EN BANC G.R. No. 157013.

July 10, 2003]

ATTY. ROMULO B. MACALINTAL, petitioner, vs. COMMISSION ON
ELECTIONS, HON. ALBERTO ROMULO, in his official capacity
as Executive Secretary, and HON. EMILIA T. BONCODIN,
Secretary
of
the
Department
of
Budget
and
Management, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for certiorari and prohibition filed by
Romulo B. Macalintal, a member of the Philippine Bar, seeking a
declaration that certain provisions of Republic Act No. 9189 (The Overseas
Absentee Voting Act of 2003)[1] suffer from constitutional infirmity. Claiming
that he has actual and material legal interest in the subject matter of this
case in seeing to it that public funds are properly and lawfully used and
appropriated, petitioner filed the instant petition as a taxpayer and as a
lawyer.
The Court upholds the right of petitioner to file the present petition.
R.A. No. 9189, entitled, An Act Providing for A System of Overseas
Absentee Voting by Qualified Citizens of the Philippines Abroad,
Appropriating Funds Therefor, and for Other Purposes, appropriates funds
under Section 29 thereof which provides that a supplemental budget on
the General Appropriations Act of the year of its enactment into law shall
provide for the necessary amount to carry out its provisions. Taxpayers,
such as herein petitioner, have the right to restrain officials from wasting
public funds through the enforcement of an unconstitutional statute. [2] The
Court has held that they may assail the validity of a law appropriating
public funds[3] because expenditure of public funds by an officer of the
State for the purpose of executing an unconstitutional act constitutes a
misapplication of such funds.[4]
The challenged provision of law involves a public right that affects a
great number of citizens. The Court has adopted the policy of taking
jurisdiction over cases whenever the petitioner has seriously and
convincingly presented an issue of transcendental significance to the
Filipino people. This has been explicitly pronounced in Kapatiran ng mga
Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan, [5] where the Court
held:
Objections to taxpayers suit for lack of sufficient personality standing, or
interest are, however, in the main procedural matters. Considering the
importance to the public of the cases at bar, and in keeping with the
Courts duty, under the 1987 Constitution, to determine whether or not the
other branches of government have kept themselves within the limits of
the Constitution and the laws and that they have not abused the discretion

given to them, the Court has brushed aside technicalities of procedure and
has taken cognizance of these petitions.[6]
Indeed, in this case, the Court may set aside procedural rules as the
constitutional right of suffrage of a considerable number of Filipinos is
involved.
The question of propriety of the instant petition which may appear to
be visited by the vice of prematurity as there are no ongoing proceedings
in any tribunal, board or before a government official exercising judicial,
quasi-judicial or ministerial functions as required by Rule 65 of the Rules of
Court, dims in light of the importance of the constitutional issues raised by
the petitioner. In Taada vs. Angara,[7] the Court held:
In seeking to nullify an act of the Philippine Senate on the ground that it
contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously alleged
to have infringed the Constitution, it becomes not only the right but in fact
the duty of the judiciary to settle the dispute. The question thus posed is
judicial rather than political. The duty (to adjudicate) remains to assure
that the supremacy of the Constitution is upheld. Once a controversy as to
the application or interpretation of constitutional provision is raised before
this Court (as in the instant case), it becomes a legal issue which the Court
is bound by constitutional mandate to decide.
In another case of paramount impact to the Filipino people, it has been
expressed that it is illogical to await the adverse consequences of the law
in order to consider the controversy actual and ripe for judicial resolution.
[8]
In yet another case, the Court said that:
. . . despite the inhibitions pressing upon the Court when confronted with
constitutional issues, it will not hesitate to declare a law or act invalid when
it is convinced that this must be done. In arriving at this conclusion, its only
criterion will be the Constitution and God as its conscience gives it in the
light to probe its meaning and discover its purpose. Personal motives and
political considerations are irrelevancies that cannot influence its decisions.
Blandishment is as ineffectual as intimidation, for all the awesome power
of the Congress and Executive, the Court will not hesitate to make the
hammer fall heavily, where the acts of these departments, or of any
official, betray the peoples will as expressed in the Constitution . . . [9]
The need to consider the constitutional issues raised before the Court
is further buttressed by the fact that it is now more than fifteen years since
the ratification of the 1987 Constitution requiring Congress to provide a
system for absentee voting by qualified Filipinos abroad.Thus, strong
reasons of public policy demand that the Court resolves the instant
petition[10] and determine whether Congress has acted within the limits of
the Constitution or if it had gravely abused the discretion entrusted to it. [11]
The petitioner raises three principal questions:
A. Does Section 5(d) of Rep. Act No. 9189 allowing the
registration of voters who are immigrants or permanent residents

in other countries by their mere act of executing an affidavit

expressing their intention to return to the Philippines, violate the
residency requirement in Section 1 of Article V of the
Constitution?
B. Does Section 18.5 of the same law empowering the COMELEC
to proclaim the winning candidates for national offices and party
list representatives including the President and the VicePresident violate the constitutional mandate under Section 4,
Article VII of the Constitution that the winning candidates for
President and the Vice-President shall be proclaimed as winners
by Congress?
C. May Congress, through the Joint Congressional Oversight
Committee created in Section 25 of Rep. Act No. 9189, exercise
the power to review, revise, amend, and approve the
Implementing Rules and Regulations that the Commission on
Elections shall promulgate without violating the independence of
the COMELEC under Section 1, Article IX-A of the Constitution?
The Court will resolve the questions in seriatim.
A. Does Section 5(d) of Rep. Act No. 9189 violate Section 1, Article
V of the 1987 Constitution of the Republic of the Philippines?
Section 5(d) provides:
Sec. 5. Disqualifications. The following shall be disqualified from voting
under this Act:
.........
d) An immigrant or a permanent resident who is recognized as such in the
host country, unless he/she executes, upon registration, an affidavit
prepared for the purpose by the Commission declaring that he/she shall
resume actual physical permanent residence in the Philippines not later
than three (3) years from approval of his/her registration under this Act.
Such affidavit shall also state that he/she has not applied for citizenship in
another country. Failure to return shall be cause for the removal of the
name of the immigrant or permanent resident from the National Registry of
Absentee Voters and his/her permanent disqualification to vote in absentia.
Petitioner posits that Section 5(d) is unconstitutional because it violates
Section 1, Article V of the 1987 Constitution which requires that the voter
must be a resident in the Philippines for at least one year and in the place
where he proposes to vote for at least six months immediately preceding
an election. Petitioner cites the ruling of the Court in Caasi vs. Court of
Appeals[12] to support his claim. In that case, the Court held that a green
card holder immigrant to the United States is deemed to have abandoned
his domicile and residence in the Philippines.
Petitioner further argues that Section 1, Article V of the Constitution
does not allow provisional registration or a promise by a voter to perform a
condition to be qualified to vote in a political exercise; [13] that the
legislature should not be allowed to circumvent the requirement of the
Constitution on the right of suffrage by providing a condition thereon which

in effect amends or alters the aforesaid residence requirement to qualify a

Filipino abroad to vote.[14] He claims that the right of suffrage should not be
granted to anyone who, on the date of the election, does not possess the
qualifications provided for by Section 1, Article V of the Constitution.
Respondent COMELEC refrained from commenting on this issue. [15]

In compliance with the Resolution of the Court, the Solicitor General

filed his comment for all public respondents. He contraposes that the
constitutional challenge to Section 5(d) must fail because of the absence of
clear and unmistakable showing that said provision of law is repugnant to
the Constitution. He stresses: All laws are presumed to be constitutional;
by the doctrine of separation of powers, a department of government owes
a becoming respect for the acts of the other two departments; all laws are
presumed to have adhered to constitutional limitations; the legislature
intended to enact a valid, sensible, and just law.
In addition, the Solicitor General points out that Section 1, Article V of
the Constitution is a verbatim reproduction of those provided for in the
1935 and the 1973 Constitutions. Thus, he cites Co vs. Electoral Tribunal of
the House of Representatives [16] wherein the Court held that the term
residence has been understood to be synonymous with domicile under
both Constitutions. He further argues that a person can have only one
domicile but he can have two residences, one permanent (the domicile)
and the other temporary;[17] and that the definition and meaning given to
the
term residence likewise
applies
to
absentee
voters. Invoking Romualdez-Marcos vs. COMELEC[18] which reiterates the
Courts ruling in Faypon vs. Quirino,[19] the Solicitor General maintains that
Filipinos who are immigrants or permanent residents abroad may have in
fact never abandoned their Philippine domicile.[20]
Taking issue with the petitioners contention that green card holders
are considered to have abandoned their Philippine domicile, the Solicitor
General suggests that the Court may have to discard its ruling in Caasi vs.
Court of Appeals[21] in so far as it relates to immigrants and permanent
residents in foreign countries who have executed and submitted their
affidavits conformably with Section 5(d) of R.A. No. 9189. He maintains
that through the execution of the requisite affidavits, the Congress of the
Philippines with the concurrence of the President of the Republic had in fact
given these immigrants and permanent residents the opportunity,
pursuant to Section 2, Article V of the Constitution, to manifest that they
had in fact never abandoned their Philippine domicile; that indubitably,
they would have formally and categorically expressed the requisite
intentions, i.e., animus manendi and animus revertendi; that Filipino
immigrants and permanent residents abroad possess the unquestionable
right to exercise the right of suffrage under Section 1, Article V of the
Constitution upon approval of their registration, conformably with R.A. No.
9189.[22]

The seed of the present controversy is the interpretation that is given

to the phrase, qualified citizens of the Philippines abroad as it appears in
R.A. No. 9189, to wit:
SEC. 2. Declaration of Policy. It is the prime duty of the State to provide a
system of honest and orderly overseas absentee voting that upholds the
secrecy and sanctity of the ballot. Towards this end, the State ensures
equal opportunity to all qualified citizens of the Philippines abroad in
the exercise of this fundamental right.
SEC. 3. Definition of Terms. For purposes of this Act:
a) Absentee Voting refers to the process by which qualified citizens of
the Philippines abroad, exercise their right to vote;
. . . (Emphasis supplied)
f) Overseas Absentee Voter refers to a citizen of the Philippines who is
qualified to register and vote under this Act, not otherwise disqualified
by law, who is abroad on the day of elections. (Emphasis supplied)
SEC. 4. Coverage. All citizens of the Philippines abroad, who are not
otherwise disqualified by law, at least eighteen (18) years of age on
the day of elections, may vote for president, vice-president, senators and
party-list representatives. (Emphasis supplied)
in relation to Sections 1 and 2, Article V of the Constitution which read:
SEC. 1. Suffrage may be exercised by all citizens of the Philippines not
otherwise disqualified by law, who are at least eighteen years of age, and
who shall have resided in the Philippines for at least one year and in the
place wherein they propose to vote for at least six months immediately
preceding the election. No literacy, property, or other substantive
requirement shall be imposed on the exercise of suffrage.
SEC. 2. The Congress shall provide a system for securing the secrecy
and sanctity of the ballot as well as a system for absentee voting by
qualified Filipinos abroad.
. . . . . . . . . (Emphasis supplied)
Section 1, Article V of the Constitution specifically provides that
suffrage may be exercised by (1) all citizens of the Philippines, (2) not
otherwise disqualified by law, (3) at least eighteen years of age, (4) who
are residents in the Philippines for at least one year and in the place where
they propose to vote for at least six months immediately preceding the
election. Under Section 5(d) of R.A. No. 9189, one of those disqualified
from voting is an immigrant or permanent resident who is recognized as
such in the host country unless he/she executes an affidavit declaring that
he/she shall resume actual physical permanent residence in the Philippines
not later than three years from approval of his/her registration under said
Act.
Petitioner questions the rightness of the mere act of execution of an
affidavit to qualify the Filipinos abroad who are immigrants or permanent
residents, to vote. He focuses solely on Section 1, Article V of the
Constitution in ascribing constitutional infirmity to Section 5(d) of R.A. No.

9189, totally ignoring the provisions of Section 2 empowering Congress to

provide a system for absentee voting by qualified Filipinos abroad.
A simple, cursory reading of Section 5(d) of R.A. No. 9189 may indeed
give the impression that it contravenes Section 1, Article V of the
Constitution. Filipino immigrants and permanent residents overseas are
perceived as having left and abandoned the Philippines to live permanently
in their host countries and therefore, a provision in the law enfranchising
those who do not possess the residency requirement of the Constitution by
the mere act of executing an affidavit expressing their intent to return to
the Philippines within a given period, risks a declaration of
unconstitutionality. However, the risk is more apparent than real.
The Constitution is the fundamental and paramount law of the nation
to which all other laws must conform and in accordance with which all
private rights must be determined and all public authority administered.
[23]
Laws that do not conform to the Constitution shall be stricken down for
being unconstitutional.
Generally,
however,
all
laws
are
presumed
constitutional. In Peralta vs. COMELEC, the Court said:

to

be

. . . An act of the legislature, approved by the executive, is presumed to be

within constitutional limitations. The responsibility of upholding the
Constitution rests not on the courts alone but on the legislature as well.
The question of the validity of every statute is first determined by the
legislative department of the government itself.[24]
Thus, presumption of constitutionality of a law must be overcome
convincingly:
. . . To declare a law unconstitutional, the repugnancy of that law to the
Constitution must be clear and unequivocal, for even if a law is aimed at
the attainment of some public good, no infringement of constitutional
rights is allowed. To strike down a law there must be a clear showing that
what the fundamental law condemns or prohibits, the statute allows it to
be done.[25]
As the essence of R.A. No. 9189 is to enfranchise overseas qualified
Filipinos, it behooves the Court to take a holistic view of the pertinent
provisions of both the Constitution and R.A. No. 9189. It is a basic rule in
constitutional construction that the Constitution should be construed as a
whole. In Chiongbian vs. De Leon,[26] the Court held that a constitutional
provision should function to the full extent of its substance and its terms,
not by itself alone, but in conjunction with all other provisions of that great
document. Constitutional provisions are mandatory in character unless,
either by express statement or by necessary implication, a different
intention is manifest.[27] The intent of the Constitution may be drawn
primarily from the language of the document itself. Should it be
ambiguous, the Court may consider the intent of its framers through their
debates in the constitutional convention.[28]

R.A. No. 9189 was enacted in obeisance to the mandate of the first
paragraph of Section 2, Article V of the Constitution that Congress shall
provide a system for voting by qualified Filipinos abroad. It must be
stressed that Section 2 does not provide for the parameters of the exercise
of legislative authority in enacting said law. Hence, in the absence of
restrictions, Congress is presumed to have duly exercised its function as
defined in Article VI (The Legislative Department) of the Constitution.
To put matters in their right perspective, it is necessary to dwell first
on the significance of absentee voting. The concept of absentee voting is
relatively new. It is viewed thus:
The method of absentee voting has been said to be completely separable
and distinct from the regular system of voting, and to be a new and
different manner of voting from that previously known, and an exception to
the customary and usual manner of voting. The right of absentee and
disabled voters to cast their ballots at an election is purely statutory;
absentee voting was unknown to, and not recognized at, the common law.
Absentee voting is an outgrowth of modern social and economic conditions
devised to accommodate those engaged in military or civil life whose
duties make it impracticable for them to attend their polling places on the
day of election, and the privilege of absentee voting may flow from
constitutional provisions or be conferred by statutes, existing in some
jurisdictions, which provide in varying terms for the casting and reception
of ballots by soldiers and sailors or other qualified voters absent on
election day from the district or precinct of their residence.
Such statutes are regarded as conferring a privilege and not a right, or an
absolute right. When the legislature chooses to grant the right by
statute, it must operate with equality among all the class to which
it is granted; but statutes of this nature may be limited in their
application to particular types of elections. The statutes should be
construed in the light of any constitutional provisions affecting
registration and elections, and with due regard to their texts prior to
amendment and to predecessor statutes and the decisions
thereunder; they should also be construed in the light of the
circumstances under which they were enacted; and so as to carry out
the objects thereof, if this can be done without doing violence to their
provisions and mandates. Further, in passing on statutes regulating
absentee voting, the court should look to the whole and every
part of the election laws, the intent of the entire plan, and
reasons and spirit of their adoption, and try to give effect to every
portion thereof.[29] (Emphasis supplied)
Ordinarily, an absentee is not a resident and vice versa; a person
cannot be at the same time, both a resident and an absentee. [30]However,
under our election laws and the countless pronouncements of the Court
pertaining to elections, an absentee remains attached to his residence in
the Philippines as residence is considered synonymous with domicile.
In Romualdez-Marcos,[31] the Court enunciated:

Article 50 of the Civil Code decrees that [f]or the exercise of civil rights and
the fulfillment of civil obligations, the domicile of natural persons is their
place of habitual residence. In Ong vs. Republic, this court took the
concept of domicile to mean an individuals permanent home, a place to
which, whenever absent for business or for pleasure, one intends to return,
and depends on facts and circumstances in the sense that they disclose
intent. Based on the foregoing, domicile includes the twin elements of the
fact of residing or physical presence in a fixed place and animus manendi,
or the intention of returning there permanently.
Residence, in its ordinary conception, implies the factual relationship of an
individual to a certain place. It is the physical presence of a person in a
given area, community or country. The essential distinction between
residence and domicile in law is that residence involves the intent to leave
when the purpose for which the resident has taken up his abode ends. One
may seek a place for purposes such as pleasure, business, or health. If a
persons intent be to remain, it becomes his domicile; if his intent is to
leave as soon as his purpose is established it is residence. It is thus, quite
perfectly normal for an individual to have different residences in various
places. However, a person can only have a single domicile, unless, for
various reasons, he successfully abandons his domicile in favor of another
domicile of choice. In Uytengsu vs. Republic, we laid this distinction quite
clearly:
There is a difference between domicile and residence. Residence is used to
indicate a place of abode, whether permanent or temporary; domicile
denotes a fixed permanent residence to which, when absent, one has
the intention of returning. A man may have a residence in one place and a
domicile in another.Residence is not domicile, but domicile is residence
coupled with the intention to remain for an unlimited time. A man can have
but one domicile for the same purpose at any time, but he may have
numerous places of residence. His place of residence is generally his place
of domicile, but it is not by any means necessarily so since no length of
residence without intention of remaining will constitute domicile.
For political purposes the concepts of residence and domicile are dictated
by the peculiar criteria of political laws. As these concepts have evolved in
our election law, what has clearly and unequivocally emerged is
the fact that residence for election purposes is used
synonymously with domicile.[32](Emphasis supplied)
Aware of the domiciliary legal tie that links an overseas Filipino to his
residence in this country, the framers of the Constitution considered the
circumstances that impelled them to require Congress to establish a
system for overseas absentee voting, thus:
MR. OPLE. With respect to Section 1, it is not clear whether the right of
suffrage, which here has a residential restriction, is not denied to citizens
temporarily residing or working abroad. Based on the statistics of several
government agencies, there ought to be about two million such Filipinos at
this time. Commissioner Bernas had earlier pointed out that these
provisions are really lifted from the two previous Constitutions of 1935 and
1973, with the exception of the last paragraph. They could not therefore

have foreseen at that time the phenomenon now described as the Filipino
labor force explosion overseas.
According to government data, there are now about 600,000 contract
workers and employees, and although the major portions of these
expatriate communities of workers are to be found in the Middle East, they
are scattered in 177 countries in the world.
In a previous hearing of the Committee on Constitutional Commissions and
Agencies, the Chairman of the Commission on Elections, Ramon Felipe,
said that there was no insuperable obstacle to making effective the right of
suffrage for Filipinos overseas. Those who have adhered to their Filipino
citizenship notwithstanding strong temptations are exposed to embrace a
more convenient foreign citizenship. And those who on their own or under
pressure of economic necessity here, find that they have to detach
themselves from their families to work in other countries with definite
tenures of employment. Many of them are on contract employment for
one, two, or three years. They have no intention of changing their
residence on a permanent basis, but are technically disqualified from
exercising the right of suffrage in their countries of destination by the
residential requirement in Section 1 which says:
Suffrage shall be exercised by all citizens of the Philippines not otherwise
disqualified by law, who are eighteen years of age or over, and who shall
have resided in the Philippines for at least one year and in the place
wherein they propose to vote for at least six months preceding the
election.
I, therefore, ask the Committee whether at the proper time they might
entertain an amendment that will make this exercise of the right to vote
abroad for Filipino citizens an effective, rather than merely a nominal right
under this proposed Constitution.
FR. BERNAS. Certainly, the Committee will consider that. But more than
just saying that, I would like to make a comment on the meaning of
residence in the Constitution because I think it is a concept that has been
discussed in various decisions of the Supreme Court, particularly in the
case of Faypon vs. Quirino, a 1954 case which dealt precisely with the
meaning of residence in the Election Law. Allow me to quote:
A citizen may leave the place of his birth to look for greener pastures, as
the saying goes, to improve his lot and that, of course, includes study in
other places, practice of his avocation, reengaging in business. When an
election is to be held, the citizen who left his birthplace to improve his lot
may decide to return to his native town, to cast his ballot, but for
professional or business reasons, or for any other reason, he may not
absent himself from the place of his professional or business activities.
So, they are here registered as voters as he has the qualifications to be
one, and is not willing to give up or lose the opportunity to choose the
officials who are to run the government especially in national
elections. Despite such registration, the animus revertendi to his home, to
his domicile or residence of origin has not forsaken him.
This may be the explanation why the registration of a voter in a place other
than his residence of origin has not been deemed sufficient to consider
abandonment or loss of such residence of origin.

In other words, residence in this provision refers to two residence

qualifications: residence in the Philippines and residence in the place
where he will vote. As far as residence in the Philippines is concerned, the
word residence means domicile, but as far as residence in the place where
he will actually cast his ballot is concerned, the meaning seems to be
different. He could have a domicile somewhere else and yet he is a
resident of a place for six months and he is allowed to vote there. So that
there may be serious constitutional obstacles to absentee voting, unless
the vote of the person who is absent is a vote which will be
considered as cast in the place of his domicile.
MR. OPLE. Thank you for citing the jurisprudence.
It gives me scant comfort thinking of about two million Filipinos who should
enjoy the right of suffrage, at least a substantial segment of these
overseas Filipino communities. The Committee, of course, is aware that
when this Article of the Constitution explicitly and unequivocally extends
the right of effective suffrage to Filipinos abroad, this will call for a logistical
exercise of global proportions. In effect, this will require budgetary and
administrative commitments on the part of the Philippine government,
mainly through the COMELEC and the Ministry of Foreign Affairs, and
perhaps, a more extensive elaboration of this mechanism that will be put in
place to make effective the right to vote. Therefore, seeking shelter in
some wise jurisprudence of the past may not be sufficient to meet
the demands of the right of suffrage for Filipinos abroad that I have
mentioned. But I want to thank the Committee for saying that an
amendment to this effect may be entertained at the proper time. . . . . . . . .
.
[33]
(Emphasis supplied)
Thus, the Constitutional Commission recognized the fact that while
millions of Filipinos reside abroad principally for economic reasons and
hence they contribute in no small measure to the economic uplift of this
country, their voices are marginal insofar as the choice of this countrys
leaders is concerned.
The Constitutional Commission realized that under the laws then
existing and considering the novelty of the system of absentee voting in
this jurisdiction, vesting overseas Filipinos with the right to vote would
spawn constitutional problems especially because the Constitution itself
provides for the residency requirement of voters:
MR. REGALADO. Before I act on that, may I inquire from Commissioner
Monsod if the term absentee voting also includes transient voting;
meaning, those who are, let us say, studying in Manila need not go back to
their places of registration, for instance, in Mindanao, to cast their votes.
MR. MONSOD. I think our provision is for absentee voting by Filipinos
abroad.
MR. REGALADO. How about those people who cannot go back to the places
where they are registered?
MR. MONSOD. Under the present Election Code, there are provisions for
allowing students and military people who are temporarily in another place

to register and vote. I believe that those situations can be covered by the
Omnibus Election Code. The reason we want absentee voting to be in
the Constitution as a mandate to the legislature is that there
could be inconsistency on the residence rule if it is just a question
of legislation by Congress.So, by allowing it and saying that this is
possible, then legislation can take care of the rest.[34] (Emphasis
supplied)
Thus, Section 2, Article V of the Constitution came into being to remove
any doubt as to the inapplicability of the residency requirement in Section
1. It is precisely to avoid any problems that could impede the
implementation of its pursuit to enfranchise the largest number of qualified
Filipinos who are not in the Philippines that the Constitutional Commission
explicitly mandated Congress to provide a system for overseas absentee
voting.
The discussion of the Constitutional Commission on the effect of the
residency requirement prescribed by Section 1, Article V of the Constitution
on the proposed system of absentee voting for qualified Filipinos abroad is
enlightening:
MR. SUAREZ. May I just be recognized for a clarification. There are certain
qualifications for the exercise of the right of suffrage like having resided in
the Philippines for at least one year and in the place where they propose to
vote for at least six months preceding the elections. What is the effect of
these mandatory requirements on the matter of the exercise of the right of
suffrage by the absentee voters like Filipinos abroad?
THE PRESIDENT. Would Commissioner Monsod care to answer?
MR. MONSOD. I believe the answer was already given by Commissioner
Bernas, that the domicile requirements as well as the qualifications and
disqualifications would be the same.
THE PRESIDENT. Are we leaving it to the legislature to devise the system?
FR. BERNAS. I think there is a very legitimate problem raised there.
THE PRESIDENT. Yes.
MR. BENGZON. I believe Commissioner Suarez is clarified.
FR. BERNAS. But I think it should be further clarified with regard to the
residence requirement or the place where they vote in practice; the
understanding is that it is flexible. For instance, one might be a resident of
Naga or domiciled therein, but he satisfies the requirement of residence in
Manila, so he is able to vote in Manila.
MR. TINGSON. Madam President, may I then suggest to the Committee to
change the word Filipinos to QUALIFIED FILIPINO VOTERS. Instead of
VOTING BY FILIPINOS ABROAD, it should be QUALIFIED FILIPINO VOTERS. If
the Committee wants QUALIFIED VOTERS LIVING ABROAD, would that not
satisfy the requirement?
THE PRESIDENT. What does Commissioner Monsod say?
MR. MONSOD. Madam President, I think I would accept the phrase
QUALIFIED FILIPINOS ABROAD because QUALIFIED would assume that he
has the qualifications and none of the disqualifications to vote.

MR. TINGSON. That is right. So does the Committee accept?

FR. BERNAS. QUALIFIED FILIPINOS ABROAD?
THE PRESIDENT. Does the Committee accept the amendment?
MR. REGALADO. Madam President.
THE PRESIDENT. Commissioner Regalado is recognized.
MR. REGALADO. When Commissioner Bengzon asked me to read my
proposed amendment, I specifically stated that the National Assembly shall
prescribe a system which will enable qualified citizens, temporarily absent
from the Philippines, to vote. According to Commissioner Monsod, the use
of the phrase absentee voting already took that into account as its
meaning. That is referring to qualified Filipino citizens temporarily abroad.
MR. MONSOD. Yes, we accepted that. I would like to say that with respect
to registration we will leave it up to the legislative assembly, for example,
to require where the registration is. If it is, say, members of the diplomatic
corps who may be continuously abroad for a long time, perhaps, there can
be a system of registration in the embassies. However, we do not like to
preempt the legislative assembly.
THE PRESIDENT. Just to clarify, Commissioner Monsods amendment is only
to provide a system.
MR. MONSOD. Yes.
THE PRESIDENT. The Commissioner is not stating here that he wants new
qualifications for these absentee voters.
MR. MONSOD. That is right. They must have the qualifications and none of
the disqualifications.
THE PRESIDENT. It is just to devise a system by which they can vote.
MR. MONSOD. That is right, Madam President.[35] (Emphasis supplied)
Clearly therefrom, the intent of the Constitutional Commission is to
entrust to Congress the responsibility of devising a system of absentee
voting. The qualifications of voters as stated in Section 1 shall remain
except for the residency requirement. This is in fact the reason why the
Constitutional Commission opted for the term qualified Filipinos
abroad with respect to the system of absentee voting that Congress should
draw up. As stressed by Commissioner Monsod, by the use of the
adjective qualified with respect to Filipinos abroad, the assumption is that
they have the qualifications and none of the disqualifications to vote. In
fine-tuning the provision on absentee voting, the Constitutional
Commission discussed how the system should work:
MR. SUAREZ. For clarification purposes, we just want to state for the record
that in the case of qualified Filipino citizens residing abroad and exercising
their right of suffrage, they can cast their votes for the candidates in the
place where they were registered to vote in the Philippines. So as to avoid
any complications, for example, if they are registered in Angeles City, they
could not vote for a mayor in Naga City.
In other words, if that qualified voter is registered in Angeles City, then he
can vote only for the local and national candidates in Angeles City. I just
want to make that clear for the record.

MR. REGALADO. Madam President.

MR. BENGZON. Madam President, the Floor Leader wishes to

inquire if there are more clarifications needed from the body.

THE PRESIDENT. What does Commissioner Regalado say?

MR. REGALADO. I just want to make a note on the statement of
Commissioner Suarez that this envisions Filipinos residing
abroad. The understanding in the amendment is that the
Filipino is temporarily abroad. He may not be actually
residing abroad; he may just be there on a business trip. It
just so happens that the day before the elections he has to
fly to the United States, so he could not cast his vote. He is
temporarily abroad, but not residing there. He stays in a
hotel for two days and comes back. This is not limited
only to Filipinos temporarily residing abroad. But as
long as he is temporarily abroad on the date of the
elections, then he can fall within the prescription of
Congress in that situation.
MR.

SUAREZ. I thank the Commissioner for his further

clarification. Precisely, we need this clarification on record.

MR. MONSOD. Madam President, to clarify what we mean by

temporarily abroad, it need not be on very short trips.
One can be abroad on a treaty traders visa. Therefore, when
we talk about registration, it is possible that his residence is
in Angeles and he would be able to vote for the candidates
in Angeles, but Congress or the Assembly may provide
the procedure for registration, like listing ones name,
in a registry list in the embassy abroad. That is still
possible under the system.
FR.

BERNAS. Madam President, just one

Commissioner Monsod agrees with this.

clarification

if

Suppose we have a situation of a child of a diplomatic officer who

reaches the voting age while living abroad and he has never
registered here. Where will he register? Will he be a
registered voter of a certain locality in the Philippines?
MR. MONSOD. Yes, it is possible that the system will enable that
child to comply with the registration requirements in an
embassy in the United States and his name is then entered
in the official registration book in Angeles City, for instance.
FR. BERNAS. In other words, he is not a registered voter of Los
Angeles, but a registered voter of a locality here.
MR. MONSOD. That is right. He does not have to come home to
the Philippines to comply with the registration procedure
here.
FR. BERNAS. So, he does not have to come home.

Also, the Floor Leader is happy to announce that there are no more
registered Commissioners to propose amendments. So I move that we
close the period of amendments.
[36]

(Emphasis supplied)

It is clear from these discussions of the members of the Constitutional

Commission that they intended to enfranchise as much as
possible all Filipino citizens abroad who have not abandoned their domicile
of origin. The Commission even intended to extend to young Filipinos who
reach voting age abroad whose parents domicile of origin is in the
Philippines, and consider them qualified as voters for the first time.
It is in pursuance of that intention that the Commission provided for
Section 2 immediately after the residency requirement of Section 1.By the
doctrine of necessary implication in statutory construction, which may be
applied in construing constitutional provisions, [37] the strategic location of
Section 2 indicates that the Constitutional Commission provided for an
exception to the actual residency requirement of Section 1 with respect to
qualified Filipinos abroad. The same Commission has in effect declared that
qualified Filipinos who are not in the Philippines may be allowed to vote
even though they do not satisfy the residency requirement in Section 1,
Article V of the Constitution.
That Section 2 of Article V of the Constitution is an exception to the
residency requirement found in Section 1 of the same Article was in fact
the subject of debate when Senate Bill No. 2104, which became R.A. No.
9189, was deliberated upon on the Senate floor, thus:
Senator Arroyo. Mr. President, this bill should be looked into in
relation to the constitutional provisions. I think the sponsor
and I would agree that the Constitution is supreme in any
statute that we may enact.
Let me read Section 1, Article V, of the Constitution entitled, Suffrage. It
says:
Section 1. Suffrage may be exercised by all citizens of the Philippines not
otherwise disqualified by law, who are at least eighteen years of age, and
who shall have resided in the Philippines for at least one year and in the
place wherein they propose to vote for at least six months immediately
preceding the election.
Now, Mr. President, the Constitution says, who shall have resided
in the Philippines. They are permanent immigrants. They
have changed residence so they are barred under the
Constitution. This is why I asked whether this committee
amendment which in fact does not alter the original text of
the bill will have any effect on this?
Senator Angara. Good question, Mr. President. And this has
been asked in various fora. This is in compliance with the

Constitution. One, the interpretation here of residence is

synonymous with domicile.

months before the election, otherwise, he is not qualified to

vote.

As the gentleman and I know, Mr. President, domicile is the intent

to return to ones home. And the fact that a Filipino may
have been physically absent from the Philippines and
may be physically a resident of the United States, for
example, but has a clear intent to return to the
Philippines, will make him qualified as a resident of
the Philippines under this law.

That is why I am raising this point because I think we have a

fundamental difference here.
Senator Angara. It is a good point to raise, Mr. President. But it
is a point already well-debated even in the constitutional
commission of 1986.And the reason Section 2 of Article
V was placed immediately after the six-month/oneyear residency requirement is to demonstrate
unmistakably that Section 2 which authorizes
absentee voting is an exception to the six-month/oneyear residency requirement. That is the first principle, Mr.
President, that one must remember.

This is consistent, Mr. President, with the constitutional mandate

that we that Congress must provide a franchise to overseas
Filipinos.
If we read the Constitution and the suffrage principle
literally as demanding physical presence, then there
is no way we can provide for offshore voting to our
offshore kababayan, Mr. President.

The second reason, Mr. President, is that under our jurisprudence

and I think this is so well-entrenched that one need not
argue about it residency has been interpreted as
synonymous with domicile.

Senator Arroyo. Mr. President, when the Constitution says, in

Section 2 of Article V, it reads: The Congress shall provide a
system for securing the secrecy and sanctity of the ballot as
well as a system for absentee voting by qualified Filipinos
abroad.
The key to this whole exercise, Mr. President, is qualified.
In other words, anything that we may do or say in
granting our compatriots abroad must be anchored
on the proposition that they are qualified. Absent the
qualification, they cannot vote. And residents(sic) is a
qualification.
I will lose votes here from permanent residents so-called greencard holders, but the Constitution is the Constitution. We
cannot compromise on this. The Senate cannot be a party to
something that would affect or impair the Constitution.
Look at what the Constitution says In the place wherein they
propose to vote for at least six months immediately
preceding the election.
Mr. President, all of us here have run (sic) for office.
I live in Makati. My neighbor is Pateros where Senator Cayetano
lives. We are separated only by a creek. But one who votes
in Makati cannot vote in Pateros unless he resides in Pateros
for six months. That is how restrictive our Constitution is. I
am not talking even about the Election Code. I am talking
about the Constitution.
As I have said, if a voter in Makati would want to vote in Pateros,
yes, he may do so. But he must do so, make the transfer six

But the third more practical reason, Mr. President, is, if

we follow the interpretation of the gentleman, then it
is legally and constitutionally impossible to give a
franchise to vote to overseas Filipinos who do not
physically live in the country, which is quite ridiculous
because that is exactly the whole point of this
exercise to enfranchise them and empower them to
vote.
[38]

(Emphasis supplied)

Accordingly, Section 4 of R.A. No. 9189 provides for the coverage of

the absentee voting process, to wit:
SEC. 4. Coverage. All citizens of the Philippines abroad, who are not
otherwise disqualified by law, at least eighteen (18) years of age on the
day of elections, may vote for president, vice-president, senators and
party-list representatives.
which does not require physical residency in the Philippines; and Section 5
of the assailed law which enumerates those who are disqualified, to wit:
SEC. 5. Disqualifications. The following shall be disqualified from voting
under this Act:
a) Those who have lost their Filipino citizenship in accordance with
Philippine laws;
b) Those who have expressly renounced their Philippine citizenship and
who have pledged allegiance to a foreign country;
c) Those who have committed and are convicted in a final judgment by a
court or tribunal of an offense punishable by imprisonment of not less than
one (1) year, including those who have committed and been found guilty of
Disloyalty as defined under Article 137 of the Revised Penal Code, such

disability not having been removed by plenary pardon or

amnesty: Provided, however, That any person disqualified to vote under
this subsection shall automatically acquire the right to vote upon
expiration of five (5) years after service of sentence; Provided, further,
That the Commission may take cognizance of final judgments issued by
foreign courts or tribunals only on the basis of reciprocity and subject to
the formalities and processes prescribed by the Rules of
Court on execution of judgments;
d) An immigrant or a permanent resident who is recognized as such in the
host country, unless he/she executes, upon registration, an affidavit
prepared for the purpose by the Commission declaring that he/she shall
resume actual physical permanent residence in the Philippines not later
than three (3) years from approval of his/her registration under this
Act. Such affidavit shall also state that he/she has not applied for
citizenship in another country. Failure to return shall be cause for the
removal of the name of the immigrant or permanent resident from the
National Registry of Absentee Voters and his/her permanent
disqualification to vote in absentia.
e) Any citizen of the Philippines abroad previously declared insane or
incompetent by competent authority in the Philippines or abroad, as
verified by the Philippine embassies, consulates or foreign service
establishments concerned, unless such competent authority subsequently
certifies that such person is no longer insane or incompetent.
As finally approved into law, Section 5(d) of R.A. No. 9189 specifically
disqualifies an immigrant or permanent resident who is recognized as such
in the host country because immigration or permanent residence in
another country implies renunciation of ones residence in his country of
origin. However, same Section allows an immigrant and permanent
resident abroad to register as voter for as long as he/she executes an
affidavit to show that he/she has not abandoned his domicile in pursuance
of the constitutional intent expressed in Sections 1 and 2 of Article V
that all citizens of the Philippines not otherwise disqualified by law must be
entitled to exercise the right of suffrage and, that Congress must establish
a system for absentee voting; for otherwise, if actual, physical residence in
the Philippines is required, there is no sense for the framers of the
Constitution to mandate Congress to establish a system for absentee
voting.
Contrary to the claim of petitioner, the execution of the affidavit itself
is not the enabling or enfranchising act. The affidavit required in Section
5(d) is not only proof of the intention of the immigrant or permanent
resident to go back and resume residency in the Philippines, but more
significantly, it serves as an explicit expression that he had not in fact
abandoned his domicile of origin. Thus, it is not correct to say that the
execution of the affidavit under Section 5(d) violates the Constitution that
proscribes provisional registration or a promise by a voter to perform a
condition to be qualified to vote in a political exercise.
To repeat, the affidavit is required of immigrants and permanent
residents abroad because by their status in their host countries, they are

presumed to have relinquished their intent to return to this country; thus,

without the affidavit, the presumption of abandonment of Philippine
domicile shall remain.
Further perusal of the transcripts of the Senate proceedings discloses
another reason why the Senate required the execution of said affidavit. It
wanted the affiant to exercise the option to return or to express his
intention to return to his domicile of origin and not to preempt that choice
by legislation. Thus:
Senator Villar. Yes, we are going back.
It states that: For Filipino immigrants and those who have
acquired permanent resident status abroad, a requirement
for the registration is the submission of a Sworn Declaration
of Intent to Return duly sworn before any Philippine embassy
or consulate official authorized to administer oath
Mr. President, may we know the rationale of this provision? Is the
purpose of this Sworn Declaration to include only those who
have the intention of returning to be qualified to exercise the
right of suffrage? What if the Filipino immigrant has no
purpose of returning? Is he automatically disbarred from
exercising this right to suffrage?
Senator Angara. The rationale for this, Mr. President, is
that we want to be expansive and all-inclusive in this
law. That as long as he is a Filipino, no matter
whether he is a green-card holder in the U.S. or not,
he will be authorized to vote. But if he is already a
green-card holder, that means he has acquired
permanent residency in the United States, then he
must indicate an intention to return. This is what
makes for the definition of domicile. And to acquire the
vote, we thought that we would require the immigrants and
the green-card holders . . . Mr. President, the three
administration senators are leaving, maybe we may ask for a
vote [Laughter].
Senator Villar. For a merienda, Mr. President.
Senator Angara. Mr. President, going back to the business at
hand. The rationale for the requirement that an immigrant or
a green-card holder should file an affidavit that he will go
back to the Philippines is that, if he is already an immigrant
or a green-card holder, that means he may not return to the
country any more and that contradicts the definition of
domicile under the law.
But what we are trying to do here, Mr. President, is really
provide the choice to the voter. The voter, after
consulting his lawyer or after deliberation within the family,
may decide No, I think we are risking our permanent status

in the United States if we file an affidavit that we want to go

back. But we want to give him the opportunity to
make that decision. We do not want to make that
decision for him. [39](Emphasis supplied)
The jurisprudential declaration in Caasi vs. Court of Appeals that green
card holders are disqualified to run for any elective office finds no
application to the present case because the Caasi case did not, for obvious
reasons, consider the absentee voting rights of Filipinos who are
immigrants and permanent residents in their host countries.
In the advent of The Overseas Absentee Voting Act of 2003 or R.A.
9189, they may still be considered as a qualified citizen of the Philippines
abroad upon fulfillment of the requirements of registration under the new
law for the purpose of exercising their right of suffrage.
It must be emphasized that Section 5(d) does not only require an
affidavit or a promise to resume actual physical permanent residence in
the Philippines not later than three years from approval of his/her
registration, the Filipinos abroad must also declare that they have not
applied for citizenship in another country. Thus, they must return to the
Philippines; otherwise, their failure to return shall be cause for the removal
of their names from the National Registry of Absentee Voters and his/her
permanent disqualification to vote in absentia.
Thus, Congress crafted a process of registration by which a Filipino
voter permanently residing abroad who is at least eighteen years old, not
otherwise disqualified by law, who has not relinquished Philippine
citizenship and who has not actually abandoned his/her intentions to return
to his/her domicile of origin, the Philippines, is allowed to register and vote
in the Philippine embassy, consulate or other foreign service
establishments of the place which has jurisdiction over the country where
he/she has indicated his/her address for purposes of the elections, while
providing for safeguards to a clean election.
Thus, Section 11 of R.A. No. 9189 provides:
SEC. 11. Procedure for Application to Vote in Absentia.
11.1. Every qualified citizen of the Philippines abroad whose application for
registration has been approved, including those previously registered
under Republic Act No. 8189, shall, in every national election, file with the
officer of the embassy, consulate or other foreign service establishment
authorized by the Commission, a sworn written application to vote in a
form prescribed by the Commission. The authorized officer of such
embassy, consulate or other foreign service establishment shall transmit to
the Commission the said application to vote within five (5) days from
receipt thereof. The application form shall be accomplished in triplicate and
submitted together with the photocopy of his/her overseas absentee voter
certificate of registration.
11.2. Every application to vote in absentia may be done personally at, or
by mail to, the embassy, consulate or foreign service establishment, which

has jurisdiction over the country where he/she has indicated his/her
address for purposes of the elections.
11.3. Consular and diplomatic services rendered in connection with the
overseas absentee voting processes shall be made available at no cost to
the overseas absentee voter.
Contrary to petitioners claim that Section 5(d) circumvents the
Constitution, Congress enacted the law prescribing a system of overseas
absentee voting in compliance with the constitutional mandate. Such
mandate expressly requires that Congress provide a system
ofabsentee voting that necessarily presupposes that the qualified citizen of
the Philippines abroad is not physically present in the country. The
provisions of Sections 5(d) and 11 are components of the system of
overseas absentee voting established by R.A. No. 9189. The qualified
Filipino abroad who executed the affidavit is deemed to have retained his
domicile in the Philippines. He is presumed not to have lost his domicile by
his physical absence from this country. His having become an immigrant or
permanent resident of his host country does not necessarily imply an
abandonment of his intention to return to his domicile of origin, the
Philippines. Therefore, under the law, he must be given the opportunity to
express that he has not actually abandoned his domicile in the Philippines
by executing the affidavit required by Sections 5(d) and 8(c) of the law.
Petitioners speculative apprehension that the implementation of
Section 5(d) would affect the credibility of the elections is insignificant as
what is important is to ensure that all those who possess the qualifications
to vote on the date of the election are given the opportunity and permitted
to freely do so. The COMELEC and the Department of Foreign Affairs have
enough resources and talents to ensure the integrity and credibility of any
election conducted pursuant to R.A. No. 9189.
As to the eventuality that the Filipino abroad would renege on his
undertaking to return to the Philippines, the penalty of perpetual
disenfranchisement provided for by Section 5(d) would suffice to serve as
deterrence to non-compliance with his/her undertaking under the affidavit.
Petitioner argues that should a sizable number of immigrants renege
on their promise to return, the result of the elections would be affected and
could even be a ground to contest the proclamation of the winning
candidates and cause further confusion and doubt on the integrity of the
results of the election. Indeed, the probability that after an immigrant has
exercised the right to vote, he shall opt to remain in his host country
beyond the third year from the execution of the affidavit, is not
farfetched. However, it is not for this Court to determine the wisdom of a
legislative exercise. As expressed in Taada vs. Tuvera,[40] the Court is not
called upon to rule on the wisdom of the law or to repeal it or modify it if
we find it impractical.
Congress itself was conscious of said probability and in fact, it has
addressed the expected problem. Section 5(d) itself provides for a
deterrence which is that the Filipino who fails to return as promised stands
to lose his right of suffrage. Under Section 9, should a registered overseas

absentee voter fail to vote for two consecutive national elections, his name
may be ordered removed from the National Registry of Overseas Absentee
Voters.
Other serious legal questions that may be raised would be: what
happens to the votes cast by the qualified voters abroad who were not able
to return within three years as promised? What is the effect on the votes
cast by the non-returnees in favor of the winning candidates?The votes
cast by qualified Filipinos abroad who failed to return within three years
shall not be invalidated because they were qualified to vote on the date of
the elections, but their failure to return shall be cause for the removal of
the names of the immigrants or permanent residents from the National
Registry of Absentee Voters and their permanent disqualification to vote in
absentia.
In fine, considering the underlying intent of the Constitution, the Court
does not find Section 5(d) of R.A. No. 9189 as constitutionally defective.
B. Is Section 18.5 of R.A. No. 9189 in relation to Section 4 of the
same Act in contravention of Section 4, Article VII of the
Constitution?
Section 4 of R.A. No. 9189 provides that the overseas absentee voter
may vote for president, vice-president, senators and party-list
representatives.
Section 18.5 of the same Act provides:
SEC. 18. On-Site Counting and Canvassing.
.........
18. 5 The canvass of votes shall not cause the delay of the proclamation of
a winning candidate if the outcome of the election will not be affected by
the results thereof. Notwithstanding the foregoing, the Commission is
empowered to order the proclamation of winning
candidates despite the fact that the scheduled election has not taken
place in a particular country or countries, if the holding of elections therein
has been rendered impossible by events, factors and circumstances
peculiar to such country or countries, in which events, factors and
circumstances are beyond the control or influence of the
Commission. (Emphasis supplied)
Petitioner claims that the provision of Section 18.5 of R.A. No. 9189
empowering the COMELEC to order the proclamation of winning candidates
insofar as it affects the canvass of votes and proclamation of winning
candidates for president and vice-president, is unconstitutional because it
violates the following provisions of paragraph 4, Section 4 of Article VII of
the Constitution:
SEC. 4 . . .
The returns of every election for President and Vice-President, duly
certified by the board of canvassers of each province or city, shall be
transmitted to the Congress, directed to the President of the Senate. Upon
receipt of the certificates of canvass, the President of the Senate shall, not

later than thirty days after the day of the election, open all the certificates
in the presence of the Senate and the House of Representatives in joint
public session, and the Congress, upon determination of the authenticity
and due execution thereof in the manner provided by law, canvass the
votes.
The person having the highest number of votes shall be proclaimed
elected, but in case two or more shall have an equal and highest number
of votes, one of them shall forthwith be chosen by the vote of a majority of
all the Members of both Houses of the Congress, voting separately.
The Congress shall promulgate its rules for the canvassing of the
certificates.
...
which gives to Congress the duty to canvass the votes and proclaim the
winning candidates for president and vice-president.
The Solicitor General asserts that this provision must be harmonized
with paragraph 4, Section 4, Article VII of the Constitution and should be
taken to mean that COMELEC can only proclaim the winning Senators and
party-list representatives but not the President and Vice-President. [41]
Respondent COMELEC has no comment on the matter.
Indeed, the phrase, proclamation of winning candidates, in Section
18.5 of R.A. No. 9189 is far too sweeping that it necessarily includes the
proclamation of the winning candidates for the presidency and the vicepresidency.
Section 18.5 of R.A. No. 9189 appears to be repugnant to Section 4,
Article VII of the Constitution only insofar as said Section totally
disregarded the authority given to Congress by the Constitution to proclaim
the winning candidates for the positions of president and vice-president.
In addition, the Court notes that Section 18.4 of the law, to wit:
18.4. . . . Immediately upon the completion of the canvass, the chairman of
the Special Board of Canvassers shall transmit via facsimile, electronic
mail, or any other means of transmission equally safe and reliable the
Certificates of Canvass and the Statements of Votes to the Commission, .
. . [Emphasis supplied]
clashes with paragraph 4, Section 4, Article VII of the Constitution which
provides that the returns of every election for President and Vice-President
shall be certified by the board of canvassers to Congress.
Congress could not have allowed the COMELEC to usurp a power that
constitutionally belongs to it or, as aptly stated by petitioner, to encroach
on the power of Congress to canvass the votes for president and vicepresident and the power to proclaim the winners for the said positions. The
provisions of the Constitution as the fundamental law of the land should be
read as part of The Overseas Absentee Voting Act of 2003 and hence, the
canvassing of the votes and the proclamation of the winning candidates for

president and vice-president for the entire nation must remain in the hands
of Congress.
C. Are Sections 19 and 25 of R.A. No. 9189 in violation of Section
1, Article IX-A of the Constitution?
Petitioner avers that Sections 19 and 25 of R.A. No. 9189 violate
Article IX-A (Common Provisions) of the Constitution, to wit:
Section 1. The Constitutional Commissions, which shall be independent,
are the Civil Service Commission, the Commission on Elections, and the
Commission on Audit. (Emphasis supplied)
He submits that the creation of the Joint Congressional Oversight
Committee with the power to review, revise, amend and approve the
Implementing Rules and Regulations promulgated by the COMELEC, R.A.
No. 9189 intrudes into the independence of the COMELEC which, as a
constitutional body, is not under the control of either the executive or
legislative departments of government; that only the COMELEC itself can
promulgate rules and regulations which may be changed or revised only by
the majority of its members; and that should the rules promulgated by the
COMELEC violate any law, it is the Court that has the power to review the
same via the petition of any interested party, including the legislators.
It is only on this question that respondent COMELEC submitted its
Comment. It agrees with the petitioner that Sections 19 and 25 of R.A. No.
9189 are unconstitutional. Like the petitioner, respondent COMELEC
anchors its claim of unconstitutionality of said Sections upon Section 1,
Article IX-A of the Constitution providing for the independence of the
constitutional commissions such as the COMELEC. It asserts that its power
to formulate rules and regulations has been upheld in Gallardo vs. Tabamo,
Jr.[42] where this Court held that the power of the COMELEC to formulate
rules and regulations is implicit in its power to implement regulations
under Section 2(1) of Article IX-C[43] of the Constitution. COMELEC joins the
petitioner in asserting that as an independent constitutional body, it may
not be subject to interference by any government instrumentality and that
only this Court may review COMELEC rules and only in cases of grave
abuse of discretion.
The COMELEC adds, however, that another provision, vis--vis its rulemaking power, to wit:
SEC. 17. Voting by Mail.
17.1. For the May, 2004 elections, the Commission shall authorize voting
by mail in not more than three (3) countries, subject to the approval of
the Congressional Oversight Committee. Voting by mail may be
allowed in countries that satisfy the following conditions:
a) Where the mailing system is fairly well-developed and secure to prevent
occasion for fraud;
b) Where there exists a technically established identification system that
would preclude multiple or proxy voting; and

c) Where the system of reception and custody of mailed ballots in the

embassies, consulates and other foreign service establishments concerned
are adequate and well-secured.
Thereafter, voting by mail in any country shall be allowed only upon review
and approval of the Joint Congressional Oversight Committee.
. . . . . . . . . (Emphasis supplied)
is likewise unconstitutional as it violates Section 1, Article IX-A mandating
the independence of constitutional commissions.
The Solicitor General takes exception to his prefatory statement that
the constitutional challenge must fail and agrees with the petitioner that
Sections 19 and 25 are invalid and unconstitutional on the ground that
there is nothing in Article VI of the Constitution on Legislative Department
that would as much as imply that Congress has concurrent power to
enforce and administer election laws with the COMELEC; and by the
principles of exclusio unius est exclusio alterius and expressum facit
cessare tacitum, the constitutionally enumerated powers of Congress
circumscribe its authority to the exclusion of all others.
The parties are unanimous in claiming that Sections 19, 25 and
portions of Section 17.1 are unconstitutional. Thus, there is no actual issue
forged on this question raised by petitioner.
However, the Court finds it expedient to expound on the role of
Congress through the Joint Congressional Oversight Committee (JCOC)vis-vis the independence of the COMELEC, as a constitutional body.
R.A. No. 9189 created the JCOC, as follows:
SEC. 25. Joint Congressional Oversight Committee. A Joint Congressional
Oversight Committee is hereby created, composed of the Chairman of the
Senate Committee on Constitutional Amendments, Revision of Codes and
Laws, and seven (7) other Senators designated by the Senate President,
and the Chairman of the House Committee on Suffrage and Electoral
Reforms, and seven (7) other Members of the House of Representatives
designated by the Speaker of the House of
Representatives: Provided, That, of the seven (7) members to be
designated by each House of Congress, four (4) should come from the
majority and the remaining three (3) from the minority.
The Joint Congressional Oversight Committee shall have the power
to monitor and evaluate the implementation of this Act. It shall
review, revise, amend and approve the Implementing Rules and
Regulations promulgated by the Commission. (Emphasis supplied)
SEC. 19. Authority of the Commission to Promulgate Rules. The
Commission shall issue the necessary rules and regulations to effectively
implement the provisions of this Act within sixty (60) days from the
effectivity of this Act. The Implementing Rules and Regulations shall
be submitted to the Joint Congressional Oversight Committee
created by virtue of this Act for prior approval.
. . . . . . . . . (Emphasis supplied)

Composed of Senators and Members of the House of Representatives, the

Joint Congressional Oversight Committee (JCOC) is a purely legislative
body. There is no question that the authority of Congress to monitor and
evaluate the implementation of R.A. No. 9189 is geared towards possible
amendments or revision of the law itself and thus, may be performed in aid
of its legislation.
However, aside from its monitoring and evaluation functions, R.A. No.
9189 gives to the JCOC the following functions: (a) to review, revise,
amend and approve the Implementing Rules and Regulations (IRR)
promulgated by the COMELEC [Sections 25 and 19]; and (b) subject to the
approval of the JCOC [Section 17.1], the voting by mail in not more than
three countries for the May 2004 elections and in any country determined
by COMELEC.
The ambit of legislative power under Article VI of the Constitution is
circumscribed by other constitutional provisions. One such provision is
Section 1 of Article IX-A of the 1987 Constitution ordaining that
constitutional commissions such as the COMELEC shall be independent.
Interpreting Section 1, Article X of the 1935 Constitution providing
that there shall be an independent COMELEC, the Court has held that
[w]hatever may be the nature of the functions of the Commission on
Elections, the fact is that the framers of the Constitution wanted it to be
independent from the other departments of the Government. [44] In an
earlier case, the Court elucidated:
The Commission on Elections is a constitutional body. It is intended to play
a distinct and important part in our scheme of government. In the
discharge of its functions, it should not be hampered with restrictions that
would be fully warranted in the case of a less responsible organization. The
Commission may err, so may this court also. It should be allowed
considerable latitude in devising means and methods that will insure the
accomplishment of the great objective for which it was created free,
orderly and honest elections. We may not agree fully with its choice of
means, but unless these are clearly illegal or constitute gross abuse of
discretion, this court should not interfere. Politics is a practical matter, and
political questions must be dealt with realistically not from the standpoint
of pure theory. The Commission on Elections, because of its fact-finding
facilities, its contacts with political strategists, and its knowledge derived
from actual experience in dealing with political controversies, is in a
peculiarly advantageous position to decide complex political questions.
[45]
(Emphasis supplied)
The Court has no general powers of supervision over COMELEC which
is an independent body except those specifically granted by the
Constitution, that is, to review its decisions, orders and rulings. [46] In the
same vein, it is not correct to hold that because of its recognized extensive
legislative power to enact election laws, Congress may intrude into the
independence of the COMELEC by exercising supervisory powers over its
rule-making authority.

