique
in that its machinery and equipment have always to be taken in relation to the
equipment on the other end of the transmission arrangement. Any lack, aging,

acquisition, rehabilitation, or refurbishment of machinery and equipment necessarily

entails a major adjustment or innovation on the business of petitioner. As pointed out
by petitioner, any change in the sending end abroad has to be matched with the
corresponding change in the receiving end in the Philippines. Conversely, any in the
receiving end abroad has to be matched with the corresponding change in the sending
end in the Philippines. An inability on the part of petitioner to meet the variegations
demanded be technology could result in a deterioration or total failure of the service of
satellite communications.
At present, petitioner is engaged in several projects aimed at refurbishing,
rehabilitating, and renewing its machinery and equipment in order to keep up with the
continuing charges of the times and to maintain its facilities at a competitive level with
the technological advances abroad. There projected undertakings were formulated on
the premise that rates are maintained at their present or at reasonable levels. Hence,
an undue reduction thereof may practically lead to a cessation of its business. While
we concede the primacy of the public interest in an adequate and efficient service, the
same is not necessarily to be equated with reduced rates. Reasonableness in the rates
assumes that the same is fair to both the public utility and the consumer.
Consequently, we hold that the challenged order, particularly on the issue of rates
provided therein, being violative of the due process clause is void and should be
nullified. Respondents should now proceed, as they should heretofore have done, with
the hearing and determination of petitioner's pending application for a certificate of
public convenience and necessity and in which proceeding the subject of rates
involved in the present controversy, as well as other matter involved in said application,
be duly adjudicated with reasonable dispatch and with due observance of our
pronouncements herein.
WHEREFORE, the writ prayed for is GRANTED and the order of respondents, dated
September 2, 1988, in NTC Case No. 87-94 is hereby SET ASIDE. The temporary
restraining order issued under our resolution of September 13, 1988, as specifically
directed against the aforesaid order of respondents on the matter of existing rates on
petitioner's present authorized services, is hereby made permanent.
SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Bidin,
Sarmiento, Cortes, Grio-Aquino and Medialdea, JJ., concur.
Padilla, J., took no part.

CONSTILAW 2-SEC. I | 143

Separate Opinions

GUTIERREZ, JR., J., concurring:

I concur in the ponencia of Justice Regalado and join him in the erudite and thorough
discussion of the respondent's authority. However, I have reservations about our
continuing to abide by the dictum that in the exercise of quasi-legislative power, notice
and hearing are not required. I believe that this doctrine is ripe for re- examination.
Senators and Congressmen are directly elected by the people. Administrative officials
are not. If the members of an administrative body are, as is so often the case,
appointed not on the basis of competence and qualifications but out of political or
personal considerations, it is not only the sense of personal responsibility to the
electorate affected by legislation which is missing. The expertise and experience
needed for the issuance of sound rules and regulations would also be sorely lacking.
Congress never passes truly important legislation without holding public hearings. Yet,
administrative officials who are not directly attuned to the public pulse see no need for
hearings. They issue rules and circulars with far reaching effects on our economy and
our nation's future on the assumption that the head of an agency knows best what is
good for the people. I believe that in the exercise of quasi-legislative powers,
administrative agencies, much, much more than Congress, should hold hearings and
should be given guidelines as to when notices and hearings are essential even in
quasi-legislation.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I concur in the ponencia of Justice Regalado and join him in the erudite and thorough
discussion of the respondent's authority. However, I have reservations about our
continuing to abide by the dictum that in the exercise of quasi-legislative power, notice
and hearing are not required. I believe that this doctrine is ripe for re- examination.
Senators and Congressmen are directly elected by the people. Administrative officials
are not. If the members of an administrative body are, as is so often the case,
appointed not on the basis of competence and qualifications but out of political or
personal considerations, it is not only the sense of personal responsibility to the
electorate affected by legislation which is missing. The expertise and experience
needed for the issuance of sound rules and regulations would also be sorely lacking.
Congress never passes truly important legislation without holding public hearings. Yet,
administrative officials who are not directly attuned to the public pulse see no need for
hearings. They issue rules and circulars with far reaching effects on our economy and
our nation's future on the assumption that the head of an agency knows best what is
good for the people. I believe that in the exercise of quasi-legislative powers,
administrative agencies, much, much more than Congress, should hold hearings and
should be given guidelines as to when notices and hearings are essential even in
quasi-legislation.

Separate Opinions
GUTIERREZ, JR., J., concurring:
I concur in the ponencia of Justice Regalado and join him in the erudite and thorough
discussion of the respondent's authority. However, I have reservations about our
continuing to abide by the dictum that in the exercise of quasi-legislative power, notice
and hearing are not required. I believe that this doctrine is ripe for re- examination.
Senators and Congressmen are directly elected by the people. Administrative officials
are not. If the members of an administrative body are, as is so often the case,
appointed not on the basis of competence and qualifications but out of political or
personal considerations, it is not only the sense of personal responsibility to the
electorate affected by legislation which is missing. The expertise and experience
needed for the issuance of sound rules and regulations would also be sorely lacking.
Congress never passes truly important legislation without holding public hearings. Yet,
administrative officials who are not directly attuned to the public pulse see no need for
hearings. They issue rules and circulars with far reaching effects on our economy and
our nation's future on the assumption that the head of an agency knows best what is
CONSTILAW 2-SEC. I | 144

good for the people. I believe that in the exercise of quasi-legislative powers,
administrative agencies, much, much more than Congress, should hold hearings and
should be given guidelines as to when notices and hearings are essential even in
quasi-legislation.

CONSTILAW 2-SEC. I | 145