By virtue of Section 19 of R.A. No. 9189, Congress has empowered the

COMELEC to issue the necessary rules and regulations to effectively
implement the provisions of this Act within sixty days from the effectivity
of this Act. This provision of law follows the usual procedure in drafting
rules and regulations to implement a law the legislature grants an
administrative agency the authority to craft the rules and regulations
implementing the law it has enacted, in recognition of the administrative
expertise of that agency in its particular field of operation. [47] Once a law is
enacted and approved, the legislative function is deemed accomplished
and complete. The legislative function may spring back to Congress
relative to the same law only if that body deems it proper to review, amend
and revise the law, but certainly not to approve, review, revise and amend
the IRR of the COMELEC.
By vesting itself with the powers to approve, review, amend, and
revise the IRR for The Overseas Absentee Voting Act of 2003,Congress
went beyond the scope of its constitutional authority. Congress trampled
upon the constitutional mandate of independence of the COMELEC. Under
such a situation, the Court is left with no option but to withdraw from its
usual reticence in declaring a provision of law unconstitutional.
The second sentence of the first paragraph of Section 19 stating that
[t]he Implementing Rules and Regulations shall be submitted to the Joint
Congressional Oversight Committee created by virtue of this Act for prior
approval, and the second sentence of the second paragraph of Section 25
stating that [i]t shall review, revise, amend and approve the Implementing
Rules and Regulations promulgated by the Commission, whereby Congress,
in both provisions, arrogates unto itself a function not specifically vested
by the Constitution, should be stricken out of the subject statute for
constitutional infirmity. Both provisions brazenly violate the mandate on
the independence of the COMELEC.
Similarly, the phrase, subject to the approval of the Congressional
Oversight Committee in the first sentence of Section 17.1 which empowers
the Commission to authorize voting by mail in not more than three
countries for the May, 2004 elections; and the phrase, only upon review
and approval of the Joint Congressional Oversight Committee found in the
second paragraph of the same section are unconstitutional as they require
review and approval of voting by mail in any country after the 2004
elections. Congress may not confer upon itself the authority to approve or
disapprove the countries wherein voting by mail shall be allowed, as
determined by the COMELEC pursuant to the conditions provided for in
Section 17.1 of R.A. No. 9189. [48] Otherwise, Congress would overstep the
bounds of its constitutional mandate and intrude into the independence of
the COMELEC.
During the deliberations, all the members of the Court agreed to
adopt the separate opinion of Justice Reynato S. Puno as part of the
ponencia on the unconstitutionality of Sections 17.1, 19 and 25 of R.A. No.
9189 insofar as they relate to the creation of and the powers given to the
Joint Congressional Oversight Committee.

WHEREFORE, the petition is partly GRANTED. The following portions

of R.A. No. 9189 are declared VOID for being UNCONSTITUTIONAL:
a) The phrase in the first sentence of the first paragraph of
Section 17.1, to wit: subject to the approval of the Joint
Congressional Oversight Committee;
b) The portion of the last paragraph of Section 17.1, to wit: only
upon review and approval of the Joint Congressional
Oversight Committee;
c) The second sentence of the first paragraph of Section 19, to
wit: The Implementing Rules and Regulations shall be
submitted to the Joint Congressional Oversight
Committee created by virtue of this Act for prior
approval; and
d) The second sentence in the second paragraph of Section 25, to wit: It
shall review, revise, amend and approve the Implementing Rules
and Regulations promulgated by the Commission of the same law;
for being repugnant to Section 1, Article IX-A of the Constitution
mandating the independence of constitutional commission, such as
COMELEC.
The constitutionality of Section 18.5 of R.A. No. 9189
is UPHELD with respect only to the authority given to the COMELEC to
proclaim the winning candidates for the Senators and party-list
representatives but not as to the power to canvass the votes and proclaim
the winning candidates for President and Vice-President which is lodged
with Congress under Section 4, Article VII of the Constitution.
The constitutionality of Section 5(d) is UPHELD.
Pursuant to Section 30 of R.A. No. 9189, the rest of the provisions of
said law continues to be in full force and effect.
SO ORDERED.

EN BANC
LOIDA NICOLAS-LEWIS, GREGORIO B. MACABENTA,
ALEJANDRO A. ESCLAMADO, ARMANDO B. HEREDIA,
REUBEN S. SEGURITAN, ERIC LACHICA FURBEYRE,
TERESITA A. CRUZ, JOSEFINA OPENA DISTERHOFT,
MERCEDES V. OPENA, CORNELIO R. NATIVIDAD,
EVELYN D. NATIVIDAD,
Petitioners,

G.R. No. 162759

August 4, 2006

- versus COMMISSION ON ELECTIONS,

Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
GARCIA, J.:
In this petition for certiorari and mandamus, petitioners, referring to
themselves as "duals" or dual citizens, pray that they and others who
retained or reacquired Philippine citizenship under Republic Act (R.A.) No.
9225, the Citizenship Retention and Re-Acquisition Act of 2003, be allowed
to avail themselves of the mechanism provided under the Overseas
Absentee Voting Act of 2003 [1] (R.A. 9189) and that the Commission on
Elections (COMELEC) accordingly be ordered to allow them to vote and
register as absentee voters under the aegis of R.A. 9189.
The facts:
Petitioners are successful applicants for recognition of Philippine citizenship
under R.A. 9225 which accords to such applicants the right of suffrage,
among others. Long before the May 2004 national and local elections,

petitioners

sought

registration

and

certification

as "overseas absentee voter" only to be advised by the Philippine Embassy

the petition. As may be expected, petitioners were not able to register let
alone vote in said elections.

in the United States that, per a COMELEC letter to the Department of

Foreign Affairs dated September 23, 2003 [2], they have yet no right to vote
in such elections owing to their lack of the one-year residence requirement
prescribed by the Constitution. The same letter, however, urged the
different Philippine posts abroad not to discontinue their campaign for
voters registration, as the residence restriction adverted to would
contextually affect merely certain individuals who would likely be eligible
to vote in future elections.

On May 20, 2004, the Office of the Solicitor General (OSG) filed
a Manifestation (in Lieu of Comment), therein stating that all qualified
overseas Filipinos, including dual citizens who care to exercise the right
of suffrage, may do so , observing, however, that the conclusion of the
2004 elections had rendered the petition moot and academic. [7]

The holding of the 2004 elections had, as the OSG pointed out, indeed
rendered the petition moot and academic, but insofar only as petitioners

Prodded for clarification by petitioner Loida Nicolas-Lewis in the light of the

participation in such political exercise is concerned. The broader and

ruling in Macalintal vs. COMELEC

transcendental issue tendered or subsumed in the petition, i.e., the

[3]

on the residency requirement, the

propriety of allowing duals to participate and vote as absentee voter in

COMELEC wrote in response:

Although R.A. 9225 enjoys the presumption of
constitutionality , it is the Commission's position that those
who have availed of the law cannot exercise the right of
suffrage given under the OAVL for the reason that the OAVL
was not enacted for them. Hence, as Filipinos who have
merely re-acquired their citizenship on 18 September
2003 at the earliest, and as law and jurisprudence now
stand, they are considered regular voters who have to
meet the requirements of residency, among others under
Section 1, Article 5 of the Constitution. [4]

future elections, however, remains unresolved.

Observing the petitioners and the COMELECs respective formulations of

the issues, the same may be reduced into the question of whether or not
petitioners and others who might have meanwhile retained and/or
reacquired Philippine citizenship pursuant to R.A. 9225 may vote as
absentee voter under R.A. 9189.
The Court resolves the poser in the affirmative, and thereby accords merit

Faced with the prospect of not being able to vote in the May 2004 elections

to the petition.

owing to the COMELEC's refusal to include them in the National Registry of

Absentee Voters, petitioner Nicolas-Lewis et al.,

[5]

filed on April 1, 2004 this

petition for certiorari and mandamus.

In esse, this case is all about suffrage. A quick look at the governing
provisions on the right of suffrage is, therefore, indicated.
We start off with Sections 1 and 2 of Article V of the Constitution,

A little over a week before the May 10, 2004 elections, or on April 30,
2004, the COMELEC filed a Comment,[6] therein praying for the denial of

respectively reading as follows:

SECTION 1. Suffrage may be exercised by all citizens of
the Philippines not otherwise disqualified by law, who are

at least eighteen years of age, and who shall have resided

in the Philippines for at least one year and in the place
wherein they propose to vote for at least six months
immediately preceding the election. xxx.

country. Failure to return shall be the cause for the removal

of the name of the immigrant or permanent resident from
the National Registry of Absentee Voters and his/her
permanent disqualification to vote in absentia.

SEC 2. The Congress shall provide a system for absentee

voting by qualified Filipinos abroad.

(e)
Any citizen of the Philippines abroad
previously declared insane or incompetent by competent
authority . (Words in bracket added.)

In a nutshell, the aforequoted Section 1 prescribes residency requirement

as a general eligibility factor for the right to vote. On the other hand,

Notably, Section 5 lists those who cannot avail themselves of the absentee

Section 2 authorizes Congress to devise a system wherein an absentee

voting mechanism. However, Section 5(d) of the enumeration respecting

may vote, implying that a non-resident may, as an exception to the

residency prescription in the preceding section, be allowed to vote.

Filipino immigrants and permanent residents in another country opens an

exception and qualifies the disqualification rule. Section 5(d) would,

In response to its above mandate, Congress enacted R.A. 9189 - the

OAVL[8] - identifying in its Section 4 who can vote under it and in the
following section who cannot, as follows:
Section 4. Coverage. All citizens of the Philippines abroad,
who are not otherwise disqualified by law, at least eighteen
(18) years of age on the day of elections, may vote for
president,
vice-president,
senators
and
party-list
representatives.
Section 5. Disqualifications. The following shall be
disqualified from voting under this Act:
(a) Those who have lost their Filipino citizenship in
accordance with Philippine laws;
(b) Those who have expressly renounced their Philippine
citizenship and who have pledged allegiance to a foreign
country;
(c) Those who have [been] convicted in a final judgment by
a court or tribunal of an offense punishable by
imprisonment of not less than one (1) year, including those
who have been found guilty of Disloyalty as defined under
Article 137 of the Revised Penal Code, .;
(d) An immigrant or a permanent resident who is
recognized as such in the host country, unless he/she
executes, upon registration, an affidavit prepared for the
purpose by the Commission declaring that he/she shall
resume actual physical permanent residence in the
Philippines not later than three (3) years from approval of
his/her registration under this Act. Such affidavit shall also
state that he/she has not applied for citizenship in another

however, face a constitutional challenge on the ground that, as narrated

in Macalintal, it violates Section 1, Article V of the 1987 Constitution which
requires that the voter must be a resident in
the Philippines for at least one year and in the place where
he proposes to vote for at least six months immediately
preceding an election. [The challenger] cites Caasi vs.
Court of Appeals [9] to support his claim [where] the Court
held that a green card holder immigrant to the [US] is
deemed to have abandoned his domicile and residence in
the Philippines.
[The challenger] further argues that Section 1, Article V of
the Constitution does not allow provisional registration or a
promise by a voter to perform a condition to be qualified to
vote in a political exercise; that the legislature should not
be allowed to circumvent the requirement of the
Constitution on the right of suffrage by providing a
condition thereon which in effect amends or alters the
aforesaid residence requirement to qualify a Filipino abroad
to vote. He claims that the right of suffrage should not be
granted to anyone who, on the date of the election, does
not possess the qualifications provided for by Section 1,
Article V of the Constitution.[10] (Words in bracket added.)
As may be recalled, the Court upheld the constitutionality of Section 5(d) of
R.A. 9189 mainly on the strength of the following premises:

As finally approved into law, Section 5(d) of R.A. No. 9189

specifically
disqualifies
an immigrant or permanent
resident who is recognized as such in the host country
because immigration or permanent residence in another
country implies renunciation of one's residence in his
country of origin. However, same Section allows an
immigrant and permanent resident abroad to register as
voter for as long as he/she executes an affidavit to show
that he/she has not abandoned his domicile in pursuance
of the constitutional intent expressed in Sections 1 and 2 of
Article V that all citizens of the Philippines not otherwise
disqualified by law must be entitled to exercise the right of
suffrage and, that Congress must establish a system for
absentee voting; for otherwise, if actual, physical residence
in the Philippines is required, there is no sense for the
framers of the Constitution to mandate Congress to
establish a system for absentee voting.
Contrary to the claim of [the challenger], the execution of
the affidavit itself is not the enabling or enfranchising
act. The affidavit required in Section 5(d) is not only proof
of the intention of the immigrant or permanent resident to
go back and resume residency in the Philippines, but more
significantly, it serves as an explicit expression that he had
not in fact abandoned his domicile of origin. Thus, it is not
correct to say that the execution of the affidavit under
Section 5(d) violates the Constitution that proscribes
provisional registration or a promise by a voter to perform
a condition to be qualified to vote in a political exercise.

Natural-born citizens of the Philippines who, after the

effectivity of this Act, become citizens of a foreign country
shall retain their Philippine citizenship upon taking the
aforesaid oath.
SEC. 4. Derivative Citizenship. The unmarried child,
whether legitimate, illegitimate or adopted, below eighteen
(18) years of age, of those who re-acquire Philippine
citizenship upon effectivity of this Act shall be deemed
citizens of the Philippines.
SEC. 5. Civil and Political Rights and Liabilities. Those who
retain or re-acquire Philippine citizenship under this Act
shall enjoy full civil and political rights and be subject to all
attendant liabilities and responsibilities under existing laws
of the Philippines and the following conditions:
(1) Those intending to exercise their right of
suffrage must meet the requirements under
Section 1, Article V of the Constitution, Republic Act
No. 9189, otherwise known as The Overseas
Absentee Voting Act of 2003 and other existing
laws;

Soon after Section 5(d) of R.A. 9189 passed the test of constitutionality,

(2) Those seeking elective public office in the

Philippines shall meet the qualifications for holding
such public office as required by the Constitution
and existing laws and, at the time of the filing of
the certificate of candidacy, make a personal and
sworn renunciation of any and all foreign
citizenship ;

Congress enacted R.A. 9225 the relevant portion of which reads:

3) xxx xxx xxx.

SEC. 2. Declaration of Policy. It is

policy of the State that all Philippine
citizens of another country shall be
lost their Philippine citizenship under
Act.

hereby declared the

citizens who become
deemed not to have
the conditions of this

SEC. 3. Retention of Philippine Citizenship. Any provision of

law to the contrary notwithstanding, natural-born citizens
of the Philippines who have lost their Philippine citizenship
by reason of their naturalization as citizens of a foreign
country are hereby deemed to have re-acquired Philippine
citizenship upon taking the following oath of allegiance to
the Republic:
xxx xxx xxx

(4) xxx xxx xxx;

(5) That right to vote or be elected or appointed to
any public office in the Philippines cannot be
exercised by, or extended to, those who:
(a) are candidates for or are occupying any
public office in the country of which they
are naturalized citizens; and/or
(b) are in active service as commissioned
or non-commissioned officers in the armed
forces of the country which they are
naturalized citizens.

After what appears to be a successful application for recognition of

in the Philippines first before they can exercise their right to vote. On the

Philippine citizenship under R.A. 9189, petitioners now invoke their right

contrary, R.A. 9225, in implicit acknowledgment that duals are most likely

to enjoy political rights, specifically the right of suffrage, pursuant to

non-residents, grants under its Section 5(1) the same right of suffrage as

Section 5 thereof.

that

granted

an

absentee

voter

under

R.A.

9189.

It

cannot

be

overemphasized that R.A. 9189 aims, in essence, to enfranchise as much

Opposing the petitioners bid, however, respondent COMELEC invites
attention to the same Section 5 (1) providing that duals can enjoy their
right to vote, as an adjunct to political rights, only if they meet the

as possible all overseas Filipinos who, save for the residency requirements
exacted of an ordinary voter under ordinary conditions, are qualified to
vote. Thus, wrote the Court in Macalintal:

requirements of Section 1, Article V of the Constitution, R.A. 9189 and

other existing laws. Capitalizing on what at first blush is the clashing
provisions of the aforecitedprovision of the Constitution, which, to repeat,
requires residency in the Philippines for a certain period, and R.A. 9189
which grants a Filipino non-resident absentee voting rights, [12] COMELEC
argues:
4. DUALS MUST FIRST ESTABLISH THEIR
RESIDENCE IN THE PHILIPPINES

DOMICILE/

4.01. The inclusion of such additional and specific

requirements in RA 9225 is logical. The
duals, upon renouncement of their Filipino
citizenship and acquisition of foreign
citizenship, have practically and legally
abandoned their domicile and severed their
legal ties to the homeland as a
consequence. Having
subsequently
acquired a second citizenship (i.e., Filipino)
then, duals must, for purposes of voting,
first of all, decisively and definitely
establish their domicile through positive
acts;
The Court disagrees.
As may be noted, there is no provision in the dual citizenship law - R.A.
9225 - requiring "duals" to actually establish residence and physically stay

It is clear from these discussions of the Constitutional

Commission that [it] intended to enfranchise as much as
possible all Filipino citizens abroad who have not
abandoned their domicile of origin. The Commission even
intended to extend to young Filipinos who reach voting age
abroad whose parents domicile of origin is in
the Philippines, and consider them qualified as voters for
the first time.
It is in pursuance of that intention that the Commission
provided for Section 2 [Article V] immediately after the
residency requirement of Section 1. By the doctrine of
necessary implication in statutory construction, , the
strategic location of Section 2 indicates that the
Constitutional Commission provided for an exception to the
actual residency requirement of Section 1 with respect to
qualified Filipinos abroad. The same Commission has in
effect declared that qualified Filipinos who are not in
the Philippines may be allowed to vote even though they
do not satisfy the residency requirement in Section 1,
Article V of the Constitution.
That Section 2 of Article V of the Constitution is an
exception to the residency requirement found in Section 1
of the same Article was in fact the subject of debate when
Senate Bill No. 2104, which became R.A. No. 9189, was
deliberated upon on the Senate floor, thus:
Senator Arroyo. Mr. President, this
should be looked into in relation to
constitutional
provisions. I
think
sponsor and I would agree that
Constitution is supreme in any statute
we may enact.

bill
the
the
the
that

Let me read Section 1, Article V, of the

Constitution .
xxx xxx xxx
Now, Mr. President, the Constitution says,
who
shall
have
resided
in
the Philippines. They
are
permanent
immigrants. They have changed residence
so
they
are
barred
under
the
Constitution. This is why I asked whether
this committee amendment which in fact
does not alter the original text of the bill
will have any effect on this?
Senator
Angara. Good
question,
Mr.
President. And this has been asked in
various fora. This is in compliance with the
Constitution. One, the interpretation here
of residence is synonymous with domicile.
As the gentleman and I know, Mr.
President, domicile is the intent to return to
one's home. And the fact that a Filipino
may have been physically absent from
the Philippines and may be physically
a resident of the United States, for
example, but has a clear intent to
return to the Philippines, will make
him qualified as a resident of the
Philippines under this law.
This is consistent, Mr. President, with the
constitutional mandate that we that
Congress must provide a franchise to
overseas Filipinos.
If we read the Constitution and the
suffrage
principle
literally
as
demanding physical presence, then
there is no way we can provide for
offshore voting to our offshore
kababayan, Mr. President.
Senator Arroyo. Mr. President, when the
Constitution says, in Section 2 of Article V,
it reads: The Congress shall provide a
system for securing the secrecy and
sanctity of the ballot as well as a system
for absentee voting by qualified Filipinos
abroad.

The key to this whole exercise, Mr.

President, is qualified. In other words,
anything that we may do or say in
granting our compatriots abroad must
be anchored on the proposition that
they
are
qualified. Absent
the
qualification, they cannot vote. And
residents (sic) is a qualification.
xxx xxx xxx
Look at what the Constitution says In the
place wherein they propose to vote for at
least six months immediately preceding
the election.
Mr. President, all of us here have run (sic)
for office.
I live in Makati. My neighbor is Pateros . We
are separated only by a creek. But one who
votes in Makati cannot vote in Pateros
unless he resides in Pateros for six
months. That is how restrictive our
Constitution is. .
As I have said, if a voter in Makati would
want to vote in Pateros, yes, he may do
so. But he must do so, make the transfer
six months before the election, otherwise,
he is not qualified to vote.
xxx xxx xxx
Senator Angara. It is a good point to raise,
Mr. President. But it is a point already welldebated
even
in
the
constitutional
commission of 1986. And the reason
Section 2 of Article V was placed
immediately after the six-month/oneyear residency requirement is to
demonstrate
unmistakably
that
Section 2 which authorizes absentee
voting is an exception to the sixmonth/one-year
residency
requirement. That is the first principle,
Mr. President, that one must remember.
The second reason, Mr. President, is that
under our jurisprudence residency has

been interpreted
domicile.

as

synonymous

with

But the third more practical

reason,
is,
if
we follow the interpretation of the ge
ntleman, then
it
is
legally
and
constitutionally impossible to give a
franchise to vote to overseas Filipinos
who do not physically live in the
country, which is quite ridiculous
because that is exactly the whole
point of this exercise to enfranchise
them
and
empower
them
to
vote. [14] (Emphasis and words in bracket
added; citations omitted)

While perhaps not determinative of the issue tendered herein, we note that
the expanded thrust of R.A. 9189 extends also to what might be tag as the
next generation of "duals". This may be deduced from the inclusion of the
provision on derivative citizenship in R.A. 9225 which reads:
SEC. 4. Derivative Citizenship. The unmarried child,
whether legitimate, illegitimate or adopted, below eighteen
(18) years of age, of those who re-acquire Philippine
citizenship upon effectivity of this Act shall be deemed
citizens of the Philippines.

It is very likely that a considerable number of those unmarried children bel

Lest it be overlooked, no less than the COMELEC itself admits that

ow eighteen (18) years of age had never set foot in the Philippines. Now

the Citizenship Retention and Re-Acquisition Act expanded the coverage of

then, if the next generation of "duals" may nonetheless avail themselves

overseas absentee voting. According to the poll body:

the right to enjoy full civil and political rights under Section 5 of the Act,

1.05 With the passage of RA 9225 the scope of overseas

absentee voting has been consequently expanded so as to
include Filipinos who are also citizens of other countries,
subject, however, to the strict prerequisites indicated in the
pertinent provisions of RA 9225; [15]

then there is neither no rhyme nor reason why the petitioners and other
present day "duals," provided they meet the requirements under Section 1,
Article V of the Constitution in relation to R.A. 9189, be denied the right of
suffrage as an overseas absentee voter. Congress could not have plausibly

Considering the unison intent of the Constitution and R.A. 9189 and the
expansion of the scope of that law with the passage of R.A. 9225, the

intended such absurd situation.

WHEREFORE, the instant petition is GRANTED. Accordingly, the Court

irresistible conclusion is that "duals" may now exercise the right of suffrage

rules and so holds that those who retain or re-acquire Philippine citizenship

thru the absentee voting scheme and asoverseas absentee voters. R.A.

under Republic

9189 defines the terms adverted to in the following wise:

Absentee Voting refers to the process by which qualified
citizens of the Philippines abroad exercise their right to
vote;
Overseas Absentee Voter refers to a citizen of
the Philippines who is qualified to register and vote under
this Act, not otherwise disqualified by law, who is abroad
on the day of elections;

Act

No.

9225,

the Citizenship

Retention

and

Re-Acquisition Act of 2003, may exercise the right to vote under the
system of absentee voting in Republic Act No. 9189, the Overseas
Absentee Voting Act of 2003.
SO ORDERED.

denied due course to the Certificate of Candidacy (COC) Velasco had filed
for the position of Mayor of the Municipality of Sasmuan, Pampanga.
THE ANTECEDENTS

Velasco was born in San Antonio, Sasmuan, Pampanga on June 22, 1952 to
Arsenio Velasco and Lucia Mangalindan. He married Evelyn D. Castillo
on June 29, 1975 at the Roman Catholic Church of Sasmuan. In 1983, he
moved

to and

worked

in the United

States

of

America where he

subsequently became a citizen.

Sometime in 2006, Velasco applied for dual citizenship under Republic Act
No. 9225, otherwise known as the Citizenship Retention and Re-Acquisition
Act of 2003. His application was approved on July 31, 2006. On the same
day, he took his oath of allegiance to the Republic of the Philippines before
the

Philippine

Consulate

General

in San

Francisco. He

returned

to

the Philippines onSeptember 14, 2006 and has not left since, except for a
3-day Hongkong trip from September 26, 2006 to September 29, 2009.

Soon thereafter or on October 13, 2006, Velasco applied for

EN BANC Dec 24, 2008 G.R. No. 180051

registration as a voter of Sasmuan, Pampanga. The Election Registration

Nardo Velasco vs COMELEC and Mozart P. Panlaqui

Board (ERB) denied his application. Thereupon, Velasco filed a petition for

BRION, J.

the inclusion of his name in the list of voters with the Municipal Trial Court

This petition for certiorari filed by Nardo M. Velasco (Velasco) under Rule

of Sasmuan (MTC). The MTC, finding no evidence of Velascos change of

64, in relation with Rule 65, of the Revised Rules of Court seeks to set

domicile, granted Velascos petition on February 9, 2007; it reversed the

aside and annul [1] the Resolution dated July 6, 2007 of the Second

ERBs decision and ordered Velascos inclusion in the List of Voters of

Division of the Commission on Elections (COMELEC) and [2] the Resolution

Sasmuan.

dated October 15, 2007 of the COMELEC en banc, in SPA Case No. 07-148
entitled Mozart P. Panlaqui v. Nardo M. Velasco. The assailed resolutions

On March 1, 2007, Branch 52 of the Regional Trial Court of Guagua,

Pampanga (RTC) reversed and set aside, on appeal, the MTC decision. The

RTC reasoned out that Velasco lost his domicile of origin [Sasmuan,

under Section 1, Article V of the Constitution) to register as voter; he

Pampanga] when he became a US citizen; under Philippine immigration

arrived in the Philippines only last September 14, 2006; and (4) Velasco is

laws, he could only stay in the Philippines as a visitor or as a resident alien.

not eligible to run for office since he is not a qualified voter. Panlaqui asked

Velasco, according to the RTC, only regained or reacquired his Philippine

for the annulment, revocation and cancellation of, or denial of due course

residency on July 31, 2006 when he reacquired his Filipino citizenship. The

to, Velascos COC that allegedly contained obvious and gross material

RTC based this conclusion on our ruling in Caasi v. Court of Appeals[1] that

misrepresentation. The case was docketed as SPA Case No. 07-148.

naturalization in a foreign country results in the abandonment of domicile

in the Philippines. Thus, the RTC found that Velasco failed to comply with

In his Answer, Velasco denied the allegations of Panlaquis petition

the residency requirement under the Constitution, making him ineligible to

and claimed in defense that: (1) he possesses all the qualifications of a

vote in the May 14, 2007 elections.

voter of Sasmuan, as he is a domiciliary and permanent resident of the

Philippines and Sasmuan since birth; that, when he took his oath of

Velasco appealed the RTC decision to the Court of Appeals

allegiance on July 31, 2006, he is considered not to have lost his Philippine

(CA) via a petition for review under Rule 42 of the Rules of Court; the

citizenship and therefore continues to enjoy full civic and political rights

appeal was docketed as CA-G.R. SP No. 98259.

under the Constitution and the statutes; (2) the appeal or review of the RTC
decision is pending resolution with the Court of Appeals; (3) he did not act

It was against this factual backdrop that Velasco filed

on March

28,

2007 his

COC

for

the

position

of

Mayor

with malice, bad faith and gross misrepresentation when he stated that he

of

is a registered voter of Precinct No. 103-A of Sasmuan in his COC, as the

Sasmuan. Velascos COC contains, among others, the required information

MTC decision has not been reversed with finality; (4) he has renounced his

that he is a registered voter of Precinct No. 103-A of Sasmuan,

American citizenship on March 29, 2007 or prior to the filing of his COC,

Pampanga. He executed on even date an Affidavit renouncing, abandoning,

making him eligible to seek elective public office pursuant to Republic Act

and relinquishing his American citizenship.

No. 9255; and (5) he possesses all the qualifications of a voter of Sasmuan
and of a candidate for Municipal Mayor, Sasmuan being his domicile of

The next day, private respondent Mozart Panlaqui (Panlaqui), who

origin and permanent residence. He claimed that he is qualified to vote

also filed his COC for the position of Mayor of Sasmuan, filed a Petition to

and seek public office until a final judgment is rendered saying otherwise;

Deny Due Course To and/or To Cancel Velascos COC, claiming that: (1)

hence, he did not commit any misrepresentation and Panlaquis petition

contrary to Velascos claim, he is not a registered voter of Precinct No. 103-

should be dismissed.

A, as his name is not included in the list of voters; (2) the RTC has rendered
a decision denying Velascos petition for inclusion as voter; (3) Velasco does

Velasco garnered 7,822 votes [the most number] for the position of

not possess the constitutional requirement of legal residency (i.e., one year

Mayor of Sasmuan in the May 14, 2007 election. As the COMELEC failed to

residency in the Philippines immediately preceding the election as provided

resolve Panlaquis petition prior to the election, Velasco was proclaimed

Mayor of Sasmuan on May 16, 2007.He took his oath of office and assumed

2.

Respondent Comelec committed grave abuse of

discretion when it ruled that the March 1,
2008 decision of the RTC of Guagua, Pampanga
reversing the earlier decision of the MTC of
Sasmuan, Pampanga is already final and
executory.

3.

Respondent COMELEC committed grave abuse

of discretion when it annulled the proclamation
of the petitioner without notice and hearing.

4.

Respondent Comelec committed grave abuse of

discretion
when
it
ruled
that
petitioner
committed material misrepresentation in his COC
by merely relying on private respondents
baseless allegations in the petition to deny due
course to petitioners COC without taking into
consideration that petitioner possesses all the
qualifications and none of the disqualification of
a voter.

the powers and functions of the office on June 30, 2007.

On July 6, 2007, the Second Division of the COMELEC issued a

Resolution the first of the interrelated resolutions assailed in the present
petition canceling Velascos COC and declaring his proclamation as Mayor
of Sasmuan null and void. Citing Section 138 of the Omnibus Election Code
(OEC)[2] which

declared

the

decision

of

the

RTC

in

the

voters

inclusion/exclusion proceedings final and executory, the Second Division of

the COMELEC found Velasco guilty of material misrepresentation when he
claimed in his COC filed on March 28, 2007 that he is a registered voter of
Sasmuan, Pampanga. This defect, according to the Second Division,
effectively voided Velascos COC.

Velasco moved to reconsider the Second Divisions Resolution, but

the COMELEC en banc in a Resolution dated October 15, 2007 (also
assailed

in

this

petition)

denied

the

motion. The

COMELEC en

banc essentially affirmed the Second Divisions ruling.Additionally, the

COMELEC pointed out that in the absence of a writ or order issued by the
CA (where the appeal from the RTC decision in the inclusion/exclusion case
was then pending) enjoining the enforcement of the RTC decision, it had to
apply Section 138 of the OEC. Velasco responded to this development by
filing the present petition with this Court.

THE PETITION, COMMENTS AND RELATED DEVELOPMENTS

The petition is based on the following grounds/arguments:
1.
Respondent Comelec committed grave abuse of
discretion when it decided the issue on
petitioners right to vote despite its apparent
lack of jurisdiction on this issue and the
pendency of such prejudicial issue before the CA.

In his comment, Panlaqui asserts that: (1) Velasco committed

forum shopping, as another case involving the same issues is on appeal
and pending resolution with the CA; and (2) in light of this appeal, not all
the requisites for a petition for certiorari are present; in the alternative and
assuming certiorari to be proper, the COMELEC did not commit grave
abuse of discretion, as the RTC decision is final, executory, and nonappealable.

The Office of the Solicitor General (OSG) filed a Comment in behalf

of the COMELEC. The OSG argues that the COMELEC did not commit grave
abuse of discretion. The COMELEC has jurisdiction under Section 78 of
Batas Pambansa Blg. 881, as amended, or the OEC over petitions to deny

due course and/or cancel a COC (COC-denial/cancellation). There was

explicitly stating that the jurisprudence it cited to support its appellate

likewise no denial of due process; Velasco filed an Answer to Panlaquis

jurisdiction in voters inclusion/exclusion proceeding is no longer good law

petition and was fully heard before the COMELEC denied due course to his

because of the amendments to the election law on which its cited

COC. The OSG also argues that Velascos immigration to the United

jurisprudence was based. It declared that Section 138 of the OEC being

States and

an

explicit that the decision on appeal by the RTC in inclusion and exclusion

abandonment of his Philippine domicile and residence. Finally, the OSG

cases is immediately final and executory appears to be a clear mandate

claims that Velasco committed misrepresentation in declaring his residence

for this Court (the CA) not to entertain instant petition for lack of

at Sasmuan in his COC a ground for the cancellation of COC under Section

jurisdiction.

subsequent

acquisition

of UScitizenship

constituted

78 of the OEC. The real issue, according to the OSG, is not Velascos right to
vote, but the misrepresentation he committed when he filed his COC.

Based on these submissions, we are called upon to resolve the

following issues: (1) whether Velasco forum-shopped; and (2) whether the

On March 5, 2008, the COMELEC issued a writ of execution to

COMELEC gravely abused its discretion in canceling Velascos COC.

implement the assailed resolutions. The CA, on the other hand, rendered
on March 13, 2008 its decision in CA-GR SP No. 98259 granting Velascos

THE COURTS RULING

appeal, thereby reversing and setting aside the RTC decision. The appellate
court ruled that, contrary to the RTCs finding, Velasco effectively
reacquired his residence when he decided to relocate in the Philippines for

We find the petition devoid of merit.

good in 2003; from 2003-2006, Velasco stayed in the Philippines for a total
of almost two (2) years for the last three (3) years immediately preceding

Grave Abuse of Discretion.

the May 14, 2007 election; from the totality of these acts, Velasco revealed

The well-settled rule is that this Court will not interfere with a

his intention to reacquire his rights as a Filipino citizen. Citing Macalintal v.

COMELEC decision unless the COMELEC is shown to have committed grave

Commission on Elections,[3] the CA considered Velasco a qualified voter.

abuse of discretion.[4] Correctly understood, grave abuse of discretion is

such capricious and whimsical exercise of judgment as is equivalent to lack

On Velascos motion, we issued a status quo ante order enjoining

the COMELEC from implementing the assailed resolutions.

of jurisdiction, or [an] exercise of power in an arbitrary and despotic

manner by reason of passion or personal hostility, or an exercise of
judgment so patent and gross as to amount to an evasion of a positive

In an interesting twist, the CA issued on August 19, 2008 an

Amended Decision in response to a motion for reconsideration of its earlier
decision dismissing Velascos Rule 42 petition for lack of jurisdiction. It
reversed its earlier ruling that it has jurisdiction to entertain the appeal,

duty or to a virtual refusal to perform the duty enjoined, or to act in a

manner not at all in contemplation of law.[5]

true faith and allegiance thereto; that he will obey the

laws, legal orders, and decrees promulgated by the duly
constituted authorities; that he is not a permanent resident
or immigrant to a foreign country; that the obligation
assumed by his oath is assumed voluntarily, without
mental reservation or purpose of evasion; and that the
facts stated in the certificate of candidacy are true
to the best of his knowledge.

Velasco imputes grave abuse of discretion on the COMELEC for

canceling

his

COC

on

the

sole

ground

that

he

committed

false

representation when he claimed that he is a registered voter of Precinct No.

103-A. This imputation directly poses to us the question: was the
COMELEC ruling capriciously, whimsically, and arbitrarily made?

xxxx

In answering this question, we recognize at the outset that together

SEC. 78. Petition to deny due course to or cancel a

certificate of candidacy. A verified petition seeking to
deny due course or to cancel a certificate of candidacy
may be filed by any person exclusively on the ground that
any material representation contained therein as required
under Section 74 hereof is false. The petition may be filed
at any time not later than twenty-five days from the time of
the filing of the certificate of candidacy and shall be
decided, after due notice and hearing not later than fifteen
days before the election.

with the cancellation of the COC that is directly before us, we have to
consider the effect and impact of the inclusion/exclusion proceedings that
Velasco brought before the MTC which, on appeal to the RTC, ultimately led
to

the

denial

of

his

listing

as

voter

in

Sasmuan. While

this

inclusion/exclusion case is not before us, it was the ruling in this proceeding
that the COMELEC cited as ground for the cancellation of Velascos COC
after Velasco claimed that he is a registered voter of Precinct No. 103-A of
Sasmuan, Pampanga.
The COC Denial/Cancellation Proceedings.

The false representation that these provisions mention must necessarily

pertain to a material fact, not to a mere innocuous mistake.This is

Section 74, in relation with Section 78 of the OEC governs the

emphasized by the consequences of any material falsity: a candidate who

cancellation of, and grant or denial of due course to, COCs.The combined

falsifies a material fact cannot run; if he runs and is elected, cannot serve;

application of these sections requires that the facts stated in the COC by

in both cases, he or she can be prosecuted for violation of the election

the would-be candidate be true, as any false representation of a material

laws.

fact is a ground for the COCs cancellation or the withholding of due

qualification for elective office, such as his or her citizenship and residence.

course. To quote these provisions:

SEC.
74. Contents
of
certificate
of
candidacy. The certificate of candidacy shall state that
the person filing it is announcing his candidacy for the
office stated therein and that he is eligible for said office; if
for Member of the Batasang Pambansa, the province,
including its component cities, highly urbanized city or
district or sector which he seeks to represent; the political
party to which he belongs; civil status; his date of birth;
residence; his post office address for all election purposes;
his profession or occupation; that he will support and
defend the Constitution of the Philippines and will maintain

[6]

Obviously, these facts are those

that

refer

to

candidates

The candidates status as a registered voter similarly falls under this

classification as it is a requirement that, by law (the Local Government

Code), must be reflected in the COC. The reason for this is obvious: the
candidate, if he or she wins, will work for and represent the local
government under which he is running.

Separately from the requirement of materiality, a false representation

of his petition upon the Board.The petition shall be decided

within fifteen (15) days after its filing.

under Section 78 must consist of a deliberate attempt to mislead,

misinform, or hide a fact which would otherwise render a candidate
ineligible. In other words, it must be made with the intention to deceive the
electorate as to the would-be candidates qualifications for public office.
The Voters Inclusion/Exclusion Proceedings.

The process of voters inclusion/exclusion, as part of the voters

registration process, is provided and defined under Sections 138, 139 and

If the decision is for the inclusion of voters in the

permanent list of voters, the Board shall place the
application for registration previously disapproved in the
corresponding book of voters and indicate in the
application for registration the date of the order of
inclusion and the court which issued the same [As
amended by Section 34 of RA 8189].
Section 143. Common rules governing judicial
proceedings in the matter of inclusion, exclusion
and correction of names of voters.

143 of the OEC. These sections provide:

Sec.
138. Jurisdiction
in
inclusion
and
exclusion cases. The Municipal and Metropolitan Trial
Courts shall have original and exclusive jurisdiction over all
cases of inclusion and exclusion of voters from the list in
their respective cities or municipalities. Decisions of the
Municipal or Metropolitan Trial Courts may be appealed by
the aggrieved party to the Regional Trial Courts within five
(5) days from receipt of notice thereof. Otherwise, said
decision shall become final and executory. The regional
trial court shall decide the appeal within ten (10) days from
the time it is received and the decision shall become final
and executory. No motion for reconsideration shall be
entertained [As amended by Section 33 of Republic Act No.
8189 (RA 8189)].
Sec. 139. Petition for inclusion of voters in the
list. Any person whose application for registration has
been disapproved by the Board or whose name has been
stricken out from the list may file with the court a petition
to include his name in the permanent list of voters in his
precinct at any time except one hundred five (105) days
prior to a regular election or seventy-five (75) days prior to
a special election. It shall be supported by a certificate of
disapproval of his application and proof of service of notice

(a) Petition for inclusion, exclusion, or correction of

names of voters shall be filed during office hours;
(b) Notice of the place, date and time of the
hearing of the petition shall be served upon the members
of the Board and the challenged voter upon the filing of the
petition. Service of such notice may be made by sending a
copy thereof by personal delivery or by leaving it in the
possession of a person of sufficient discretion in the
residence of the challenged voter, or by registered
mail. Should the foregoing procedures be not practicable,
the notice shall be posted in the bulletin board of the city
or municipal hall and in two (2) other conspicuous places
within the city or municipality;
xxx
(c) A petition shall refer only one to one (1)
precinct and implead the Board as respondents;.
(d) No costs shall be assessed against any party in
these proceedings. However, if the court should find that
the application has been filed solely to harass the adverse
party and cause him to incur expenses, it shall order the
culpable party to pay the costs and incidental expenses.

propose to vote, at least six (6) months immediately preceding the

(e) Any voter, candidate or political party who may

be affected by the proceedings may intervene and present
his evidence.

election.The OEC, on the other hand, requires under its Section 74 that the
would-be candidate state material facts such as, among others, his
residence. Under the combined application of Section 65 of the OEC and

(f) The decision shall be based on the evidence

presented and in no case rendered upon a stipulation of
facts. x x x

Section 39 of the Local Government Code (LGC), a local official must

among others have the same residency requirement as required under the
VRA. Another point of convergence is on the candidates status as a

(g) The petition shall be heard and decided within

ten (10) days from the date of its filing. Cases appealed to
the Regional Trial Court shall be decided within ten (10)
days from receipt of the appeal. In all, cases, the court
shall decide these petitions not later than fifteen (15) days
before the election and the decision shall be immediately
final and executory. [As amended by Section 32 of RA
8189]

registered voter; a candidate for a local government position must be a

registered voter in the barangay, municipality, province, or city where he
or she intends to run for office.

The
Inclusion/exclusion proceedings essentially involve the simple issue of
whether a petitioner shall be included in or excluded from the list of voters
based on the qualifications required by law and the facts presented to
show possession of these qualifications.

terms

of

purpose,

voters

inclusion/exclusion

and

COC

to be registered as a voter to be eligible to vote, while the other refers to

the application to be a candidate. Because of their differing purposes, they
also involve different issues and entail different reliefs although the facts
on which they rest may have commonalities where they may be said to
converge or interface. One such commonality is on the matter of
residence. Section 9 of Republic Act 8189, otherwise known as the Voters
Act (VRA),

requires

in

the

two

proceedings

likewise

differ. Velascos remedy from the adverse decision in his petition for
inclusion as voter is as provided under Section 138 of the OEC quoted
above. From the MTC, the recourse is to the RTC whose decision is final and
executory, correctible

by

the

Court

of

Appeals

only

by

writ

jurisdiction. On the other hand, the approval of a certificate of candidacy or

denial/cancellation are different proceedings; one refers to the application

Registration

available

of certiorari based on grave abuse of discretion amounting to lack of

The Proceedings Compared.

In

remedies

that

voters

shall

have

resided

in

the Philippinesfor at least one (1) year, and in the place wherein they

its denial is a matter directly cognizable by the COMELEC, with the decision
of its Division reviewable by the COMELEC en banc whose decision is in
turn reviewable by this Court under Rule 64 of the Rules of Court and
Section 7, of Article IX-A of the 1987 Constitution.
No Grave Abuse of Discretion.
In the present case, the ERB denied Velascos registration as a
voter, which denial the RTC subsequently supported. As already mentioned,
this denial by the RTC is, by law, final and executory. Since Velascos
knowledge of the RTC decision at the time he filed his COC is not disputed,

the COMELEC concluded that he committed a material misrepresentation

of August 19, 2008, albeit on motion for reconsideration, that it had no

when he stated under oath in his COC that he is a registered voter of

jurisdiction to entertain Velascos appeal.

Sasmuan.

The Right to Vote

The above discussions, particularly on the distinctions between

Under these facts and legal situation, we cannot hold that the

inclusion/exclusion

proceedings
and

belie

and

Velascos

COC

denial/cancellation

COMELECs conclusion is legally erroneous, much less that it is tainted by

proceedings, refute

position

that

the

COMELEC

grave abuse of discretion. It is a matter of record, appearing in a final RTC

improperly ruled on his right to vote when it cancelled his COC.The

judgment no less, that Velasco was not a registered voter of Sasmuan at

tribunals given authority by law and who actually ruled on whether Velasco

the time he filed his COC. His claim in this regard was therefore false and

should have the right to vote in Sasmuan, Pampanga were the ERB, the

was a material misrepresentation. Other than his active misrepresentation,

MTC, and subsequently, the RTC. The COMELEC did not so rule; it

Velasco likewise was inexplicably silent about, and thus knowingly omitted

merely recognized the RTCs final and executory ruling on the

any mention of, the denial of his registration. As the COMELEC did, we can

matter.

only conclude that he deliberately concealed the existence of the final and
executory RTC ruling when he filed his COC. He could not disclose this fact
as the unavoidable consequence of disclosure was to render him
unqualified to be a candidate.[8]

This conclusion is not a hairsplitting sophistry, but one based on

clear

distinctions

drawn

by

the

law.

As

above

pointed

out,

inclusion/exclusion and COC denial/cancellation proceedings, while they

may ultimately have common factual bases, are still proceedings poles

That the COMELEC relied on the RTC ruling in canceling the COC of

apart in terms of the issues, reliefs, and remedies involved. That at some

Velasco cannot likewise be a legal error as Section 138 of the OEC is clear

point

they

may

converge

(as

in

this

case,

where

the

COC

and categorical in its terms: Decisions of the Municipal or Metropolitan Trial

denial/cancellation proceeding relied on and used the results of the voters

Courts may be appealed by the aggrieved party to the Regional Trial

inclusion/exclusion proceeding) does not erase the distinctions between

Courts within five (5) days from receipt of notice thereof. Otherwise, said

them. In the context of this case, it does not mean that the COMELEC

decision shall become final and executory. The regional trial court shall

commonly with the ERB, the MTC and the RTC ruled on Velascos right to

decide the appeal within ten days from the time the appeal was received

vote because the COMELEC relied on the latters ruling.

and its decision shall be final and executory. We note that when Velasco
sought recourse with the Court of Appeals, he did so by way of
appeal under Rule 42 of the Rules of Court a recourse that was not
available to him because an RTC ruling in an inclusion/exclusion is final and
executory. This led the appellate court to recognize in its Amended Decision

In Domino v. COMELEC[9] where this Court faced the contention that

the decision of the first level court in an exclusion proceeding on the issue
of residence is final and conclusive on the COMELEC hearing a COC
denial/cancellation proceeding under Section 78 of the OED we ruled

that the factual findings of the trial court and its resultant conclusions in

under Republic Act No. 9189 (the Oversees Absentee Voting Law or

the inclusion/exclusion proceedings on matters other than the right to vote

the OAVL)[15] as we ruled in Nicolas-Lewis v. COMELEC.[16] In Macalintal v.

in the precinct within its territorial jurisdiction are not conclusive on and do

COMELEC,[17] we significantly said that absentee voters are exempted from

not rise to the level of a res judicata ruling with respect to the COMELEC.

the constitutional residency requirement for regular Philippine voters.Thus,

The reason is that inclusion/exclusion proceedings, while judicial in

the residency requirements we cited above under the VRA and the LGC do

character, are summary proceedings. [11] We further added that a decision

not apply to Velasco, assuming he registered as a dual citizen/absentee

in an inclusion/exclusion proceeding does not operate as a bar to any

voter.

[10]

future action in any other election that a party may take concerning his
right to be registered as a voter.[12] Otherwise stated, a ruling on the right
to vote by the trial court for a specific election is binding on the
COMELEC. By clear implication, the COMELEC itself does not rule on the
right to vote by recognizing in a Sec. 78 COC denial/cancellation
proceeding the final and executory ruling by a court, as mandated by law,
in an inclusion/exclusion proceeding.

By law, however, the right of dual citizens who vote as absentee

voters pertains only to the election of national officials, specifically: the
president, the vice-president, the senators, and party-list representatives.
[18]

Thus, Velasco was not eligible to voteas an absentee voter in the local

election of 2007. In fact, the records do not show that Velasco ever
registered as an absentee voter for the 2007 election. [19]

Velascos Qualifications/Disqualifications as a Voter

On the other hand, Velasco could not have registered as a regular

voter because he did not possess the residency requirement of one-year

Whether Velasco possesses all the qualifications and none of the

stay in the Philippines and six-months stay in the municipality where he

disqualifications to register as a voter of Sasmuan, Pampanga is a matter

proposed to vote at the time of the election. The records show that he

that is not directly before us as his inclusion as a Sasmuan voter is not

arrived in the Philippines only on September 14, 2006 and applied for

before us. As the COMELEC did, we rely on the final and executory RTC

registration on October 13 of that year [20] for the election to be held in May

ruling excluding Velasco from the Sasmuan voters list. We observe,

of the following year (2007). To hark back and compare his case to a similar

however, that at the time he filed his application for registration with the

case,Coquilla v. COMELEC,[21] Velasco, before acquiring his dual citizenship

COMELEC local office on October 13, 2006, Velasco was a dual citizen. The

status, was an American citizen who had lost his residency and domiciliary

records show that Velasco renounced his American citizenship only

status in the Philippines; whose sojourn in the Philippines was via a visitors

on March 28, 2007,[13] although he secured his dual citizenship status as

visa;

early

in San

the Philippines. Like Coquilla before him, Velasco could not have therefore

Francisco, California.[14] Under his dual citizenship status, he possessed the

validly registered as a regular voter eight months before the May 2007

right to vote in Philippine elections through the absentee voting scheme

local elections.

as July

31,

2006 at

the

Philippine

Consulate

and

who

never

established

permanent

residence

in

cases in favor of the respective Senate or the House of Representatives

The Due Process Issue.

electoral tribunals after the candidates take their oath of office. [29]

Finally, we see no merit in Velascos argument that the COMELEC

Under these circumstances, Velascos claim of denial of due process

annulled his proclamation as Mayor without due process.The nullification of

is misplaced since he was given the opportunity to be heard in a

his proclamation as a winning candidate was an outcome - a necessary

proceeding that would result in the annulment of his proclamation; due

legal consequence of the cancellation of his COC pursuant to Section 78 of

process was duly served because its essence is the opportunity to be heard

the OEC. A COC cancellation proceeding essentially partakes of the nature

and this was fully given to Velasco.[30]

of a disqualification case.[22] In the present case, Velasco filed an Answer to

Panlaquis petition to cancel or deny due course to his (Velascos) COC;

In sum, the COMELEC resolutions canceling Velascos COC are

hence, he was afforded the opportunity to be heard in the cancellation of

procedurally and substantively correct, thus negating the grave abuse of

his COC.

discretion that Velasco alleges.

Under the combined application of Sections 6 [23] and 7[24] of

Republic Act No. 6646,[25] candidates who are disqualified by final judgment
before the election shall not be voted for and the votes cast for them shall
not be counted. If the disqualification or COC cancellation/denial case is not
resolved before election day, the proceedings shall continue even after
the election and the proclamation of the winner. [26] In the meanwhile, the
candidate may be voted for and be proclaimed if he or she wins, but the
COMELECs jurisdiction to deny due course and cancel his or her COC
continues. This rule applies even if the candidate facing disqualification is
voted for and receives the highest number of votes, [27] and even if the
candidate is proclaimed and has taken his oath of office. [28] The only
exception to this rule is in the case of congressional or senatorial

As our final point, we are aware that Velasco won the May 14,
2007 mayoralty election in Sasmuan. We recognize, too, that we have
ruled in the past that a candidates victory in the election may be
considered a sufficient basis to rule in favor of the candidate sought to be
disqualified if the main issue involves defects in the candidates certificate
of candidacy. We said that while provisions relating to certificates of
candidacy

are

mandatory

in

terms,

it

is

an

established

rule

of

interpretation as regards election laws, that mandatory provisions

requiring certain steps before elections will be construed as directory after
the elections, to give effect to the will of the people. We so ruled in Quizon
v. COMELEC and Saya-ang v. COMELEC.[31]

candidates with unresolved disqualification or COC denial/cancellation

The present case perhaps presents the proper time and opportunity to fine-

cases after the elections. Pursuant to Section 17 of Article VI of the

tune our above ruling. We say this with the realization that a blanket and

Constitution, the COMELEC ipso jure loses jurisdiction over these unfinished

unqualified reading and application of this ruling can be fraught with

dangerous significance for the rule of law and the integrity of our

elections. For one, such blanket/unqualified reading may provide a way

We distinguish our ruling in this case from others that we have

around the law that effectively negates election requirements aimed at

made in the past by the clarification that COC defects beyond matters of

providing the electorate with the basic information to make an informed

form and that involve material misrepresentations cannot avail of the

choice about a candidates eligibility and fitness for office.

benefit of our ruling that COC mandatory requirements before elections are

The first requirement that may fall when an unqualified reading is

made is Section 39 of the LGC which specifies the basic qualifications of
local government officials. Equally susceptive of being rendered toothless
is Section 74 of the OEC that sets out what should be stated in a
COC. Section 78 may likewise be emasculated as mere delay in the
resolution of the petition to cancel or deny due course to a COC can render
a Section 78 petition useless if a candidate with false COC data wins. To
state the obvious, candidates may risk falsifying their COC qualifications if
they know that an election victory will cure any defect that their COCs may
have. Election victory then becomes a magic formula to bypass election
eligibility requirements.

considered merely directory after the people shall have spoken. A

mandatory and material election law requirement involves more than the
will

of

the

people

in

any

given

locality.

Where

a material

COC

misrepresentation under oath is made, thereby violating both our election

and criminal laws, we are faced as well with an assault on the will of the
people of the Philippines as expressed in our laws. In a choice between
provisions on material qualifications of elected officials, on the one hand,
and the will of the electorate in any given locality, on the other, we believe
and so hold that we cannot choose the electorate will. The balance must
always tilt in favor of upholding and enforcing the law. To rule otherwise is
to slowly gnaw at the rule of law.
WHEREFORE, we DISMISS the petition for lack of merit. The Status Quo

In the process, the rule of law suffers; the clear and unequivocal

Order we

issued

is

hereby

ordered IMMEDIATELY

LIFTED.

legal command, framed by a Congress representing the national will, is

We DECLARE that there is no more legal impediment or obstacle to the

rendered inutile because the people of a given locality has decided to vote

implementation of the assailed COMELEC resolutions. No costs.

a candidate into office despite his or her lack of the qualifications Congress
has determined to be necessary.
In the present case, Velasco is not only going around the law by his
claim that he is registered voter when he is not, as has been determined
by a court in a final judgment. Equally important is that he has made a
material

misrepresentation under

oath

in

his

COC regarding

his

qualification. For these violations, he must pay the ultimate price the
nullification of his election victory. He may also have to account in a
criminal court for making a false statement under oath, but this is a matter
for the proper authorities to decide upon.

SO ORDERED.

payment of the fees in question. On February 6, 1954, the Auditor General

issued an order directing the Cashier of the Department of Justice to
deduct from the salary of Leopoldo T. Bacani the amount of P25 every
payday and from the salary of Mateo A. Matoto the amount of P10 every
payday beginning March 30, 1954. To prevent deduction of these fees from
their salaries and secure a judicial ruling that the National Coconut
Corporation is not a government entity within the purview of section 16,
Rule 130 of the Rules of Court, this action was instituted in the Court of
First Instance of Manila.
Defendants set up as a defense that the National Coconut Corporation is a
government entity within the purview of section 2 of the Revised
Administrative Code of 1917 and, hence, it is exempt from paying the
stenographers fees under Rule 130 of the Rules of Court. After trial, the
court found for the Plaintiffs declaring (1) that Defendant National
Coconut Corporation is not a government entity within the purview of
section 16, Rule 130 of the Rules of Court; chan roblesvirtualawlibrary(2)
that the payments already made by said Defendant to Plaintiffs herein and
received by the latter from the former in the total amount of P714, for
copies of the stenographic transcripts in question, are valid, just and
legal; chan roblesvirtualawlibraryand (3) that Plaintiffs are under no
obligation whatsoever to make a refund of these payments already
received by them. This is an appeal from said decision.

EN BANC
[G.R. No. L-9657. November 29, 1956.]
LEOPOLDO T. BACANI and MATEO A. MATOTO, Plaintiffs-Appellees,
vs. NATIONAL COCONUT CORPORATION, ET AL., Defendants,
NATIONAL COCONUT CORPORATION and BOARD OF
LIQUIDATORS, Defendants-Appellants.

DECISION
BAUTISTA ANGELO, J.:
Plaintiffs herein are court stenographers assigned in Branch VI of the Court
of First Instance of Manila. During the pendency of Civil Case No. 2293 of
said court, entitled Francisco Sycip vs. National Coconut Corporation,
Assistant Corporate Counsel Federico Alikpala, counsel forDefendant,
requested said stenographers for copies of the transcript of the
stenographic notes taken by them during the hearing. Plaintiffs complied
with the request by delivering to Counsel Alikpala the needed transcript
containing 714 pages and thereafter submitted to him their bills for the
payment of their fees. The National Coconut Corporation paid the amount
of P564 to Leopoldo T. Bacani and P150 to Mateo A. Matoto for said
transcript at the rate of P1 per page.
Upon inspecting the books of this corporation, the Auditor General
disallowed the payment of these fees and sought the recovery of the
amounts paid. On January 19, 1953, the Auditor General required
the Plaintiffs to reimburse said amounts on the strength of a circular of the
Department of Justice wherein the opinion was expressed that the National
Coconut Corporation, being a government entity, was exempt from the

Under section 16, Rule 130 of the Rules of Court, the Government of the
Philippines is exempt from paying the legal fees provided for therein, and
among these fees are those which stenographers may charge for the
transcript of notes taken by them that may be requested by any interested
person (section 8). The fees in question are for the transcript of notes
taken during the hearing of a case in which the National Coconut
Corporation is interested, and the transcript was requested by its assistant
corporate counsel for the use of said corporation.
On the other hand, section 2 of the Revised Administrative Code defines
the scope of the term Government of the Republic of the Philippines as
follows:chanroblesvirtuallawlibrary
The Government of the Philippine Islands is a term which refers to the
corporate governmental entity through which the functions of government
are exercised throughout the Philippine Islands, including, save as the
contrary appears from the context, the various arms through which
political authority is made effective in said Islands, whether pertaining to
the central Government or to the provincial or municipal branches or other
form of local government.
The question now to be determined is whether the National Coconut
Corporation may be considered as included in the term Government of the
Republic of the Philippines for the purposes of the exemption of the legal
fees provided for in Rule 130 of the Rules of Court.
As may be noted, the term Government of the Republic of the Philippines
refers to a government entity through which the functions of government
are exercised, including the various arms through which political authority
is made effective in the Philippines, whether pertaining to the central

government or to the provincial or municipal branches or other form of

local government. This requires a little digression on the nature and
functions of our government as instituted in our Constitution.
To begin with, we state that the term Government may be defined as
that institution or aggregate of institutions by which an independent
society makes and carries out those rules of action which are necessary to
enable men to live in a social state, or which are imposed upon the people
forming that society by those who possess the power or authority of
prescribing them (U.S. vs. Dorr, 2 Phil., 332). This institution, when
referring to the national government, has reference to what our
Constitution has established composed of three great departments, the
legislative, executive, and the judicial, through which the powers and
functions of government are exercised. These functions are
twofold:chanroblesvirtuallawlibrary constitute and ministrant. The former
are those which constitute the very bonds of society and are compulsory in
nature; chan roblesvirtualawlibrarythe latter are those that are undertaken
only by way of advancing the general interests of society, and are merely
optional. President Wilson enumerates the constituent functions as
follows:chanroblesvirtuallawlibrary

From the above we may infer that, strictly speaking, there are functions
which our government is required to exercise to promote its objectives as
expressed in our Constitution and which are exercised by it as an attribute
of sovereignty, and those which it may exercise to promote merely the
welfare, progress and prosperity of the people. To this latter class belongs
the organization of those corporations owned or controlled by the
government to promote certain aspects of the economic life of our people
such as the National Coconut Corporation. These are what we call
government-owned or controlled corporations which may take on the form
of a private enterprise or one organized with powers and formal
characteristics of a private corporations under the Corporation Law.
The question that now arises is:chanroblesvirtuallawlibrary Does the fact
that these corporation perform certain functions of government make them
a part of the Government of the Philippines?

(8) Dealings
of
the
state
with
foreign
powers:chanroblesvirtuallawlibrary the preservation of the state from
external danger or encroachment and the advancement of its international
interests. (Malcolm, The Government of the Philippine Islands, p. 19.)

The answer is simple:chanroblesvirtuallawlibrary they do not acquire that

status for the simple reason that they do not come under the classification
of municipal or public corporation. Take for instance the National Coconut
Corporation. While it was organized with the purpose of adjusting the
coconut industry to a position independent of trade preferences in the
United States and of providing Facilities for the better curing of copra
products and the proper utilization of coconut by-products, a function
which our government has chosen to exercise to promote the coconut
industry, however, it was given a corporate power separate and distinct
from our government, for it was made subject to the provisions of our
Corporation Law in so far as its corporate existence and the powers that it
may exercise are concerned (sections 2 and 4, Commonwealth Act No.
518). It may sue and be sued in the same manner as any other private
corporations, and in this sense it is an entity different from our
government. As this Court has aptly said, The mere fact that the
Government happens to be a majority stockholder does not make it a
public corporation (National Coal Co. vs. Collector of Internal Revenue, 46
Phil., 586-587). By becoming a stockholder in the National Coal Company,
the Government divested itself of its sovereign character so far as respects
the transactions of the corporation cralaw . Unlike the Government, the
corporation may be sued without its consent, and is subject to taxation. Yet
the National Coal Company remains an agency or instrumentality of
government. (Government of the Philippine Islands vs. Springer, 50 Phil.,
288.)

The
most
important
of
the
ministrant
functions
are:chanroblesvirtuallawlibrary public works, public education, public
charity, health and safety regulations, and regulations of trade and
industry. The principles deter mining whether or not a government shall
exercise
certain
of
these
optional
functions
are:chanroblesvirtuallawlibrary (1) that a government should do for the
public welfare those things which private capital would not naturally
undertake and (2) that a government should do these things which by its
very nature it is better equipped to administer for the public welfare than is
any private individual or group of individuals. (Malcolm, The Government of
the Philippine Islands, pp. 19-20.)

To recapitulate, we may mention that the term Government of the

Republic of the Philippines used in section 2 of the Revised Administrative
Code refers only to that government entity through which the functions of
the government are exercised as an attribute of sovereignty, and in this
are included those arms through which political authority is made effective
whether they be provincial, municipal or other form of local government.
These are what we call municipal corporations. They do not include
government entities which are given a corporate personality separate and
distinct from the government and which are governed by the Corporation
Law. Their powers, duties and liabilities have to be determined in the light
of that law and of their corporate charters. They do not therefore come

(1) The keeping of order and providing for the protection of persons and
property from violence and robbery.
(2) The fixing of the legal relations between man and wife and between
parents and children.
(3) The regulation of the holding, transmission, and interchange of
property, and the determination of its liabilities for debt or for crime.
(4) The determination of contract rights between individuals.
(5) The definition and punishment of crime.
(6) The administration of justice in civil cases.
(7) The determination of the political duties, privileges, and relations of
citizens.

within the exemption clause prescribed in section 16, Rule 130 of our Rules
of Court.
Public corporations are those formed or organized for the government of a
portion of the State. (Section 3, Republic Act No. 1459, Corporation Law).
The generally accepted definition of a municipal corporation would only
include organized cities and towns, and like organizations, with political
and legislative powers for the local, civil government and police regulations
of the inhabitants of the particular district included in the boundaries of the
corporation. Heller vs. Stremmel, 52 Mo. 309, 312.
In its more general sense the phrase municipal corporation may include
both towns and counties, and other public corporations created by
government for political purposes. In its more common and limited
signification, it embraces only incorporated villages, towns and cities. Dunn
vs. Court of County Revenues, 85 Ala. 144, 146, 4 So. 661. (McQuillin,
Municipal Corporations, 2nd ed., Vol. 1, p. 385.)
We may, therefore, define a municipal corporation in its historical and
strict sense to be the incorporation, by the authority of the government, of
the inhabitants of a particular place or district, and authorizing them in
their corporate capacity to exercise subordinate specified powers of
legislation and regulation with respect to their local and internal concerns.
This power of local government is the distinctive purpose and the
distinguishing feature of a municipal corporation proper. (Dillon, Municipal
Corporations, 5th ed., Vol. I, p. 59.)
It is true that under section 8, Rule 130, stenographers may only charge as
fees P0.30 for each page of transcript of not less than 200 words before
the appeal is taken and P0.15 for each page after the filing of the appeal,
but in this case the National Coconut Corporation has agreed and in fact
has paid P1.00 per page for the services rendered by the Plaintiffs and has
not raised any objection to the amount paid until its propriety was disputed
by the Auditor General. The payment of the fees in question became
therefore contractual and as such is valid even if it goes beyond the limit
prescribed in section 8, Rule 130 of the Rules of Court.
As regards the question of procedure raised by Appellants, suffice it to say
that the same is insubstantial, considering that this case refers not to a
money claim disapproved by the Auditor General but to an action of
prohibition the purpose of which is to restrain the officials concerned from
deducting from Plaintiffs salaries the amount paid to them as
stenographers fees. This case does not come under section 1, Rule 45 of
the Rules of Court relative to appeals from a decision of the Auditor
General.
Wherefore, the decision appealed from is affirmed, without pronouncement
as to costs.
Paras, C.J., Bengzon, Padilla, Montemayor, Labrador, Concepcion,
Reyes, J. B. L., Endencia and Felix, JJ., concur.

EN BANC
G.R. No. L-5

November 16, 1945

CO KIM CHAM ( alias CO CHAM), Petitioner, vs. EUSEBIO VALDEZ TAN

KEH and ARSENIO P. DIZON, Judge of First Instance of
Manila, Respondents.
Marcelino Lontok for petitioner.
Revilla and Palma for respondent Valdez Tan Keh.
Respondent Judge Dizon in his own behalf.
Vicente Hilado and J. A. Wolfson as amici curiae.
R E S O L U T I O N chanrobles virtual law library
FERIA, J.:
This is a motion for reconsideration of our decision rendered in this case
filed by the respondent. Two attorneys at law, who were allowed to appear
as amici curiae, have also presented memoranda to discuss certain points
on which the dissenting opinions rely.chanroblesvirtualawlibrary chanrobles
virtual law library
(1) It is contended that the military occupation of the Philippine Islands by
the Japanese was not actual and effective because of the existence of
guerrilla bands in barrios and mountains and even towns and villages; and
consequently, no government de facto could have been validly established
by the Japanese military forces in the Philippines under the precepts of the
Hague Conventions and the law of
nations.chanroblesvirtualawlibrary chanrobles virtual law library
The presence of guerrilla bands in barrios and mountains, and even in
towns of the Philippines whenever these towns were left by Japanese
garrisons or by the detachments of troops sent on patrol to these places,
was not sufficient to make the military occupation ineffective, nor did it
cause that occupation to cease, or prevent the constitution or
establishment of a de facto government in the Islands. The belligerent
occupation of the Philippines by the Japanese invaders became an
accomplished fact from the time General Wainwright, Commander of the
American and Filipino forces in Luzon, and General Sharp, Commander of
the forces in Visayas and Mindanao, surrendered and ordered the surrender
of their forces to the Japanese invaders, and the Commonwealth
Government had become incapable of publicly exercising its authority, and
the invader had substituted his own authority for that of the legitimate
government in Luzon, Visayas and
Mindanao.chanroblesvirtualawlibrary chanrobles virtual law library
"According to the rules of Land Warfare of the United States Army,
belligerent or so-called military occupation is a question of fact. It
presupposes a hostile invasion as a result of which the invader has
rendered the invaded government incapable of publicly exercising its
authority, and that the invader is in position to substitute and has

substituted his own authority for that of the legitimate government of the
territory invaded." (International Law Chiefly as Interpreted and Applied by
the United States, by Hyde Vol. II, pp. 361, 362.) " Belligerent occupation
must be both actual and effective. Organized resistance must be overcome
and the forces in possession must have taken measures to establish law
and order. It doubtless suffices if the occupying army can, within a
reasonable time, send detachments of troops to make its authority felt
within the occupied district." ( Id., p. 364.) "Occupation once acquired must
be maintained . . . . It does not cease, however, . . . Nor does the existence
of a rebellion or the operations of guerrilla bands cause it to cease, unless
the legitimate government is re-established and the occupant fails
promptly to suppress such rebellion or guerrilla operations." ( Id., p.
365.)chanrobles virtual law library
But supposing arguendo that there were provinces or districts in these
Islands not actually and effectively occupied by the invader, or in which the
latter, consequently, had not substituted his own authority for that of the
invaded government, and the Commonwealth Government had continued
publicly exercising its authority, there is no question as to the validity of
the judicial acts and proceedings of the courts functioning in said territory,
under the municipal law, just as there can be no question as to the validity
of the judgments and proceedings of the courts continued in the territory
occupied by the belligerent occupant, under the law of
nations.chanroblesvirtualawlibrary chanrobles virtual law library
(2) It is submitted that the renunciation in our Constitution and in the
Kellog-Briand Pact of war as an instrument of national policy, rendered
inapplicable the rules of international law authorizing the belligerent
Japanese army of occupation to set up a provisional or de
facto government in the Philippines, because Japan started war
treacherously and emphasized was as an instrument of national policy; and
that to give validity to the judicial acts of courts sponsored by the Japanese
would be tantamount to giving validity to the acts of these invaders, and
would be nothing short of legalizing the Japanese invasion of the
Philippines.chanroblesvirtualawlibrary chanrobles virtual law library
In reply to this contention, suffice it to say that the provisions of the Hague
Conventions which impose upon a belligerent occupant the duty to
continue the courts as well as the municipal laws in force in the country
unless absolutely prevented, in order to reestablish and insure "I" ordre et
al vie publice," that is, the public order and safety, and the entire social
and commercial life of the country, were inserted, not for the benefit of the
invader, but for the protection and benefit of the people or inhabitants of
the occupied territory and of those not in the military service, in order that
the ordinary pursuits and business of society may not be unnecessarily
deranged.chanroblesvirtualawlibrary chanrobles virtual law library

This is the opinion of all writers on international law up to date, among

then Wheaton (Vol. II, p. 236) and Oppenheim (Vol. II, p. 338) in their
recently revised Treatises on International Law, edited in the year 1944,
and the Interpretation of the Supreme Court of the United States in many
cases, specially in the case of Dow vs. Johnson (106 U. S., 158), in which
that Court said: "As a necessary consequence of such occupation and
domination, the political relations of its people to their former government
are, for the time being, severed. But for their protection and benefit, and
the protection and benefit of others not in the military service, or, in other
words, in order that the ordinary pursuits and business of society may not
be unnecessarily deranged, the municipal laws, that is, such as affect
private rights of persons and property and provide for the punishment of
crime, are generally allowed to continue in force, and to be administered
by the ordinary tribunals as they were administered before the occupation.
They are considered as continuing, unless suspended or superseded by the
occupying belligerent." (Dow vs.Johnson, 100 U. S., 158; 25 U. S. [Law,
ed.], 632).chanroblesvirtualawlibrary chanrobles virtual law library
The fact that the belligerent occupant is a treacherous aggressor, as Japan
was, does not, therefore, exempt him from complying with the said
precepts of the Hague Conventions, nor does it make null and void the
judicial acts of the courts continued by the occupant in the territory
occupied. To deny validity to such judicial acts would benefit the invader or
aggressor, who is presumed to be intent upon causing as much harm as
possible to the inhabitants or nationals of the enemy's territory, and
prejudice the latter; it would cause more suffering to the conquered and
assist the conqueror or invader in realizing his nefarious design; in fine, it
would result in penalizing the nationals of the occupied territory, and
rewarding the invader or occupant for his acts of treachery and
aggression.chanroblesvirtualawlibrary chanrobles virtual law library
(3) We held in our decision that the word "processes," as used in the
proclamation of General Douglas MacArthur of October 23, 1944, cannot
be interpreted to mean judicial processes; and because of the cogent
reasons therein set forth, we did not deem it necessary to specify the
processes to which said proclamation should be construed to refer. As
some doubt still lingers in the minds of persons interested is sustaining a
contrary interpretation or construction, we are now constrained to say that
term as used in the proclamation should be construed to mean legislative
and constitutional processes, by virtue of the maxim "noscitur a sociis."
According to this maxim, where a particular word or phrase is ambiguous in
itself or is equally susceptible of various meanings, its meaning may be
made clear and specific by considering the company in which it is found.
(Black on Interpretation of Laws, 2d ed., pp. 194-196.) Since the
proclamation provides that "all laws, regulations and processes of any
other government in the Philippines than that of the said Commonwealth

are null and void," the word "processes" must be interpreted or construed
to refer to the Executive Orders of the Chairman of the Philippine Executive
Commission, Ordinances promulgated by the President of the so-called
Republic of the Philippines, and the Constitution itself of said Republic, and
others that are of the same class as the laws and regulations with which
the word "processes" is associated.chanroblesvirtualawlibrary chanrobles
virtual law library
To illustrate, "an English act required licenses for "houses, rooms, shops, or
buildings, kept open for public refreshment, resort, and entertainment." It
was adjudged that the word "entertainment," in this connection, did not
necessarily mean a concert, dramatic performance, or other
divertissement, nor did it necessarily imply the furnishing of food or drink,
but that, judged from its associations, it meant the reception and
accommodation of the public. So where a policy of marine insurance is
specified to protect the assured against "arrests, restraints, and
detainments of all kings, princes, and people," the word "people" means
the ruling or governing power of the country, this signification being
impressed upon it by its association with the words "kings" and "princes."
Again, in a statute relating to imprisonment for debt, which speaks of
debtors who shall be charged with "fraud" or undue preference to one
creditor to the prejudice of another, the word "undue" means fraudulent. A
statute of bankruptcy, declaring that any fraudulent "gift, transfer or
delivery" of property shall constitute an act of bankruptcy, applies only to
such deliveries as are in the nature of a gift - such as change the
ownership of the property, to the prejudice of creditors; it does not include
a delivery to a bailee for safekeeping." (Black on Interpretation of
Laws, supra.)chanrobles virtual law library
(4) The state of Wheaton (International Law), 7th ed., p. 245) that "when it
is said that an occupier's acts are valid, it must be remembered that no
crucial instances exist to show that if his acts should all be reversed (by
the restored government or its representatives) no international wrong
would be committed," evidently does not mean that the restored
government or its representatives may reverse the judicial acts and
proceedings of the courts during the belligerent occupation without
violating the law of nations and doing any wrong at all. A violation of the
law of nations does not always and necessarily cause an international
wrong. As the said judicial acts which apply the municipal laws, that is,
such as affect private rights of persons and property, and provide for the
punishment of crimes, are good and valid even after occupation has
ceased, although it is true that no crucial instances exist to show that,
were they reversed or invalidated by the restored or legitimate
government, international wrong would be committed, it is nonetheless
true and evident that by such abrogation national wrong would be caused
to the inhabitants or citizens of the legitimate government. According to

the law of nations and Wheaton himself, said judicial acts are legal and
valid before and after the occupation has ceased and the legitimate
government has been restored. As there are vested rights which have been
acquired by he parties by virtue of such judgments, the restored
government or its representative cannot reverse or abrogate them without
causing wrong or injury to the interested parties, because such reversal
would deprive them of their properties without due process of
law.chanroblesvirtualawlibrary chanrobles virtual law library
In this connection, it may not be amiss to refer to the decision of the
Supreme Court of the United States in the case of Raymond vs. Thomas
(91 U. S., 712), quoted in our decision as applicable by analogy. In said
case, the Commander in Chief of the United States forces in South
Carolina, after the end of the Civil War and while the territory was still
under Military Government, issued a special order annulling a decree
rendered by a court of chancery in a case within its jurisdiction, on the
wrong assumption that he had authority to do so under the acts of
Congress approved March 2, and July 19, 1867, which defined his powers
and duties. That Supreme Court declared void the said special order on the
ground "that it was an arbitrary stretch of authority needful to no good end
that can be imagined. Whether Congress could have conferred power to do
such an act is a question we are not called upon to consider. It is an
unbending rule of law that the exercise of military power where the rights
of the citizen are concerned, shall never be pushed beyond what the
exigency requires."chanrobles virtual law library
(5) It is argued with insistence that the courts of the Commonwealth
continued in the Philippines by the belligerent occupant became also
courts of Japan, and their judgments and proceedings being acts of foreign
courts cannot now be considered valid and continued by the courts of the
Commonwealth Government after the restoration of the latter. As we have
already stated in our decision the fundamental reasons why said courts,
while functioning during the Japanese regime, could not be considered as
courts of Japan, it is sufficient now to invite attention to the decision of the
Supreme Court of the United States in the case of The Admittance,
Jecker vs. Montgomery (13 How., 498; 14 Law. ed., 240), which we did not
deem necessary to quote in our decision, in which it was held that "the
courts, established or sanctioned in Mexico during the war by the
commanders of the American forces, were nothing more than the agents of
the military power, to assist it in preserving order in the conquered
territory, and to protect the inhabitants in their persons and property while
it was occupied by the American arms. They were subject to the military
power, and their decisions under its control, whenever the commanding
officer thought proper to interfere. They were not courts of the United
States, and had no right to adjudicate upon a question of prize or no prize."

(The Admittance, Jecker vs. Montgomery, 13 How., 498; 14 Law. ed.,

240.).chanroblesvirtualawlibrary chanrobles virtual law library
(6) The petition for mandamus in the present case is the plain, speedy and
adequate remedy. The mandamus applied for is not to compel the
respondent judge to order the reconstitution of the record of the case,
because the record had already been reconstituted by order of the court. It
is sought to compel the respondent judge to continue the proceedings in
said case. As the judge refused to act on the ground that he had no power
or jurisdiction to continue taking cognizance of the case, mandamus and
not appeal is the plain, speedy and adequate remedy. For it is a well
established rule that "if a a court has erroneously decided some question
of law or of practice, presented as a preliminary objection, and upon such
erroneous construction has refused to go into the merits of the
case, mandamus will lie to compel it to proceed." (High on Extraordinary
Legal Remedies, section 151; Castro Revilla vs. Garduo, 53 Phil.,
934.)chanrobles virtual law library
In view of the foregoing, the motion for reconsideration filed by the
respondents is denied. The petition for oral argument on said motion for
reconsideration, based on the resolution of division of this Court dated July
3, 1945, amendatory of section 2, Rule 54, of the Rules of Court, is also
denied, since said resolution has not yet been adopted by this Court in
banc, and the respondents and amici curiae were allowed to file, and they
filed, their arguments in writing.chanroblesvirtualawlibrary chanrobles
virtual law library
Moran, C. J., Ozaeta, Paras, Jaranilla, De Joya, and Pablo, JJ., concur.

EN BANC [G.R. No. 104768. July 21, 2003]

Republic of the Philippines, petitioner, vs. Sandiganbayan, Major
General
Josephus
Q.
Ramas
and
Elizabeth
Dimaano, respondents.
DECISION
CARPIO, J.:
The Case
Before this Court is a petition for review on certiorari seeking to set
aside the Resolutions of the Sandiganbayan (First Division) [1] dated 18
November 1991 and 25 March 1992 in Civil Case No. 0037. The first
Resolution dismissed petitioners Amended Complaint and ordered the
return of the confiscated items to respondent Elizabeth Dimaano, while the
second Resolution denied petitioners Motion for Reconsideration. Petitioner
prays for the grant of the reliefs sought in its Amended Complaint, or in the
alternative, for the remand of this case to the Sandiganbayan (First
Division) for further proceedings allowing petitioner to complete the
presentation of its evidence.
Antecedent Facts
Immediately upon her assumption to office following the successful
EDSA Revolution, then President Corazon C. Aquino issued Executive Order
No. 1 (EO No. 1) creating the Presidential Commission on Good
Government (PCGG). EO No. 1 primarily tasked the PCGG to recover all illgotten wealth of former President Ferdinand E. Marcos, his immediate
family, relatives, subordinates and close associates. EO No. 1 vested the
PCGG with the power (a) to conduct investigation as may be necessary in
order to accomplish and carry out the purposes of this order and the power

(h) to promulgate such rules and regulations as may be necessary to carry

out the purpose of this order. Accordingly, the PCGG, through its then
Chairman Jovito R. Salonga, created an AFP Anti-Graft Board (AFP Board)
tasked to investigate reports of unexplained wealth and corrupt practices
by AFP personnel, whether in the active service or retired. [2]
Based on its mandate, the AFP Board investigated various reports of
alleged unexplained wealth of respondent Major General Josephus Q.
Ramas (Ramas). On 27 July 1987, the AFP Board issued a Resolution on its
findings and recommendation on the reported unexplained wealth of
Ramas. The relevant part of the Resolution reads:
III. FINDINGS and EVALUATION:
Evidence in the record showed that respondent is the owner of a house and
lot located at 15-Yakan St., La Vista, Quezon City. He is also the owner of a
house and lot located in Cebu City. The lot has an area of 3,327 square
meters.
The value of the property located in Quezon City may be estimated
modestly at P700,000.00.
The equipment/items and communication facilities which were found in the
premises of Elizabeth Dimaano and were confiscated by elements of the PC
Command of Batangas were all covered by invoice receipt in the name of
CAPT. EFREN SALIDO, RSO Command Coy, MSC, PA. These items could not
have been in the possession of Elizabeth Dimaano if not given for her use
by respondent Commanding General of the Philippine Army.
Aside from the military equipment/items and communications equipment,
the raiding team was also able to confiscate money in the amount
ofP2,870,000.00 and $50,000 US Dollars in the house of Elizabeth Dimaano
on 3 March 1986.
Affidavits of members of the Military Security Unit, Military Security
Command, Philippine Army, stationed at Camp Eldridge, Los Baos, Laguna,
disclosed that Elizabeth Dimaano is the mistress of respondent. That
respondent usually goes and stays and sleeps in the alleged house of
Elizabeth Dimaano in Barangay Tengga, Itaas, Batangas City and when he
arrives, Elizabeth Dimaano embraces and kisses respondent. That on
February 25, 1986, a person who rode in a car went to the residence of
Elizabeth Dimaano with four (4) attache cases filled with money and owned
by MGen Ramas.
Sworn statement in the record disclosed also that Elizabeth Dimaano had
no visible means of income and is supported by respondent for she was
formerly a mere secretary.
Taking in toto the evidence, Elizabeth Dimaano could not have used the
military equipment/items seized in her house on March 3, 1986 without the
consent of respondent, he being the Commanding General of the Philippine
Army. It is also impossible for Elizabeth Dimaano to claim that she owns
theP2,870,000.00 and $50,000 US Dollars for she had no visible source of
income.
This money was never declared in the Statement of Assets and Liabilities
of respondent. There was an intention to cover the existence of these
money because these are all ill-gotten and unexplained wealth. Were it not

for the affidavits of the members of the Military Security Unit assigned at
Camp Eldridge, Los Baos, Laguna, the existence and ownership of these
money would have never been known.
The Statement of Assets and Liabilities of respondent were also submitted
for scrutiny and analysis by the Boards consultant. Although the amount
ofP2,870,000.00 and $50,000 US Dollars were not included, still it was
disclosed that respondent has an unexplained wealth of P104,134. 60.
IV. CONCLUSION:
In view of the foregoing, the Board finds that a prima facie case exists
against respondent for ill-gotten and unexplained wealth in the amount
ofP2,974,134.00 and $50,000 US Dollars.
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be
prosecuted and tried for violation of RA 3019, as amended, otherwise
known as Anti-Graft and Corrupt Practices Act and RA 1379, as amended,
otherwise known as The Act for the Forfeiture of Unlawfully Acquired
Property.[3]
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under
Republic Act No. 1379 (RA No. 1379) [4] against Ramas.
Before Ramas could answer the petition, then Solicitor General
Francisco I. Chavez filed an Amended Complaint naming the Republic of
the Philippines (petitioner), represented by the PCGG, as plaintiff and
Ramas as defendant. The Amended Complaint also impleaded Elizabeth
Dimaano (Dimaano) as co-defendant.
The Amended Complaint alleged that Ramas was the Commanding
General of the Philippine Army until 1986. On the other hand, Dimaano was
a confidential agent of the Military Security Unit, Philippine Army, assigned
as a clerk-typist at the office of Ramas from 1 January 1978 to February
1979. The Amended Complaint further alleged that Ramas acquired funds,
assets and properties manifestly out of proportion to his salary as an army
officer and his other income from legitimately acquired property by taking
undue advantage of his public office and/or using his power, authority and
influence as such officer of the Armed Forces of the Philippines and as a
subordinate and close associate of the deposed President Ferdinand
Marcos.[5]
The Amended Complaint also alleged that the AFP Board, after a
previous inquiry, found reasonable ground to believe that respondents
have violated RA No. 1379.[6] The Amended Complaint prayed for, among
others, the forfeiture of respondents properties, funds and equipment in
favor of the State.
Ramas filed an Answer with Special and/or Affirmative Defenses and
Compulsory Counterclaim to the Amended Complaint. In his Answer,
Ramas contended that his property consisted only of a residential house at
La Vista Subdivision, Quezon City, valued at P700,000, which was not out
of proportion to his salary and other legitimate income. He denied

ownership of any mansion in Cebu City and the cash, communications

equipment and other items confiscated from the house of Dimaano.
Dimaano filed her own Answer to the Amended Complaint. Admitting
her employment as a clerk-typist in the office of Ramas from JanuaryNovember 1978 only, Dimaano claimed ownership of the monies,
communications equipment, jewelry and land titles taken from her house
by the Philippine Constabulary raiding team.
After termination of the pre-trial, [7] the court set the case for trial on
the merits on 9-11 November 1988.
On 9 November 1988, petitioner asked for a deferment of the hearing
due to its lack of preparation for trial and the absence of witnesses and
vital documents to support its case. The court reset the hearing to 17 and
18 April 1989.
On 13 April 1989, petitioner filed a motion for leave to amend the
complaint in order to charge the delinquent properties with being subject
to forfeiture as having been unlawfully acquired by defendant Dimaano
alone x x x.[8]
Nevertheless, in an order dated 17 April 1989, the Sandiganbayan
proceeded with petitioners presentation of evidence on the ground that the
motion for leave to amend complaint did not state when petitioner would
file the amended complaint. The Sandiganbayan further stated that the
subject matter of the amended complaint was on its face vague and not
related to the existing complaint. The Sandiganbayan also held that due to
the time that the case had been pending in court, petitioner should
proceed to present its evidence.
After presenting only
postponement of the trial.

three

witnesses,

petitioner

asked

for a

On 28 September 1989, during the continuation of the trial, petitioner

manifested its inability to proceed to trial because of the absence of other
witnesses or lack of further evidence to present. Instead, petitioner
reiterated its motion to amend the complaint to conform to the evidence
already presented or to change the averments to show that Dimaano alone
unlawfully acquired the monies or properties subject of the forfeiture.
The Sandiganbayan noted that petitioner had already delayed the
case for over a year mainly because of its many postponements. Moreover,
petitioner would want the case to revert to its preliminary stage when in
fact the case had long been ready for trial. The Sandiganbayan ordered
petitioner to prepare for presentation of its additional evidence, if any.
During the trial on 23 March 1990, petitioner again admitted its
inability to present further evidence. Giving petitioner one more chance to
present further evidence or to amend the complaint to conform to its
evidence, the Sandiganbayan reset the trial to 18 May 1990. The
Sandiganbayan, however, hinted that the re-setting was without prejudice
to any action that private respondents might take under the
circumstances.

However, on 18 May 1990, petitioner again expressed its inability to

proceed to trial because it had no further evidence to present.Again, in the
interest of justice, the Sandiganbayan granted petitioner 60 days within
which to file an appropriate pleading. The Sandiganbayan, however,
warned petitioner that failure to act would constrain the court to take
drastic action.
Private respondents then filed their motions to dismiss based
on Republic v. Migrino.[9] The Court held in Migrino that the PCGG does
not have jurisdiction to investigate and prosecute military officers by
reason of mere position held without a showing that they are subordinates
of former President Marcos.
On 18 November 1991, the Sandiganbayan rendered a resolution, the
dispositive portion of which states:
WHEREFORE, judgment is hereby rendered dismissing the Amended
Complaint, without pronouncement as to costs. The counterclaims are
likewise dismissed for lack of merit, but the confiscated sum of money,
communications equipment, jewelry and land titles are ordered returned to
Elizabeth Dimaano.
The records of this case are hereby remanded and referred to the Hon.
Ombudsman, who has primary jurisdiction over the forfeiture cases under
R.A. No. 1379, for such appropriate action as the evidence warrants. This
case is also referred to the Commissioner of the Bureau of Internal
Revenue for a determination of any tax liability of respondent Elizabeth
Dimaano in connection herewith.
SO ORDERED.
On 4 December 1991, petitioner filed its Motion for Reconsideration.
In answer to the Motion for Reconsideration, private respondents filed
a Joint Comment/Opposition to which petitioner filed its Reply on 10
January 1992.
On 25 March 1992, the Sandiganbayan rendered a Resolution denying
the Motion for Reconsideration.
Ruling of the Sandiganbayan
The Sandiganbayan dismissed the Amended Complaint on the
following grounds:
(1.) The actions taken by the PCGG are not in accordance with the
rulings of the Supreme Court in Cruz, Jr. v.
Sandiganbayan[10] and Republic v. Migrino[11] which involve
the same issues.
(2.) No previous inquiry similar to preliminary investigations in
criminal cases was conducted against Ramas and Dimaano.
(3.) The evidence adduced against Ramas does not constitute a prima
facie case against him.
(4.) There was an illegal search and seizure of the items confiscated.
The Issues

Petitioner raises the following issues:

A. RESPONDENT
COURT
SERIOUSLY
ERRED
IN
CONCLUDING THAT PETITIONERS EVIDENCE
CANNOT MAKE A CASE FOR FORFEITURE AND
THAT
THERE
WAS
NO
SHOWING
OF
CONSPIRACY, COLLUSION OR RELATIONSHIP
BY CONSANGUINITY OR AFFINITY BY AND
BETWEEN
RESPONDENT
RAMAS
AND
RESPONDENT DIMAANO NOTWITHSTANDING
THE FACT THAT SUCH CONCLUSIONS WERE
CLEARLY UNFOUNDED AND PREMATURE,
HAVING BEEN RENDERED PRIOR TO THE
COMPLETION OF THE PRESENTATION OF THE
EVIDENCE OF THE PETITIONER.
B. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING
THAT
THE
ACTIONS
TAKEN
BY
THE
PETITIONER, INCLUDING THE FILING OF THE
ORIGINAL COMPLAINT AND THE AMENDED
COMPLAINT, SHOULD BE STRUCK OUT IN LINE
WITH THE RULINGS OF THE SUPREME COURT
IN CRUZ, JR. v. SANDIGANBAYAN, 194 SCRA
474 AND REPUBLIC v. MIGRINO, 189 SCRA
289, NOTWITHSTANDING THE FACT THAT:
1. The cases of Cruz, Jr. v. Sandiganbayan, supra,
and Republic v. Migrino, supra, are clearly
not applicable to this case;
2. Any procedural defect in the institution of the
complaint in Civil Case No. 0037 was cured
and/or waived by respondents with the
filing of their respective answers with
counterclaim; and
3. The separate motions to dismiss were evidently
improper considering that they were filed
after commencement of the presentation of
the evidence of the petitioner and even
before the latter was allowed to formally
offer its evidence and rest its case;
C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING
THAT THE ARTICLES AND THINGS SUCH AS
SUMS
OF
MONEY,
COMMUNICATIONS
EQUIPMENT, JEWELRY AND LAND TITLES
CONFISCATED
FROM
THE
HOUSE
OF
RESPONDENT DIMAANO WERE ILLEGALLY
SEIZED AND THEREFORE EXCLUDED AS
EVIDENCE.
The Courts Ruling

First Issue: PCGGs Jurisdiction to Investigate

Private Respondents
This case involves a revisiting of an old issue already decided by this
Court in Cruz, Jr. v. Sandiganbayan[13] and Republic v. Migrino.[14]
The primary issue for resolution is whether the PCGG has the
jurisdiction to investigate and cause the filing of a forfeiture petition
against Ramas and Dimaano for unexplained wealth under RA No. 1379.
We hold that PCGG has no such jurisdiction.
The PCGG created the AFP Board to investigate the unexplained
wealth and corrupt practices of AFP personnel, whether in the active
service or retired.[15] The PCGG tasked the AFP Board to make the
necessary recommendations to appropriate government agencies on the
action to be taken based on its findings. [16] The PCGG gave this task to the
AFP Board pursuant to the PCGGs power under Section 3 of EO No. 1 to
conduct investigation as may be necessary in order to accomplish and to
carry out the purposes of this order. EO No. 1 gave the PCGG specific
responsibilities, to wit:
SEC. 2. The Commission shall be charged with the task of assisting the
President in regard to the following matters:
(a) The recovery of all ill-gotten wealth accumulated by former
President Ferdinand E. Marcos, his immediate family,
relatives, subordinates and close associates, whether
located in the Philippines or abroad, including the
takeover and sequestration of all business enterprises
and entities owned or controlled by them, during his
administration, directly or through nominees, by taking
undue advantage of their public office and/ or using their
powers, authority, influence, connections or relationship.
(b) The investigation of such cases of graft and corruption as the
President may assign to the Commission from time to
time.
x x x.
The PCGG, through the AFP Board, can only investigate the
unexplained wealth and corrupt practices of AFP personnel who fall under
either of the two categories mentioned in Section 2 of EO No. 1. These are:
(1) AFP personnel who have accumulated ill-gotten wealth during the
administration of former President Marcos by being the latters immediate
family, relative, subordinate or close associate, taking undue advantage of
their public office or using their powers, influence x x x; [17] or (2) AFP
personnel involved in other cases of graft and corruption provided the
President assigns their cases to the PCGG.[18]
Petitioner, however, does not claim that the President assigned Ramas
case to the PCGG. Therefore, Ramas case should fall under the first
category of AFP personnel before the PCGG could exercise its jurisdiction
over him. Petitioner argues that Ramas was undoubtedly a subordinate of

former President Marcos because of his position as the Commanding

General of the Philippine Army. Petitioner claims that Ramas position
enabled him to receive orders directly from his commander-in-chief,
undeniably making him a subordinate of former President Marcos.

gotten wealth by the deposed President or by former President Marcos

acquiescence in Ramas own accumulation of ill-gotten wealth if any.

We hold that Ramas was not a subordinate of former President Marcos

in the sense contemplated under EO No. 1 and its amendments.

Petitioners
attempt
to
differentiate
the
instant
case
from Migrino does not convince us. Petitioner argues that unlike
in Migrino, the AFP Board Resolution in the instant case states that the
AFP Board conducted the investigation pursuant to EO Nos. 1, 2, 14 and
14-A in relation to RA No. 1379. Petitioner asserts that there is a
presumption that the PCGG was acting within its jurisdiction of
investigating crony-related cases of graft and corruption and that Ramas
was truly a subordinate of the former President. However, the same AFP
Board Resolution belies this contention. Although the Resolution begins
with such statement, it ends with the following recommendation:

Mere position held by a military officer does not automatically make

him a subordinate as this term is used in EO Nos. 1, 2, 14 and 14-A absent
a showing that he enjoyed close association with former President
Marcos. Migrino discussed this issue in this wise:
A close reading of EO No. 1 and related executive orders will readily show
what is contemplated within the term subordinate. The Whereas Clauses of
EO No. 1 express the urgent need to recover the ill-gotten wealth amassed
by former President Ferdinand E. Marcos, his immediate family, relatives,
and close associates both here and abroad.
EO No. 2 freezes all assets and properties in the Philippines in which former
President Marcos and/or his wife, Mrs. Imelda Marcos, their close relatives,
subordinates, business associates, dummies, agents, or nominees have
any interest or participation.
Applying the rule in statutory construction known as ejusdem generis that
is[W]here general words follow an enumeration of persons or things by
words of a particular and specific meaning, such general words are not to
be construed in their widest extent, but are to be held as applying only to
persons or things of the same kind or class as those specifically mentioned
[Smith, Bell & Co, Ltd. vs. Register of Deeds of Davao, 96 Phil. 53, 58,
citing Black on Interpretation of Laws, 2nd Ed., 203].
[T]he term subordinate as used in EO Nos. 1 & 2 refers to one who enjoys a
close association with former President Marcos and/or his wife, similar to
the immediate family member, relative, and close associate in EO
No. 1 and the close relative, business associate, dummy, agent, or
nominee in EO No. 2.
xxx
It does not suffice, as in this case, that the respondent is or was a
government official or employee during the administration of former
President Marcos.There must be a prima facie showing that the
respondent unlawfully accumulated wealth by virtue of his close
association or relation with former Pres. Marcos and/or his wife.
(Emphasis supplied)
Ramas position alone as Commanding General of the Philippine Army
with the rank of Major General[19] does not suffice to make him a
subordinate of former President Marcos for purposes of EO No. 1 and its
amendments. The PCGG has to provide a prima facie showing that Ramas
was a close associate of former President Marcos, in the same manner that
business associates, dummies, agents or nominees of former President
Marcos were close to him. Such close association is manifested either by
Ramas complicity with former President Marcos in the accumulation of ill-

This, the PCGG failed to do.

V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be
prosecuted and tried for violation of RA 3019, as amended, otherwise
known as Anti-Graft and Corrupt Practices Act and RA 1379, as amended,
otherwise known as The Act for the Forfeiture of Unlawfully Acquired
Property.[20]
Thus, although the PCGG sought to investigate and prosecute private
respondents under EO Nos. 1, 2, 14 and 14-A, the result yielded a finding
of violation of Republic Acts Nos. 3019 and 1379 without any relation to EO
Nos. 1, 2, 14 and 14-A. This absence of relation to EO No. 1 and its
amendments proves fatal to petitioners case. EO No. 1 created the PCGG
for a specific and limited purpose, and necessarily its powers must be
construed to address such specific and limited purpose.
Moreover, the resolution of the AFP Board and even the Amended
Complaint do not show that the properties Ramas allegedly owned were
accumulated by him in his capacity as a subordinate of his commander-inchief. Petitioner merely enumerated the properties Ramas allegedly owned
and suggested that these properties were disproportionate to his salary
and other legitimate income without showing that Ramas amassed them
because of his close association with former President Marcos. Petitioner, in
fact, admits that the AFP Board resolution does not contain a finding that
Ramas accumulated his wealth because of his close association with
former President Marcos, thus:
10. While it is true that the resolution of the Anti-Graft Board of the
New Armed Forces of the Philippines did not categorically find
a prima facieevidence showing that respondent Ramas unlawfully
accumulated wealth by virtue of his close association or relation
with former President Marcos and/or his wife, it is submitted that
such omission was not fatal. The resolution of the Anti-Graft Board
should be read in the context of the law creating the same and the
objective of the investigation which was, as stated in the above, pursuant
to Republic Act Nos. 3019 and 1379 in relation to Executive Order Nos. 1,
2, 14 and 14-a;[21] (Emphasis supplied)

Such omission is fatal. Petitioner forgets that it is precisely a prima

facie showing that the ill-gotten wealth was accumulated by a subordinate
of former President Marcos that vests jurisdiction on PCGG. EO No.
1[22] clearly premises the creation of the PCGG on the urgent need to
recover all ill-gotten wealth amassed by former President Marcos, his
immediate family, relatives, subordinates and close associates. Therefore,
to say that such omission was not fatal is clearly contrary to the intent
behind the creation of the PCGG.
In Cruz, Jr. v. Sandiganbayan,[23] the Court outlined the cases that
fall under the jurisdiction of the PCGG pursuant to EO Nos. 1, 2, [24]14,[25] 14A:[26]
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation
with Sections 1, 2 and 3 of Executive Order No. 14, shows what the
authority of the respondent PCGG to investigate and prosecute covers:
(a) the investigation and prosecution of the civil action for the
recovery of ill-gotten wealth under Republic Act No.
1379, accumulated by former President Marcos, his
immediate family, relatives, subordinates and close
associates, whether located in the Philippines or abroad,
including the take-over or sequestration of all business
enterprises and entities owned or controlled by them,
during his administration, directly or through his
nominees, by taking undue advantage of their public
office and/or using their powers, authority and
influence, connections or relationships; and
(b) the investigation and prosecution of such offenses committed
in the acquisition of said ill-gotten wealth as contemplated
under Section 2(a) of Executive Order No. 1.
However, other violations of the Anti-Graft and Corrupt Practices
Act not otherwise falling under the foregoing categories, require a
previous authority of the President for the respondent PCGG to
investigate and prosecute in accordance with Section 2 (b) of
Executive Order No. 1.Otherwise, jurisdiction over such cases is
vested in the Ombudsman and other duly authorized investigating
agencies such as the provincial and city prosecutors, their
assistants, the Chief State Prosecutor and his assistants and the
state prosecutors. (Emphasis supplied)
The proper government agencies, and not the PCGG, should
investigate and prosecute forfeiture petitions not falling under EO No. 1
and its amendments. The preliminary investigation of unexplained wealth
amassed on or before 25 February 1986 falls under the jurisdiction of the
Ombudsman, while the authority to file the corresponding forfeiture
petition rests with the Solicitor General. [27] The Ombudsman Act or Republic
Act No. 6770 (RA No. 6770) vests in the Ombudsman the power to conduct
preliminary investigation and to file forfeiture proceedings involving
unexplained wealth amassed after 25 February 1986.[28]

After the pronouncements of the Court in Cruz, the PCGG still pursued
this case despite the absence of a prima facie finding that Ramas was a
subordinate of former President Marcos. The petition for forfeiture filed with
the Sandiganbayan should be dismissed for lack of authority by the PCGG
to investigate respondents since there is no prima facie showing that EO
No. 1 and its amendments apply to respondents. The AFP Board Resolution
and even the Amended Complaint state that there are violations of RA Nos.
3019 and 1379. Thus, the PCGG should have recommended Ramas case to
the Ombudsman who has jurisdiction to conduct the preliminary
investigation of ordinary unexplained wealth and graft cases. As stated
in Migrino:
[But] in view of the patent lack of authority of the PCGG to investigate and
cause the prosecution of private respondent for violation of Rep. Acts Nos.
3019 and 1379, the PCGG must also be enjoined from proceeding with the
case, without prejudice to any action that may be taken by the proper
prosecutory agency. The rule of law mandates that an agency of
government be allowed to exercise only the powers granted to it.
Petitioners argument that private respondents have waived any defect
in the filing of the forfeiture petition by submitting their respective Answers
with counterclaim deserves no merit as well.
Petitioner has no jurisdiction over private respondents. Thus, there is
no jurisdiction to waive in the first place. The PCGG cannot exercise
investigative or prosecutorial powers never granted to it. PCGGs powers
are specific and limited. Unless given additional assignment by the
President, PCGGs sole task is only to recover the ill-gotten wealth of the
Marcoses, their relatives and cronies.[29]Without these elements, the PCGG
cannot claim jurisdiction over a case.
Private respondents questioned the authority and jurisdiction of the
PCGG to investigate and prosecute their cases by filing their Motion to
Dismiss as soon as they learned of the pronouncement of the Court
in Migrino. This case was decided on 30 August 1990, which explains why
private respondents only filed their Motion to Dismiss on 8 October
1990. Nevertheless, we have held that the parties may raise lack of
jurisdiction at any stage of the proceeding. [30] Thus, we hold that there was
no waiver of jurisdiction in this case. Jurisdiction is vested by law and not
by the parties to an action.[31]
Consequently, the petition should be dismissed for lack of jurisdiction
by the PCGG to conduct the preliminary investigation. The Ombudsman
may still conduct the proper preliminary investigation for violation of RA
No. 1379, and if warranted, the Solicitor General may file the forfeiture
petition with the Sandiganbayan.[32] The right of the State to forfeit
unexplained wealth under RA No. 1379 is not subject to prescription,
laches or estoppel.[33]

Second Issue: Propriety of Dismissal of Case

Before Completion of Presentation of Evidence

Petitioner also contends that the Sandiganbayan erred in dismissing

the case before completion of the presentation of petitioners evidence.
We disagree.

evidence. Finally, on 11 July 1990, petitioner filed its Re-Amended

Complaint.[38] The Sandiganbayan correctly observed that a case already
pending for years would revert to its preliminary stage if the court were to
accept the Re-Amended Complaint.

Based on the findings of the Sandiganbayan and the records of this

case, we find that petitioner has only itself to blame for non-completion of
the presentation of its evidence. First, this case has been pending for four
years before the Sandiganbayan dismissed it.Petitioner filed its
Amended Complaint on 11
August 1987, and only began to
present its evidence on 17 April 1989. Petitioner had almost two years to
prepare its evidence. However, despite this sufficient time, petitioner still
delayed the presentation of the rest of its evidence by filing numerous
motions for postponements and extensions. Even before the date set for
the presentation of its evidence, petitioner filed, on 13 April 1989, a Motion
for Leave to Amend the Complaint. [34] The motion sought to charge the
delinquent properties (which comprise most of petitioners evidence) with
being subject to forfeiture as having been unlawfully acquired by
defendant Dimaano alone x x x.

Based on these circumstances, obviously petitioner has only itself to

blame for failure to complete the presentation of its evidence. The
Sandiganbayan gave petitioner more than sufficient time to finish the
presentation of its evidence. The Sandiganbayan overlooked petitioners
delays and yet petitioner ended the long-string of delays with the filing of a
Re-Amended Complaint, which would only prolong even more the
disposition of the case.

The Sandiganbayan, however, refused to defer the presentation of

petitioners evidence since petitioner did not state when it would file the
amended complaint. On 18 April 1989, the Sandiganbayan set the
continuation of the presentation of evidence on 28-29 September and 9-11
October 1989, giving petitioner ample time to prepare its evidence. Still,
on 28 September 1989, petitioner manifested its inability to proceed with
the presentation of its evidence. The Sandiganbayan issued an Order
expressing its view on the matter, to wit:

Thus, we hold that the Sandiganbayan did not err in dismissing the
case before completion of the presentation of petitioners evidence.

The Court has gone through extended inquiry and a narration of the above
events because this case has been ready for trial for over a year and much
of the delay hereon has been due to the inability of the government to
produce on scheduled dates for pre-trial and for trial documents and
witnesses, allegedly upon the failure of the military to supply them for the
preparation of the presentation of evidence thereon. Of equal interest is
the fact that this Court has been held to task in public about its alleged
failure to move cases such as this one beyond the preliminary stage, when,
in view of the developments such as those of today, this Court is now faced
with a situation where a case already in progress will revert back to the
preliminary stage, despite a five-month pause where appropriate action
could have been undertaken by the plaintiff Republic. [35]
On 9 October 1989, the PCGG manifested in court that it was
conducting a preliminary investigation on the unexplained wealth of
private respondents as mandated by RA No. 1379.[36] The PCGG prayed for
an additional four months to conduct the preliminary investigation. The
Sandiganbayan granted this request and scheduled the presentation of
evidence on 26-29 March 1990. However, on the scheduled date, petitioner
failed to inform the court of the result of the preliminary investigation the
PCGG supposedly conducted. Again, the Sandiganbayan gave petitioner
until 18 May 1990 to continue with the presentation of its evidence and to
inform the court of what lies ahead insofar as the status of the case is
concerned x x x.[37] Still on the date set, petitioner failed to present its

Moreover,
the
pronouncements
of
the
Court
in Migrino and Cruz prompted the Sandiganbayan to dismiss the case
since the PCGG has no jurisdiction to investigate and prosecute the case
against private respondents. This alone would have been sufficient legal
basis for the Sandiganbayan to dismiss the forfeiture case against private
respondents.

Third Issue: Legality of the Search and Seizure

Petitioner claims that the Sandiganbayan erred in declaring the
properties confiscated from Dimaanos house as illegally seized and
therefore inadmissible in evidence. This issue bears a significant effect on
petitioners case since these properties comprise most of petitioners
evidence against private respondents. Petitioner will not have much
evidence to support its case against private respondents if these properties
are inadmissible in evidence.
On 3 March 1986, the Constabulary raiding team served at Dimaanos
residence a search warrant captioned Illegal Possession of Firearms and
Ammunition. Dimaano was not present during the raid but Dimaanos
cousins witnessed the raid. The raiding team seized the items detailed in
the seizure receipt together with other items not included in the search
warrant. The raiding team seized these items: one baby armalite rifle with
two magazines; 40 rounds of 5.56 ammunition; one pistol, caliber .45;
communications equipment, cash consisting ofP2,870,000 and US$50,000,
jewelry, and land titles.
Petitioner wants the Court to take judicial notice that the raiding team
conducted the search and seizure on March 3, 1986 or five days after the
successful EDSA revolution.[39] Petitioner argues that a revolutionary
government was operative at that time by virtue of Proclamation No. 1
announcing that President Aquino and Vice President Laurel were taking
power in the name and by the will of the Filipino people. [40] Petitioner
asserts that the revolutionary government effectively withheld the
operation of the 1973 Constitution which guaranteed private respondents
exclusionary right.

Moreover, petitioner argues that the exclusionary right arising from an

illegal search applies only beginning 2 February 1987, the date of
ratification of the 1987 Constitution. Petitioner contends that all rights
under the Bill of Rights had already reverted to its embryonic stage at the
time of the search. Therefore, the government may confiscate the monies
and items taken from Dimaano and use the same in evidence against her
since at the time of their seizure, private respondents did not enjoy any
constitutional right.
Petitioner is partly right in its arguments.
The EDSA Revolution took place on 23-25 February 1986. As succinctly
stated in President Aquinos Proclamation No. 3 dated 25 March 1986, the
EDSA Revolution was done in defiance of the provisions of the 1973
Constitution.[41] The
resulting
government
was
indisputably
a
revolutionary government bound by no constitution or legal limitations
except treaty obligations that the revolutionary government, as the de
jure government in the Philippines, assumed under international law.
The correct issues are: (1) whether the revolutionary government was
bound by the Bill of Rights of the 1973 Constitution during
theinterregnum, that is, after the actual and effective take-over of power
by the revolutionary government following the cessation of resistance by
loyalist forces up to 24 March 1986 (immediately before the adoption of
the Provisional Constitution); and (2) whether the protection accorded to
individuals under the International Covenant on Civil and Political Rights
(Covenant) and the Universal Declaration of Human Rights (Declaration)
remained in effect during the interregnum.
We hold that the Bill of Rights under the 1973 Constitution was not
operative during the interregnum. However, we rule that the protection
accorded to individuals under the Covenant and the Declaration remained
in effect during the interregnum.
During the interregnum, the directives and orders of the revolutionary
government were the supreme law because no constitution limited the
extent and scope of such directives and orders. With the abrogation of the
1973 Constitution by the successful revolution, there was no municipal law
higher than the directives and orders of the revolutionary
government. Thus, during the interregnum, a person could not invoke any
exclusionary right under a Bill of Rights because there was neither a
constitution nor a Bill of Rights during the interregnum. As the Court
explained in Letter of Associate Justice Reynato S. Puno:[42]
A revolution has been defined as the complete overthrow of the
established government in any country or state by those who were
previously subject to it or as a sudden, radical and fundamental change in
the government or political system, usually effected with violence or at
least some acts of violence. In Kelsen's book, General Theory of Law and
State, it is defined as that which occurs whenever the legal order of a
community is nullified and replaced by a new order . . . a way not
prescribed by the first order itself.

It was through the February 1986 revolution, a relatively peaceful one, and
more popularly known as the people power revolution that the Filipino
people tore themselves away from an existing regime. This revolution also
saw the unprecedented rise to power of the Aquino government.
From the natural law point of view, the right of revolution has been defined
as an inherent right of a people to cast out their rulers, change their policy
or effect radical reforms in their system of government or institutions by
force or a general uprising when the legal and constitutional methods of
making such change have proved inadequate or are so obstructed as to be
unavailable. It has been said that the locus of positive law-making power
lies with the people of the state and from there is derived the right of the
people to abolish, to reform and to alter any existing form of government
without regard to the existing constitution.
xxx
It is widely known that Mrs. Aquinos rise to the presidency was
not due to constitutional processes; in fact, it was achieved in
violation of the provisions of the 1973 Constitution as a Batasang
Pambansa resolution had earlier declared Mr. Marcos as the
winner in the 1986 presidential election. Thus it can be said that the
organization of Mrs. Aquinos Government which was met by little
resistance and her control of the state evidenced by the appointment of
the Cabinet and other key officers of the administration, the departure of
the Marcos Cabinet officials, revamp of the Judiciary and the Military
signaled the point where the legal system then in effect, had ceased
to be obeyed by the Filipino. (Emphasis supplied)
To hold that the Bill of Rights under the 1973 Constitution remained
operative during the interregnum would render void all sequestration
orders issued by the Philippine Commission on Good Government (PCGG)
before the adoption of the Freedom Constitution. The sequestration orders,
which direct the freezing and even the take-over of private property by
mere executive issuance without judicial action, would violate the due
process and search and seizure clauses of the Bill of Rights.
During the interregnum, the government in power was concededly a
revolutionary government bound by no constitution. No one could validly
question the sequestration orders as violative of the Bill of Rights because
there was no Bill of Rights during the interregnum.However, upon the
adoption of the Freedom Constitution, the sequestered companies assailed
the sequestration orders as contrary to the Bill of Rights of the Freedom
Constitution.
In Bataan Shipyard & Engineering Co. Inc. vs. Presidential
Commission on Good Government,[43] petitioner Baseco, while
conceding there was no Bill of Rights during the interregnum, questioned
the continued validity of the sequestration orders upon adoption of the
Freedom Constitution in view of the due process clause in its Bill of
Rights. The Court ruled that the Freedom Constitution, and later the 1987
Constitution, expressly recognized the validity of sequestration orders,
thus:

If any doubt should still persist in the face of the foregoing considerations
as to the validity and propriety of sequestration, freeze and takeover
orders, it should be dispelled by the fact that these particular remedies and
the authority of the PCGG to issue them have received constitutional
approbation and sanction. As already mentioned, the Provisional or
Freedom Constitution recognizes the power and duty of the President to
enact measures to achieve the mandate of the people to . . . (r)ecover illgotten properties amassed by the leaders and supporters of the previous
regime and protect the interest of the people through orders of
sequestration or freezing of assets or accounts. And as also already
adverted to, Section 26, Article XVIII of the 1987 Constitution treats of, and
ratifies the authority to issue sequestration or freeze orders under
Proclamation No. 3 dated March 25, 1986.
The framers of both the Freedom Constitution and the 1987
Constitution were fully aware that the sequestration orders would clash
with the Bill of Rights. Thus, the framers of both constitutions had to
include specific language recognizing the validity of the sequestration
orders. The following discourse by Commissioner Joaquin G. Bernas during
the deliberations of the Constitutional Commission is instructive:
FR. BERNAS: Madam President, there is something schizophrenic about the
arguments in defense of the present amendment.
For instance, I have carefully studied Minister Salongas lecture in
the Gregorio Araneta University Foundation, of which all of us
have been given a copy. On the one hand, he argues that
everything the Commission is doing is traditionally legal. This is
repeated by Commissioner Romulo also. Minister Salonga spends
a major portion of his lecture developing that argument. On the
other hand, almost as an afterthought, he says that in the end
what matters are the results and not the legal niceties, thus
suggesting that the PCGG should be allowed to make some legal
shortcuts, another word for niceties or exceptions.
Now, if everything the PCGG is doing is legal, why is it asking the
CONCOM for special protection? The answer is clear. What they
are doing will not stand the test of ordinary due process,
hence they are asking for protection, for
exceptions. Grandes malos, grandes remedios, fine, as the
saying stands, but let us not say grandes malos, grande y malos
remedios. That is not an allowable extrapolation. Hence, we
should not give the exceptions asked for, and let me elaborate
and give three reasons:
First, the whole point of the February Revolution and of the work
of the CONCOM is to hasten constitutional normalization. Very
much at the heart of the constitutional normalization is the full
effectivity of the Bill of Rights. We cannot, in one breath, ask for
constitutional normalization and at the same time ask for a
temporary halt to the full functioning of what is at the heart of
constitutionalism. That would be hypocritical; that would be a
repetition of Marcosian protestation of due process and rule of
law. The New Society word for that is backsliding. It is tragic when
we begin to backslide even before we get there.

Second, this is really a corollary of the first. Habits tend to

become ingrained. The committee report asks for extraordinary
exceptions from the Bill of Rights for six months after the
convening of Congress, and Congress may even extend this
longer.
Good deeds repeated ripen into virtue; bad deeds repeated
become vice. What the committee report is asking for is that we
should allow the new government to acquire the vice of
disregarding the Bill of Rights.
Vices, once they become ingrained, become difficult to shed. The
practitioners of the vice begin to think that they have a vested
right to its practice, and they will fight tooth and nail to keep the
franchise. That would be an unhealthy way of consolidating the
gains of a democratic revolution.
Third, the argument that what matters are the results and not the
legal niceties is an argument that is very disturbing. When it
comes from a staunch Christian like Commissioner Salonga, a
Minister, and repeated verbatim by another staunch Christian like
Commissioner Tingson, it becomes doubly disturbing and even
discombobulating. The argument makes the PCGG an auctioneer,
placing the Bill of Rights on the auction block. If the price is right,
the search and seizure clause will be sold. Open your Swiss bank
account to us and we will award you the search and seizure
clause. You can keep it in your private safe.
Alternatively, the argument looks on the present government as
hostage to the hoarders of hidden wealth. The hoarders will
release the hidden health if the ransom price is paid and the
ransom price is the Bill of Rights, specifically the due process in
the search and seizure clauses. So, there is something positively
revolving about either argument. The Bill of Rights is not for sale
to the highest bidder nor can it be used to ransom captive
dollars. This nation will survive and grow strong, only if it would
become convinced of the values enshrined in the Constitution of
a price that is beyond monetary estimation.
For these reasons, the honorable course for the Constitutional
Commission is to delete all of Section 8 of the committee report
and allow the new Constitution to take effect in full vigor. If
Section 8 is deleted, the PCGG has two options. First, it can
pursue the Salonga and the Romulo argument that what the
PCGG has been doing has been completely within the pale of the
law. If sustained, the PCGG can go on and should be able to go
on, even without the support of Section 8. If not sustained,
however, the PCGG has only one honorable option, it must bow to
the majesty of the Bill of Rights.
The PCGG extrapolation of the law is defended by staunch
Christians. Let me conclude with what another Christian replied
when asked to toy around with the law. From his prison cell,
Thomas More said, "I'll give the devil benefit of law for my nations
safety sake. I ask the Commission to give the devil benefit of law
for our nations sake. And we should delete Section 8.
Thank you, Madam President. (Emphasis supplied)

Despite the impassioned plea by Commissioner Bernas against the

amendment
excepting sequestration orders from the Bill of Rights,the
Constitutional Commission still adopted the amendment as Section 26,
[44]
Article XVIII of the 1987 Constitution. The framers of the Constitution
were fully aware that absent Section 26, sequestration orders would not
stand the test of due process under the Bill of Rights.
Thus, to rule that the Bill of Rights of the 1973 Constitution remained
in force during the interregnum, absent a constitutional provision excepting
sequestration orders from such Bill of Rights, would clearly render all
sequestration orders void during the interregnum.Nevertheless, even
during the interregnum the Filipino people continued to enjoy, under the
Covenant and the Declaration, almost the same rights found in the Bill of
Rights of the 1973 Constitution.
The revolutionary government, after installing itself as the de
jure government, assumed responsibility for the States good faith
compliance with the Covenant to which the Philippines is a
signatory. Article 2(1) of the Covenant requires each signatory State to
respect and to ensure to all individuals within its territory and subject to its
jurisdiction the rights[45] recognized in the present Covenant. Under Article
17(1) of the Covenant, the revolutionary government had the duty to
insure that [n]o one shall be subjected to arbitrary or unlawful interference
with his privacy, family, home or correspondence.

Constitution served as a self-limitation by the revolutionary government to

avoid abuses of the absolute powers entrusted to it by the people.
During the interregnum when no constitution or Bill of Rights existed,
directives and orders issued by government officers were valid so long as
these officers did not exceed the authority granted them by the
revolutionary government. The directives and orders should not have also
violated the Covenant or the Declaration. In this case, the revolutionary
government presumptively sanctioned the warrant since the revolutionary
government did not repudiate it. The warrant, issued by a judge upon
proper application, specified the items to be searched and seized. The
warrant is thus valid with respect to the items specifically described in the
warrant.
However, the Constabulary raiding team seized items not included in
the warrant. As admitted by petitioners witnesses, the raiding team
confiscated items not included in the warrant, thus:
Direct Examination of Capt. Rodolfo Sebastian
AJ AMORES
Q. According to the search warrant, you are supposed to
seize only for weapons. What else, aside from the
weapons, were seized from the house of Miss
Elizabeth Dimaano?

The Declaration, to which the Philippines is also a signatory, provides

in its Article 17(2) that [n]o one shall be arbitrarily deprived of his
property. Although the signatories to the Declaration did not intend it as a
legally binding document, being only a declaration, the Court has
interpreted the Declaration as part of the generally accepted principles of
international law and binding on the State. [46] Thus, the revolutionary
government was also obligated under international law to observe the
rights[47] of individuals under the Declaration.
The revolutionary government did not repudiate the Covenant or the
Declaration during the interregnum. Whether the revolutionary
government could have repudiated all its obligations under the Covenant
or the Declaration is another matter and is not the issue here.Suffice it to
say that the Court considers the Declaration as part of customary
international law, and that Filipinos as human beings are proper subjects of
the rules of international law laid down in the Covenant. The fact is the
revolutionary government did not repudiate the Covenant or the
Declaration in the same way it repudiated the 1973 Constitution. As the de
jure government, the revolutionary government could not escape
responsibility for the States good faith compliance with its treaty
obligations under international law.
It was only upon the adoption of the Provisional Constitution on 25
March 1986 that the directives and orders of the revolutionary government
became subject to a higher municipal law that, if contravened, rendered
such directives and orders void. The Provisional Constitution adopted
verbatim the Bill of Rights of the 1973 Constitution. [48] The Provisional

A. The communications equipment, money in Philippine

currency and US dollars, some jewelries, land titles,
sir.
Q. Now, the search warrant speaks only of weapons to be
seized from the house of Elizabeth Dimaano. Do you
know the reason why your team also seized other
properties not mentioned in said search warrant?
A. During the conversation right after the conduct of said
raid, I was informed that the reason why they also
brought the other items not included in the search
warrant was because the money and other jewelries
were contained in attach cases and cartons with
markings Sony Trinitron, and I think three (3) vaults or
steel safes. Believing that the attach cases and the
steel safes were containing firearms, they forced open
these containers only to find out that they contained
money.
xxx
Q. You said you found money instead of weapons, do you
know the reason why your team seized this money
instead of weapons?
A. I think the overall team leader and the other two officers
assisting him decided to bring along also the money
because at that time it was already dark and they felt

most secured if they will bring that because they

might be suspected also of taking money out of those
items, your Honor.[49]

Q. And this became the subject of your complaint with the

issuing Court, with the fiscals office who charged
Elizabeth Dimaano for Illegal Possession of Firearms
and Ammunition?
A. Yes, sir.

Cross-examination
Atty. Banaag

Q. Do you know what happened to that case?

A. I think it was dismissed, sir.

Q. Were you present when the search warrant in connection

with this case was applied before the Municipal Trial
Court of Batangas, Branch 1?
A. Yes, sir.

Q. In the fiscals office?

A. Yes, sir.

Q. And the search warrant applied for by you was for the
search and seizure of five (5) baby armalite rifles M-16
and five (5) boxes of ammunition?
A. Yes, sir.

Q. Because the armalite rifle you seized, as well as the .45

caliber pistol had a Memorandum Receipt in the name
of Felino Melegrito, is that not correct?
A. I think that was the reason, sir.

xxx
AJ AMORES

Q. There were other articles seized which were not included

in the search warrant, like for instance, jewelries. Why
did you seize the jewelries?
A. I think it was the decision of the overall team leader and
his assistant to bring along also the jewelries and
other items, sir. I do not really know where it was
taken but they brought along also these articles. I do
not really know their reason for bringing the same, but
I just learned that these were taken because they
might get lost if they will just leave this behind.

Q. Before you applied for a search warrant, did you conduct

surveillance in the house of Miss Elizabeth Dimaano?
A. The Intelligence Operatives conducted surveillance
together with the MSU elements, your Honor.
Q. And this party believed there were weapons deposited in
the house of Miss Elizabeth Dimaano?
A. Yes, your Honor.
Q. And they so swore before the Municipal Trial Judge?
A. Yes, your Honor.
Q. But they did not mention to you, the applicant for the
search warrant, any other properties or contraband
which could be found in theresidence of Miss Elizabeth
Dimaano?
A. They just gave us still unconfirmed report about some
hidden items, for instance, the communications
equipment and money. However, I did not include that
in the application for search warrant considering that
we have not established concrete evidence about
that. So when
Q. So that when you applied for search warrant, you had
reason to believe that only weapons were in the house
of Miss Elizabeth Dimaano?
A. Yes, your Honor.[50]
xxx
Q. You stated that a .45 caliber pistol was seized along with
one armalite rifle M-16 and how many ammunition?
A. Forty, sir.

xxx
Q. How about the money seized by your raiding team, they
were not also included in the search warrant?
A. Yes sir, but I believe they were also taken considering that
the money was discovered to be contained in attach
cases. These attach cases were suspected to be
containing pistols or other high powered firearms, but
in the course of the search the contents turned out to
be money. So the team leader also decided to take
this considering that they believed that if they will just
leave the money behind, it might get lost also.
Q. That holds true also with respect to the other articles that
were seized by your raiding team, like Transfer
Certificates of Title of lands?
A. Yes, sir. I think they were contained in one of the vaults
that were opened.[51]
It is obvious from the testimony of Captain Sebastian that the warrant
did not include the monies, communications equipment, jewelry and land
titles that the raiding team confiscated. The search warrant did not
particularly describe these items and the raiding team confiscated them on
its own authority. The raiding team had no legal basis to seize these items
without showing that these items could be the subject of warrantless

search and seizure.[52] Clearly, the raiding team exceeded its authority
when it seized these items.
The seizure of these items was therefore void, and unless these items
are contraband per se,[53] and they are not, they must be returned to the
person from whom the raiding seized them. However, we do not declare
that such person is the lawful owner of these items, merely that the search
and seizure warrant could not be used as basis to seize and withhold these
items from the possessor. We thus hold that these items should be
returned immediately to Dimaano.
WHEREFORE, the petition for certiorari is DISMISSED. The questioned
Resolutions of the Sandiganbayan dated 18 November 1991 and 25 March
1992 in Civil Case No. 0037, remanding the records of this case to the
Ombudsman for such appropriate action as the evidence may warrant, and
referring this case to the Commissioner of the Bureau of Internal Revenue
for a determination of any tax liability of respondent Elizabeth Dimaano,
are AFFIRMED.
SO ORDERED.

EN BANC

x-------------------------------------------x
ELISEO F. SORIANO,
Petitioner,
- versus MOVIE AND TELEVISION REVIEW AND
CLASSIFICATION BOARD, ZOSIMO G.
ALEGRE, JACKIE AQUINO-GAVINO,NOEL R.
DEL PRADO, EMMANUEL BORLAZA, JOSE E.
ROMERO IV, and FLORIMONDO C. ROUS, in
their capacity as members of the Hearing
and Adjudication Committee of the
MTRCB, JESSIE L. GALAPON, ANABEL M.
DELA CRUZ, MANUEL M. HERNANDEZ,
JOSE L. LOPEZ, CRISANTO SORIANO,
BERNABE S. YARIA, JR., MICHAEL M.
SANDOVAL, and ROLDAN A. GAVINO,
in their capacity as complainants before

April 29, 2009

the MTRCB,
ELISEO F. SORIANO,

G.R. No. 164785

Respondents.
x-----------------------------------------------------------------------------------------x

Petitioner,
- versus MA. CONSOLIZA P. LAGUARDIA, in her
capacity as Chairperson of the Movie and
Television Review and Classification
Board, MOVIE AND TELEVISION REVIEW
AND CLASSIFICATION BOARD, JESSIE L.
GALAPON, ANABEL M. DELA CRUZ,
MANUEL M. HERNANDEZ, JOSE L. LOPEZ,
CRISANTO SORIANO, BERNABE S. YARIA,
JR., MICHAEL M. SANDOVAL, and ROLDAN
A. GAVINO,
Respondents.

DECISION
G.R. No. 165636

VELASCO, JR., J.:

In these two petitions for certiorari and prohibition under Rule 65,
petitioner Eliseo F. Soriano seeks to nullify and set aside an order and a
decision of the Movie and Television Review and Classification Board
(MTRCB) in connection with certain utterances he made in his television
show, Ang Dating Daan.
Facts of the Case

On August 10, 2004, at around 10:00 p.m., petitioner, as host of the

sought to withdraw[7] his motion for reconsideration, followed by the filing

program Ang Dating Daan, aired on UNTV 37, made the following remarks:

with this Court of a petition for certiorari and prohibition, [8] docketed as

Lehitimong anak ng demonyo; sinungaling;

Gago ka talaga Michael, masahol ka pa sa putang babae o
di ba. Yung putang babae ang gumagana lang doon yung
ibaba, [dito] kay Michael ang gumagana ang itaas, o di
ba! O, masahol pa sa putang babae yan. Sabi ng lola ko
masahol
pa
sa
putang
babae
yan. Sobra
ang
kasinungalingan ng mga demonyong ito.[1] x x x
Two days after, before the MTRCB, separate but almost identical
affidavit-complaints were lodged by Jessie L. Galapon and seven other
private respondents, all members of the Iglesia ni Cristo (INC), [2] against
petitioner in connection with the above broadcast. Respondent Michael M.

G.R. No. 164785, to nullify the preventive suspension order thus issued.
On September 27, 2004, in Adm. Case No. 01-04, the MTRCB
issued a decision, disposing as follows:
WHEREFORE, in view of all the foregoing, a
Decision is hereby rendered, finding respondent Soriano
liable for his utterances and thereby imposing on him a
penalty of three (3) months suspension from his program,
Ang Dating Daan.
Co-respondents Joselito Mallari, Luzviminda Cruz
and UNTV Channel 37 and its owner, PBC, are hereby
exonerated for lack of evidence.
SO ORDERED.

Sandoval, who felt directly alluded to in petitioners remark, was then a

minister of INC and a regular host of the TV program Ang Tamang Daan.
[3]

Forthwith, the MTRCB sent petitioner a notice of the hearing on August

16, 2004 in relation to the alleged use of some cuss words in the August
10, 2004 episode of Ang Dating Daan.
After a preliminary conference in which petitioner appeared, the
MTRCB, by Order of August 16, 2004, preventively suspended the showing
of Ang Dating Daan program for 20 days, in accordance with Section 3(d)
of Presidential Decree No. (PD) 1986, creating the MTRCB, in relation to
Sec. 3, Chapter XIII of the 2004 Implementing Rules and Regulations (IRR)
of PD 1986 and Sec. 7, Rule VII of the MTRCB Rules of Procedure. [5] The
same order also set the case for preliminary investigation.

Petitioner then filed this petition for certiorari and prohibition with
prayer for injunctive relief, docketed as G.R. No. 165636.
In a Resolution dated April 4, 2005, the Court consolidated G.R. No.
164785 with G.R. No. 165636.
In G.R. No. 164785, petitioner raises the following issues:
THE ORDER OF PREVENTIVE SUSPENSION PROMULGATED
BY RESPONDENT [MTRCB] DATED 16 AUGUST 2004
AGAINST THE TELEVISION PROGRAM ANG DATING DAAN x x
x IS NULL AND VOID FOR BEING ISSUED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION
(A)

BY REASON THAT THE [IRR] IS INVALID INSOFAR AS

IT PROVIDES FOR THE ISSUANCE OF PREVENTIVE
SUSPENSION ORDERS;

(B)

BY REASON OF LACK OF DUE HEARING IN THE CASE

AT BENCH;

The following day, petitioner sought reconsideration of the

preventive suspension order, praying that Chairperson Consoliza P.
Laguardia and two other members of the adjudication board recuse
themselves from hearing the case. [6] Two days after, however, petitioner

(C)

FOR BEING VIOLATIVE OF EQUAL PROTECTION

UNDER THE LAW;

(D)

FOR BEING VIOLATIVE OF FREEDOM OF RELIGION;

AND

(E)

FOR BEING VIOLATIVE OF FREEDOM OF SPEECH

AND EXPRESSION.

IMPLEMENTATION THEREBY RESULTING IN AN UNDUE

DELEGATION OF LEGISLATIVE POWER BY REASON THAT IT
DOES NOT PROVIDE FOR THE PENALTIES FOR VIOLATIONS
OF ITS PROVISIONS. CONSEQUENTLY, THE [IRR], RULES OF
PROCEDURE, AND OFFICIAL ACTS OF THE MTRCB
PURSUANT THERETO, I.E. DECISION DATED 27 SEPTEMBER
2004 AND ORDER DATED 19 OCTOBER 2004, ARE LIKEWISE
CONSTITUTIONALLY INFIRM AS APPLIED IN THE CASE AT
BENCH[11]

In G.R. No. 165636, petitioner relies on the following

grounds:

G.R. No. 164785

SECTION
3(C)
OF
[PD]
1986,
IS
PATENTLY UNCONSTITUTIONAL AND ENACTED WITHOUT OR
IN EXCESS OF JURISDICTION x x x CONSIDERING THAT:

We shall first dispose of the issues in G.R. No. 164785, regarding

the assailed order of preventive suspension, although its implementability

had already been overtaken and veritably been rendered moot by the

SECTION 3(C) OF [PD] 1986, AS APPLIED TO PETITIONER,

UNDULY INFRINGES ON THE CONSTITUTIONAL GUARANTEE
OF FREEDOM OF RELIGION, SPEECH, AND EXPRESSION AS
IT PARTAKES OF THE NATURE OF A SUBSEQUENT
PUNISHMENT CURTAILING THE SAME; CONSEQUENTLY, THE
IMPLEMENTING RULES AND REGULATIONS, RULES OF
PROCEDURE, AND OFFICIAL ACTS OF THE MTRCB
PURSUANT
THERETO,
I.E.
DECISION
DATED
27
SEPTEMBER 2004 AND ORDER DATED 19 OCTOBER 2004,
ARE LIKEWISE CONSTITUTIONALLY INFIRM AS APPLIED IN
THE CASE AT BENCH;

equally assailed September 27, 2004 decision.

It is petitioners threshold posture that the preventive suspension
imposed against him and the relevant IRR provision authorizing it are
invalid inasmuch as PD 1986 does not expressly authorize the MTRCB to
issue preventive suspension.
Petitioners contention is untenable.
Administrative agencies have powers and functions which may be

II
SECTION 3(C) OF [PD] 1986, AS APPLIED TO PETITIONER,
UNDULY INFRINGES ON THE CONSTITUTIONAL GUARANTEE
OF DUE PROCESS OF LAW AND EQUAL PROTECTION UNDER
THE LAW; CONSEQUENTLY, THE [IRR], RULES OF
PROCEDURE, AND OFFICIAL ACTS OF THE MTRCB
PURSUANT THERETO, I.E., DECISION DATED 27 SEPTEMBER
2004 AND ORDER DATED 19 OCTOBER 2004, ARE LIKEWISE
CONSTITUTIONALLY INFIRM AS APPLIED IN THE CASE AT
BENCH; AND

administrative, investigatory, regulatory, quasi-legislative, or quasi-judicial,

or a mix of the five, as may be conferred by the Constitution or by statute.
[12]

They have in fine only such powers or authority as are granted or

delegated, expressly or impliedly, by law. [13] And in determining whether an

agency has certain powers, the inquiry should be from the law itself. But
once ascertained as existing, the authority given should be liberally
construed.[14]

III
[PD] 1986 IS NOT COMPLETE IN ITSELF AND DOES NOT
PROVIDE FOR A SUFFICIENT STANDARD FOR ITS

A perusal of the MTRCBs basic mandate under PD 1986 reveals the

possession by the agency of the authority, albeit impliedly, to issue the

challenged order of preventive suspension. And this authority stems

k)
To exercise such powers and functions as may be
necessary or incidental to the attainment of the purposes
and objectives of this Act x x x. (Emphasis added.)

naturally from, and is necessary for the exercise of, its power of regulation
and supervision.

The issuance of a preventive suspension comes well within the

Sec. 3 of PD 1986 pertinently provides the following:

Section 3. Powers and Functions.The BOARD shall have the
following functions, powers and duties:
xxxx

scope of the MTRCBs authority and functions expressly set forth in PD

1986, more particularly under its Sec. 3(d), as quoted above, which
empowers the MTRCB to supervise, regulate, and grant, deny or cancel,
permits for the x x x exhibition, and/or television broadcast of all motion

c)
To approve or disapprove, delete objectionable
portions from and/or prohibit the x x x production, x x x
exhibition and/or television broadcast of the motion
pictures, television programs and publicity materials
subject of the preceding paragraph, which, in the judgment
of the board applying contemporary Filipino cultural values
as standard, are objectionable for being immoral, indecent,
contrary to law and/or good customs, injurious to the
prestige of the Republic of the Philippines or its people, or
with a dangerous tendency to encourage the commission
of violence or of wrong or crime such as but not limited to:

pictures, television programs and publicity materials, to the end that no

such pictures, programs and materials as are determined by the BOARD to
be objectionable in accordance with paragraph (c) hereof shall be x x x
exhibited and/or broadcast by television.
Surely, the power to issue preventive suspension forms part of the
MTRCBs express regulatory and supervisory statutory mandate and its
investigatory and disciplinary authority subsumed in or implied from such
mandate. Any other construal would render its power to regulate, supervise,

xxxx

vi) Those which are libelous or defamatory to the good

name and reputation of any person, whether living or
dead;

or discipline illusory.
Preventive suspension, it ought to be noted, is not a penalty by
itself, being merely a preliminary step in an administrative investigation.
[15]

xxxx

(d) To supervise, regulate, and grant, deny or cancel,

permits for the x x x production, copying, distribution, sale,
lease, exhibition, and/or television broadcast of all
motion pictures, television programs and publicity
materials, to the end that no such pictures, programs
and materials as are determined by the BOARD to be
objectionable in accordance with paragraph (c) hereof shall
be x x x produced, copied, reproduced, distributed, sold,
leased, exhibited and/or broadcast by television;
xxxx

And the power to discipline and impose penalties, if granted, carries

with it the power to investigate administrative complaints and, during such

investigation, to preventively suspend the person subject of the complaint.
To reiterate, preventive suspension authority of the MTRCB springs
from its powers conferred under PD 1986. The MTRCB did not, as petitioner
insinuates, empower itself to impose preventive suspension through the
medium of the IRR of PD 1986. It is true that the matter of imposing
preventive suspension is embodied only in the IRR of PD 1986. Sec. 3,
Chapter XIII of the IRR provides:

Sec. 3. PREVENTION SUSPENSION ORDER.Any time

during the pendency of the case, and in order to prevent or
stop further violations or for the interest and welfare of the
public, the Chairman of the Board may issue a Preventive
Suspension Order mandating the preventive x x x
suspension of the permit/permits involved, and/or closure
of the x x x television network, cable TV station x x x
provided that the temporary/preventive order thus issued
shall have a life of not more than twenty (20) days from
the date of issuance.

reiterate, provides, To exercise such powers and functions as may be

necessary or incidental to the attainment of the purposes and objectives of
this Act x x x. Indeed, the power to impose preventive suspension is one of
the implied powers of MTRCB. As distinguished from express powers,
implied powers are those that can be inferred or are implicit in the wordings
or conferred by necessary or fair implication of the enabling act. [17] As we
held in Angara v. Electoral Commission, when a general grant of power is

But the mere absence of a provision on preventive suspension in

conferred or a duty enjoined, every particular power necessary for the

PD 1986, without more, would not work to deprive the MTRCB a basic

exercise of one or the performance of the other is also conferred by

disciplinary tool, such as preventive suspension. Recall that the MTRCB is

necessary

expressly empowered by statute to regulate and supervise television

suspension pending investigation is one of the implied or inherent powers of

programs to obviate the exhibition or broadcast of, among others, indecent

MTRCB.

or immoral materials and to impose sanctions for violations and, corollarily,

to prevent further violations as it investigates. Contrary to petitioners
assertion, the aforequoted Sec. 3 of the IRR neither amended PD 1986 nor
extended the effect of the law. Neither did the MTRCB, by imposing the
assailed preventive suspension, outrun its authority under the law. Far from
it. The preventive suspension was actually done in furtherance of the law,
imposed pursuant, to repeat, to the MTRCBs duty of regulating or
supervising television programs, pending a determination of whether or
not there has actually been a violation. In the final analysis, Sec. 3,
Chapter XIII of the 2004 IRR merely formalized a power which PD 1986
bestowed, albeit impliedly, on MTRCB.
Sec. 3(c) and (d) of PD 1986 finds application to the present case,
sufficient to authorize the MTRCBs assailed action.Petitioners restrictive
reading of PD 1986, limiting the MTRCB to functions within the literal
confines of the law, would give the agency little leeway to operate, stifling
and rendering it inutile, when Sec. 3(k) of PD 1986 clearly intends to grant
the MTRCB a wide room for flexibility in its operation. Sec. 3(k), we

implication.[18] Clearly,

the

power

to

impose

preventive

We cannot agree with petitioners assertion that the

aforequoted IRR provision on preventive suspension is applicable
only to motion pictures and publicity materials. The scope of the
MTRCBs authority extends beyond motion pictures. What the
acronym MTRCB stands for would suggest as much. And while the
law makes specific reference to the closure of a television network,
the suspension of a television program is a far less punitive
measure that can be undertaken, with the purpose of stopping
further violations of PD 1986. Again, the MTRCB would regretfully
be rendered ineffective should it be subject to the restrictions
petitioner envisages.
Just as untenable is petitioners argument on the nullity of the
preventive suspension order on the ground of lack of hearing. As it were,
the MTRCB handed out the assailed order after petitioner, in response to a
written notice, appeared before that Board for a hearing on private
respondents complaint. No less than petitioner admitted that the order was

issued after the adjournment of the hearing, [19] proving that he had already

within the purview of this case, simply too different to even consider

appeared before the MTRCB. Under Sec. 3, Chapter XIII of the IRR of PD

whether or not there is a prima facie indication of oppressive inequality.

1986, preventive suspension shall issue [a]ny time during the pendency of
the case. In this particular case, it was done after MTRCB duly apprised
petitioner of his having possibly violated PD 1986 [20] and of administrative
complaints that had been filed against him for such violation.
At any event, that preventive suspension can validly be meted out
even without a hearing.[22]
Petitioner next faults the MTRCB for denying him his right to the
equal protection of the law, arguing that, owing to the preventive

Petitioner next injects the notion of religious freedom, submitting

that what he uttered was religious speech, adding that words like putang
babae were said in exercise of his religious freedom.
The argument has no merit.
The Court is at a loss to understand how petitioners utterances in
question can come within the pale of Sec. 5, Article III of the 1987
Constitution on religious freedom. The section reads as follows:

suspension order, he was unable to answer the criticisms coming from the
INC ministers.
Petitioners position does not persuade. The equal protection clause
demands that all persons subject to legislation should be treated alike,
under like circumstances and conditions both in the privileges conferred

No law shall be made respecting the establishment

of a religion, or prohibiting the free exercise thereof. The
free exercise and enjoyment of religious profession and
worship, without discrimination or preference, shall forever
be allowed. No religious test shall be required for the
exercise of civil or political rights.

and liabilities imposed.[23] It guards against undue favor and individual

privilege as well as hostile discrimination. [24] Surely, petitioner cannot,
under the premises, place himself in the same shoes as the INC ministers,
who, for one, are not facing administrative complaints before the MTRCB.
For another, he offers no proof that the said ministers, in their TV
programs, use language similar to that which he used in his own,
necessitating the MTRCBs disciplinary action. If the immediate result of the
preventive suspension order is that petitioner remains temporarily gagged
and is unable to answer his critics, this does not become a deprivation of
the equal protection guarantee. The Court need not belabor the fact that
the circumstances of petitioner, as host of Ang Dating Daan, on one hand,
and the INC ministers, as hosts of Ang Tamang Daan, on the other, are,

There

is

nothing

in

petitioners

statements

subject

of

the

complaints expressing any particular religious belief, nothing furthering his

avowed evangelical mission. The fact that he came out with his statements
in a televised bible exposition program does not automatically accord them
the character of a religious discourse. Plain and simple insults directed at
another person cannot be elevated to the status of religious speech. Even
petitioners attempts to place his words in context show that he was moved
by anger and the need to seek retribution, not by any religious
conviction. His claim, assuming its veracity, that some INC ministers
distorted his statements respecting amounts Ang Dating Daan owed to a
TV station does not convert the foul language used in retaliation as
religious speech. We cannot accept that petitioner made his statements in

defense of his reputation and religion, as they constitute no intelligible

We are not persuaded as shall be explained shortly. But first, we

defense or refutation of the alleged lies being spread by a rival religious

restate certain general concepts and principles underlying the freedom of

group. They simply illustrate that petitioner had descended to the level of

speech and expression.

name-calling and foul-language discourse. Petitioner could have chosen to

contradict and disprove his detractors, but opted for the low road.

It is settled that expressions by means of newspapers, radio,

television, and motion pictures come within the broad protection of the

Petitioner, as a final point in G.R. No. 164785, would have the

free speech and expression clause.[25] Each method though, because of its

Court nullify the 20-day preventive suspension order, being, as insisted, an

dissimilar presence in the lives of people and accessibility to children,

unconstitutional abridgement of the freedom of speech and expression and

tends to present its own problems in the area of free speech protection,

an impermissible prior restraint. The main issue tendered respecting the

with broadcast media, of all forms of communication, enjoying a lesser

adverted violation and the arguments holding such issue dovetails with

degree of protection.[26] Just as settled is the rule that restrictions, be it in

those challenging the three-month suspension imposed under the assailed

the form of prior restraint, e.g., judicial injunction against publication or

September 27, 2004 MTRCB decision subject of review under G.R. No.

threat of cancellation of license/franchise, or subsequent liability, whether

165636. Both overlapping issues and arguments shall be jointly addressed.

in libel

and

proceedings,

damage suits,

prosecution

are

to

anathema

the

for

freedom

sedition,
of

or contempt

expression. Prior

restraint means official government restrictions on the press or other

forms of expression in advance of actual publication or dissemination.
[27]

G.R. No. 165636

The freedom of expression, as with the other freedoms encased in the

Bill of Rights, is, however, not absolute. It may be regulated to some extent

Petitioner urges the striking down of the decision suspending him from

to serve important public interests, some forms of speech not being

hosting Ang Dating Daan for three months on the main ground that the

protected. As has been held, the limits of the freedom of expression are

decision violates, apart from his religious freedom, his freedom of speech

reached when the expression touches upon matters of essentially private

and expression guaranteed under Sec. 4, Art. III of the Constitution, which

concern.[28] In

reads:
No law shall be passed abridging the freedom of
speech, of expression, or of the press, or the right of the
people peaceably to assemble and petition the government
for redress of grievance

the

oft-quoted

expression

of

Justice

Holmes,

the

constitutional guarantee obviously was not intended to give immunity for

every possible use of language. [29] From Lucas v. Royo comes this line:
[T]he freedom to express ones sentiments and belief does not grant one
the license to vilify in public the honor and integrity of another. Any
sentiments must be expressed within the proper forum and with proper

He would also have the Court declare PD 1986, its Sec. 3(c) in
particular, unconstitutional for reasons articulated in this petition.

regard for the rights of others.

Indeed, as noted in Chaplinsky v. State of New Hampshire,[31] there

are certain well-defined and narrowly limited classes of speech that are

apply to all cases, but nonetheless stated the ensuing observations on the
matter:

harmful, the prevention and punishment of which has never been thought

There is no perfect definition of obscenity but the

latest word is that of Miller v. California which established
basic guidelines, to wit: (a) whether to the average person,
applying contemporary standards would find the work,
taken as a whole, appeals to the prurient interest; (b)
whether the work depicts or describes, in a patently
offensive way, sexual conduct specifically defined by the
applicable state law; and (c) whether the work, taken as a
whole, lacks serious literary, artistic, political, or scientific
value. But, it would be a serious misreading of Miller to
conclude that the trier of facts has the unbridled discretion
in determining what is patently offensive. x x x What
remains clear is that obscenity is an issue proper for
judicial determination and should be treated on a case to
case basis and on the judges sound discretion.

to raise any Constitutional problems. In net effect, some forms of speech

are not protected by the Constitution, meaning that restrictions on
unprotected speech may be decreed without running afoul of the freedom
of speech clause.[32] A speech would fall under the unprotected type if the
utterances involved are no essential part of any exposition of ideas, and
are of such slight social value as a step of truth that any benefit that may
be derived from them is clearly outweighed by the social interest in order
and morality.[33] Being of little or no value, there is, in dealing with or
regulating them, no imperative call for the application of the clear and
present danger rule or the balancing-of-interest test, they being essentially
modes of weighing competing values,[34] or, with like effect, determining
which of the clashing interests should be advanced.
Petitioner asserts that his utterance in question is a protected form
of speech.
The Court rules otherwise. It has been established in this
jurisdiction that unprotected speech or low-value expression refers to
libelous statements, obscenity or pornography, false or misleading
advertisement, insulting or fighting words, i.e., those which by their very
utterance inflict injury or tend to incite an immediate breach of peace and
expression endangering national security.

Following the contextual lessons of the cited case of Miller v.

California,[36] a patently offensive utterance would come within the pale of
the term obscenity should it appeal to the prurient interest of an average
listener applying contemporary standards.
A

cursory

examination

of

the

utterances

complained

of

and

the

circumstances of the case reveal that to an average adult, the

utterances Gago ka talaga x x x, masahol ka pa sa putang babae x x x.
Yung putang babae ang gumagana lang doon yung ibaba, [dito] kay
Michael ang gumagana ang itaas, o di ba! may not constitute obscene but
merely indecent utterances. They can be viewed as figures of speech or
merely a play on words. In the context they were used, they may not

The Court finds that petitioners statement can be treated as

appeal to the prurient interests of an adult. The problem with the

obscene, at least with respect to the average child. Hence, it is, in that

challenged statements is that they were uttered in a TV program that is

context, unprotected speech. In Fernando v. Court of Appeals, the Court

rated G or for general viewership, and in a time slot that would likely reach

expressed difficulty in formulating a definition ofobscenity that would

even the eyes and ears of children.

While adults may have understood that the terms thus used were

the constitutional protection of free speech. Said statements were made in

not to be taken literally, children could hardly be expected to have the

a medium easily accessible to children. With respect to the young minds,

same discernment. Without parental guidance, the unbridled use of such

said utterances are to be treated as unprotected speech.

language as that of petitioner in a television broadcast could corrupt

impressionable young minds. The term putang babae means a female
prostitute, a term wholly inappropriate for children, who could look it up in
a dictionary and just get the literal meaning, missing the context within
which it was used. Petitioner further used the terms, ang gumagana lang
doon yung ibaba, making reference to the female sexual organ and how a
female prostitute uses it in her trade, then stating that Sandoval was worse
than that by using his mouth in a similar manner.Children could be
motivated by curiosity and ask the meaning of what petitioner said, also
without placing the phrase in context.They may be inquisitive as to why
Sandoval is different from a female prostitute and the reasons for the
dissimilarity. And upon learning the meanings of the words used, young
minds, without the guidance of an adult, may, from their end, view this
kind of indecent speech as obscene, if they take these words literally and
use them in their own speech or form their own ideas on the matter. In this

No

doubt

what

petitioner

said

constitutes

indecent

or

offensive

utterances. But while a jurisprudential pattern involving certain offensive

utterances conveyed in different mediums has emerged, this case is
veritably one of first impression, it being the first time that indecent
speech communicated via television and the applicable norm for its
regulation

are,

in

this

Communications

jurisdiction,

made

the

focal

point. Federal

Commission (FCC) v. Pacifica Foundation,[37] a

1978 American landmark case cited in Eastern Broadcasting Corporation v.

Dans, Jr.[38] and Chavez v. Gonzales,[39] is a rich source of persuasive
lessons. Foremost of these relates to indecent speech without prurient
appeal component coming under the category of protected speech
depending on the context within which it was made, irresistibly suggesting
that, within a particular context, such indecent speech may validly be
categorized as unprotected, ergo, susceptible to restriction.

particular case, where children had the opportunity to hear petitioners

In FCC, seven of what were considered filthy words [40] earlier recorded in a

words, when speaking of the average person in the test for obscenity, we

monologue by a satiric humorist later aired in the afternoon over a radio

are speaking of the average child, not the average adult. The average child

station owned by Pacifica Foundation. Upon the complaint of a man who

may not have the adults grasp of figures of speech, and may lack the

heard the pre-recorded monologue while driving with his son, FCC declared

understanding that language may be colorful, and words may convey more

the

than the literal meaning. Undeniably the subject speech is very suggestive

prohibiting law, though not necessarily obscene. FCC added, however, that

of a female sexual organ and its function as such. In this sense, we find

its declaratory order was issued in a special factual context, referring, in

petitioners utterances obscene and not entitled to protection under the

gist, to an afternoon radio broadcast when children were undoubtedly in

umbrella of freedom of speech.

the audience. Acting on the question of whether the FCC could regulate the

Even if we concede that petitioners remarks are not obscene but merely
indecent speech, still the Court rules that petitioner cannot avail himself of

language

used

as patently

offensive and indecent under

subject utterance, the US Supreme Court ruled in the affirmative, owing to

two special features of the broadcast medium, to wit: (1) radio is a

pervasive medium and (2) broadcasting is uniquely accessible to children.

used were, by any civilized norm, clearly not suitable for children. Where a

The US Court, however, hastened to add that the monologue would be

language is categorized as indecent, as in petitioners utterances on a

protected speech in other contexts, albeit it did not expound and identify a

general-patronage rated TV program, it may be readily proscribed as

compelling state interest in putting FCCs content-based regulatory action

unprotected speech.

under scrutiny.
The Court in Chavez[41] elucidated on the distinction between regulation or

A view has been advanced that unprotected speech refers only to

pornography,[43] false

or

misleading

advertisement, [44] advocacy

of

restriction of protected speech that is content-based and that which is

imminent lawless action, and expression endangering national security. But

content-neutral. A content-based restraint is aimed at the contents or idea

this list is not, as some members of the Court would submit, exclusive or

of the expression, whereas a content-neutral restraint intends to regulate

carved in stone. Without going into specifics, it may be stated without fear

the time, place, and manner of the expression under well-defined

of contradiction that US decisional law goes beyond the aforesaid general

standards tailored to serve a compelling state interest, without restraint on

exceptions. As the Court has been impelled to recognize exceptions to the

the message of the expression. Courts subject content-based restraint to

rule against censorship in the past, this particular case constitutes yet

strict scrutiny.

another exception, another instance of unprotected speech, created by the

necessity of protecting the welfare of our children. As unprotected speech,
petitioners utterances can be subjected to restraint or regulation.

With the view we take of the case, the suspension MTRCB imposed under
the premises was, in one perspective, permissible restriction. We make this
disposition against the backdrop of the following interplaying factors: First,
the indecent speech was made via television, a pervasive medium that, to
borrow from Gonzales v. Kalaw Katigbak,[42] easily reaches every home

Despite the settled ruling in FCC which has remained undisturbed since
1978, petitioner asserts that his utterances must present a clear and
present danger of bringing about a substantive evil the State has a right
and duty to prevent and such danger must be grave and imminent. [45]

where there is a set [and where] [c]hildren will likely be among the avid

Petitioners invocation of the clear and present danger doctrine, arguably

viewers of the programs therein shown; second, the broadcast was aired at

the most permissive of speech tests, would not avail him any relief, for the

the time of the day when there was a reasonable risk that children might

application of said test is uncalled for under the premises. The doctrine,

be in the audience; and third, petitioner uttered his speech on a G or for

first formulated by Justice Holmes, accords protection for utterances so

general patronage rated program. Under Sec. 2(A) of Chapter IV of the IRR

that the printed or spoken words may not be subject to prior restraint or

of the MTRCB, a show for general patronage is [s]uitable for all ages,

subsequent punishment unless its expression creates a clear and present

meaning that the material for television x x x in the judgment of the

danger of bringing about a substantial evil which the government has the

BOARD, does not contain anything unsuitable for children and minors, and

power to prohibit.[46] Under the doctrine, freedom of speech and of press is

may be viewed without adult guidance or supervision. The words petitioner

susceptible of restriction when and only when necessary to prevent grave

and immediate danger to interests which the government may lawfully

The Court explained also in Gonzales v. COMELEC the balancing of

protect. As it were, said doctrine evolved in the context of prosecutions for

interests test:

rebellion and other crimes involving the overthrow of government. [47] It was
originally designed to determine the latitude which should be given to
speech that espouses anti-government action, or to have serious and
substantial deleterious consequences on the security and public order of
the community.[48] The clear and present danger rule has been applied to
this jurisdiction.[49] As a standard of limitation on free speech and press,
however, the clear and present danger test is not a magic incantation that
wipes out all problems and does away with analysis and judgment in the
testing of the legitimacy of claims to free speech and which compels a
court to release a defendant from liability the moment the doctrine is
invoked, absent proof of imminent catastrophic disaster. [50] As we observed
in Eastern Broadcasting Corporation, the clear and present danger test
does

not

lend

itself

to

simplistic

and

all

embracing

interpretation applicable to all utterances in all forums.[51]

To be sure, the clear and present danger doctrine is not the only test which
has been applied by the courts. Generally, said doctrine is applied to cases
involving the overthrow of the government and even other evils which do
not clearly undermine national security. Since not all evils can be measured
in terms of proximity and degree the Court, however, in several casesAyer
Productions
balancing

v.
of

Capulong[52] and Gonzales

interests

test. Former

Chief

v.

COMELEC,[53] applied
Justice

Fred

Ruiz

the

Castro,

inGonzales v. COMELEC, elucidated in his Separate Opinion that where the

legislation under constitutional attack interferes with the freedom of
speech and assembly in a more generalized way and where the effect of
the speech and assembly in terms of the probability of realization of a
specific danger is not susceptible even of impressionistic calculation,
[54]

then the balancing of interests test can be applied.

When particular conduct is regulated in the interest of

public order, and the regulation results in an indirect,
conditional, partial abridgment of speech, the duty of
the courts is to determine which of the two conflicting
interests demands the greater protection under the
particular circumstances presented. x x x We must,
therefore, undertake the delicate and difficult task x x x
to weigh the circumstances and to appraise the
substantiality of the reasons advanced in support of
the regulation of the free enjoyment of rights x x x.
In enunciating standard premised on a judicial
balancing of the conflicting social values and individual
interests competing for ascendancy in legislation which
restricts expression, the court in Douds laid the basis
for what has been called the balancing-of-interests test
which has found application in more recent decisions of
the U.S. Supreme Court. Briefly stated, the balancing
test requires a court to take conscious and detailed
consideration of the interplay of interests observable in
a given situation or type of situation.
xxxx
Although the urgency of the public interest sought to
be secured by Congressional power restricting the
individuals freedom, and the social importance and
value of the freedom so restricted, are to be judged in
the concrete, not on the basis of abstractions, a wide
range of factors are necessarily relevant in
ascertaining the point or line of equilibrium. Among
these are (a) the social value and importance of the
specific aspect of the particular freedom restricted by
the legislation; (b) the specific thrust of the
restriction, i.e., whether the restriction is direct or
indirect, whether or not the persons affected are few;
(c) the value and importance of the public interest
sought to be secured by the legislationthe reference
here is to the nature and gravity of the evil which
Congress seeks to prevent; (d) whether the specific
restriction decreed by Congress is reasonably

appropriate and necessary for the protection of such

public interest; and (e) whether the necessary
safeguarding of the public interest involved may be
achieved by some other measure less restrictive of the
protected freedom.[55]

No doubt, one of the fundamental and most vital rights granted to citizens
of a State is the freedom of speech or expression, for without the
enjoyment of such right, a free, stable, effective, and progressive
democratic state would be difficult to attain. Arrayed against the freedom

This balancing of interest test, to borrow from Professor Kauper,

rests on

of speech is the right of the youth to their moral, spiritual, intellectual, and

the theory that it is the courts function in a case before it when it finds

social being which the State is constitutionally tasked to promote and

public interests served by legislation, on the one hand, and the free

protect. Moreover, the State is also mandated to recognize and support the

expression clause affected by it, on the other, to balance one against the

vital role of the youth in nation building as laid down in Sec. 13, Art. II of

other and arrive at a judgment where the greater weight shall be placed. If,

the 1987 Constitution.

[56]

on balance, it appears that the public interest served by restrictive

legislation is of such nature that it outweighs the abridgment of freedom,
then the court will find the legislation valid. In short, the balance-ofinterests theory rests on the basis that constitutional freedoms are not
absolute, not even those stated in the free speech and expression clause,
and that they may be abridged to some extent to serve appropriate and
important interests.[57] To the mind of the Court, the balancing of interest
doctrine is the more appropriate test to follow.

The Constitution has, therefore, imposed the sacred obligation and

responsibility on the State to provide protection to the youth against illegal
or improper activities which may prejudice their general well-being. The
Article on youth, approved on second reading by the Constitutional
Commission, explained that the State shall extend social protection to
minors against all forms of neglect, cruelty, exploitation, immorality, and
practices which may foster racial, religious or other forms of discrimination.
[58]

In the case at bar, petitioner used indecent and obscene language and a
three (3)-month suspension was slapped on him for breach of MTRCB
rules. In this setting, the assertion by petitioner of his enjoyment of his
freedom of speech is ranged against the duty of the government to protect
and promote the development and welfare of the youth.

Indisputably, the State has a compelling interest in extending social

protection to minors against all forms of neglect, exploitation, and
immorality which may pollute innocent minds. It has a compelling interest
in helping parents, through regulatory mechanisms, protect their childrens
minds

from

exposure

to

undesirable

materials

and

corrupting

After a careful examination of the factual milieu and the arguments raised

experiences. The Constitution, no less, in fact enjoins the State, as earlier

by petitioner in support of his claim to free speech, the Court rules that the

indicated, to promote and protect the physical, moral, spiritual, intellectual,

governments interest to protect and promote the interests and welfare of

and social well-being of the youth to better prepare them fulfill their role in

the children adequately buttresses the reasonable curtailment and valid

the field of nation-building.[59] In the same way, the State is mandated to

restraint on petitioners prayer to continue as program host of Ang Dating

support parents in the rearing of the youth for civic efficiency and the

Daan during the suspension period.

development of moral character.[60]

Petitioners offensive and obscene language uttered in a television

broadcast, without doubt, was easily accessible to the children.His
statements

could

have

exposed

children

to

language

that

is

Judge Jerome Frank, it is hardly the concern of the law to

deal with the sexual fantasies of the adult population. It
cannot be denied though that the State as parens
patriae is called upon to manifest an attitude of caring for
the welfare of the young.[62]

unacceptable in everyday use. As such, the welfare of children and the

States mandate to protect and care for them, as parens patriae,
[61]

constitute

substantial

and

compelling

government

interest

in

regulating petitioners utterances in TV broadcast as provided in PD 1986.

The compelling need to protect the young impels us to sustain the

regulatory action MTRCB took in the narrow confines of the case. To
reiterate, FCC justified the restraint on the TV broadcast grounded on the
following considerations: (1) the use of television with its unique

FCC explains the duty of the government to act as parens patriae to

protect the children who, because of age or interest capacity, are
susceptible of being corrupted or prejudiced by offensive language, thus:
[B]roadcasting is uniquely accessible to children, even
those too young to read. Although Cohens written
message,
[Fuck
the
Draft],
might
have
been
incomprehensible to a first grader, Pacificas broadcast
could have enlarged a childs vocabulary in an
instant. Other forms of offensive expression may be
withheld from the young without restricting the expression
at its source. Bookstores and motion picture theaters, for
example, may be prohibited from making indecent material
available to children. We held in Ginsberg v. New York that
the governments interest in the well-being of its youth and
in supporting parents claim to authority in their own
household justified the regulation of otherwise protected
expression. The ease with which children may obtain
access to broadcast material, coupled with the concerns
recognized in Ginsberg, amply justify special treatment of
indecent broadcasting.
Moreover, Gonzales v. Kalaw Katigbak likewise stressed the duty of
the State to attend to the welfare of the young:
x x x It is the consensus of this Court that where television
is concerned, a less liberal approach calls for
observance. This is so because unlike motion pictures
where the patrons have to pay their way, television
reaches every home where there is a set. Children then will
likely will be among the avid viewers of the programs
therein shown. As was observed by Circuit Court of Appeals

accessibility to children, as a medium of broadcast of a patently offensive

speech; (2) the time of broadcast; and (3) the G rating of the Ang Dating
Daan program. And in agreeing with MTRCB, the court takes stock of and
cites with approval the following excerpts from FCC:

It is appropriate, in conclusion, to emphasize the

narrowness of our holding. This case does not involve a
two-way radio conversation between a cab driver and a
dispatcher, or a telecast of an Elizabethan comedy. We
have not decided that an occasional expletive in either
setting would justify any sanction. x x x The [FFCs] decision
rested entirely on a nuisance rationale under which context
is all important. The concept requires consideration of a
host of variables. The time of day was emphasized by the
[FFC]. The content of the program in which the language is
used will affect the composition of the audience x x x. As
Mr. Justice Sutherland wrote a nuisance may be merely a
right thing in the wrong place, like a pig in the parlor
instead of the barnyard. We simply hold that when the
[FCC] finds that a pig has entered the parlor, the exercise
of its regulatory power does not depend on proof that the
pig is obscene. (Citation omitted.)
There can be no quibbling that the remarks in question petitioner uttered
on prime-time television are blatantly indecent if not outright obscene. It is
the kind of speech that PD 1986 proscribes necessitating the exercise by
MTRCB of statutory disciplinary powers. It is the kind of speech that the

State has the inherent prerogative, nay duty, to regulate and prevent

The power of MTRCB to regulate and even impose some prior restraint on

should such action served and further compelling state interests. One who

radio and television shows, even religious programs, was upheld in Iglesia

utters indecent, insulting, or offensive words on television when

Ni Cristo v. Court of Appeals. Speaking through Chief Justice Reynato S.

unsuspecting children are in the audience is, in the graphic language

Puno, the Court wrote:

of FCC, a pig in the parlor. Public interest would be served if the pig is
reasonably restrained or even removed from the parlor.
Ergo, petitioners offensive and indecent language can be subjected to prior
restraint.
Petitioner theorizes that the three (3)-month suspension is either prior
restraint or subsequent punishment that, however, includes prior restraint,
albeit indirectly.

We thus reject petitioners postulate that its religious

program is per se beyond review by the respondent Board.
Its public broadcast on TV of its religious program brings it
out of the bosom of internal belief. Television is a medium
that reaches even the eyes and ears of children. The Court
iterates the rule that the exercise of religious freedom can
be regulated by the State when it will bring about the clear
and present danger of some substantive evil which the
State is duty bound to prevent, i.e., serious detriment to
the more overriding interest of public health, public morals,
or public welfare. x x x
xxxx

After a review of the facts, the Court finds that what MTRCB imposed on
petitioner is an administrative sanction or subsequent punishment for his
offensive and obscene language in Ang Dating Daan.

While the thesis has a lot to commend itself, we are not

ready to hold that [PD 1986] is unconstitutional for
Congress to grant an administrative body quasi-judicial
power to preview and classify TV programs and enforce its
decision subject to review by our courts. As far back as
1921, we upheld this setup in Sotto vs. Ruiz, viz:

To clarify, statutes imposing prior restraints on speech are generally illegal

and presumed unconstitutional breaches of the freedom of speech. The
exceptions to prior restraint are movies, television, and radio broadcast
censorship in view of its access to numerous people, including the young
who must be insulated from the prejudicial effects of unprotected

The use of the mails by private persons is

in the nature of a privilege which can be regulated
in order to avoid its abuse.Persons possess no
absolute right to put into the mail anything they
please, regardless of its character. [63]

speech. PD 1986 was passed creating the Board of Review for Motion
Pictures and Television (now MTRCB) and which requires prior permit or
license before showing a motion picture or broadcasting a TV program. The
Board can classify movies and television programs and can cancel permits
for exhibition of films or television broadcast.

Bernas adds:
Under the decree a movie classification board is
made the arbiter of what movies and television programs
or parts of either are fit for public consumption. It decides
what movies are immoral, indecent, contrary to law and/or
good customs, injurious to the prestige of the Republic of
the Philippines or its people, and what tend to incite
subversion, insurrection, rebellion or sedition, or tend to

undermine the faith and confidence of the people in their

government
and/or
duly
constituted
authorities,
etc. Moreover, its decisions are executory unless stopped
by a court.[64]

to Sec. 3(i) of PD 1986 and the remedies that may be availed of by the
aggrieved

private party under

the

provisions

on libel

or tort,

if

applicable. As FCC teaches, the imposition of sanctions on broadcasters

Moreover, in MTRCB v. ABS-CBN Broadcasting Corporation,[65] it was held

who indulge in profane or indecent broadcasting does not constitute

that the power of review and prior approval of MTRCB extends to all

forbidden censorship. Lest it be overlooked, the sanction imposed is

television programs and is valid despite the freedom of speech guaranteed

not per se for petitioners exercise of his freedom of speech via television,

by the Constitution. Thus, all broadcast networks are regulated by the

but for the indecent contents of his utterances in a G rated TV program.

MTRCB since they are required to get a permit before they air their
television programs.Consequently, their right to enjoy their freedom of
speech is subject to that requirement. As lucidly explained by Justice Dante
O. Tinga, government regulations through the MTRCB became a necessary

More importantly, petitioner is deemed to have yielded his right to his full
enjoyment of his freedom of speech to regulation under PD 1986 and its
IRR as television station owners, program producers, and hosts have
impliedly accepted the power of MTRCB to regulate the broadcast industry.

evil with the government taking the role of assigning bandwidth to

individual broadcasters. The stations explicitly agreed to this regulatory

Neither can petitioners virtual inability to speak in his program during the

scheme; otherwise, chaos would result in the television broadcast industry

period of suspension be plausibly treated as prior restraint on future

as competing broadcasters will interfere or co-opt each others signals. In

speech. For viewed in its proper perspective, the suspension is in the

this scheme, station owners and broadcasters in effect waived their right to

nature of an intermediate penalty for uttering an unprotected form of

the full enjoyment of their right to freedom of speech in radio and

speech. It

television programs and impliedly agreed that said right may be subject to

cancellation of exhibition or broadcast permit or license. In fine, the

prior restraintdenial of permit or subsequent punishment, like suspension

suspension meted was simply part of the duties of the MTRCB in the

or cancellation of permit, among others.

enforcement and administration of the law which it is tasked to

is

definitely

lesser

punishment

than

the

permissible

implement. Viewed in its proper context, the suspension sought to penalize

The three (3) months suspension in this case is not a prior restraint on the
right of petitioner to continue with the broadcast of Ang Dating Daan as a
permit was already issued to him by MTRCB for such broadcast. Rather, the
suspension is in the form of permissible administrative sanction or
subsequent punishment for the offensive and obscene remarks he uttered
on the evening of August 10, 2004 in his television program, Ang Dating
Daan. It is a sanction that the MTRCB may validly impose under its charter
without running afoul of the free speech clause. And the imposition is
separate and distinct from the criminal action the Board may take pursuant

past speech made on prime-time G rated TV program; it does not bar

future speech of petitioner in other television programs; it is a permissible
subsequent administrative sanction; it should not be confused with a prior
restraint on speech. While not on all fours, the Court, in MTRCB,
[66]

sustained the power of the MTRCB to penalize a broadcast company for

exhibiting/airing a pre-taped TV episode without Board authorization in

violation of Sec. 7 of PD 1986.

Any simplistic suggestion, however, that the MTRCB would be crossing the

distortion of his statements by the INC hosts ofAng Tamang Daan. But on

limits of its authority were it to regulate and even restrain the prime-time

the night he uttered them in his television program, the word simply came

television broadcast of indecent or obscene speech in a G rated program is

out as profane language, without any warning or guidance for undiscerning

not acceptable. As made clear inEastern Broadcasting Corporation, the

ears.

freedom of television and radio broadcasting is somewhat lesser in scope

than the freedom accorded to newspaper and print media. The MTRCB, as
a regulatory agency, must have the wherewithal to enforce its mandate,
which would not be effective if its punitive actions would be limited to
mere fines. Television broadcasts should be subject to some form of
regulation, considering the ease with which they can be accessed, and
violations of the regulations must be met with appropriate and proportional
disciplinary action. The suspension of a violating television program would
be

sufficient

punishment

and

serve

as

deterrent

for

As to petitioners other argument about having been denied due process

and equal protection of the law, suffice it to state that we have at length
debunked similar arguments in G.R. No. 164785. There is no need to
further delve into the fact that petitioner was afforded due process when
he attended the hearing of the MTRCB, and that he was unable to
demonstrate that he was unjustly discriminated against in the MTRCB
proceedings.

those

Finally, petitioner argues that there has been undue delegation of

responsible. The prevention of the broadcast of petitioners television

legislative power, as PD 1986 does not provide for the range of imposable

program is justified, and does not constitute prohibited prior restraint. It

penalties that may be applied with respect to violations of the provisions of

behooves the Court to respond to the needs of the changing times, and

the law.

craft jurisprudence to reflect these times.

The argument is without merit.
Petitioner, in questioning the three-month suspension, also tags as
unconstitutional the very law creating the MTRCB, arguing that PD 1986, as
applied to him, infringes also upon his freedom of religion. The Court has
earlier adequately explained why petitioners undue reliance on the
religious freedom cannot lend justification, let alone an exempting
dimension to his licentious utterances in his program. The Court sees no
need to address anew the repetitive arguments on religious freedom. As
earlier discussed in the disposition of the petition in G.R. No. 164785, what
was uttered was in no way a religious speech. Parenthetically, petitioners
attempt to characterize his speech as a legitimate defense of his religion
fails miserably. He tries to place his words in perspective, arguing evidently
as an afterthought that this was his method of refuting the alleged

In Edu

v.

Ericta, the

Court

discussed

the

matter

of

delegation of legislative power in the following wise:

It is a fundamental principle flowing from the
doctrine of separation of powers that Congress may not
delegate its legislative power to the two other branches of
the government, subject to the exception that local
governments may over local affairs participate in its
exercise. What cannot be delegated is the authority under
the Constitution to make laws and to alter and repeal
them; the test is the completeness of the statute in all its
term and provisions when it leaves the hands of the
legislature. To determine whether or not there is an undue
delegation of legislative power, the inquiry must be
directed to the scope and definiteness of the measure
enacted. The legislature does not abdicate its functions

undue

when it describes what job must be done, who is to do it,

and what is the scope of his authority. For a complex
economy, that may indeed be the only way in which the
legislative process can go forward. A distinction has
rightfully been made between delegation of power to make
laws which necessarily involves a discretion as to what it
shall be, which constitutionally may not be done, and
delegation of authority or discretion as to its execution to
be exercised under and in pursuance of the law, to which
no valid objection can be made. The Constitution is thus
not to be regarded as denying the legislature the
necessary resources of flexibility and practicability.
To avoid the taint of unlawful delegation, there
must be a standard, which implies at the very least that
the legislature itself determines matters of principle and
lays down fundamental policy. Otherwise, the charge of
complete abdication may be hard to repel. A standard thus
defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It
indicates the circumstances under which the legislative
command is to be effected. It is the criterion by which
legislative purpose may be carried out.Thereafter, the
executive or administrative office designated may in
pursuance
of
the
above
guidelines
promulgate
supplemental rules and regulations.

conferment of power and functions, is charged with supervising and

regulating, granting, denying, or canceling permits for the exhibition and/or
television broadcast of all motion pictures, television programs, and
publicity materials to the end that no such objectionable pictures,
programs, and materials shall be exhibited and/or broadcast by television.
Complementing this provision is Sec. 3(k) of the decree authorizing the
MTRCB to exercise such powers and functions as may be necessary or
incidental to the attainment of the purpose and objectives of [the law]. As
earlier

explained,

the

investiture

of

supervisory,

regulatory,

and

disciplinary power would surely be a meaningless grant if it did not carry

with it the power to penalize the supervised or the regulated as may be
proportionate to the offense committed, charged, and proved. As the Court
said in Chavez v. National Housing Authority:
x x x [W]hen a general grant of power is conferred
or duty enjoined, every particular power necessary for the
exercise of the one or the performance of the other is also
conferred. x x x [W]hen the statute does not specify the
particular method to be followed or used by a government
agency in the exercise of the power vested in it by law,
said agency has the authority to adopt any reasonable
method to carry out its function.[68]

Based on the foregoing pronouncements and analyzing the law in

question, petitioners protestation about undue delegation of legislative
power for the sole reason that PD 1986 does not provide for a range of
penalties for violation of the law is untenable. His thesis is that MTRCB, in
promulgating the IRR of PD 1986, prescribing a schedule of penalties for
violation of the provisions of the decree, went beyond the terms of the
law.

Given the foregoing perspective, it stands to reason that the power of the
MTRCB to regulate and supervise the exhibition of TV programs carries with
it or necessarily implies the authority to take effective punitive action for
violation of the law sought to be enforced. And would it not be logical too
to say that the power to deny or cancel a permit for the exhibition of a TV
program or broadcast necessarily includes the lesser power to suspend?

Petitioners posture is flawed by the erroneous assumptions holding it

together, the first assumption being that PD 1986 does not prescribe the
imposition of, or authorize the MTRCB to impose, penalties for violators of
PD 1986. As earlier indicated, however, the MTRCB, by express and direct

The MTRCB promulgated the IRR of PD 1986 in accordance with Sec. 3(a)
which, for reference, provides that agency with the power [to] promulgate
such

rules

and

regulations

as

are

necessary

or

proper

for

the

implementation of this Act, and the accomplishment of its purposes and

details in the enforcement of a particular statute. [69] The grant of the rule-

objectives x x x. And Chapter XIII, Sec. 1 of the IRR providing:

making power to administrative agencies is a relaxation of the principle of

Section 1. VIOLATIONS AND ADMINISTRATIVE

SANCTIONS.Without prejudice to the immediate filing of
the appropriate criminal action and the immediate seizure
of the pertinent articles pursuant to Section 13, any
violation of PD 1986 and its Implementing Rules and
Regulations governing motion pictures, television
programs, and related promotional materials shall
be penalized with suspension or cancellation of
permits and/or licenses issued by the Board and/or
with the imposition of fines and other administrative
penalty/penalties. The Board recognizes the existing Table
of Administrative Penalties attached without prejudice to
the power of the Board to amend it when the need
arises. In the meantime the existing revised Table of
Administrative Penalties shall be enforced. (Emphasis
added.)

separation of powers and is an exception to the non-delegation of

legislative powers.[70] Administrative regulations or subordinate legislation
calculated to promote the public interest are necessary because of the
growing complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the
law.[71] Allowing the MTRCB some reasonable elbow-room in its operations
and, in the exercise of its statutory disciplinary functions, according it
ample latitude in fixing, by way of an appropriate issuance, administrative
penalties with due regard for the severity of the offense and attending
mitigating or aggravating circumstances, as the case may be, would be
consistent with its mandate to effectively and efficiently regulate the
movie and television industry.

This is, in the final analysis, no more than a measure to specifically

implement the aforequoted provisions of Sec. 3(d) and (k). Contrary to
what petitioner implies, the IRR does not expand the mandate of the
MTRCB under the law or partake of the nature of an unauthorized
administrative legislation. The MTRCB cannot shirk its responsibility to
regulate the public airwaves and employ such means as it can as a
guardian of the public.

But even as we uphold the power of the MTRCB to review and

impose sanctions for violations of PD 1986, its decision to suspend
petitioner must be modified, for nowhere in that issuance, particularly the
power-defining Sec. 3 nor in the MTRCB Schedule of Administrative
Penalties effective January 1, 1999 is the Board empowered to suspend the
program host or even to prevent certain people from appearing in
television programs. The MTRCB, to be sure, may prohibit the broadcast of

In Sec. 3(c), one can already find the permissible actions of the

such television programs or cancel permits for exhibition, but it may not

MTRCB, along with the standards to be applied to determine whether there

suspend

have been statutory breaches. The MTRCB may evaluate motion pictures,

jurisdiction. The MTRCB cannot extend its exercise of regulation beyond

television programs, and publicity materials applying contemporary Filipino

what the law provides. Only persons, offenses, and penalties clearly falling

cultural values as standard, and, from there, determine whether these

clearly within the letter and spirit of PD 1986 will be considered to be

audio and video materials are objectionable for being immoral, indecent,

within the decrees penal or disciplinary operation. And when it exists, the

contrary to law and/or good customs, [etc.] x x x and apply the sanctions it

reasonable doubt must be resolved in favor of the person charged with

deems proper. The lawmaking body cannot possibly provide for all the

violating the statute and for whom the penalty is sought. Thus, the MTRCBs

television

personalities,

for

such

would

be

beyond

its

decision in Administrative Case No. 01-04 dated September 27, 2004 and
the

subsequent

order

issued

pursuant

to

said

decision

must

SO ORDERED.

be

modified. The suspension should cover only the television program on

which petitioner appeared and uttered the offensive and obscene
language, which sanction is what the law and the facts obtaining call for.
In ending, what petitioner obviously advocates is an unrestricted
speech paradigm in which absolute permissiveness is the norm. Petitioners
flawed belief that he may simply utter gutter profanity on television without
adverse consequences, under the guise of free speech, does not lend itself
to acceptance in this jurisdiction. We repeat: freedoms of speech and
expression are not absolute freedoms. To say any act that restrains speech
should be greeted with furrowed brows is not to say that any act that
restrains or regulates speech or expression is per se invalid. This only
recognizes the importance of freedoms of speech and expression, and
indicates the necessity to carefully scrutinize acts that may restrain or
regulate speech.
WHEREFORE, the decision of the MTRCB in Adm. Case No. 01-04
dated

September

27,

2004

is

hereby AFFIRMED with

the MODIFICATION of limiting the suspension to the program Ang Dating

Daan. As thus modified, the fallo of the MTRCB shall read as follows:
WHEREFORE, in view of all the foregoing, a
Decision is hereby rendered, imposing a penalty of THREE
(3) MONTHS SUSPENSION on the television
program, Ang Dating Daan, subject of the instant
petition.
Co-respondents Joselito Mallari, Luzviminda Cruz,
and UNTV Channel 37 and its owner, PBC, are hereby
exonerated for lack of evidence.
Costs against petitioner.

FIRST DIVISION
G.R. No. 70853 March 12, 1987
REPUBLIC OF THE PHILIPPINES, petitioner-appellee,
vs.
PABLO FELICIANO and INTERMEDIATE APPELLATE
COURT, respondents-appellants.
YAP, J.:
Petitioner seeks the review of the decision of the Intermediate Appellate
Court dated April 30, 1985 reversing the order of the Court of First Instance
of Camarines Sur, Branch VI, dated August 21, 1980, which dismissed the
complaint of respondent Pablo Feliciano for recovery of ownership and
possession of a parcel of land on the ground of non-suability of the State.
The background of the present controversy may be briefly summarized as
follows:
On January 22, 1970, respondent Feliciano filed a complaint with the then
Court of First Instance of Camarines Sur against the Republic of the
Philippines, represented by the Land Authority, for the recovery of
ownership and possession of a parcel of land, consisting of four (4) lots
with an aggregate area of 1,364.4177 hectares, situated in the Barrio of
Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff alleged that
he bought the property in question from Victor Gardiola by virtue of a
Contract of Sale dated May 31, 1952, followed by a Deed of Absolute Sale
on October 30, 1954; that Gardiola had acquired the property by purchase
from the heirs of Francisco Abrazado whose title to the said property was
evidenced by an informacion posesoria that upon plaintiff's purchase of the
property, he took actual possession of the same, introduced various
improvements therein and caused it to be surveyed in July 1952, which
survey was approved by the Director of Lands on October 24, 1954; that on
November 1, 1954, President Ramon Magsaysay issued Proclamation No.
90 reserving for settlement purposes, under the administration of the
National Resettlement and Rehabilitation Administration (NARRA), a tract of
land situated in the Municipalities of Tinambac and Siruma, Camarines Sur,
after which the NARRA and its successor agency, the Land Authority,
started sub-dividing and distributing the land to the settlers; that the
property in question, while located within the reservation established
under Proclamation No. 90, was the private property of plaintiff and should
therefore be excluded therefrom. Plaintiff prayed that he be declared the

rightful and true owner of the property in question consisting of 1,364.4177

hectares; that his title of ownership based on informacion posesoria of his
predecessor-in-interest be declared legal valid and subsisting and that
defendant be ordered to cancel and nullify all awards to the settlers.
The defendant, represented by the Land Authority, filed an answer, raising
by way of affirmative defenses lack of sufficient cause of action and
prescription.
On August 29, 1970, the trial court, through Judge Rafael S. Sison,
rendered a decision declaring Lot No. 1, with an area of 701.9064 hectares,
to be the private property of the plaintiff, "being covered by a possessory
information title in the name of his predecessor-in-interest" and declaring
said lot excluded from the NARRA settlement reservation. The court
declared the rest of the property claimed by plaintiff, i.e. Lots 2, 3 and 4,
reverted to the public domain.
A motion to intervene and to set aside the decision of August 29, 1970 was
filed by eighty-six (86) settlers, together with the barrio council of Pagasay, alleging among other things that intervenors had been in possession
of the land in question for more than twenty (20) years under claim of
ownership.
On January 25, 1971, the court a quo reconsidered its decision, reopened
the case and directed the intervenors to file their corresponding pleadings
and present their evidence; all evidence already presented were to remain
but plaintiff, as well as the Republic of the Philippines, could present
additional evidence if they so desire. The plaintiff presented additional
evidence on July 30, 1971, and the case was set for hearing for the
reception of intervenors' evidence on August 30 and August 31, 1971.
On August 30, 1971, the date set for the presentation of the evidence for
intervenors, the latter did not appear but submitted a motion for
postponement and resetting of the hearing on the next day, August 31,
1971. The trial court denied the motion for postponement and allowed
plaintiff to offer his evidence "en ausencia," after which the case would be
deemed submitted for decision. On the following day, August 31, 1971,
Judge Sison rendered a decision reiterating his decision of August 29, 1970.
A motion for reconsideration was immediately filed by the intervenors. But
before this motion was acted upon, plaintiff filed a motion for execution,
dated November 18, 1971. On December 10, 1971, the lower court, this
time through Judge Miguel Navarro, issued an order denying the motion for
execution and setting aside the order denying intervenors' motion for
postponement. The case was reopened to allow intervenors to present
their evidence. Unable to secure a reconsideration of Judge Navarro's
order, the plaintiff went to the Intermediate Appellate Court on a petition
for certiorari. Said petition was, however, denied by the Intermediate
Appellate Court, and petitioners brought the matter to this Court in G.R.

No. 36163, which was denied on May 3, 1973 Consequently, the case was
remanded to the court a quo for further proceedings.
On August 31, 1970, intervenors filed a motion to dismiss, principally on
the ground that the Republic of the Philippines cannot be sued without its
consent and hence the action cannot prosper. The motion was opposed by
the plaintiff.
On August 21, 1980, the trial court, through Judge Esteban Lising, issued
the questioned order dismissing the case for lack of jurisdiction.
Respondent moved for reconsideration, while the Solicitor General, on
behalf of the Republic of the Philippines filed its opposition thereto,
maintaining that the dismissal was proper on the ground of non-suability of
the State and also on the ground that the existence and/or authenticity of
the purported possessory information title of the respondents' predecessorin-interest had not been demonstrated and that at any rate, the same is
not evidence of title, or if it is, its efficacy has been lost by prescription and
laches.
Upon denial of the motion for reconsideration, plaintiff again went to the
Intermediate Appellate Court on petition for certiorari. On April 30, 1985,
the respondent appellate court rendered its decision reversing the order of
Judge Lising and remanding the case to the court a quo for further
proceedings. Hence this petition.
We find the petition meritorious. The doctrine of non-suability of the State
has proper application in this case. The plaintiff has impleaded the
Republic of the Philippines as defendant in an action for recovery of
ownership and possession of a parcel of land, bringing the State to court
just like any private person who is claimed to be usurping a piece of
property. A suit for the recovery of property is not an action in rem, but an
action in personam.1 It is an action directed against a specific party or
parties, and any judgment therein binds only such party or parties. The
complaint filed by plaintiff, the private respondent herein, is directed
against the Republic of the Philippines, represented by the Land Authority,
a governmental agency created by Republic Act No. 3844.
By its caption and its allegation and prayer, the complaint is clearly a suit
against the State, which under settled jurisprudence is not permitted,
except upon a showing that the State has consented to be sued, either
expressly or by implication through the use of statutory language too plain
to be misinterpreted. 2 There is no such showing in the instant case. Worse,
the complaint itself fails to allege the existence of such consent. This is a
fatal defect, 3 and on this basis alone, the complaint should have been
dismissed.
The failure of the petitioner to assert the defense of immunity from suit
when the case was tried before the court a quo, as alleged by private

respondent, is not fatal. It is now settled that such defense "may be

invoked by the courts sua sponte at any stage of the proceedings." 4
Private respondent contends that the consent of petitioner may be read
from the Proclamation itself, when it established the reservation " subject
to private rights, if any there be. " We do not agree. No such consent can
be drawn from the language of the Proclamation. The exclusion of existing
private rights from the reservation established by Proclamation No. 90 can
not be construed as a waiver of the immunity of the State from suit. Waiver
of immunity, being a derogation of sovereignty, will not be inferred lightly.
but must be construed instrictissimi juris. 5 Moreover, the Proclamation is
not a legislative act. The consent of the State to be sued must emanate
from statutory authority. Waiver of State immunity can only be made by an
act of the legislative body.
Neither is there merit in respondent's submission, which the respondent
appellate court sustained, on the basis of our decision in
the Begosa case, 6 that the present action is not a suit against the State
within the rule of State immunity from suit, because plaintiff does not seek
to divest the Government of any of its lands or its funds. It is contended
that the complaint involves land not owned by the State, but private land
belonging to the plaintiff, hence the Government is not being divested of
any of its properties. There is some sophistry involved in this argument,
since the character of the land sought to be recovered still remains to be
established, and the plaintiff's action is directed against the State precisely
to compel the latter to litigate the ownership and possession of the
property. In other words, the plaintiff is out to establish that he is the owner
of the land in question based, incidentally, on an informacion posesoria of
dubious value, and he seeks to establish his claim of ownership by suing
the Republic of the Philippines in an action in personam.

respondent could have applied for judicial confirmation of imperfect title

under the Public Land Act, which is an action in rem. However, having
failed to do so, it is rather late for him to pursue this avenue at this time.
Respondent must also contend, as the records disclose, with the fact
admitted by him and stated in the decision of the Court a quo that settlers
have been occupying and cultivating the land in question since even
before the outbreak of the war, which puts in grave doubt his own claim of
possession.
Worthy of note is the fact, as pointed out by the Solicitor General, that
the informacion posesoria registered in the Office of the Register of Deed
of Camarines Sur on September 23, 1952 was a "reconstituted" possessory
information; it was "reconstituted from the duplicate presented to this
office (Register of Deeds) by Dr. Pablo Feliciano," without the submission of
proof that the alleged duplicate was authentic or that the original thereof
was lost. Reconstitution can be validly made only in case of loss of the
original. 10 These circumstances raise grave doubts as to the authenticity
and validity of the "informacion posesoria" relied upon by respondent
Feliciano. Adding to the dubiousness of said document is the fact that
"possessory information calls for an area of only 100
hectares," 11 whereas the land claimed by respondent Feliciano comprises
1,364.4177 hectares, later reduced to 701-9064 hectares. Courts should be
wary in accepting "possessory information documents, as well as other
purportedly old Spanish titles, as proof of alleged ownership of lands.
WHEREFORE, judgment is hereby rendered reversing and setting aside the
appealed decision of the Intermediate Appellate Court, dated April 30,
1985, and affirming the order of the court a quo, dated August 21, 1980,
dismissing the complaint filed by respondent Pablo Feliciano against the
Republic of the Philippines. No costs.

The inscription in the property registry of an informacion posesoria under

the Spanish Mortgage Law was a means provided by the law then in force
in the Philippines prior to the transfer of sovereignty from Spain to the
United States of America, to record a claimant's actual possession of a
piece of land, established through an ex parte proceeding conducted in
accordance with prescribed rules. 7 Such inscription merely furnishes, at
best, prima facie evidence of the fact that at the time the proceeding was
held, the claimant was in possession of the land under a claim of right as
set forth in his application. 8 The possessory information could ripen into a
record of ownership after the lapse of 20 years (later reduced to 10 years),
upon the fulfillment of the requisites prescribed in Article 393 of the
Spanish Mortgage Law.

SO ORDERED.

There is no showing in the case at bar that the informacion posesoria held
by the respondent had been converted into a record of ownership. Such
possessory information, therefore, remained at best mere prima
facie evidence of possession. Using this possessory information, the

This is an appeal by both parties from a judgment of the Court of First

Instance of the city of Manila in favor of the plaintiff for the sum of
P14,741, together with the costs of the cause.

Narvasa, Cruz, Feliciano, Gancayco and Sarmiento, JJ., concur. MelencioHerrera, J., is on leave.
EN BANC
G.R. No. L-11154

March 21, 1916

E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.
Crossfield and O'Brien for plaintiff.
Attorney-General Avancea for defendant..
TRENT, J.:

Counsel for the plaintiff insist that the trial court erred (1) "in limiting the
general damages which the plaintiff suffered to P5,000, instead of P25,000
as claimed in the complaint," and (2) "in limiting the time when plaintiff
was entirely disabled to two months and twenty-one days and fixing the
damage accordingly in the sum of P2,666, instead of P6,000 as claimed by
plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that the trial court
erred: (a) in finding that the collision between the plaintiff's motorcycle and
the ambulance of the General Hospital was due to the negligence of the
chauffeur; (b) in holding that the Government of the Philippine Islands is
liable for the damages sustained by the plaintiff as a result of the collision,
even if it be true that the collision was due to the negligence of the
chauffeur; and (c) in rendering judgment against the defendant for the sum
of P14,741.
The trial court's findings of fact, which are fully supported by the record,
are as follows:
It is a fact not disputed by counsel for the defendant that when the
plaintiff, riding on a motorcycle, was going toward the western part
of Calle Padre Faura, passing along the west side thereof at a
speed of ten to twelve miles an hour, upon crossing Taft Avenue
and when he was ten feet from the southwestern intersection of
said streets, the General Hospital ambulance, upon reaching said
avenue, instead of turning toward the south, after passing the
center thereof, so that it would be on the left side of said avenue,
as is prescribed by the ordinance and the Motor Vehicle Act, turned
suddenly and unexpectedly and long before reaching the center of
the street, into the right side of Taft Avenue, without having
sounded any whistle or horn, by which movement it struck the
plaintiff, who was already six feet from the southwestern point or
from the post place there.
By reason of the resulting collision, the plaintiff was so severely
injured that, according to Dr. Saleeby, who examined him on the
very same day that he was taken to the General Hospital, he was
suffering from a depression in the left parietal region, a would in
the same place and in the back part of his head, while blood issued
from his nose and he was entirely unconscious.
The marks revealed that he had one or more fractures of the skull
and that the grey matter and brain was had suffered material
injury. At ten o'clock of the night in question, which was the time
set for performing the operation, his pulse was so weak and so
irregular that, in his opinion, there was little hope that he would
live. His right leg was broken in such a way that the fracture
extended to the outer skin in such manner that it might be

regarded as double and the would be exposed to infection, for

which reason it was of the most serious nature.
At another examination six days before the day of the trial, Dr.
Saleeby noticed that the plaintiff's leg showed a contraction of an
inch and a half and a curvature that made his leg very weak and
painful at the point of the fracture. Examination of his head
revealed a notable readjustment of the functions of the brain and
nerves. The patient apparently was slightly deaf, had a light
weakness in his eyes and in his mental condition. This latter
weakness was always noticed when the plaintiff had to do any
difficult mental labor, especially when he attempted to use his
money for mathematical calculations.
According to the various merchants who testified as witnesses, the
plaintiff's mental and physical condition prior to the accident was
excellent, and that after having received the injuries that have
been discussed, his physical condition had undergone a noticeable
depreciation, for he had lost the agility, energy, and ability that he
had constantly displayed before the accident as one of the best
constructors of wooden buildings and he could not now earn even
a half of the income that he had secured for his work because he
had lost 50 per cent of his efficiency. As a contractor, he could no
longer, as he had before done, climb up ladders and scaffoldings to
reach the highest parts of the building.
As a consequence of the loss the plaintiff suffered in the efficiency
of his work as a contractor, he had to dissolved the partnership he
had formed with the engineer. Wilson, because he was
incapacitated from making mathematical calculations on account
of the condition of his leg and of his mental faculties, and he had to
give up a contract he had for the construction of the Uy Chaco
building."
We may say at the outset that we are in full accord with the trial court to
the effect that the collision between the plaintiff's motorcycle and the
ambulance of the General Hospital was due solely to the negligence of the
chauffeur.
The two items which constitute a part of the P14,741 and which are drawn
in question by the plaintiff are (a) P5,000, the award awarded for
permanent injuries, and (b) the P2,666, the amount allowed for the loss of
wages during the time the plaintiff was incapacitated from pursuing his
occupation. We find nothing in the record which would justify us in
increasing the amount of the first. As to the second, the record shows, and
the trial court so found, that the plaintiff's services as a contractor were
worth P1,000 per month. The court, however, limited the time to two
months and twenty-one days, which the plaintiff was actually confined in

the hospital. In this we think there was error, because it was clearly
established that the plaintiff was wholly incapacitated for a period of six
months. The mere fact that he remained in the hospital only two months
and twenty-one days while the remainder of the six months was spent in
his home, would not prevent recovery for the whole time. We, therefore,
find that the amount of damages sustained by the plaintiff, without any
fault on his part, is P18,075.

action in favor of the plaintiff or extended the defendant's liability to any

case not previously recognized.

As the negligence which caused the collision is a tort committed by an

agent or employee of the Government, the inquiry at once arises whether
the Government is legally-liable for the damages resulting therefrom.

The plaintiff was authorized to bring this action against the Government "in
order to fix the responsibility for the collision between his motorcycle and
the ambulance of the General Hospital and to determine the amount of the
damages, if any, to which Mr. E. Merritt is entitled on account of said
collision, . . . ." These were the two questions submitted to the court for
determination. The Act was passed "in order that said questions may be
decided." We have "decided" that the accident was due solely to the
negligence of the chauffeur, who was at the time an employee of the
defendant, and we have also fixed the amount of damages sustained by
the plaintiff as a result of the collision. Does the Act authorize us to hold
that the Government is legally liable for that amount? If not, we must look
elsewhere for such authority, if it exists.

Act No. 2457, effective February 3, 1915, reads:

An Act authorizing E. Merritt to bring suit against the Government
of the Philippine Islands and authorizing the Attorney-General of
said Islands to appear in said suit.
Whereas a claim has been filed against the Government of the
Philippine Islands by Mr. E. Merritt, of Manila, for damages resulting
from a collision between his motorcycle and the ambulance of the
General Hospital on March twenty-fifth, nineteen hundred and
thirteen;
Whereas it is not known who is responsible for the accident nor is it
possible to determine the amount of damages, if any, to which the
claimant is entitled; and
Whereas the Director of Public Works and the Attorney-General
recommended that an Act be passed by the Legislature authorizing
Mr. E. Merritt to bring suit in the courts against the Government, in
order that said questions may be decided: Now, therefore,
By authority of the United States, be it enacted by the Philippine
Legislature, that:
SECTION 1. E. Merritt is hereby authorized to bring suit in the Court
of First Instance of the city of Manila against the Government of the
Philippine Islands in order to fix the responsibility for the collision
between his motorcycle and the ambulance of the General
Hospital, and to determine the amount of the damages, if any, to
which Mr. E. Merritt is entitled on account of said collision, and the
Attorney-General of the Philippine Islands is hereby authorized and
directed to appear at the trial on the behalf of the Government of
said Islands, to defendant said Government at the same.
SEC. 2. This Act shall take effect on its passage.
Enacted, February 3, 1915.
Did the defendant, in enacting the above quoted Act, simply waive its
immunity from suit or did it also concede its liability to the plaintiff? If only
the former, then it cannot be held that the Act created any new cause of

All admit that the Insular Government (the defendant) cannot be sued by
an individual without its consent. It is also admitted that the instant case is
one against the Government. As the consent of the Government to be sued
by the plaintiff was entirely voluntary on its part, it is our duty to look
carefully into the terms of the consent, and render judgment accordingly.

The Government of the Philippine Islands having been "modeled after the
Federal and State Governments in the United States," we may look to the
decisions of the high courts of that country for aid in determining the
purpose and scope of Act No. 2457.
In the United States the rule that the state is not liable for the torts
committed by its officers or agents whom it employs, except when
expressly made so by legislative enactment, is well settled. "The
Government," says Justice Story, "does not undertake to guarantee to any
person the fidelity of the officers or agents whom it employs, since that
would involve it in all its operations in endless embarrassments, difficulties
and losses, which would be subversive of the public interest." (Claussen vs.
City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9 Wheat, 720; 6
L. Ed., 199; and Beers vs. States, 20 How., 527; 15 L. Ed., 991.)
In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover
damages from the state for personal injuries received on account of the
negligence of the state officers at the state fair, a state institution created
by the legislature for the purpose of improving agricultural and kindred
industries; to disseminate information calculated to educate and benefit
the industrial classes; and to advance by such means the material interests
of the state, being objects similar to those sought by the public school
system. In passing upon the question of the state's liability for the
negligent acts of its officers or agents, the court said:
No claim arises against any government is favor of an individual,
by reason of the misfeasance, laches, or unauthorized exercise of

powers by its officers or agents. (Citing Gibbons vs. U. S., 8 Wall.,

269; Clodfelter vs. State, 86 N. C., 51, 53; 41 Am. Rep., 440;
Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs.
State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep.,
203; Story on Agency, sec. 319.)
As to the scope of legislative enactments permitting individuals to sue the
state where the cause of action arises out of either fort or contract, the
rule is stated in 36 Cyc., 915, thus:
By consenting to be sued a state simply waives its immunity from
suit. It does not thereby concede its liability to plaintiff, or create
any cause of action in his favor, or extend its liability to any cause
not previously recognized. It merely gives a remedy to enforce a
preexisting liability and submits itself to the jurisdiction of the
court, subject to its right to interpose any lawful defense.
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April
16, 1915, the Act of 1913, which authorized the bringing of this suit, read:
SECTION 1. Authority is hereby given to George Apfelbacher, of the
town of Summit, Waukesha County, Wisconsin, to bring suit in such
court or courts and in such form or forms as he may be advised for
the purpose of settling and determining all controversies which he
may now have with the State of Wisconsin, or its duly authorized
officers and agents, relative to the mill property of said George
Apfelbacher, the fish hatchery of the State of Wisconsin on the
Bark River, and the mill property of Evan Humphrey at the lower
end of Nagawicka Lake, and relative to the use of the waters of
said Bark River and Nagawicka Lake, all in the county of Waukesha,
Wisconsin.
In determining the scope of this act, the court said:
Plaintiff claims that by the enactment of this law the legislature
admitted liability on the part of the state for the acts of its officers,
and that the suit now stands just as it would stand between private
parties. It is difficult to see how the act does, or was intended to
do, more than remove the state's immunity from suit. It simply
gives authority to commence suit for the purpose of settling
plaintiff's controversies with the estate. Nowhere in the act is there
a whisper or suggestion that the court or courts in the disposition
of the suit shall depart from well established principles of law, or
that the amount of damages is the only question to be settled. The
act opened the door of the court to the plaintiff. It did not pass
upon the question of liability, but left the suit just where it would
be in the absence of the state's immunity from suit. If the
Legislature had intended to change the rule that obtained in this
state so long and to declare liability on the part of the state, it

would not have left so important a matter to mere inference, but

would have done so in express terms. (Murdock Grate Co. vs.
Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)
In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893,
relied upon and considered, are as follows:
All persons who have, or shall hereafter have, claims on contract or
for negligence against the state not allowed by the state board of
examiners, are hereby authorized, on the terms and conditions
herein contained, to bring suit thereon against the state in any of
the courts of this state of competent jurisdiction, and prosecute the
same to final judgment. The rules of practice in civil cases shall
apply to such suits, except as herein otherwise provided.
And the court said:
This statute has been considered by this court in at least two
cases, arising under different facts, and in both it was held that
said statute did not create any liability or cause of action against
the state where none existed before, but merely gave an additional
remedy to enforce such liability as would have existed if the
statute had not been enacted. (Chapman vs. State, 104 Cal., 690;
43 Am. St. Rep., 158; Melvin vs. State, 121 Cal., 16.)
A statute of Massachusetts enacted in 1887 gave to the superior court
"jurisdiction of all claims against the commonwealth, whether at law or in
equity," with an exception not necessary to be here mentioned. In
construing this statute the court, in Murdock Grate Co. vs.
Commonwealth (152 Mass., 28), said:
The statute we are discussing disclose no intention to create
against the state a new and heretofore unrecognized class of
liabilities, but only an intention to provide a judicial tribunal where
well recognized existing liabilities can be adjudicated.
In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had,
by the terms of the statute of New York, jurisdiction of claims for damages
for injuries in the management of the canals such as the plaintiff had
sustained, Chief Justice Ruger remarks: "It must be conceded that the state
can be made liable for injuries arising from the negligence of its agents or
servants, only by force of some positive statute assuming such liability."
It being quite clear that Act No. 2457 does not operate to extend the
Government's liability to any cause not previously recognized, we will now
examine the substantive law touching the defendant's liability for the
negligent acts of its officers, agents, and employees. Paragraph 5 of article
1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special
agent, but not when the damage should have been caused by the
official to whom properly it pertained to do the act performed, in

which case the provisions of the preceding article shall be

applicable.
The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person
causes to another by his fault or negligence is based, as is
evidenced by the same Law 3, Title 15, Partida 7, on that the
person obligated, by his own fault or negligence, takes part in the
act or omission of the third party who caused the damage. It
follows therefrom that the state, by virtue of such provisions of law,
is not responsible for the damages suffered by private individuals
in consequence of acts performed by its employees in the
discharge of the functions pertaining to their office, because
neither fault nor even negligence can be presumed on the part of
the state in the organization of branches of public service and in
the appointment of its agents; on the contrary, we must
presuppose all foresight humanly possible on its part in order that
each branch of service serves the general weal an that of private
persons interested in its operation. Between these latter and the
state, therefore, no relations of a private nature governed by the
civil law can arise except in a case where the state acts as a
judicial person capable of acquiring rights and contracting
obligations. (Supreme Court of Spain, January 7, 1898; 83 Jur. Civ.,
24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the
obligations which arise out of fault or negligence; and whereas in
the first article thereof. No. 1902, where the general principle is
laid down that where a person who by an act or omission causes
damage to another through fault or negligence, shall be obliged to
repair the damage so done, reference is made to acts or omissions
of the persons who directly or indirectly cause the damage, the
following articles refers to this persons and imposes an identical
obligation upon those who maintain fixed relations of authority and
superiority over the authors of the damage, because the law
presumes that in consequence of such relations the evil caused by
their own fault or negligence is imputable to them. This legal
presumption gives way to proof, however, because, as held in the
last paragraph of article 1903, responsibility for acts of third
persons ceases when the persons mentioned in said article prove
that they employed all the diligence of a good father of a family to
avoid the damage, and among these persons, called upon to
answer in a direct and not a subsidiary manner, are found, in
addition to the mother or the father in a proper case, guardians
and owners or directors of an establishment or enterprise, the
state, but not always, except when it acts through the agency of a

special agent, doubtless because and only in this case, the fault or
negligence, which is the original basis of this kind of objections,
must be presumed to lie with the state.
That although in some cases the state might by virtue of the
general principle set forth in article 1902 respond for all the
damage that is occasioned to private parties by orders or
resolutions which by fault or negligence are made by branches of
the central administration acting in the name and representation of
the state itself and as an external expression of its sovereignty in
the exercise of its executive powers, yet said article is not
applicable in the case of damages said to have been occasioned to
the petitioners by an executive official, acting in the exercise of his
powers, in proceedings to enforce the collections of certain
property taxes owing by the owner of the property which they hold
in sublease.
That the responsibility of the state is limited by article 1903 to the
case wherein it acts through a special agent (and a special agent,
in the sense in which these words are employed, is one who
receives a definite and fixed order or commission, foreign to the
exercise of the duties of his office if he is a special official) so that
in representation of the state and being bound to act as an agent
thereof, he executes the trust confided to him. This concept does
not apply to any executive agent who is an employee of the acting
administration and who on his own responsibility performs the
functions which are inherent in and naturally pertain to his office
and which are regulated by law and the regulations." (Supreme
Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)
That according to paragraph 5 of article 1903 of the Civil Code and
the principle laid down in a decision, among others, of the 18th of
May, 1904, in a damage case, the responsibility of the state is
limited to that which it contracts through a special agent, duly
empowered by a definite order or commission to perform some act
or charged with some definite purpose which gives rise to the
claim, and not where the claim is based on acts or omissions
imputable to a public official charged with some administrative or
technical office who can be held to the proper responsibility in the
manner laid down by the law of civil responsibility. Consequently,
the trial court in not so deciding and in sentencing the said entity
to the payment of damages, caused by an official of the second
class referred to, has by erroneous interpretation infringed the
provisions of articles 1902 and 1903 of the Civil Code. (Supreme
Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)
It is, therefore, evidence that the State (the Government of the Philippine
Islands) is only liable, according to the above quoted decisions of the

Supreme Court of Spain, for the acts of its agents, officers and employees
when they act as special agents within the meaning of paragraph 5 of
article 1903, supra, and that the chauffeur of the ambulance of the General
Hospital was not such an agent.
For the foregoing reasons, the judgment appealed from must be reversed,
without costs in this instance. Whether the Government intends to make
itself legally liable for the amount of damages above set forth, which the
plaintiff has sustained by reason of the negligent acts of one of its
employees, by legislative enactment and by appropriating sufficient funds
therefor, we are not called upon to determine. This matter rests solely with
the Legislature and not with the courts.
Arellano, C. J., Torres, Johnson, and Moreland, JJ., concur.

operation and management of a Philippine satellite by a Filipino-owned or

controlled private consortium or corporation.
Pursuant

to

Article

IV

of

the

MOU,

the

consortium

of

private

telecommunications carriers formed a corporation and adopted the

corporate name Philippine Agila Satellite, Inc. (PASI), herein petitioner.
By letter[2] dated June 28, 1996, PASI president Rodrigo A. Silverio (Silverio)
requested the then DOTC Secretary Amado S. Lagdameo, Jr. for official
government confirmation of the assignment of Philippine orbital slots 161E
and 153E to PASI for its AGILA satellites.

In response to Silverios letter, Secretary Lagdameo, by letter [3] dated July

3, 1996, confirmed the governments assignment of Philippine orbital slots
161E and 153E to PASI for its AGILA satellites.

THIRD DIVISION
PHILIPPINE AGILA
SATELLITE,
INC.
byMICHAEL C. U. DE
GUZMAN,
Petitioner,

G.R. No. 134887

represented
Promulgated:
July 27, 2006

- versus -

PASI thereupon undertook preparations for the launching, operation and

management of its satellites by, among other things, obtaining loans,
increasing its capital, conducting negotiations with its business partners,
and making an initial payment of US$ 3.5 million to Aerospatiale, a French

SEC. JOSEFINA TRINIDADLICHAUCO and the

HON. OMBUDSMAN,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:

satellite manufacturer.
Michael de Guzman (de Guzman), PASI President and Chief Executive
Officer (CEO), later informed Jesli Lapuz (Lapuz), President and CEO of the
Landbank of the Philippines, by letter [4] of December 3, 1996, of the
governments assignment to PASI of orbital slots 161E and 153E and
requested the banks confirmation of its participation in a club loan in the

On June 6, 1994, a Memorandum of Understanding [1] (MOU) was entered

amount of US$ 11 million, the proceeds of which would be applied to PASIs

into by a consortium of private telecommunications carriers and the

interim satellite.

Department of Transportation and Communications (DOTC) represented by

then Secretary Jesus B. Garcia, Jr. relative to the launching, ownership,

It appears that Lapuz sent a copy of De Guzmans letter to then DOTC

Undersecretary
letter

[5]

Josefina

T.

Lichauco,

(Lichauco)

of December 5, 1996, wrote Lapuz as follows:

who,

by

1.

Kindly be informed that there is simply no basis for

Michael de Guzman to allege that the DOTC has
assigned two (2) slots to PASI. He conveniently
neglected to attach as another annex, in addition to
Sec. Lagdameos letter of 3 July 1996 (Annex A) the
letter of 28 June (Annex B) in response to which the
July 3rd letter had been sent to PASI. Annex B precisely
provides that one slot (153 E, to which the interim
satellite was supposed to migrate) was to be used for
the migration of the Russian satellite in time for the
APEC Leaders Summit. This particular endeavor was
not successful. The interim satellite Gorizont never
moved from its orbital location of 130E Longitude.
Annex C is a letter from an official of the Subic Bay
Satellite Systems Inc., with its attachments, addressed
to me stating that as of the 13 th of November, no such
voyage to 153E orbital slot had been commenced. In
fact DHI hid this fact from me, and in fact stated that
Gorizont had already moved and was on its way to
153E.

for just any satellite, where it was the President who

chose the name for the first Philippine satellite in
orbit. No one else coined that name but he. He has
therefore given the name Agila I to the Mabuhay
satellite now in orbit at 144E, being the first Philippine
satellite in orbit. He made this announcement in the
presence of all the APEC Heads of State just before
the presentation to him of the Manila Action Plan for
APEC. (Underscoring supplied)

Lichauco subsequently issued, in December 1997, a Notice of Offer [6] for

several orbital slots including 153E.

PASI, claiming that the offer was without its knowledge and that it
subsequently came to learn that another company whose identity had not
been disclosed had submitted a bid and won the award for orbital slot
153E, filed on January 23, 1998 a complaint[7] before the Regional Trial

Since this timely migration did not happen in time for

the APEC Leaders Meeting on 24 November, this 153E
Longitude slot can no longer be assigned to PASI.

2.

Court (RTC) of Mandaluyong City against Lichauco and the Unknown

Awardee, for injunction to enjoin the award of orbital slot 153E, declare its

The other slot 161E Longitude is the one that can be

made available for PASIs eventual launch, in 1998
most likely, in exchange for one free satellite
transponder unit utilization, for all requirements of
Government. These have yet to be embodied in a
contract between PASI and the DOTC.

nullity, and for damages.

I understand from my meeting with DHI/PASI this

morning, and from the de Guzman letter you sent to
me, that the latter are still interested in pursuing their
interim satellite project and are applying for a loan
with your bank. Of course they can always pursue this
as a business venture of DHI/PASI which is their own
corporate business decision. The DOTC supports this
venture but they will be getting only one orbital slot for
both the Interim Satellite Project and for the Launch
Project. I understand from todays meeting with them
that this is technically feasible.

affidavit-complaint, de Guzman charged Lichauco with gross violation of

3. As regards the use of the name Agila, Mr. de Guzmans

allegation that DHI/PASI has registered Agila as a
corporate alias/trademark is FALSE. There is no such
thing as registration of a corporate alias. Nor for that
matter can the trade name of a satellite be registered

PASI also filed on February 23, 1998 a complaint before the Office
of the Ombudsman against Secretary Josefina TrinidadLichauco. In his

Section 3(e) of Republic Act No. 3019, otherwise known as the Anti-Graft
and Corrupt Practices Act, as amended, reading:
(e) Causing any undue injury to any party, including the
Government, or giving any private party any
unwarranted benefits, advantage or preference in the
discharge of his official, administrative or judicial
functions through manifest partiality, evident bad
faith or gross inexcusable negligence. This provision
shall apply to officers and employees of officers or
government corporations charged with the grant of
licenses or permits or other concessions.

The complaint was docketed as OMB Case No. 0-98-0416. The Evaluation
and

Preliminary

Investigation

Bureau

(EPIB)

of

the

Office

of

the

Ombudsman, by Evaluation Report[8] dated April 15, 1998, found the

existence of a prejudicial question after considering that the case filed with
the RTC involves facts intimately related to those upon which the criminal
prosecution would be based and that the guilt or the innocence of the

the issue raised in the subsequent criminal action, and (b)

the resolution of such issue determines whether or not the
criminal action may proceed.
The rationale for the principle of prejudicial question is that
although it does not conclusively resolve the guilt or innocence of
the accused, it tests the sufficiency of the allegations in the
complaint or information in order to sustain the further
prosecution of the criminal case.[12] Hence, the need for its prior
resolution before further proceedings in the criminal action may be
had.

accused would necessarily be determined in the resolution of the issues

raised in the civil case. It thus concluded that the filing of the complaint
before the Ombudsman is premature since the issues involved herein are
now subject of litigation in the case filed with the RTC, and accordingly
recommended its dismissal. Then Ombudsman Aniano A. Desierto approved
on April 24, 1998 the recommendation of the EPIB.
PASI moved to reconsider[9] the dismissal of the complaint, but was denied
by Order

[10]

dated July 17, 1998.

PASI concedes that the issues in the civil case are similar or
intimately related to the issue raised in the criminal case. It contends,
however, that the resolution of the issues in the civil case is not
determinative of the guilt or innocence of Lichauco, it arguing that even if
she is adjudged liable for damages, it does not necessarily follow that she
would be convicted of the crime charged.
To determine the existence of a prejudicial question in the case before the
Ombudsman, it is necessary to examine the elements of Section 3(e) of R.A.

In the meantime, a motion to dismiss the civil case against respondent was

3019 for which Lichauco was charged and the causes of action in the civil

denied by the trial court. On elevation of the order of denial to the Court of
Appeals, said court, by Decision dated February 21, 2000, ordered the

case.

dismissal of the case. This Court, by Decision dated May 3, 2006, ordered

Section 3(e) of R.A. 3019 which was earlier quoted has the following

the reinstatement of the case, however.

elements:

[11]

PASI is now before this Court via petition for review on certiorari, arguing

1.

The accused is a public officer discharging

administrative or official functions or private persons
charged in conspiracy with them;

2.

The public officer committed the prohibited act

during the performance of his official duty or in relation
to his public position;

3.

The public officer acted with manifest partiality,

evident bad faith or gross, inexcusable negligence; and

4.

His action caused undue injury to the Government or

any private party, or gave any party any unwarranted
benefit, advantage or preference to such parties.[13]

that the Ombudsman erred in dismissing the complaint.

In issue are 1) whether there exists a prejudicial question and, if in the
affirmative, 2) whether the dismissal of the complaint on that account is in
order.

Section 7, Rule 111 of the Rules on Criminal Procedure provides:

Section 7. Elements of prejudicial question. The elements
of a prejudicial question are: (a) the previously instituted
civil action involves an issue similar or intimately related to

The civil case against Lichauco on the other hand involves three
causes of action. The first, for injunction, seeks to enjoin the award of

or trial stage and not to those, like the case subject of the present petition,
at the evaluation stage.

orbital slot 153E, the DOTC having previously assigned the same to PASI;
The Ombudsman goes on to proffer that at the evaluation stage, the

the second, for declaration of nullity of award, seeks to nullify the

award given to the undisclosed bidder for being beyond Lichaucos
authority; and the third, for damages arising from Lichaucos questioned

investigating officer may recommend any of several causes of action

including dismissal of the complaint for want of palpable merit or subjecting
the complaint to preliminary investigation, and the evaluation of the

acts.

complaint involves the discretion of the investigating officer which this

If the award to the undisclosed bidder of orbital slot 153E is, in the

Court cannot interfere with.

civil case, declared valid for being within Lichaucos scope of authority to
While the evaluation of a complaint involves the discretion of the

thus free her from liability for damages, there would be no prohibited
act to speak of nor would there be basis forundue injury claimed to have
been suffered by petitioner. The finding by the Ombudsman of the
existence of a prejudicial question is thus well-taken.
Respecting the propriety of the dismissal by the Ombudsman of the
complaint due to the pendency of a prejudicial question, PASI argues that
since the Rules of Procedure of the Office of the Ombudsman is silent on the
matter, the Rules of Court, specifically Section 6, Rule 111 of the Rules of
Court, which now reads:
SECTION 6. Suspension by reason of prejudicial question.
A petition for suspension of the criminal action based upon
the pendency of a prejudicial question in a civil action may
be filed in the office of the prosecutor or the court
conducting the preliminary investigation. When the
criminal action has been filed in court for trial, the petition
to suspend shall be filed in the same criminal action at any
time before the prosecution rests. (Underscoring supplied),
applies in a suppletory character.

investigating officer, its exercise should not be abused [14] or wanting in legal
basis.
Rule II, Section 2 of the Rules of Procedure of the Office of the
Ombudsman reads:
SECTION 2. Evaluation. Upon evaluating the complaint, the
investigating officer shall recommend whether it may be:
a)

dismissed outright for want of palpable

merit;
b)
referred to respondent for comment;
c)
indorsed to the proper government office or
agency which has jurisdiction over the case;
d)
forwarded to the appropriate office or official
for fact-finding investigation;
e)
referred for administrative adjudication; or
f)
subjected
to
a
preliminary
investigation. (Underscoring supplied)
From the above-quoted provision, a complaint at the evaluation stage may
be dismissed outright only for want of palpable merit.Want of palpable
merit obviously means that there is no basis for the charge or charges. If

The Ombudsman, on the other hand, argues that the above-quoted

the complaint has prima facie merit, however, the investigating officer

provision of the Rules of Court applies to cases which are at the preliminary

shall recommend the adoption of any of the actions enumerated above

from (b) to (f).[15]

When, in the course of the actions taken by those to whom the complaint
is endorsed or forwarded, a prejudicial question is found to be pending,
Section 6, Rule 111 of the Rules of Court should be applied in a suppletory
character.[16] As laid down in Yap v. Paras,[17] said rule directs that the

The crime of libel or other similar offenses shall

prescribe in one year.
The offenses of oral defamation and slander by
deed shall prescribe in six months.
Light offenses prescribe in two months.

proceedings may only be suspended, not dismissed, and that it may be

made only upon petition, and not at the instance of the judge alone or
as in this case, the investigating officer.
To give imprimatur to the Ombudsmans dismissal of petitioners criminal
complaint due to prejudicial question would not only run counter to the
provision of Section 6 of Rule 111 of the Rules of Court. It would sanction
the

extinguishment of criminal liability, if

there be any,

through

prescription under Article 89 vis a vis Articles 90 and 91 of the Revised

Penal Code which respectively read:
ART. 89. How criminal liability is totally extinguished. Criminal
liability is totally extinguished:
1.
By the death of the convict, as to the
personal penalties; and as to pecuniary penalties, liability
therefore is extinguished only when the death of the
offender occurs before final judgment;
2.
By service of the sentence;
3.
By amnesty, which completely extinguishes
the penalty and all its effects;
4.
By absolute pardon;
5.
By prescription of the crime;
6.
By prescription of the penalty;
7.
By the marriage of the offended woman, as
provided in Article 344 of this Code. (Underscoring
supplied)

When the penalty fixed by law is a compound one,

the highest penalty shall be made the basis of the
application of the rules contained in the first, second, and
third paragraphs of this article. x x x
ART.
91. Computation
of
prescription
of
offenses. The period of prescription shall commence to run
from the day on which the crime is discovered by the
offended party, the authorities, or their agents, and shall
be interrupted by the filing of the complaint or information,
and shall commence to run again when such proceedings
terminate without the accused being convicted or
acquitted, or are unjustifiably stopped for any reason
not imputable to him.
WHEREFORE, the Order dated July 17, 1998 of respondent
Ombudsman dismissing OMB Case No. 0-98-0416 against
respondent then Secretary Josefina Trinidad Lichauco
is SET ASIDE.
The Ombudsman is ORDERED to REINSTATE to its docket for
further proceedings, in line with the foregoing ratiocination, OMB Case No.
0-98-0416.
SO ORDERED

[G.R. No. 142396. February 11, 2003]

ART. 90. Prescription of crimes. Crimes punishable

by death, reclusion perpetua or reclusion temporal shall
prescribe in twenty years.

KHOSROW MINUCHER, petitioner, vs. HON. COURT OF APPEALS and

ARTHUR SCALZO, respondents.

Crimes punishable by other afflictive penalties

shall prescribe in fifteen years.

DECISION

Those punishable by a correctional penalty shall

prescribe in ten years; with the exception of those
punishable by arresto mayor, which shall prescribe in five
years.

VITUG, J.:
Sometime in May 1986, an Information for violation of Section 4 of
Republic Act No. 6425, otherwise also known as the Dangerous Drugs Act

of 1972, was filed against petitioner Khosrow Minucher and one Abbas
Torabian with the Regional Trial Court, Branch 151, of Pasig City. The
criminal charge followed a buy-bust operation conducted by the Philippine
police narcotic agents in the house of Minucher, an Iranian national, where
a quantity of heroin, a prohibited drug, was said to have been seized. The
narcotic agents were accompanied by private respondent Arthur Scalzo
who would, in due time, become one of the principal witnesses for the
prosecution. On 08 January 1988, Presiding Judge Eutropio Migrino
rendered a decision acquitting the two accused.
On 03 August 1988, Minucher filed Civil Case No. 88-45691 before the
Regional Trial Court (RTC), Branch 19, of Manila for damages on account of
what he claimed to have been trumped-up charges of drug trafficking
made by Arthur Scalzo. The Manila RTC detailed what it had found to be
the facts and circumstances surrounding the case.
"The testimony of the plaintiff disclosed that he is an Iranian national. He
came to the Philippines to study in the University of the Philippines in
1974. In 1976, under the regime of the Shah of Iran, he was appointed
Labor Attach for the Iranian Embassies in Tokyo, Japan and Manila,
Philippines. When the Shah of Iran was deposed by Ayatollah Khomeini,
plaintiff became a refugee of the United Nations and continued to stay in
the Philippines. He headed the Iranian National Resistance Movement in
the Philippines.
He came to know the defendant on May 13, 1986, when the latter was
brought to his house and introduced to him by a certain Jose Iigo, an
informer of the Intelligence Unit of the military. Jose Iigo, on the other
hand, was met by plaintiff at the office of Atty. Crisanto Saruca, a lawyer
for several Iranians whom plaintiff assisted as head of the anti-Khomeini
movement in the Philippines.
During his first meeting with the defendant on May 13, 1986, upon the
introduction of Jose Iigo, the defendant expressed his interest in buying
caviar. As a matter of fact, he bought two kilos of caviar from plaintiff and
paid P10,000.00 for it. Selling caviar, aside from that of Persian carpets,
pistachio nuts and other Iranian products was his business after the
Khomeini government cut his pension of over $3,000.00 per month. During
their introduction in that meeting, the defendant gave the plaintiff his
calling card, which showed that he is working at the US Embassy in the
Philippines, as a special agent of the Drug Enforcement Administration,
Department of Justice, of the United States, and gave his address as US
Embassy, Manila. At the back of the card appears a telephone number in
defendants own handwriting, the number of which he can also be
contacted.
It was also during this first meeting that plaintiff expressed his desire to
obtain a US Visa for his wife and the wife of a countryman named Abbas
Torabian. The defendant told him that he [could] help plaintiff for a fee of
$2,000.00 per visa. Their conversation, however, was more concentrated
on politics, carpets and caviar. Thereafter, the defendant promised to see
plaintiff again.
On May 19, 1986, the defendant called the plaintiff and invited the latter
for dinner at Mario's Restaurant at Makati. He wanted to buy 200 grams of

caviar. Plaintiff brought the merchandize but for the reason that the
defendant was not yet there, he requested the restaurant people to x x x
place the same in the refrigerator. Defendant, however, came and plaintiff
gave him the caviar for which he was paid. Then their conversation was
again focused on politics and business.
On May 26, 1986, defendant visited plaintiff again at the latter's residence
for 18 years at Kapitolyo, Pasig. The defendant wanted to buy a pair of
carpets which plaintiff valued at $27,900.00. After some haggling, they
agreed at $24,000.00. For the reason that defendant did not yet have the
money, they agreed that defendant would come back the next day. The
following day, at 1:00 p.m., he came back with his $24,000.00, which he
gave to the plaintiff, and the latter, in turn, gave him the pair of carpets.
At about 3:00 in the afternoon of May 27, 1986, the defendant came back
again to plaintiff's house and directly proceeded to the latter's bedroom,
where the latter and his countryman, Abbas Torabian, were playing
chess. Plaintiff opened his safe in the bedroom and obtained $2,000.00
from it, gave it to the defendant for the latter's fee in obtaining a visa for
plaintiff's wife. The defendant told him that he would be leaving the
Philippines very soon and requested him to come out of the house for a
while so that he can introduce him to his cousin waiting in a cab. Without
much ado, and without putting on his shirt as he was only in his pajama
pants, he followed the defendant where he saw a parked cab opposite the
street. To his complete surprise, an American jumped out of the cab with a
drawn high-powered gun. He was in the company of about 30 to 40 Filipino
soldiers with 6 Americans, all armed.He was handcuffed and after about 20
minutes in the street, he was brought inside the house by the
defendant. He was made to sit down while in handcuffs while the
defendant was inside his bedroom. The defendant came out of the
bedroom and out from defendant's attach case, he took something and
placed it on the table in front of the plaintiff. They also took plaintiff's wife
who was at that time at the boutique near his house and likewise arrested
Torabian, who was playing chess with him in the bedroom and both were
handcuffed together. Plaintiff was not told why he was being handcuffed
and why the privacy of his house, especially his bedroom was invaded by
defendant. He was not allowed to use the telephone. In fact, his telephone
was unplugged. He asked for any warrant, but the defendant told him to
`shut up. He was nevertheless told that he would be able to call for his
lawyer who can defend him.
The plaintiff took note of the fact that when the defendant invited him to
come out to meet his cousin, his safe was opened where he kept
the $24,000.00 the defendant paid for the carpets and another $8,000.00
which he also placed in the safe together with a bracelet worth $15,000.00
and a pair of earrings worth $10,000.00. He also discovered missing upon
his release his 8 pieces hand-made Persian carpets, valued at $65,000.00,
a painting he bought for P30,000.00 together with his TV and betamax
sets. He claimed that when he was handcuffed, the defendant took his
keys from his wallet. There was, therefore, nothing left in his house.
That his arrest as a heroin trafficker x x x had been well publicized
throughout the world, in various newspapers, particularly in Australia,

America, Central Asia and in the Philippines. He was identified in the

papers as an international drug trafficker. x x x
In fact, the arrest of defendant and Torabian was likewise on television, not
only in the Philippines, but also in America and in Germany. His friends in
said places informed him that they saw him on TV with said news.
After the arrest made on plaintiff and Torabian, they were brought to Camp
Crame handcuffed together, where they were detained for three days
without food and water."[1]
During the trial, the law firm of Luna, Sison and Manas, filed a special
appearance for Scalzo and moved for extension of time to file an answer
pending a supposed advice from the United States Department of State
and Department of Justice on the defenses to be raised.The trial court
granted the motion. On 27 October 1988, Scalzo filed another special
appearance to quash the summons on the ground that he, not being a
resident of the Philippines and the action being one in personam, was
beyond the processes of the court. The motion was denied by the court, in
its order of 13 December 1988, holding that the filing by Scalzo of a motion
for extension of time to file an answer to the complaint was a voluntary
appearance equivalent to service of summons which could likewise be
construed a waiver of the requirement of formal notice. Scalzo filed a
motion for reconsideration of the court order, contending that a motion for
an extension of time to file an answer was not a voluntary appearance
equivalent to service of summons since it did not seek an affirmative
relief. Scalzo argued that in cases involving the United States government,
as well as its agencies and officials, a motion for extension was peculiarly
unavoidable due to the need (1) for both the Department of State and the
Department of Justice to agree on the defenses to be raised and (2) to
refer the case to a Philippine lawyer who would be expected to first review
the case. The court a quo denied the motion for reconsideration in its order
of 15 October 1989.
Scalzo filed a petition for review with the Court of Appeals, there
docketed CA-G.R. No. 17023, assailing the denial. In a decision, dated 06
October 1989, the appellate court denied the petition and affirmed the
ruling of the trial court. Scalzo then elevated the incident in a petition for
review on certiorari, docketed G.R. No. 91173, to this Court. The petition,
however, was denied for its failure to comply with SC Circular No. 1-88; in
any event, the Court added, Scalzo had failed to show that the appellate
court was in error in its questioned judgment.
Meanwhile, at the court a quo, an order, dated 09 February 1990, was
issued (a) declaring Scalzo in default for his failure to file a responsive
pleading (answer) and (b) setting the case for the reception of
evidence. On 12 March 1990, Scalzo filed a motion to set aside the order of
default and to admit his answer to the complaint. Granting the motion, the
trial court set the case for pre-trial. In his answer, Scalzo denied the
material allegations of the complaint and raised the affirmative defenses
(a) of Minuchers failure to state a cause of action in his complaint and (b)
that Scalzo had acted in the discharge of his official duties as being merely
an agent of the Drug Enforcement Administration of the United States

Department of Justice. Scalzo interposed a counterclaim of P100,000.00 to

answer for attorneys' fees and expenses of litigation.
Then, on 14 June 1990, after almost two years since the institution of
the civil case, Scalzo filed a motion to dismiss the complaint on the ground
that, being a special agent of the United States Drug Enforcement
Administration, he was entitled to diplomatic immunity. He attached to his
motion Diplomatic Note No. 414 of the United States Embassy, dated 29
May 1990, addressed to the Department of Foreign Affairs of the
Philippines and a Certification, dated 11 June 1990, of Vice Consul Donna
Woodward, certifying that the note is a true and faithful copy of its
original. In an order of 25 June 1990, the trial court denied the motion to
dismiss.
On 27 July 1990, Scalzo filed a petition for certiorari with injunction
with this Court, docketed G.R. No. 94257 and entitled "Arthur W. Scalzo, Jr.,
vs. Hon. Wenceslao Polo, et al.," asking that the complaint in Civil Case No.
88-45691 be ordered dismissed. The case was referred to the Court of
Appeals, there docketed CA-G.R. SP No. 22505, per this Courts resolution of
07 August 1990. On 31 October 1990, the Court of Appeals promulgated its
decision sustaining the diplomatic immunity of Scalzo and ordering the
dismissal of the complaint against him. Minucher filed a petition for review
with this Court, docketed G.R. No. 97765 and entitled "Khosrow Minucher
vs. the Honorable Court of Appeals, et. al. (cited in 214 SCRA 242),
appealing the judgment of the Court of Appeals. In a decision, dated 24
September 1992, penned by Justice (now Chief Justice) Hilario Davide, Jr.,
this Court reversed the decision of the appellate court and remanded the
case to the lower court for trial. The remand was ordered on the theses (a)
that the Court of Appeals erred in granting the motion to dismiss of Scalzo
for lack of jurisdiction over his person without even considering the issue of
the authenticity of Diplomatic Note No. 414 and (b) that the complaint
contained sufficient allegations to the effect that Scalzo committed the
imputed acts in his personal capacity and outside the scope of his official
duties and, absent any evidence to the contrary, the issue on Scalzos
diplomatic immunity could not be taken up.
The Manila RTC thus continued with its hearings on the case. On 17
November 1995, the trial court reached a decision; it adjudged:
WHEREFORE, and in view of all the foregoing considerations, judgment is
hereby rendered for the plaintiff, who successfully established his claim by
sufficient evidence, against the defendant in the manner following:
"`Adjudging defendant liable to plaintiff in actual and compensatory
damages of P520,000.00; moral damages in the sum of P10 million;
exemplary damages in the sum of P100,000.00; attorney's fees in the sum
of P200,000.00 plus costs.
`The Clerk of the Regional Trial Court, Manila, is ordered to take note of the
lien of the Court on this judgment to answer for the unpaid docket fees
considering that the plaintiff in this case instituted this action as a pauper
litigant."[2]

While the trial court gave credence to the claim of Scalzo and the
evidence presented by him that he was a diplomatic agent entitled to
immunity as such, it ruled that he, nevertheless, should be held
accountable for the acts complained of committed outside his official
duties.On appeal, the Court of Appeals reversed the decision of the trial
court and sustained the defense of Scalzo that he was sufficiently clothed
with diplomatic immunity during his term of duty and thereby immune
from the criminal and civil jurisdiction of the Receiving State pursuant to
the terms of the Vienna Convention.
Hence, this recourse by Minucher. The instant petition for review
raises a two-fold issue: (1) whether or not the doctrine of conclusiveness of
judgment, following the decision rendered by this Court in G.R. No. 97765,
should have precluded the Court of Appeals from resolving the appeal to it
in an entirely different manner, and (2) whether or not Arthur Scalzo is
indeed entitled to diplomatic immunity.
The doctrine of conclusiveness of judgment, or its kindred rule of res
judicata, would require 1) the finality of the prior judgment, 2) a valid
jurisdiction over the subject matter and the parties on the part of the court
that renders it, 3) a judgment on the merits, and 4) an identity of the
parties, subject matter and causes of action. [3] Even while one of the issues
submitted in G.R. No. 97765 - "whether or not public respondent Court of
Appeals erred in ruling that private respondent Scalzo is a diplomat
immune from civil suit conformably with the Vienna Convention on
Diplomatic Relations" - is also a pivotal question raised in the instant
petition, the ruling in G.R. No. 97765, however, has not resolved that point
with finality. Indeed, the Court there has made this observation "It may be mentioned in this regard that private respondent himself, in his
Pre-trial Brief filed on 13 June 1990, unequivocally states that he would
present documentary evidence consisting of DEA records on his
investigation and surveillance of plaintiff and on his position and duties as
DEA special agent in Manila. Having thus reserved his right to present
evidence in support of his position, which is the basis for the alleged
diplomatic immunity, the barren self-serving claim in the belated motion to
dismiss cannot be relied upon for a reasonable, intelligent and fair
resolution of the issue of diplomatic immunity."[4]
Scalzo contends that the Vienna Convention on Diplomatic Relations,
to which the Philippines is a signatory, grants him absolute immunity from
suit, describing his functions as an agent of the United States Drugs
Enforcement Agency as conducting surveillance operations on suspected
drug dealers in the Philippines believed to be the source of prohibited
drugs being shipped to the U.S., (and) having ascertained the target, (he
then) would inform the Philippine narcotic agents (to) make the actual
arrest." Scalzo has submitted to the trial court a number of documents 1. Exh. '2' - Diplomatic Note No. 414 dated 29 May 1990;
2. Exh. '1' - Certification of Vice Consul Donna K. Woodward dated 11 June
1990;
3. Exh. '5' - Diplomatic Note No. 757 dated 25 October 1991;

4. Exh. '6' - Diplomatic Note No. 791 dated 17 November 1992; and
5. Exh. '7' - Diplomatic Note No. 833 dated 21 October 1988.
6. Exh. '3' - 1st Indorsement of the Hon. Jorge R. Coquia, Legal Adviser,
Department of Foreign Affairs, dated 27 June 1990 forwarding Embassy
Note No. 414 to the Clerk of Court of RTC Manila, Branch 19 (the trial
court);
7. Exh. '4' - Diplomatic Note No. 414, appended to the 1st Indorsement
(Exh. '3'); and
8. Exh. '8' - Letter dated 18 November 1992 from the Office of the Protocol,
Department of Foreign Affairs, through Asst. Sec. Emmanuel Fernandez,
addressed to the Chief Justice of this Court.[5]
The documents, according to Scalzo, would show that: (1) the United
States Embassy accordingly advised the Executive Department of the
Philippine Government that Scalzo was a member of the diplomatic staff of
the United States diplomatic mission from his arrival in the Philippines on
14 October 1985 until his departure on 10 August 1988; (2) that the United
States Government was firm from the very beginning in asserting the
diplomatic immunity of Scalzo with respect to the case pursuant to the
provisions of the Vienna Convention on Diplomatic Relations; and (3) that
the United States Embassy repeatedly urged the Department of Foreign
Affairs to take appropriate action to inform the trial court of Scalzos
diplomatic immunity. The other documentary exhibits were presented to
indicate that: (1) the Philippine government itself, through its Executive
Department, recognizing and respecting the diplomatic status of Scalzo,
formally advised the Judicial Department of his diplomatic status and his
entitlement to all diplomatic privileges and immunities under the Vienna
Convention; and (2) the Department of Foreign Affairs itself authenticated
Diplomatic Note No. 414. Scalzo additionally presented Exhibits "9" to "13"
consisting of his reports of investigation on the surveillance and
subsequent arrest of Minucher, the certification of the Drug Enforcement
Administration of the United States Department of Justice that Scalzo was a
special agent assigned to the Philippines at all times relevant to the
complaint, and the special power of attorney executed by him in favor of
his previous counsel[6] to show (a) that the United States Embassy, affirmed
by its Vice Consul, acknowledged Scalzo to be a member of the diplomatic
staff of the United States diplomatic mission from his arrival in the
Philippines on 14 October 1985 until his departure on 10 August 1988, (b)
that, on May 1986, with the cooperation of the Philippine law enforcement
officials and in the exercise of his functions as member of the mission, he
investigated Minucher for alleged trafficking in a prohibited drug, and (c)
that the Philippine Department of Foreign Affairs itself recognized that
Scalzo during his tour of duty in the Philippines (14 October 1985 up to 10
August 1988) was listed as being an Assistant Attach of the United States
diplomatic mission and accredited with diplomatic status by the
Government of the Philippines. In his Exhibit 12, Scalzo described the
functions of the overseas office of the United States Drugs Enforcement
Agency, i.e., (1) to provide criminal investigative expertise and assistance
to foreign law enforcement agencies on narcotic and drug control programs
upon the request of the host country, 2) to establish and maintain liaison

with the host country and counterpart foreign law enforcement officials,
and 3) to conduct complex criminal investigations involving international
criminal conspiracies which affect the interests of the United States.
The Vienna Convention on Diplomatic Relations was a codification of
centuries-old customary law and, by the time of its ratification on 18 April
1961, its rules of law had long become stable. Among the city states of
ancient Greece, among the peoples of the Mediterranean before the
establishment of the Roman Empire, and among the states of India, the
person of the herald in time of war and the person of the diplomatic envoy
in time of peace were universally held sacrosanct. [7] By the end of the 16th
century, when the earliest treatises on diplomatic law were published, the
inviolability of ambassadors was firmly established as a rule of customary
international law.[8]Traditionally, the exercise of diplomatic intercourse
among states was undertaken by the head of state himself, as being the
preeminent embodiment of the state he represented, and the foreign
secretary, the official usually entrusted with the external affairs of the
state. Where a state would wish to have a more prominent diplomatic
presence in the receiving state, it would then send to the latter a
diplomatic mission.Conformably with the Vienna Convention, the functions
of the diplomatic mission involve, by and large, the representation of the
interests of the sending state and promoting friendly relations with the
receiving state.[9]
The Convention lists the classes of heads of diplomatic missions to
include (a) ambassadors or nuncios accredited to the heads of state,[10] (b)
envoys,[11] ministers or internuncios accredited to the heads of states; and
(c) charges d' affairs[12] accredited to the ministers of foreign affairs.
[13]
Comprising the "staff of the (diplomatic) mission" are the diplomatic
staff, the administrative staff and the technical and service staff. Only the
heads of missions, as well as members of the diplomatic staff, excluding
the members of the administrative, technical and service staff of the
mission, are accorded diplomatic rank. Even while the Vienna Convention
on Diplomatic Relations provides for immunity to the members of
diplomatic missions, it does so, nevertheless, with an understanding that
the same be restrictively applied. Only "diplomatic agents," under the
terms of the Convention, are vested with blanket diplomatic immunity from
civil and criminal suits. The Convention defines "diplomatic agents" as the
heads of missions or members of the diplomatic staff, thus impliedly
withholding the same privileges from all others. It might bear stressing that
even consuls, who represent their respective states in concerns of
commerce and navigation and perform certain administrative and notarial
duties, such as the issuance of passports and visas, authentication of
documents, and administration of oaths, do not ordinarily enjoy the
traditional diplomatic immunities and privileges accorded diplomats,
mainly for the reason that they are not charged with the duty of
representing their states in political matters. Indeed, the main
yardstick in ascertaining whether a person is a diplomat entitled
to immunity is the determination of whether or not he performs
duties of diplomatic nature.

Scalzo asserted, particularly in his Exhibits 9 to 13, that he was an

Assistant Attach of the United States diplomatic mission and was
accredited as such by the Philippine Government. An attach belongs to a
category of officers in the diplomatic establishment who may be in charge
of its cultural, press, administrative or financial affairs. There could also be
a class of attaches belonging to certain ministries or departments of the
government, other than the foreign ministry or department, who are
detailed by their respective ministries or departments with the embassies
such as the military, naval, air, commercial, agricultural, labor, science,
and customs attaches, or the like.Attaches assist a chief of mission in his
duties and are administratively under him, but their main function is to
observe, analyze and interpret trends and developments in their respective
fields in the host country and submit reports to their own ministries or
departments in the home government.[14] These officials are not generally
regarded as members of the diplomatic mission, nor are they normally
designated as having diplomatic rank.
In an attempt to prove his diplomatic status, Scalzo presented
Diplomatic Notes Nos. 414, 757 and 791, all issued post litem
motam,respectively, on 29 May 1990, 25 October 1991 and 17 November
1992. The presentation did nothing much to alleviate the Court's initial
reservations in G.R. No. 97765, viz:
"While the trial court denied the motion to dismiss, the public respondent
gravely abused its discretion in dismissing Civil Case No. 88-45691 on the
basis of an erroneous assumption that simply because of the diplomatic
note, the private respondent is clothed with diplomatic immunity, thereby
divesting the trial court of jurisdiction over his person.
xxxxxxxxx
And now, to the core issue - the alleged diplomatic immunity of the private
respondent. Setting aside for the moment the issue of authenticity raised
by the petitioner and the doubts that surround such claim, in view of the
fact that it took private respondent one (1) year, eight (8) months and
seventeen (17) days from the time his counsel filed on 12 September 1988
a Special Appearance and Motion asking for a first extension of time to file
the Answer because the Departments of State and Justice of the United
States of America were studying the case for the purpose of determining
his defenses, before he could secure the Diplomatic Note from the US
Embassy in Manila, and even granting for the sake of argument that such
note is authentic, the complaint for damages filed by petitioner cannot be
peremptorily dismissed.
xxxxxxxxx
"There is of course the claim of private respondent that the acts imputed to
him were done in his official capacity. Nothing supports this self-serving
claim other than the so-called Diplomatic Note. x x x. The public
respondent then should have sustained the trial court's denial of the
motion to dismiss. Verily, it should have been the most proper and
appropriate recourse. It should not have been overwhelmed by the selfserving Diplomatic Note whose belated issuance is even suspect and

whose authenticity has not yet been proved. The undue haste with which
respondent Court yielded to the private respondent's claim is arbitrary."
A significant document would appear to be Exhibit No. 08, dated 08
November 1992, issued by the Office of Protocol of the Department of
Foreign Affairs and signed by Emmanuel C. Fernandez, Assistant Secretary,
certifying that "the records of the Department (would) show that Mr. Arthur
W. Scalzo, Jr., during his term of office in the Philippines (from 14 October
1985 up to 10 August 1988) was listed as an Assistant Attach of the United
States diplomatic mission and was, therefore, accredited diplomatic status
by the Government of the Philippines." No certified true copy of such
"records," the supposed bases for the belated issuance, was presented in
evidence.
Concededly, vesting a person with diplomatic immunity is a
prerogative of the executive branch of the government. In World Health
Organization vs. Aquino,[15] the Court has recognized that, in such matters,
the hands of the courts are virtually tied. Amidst apprehensions of
indiscriminate and incautious grant of immunity, designed to gain
exemption from the jurisdiction of courts, it should behoove the Philippine
government, specifically its Department of Foreign Affairs, to be most
circumspect, that should particularly be no less than compelling, in its post
litem motam issuances. It might be recalled that the privilege is not an
immunity from the observance of the law of the territorial sovereign or
from ensuing legal liability; it is, rather, an immunity from the exercise of
territorial jurisdiction.[16] The government of the United States itself, which
Scalzo claims to be acting for, has formulated its standards for recognition
of a diplomatic agent. The State Department policy is to only
concede diplomatic status to a person who possesses an
acknowledged diplomatic title and performs duties of diplomatic
nature.[17] Supplementary criteria for accreditation are the possession of a
valid diplomatic passport or, from States which do not issue such
passports, a diplomatic note formally representing the intention to assign
the person to diplomatic duties, the holding of a non-immigrant visa, being
over twenty-one years of age, and performing diplomatic functions on an
essentially full-time basis.[18]Diplomatic missions are requested to provide
the most accurate and descriptive job title to that which currently applies
to the duties performed. The Office of the Protocol would then assign each
individual to the appropriate functional category.[19]
But while the diplomatic immunity of Scalzo might thus remain
contentious, it was sufficiently established that, indeed, he worked for the
United States Drug Enforcement Agency and was tasked to conduct
surveillance of suspected drug activities within the country on the dates
pertinent to this case. If it should be ascertained that Arthur Scalzo was
acting well within his assigned functions when he committed the acts
alleged in the complaint, the present controversy could then be resolved
under the related doctrine of State Immunity from Suit.
The precept that a State cannot be sued in the courts of a
foreign state is a long-standing rule of customary international law then
closely identified with the personal immunity of a foreign sovereign from

suit[20] and, with the emergence of democratic states, made to attach not
just to the person of the head of state, or his representative, but also
distinctly to the state itself in its sovereign capacity. [21] If the acts giving
rise to a suit are those of a foreign government done by its foreign agent,
although not necessarily a diplomatic personage, but acting in his official
capacity, the complaint could be barred by the immunity of the foreign
sovereign from suit without its consent. Suing a representative of a state is
believed to be, in effect, suing the state itself. The proscription is not
accorded for the benefit of an individual but for the State, in whose service
he is, under the maxim - par in parem, non habet imperium - that all states
are sovereign equals and cannot assert jurisdiction over one another.
[22]
The implication, in broad terms, is that if the judgment against an
official would require the state itself to perform an affirmative act to satisfy
the award, such as the appropriation of the amount needed to pay the
damages decreed against him, the suit must be regarded as being against
the state itself, although it has not been formally impleaded. [23]
In United States of America vs. Guinto,[24] involving officers of the
United States Air Force and special officers of the Air Force Office of Special
Investigators charged with the duty of preventing the distribution,
possession and use of prohibited drugs, this Court has ruled "While the doctrine (of state immunity) appears to prohibit only suits
against the state without its consent, it is also applicable to complaints
filed against officials of the state for acts allegedly performed by them in
the discharge of their duties. x x x. It cannot for a moment be imagined
that they were acting in their private or unofficial capacity when they
apprehended and later testified against the complainant. It follows that for
discharging their duties as agents of the United States, they cannot be
directly impleaded for acts imputable to their principal, which has not
given its consent to be sued. x x x As they have acted on behalf of the
government, and within the scope of their authority, it is that government,
and not the petitioners personally, [who were] responsible for their acts." [25]
This immunity principle, however, has its limitations. Thus, Shauf vs. Court
of Appeals[26] elaborates:
It is a different matter where the public official is made to account in his
capacity as such for acts contrary to law and injurious to the rights of the
plaintiff. As was clearly set forth by Justice Zaldivar in Director of the
Bureau of Telecommunications, et al., vs. Aligaen, et al. (33 SCRA
368): `Inasmuch as the State authorizes only legal acts by its officers,
unauthorized acts of government officials or officers are not acts of the
State, and an action against the officials or officers by one whose rights
have been invaded or violated by such acts, for the protection of his rights,
is not a suit against the State within the rule of immunity of the State from
suit. In the same tenor, it has been said that an action at law or suit in
equity against a State officer or the director of a State department on the
ground that, while claiming to act for the State, he violates or invades the
personal and property rights of the plaintiff, under an unconstitutional act
or under an assumption of authority which he does not have, is not a suit
against the State within the constitutional provision that the State may not

be sued without its consent. The rationale for this ruling is that the doctrine
of state immunity cannot be used as an instrument for perpetrating an
injustice.
xxxxxxxxx
(T)he doctrine of immunity from suit will not apply and may not be invoked
where the public official is being sued in his private and personal capacity
as an ordinary citizen. The cloak of protection afforded the officers and
agents of the government is removed the moment they are sued in their
individual capacity. This situation usually arises where the public official
acts without authority or in excess of the powers vested in him. It is a wellsettled principle of law that a public official may be liable in his personal
private capacity for whatever damage he may have caused by his act done
with malice and in bad faith or beyond the scope of his authority and
jurisdiction.[27]
A foreign agent, operating within a territory, can be cloaked with
immunity from suit but only as long as it can be established that he is
acting within the directives of the sending state. The consent of the host
state is an indispensable requirement of basic courtesy between the two
sovereigns. Guinto and Shauf both involve officers and personnel of the
United States, stationed within Philippine territory, under the RP-US Military
Bases Agreement. While evidence is wanting to show any similar
agreement between the governments of the Philippines and of the United
States (for the latter to send its agents and to conduct surveillance and
related activities of suspected drug dealers in the Philippines), the consent
or imprimatur of the Philippine government to the activities of the United
States Drug Enforcement Agency, however, can be gleaned from the facts
heretofore elsewhere mentioned. The official exchanges of communication
between agencies of the government of the two countries, certifications
from officials of both the Philippine Department of Foreign Affairs and the
United States Embassy, as well as the participation of members of the
Philippine Narcotics Command in the buy-bust operation conducted at the
residence of Minucher at the behest of Scalzo, may be inadequate to
support the "diplomatic status" of the latter but they give enough
indication that the Philippine government has given its imprimatur, if not
consent, to the activities within Philippine territory of agent Scalzo of the
United States Drug Enforcement Agency. The job description of Scalzo has
tasked him to conduct surveillance on suspected drug suppliers and, after
having ascertained the target, to inform local law enforcers who would
then be expected to make the arrest. In conducting surveillance activities
on Minucher, later acting as the poseur-buyer during the buy-bust
operation, and then becoming a principal witness in the criminal case
against Minucher, Scalzo hardly can be said to have acted beyond the
scope of his official function or duties.
All told, this Court is constrained to rule that respondent Arthur Scalzo,
an agent of the United States Drug Enforcement Agency allowed by the
Philippine government to conduct activities in the country to help contain
the problem on the drug traffic, is entitled to the defense of state immunity
from suit.

WHEREFORE, on the foregoing premises, the petition is DENIED. No

costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ.,
concur

Petitioners, CARPIO MORALES,

TINGA,
VELASCO, and
- versus - BRION, JJ.
Promulgated:
HON. COURT OF APPEALS, HON.
ARIEL CADIENTE SANTOS, Labor April 16, 2009
Arbiter of the Arbitration Branch,
National Labor Relations Commission,
and BERNADETTE CARMELLA
MAGTAAS, CAROLINA DIONCO,
CHRISTOPHER RAMOS, MELVIN
DELA PAZ, RANDY TAMAYO and
EDGARDO RAMILLO,
Respondents.

x----------------------------------------------------------------------------x

SECOND DIVISION
DEUTSCHE GESELLSCHAFT FR G.R. No. 152318
TECHNISCHE ZUSAMMENARBEIT,

DECISION

TINGA, J.:

also known as GERMAN AGENCY Present:

FOR TECHNICAL COOPERATION,

On 7 September 1971, the governments of the Federal Republic of

(GTZ) HANS PETER PAULENZ and QUISUMBING, J.,

Germany and the Republic of the Philippines ratified an Agreement

ANNE NICOLAY, Chairperson,

concerning Technical Co-operation (Agreement) in Bonn, capital of what

was then West Germany. The Agreement affirmed the countries common

(a)

second

interest in promoting the technical and economic development of their

States, and recogni[zed] the benefits to be derived by both States from
closer

technical

co-operation,

and

allowed

for

the

conclusion

of

one expert in health economy, insurance and health

systems for up to 48 expert/months,

one expert in system development for up to 10

expert/months

short-term experts to deal with special tasks for a

total of up to 18 expert/months,

project assistants/guest students as required, who

shall work on the project as part of their basic and
further training and assume specific project tasks under
the separately financed junior staff promotion
programme of the Deutsche Gesellschaft fr Technische
Zusammenarbeit (GTZ);

arrangements concerning individual projects of technical co-operation.

[1]

While the Agreement provided for a limited term of effectivity of five (5)

years, it nonetheless was stated that [t]he Agreement shall be tacitly

extended for successive periods of one year unless either of the two
Contracting Parties denounces it in writing three months prior to its expiry,
and that even upon the Agreements expiry, its provisions would continue
to apply to any projects agreed upon x x x until their completion. [2]
On 10 December 1999, the Philippine government, through then Foreign

(b)

provide in situ

short-term experts to deal with diverse special tasks

for a total of up to 27 expert/months,

five local experts in health economy, health

insurance, community health systems, information
technology,
information
systems,
training
and
community mobilization for a total of up to 240
expert/months,

local and auxiliary personnel for a total of up to 120

months;

Affairs Secretary Domingo Siazon, and the German government, agreed to

an Arrangement in furtherance of the 1971 Agreement. This Arrangement
affirmed the common commitment of both governments to promote jointly
a project called, Social Health InsuranceNetworking and Empowerment
(SHINE), which was designed to enable Philippine familiesespecially poor
onesto maintain their health and secure health care of sustainable quality.
[3]

It appears that SHINE had already been in existence even prior to the

effectivity of the Arrangement, though the record does not indicate when
exactly SHINE was constituted. Nonetheless, the Arrangement stated the
various obligations of the Filipino and German governments. The relevant
provisions of the Arrangement are reproduced as follows:
3.
The Government of the Federal Republic of
Germany shall make the following contributions to the
project.
It shall

(c) supply inputs, in particular

-

two cross-country vehicles,

ten computers with accessories,

office furnishings and equipment

up to a total value of DM 310,000 (three hundred and ten

thousand Deutsche Mark);
(c)
-

meet

the cost of accommodation for the seconded experts

and their families in so far as this cost is not met by the
seconded experts themselves,
the cost of official travel by the experts referred to in
sub-paragraph (a) above within and outside the
Republic of the Philippines,

the cost of seminars and courses,

the cost of transport and insurance to the project site

of inputs to be supplied pursuant to sub-paragraph (c)
above, excluding the charges and storage fees referred
to in paragraph 4(d) below,

a proportion of the operating and administrative

costs;

xxx
4.
The Government of
the Republic of
the Philippines shall make the following contributions to the
project:
It shall
(a)
provide the necessary Philippine experts for the
project, in particular one project coordinator in the
Philippine Health Insurance Corporation (Philhealth), at least
three further experts and a sufficient number of
administrative and auxiliary personnel, as well as health
personnel in the pilot provinces and in the other project
partners, in particular one responsible expert for each pilot
province and for each association representing the various
target groups,
release suitably qualified experts from their duties
for attendance at the envisaged basic and further training
activities; it shall only nominate such candidates as have
given an undertaking to work on the project for at least five

years after completing their training and shall ensure that

these Philippine experts receive appropriate remuneration,
ensure that the project field offices have sufficient
expendables,
make available the land and buildings required for
the project;

(b)
assume an increasing proportion of the running
and operating costs of the project;
(c)
afford the seconded experts any assistance
they may require in carrying out the tasks assigned to them
and place at their disposal all necessary records and
documents;
(d)

guarantee that

the project is provided with an itemized budget of

its own in order to ensure smooth continuation of the
project.
the necessary legal and administrative framework
is created for the project,
the project is coordinated in close cooperation with
other national and international agencies relevant to
implementation,
the inputs supplied for the project on behalf of the
Government of the Federal Republic of Germany are
exempted from the cost of licenses, harbour dues, import
and export duties and other public charges and fees, as well
as storage fees, or that any costs thereof are met, and that
they are cleared by customs without delay. The
aforementioned exemptions shall, at the request of the
implementing agencies also apply to inputs procured in the
Republic of the Philippines,
the tasks of the seconded experts are taken over
as soon as possible by Philippine experts,

examinations passed by Philippine nationals

pursuant to this Arrangement are recognized in accordance
with their respective standards and that the persons
concerned are afforded such opportunities with regard to
careers,
appointments
and
advancement
as
are
commensurate with their training.[4]

In September of 1999, Anne Nicolay (Nicolay), a Belgian national, assumed

the post of SHINE Project Manager. Disagreements eventually arose
between Nicolay and private respondents in matters such as proposed
salary

In the arraignment, both governments likewise named their

respective
implementing
organizations
for
SHINE.
ThePhilippines designated the Department of Health (DOH)
and the Philippine Health Insurance Corporation (Philhealth)
with the implementation of SHINE. For their part, the
German government charge[d] the Deustche Gesellschaft fr
Technische Zusammenarbeit[[5]] (GTZ[[6]]) GmbH, Eschborn,
with the implementation of its contributions.[7]

adjustments,

and

the

course

Nicolay

was

taking

in

the

implementation of SHINE different from her predecessors. The dispute

culminated in a letter[14] dated 8 June 2000, signed by the private
respondents, addressed to Nicolay, and copies furnished officials of the
DOH, Philheath, and the director of the Manila office of GTZ. The letter
raised several issues which private respondents claim had been brought up

Private respondents were engaged as contract employees hired by

several times in the past, but have not been given appropriate response. It

GTZ to work for SHINE on various dates between December of 1998 to

was claimed that SHINE under Nicolay had veered away from its original

September of 1999. Bernadette Carmela Magtaas was hired as an

purpose to facilitate the development of social health insurance by shoring

information systems manager and project officer of SHINE; [8] Carolina

up the national health insurance program and strengthening local

Dionco as a Project Assistant of SHINE; [9] Christopher Ramos as a project

initiatives, as Nicolay had refused to support local partners and new

assistant and liason personnel of NHI related SHINE activities by GTZ;

initiatives on the premise that community and local government unit

Melvin Dela Paz and Randy Tamayo as programmers; [11] and Edgardo

schemes were not sustainablea philosophy that supposedly betrayed

Ramilo as driver, messenger and multipurpose service man. [12] The

Nicolays lack of understanding of the purpose of the project. Private

employment contracts of all six private respondents all specified Dr. Rainer

respondents further alleged that as a result of Nicolays new thrust,

Tollkotter, identified as an adviser of GTZ, as the employer. At the same

resources have been used inappropriately; that the new management style

time, all the contracts commonly provided that [i]t is mutually agreed and

was not congruent with the original goals of the project; that Nicolay

understood that [Dr. Tollkotter, as employer] is a seconded GTZ expert who

herself suffered from cultural insensitivity that consequently failed to

is hiring the Employee on behalf of GTZ and for a Philippine-German

sustain healthy relations with SHINEs partners and staff.

[10]

bilateral

project

named

Social

Health

InsuranceNetworking

Empowerment (SHINE) which will end at a given time. [13]

and

The letter ended with these ominous words:

The issues that we [the private respondents] have
stated here are very crucial to us in working for the project.
We could no longer find any reason to stay with the project

unless ALL of these issues be addressed immediately and

appropriately.[15]

On 21 August 2000, the private respondents filed a complaint for illegal

dismissal with the NLRC. Named as respondents therein where GTZ, the

In response, Nicolay wrote each of the private respondents a letter

dated 21 June 2000, all similarly worded except for their respective
addressees.

She

informed

private

respondents

that

the

Director of its Manila office Hans Peter Paulenz, its Assistant Project
Manager Christian Jahn, and Nicolay.

projects

orientations and evolution were decided in consensus with partner

On 25 October 2005, GTZ, through counsel, filed a Motion to Dismiss, on

institutions, Philhealth and the DOH, and thus no longer subject to

the ground that the Labor Arbiter had no jurisdiction over the case, as its

modifications. More pertinently, she stated:

acts were undertaken in the discharge of the governmental functions and

sovereign acts of the Government of the Federal Republic of Germany. This

You have firmly and unequivocally stated in the last

paragraph of your 8th June 2000 letter that you and the five other
staff could no longer find any reason to stay with the project unless
ALL of these issues be addressed immediately and appropriately.
Under the foregoing premises and circumstances, it is now

was opposed by private respondents with the arguments that GTZ had
failed to secure a certification that it was immune from suit from the
Department of Foreign Affairs, and that it was GTZ and not the German
government which had implemented the SHINE Project and entered into the
contracts of employment.

imperative that I am to accept your resignation, which I expect to

On 27 November 2000, the Labor Arbiter issued an Order [19] denying the

receive as soon as possible.

Motion to Dismiss. The Order cited, among others, that GTZ was a private
Taken aback, private respondents replied with a common letter, clarifying
that their earlier letter was not intended as a resignation letter, but one

corporation which entered into an employment contract; and that GTZ had
failed to secure from the DFA a certification as to its diplomatic status.

that merely intended to raise attention to what they perceived as vital

issues.[17] Negotiations ensued between private respondents and Nicolay,

On 7 February 2001, GTZ filed with the Labor Arbiter a Reiterating Motion to

but for naught. Each of the private respondents received a letter from

Dismiss, again praying that the Motion to Dismiss be granted on the

Nicolay dated 11 July 2000, informing them of the pre-termination of their

jurisdictional ground, and reprising the arguments for dismissal it had

contracts

earlier raised.[20] No action was taken by the Labor Arbiter on this new

of

employment

on

the

grounds

of

serious

and

gross

insubordination, among others, resulting to loss of confidence and trust. [18]

motion. Instead, on 15 October 2001, the Labor Arbiter rendered a

Decision[21] granting the complaint for illegal dismissal. The Decision
concluded that respondents were dismissed without lawful cause, there

being a total lack of due process both substantive and procedural [sic].

opted to assail the decision by way of a special civil action for certiorari

GTZ was faulted for failing to observe the notice requirements in the

filed with the Court of Appeals. [25]On 10 December 2001, the Court of

labor law.The Decision likewise proceeded from the premise that GTZ had

Appeals promulgated a Resolution [26] dismissing GTZs petition, finding that

treated the letter dated 8 June 2000 as a resignation letter, and devoted

judicial recourse at this stage of the case is uncalled for[,] [t]he appropriate

some focus in debunking this theory.

remedy of the petitioners [being] an appeal to the NLRC x x x. [27] A motion

[22]

The Decision initially offered that it need not discuss the jurisdictional

for reconsideration to this Resolution proved fruitless for GTZ. [28]

aspect considering that the same had already been lengthily discussed in

Thus, the present petition for review under Rule 45, assailing the decision

the Order de[n]ying respondents Motion to Dismiss.[23] Nonetheless, it

and resolutions of the Court of Appeals and of the Labor Arbiter. GTZs

proceeded to discuss the jurisdictional aspect, in this wise:

arguments center on whether the Court of Appeals could have entertained

its petition for certiorari despite its not having undertaken an appeal before

Under pain of being repetitious, the undersigned

Labor Arbiter has jurisdiction to entertain the complaint on
the following grounds:
Firstly, under the employment contract entered into
between complainants and respondents, specifically Section
10 thereof, it provides that contract partners agree that his
contract shall be subject to the LAWS of the jurisdiction of
the locality in which the service is performed.
Secondly, respondent having entered into contract,
they can no longer invoke the sovereignty of the Federal
Republic of Germany.
Lastly, it is imperative to be immune from suit,
respondents should have secured from the Department of
Foreign Affairs a certification of respondents diplomatic
status and entitlement to diplomatic privileges including
immunity from suits. Having failed in this regard,
respondents cannot escape liability from the shelter of
sovereign immunity.
Notably, GTZ did not file a motion for reconsideration to the Labor Arbiters
Decision or elevate said decision for appeal to the NLRC. Instead, GTZ

the NLRC; and whether the complaint for illegal dismissal should have been
dismissed for lack of jurisdiction on account of GTZs insistence that it
enjoys immunity from suit. No special arguments are directed with respect
to petitioners Hans Peter Paulenz and Anne Nicolay, respectively the then
Director and the then Project Manager of GTZ in the Philippines; so we have
to presume that the arguments raised in behalf of GTZs alleged immunity
from suit extend to them as well.
The Court required the Office of the Solicitor General (OSG) to file a
Comment on the petition. In its Comment dated 7 November 2005, the OSG
took the side of GTZ, with the prayer that the petition be granted on the
ground that GTZ was immune from suit, citing in particular its assigned
functions in implementing the SHINE programa joint undertaking of the
Philippine and German governments which was neither proprietary nor
commercial in nature.

The Court of Appeals had premised the dismissal of GTZs petition on its

The OSG points out, citing Heirs of Mayor Nemencio Galvez v. Court of

procedural misstep in bypassing an appeal to NLRC and challenging the

Appeals,[31] that even when appeal is available, the Court has nonetheless

Labor

appellate

allowed a writ of certiorari when the orders of the lower court were issued

court by way of a Rule 65 petition. In dismissing the petition, the Court of

either in excess of or without jurisdiction. Indeed, the Court has ruled

Appeals relied on our ruling in Air Service Cooperative v. Court of Appeals.

before that the failure to employ available intermediate recourses, such as

The central issue in that case was whether a decision of a Labor Arbiter

a motion for reconsideration, is not a fatal infirmity if the ruling assailed is a

rendered without jurisdiction over the subject matter may be annulled in a

patent nullity. This approach suggested by the OSG allows the Court to

petition before a Regional Trial Court. That case may be differentiated from

inquire directly into what is the main issuewhether GTZ enjoys immunity

the present case, since the Regional Trial Court does not have original or

from suit.

[29]

Arbiters

Decision

directly

with

the

appellate jurisdiction to review a decision rendered by a Labor Arbiter. In

contrast, there is no doubt, as affirmed by jurisprudence, that the Court of
Appeals has jurisdiction to review, by way of its original certiorari
jurisdiction, decisions ruling on complaints for illegal dismissal.

The arguments raised by GTZ and the OSG are rooted in several
indisputable facts. The SHINE project was implemented pursuant to the
bilateral agreements between the Philippine and German governments.
GTZ was tasked, under the 1991 agreement, with the implementation of

Nonetheless, the Court of Appeals is correct in pronouncing the

the contributions of the German government. The activities performed by

general rule that the proper recourse from the decision of the Labor Arbiter

GTZ pertaining to the SHINE project are governmental in nature, related as

is to first appeal the same to the NLRC. Air Services is in fact clearly

they are to the promotion of health insurance in the Philippines. The fact

detrimental to petitioners position in one regard. The Court therein noted

that GTZ entered into employment contracts with the private respondents

that on account of the failure to correctly appeal the decision of the Labor

did not disqualify it from invoking immunity from suit, as held in cases such

Arbiter to the NLRC, such judgment consequently became final and

as Holy See v. Rosario, Jr.,[32] which set forth what remains valid doctrine:

executory.[30] GTZ goes as far as to request that the Court re-examine Air
Services,

suggestion

that

is

needlessly

improvident

under

the

circumstances. Air Services affirms doctrines grounded in sound procedural

rules that have allowed for the considered and orderly disposition of labor
cases.

Certainly, the mere entering into a contract by a

foreign state with a private party cannot be the ultimate
test. Such an act can only be the start of the inquiry. The
logical question is whether the foreign state is engaged in
the activity in the regular course of business. If the foreign
state is not engaged regularly in a business or trade, the
particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an
incident thereof, then it is an act jure imperii, especially
when it is not undertaken for gain or profit.[33]

Beyond dispute is the tenability of the comment points raised by

GTZ and the OSG that GTZ was not performing proprietary functions

unincorporated. The following lucid discussion from Justice Isagani Cruz is

pertinent:
Where suit is filed not against the government itself
or its officials but against one of its entities, it must be
ascertained whether or not the State, as the principal that
may ultimately be held liable, has given its consent to be
sued. This ascertainment will depend in the first
instance on whether the government agency
impleaded is incorporated or unincorporated.

notwithstanding its entry into the particular employment contracts. Yet

there is an equally fundamental premise which GTZ and the OSG fail to
address, namely: Is GTZ, by conception, able to enjoy the Federal Republics
immunity from suit?
The principle of state immunity from suit, whether a local state or a
foreign state, is reflected in Section 9, Article XVI of the Constitution, which

An incorporated agency has a charter of its

own that invests it with a separate juridical
personality, like the Social Security System, the University
of the Philippines, and the City of Manila. By contrast, the
unincorporated agency is so called because it has no
separate juridical personality but is merged in the general
machinery of the government, like the Department of
Justice, the Bureau of Mines and the Government Printing
Office.

states that the State may not be sued without its consent. Who or what
consists of the State? For one, the doctrine is available to foreign States
insofar as they are sought to be sued in the courts of the local State,
[34]

necessary as it is to avoid unduly vexing the peace of nations.

If the instant suit had been brought directly against the Federal

If the agency is incorporated, the test of its

suability is found in its charter. The simple rule is
that it is suable if its charter says so, and this is true
regardless
of
the
functions
it
is
performing. Municipal corporations, for example, like
provinces and cities, are agencies of the State when
they are engaged in governmental functions and
therefore should enjoy the sovereign immunity from
suit. Nevertheless, they are subject to suit even in
the performance of such functions because their
charter provides that they can sue and be sued.[35]

Republic of Germany, there would be no doubt that it is a suit brought

against a State, and the only necessary inquiry is whether said State had
consented to be sued. However, the present suit was brought against GTZ.
It is necessary for us to understand what precisely are the parameters of
the legal personality of GTZ.
Counsel for GTZ characterizes GTZ as the implementing agency of
the Government of the Federal Republic of Germany, a depiction similarly
adopted by the OSG. Assuming that characterization is correct, it does not
automatically invest GTZ with the ability to invoke State immunity from
suit. The distinction lies in whether the agency is incorporated or

State immunity from suit may be waived by general or special law.

The special law can take the form of the original charter of the
incorporated government agency. Jurisprudence is replete with
examples of incorporated government agencies which were ruled
not entitled to invoke immunity from suit, owing to provisions in
their
[36]

management and operation of the Angat Dam. It is

sufficient to say that the government has
organized a private corporation, put money in it
and has allowed it to sue and be sued in any court
under its charter. (R.A. No. 6395, Sec. 3[d]). As a
government, owned and controlled corporation, it
has a personality of its own, distinct and separate
from that of the Government. Moreover, the
charter provision that the NPC can 'sue and be
sued in any court' is without qualification on the
cause of action and accordingly it can include a
tort claim such as the one instituted by the
petitioners."[41]

charters manifesting their consent to be sued. These include the National

Irrigation Administration,[37] the former Central Bank,[38]and the National
Power Corporation.[39] In SSS v. Court of Appeals,[40] the Court through
Justice Melencio-Herrera explained that by virtue of an express provision in
its charter allowing it to sue and be sued, the Social Security System did
not enjoy immunity from suit:
We come now to the amendability of the SSS to
judicial action and legal responsibility for its acts. To our
minds, there should be no question on this score
considering that the SSS is a juridical entity with a
personality of its own. It has corporate powers separate and
distinct from the Government. SSS' own organic act
specifically provides that it can sue and be sued in Court.
These words "sue and be sued" embrace all civil process
incident to a legal action. So that, even assuming that the
SSS, as it claims, enjoys immunity from suit as an entity
performing governmental functions, by virtue of the explicit
provision of the aforecited enabling law, the Government
must be deemed to have waived immunity in respect of the
SSS, although it does not thereby concede its liability. That
statutory law has given to the private citizen a remedy for
the and protection of his rights. The SSS thereby has been
required to submit to the jurisdiction of the Courts, subject
to its right to interpose any lawful defense. Whether the SSS
performs governmental or proprietary functions thus
becomes unnecessary to belabor. For by that waiver, a
private citizen may bring a suit against it for varied
objectives, such as, in this case, to obtain compensation in
damages arising from contract, and even for tort.
A recent case squarely in point anent the principle,
involving the National Power Corporation, is that of Rayo v.
Court of First Instance of Bulacan, 110 SCRA 457 (1981),
wherein this Court, speaking through Mr. Justice Vicente
Abad Santos, ruled:
"It is not necessary to write an extended
dissertation on whether or not the NPC performs a
governmental function with respect to the

It is useful to note that on the part of the Philippine government, it had

designated two entities, the Department of Health and the Philippine
Health Insurance Corporation (PHIC), as the implementing agencies in
behalf of the Philippines. The PHIC was established under Republic Act No.
7875, Section 16(g) of which grants the corporation the power to sue and
be sued in court. Applying the previously cited jurisprudence, PHIC would
not enjoy immunity from suit even in the performance of its functions
connected with SHINE, however, governmental in nature as they may be.
Is GTZ an incorporated agency of the German government? There is some
mystery surrounding that question. Neither GTZ nor the OSG go beyond the
claim that petitioner is the implementing agency of the Government of the
Federal Republic of Germany. On the other hand, private respondents
asserted before the Labor Arbiter that GTZ was a private corporation
engaged in the implementation of development projects. [42] The Labor
Arbiter accepted that claim in his Order denying the Motion to Dismiss,
[43]

though he was silent on that point in his Decision. Nevertheless, private

respondents argue in their Comment that the finding that GTZ was a

private corporation was never controverted, and is therefore deemed

As an international cooperation enterprise for sustainable

admitted.[44] In its Reply, GTZ controverts that finding, saying that it is a

development with worldwide operations, the federally owned

matter of public knowledge that the status of petitioner GTZ is that of the

Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH

implementing agency, and not that of a private corporation.[45]

supports the German Government in achieving its developmentpolicy objectives. It provides viable, forward-looking solutions for
political,

economic,

ecological

and

social

development

in

In truth, private respondents were unable to adduce any evidence to

globalised world. Working under difficult conditions, GTZ promotes

substantiate their claim that GTZ was a private corporation, and the Labor

complex reforms and change processes. Its corporate objective is to

Arbiter acted rashly in accepting such claim without explanation. But

improve peoples living conditions on a sustainable basis.

neither has GTZ supplied any evidence defining its legal nature beyond that
of the bare descriptive implementing agency. There is no doubt that the
1991 Agreement designated GTZ as the implementing agency in behalf of
the German government. Yet the catch is that such term has no precise
definition that is responsive to our concerns. Inherently, an agent acts in
behalf of a principal, and the GTZ can be said to act in behalf of the
German state. But that is as far as implementing agency could take us. The
term

by

itself

does

not

supply

whether

GTZ

is

incorporated

or

GTZ is a federal enterprise based in Eschborn near

Frankfurt am Main. It was founded in 1975 as a company
under private law. The German Federal Ministry for
Economic Cooperation and Development (BMZ) is its major
client. The company also operates on behalf of other
German ministries, the governments of other countries and
international clients, such as the European Commission, the
United Nations and the World Bank, as well as on behalf of
private enterprises. GTZ works on a public-benefit basis. All
surpluses generated are channeled [sic] back into its own
international
cooperation
projects
for
sustainable
development.[47]

unincorporated, whether it is owned by the German state or by private

interests, whether it has juridical personality independent of the German

GTZs own website elicits that petitioner is federally owned, a federal

government or none at all.

enterprise, and founded in 1975 as a company under private law. GTZ

clearly has a very meaningful relationship with the Federal Republic of

GTZ itself provides a more helpful clue, inadvertently, through its own
official Internet website.[46] In the Corporate Profile section of the English
language version of its site, GTZ describes itself as follows:

Germany, which apparently owns it. At the same time, it appears that GTZ
was actually organized not through a legislative public charter, but under
private law, in the same way that Philippine corporations can be organized

under the Corporation Code even if fully owned by the Philippine

corporation incorporated under this Code has the power and capacity x x x

government.

to sue and be sued in its corporate name.[50]

This self-description of GTZ in its own official website gives further cause

It is entirely possible that under German law, an entity such as GTZ or

for pause in adopting petitioners argument that GTZ is entitled to immunity

particularly GTZ itself has not been vested or has been specifically deprived

from suit because it is an implementing agency. The above-quoted

the power and capacity to sue and/or be sued. Yet in the proceedings below

statement does not dispute the characterization of GTZ as an implementing

and before this Court, GTZ has failed to establish that under German law, it

agency of the Federal Republic of Germany, yet it bolsters the notion that

has not consented to be sued despite it being owned by the Federal

as a company organized under private law, it has a legal personality

Republic

independent of that of the Federal Republic of Germany.

adhere to the rule that in the absence of evidence to the contrary,

The Federal Republic of Germany, in its own official website, [48] also makes

foreign laws on a particular subject are presumed to be the same as those

reference to GTZ and describes it in this manner:

of the Philippines,[51] and following the most intelligent assumption we can

x x x Going by the principle of sustainable development, the

German

Technical Cooperation (Deutsche Gesellschaft

fr

Technische

Zusammenarbeit GmbH, GTZ) takes on non-profit projects in international

technical cooperation. The GTZ is a private company owned by the
Federal Republic of Germany.[49]
Again, we are uncertain of the corresponding legal implications under
German law surrounding a private company owned by the Federal Republic
of Germany. Yet taking the description on face value, the apparent
equivalent under Philippine law is that of a corporation organized under the
Corporation Code but owned

by the Philippine government, or a

government-owned or controlled corporation without original charter. And it

bears notice that Section 36 of the Corporate Code states that [e]very

of

Germany.

We

gather, GTZ is akin to a governmental owned or controlled corporation

without original charter which, by virtue of the Corporation Code, has
expressly consented to be sued. At the very least, like the Labor Arbiter and
the Court of Appeals, this Court has no basis in fact to conclude or presume
that GTZ enjoys immunity from suit.
This absence of basis in fact leads to another important point, alluded to by
the

Labor

Arbiter

in

his

rulings.

Our

ruling

in Holy

See

v.

Del

Rosario[52] provided a template on how a foreign entity desiring to invoke

State immunity from suit could duly prove such immunity before our local
courts. The principles enunciated in that case were derived from public
international law. We stated then:
In Public International Law, when a state or
international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests the

Foreign Office of the state where it is sued to convey to the

court that said defendant is entitled to immunity.
In the United States, the procedure followed is the
process of "suggestion," where the foreign state or the
international organization sued in an American court
requests the Secretary of State to make a determination as
to whether it is entitled to immunity. If the Secretary of
State finds that the defendant is immune from suit, he, in
turn, asks the Attorney General to submit to the court a
"suggestion" that the defendant is entitled to immunity.
In England, a similar procedure is followed, only the Foreign
Office issues a certification to that effect instead of
submitting a "suggestion" (O'Connell, I International Law
130 [1965]; Note: Immunity from Suit of Foreign Sovereign
Instrumentalities and Obligations, 50 Yale Law Journal 1088
[1941]).
In the Philippines, the practice is for the foreign
government or the international organization to first secure
an executive endorsement of its claim of sovereign or
diplomatic immunity. But how the Philippine Foreign Office
conveys
its
endorsement
to
the
courts
varies.
In International Catholic Migration Commission v. Calleja,
190 SCRA 130 (1990), the Secretary of Foreign Affairs just
sent a letter directly to the Secretary of Labor and
Employment, informing the latter that the respondentemployer could not be sued because it enjoyed diplomatic
immunity. In World Health Organization v. Aquino, 48 SCRA
242 (1972), the Secretary of Foreign Affairs sent the trial
court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1
(1974), the U.S. Embassy asked the Secretary of Foreign
Affairs to request the Solicitor General to make, in behalf of
the Commander of the United States Naval Base at
Olongapo City, Zambales, a "suggestion" to respondent
Judge. The Solicitor General embodied the "suggestion" in a
Manifestation and Memorandum as amicus curiae.[53]
It is to be recalled that the Labor Arbiter, in both of his rulings,
noted that it was imperative for petitioners to secure from the
Department of Foreign Affairs a certification of respondents
diplomatic status and entitlement to diplomatic privileges including
immunity from suits.[54] The requirement might not necessarily be
imperative. However, had GTZ obtained such certification from the
DFA, it would have provided factual basis for its claim of immunity

that would, at the very least, establish a disputable evidentiary

presumption that the foreign party is indeed immune which the
opposing party will have to overcome with its own factual evidence.
We do not see why GTZ could not have secured such certification or
endorsement from the DFA for purposes of this case. Certainly, it
would have been highly prudential for GTZ to obtain the same after
the Labor Arbiter had denied the motion to dismiss. Still, even at
this juncture, we do not see any evidence that the DFA, the office of
the executive branch in charge of our diplomatic relations, has
indeed endorsed GTZs claim of immunity. It may be possible that
GTZ tried, but failed to secure such certification, due to the same
concerns that we have discussed herein.
Would the fact that the Solicitor General has endorsed GTZs claim of States
immunity from suit before this Court sufficiently substitute for the DFA
certification? Note that the rule in public international law quoted in Holy
See referred to endorsement by the Foreign Office of the State where the
suit is filed, such foreign office in the Philippines being the Department of
Foreign Affairs. Nowhere in the Comment of the OSG is it manifested that
the DFA has endorsed GTZs claim, or that the OSG had solicited the DFAs
views on the issue. The arguments raised by the OSG are virtually the same
as the arguments raised by GTZ without any indication of any special and
distinct perspective maintained by the Philippine government on the issue.
The Comment filed by the OSG does not inspire the same degree of
confidence as a certification from the DFA would have elicited.

Holy See made reference to Baer v. Tizon,[55] and that in the said case, the
United States Embassy asked the Secretary of Foreign Affairs to request the
Solicitor General to make a suggestion to the trial court, accomplished by
way of a Manifestation and Memorandum, that the petitioner therein

enjoyed immunity as the Commander of the Subic Bay Naval Base. Such

petition on that ground. As a further consequence, since petitioners failed

circumstance is actually not narrated in the text of Baer itself and was likely

to perfect an appeal from the Labor Arbiters Decision, the same has long

supplied in Holy See because its author, Justice Camilio Quiason, had

become final and executory. All other questions related to this case, such as

appeared as the Solicitor in behalf of the OSG in Baer. Nonetheless, as

whether or not private respondents were illegally dismissed, are no longer

narrated in Holy See, it was the Secretary of Foreign Affairs which directed

susceptible to review, respecting as we do the finality of the Labor Arbiters

the OSG to intervene in behalf of the United States government in

Decision.

the Baer case, and such fact is manifest enough of the endorsement by the
Foreign Office. We do not find a similar circumstance that bears here.

A final note. This decision should not be seen as deviation from the more
common methodology employed in ascertaining whether a party enjoys

The Court is thus holds and so rules that GTZ consistently has been unable

State immunity from suit, one which focuses on the particular functions

to establish with satisfaction that it enjoys the immunity from suit generally

exercised by the party and determines whether these are proprietary or

enjoyed

Germany.

sovereign in nature. The nature of the acts performed by the entity

Consequently, both the Labor Arbiter and the Court of Appeals acted within

invoking immunity remains the most important barometer for testing

proper bounds when they refused to acknowledge that GTZ is so immune

whether the privilege of State immunity from suit should apply. At the same

by dismissing the complaint against it. Our finding has additional

time, our Constitution stipulates that a State immunity from suit is

ramifications on the failure of GTZ to properly appeal the Labor Arbiters

conditional

decision to the NLRC. As pointed out by the OSG, the direct recourse to the

circumstances pertaining to the creation and legal personality of an

Court of Appeals while bypassing the NLRC could have been sanctioned had

instrumentality or agency invoking immunity remain relevant. Consent to

the Labor Arbiters decision been a patent nullity. Since the Labor Arbiter

be sued, as exhibited in this decision, is often conferred by the very same

acted properly in deciding the complaint, notwithstanding GTZs claim of

statute or general law creating the instrumentality or agency.

by

its

parent

country,

the

Federal

Republic

of

immunity, we cannot see how the decision could have translated into a

on

its

withholding

SO ORDERED.
NLRC by filing directly with the Court of Appeals the petition for certiorari. It
then follows that the Court of Appeals acted correctly in dismissing the

consent;

hence,

the

laws

WHEREFORE, the petition is DENIED. No pronouncement as to costs.

patent nullity.
As a result, there was no basis for petitioners in foregoing the appeal to the

of

and

EN BANC
G.R. No. 180388

January 18, 2011

GREGORIO R. VIGILAR, SECRETARY OF THE DEPARTMENT OF

PUBLIC WORKS AND HIGHWAYS (DPWH), DPWH
UNDERSECRETARIES TEODORO E. ENCARNACION AND EDMUNDO E.
ENCARNACION AND EDMUNDO V. MIR, DPWH ASSISTANT
SECRETARY JOEL L. ALTEA, DPWH REGIONAL DIRECTOR VICENTE B.
LOPEZ, DPWH DISTRICT ENGINEER ANGELITO M. TWAO, FELIX A.
DESIERTO OF THE TECHNICAL WORKING GROUP VALIDATION AND
AUDITING TEAM, AND LEONARDO ALVARO, ROMEO N. SUPAN,
VICTORINO C. SANTOS OF THE DPWH PAMPANGA 2ND
ENGINEERING DISTRICT, Petitioners,
vs.
ARNULFO D. AQUINO, Respondent.
DECISION
SERENO, J.:
Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the
Rules of Court, assailing the Decision 2 of the Court of Appeals in C.A.-G.R.
CV No. 82268, dated 25 September 2006.
The antecedent facts are as follows:
On 19 June 1992, petitioner Angelito M. Twao, then Officer-in-Charge
(OIC)-District Engineer of the Department of Public Works and Highways
(DPWH) 2nd Engineering District of Pampanga sent an Invitation to Bid to
respondent Arnulfo D. Aquino, the owner of A.D. Aquino Construction and
Supplies. The bidding was for the construction of a dike by bulldozing a
part of the Porac River at Barangay Ascomo-Pulungmasle, Guagua,
Pampanga.
Subsequently, on 7 July 1992, the project was awarded to respondent, and
a "Contract of Agreement" was thereafter executed between him and
concerned petitioners for the amount of PhP1,873,790.69, to cover the
project cost.
By 9 July 1992, the project was duly completed by respondent, who was
then issued a Certificate of Project Completion dated 16 July 1992. The
certificate was signed by Romeo M. Yumul, the Project Engineer; as well as
petitioner Romeo N. Supan, Chief of the Construction Section, and by
petitioner Twao.
Respondent Aquino, however, claimed that PhP1,262,696.20 was still due
him, but petitioners refused to pay the amount. He thus filed a
Complaint3 for the collection of sum of money with damages before the
Regional Trial Court of Guagua, Pampanga. The complaint was docketed as
Civil Case No. 3137.

Petitioners, for their part, set up the defense4 that the Complaint was a suit
against the state; that respondent failed to exhaust administrative
remedies; and that the "Contract of Agreement" covering the project was
void for violating Presidential Decree No. 1445, absent the proper
appropriation and the Certificate of Availability of Funds. 5
On 28 November 2003, the lower court ruled in favor of respondent, to wit:
WHEREFORE, premises considered, defendant Department of Public
Works and Highways is hereby ordered to pay the plaintiff Arnulfo D.
Aquino the following:
1. PhP1,873,790.69, Philippine Currency, representing actual
amount for the completion of the project done by the plaintiff;
2. PhP50,000.00 as attorneys fee and
3. Cost of this suit.
SO ORDERED.

It is to be noted that respondent was only asking for PhP1,262,696.20; the

award in paragraph 1 above, however, conforms to the entire contract
amount.
On appeal, the Court of Appeals reversed and set aside the Decision of the
lower court and disposed as follows:
WHEREFORE, premises considered, the appeal is GRANTED. The
"CONTRACT AGREEMENT" entered into between the plaintiff-appellees
construction company, which he represented, and the government,
through the Department of Public Works and Highway (DPWH) Pampanga
2nd Engineering District, is declared null and void ab initio.
The assailed decision of the court a quo is hereby REVERSED AND SET
ASIDE.
In line with the pronouncement in Department of Health vs. C.V.
Canchela & Associates, Architects,7 the Commission on Audit (COA) is
hereby ordered to determine and ascertain with dispatch, on a quantum
meruit basis, the total obligation due to the plaintiff-appellee for his
undertaking in implementing the subject contract of public works, and to
allow payment thereof, subject to COA Rules and Regulations, upon the
completion of the said determination.
No pronouncement as to costs.
SO ORDERED.8
Dissatisfied with the Decision of the Court of Appeals, petitioners are now
before this Court, seeking a reversal of the appellate courts Decision and a
dismissal of the Complaint in Civil Case No. G-3137. The Petition raises the
following issues:

1. WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT

THE DOCTRINE OF NON-SUABILITY OF THE STATE HAS NO APPLICATION IN
THIS CASE.
2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING
THE COMPLAINT FOR FAILURE OF RESPONDENT TO EXHAUST ALL
ADMINISTRATIVE REMEDIES.
3. WHETHER OR NOT THE COURT OF APPEALS ERRED IN ORDERING THE
COA TO ALLOW PAYMENT TO RESPONDENT ON A QUANTUM MERUIT BASIS
DESPITE THE LATTERS FAILURE TO COMPLY WITH THE REQUIREMENTS OF
PRESIDENTIAL DECREE NO. 1445.
After a judicious review of the case, the Court finds the Petition to be
without merit.
Firstly, petitioners claim that the Complaint filed by respondent before the
Regional Trial Court was done without exhausting administrative remedies.
Petitioners aver that respondent should have first filed a claim before the
Commission on Audit (COA) before going to the courts. However, it has
been established that the doctrine of exhaustion of administrative
remedies and the doctrine of primary jurisdiction are not ironclad rules. In
Republic of the Philippines v. Lacap,9 this Court enumerated the numerous
exceptions to these rules, namely: (a) where there is estoppel on the part
of the party invoking the doctrine; (b) where the challenged administrative
act is patently illegal, amounting to lack of jurisdiction; (c) where there is
unreasonable delay or official inaction that will irretrievably prejudice the
complainant; (d) where the amount involved is relatively so small as to
make the rule impractical and oppressive; (e) where the question involved
is purely legal and will ultimately have to be decided by the courts of
justice; (f) where judicial intervention is urgent; (g) where the application of
the doctrine may cause great and irreparable damage; (h) where the
controverted acts violate due process; (i) where the issue of nonexhaustion of administrative remedies has been rendered moot; (j) where
there is no other plain, speedy and adequate remedy; (k) where strong
public interest is involved; and (l) in quo warranto proceedings. In the
present case, conditions (c) and (e) are present.
The government project contracted out to respondent was completed
almost two decades ago. To delay the proceedings by remanding the case
to the relevant government office or agency will definitely prejudice
respondent. More importantly, the issues in the present case involve the
validity and the enforceability of the "Contract of Agreement" entered into
by the parties. These are questions purely of law and clearly beyond the
expertise of the Commission on Audit or the DPWH. In Lacap, this Court
said:
... It does not involve an examination of the probative value of the
evidence presented by the parties. There is a question of law when the

doubt or difference arises as to what the law is on a certain state of facts,

and not as to the truth or the falsehood of alleged facts. Said question at
best could be resolved only tentatively by the administrative authorities.
The final decision on the matter rests not with them but with the courts of
justice. Exhaustion of administrative remedies does not apply, because
nothing of an administrative nature is to be or can be done. The issue does
not require technical knowledge and experience but one that would involve
the interpretation and application of law. (Emphasis supplied.)
Secondly, in ordering the payment of the obligation due respondent on a
quantum meruit basis, the Court of Appeals correctly relied on Royal Trust
Corporation v. COA,10 Eslao v. COA,11 Melchor v. COA,12 EPG Construction
Company v. Vigilar,13 and Department of Health v. C.V. Canchela &
Associates, Architects.14 All these cases involved government projects
undertaken in violation of the relevant laws, rules and regulations covering
public bidding, budget appropriations, and release of funds for the projects.
Consistently in these cases, this Court has held that the contracts were
void for failing to meet the requirements mandated by law; public interest
and equity, however, dictate that the contractor should be compensated
for services rendered and work done.
Specifically, C.V. Canchela & Associates is similar to the case at bar, in that
the contracts involved in both cases failed to comply with the relevant
provisions of Presidential Decree No. 1445 and the Revised Administrative
Code of 1987. Nevertheless, "(t)he illegality of the subject Agreements
proceeds, it bears emphasis, from an express declaration or prohibition by
law, not from any intrinsic illegality. As such, the Agreements are not
illegal per se, and the party claiming thereunder may recover what had
been paid or delivered."15
The government project involved in this case, the construction of a dike,
was completed way back on 9 July 1992. For almost two decades, the
public and the government benefitted from the work done by respondent.
Thus, the Court of Appeals was correct in applying Eslao to the present
case. In Eslao, this Court stated:
...the Court finds that the contractor should be duly compensated for
services rendered, which were for the benefit of the general public. To deny
the payment to the contractor of the two buildings which are almost fully
completed and presently occupied by the university would be to allow the
government to unjustly enrich itself at the expense of another. Justice and
equity demand compensation on the basis of quantum meruit. (Emphasis
supplied.)
Neither can petitioners escape the obligation to compensate respondent
for services rendered and work done by invoking the states immunity from
suit. This Court has long established in Ministerio v. CFI of Cebu, 16 and
recently reiterated in Heirs of Pidacan v. ATO,17 that the doctrine of

governmental immunity from suit cannot serve as an instrument for

perpetrating an injustice to a citizen. As this Court enunciated in EPG
Construction:181avvphi1
To our mind, it would be the apex of injustice and highly
inequitable to defeat respondents right to be duly compensated
for actual work performed and services rendered, where both the
government and the public have for years received and accepted
benefits from the project and reaped the fruits of respondents
honest toil and labor.
xxx

xxx

xxx

Under these circumstances, respondent may not validly invoke the Royal
Prerogative of Dishonesty and conveniently hide under the State's cloak of
invincibility against suit, considering that this principle yields to certain
settled exceptions. True enough, the rule, in any case, is not
absolute for it does not say that the state may not be sued under
any circumstance.
xxx

xxx

xxx

Although the Amigable and Ministerio cases generously tackled the issue of
the State's immunity from suit vis a vis the payment of just compensation
for expropriated property, this Court nonetheless finds the doctrine
enunciated in the aforementioned cases applicable to the instant
controversy, considering that the ends of justice would be
subverted if we were to uphold, in this particular instance, the
State's immunity from suit.
To be sure, this Court as the staunch guardian of the citizens'
rights and welfare cannot sanction an injustice so patent on its
face, and allow itself to be an instrument in the perpetration
thereof. Justice and equity sternly demand that the State's cloak
of invincibility against suit be shred in this particular instance,
and that petitioners-contractors be duly compensated on the
basis of quantum meruit for construction done on the public
works housing project. (Emphasis supplied.)
WHEREFORE, in view of the foregoing, the Petition is DENIED for lack of
merit. The assailed Decision of the Court of Appeals in CA-G.R. No. 82268
dated 25 September 2006 is AFFIRMED.
SO ORDERED.

DECISION
SERENO, J.:
This is a Petition for Review on Certiorari with Prayer for the Issuance of
a Temporary Restraining Order (TRO) and/or Preliminary Injunction
assailing the 30 September 2008 Decision and 5 December 2008

EN BANC

Resolution of the Court of Appeals (CA) in CAG.R. SP No. 103351. [1]

On 14 September 2002, petitioner China National Machinery & Equipment
Corp. (Group) (CNMEG), represented by its chairperson, Ren Hongbin,
entered into a Memorandum of Understanding with the North Luzon
Railways Corporation (Northrail), represented by its president, Jose L.
CHINA NATIONAL MACHINERY & EQUIPMENT CORP.
(GROUP),

G.R. No. 185572

from Manila to San Fernando, La Union (the Northrail Project).[2]

Petitioner
versus

On 30 August 2003, the Export Import Bank of China (EXIM Bank)

REYES, and

HON. CESAR D. SANTAMARIA, in his official

capacity as Presiding Judge of Branch 145,
Regional Trial Court of Makati City, HERMINIO
HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROGER
R. RAYEL, ROMEL R. BAGARES, CHRISTOPHER
FRANCISCO C. BOLASTIG, LEAGUE OF URBAN
POOR FOR ACTION (LUPA), KILUSAN NG
MARALITA SA MEYCAUAYAN (KMM-LUPA
CHAPTER), DANILO M. CALDERON, VICENTE C.
ALBAN, MERLYN M. VAAL, LOLITA S. QUINONES,
RICARDO D. LANOZO, JR., CONCHITA G. GOZO,
MA. TERESA D. ZEPEDA, JOSEFINA A. LANOZO,
and SERGIO C. LEGASPI, JR., KALIPUNAN NG
DAMAYANG MAHIHIRAP (KADAMAY), EDY
CLERIGO, RAMMIL DINGAL, NELSON B. TERRADO,
CARMEN DEUNIDA, and EDUARDO LEGSON,

Cortes, Jr. for the conduct of a feasibility study on a possible railway line

PERLAS-BERNABE,

and the Department of Finance of the Philippines (DOF) entered into a

Memorandum of Understanding (Aug 30 MOU), wherein China agreed to
extend Preferential Buyers Credit to the Philippine government to finance
the Northrail Project.[3] The Chinese government designated EXIM Bank as
the lender, while the Philippine government named the DOF as the
borrower.[4] Under the Aug 30 MOU, EXIM Bank agreed to extend an amount
not exceeding USD 400,000,000 in favor of the DOF, payable in 20 years,
with a 5-year grace period, and at the rate of 3% per annum. [5]
On 1 October 2003, the Chinese Ambassador to the Philippines, Wang
Chungui (Amb. Wang), wrote a letter to DOF Secretary Jose Isidro Camacho
(Sec. Camacho) informing him of CNMEGs designation as the Prime

February 7, 2012

Respondents
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

Contractor for the Northrail Project.[6]

On 30 December 2003, Northrail and CNMEG executed a Contract

CNMEG filed an Urgent Motion for Reconsideration of this Order. [14] Before

Agreement for the construction of Section I, Phase I of the North Luzon

RTC Br. 145 could rule thereon, CNMEG filed a Motion to Dismiss dated 12

Railway System from Caloocan to Malolos on a turnkey basis (the Contract

April 2006, arguing that the trial court did not have jurisdiction over (a) its

Agreement).[7] The contract price for the Northrail Project was pegged at

person, as it was an agent of the Chinese government, making it immune

USD 421,050,000.[8]

from suit, and (b) the subject matter, as the Northrail Project was a product
of an executive agreement.[15]

On 26 February 2004, the Philippine government and EXIM Bank

entered into a counterpart financial agreement Buyer Credit Loan

On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying

Agreement No. BLA 04055 (the Loan Agreement). [9] In the Loan Agreement,

CNMEGs Motion to Dismiss and setting the case for summary hearing to

EXIM Bank agreed to extend Preferential Buyers Credit in the amount of

determine whether the injunctive reliefs prayed for should be issued.

USD 400,000,000 in favor of the Philippine government in order to finance

[16]

the construction of Phase I of the Northrail Project.[10]

the trial court in an Order dated 10 March 2008. [18] Thus, CNMEG filed

CNMEG then filed a Motion for Reconsideration,[17] which was denied by

before the CA a Petition for Certiorari with Prayer for the Issuance of TRO
On 13 February 2006, respondents filed a Complaint for Annulment

and/or Writ of Preliminary Injunction dated 4 April 2008. [19]

of Contract and Injunction with Urgent Motion for Summary Hearing to

Determine the Existence of Facts and Circumstances Justifying the

In the assailed Decision dated 30 September 2008, the appellate

Issuance of Writs of Preliminary Prohibitory and Mandatory Injunction

court dismissed the Petition for Certiorari. [20] Subsequently, CNMEG filed a

and/or TRO against CNMEG, the Office of the Executive Secretary, the DOF,

Motion for Reconsideration,[21] which was denied by the CA in a Resolution

the Department of Budget and Management, the National Economic

dated 5 December 2008.[22] Thus, CNMEG filed the instant Petition for

Development Authority and Northrail. [11] The case was docketed as Civil

Review on Certiorari dated 21 January 2009, raising the following issues: [23]

Case No. 06-203 before the Regional Trial Court, National Capital Judicial
Region, Makati City, Branch 145 (RTC Br. 145). In the Complaint,
respondents alleged that the Contract Agreement and the Loan Agreement
were void for being contrary to (a) the Constitution; (b) Republic Act No.
9184 (R.A. No. 9184), otherwise known as the Government Procurement
Reform Act; (c) Presidential Decree No. 1445, otherwise known as the
Government Auditing Code; and (d) Executive Order No. 292, otherwise
known as the Administrative Code.[12]
RTC Br. 145 issued an Order dated 17 March 2006 setting the case
for hearing on the issuance of injunctive reliefs. [13] On 29 March 2006,

Whether or not petitioner CNMEG is an agent of

the sovereign Peoples Republic of China.
Whether or not the Northrail contracts are
products of an executive agreement between two
sovereign states.
Whether or not the certification from the
Department of Foreign Affairs is necessary under the
foregoing circumstances.
Whether or not the act being undertaken by
petitioner CNMEG is an act jure imperii.

Whether or not the Court of Appeals failed to

avoid a procedural limbo in the lower court.
Whether or not the Northrail Project is subject to
competitive public bidding.
Whether or not the Court of Appeals ignored the
ruling of this Honorable Court in the Neri case.
CNMEG prays for the dismissal of Civil Case No. 06-203 before RTC
Br. 145 for lack of jurisdiction. It likewise requests this Court for the issuance

acts or acts jure imperii of a state, but not with

regard
to
private
acts
or
acts jure
gestionis. (Emphasis supplied; citations omitted.)
xxx xxx xxx
The restrictive theory came about because of the
entry of sovereign states into purely commercial activities
remotely connected with the discharge of governmental
functions. This is particularly true with respect to the
Communist states which took control of nationalized
business activities and international trading.

of a TRO and, later on, a writ of preliminary injunction to restrain public

respondent from proceeding with the disposition of Civil Case No. 06-203.

In JUSMAG v. National Labor Relations Commission,[25] this Court

affirmed the Philippines adherence to the restrictive theory as follows:

The crux of this case boils down to two main issues, namely:
1.

Whether CNMEG is entitled to immunity, precluding it

from being sued before a local court.

2.

Whether the Contract Agreement is an executive

agreement, such that it cannot be questioned by or before
a local court.

First issue: Whether

CNMEG is entitled to
immunity
This Court explained the doctrine of sovereign immunity in Holy See
v. Rosario,[24] to wit:
There are two conflicting concepts of sovereign
immunity, each widely held and firmly established.
According to the classical or absolute theory, a sovereign
cannot, without its consent, be made a respondent
in the courts of another sovereign. According to the
newer or restrictive theory, the immunity of the
sovereign is recognized only with regard to public

The doctrine of state immunity from suit has

undergone further metamorphosis. The view evolved that
the existence of a contract does not, per se, mean that
sovereign states may, at all times, be sued in local courts.
The complexity of relationships between sovereign states,
brought about by their increasing commercial activities,
mothered a more restrictive application of the doctrine.
xxx xxx xxx
As it stands now, the application of the
doctrine
of
immunity
from
suit
has
been restricted to sovereign or governmental
activities (jure
imperii). The
mantle
of
state
immunity cannot be extended to commercial, private and
proprietary acts (jure gestionis).[26](Emphasis supplied.)
Since the Philippines adheres to the restrictive theory, it is crucial to
ascertain the legal nature of the act involved whether the entity claiming
immunity performs governmental, as opposed to proprietary, functions. As
held in United States of America v. Ruiz[27]
The restrictive application of State immunity is
proper only when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State

may be said to have descended to the level of an individual

and can thus be deemed to have tacitly given its consent
to be sued only when it enters into business contracts. It
does not apply where the contract relates to the exercise of
its sovereign functions.[28]

Agreement must not be read in isolation. Instead, it must be construed in

conjunction with three other documents executed in relation to the
Northrail Project, namely: (a) the Memorandum of Understanding dated 14
September 2002 between Northrail and CNMEG; [30] (b) the letter of Amb.

A.
CNMEG
is
engaged in a proprietary
activity.

Wang dated 1 October 2003 addressed to Sec. Camacho; [31] and (c) the
Loan Agreement.

A threshold question that must be answered is whether CNMEG

performs governmental or proprietary functions. A thorough examination of

1.
Memorandum
Understanding dated
September 2002

of
14

the basic facts of the case would show that CNMEG is engaged in a
The Memorandum of Understanding dated 14 September 2002

proprietary activity.

shows that CNMEG sought the construction of the Luzon Railways as a

The parties executed the Contract Agreement for the purpose of
constructing the Luzon Railways, viz:

proprietary venture. The relevant parts thereof read:

[29]

WHEREAS the Employer (Northrail) desired to

construct the railways form Caloocan to Malolos, section I,
Phase I of Philippine North Luzon Railways Project
(hereinafter referred to as THE PROJECT);

WHEREAS, CNMEG has the financial capability,

professional competence and technical expertise to
assess the state of the [Main Line North (MLN)] and
recommend implementation plans as well as undertake
its rehabilitation and/or modernization;

AND WHEREAS the Contractor has offered to

provide the Project on Turnkey basis, including design,
manufacturing, supply, construction, commissioning, and
training of the Employers personnel;

WHEREAS, CNMEG has expressed interest in

the rehabilitation and/or modernization of the
MLN from Metro Manila to San Fernando, La Union
passing through the provinces of Bulacan, Pampanga,
Tarlac, Pangasinan and La Union (the Project);

AND WHEREAS the Loan Agreement of the

Preferential Buyers Credit between Export-Import Bank
of China and Department of Finance of Republic of
the Philippines;

WHEREAS, the NORTHRAIL CORP. welcomes

CNMEGs proposal to undertake a Feasibility Study (the
Study) at no cost to NORTHRAIL CORP.;

NOW, THEREFORE, the parties agree to sign this

Contract for the Implementation of the Project.
The above-cited portion of the Contract Agreement, however, does
not on its own reveal whether the construction of the Luzon railways was
meant to be a proprietary endeavor. In order to fully understand the
intention behind and the purpose of the entire undertaking, the Contract

WHEREAS, the
NORTHRAIL
CORP.
also
welcomes CNMEGs interest in undertaking the
Project with Suppliers Credit and intends to
employ CNMEG as the Contractor for the Project
subject to compliance with Philippine and Chinese
laws, rules and regulations for the selection of a
contractor;
WHEREAS, the NORTHRAIL CORP. considers
CNMEGs proposal advantageous to the Government of

the Republic of thePhilippines and has therefore agreed

to assist CNMEG in the conduct of the aforesaid Study;

1.
CNMEG
has
the
proven
competence and capability to undertake the Project as
evidenced by the ranking of 42 given by the ENR among
225 global construction companies.

xxx xxx xxx

2.
CNMEG already signed an MOU
with the North Luzon Railways Corporation last
September 14, 2000 during the visit of Chairman Li
Peng. Such being the case, they have already
established an initial working relationship with your
North Luzon Railways Corporation. This
would
categorize CNMEG as the state corporation within
the Peoples Republic of China which initiated our
Governments involvement in the Project.

II. APPROVAL PROCESS

2.1

As soon as possible after completion and

presentation of the Study in accordance with
Paragraphs 1.3 and 1.4 above and in
compliance with necessary governmental laws,
rules, regulations and procedures required from
both parties, the parties shall commence the
preparation and negotiation of the terms and
conditions of the Contract (the Contract) to be
entered
into
between
them
on
the
implementation of the Project. The parties
shall
use
their best
endeavors
to
formulate and finalize a Contract with a
view to signing the Contract within one
hundred twenty (120) days from CNMEGs
presentation of the Study.[33](Emphasis
supplied)

3.
Among
the
various
state
corporations of the Peoples Republic of China, only
CNMEG has the advantage of being fully familiar with
the current requirements of the Northrail Project having
already accomplished a Feasibility Study which was
used as inputs by the North Luzon Railways Corporation
in the approvals (sic) process required by the Republic
of the Philippines.[34](Emphasis supplied.)
Thus, the desire of CNMEG to secure the
Northrail Project was in the ordinary or regular course of
its business as a global construction company. The
implementation of the Northrail Project was intended to
generate profit for CNMEG, with the Contract Agreement
placing a contract price of USD 421,050,000 for the
venture.[35] The use of the term state corporation to
refer to CNMEG was only descriptive of its nature as a
government-owned and/or -controlled corporation, and
its assignment as the Primary Contractor did not imply
that it was acting on behalf of China in the performance
of the latters sovereign functions. To imply otherwise
would result in an absurd situation, in which all Chinese
corporations owned by the state would be automatically
considered as performing governmental activities, even
if they are clearly engaged in commercial or proprietary
pursuits.

Clearly, it was CNMEG that initiated the undertaking, and not the
Chinese government. The Feasibility Study was conducted not because of
any diplomatic gratuity from or exercise of sovereign functions by the
Chinese government, but was plainly a business strategy employed by
CNMEG with a view to securing this commercial enterprise.
2.
Letter dated 1
October 2003

That CNMEG, and not the Chinese government, initiated the

Northrail Project was confirmed by Amb. Wang in his letter dated 1 October
2003, thus:

3.

The

Agreement

Loan

CNMEG claims immunity on the ground that the Aug 30 MOU on the
financing of the Northrail Project was signed by the Philippine and Chinese
governments, and its assignment as the Primary Contractor meant that it

subject matter of the action in accordance with its

jurisdictional rules, (b) the Republic had notice of the
proceedings, (c) the judgment of the court was not obtained
through collusion or fraud, and (d) such judgment was not
based on a clear mistake of fact or law.[36]

was bound to perform a governmental function on behalf of China. However,

the Loan Agreement, which originated from the same Aug 30 MOU, belies
this reasoning, viz:
Article 11. xxx (j) Commercial Activity The execution
and delivery of this Agreement by the Borrower constitute,
and the Borrowers performance of and compliance with its
obligations under this Agreement will constitute, private
and commercial acts done and performed for
commercial purposes under the laws of the Republic
of the Philippines and neither the Borrower nor any
of its assets is entitled to any immunity or privilege
(sovereign or otherwise) from suit, execution or any
other legal process with respect to its obligations
under this Agreement, as the case may be, in any
jurisdiction. Notwithstanding the foregoing, the Borrower
does not waive any immunity with respect of its assets
which are (i) used by a diplomatic or consular mission of the
Borrower and (ii) assets of a military character and under
control of a military authority or defense agency and (iii)
located in the Philippines and dedicated to public or
governmental use (as distinguished from patrimonial assets
or assets dedicated to commercial use). (Emphasis
supplied.)
(k) Proceedings to Enforce Agreement In any
proceeding in the Republic of the Philippines to enforce this
Agreement, the choice of the laws of the Peoples Republic
of China as the governing law hereof will be recognized and
such law will be applied. The waiver of immunity by the
Borrower, the irrevocable submissions of the Borrower to the
non-exclusive jurisdiction of the courts of the Peoples
Republic of China and the appointment of the Borrowers
Chinese Process Agent is legal, valid, binding and
enforceable and any judgment obtained in the Peoples
Republic of China will be if introduced, evidence for
enforcement in any proceedings against the Borrower and
its assets in the Republic of the Philippines provided that (a)
the court rendering judgment had jurisdiction over the

Further, the Loan Agreement likewise contains this express waiver of

immunity:
15.5 Waiver of Immunity The Borrower irrevocably
and unconditionally waives, any immunity to which it or its
property may at any time be or become entitled, whether
characterized as sovereign immunity or otherwise, from any
suit, judgment, service of process upon it or any agent,
execution on judgment, set-off, attachment prior to
judgment, attachment in aid of execution to which it or its
assets may be entitled in any legal action or proceedings
with respect to this Agreement or any of the transactions
contemplated hereby or hereunder. Notwithstanding the
foregoing, the Borrower does not waive any immunity in
respect of its assets which are (i) used by a diplomatic or
consular mission of the Borrower, (ii) assets of a military
character and under control of a military authority or
defense agency and (iii) located in the Philippines and
dedicated to a public or governmental use (as distinguished
from patrimonial assets or assets dedicated to commercial
use).[37]
Thus, despite petitioners claim that the EXIM Bank extended
financial assistance to Northrail because the bank was mandated by the
Chinese government, and not because of any motivation to do business in
the Philippines,[38] it is clear from the foregoing provisions that the Northrail
Project was a purely commercial transaction.
Admittedly, the Loan Agreement was entered into between EXIM
Bank and the Philippine government, while the Contract Agreement was
between Northrail and CNMEG. Although the Contract Agreement is silent on
the classification of the legal nature of the transaction, the foregoing
provisions of the Loan Agreement, which is an inextricable part of the entire

undertaking, nonetheless reveal the intention of the parties to the Northrail

Project to classify the whole venture as commercial or proprietary in
character.
Thus, piecing together the content and tenor of the Contract
Agreement, the Memorandum of Understanding dated 14 September 2002,
Amb. Wangs letter dated 1 October 2003, and the Loan Agreement would
reveal the desire of CNMEG to construct the Luzon Railways in pursuit of a
purely commercial activity performed in the ordinary course of its
business.
B.
CNMEG
failed
to
adduce
evidence that it is
immune
from
suit
under Chinese law.
Even

assuming arguendo that

CNMEG

performs

governmental

functions, such claim does not automatically vest it with immunity. This view
finds support in Malong v. Philippine National Railways, in which this Court
held that (i)mmunity from suit is determined by the character of the objects
for which the entity was organized.[39]
In this regard, this Courts ruling in Deutsche Gesellschaft Fr
Technische Zusammenarbeit (GTZ) v. CA [40] must be examined. In Deutsche
Gesellschaft, Germany and

the Philippines entered

into

Technical

Cooperation Agreement, pursuant to which both signed an arrangement

promoting the Social Health InsuranceNetworking and Empowerment
(SHINE) project. The two governments named their respective implementing
organizations: the Department of Health (DOH) and the Philippine Health
Insurance

Corporation

(PHIC)

for

the Philippines,

and

GTZ

for

the

implementation of Germanys contributions. In ruling that GTZ was not

immune from suit, this Court held:

The arguments raised by GTZ and the [Office of the

Solicitor General (OSG)] are rooted in several indisputable
facts. The SHINE project was implemented pursuant
to the bilateral agreements between the Philippine
and German governments. GTZ was tasked, under
the 1991 agreement, with the implementation of the
contributions of the German government. The
activities performed by GTZ pertaining to the SHINE
project are governmental in nature, related as they
are to the promotion of health insurance in the Philippines.
The fact that GTZ entered into employment contracts with
the private respondents did not disqualify it from invoking
immunity from suit, as held in cases such as Holy See v.
Rosario, Jr., which set forth what remains valid doctrine:
Certainly, the mere entering into a
contract by a foreign state with a private
party cannot be the ultimate test. Such an
act can only be the start of the inquiry. The
logical question is whether the foreign
state is engaged in the activity in the
regular course of business. If the foreign
state is not engaged regularly in a business
or trade, the particular act or transaction
must then be tested by its nature. If the act
is in pursuit of a sovereign activity, or an
incident thereof, then it is an act jure
imperii, especially when it is not
undertaken for gain or profit.
Beyond dispute is the tenability of the comment
points (sic) raised by GTZ and the OSG that GTZ was not
performing proprietary functions notwithstanding its
entry into the particular employment contracts. Yet there is
an equally fundamental premise which GTZ and the OSG fail
to address, namely: Is GTZ, by conception, able to enjoy
the Federal Republics immunity from suit?
The principle of state immunity from suit, whether
a local state or a foreign state, is reflected in Section 9,
Article XVI of the Constitution, which states that the State
may not be sued without its consent. Who or what consists
of the State? For one, the doctrine is available to foreign

States insofar as they are sought to be sued in the courts

of the local State, necessary as it is to avoid unduly vexing
the peace of nations.
If the instant suit had been brought directly against
the Federal Republic of Germany, there would be no doubt
that it is a suit brought against a State, and the only
necessary inquiry is whether said State had consented to
be sued. However, the present suit was brought against
GTZ. It is necessary for us to understand what precisely are
the parameters of the legal personality of GTZ.
Counsel for GTZ characterizes GTZ as the
implementing agency of the Government of the
Federal Republic of Germany, a depiction similarly
adopted by the OSG. Assuming that the characterization is
correct, it does not automatically invest GTZ with the
ability to invoke State immunity from suit. The
distinction lies in whether the agency is incorporated or
unincorporated.

xxx xxx xxx

State immunity from suit may be waived by

general or special law. The special law can take the form of
the original charter of the incorporated government
agency. Jurisprudence is replete with examples of
incorporated government agencies which were ruled not
entitled to invoke immunity from suit, owing to provisions
in their charters manifesting their consent to be sued.
xxx xxx xxx
It is useful to note that on the part of the Philippine
government, it had designated two entities, the Department
of Health and the Philippine Health Insurance Corporation
(PHIC), as the implementing agencies in behalf of the
Philippines. The PHIC was established under Republic Act No.
7875, Section 16 (g) of which grants the corporation the
power to sue and be sued in court. Applying the previously
cited jurisprudence, PHIC would not enjoy immunity from suit
even in the performance of its functions connected with

SHINE, however, (sic) governmental in nature as (sic) they

may be.
Is GTZ an incorporated agency of the
German government? There is some mystery
surrounding that question. Neither GTZ nor the
OSG go beyond the claim that petitioner is the
implementing agency of the Government of the
Federal Republic of Germany. On the other hand,
private respondents asserted before the Labor Arbiter that
GTZ was a private corporation engaged in the
implementation of development projects. The Labor
Arbiter accepted that claim in his Order denying the
Motion to Dismiss, though he was silent on that point in
his Decision. Nevertheless, private respondents argue in
their Comment that the finding that GTZ was a private
corporation was never controverted, and is therefore
deemed admitted. In its Reply, GTZ controverts that
finding, saying that it is a matter of public knowledge that
the status of petitioner GTZ is that of the implementing
agency, and not that of a private corporation.
In truth, private respondents were unable to
adduce any evidence to substantiate their claim that GTZ
was a private corporation, and the Labor Arbiter acted
rashly in accepting such claim without explanation.
But neither has GTZ supplied any evidence defining
its legal nature beyond that of the bare descriptive
implementing agency. There is no doubt that the
1991
Agreement
designated
GTZ
as
the
implementing agency in behalf of the German
government. Yet the catch is that such term has no
precise definition that is responsive to our concerns.
Inherently, an agent acts in behalf of a principal, and
the GTZ can be said to act in behalf of the German
state. But that is as far as implementing agency
could take us. The term by itself does not supply
whether GTZ is incorporated or unincorporated,
whether it is owned by the German state or by
private interests, whether it has juridical personality
independent of the German government or none at
all.
xxx xxx xxx

Again, we are uncertain of the corresponding

legal implications under German law surrounding a
private company owned by the Federal Republic of
Germany. Yet taking the description on face value,
the apparent equivalent under Philippine law is that
of a corporation organized under the Corporation
Code but owned by the Philippine government, or a
government-owned
or
controlled
corporation
without original charter. And it bears notice that
Section 36 of the Corporate Code states that [e]very
corporation incorporated under this Code has the
power and capacity x x x to sue and be sued in its
corporate name.
It is entirely possible that under German law, an
entity such as GTZ or particularly GTZ itself has not been
vested or has been specifically deprived the power and
capacity to sue and/or be sued. Yet in the proceedings
below and before this Court, GTZ has failed to establish
that under German law, it has not consented to be
sued despite it being owned by the Federal Republic
of Germany. We adhere to the rule that in the
absence of evidence to the contrary, foreign laws on
a particular subject are presumed to be the same as
those of the Philippines, and following the most
intelligent assumption we can gather, GTZ is akin to
a governmental owned or controlled corporation
without original charter which, by virtue of the
Corporation Code, has expressly consented to be
sued. At the very least, like the Labor Arbiter and the Court
of Appeals, this Court has no basis in fact to conclude or
presume that GTZ enjoys immunity from suit. [41] (Emphasis
supplied.)
Applying the foregoing ruling to the case at bar, it is readily
apparent that CNMEG cannot claim immunity from suit, even if it contends
that it performs governmental functions. Its designation as the Primary
Contractor does not automatically grant it immunity, just as the term
implementing agency has no precise definition for purposes of ascertaining
whether GTZ was immune from suit. Although CNMEG claims to be a

government-owned corporation, it failed to adduce evidence that it has not

consented to be sued under Chinese law. Thus, following this Courts ruling
in Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG
is to be presumed to be a government-owned and -controlled corporation
without an original charter. As a result, it has the capacity to sue and be
sued under Section 36 of the Corporation Code.
C.
CNMEG
failed to present a
certification from the
Department of Foreign
Affairs.
In Holy See,[42] this Court reiterated the oft-cited doctrine that the
determination by the Executive that an entity is entitled to sovereign or
diplomatic immunity is a political question conclusive upon the courts, to wit:
In Public International Law, when a state or
international agency wishes to plead sovereign or diplomatic
immunity in a foreign court, it requests the Foreign
Office of the state where it is sued to convey to the
court that said defendant is entitled to immunity.
xxx xxx xxx
In the Philippines, the practice is for the foreign
government or the international organization to first
secure an executive endorsement of its claim of
sovereign or diplomatic immunity. But how the
Philippine Foreign Office conveys its endorsement to the
courts
varies.
In International
Catholic
Migration
Commission v. Calleja, 190 SCRA 130 (1990), the Secretary
of Foreign Affairs just sent a letter directly to the Secretary
of Labor and Employment, informing the latter that the
respondent-employer could not be sued because it enjoyed
diplomatic immunity. In World Health Organization v.
Aquino, 48 SCRA 242 (1972), the Secretary of Foreign
Affairs sent the trial court a telegram to that effect. In Baer
v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the

Secretary of Foreign Affairs to request the Solicitor General

to make, in behalf of the Commander of the United States
Naval Base at Olongapo City, Zambales, a suggestion to
respondent Judge. The Solicitor General embodied the
suggestion in a Manifestation and Memorandum as amicus
curiae.

deemed to have likewise accepted the responsibility

of seeing to it that their agreements are duly
regarded. In our country, this task falls principally of
(sic) the DFA as being the highest executive
department with the competence and authority to
so act in this aspect of the international arena.
[45]
(Emphasis supplied.)

In the case at bench, the Department of Foreign

Affairs, through the Office of Legal Affairs moved with this
Court to be allowed to intervene on the side of petitioner.
The Court allowed the said Department to file its
memorandum in support of petitioners claim of sovereign
immunity.

Further, the fact that this authority is exclusive to the DFA was also
emphasized in this Courts ruling in Deutsche Gesellschaft:

In some cases, the defense of sovereign immunity

was submitted directly to the local courts by the
respondents through their private counsels (Raquiza v.
Bradford, 75 Phil. 50 [1945]; Miquiabas v. PhilippineRyukyus Command, 80 Phil. 262 [1948]; United States of
America v. Guinto, 182 SCRA 644 [1990] and companion
cases). In cases where the foreign states bypass the
Foreign Office, the courts can inquire into the facts and
make their own determination as to the nature of the acts
and transactions involved.[43] (Emphasis supplied.)
The question now is whether any agency of the Executive Branch can
make a determination of immunity from suit, which may be considered as
conclusive upon the courts. This Court, in Department of Foreign Affairs (DFA) v.
National

Labor

Relations

Commission

(NLRC),[44] emphasized

the

competence and authority to provide such necessary determination, to wit:

The DFAs function includes, among its other
mandates, the determination of persons and
institutions covered by diplomatic immunities, a
determination which, when challenge, (sic) entitles
it to seek relief from the court so as not to seriously
impair the conduct of the country's foreign
relations. The DFA must be allowed to plead its case
whenever necessary or advisable to enable it to help keep
the credibility of the Philippine government before the
international
community. When
international
agreements are concluded, the parties thereto are

DFAs

It is to be recalled that the Labor Arbiter, in both of

his rulings, noted that it was imperative for petitioners to
secure from the Department of Foreign Affairs a
certification of respondents diplomatic status and
entitlement to diplomatic privileges including immunity
from suits. The requirement might not necessarily be
imperative.
However, had
GTZ
obtained
such
certification from the DFA, it would have provided
factual basis for its claim of immunity that would, at
the very least, establish a disputable evidentiary
presumption that the foreign party is indeed
immune which the opposing party will have to
overcome with its own factual evidence. We do not
see why GTZ could not have secured such
certification or endorsement from the DFA for
purposes of this case. Certainly, it would have been
highly prudential for GTZ to obtain the same after the Labor
Arbiter had denied the motion to dismiss. Still, even at this
juncture, we do not see any evidence that the DFA,
the office of the executive branch in charge of our
diplomatic relations, has indeed endorsed GTZs
claim of immunity. It may be possible that GTZ tried, but
failed to secure such certification, due to the same
concerns that we have discussed herein.
Would the fact that the Solicitor General has
endorsed GTZs claim of States immunity from suit
before this Court sufficiently substitute for the DFA
certification? Note that the rule in public
international law quoted in Holy See referred to
endorsement by the Foreign Office of the State
where the suit is filed, such foreign office in the

Philippines being the Department of Foreign

Affairs. Nowhere in the Comment of the OSG is it
manifested that the DFA has endorsed GTZs claim,
or that the OSG had solicited the DFAs views on the
issue. The arguments raised by the OSG are virtually the
same as the arguments raised by GTZ without any
indication of any special and distinct perspective
maintained by the Philippine government on the
issue. The Comment filed by the OSG does not
inspire the same degree of confidence as a
certification from the DFA would have elicited.
[46]
(Emphasis supplied.)

In the United States, the Foreign Sovereign Immunities Act of 1976

provides for a waiver by implication of state immunity. In the said law, the
agreement to submit disputes to arbitration in a foreign country is construed
as an implicit waiver of immunity from suit. Although there is no similar law
in the Philippines, there is reason to apply the legal reasoning behind the
waiver in this case.
The Conditions of Contract,[48] which is an integral part of the

In the case at bar, CNMEG offers the Certification executed by the

Contract Agreement,[49] states:

Economic and Commercial Office of the Embassy of the Peoples Republic of

33. SETTLEMENT OF DISPUTES AND ARBITRATION

China, stating that the Northrail Project is in pursuit of a sovereign activity.

33.1. Amicable Settlement

[47]

Surely, this is not the kind of certification that can establish CNMEGs

entitlement to immunity from suit, as Holy See unequivocally refers to the

determination of the Foreign Office of the state where it is sued.
Further, CNMEG also claims that its immunity from suit has the
executive endorsement of both the OSG and the Office of the Government
Corporate Counsel (OGCC), which must be respected by the courts.
However,

as

expressly

enunciated

in Deutsche

Gesellschaft,

this

determination by the OSG, or by the OGCC for that matter, does not inspire
the same degree of confidence as a DFA certification. Even with a DFA
certification, however, it must be remembered that this Court is not

Both parties shall attempt to amicably settle all

disputes or controversies arising from this Contract before
the commencement of arbitration.
33.2. Arbitration
All disputes or controversies arising from this
Contract which cannot be settled between the Employer and
the Contractor shall be submitted to arbitration in
accordance with the UNCITRAL Arbitration Rules at present
in force and as may be amended by the rest of this Clause.
The
appointing
authority
shall
be Hong
Kong International Arbitration Center.
The
place
of
arbitration shall be in Hong Kong at Hong Kong International
Arbitration Center (HKIAC).

precluded from making an inquiry into the intrinsic correctness of such

certification.

Under the above provisions, if any dispute arises between Northrail

and CNMEG, both parties are bound to submit the matter to the HKIAC for

D.
An
agreement to submit
any
dispute
to
arbitration
may
be
construed as an implicit
waiver of immunity from
suit.

arbitration. In case the HKIAC makes an arbitral award in favor of Northrail,

its enforcement in the Philippines would be subject to the Special Rules on
Alternative Dispute Resolution (Special Rules). Rule 13 thereof provides for
the Recognition and Enforcement of a Foreign Arbitral Award. Under Rules
13.2 and 13.3 of the Special Rules, the party to arbitration wishing to have

an arbitral award recognized and enforced in the Philippines must petition

the proper regional trial court (a) where the assets to be attached or levied

A.
CNMEG
is
neither a government nor a
government agency.

upon is located; (b) where the acts to be enjoined are being performed; (c) in
the principal place of business in the Philippines of any of the parties; (d) if
any of the parties is an individual, where any of those individuals resides; or
(e) in the National Capital Judicial Region.

The

Contract

Agreement

was

not

concluded

the Philippines and China, but between Northrail and CNMEG.

between
[51]

By the

terms of the Contract Agreement, Northrail is a government-owned or

-controlled corporation, while CNMEG is a corporation duly organized and

From all the foregoing, it is clear that CNMEG has agreed that it will

created under the laws of the Peoples Republic of China. [52] Thus, both

not be afforded immunity from suit. Thus, the courts have the competence

Northrail and CNMEG entered into the Contract Agreement as entities with

and jurisdiction to ascertain the validity of the Contract Agreement.

personalities distinct and separate from the Philippine and Chinese

Second issue: Whether

the Contract Agreement
is
an
executive
agreement

governments, respectively.

Article 2(1) of the Vienna Convention on the Law of Treaties (Vienna

Convention) defines a treaty as follows:
[A]n international agreement concluded between
States in written form and governed by international law,
whether embodied in a single instrument or in two or more
related instruments and whatever its particular designation.
In Bayan Muna v. Romulo, this Court held that an
executive agreement is similar to a treaty, except that the
former (a) does not require legislative concurrence; (b) is
usually less formal; and (c) deals with a narrower range of
subject matters.[50]
Despite these differences, to be considered an executive agreement,
the following three requisites provided under the Vienna Convention must
nevertheless concur: (a) the agreement must be between states; (b) it must
be written; and (c) it must governed by international law. The first and the
third requisites do not obtain in the case at bar.

Neither can it be said that CNMEG acted as agent of the Chinese

government. As previously discussed, the fact that Amb. Wang, in his letter
dated 1 October 2003,[53] described CNMEG as a state corporation and
declared its designation as the Primary Contractor in the Northrail Project did
not mean it was to perform sovereign functions on behalf of China. That
label was only descriptive of its nature as a state-owned corporation, and
did not preclude it from engaging in purely commercial or proprietary
ventures.
B.
The Contract
Agreement
is
to
be
governed by Philippine
law.
Article 2 of the Conditions of Contract, [54] which under Article 1.1 of
the Contract Agreement is an integral part of the latter, states:
APPLICABLE LAW AND GOVERNING LANGUAGE
The contract shall in all respects be read and
construed in accordance with the laws of the Philippines.

The contract shall be written in English language. All

correspondence and other documents pertaining to the
Contract which are exchanged by the parties shall be written
in English language.

Since the Contract Agreement explicitly provides that Philippine law

shall be applicable, the parties have effectively conceded that their rights
and obligations thereunder are not governed by international law.
It is therefore clear from the foregoing reasons that the Contract
Agreement does not partake of the nature of an executive agreement. It is
merely an ordinary commercial contract that can be questioned before the
local courts.
WHEREFORE, the instant Petition is DENIED. Petitioner China
National Machinery & Equipment Corp. (Group) is not entitled to immunity
from

suit,

and

the

Contract

Agreement

is

not

an

executive

agreement. CNMEGs prayer for the issuance of a TRO and/or Writ of

Preliminary Injunction is DENIED for being moot and academic. This case
is REMANDED to the Regional Trial Court of Makati, Branch 145, for further
proceedings as regards the validity of the contracts subject of Civil Case No.
06-203.
No pronouncement on costs of suit.
SO ORDERED.

In this petition for review [1] under Rule 45 of the Rules of Court, the
National Home Mortgage Finance Corporation assails the August 20, 2004
GR NO 166508, October 2 2009
NATIONAL HOME MORTGAGE FINANCE CORPORATION,
Petitioner
V
MARIO ABAYARI, MAY ALMINE, MA. VICTORIA ALPAJARO, FLORANTE
AMORES,
ANGELINA
ANCHETA,
ANGELINE
ODIEM-ARANETA,
CECILIA
PACIBLE,
MIRIAM
BAJADO,
EDUARDO
BALAURO,
EVANGELINA BALIAO, LUISA BANUA, RIZALINA BENLAYO, MARJORIE
BINAG, CRESENCIA BISNAR, CARMELITA BREBONERIA, JOSELYN
BUNYI, EMILIO CABAMONGAN, JR., PAZ DIVINA CABANERO, RAUL
CABANILLA, LEONILA WYNDA CADA, CELSTINA CASAO, ELIZABETH
CASAS, ARNULFO CATALAN, FRANCIS DE LA CHICA, JAIME CORTES,
JAIME DE LA CRUZ, JHONNY CUSTODIO, MA. BELINDA DAPULA,
REMEDIOS DEBUQUE, REBECCA DECARA, JOCELYN DIEGO, JAIME
DUQUE,
LUCIA
ENRIQUEZ,
MA.
LUCIA
ESPEROS,
HELEN
EVANGELISTA, CELSO FERNANDEZ, EDILBERTO SAN GABRIEL,
REYNALDO SAN GABRIEL, EDMUNDO GARAIS, JENNILYN GOZADO,
EVELYN GUEVARRA, MA. MAGDALENA HIDONA, VICTORINO
INDEFONSO, JR., GRACE CECILLE JAVIER, MARIETA JOSE, MA.
CECILIA KAPAW-AN, EVANGELINE LABAY, SENORA LUCUNSAY,
MILAGROSO ALLAN LAMBAN, VIOLETA DE LEON, CHARITO
LONTAYAO, REMEDIOS LOYOLA, NORA MALALUAN, ALBERTO
MALIFICIADO, DENNIS MANZANO, MA. CONCEPCION MARQUEZ,
REYNALDO MASILANG, MAGDALENA MENDOZA, MELCHOR NANUD,
MILAGROS NEPOMUCENO, ROSEMARIE NEPOMUCENO, APOLO
NISPEROS, ANNALIZA NOBRERA, EVANGELINE NUESCA, YUMINA
PABLO, GLORIA PANGANIBAN, ROGELIO PAQUIZ, ROLANDO
PAREDES, NORA PEDROSO, MARIA HILNA DELA PEA VICTORIA,
PEARADA, MELVIN PERALTA, DOROTHY PEREZ, FREDERICK
MICHAEL PORTACION, ROMMEL RABACA, RODERICK REALUBIT,
GWENDOLYN REMORIN, ANTONIO DE LOS REYES, NERISSA REYES,
NENITA ROBRIGADO, ALLAN ROMERO, MA. ROSARIO ROMULO, LUIS
DEL ROSARIO, CRISTINA ROSAS, DEXTER SALAZAR, MAGDALENA
SALOMON, OLIVIA SALOMON, ELENITA SANCHEZ, ANGELINA
SANTELICES, ANABELLE SANTOS, SHARLENE SANTOS, JAIME SINGH
DELMASINGUN, EVELYN SO, MILAGROS SOLMIRANO, CHRISTINE
TALUSIK, CYRIL ROMUADO TEJA EFREN TESORERO, PENNYLANE
TIONGSON, CYPRIANO TOMINES, RONILO UMALI, MA. LOURSES
VALDUAZA, MA. ANTONIA VALENZUELA, EDWIN VANGUARDIA,
CARLO VEGA, ANNAMOR VELASCO, ESTEFANIA VILLANUEVA,
CANDELARIA YODICO,
Respondents.
Peralta, J.

Decision[2] of the Court of Appeals in CA-G.R. SP No. 82637, which

dismissed its petition for certiorari from the October 14, 2003 [3] and
December 15, 2003[4] Orders issued by the Regional Trial Court (RTC) of
Makati City, Branch 138.[5]The said Orders, in turn, respectively granted the
issuance of a writ of execution and denied petitioners motion for
reconsideration in Civil Case No. 99-1209 a case for mandamus.
The antecedents follow.
Petitioner, the National Home Mortgage Finance Corporation
(NHMFC), is a government-owned and controlled corporation created under
the authority of Presidential Decree No. 1267 for the primary purpose
of developing and providing a secondary market for home mortgages
granted by public and/or private home-financing institutions. [6] In its
employ were respondents,[7]mostly rank-and-file employees, who all
profess as having been hired after June 30, 1989. [8]
On July 1, 1989, Republic Act No. 6758, otherwise known as The
Compensation and Position Classification Act of 1989, was enacted and
was subsequently approved on August 21, 1989. Section 12 thereof
directed that all allowances namely representation and transportation
allowance, clothing and laundry allowance, subsistence allowance, hazard
pay and other allowances as may be determined by the budget
department enjoyed by covered employees should be deemed included in
the standardized salary rates prescribed therein, and that the other
additional compensation being received by incumbents only as of July 1,
1989 not integrated into the standardized salary rates should continue to
be authorized. To implement the law, the Department of Budget and
Management (DBM) issued Corporate Compensation Circular No. 10.

[9]

authorized for employees appointed after June 30,

1989. The use of the word only before the words as of July
1, 1989 qualifies the additional compensation which can be
continued. The foregoing applies to all employees whether
permanent or casual.

Section 5.5[10] thereof excluded certain allowances and benefits from

integration into the standardized basic salary but continued their grant to
those who were incumbents as of June 30, 1989 and who were actually
receiving the benefits as of said date. These are the allowances involved in

DBM Circular No. 10, the Implementing Rules and

Regulations particularly section 5.5 thereofuse the word
only for incumbents as of June 30, 1989 and by implication
the same shall not apply to employees appointed after June
30, 1989. This is in effect another qualification limiting the
grant of benefits to those who are incumbents as of June
30, 1989, a condition not imposed by Section 12 of
Republic Act No. 6758 for which reason it has to be strike
(sic) down.[14]

this case.
Respondents filed a petition for mandamus with the RTC of Makati
City, Branch 138[11] to compel petitioner to pay them meal, rice, medical,
dental, optical and childrens allowances, as well as longevity pay, which
allegedly were already being enjoyed by other NHMFC employees as early
as July 1, 1989. In its April 27, 2001 Decision, the trial court ruled favorably
and ordered petitioner to pay respondents the allowances prayed for,

Petitioner timely filed an appeal with the Court of Appeals. [15] In its

retroactive to the respective dates of appointment. [12] The dispositive

November 21, 2001 Decision, the appellate court affirmed the trial courts

portion of the Decision reads:

ruling.[16] No appeal was taken from the decision and upon its finality,

WHEREFORE, judgment is hereby rendered in favor

of the petitioners and respondent is ordered to pay
petitioners their meal allowance, rice allowance, medical
allowance, longevity pay and childrens allowance
retroactive to the dates of their respective appointments
up to the present or for the time that they were employed
by the respondent.
SO ORDERED.

[13]

In arriving at the conclusion that respondents were entitled to the

prayed-for benefits, the trial court explained, thus,
The use of the word only before the words July 1,
1989 in section 12 of Republic Act No. 6758 appears to be
the source of the dispute.
Section 12 is clear that other additional
compensation being received by incumbents only as of July
1, 1989 that are not integrated into the standardized salary
rates shall continue to be authorized. The law is
prospective in effect and it does not say that such
additional compensation shall not continue to be

[17]

respondents moved for execution.[18]

However, the motion for execution was withdrawn when on May

12, 2002, petitioner and respondents executed a Compromise Agreement

in which petitioner bound itself to comply with the decision rendered in the
case, except that the payment of the allowances adjudicated in favor of
respondents would be made in four installments instead. It was, likewise
stipulated therein that the parties waive all claims against each other. The
trial court did not take any positive action on the compromise except to
note the same since the parties did not intend to novate the April 27, 2001
Decision.[19] On that basis, petitioner had started paying respondents the
arrears in benefits.
Conflict arose when the DBM sent a letter [20] dated July 15, 2003 to
NHMFC President Angelico Salud disallowing the payment of certain
allowances, including those awarded by the trial court to respondents. A
reading of the letter reveals that the disallowance was made in accordance

with the 2002 NHMFC Corporate Operating Budget previously issued by the

settled rule that government funds may not be garnished in the absence of

DBM.

an appropriation made by law.[30]

To abide by the DBMs directive, petitioner then issued a

The Court of Appeals, however, found no grave abuse of discretion

memorandum stating that effective August 2003, the grant of benefits to

on the part of the trial court; hence, in its August 20, 2004 Decision, it

its

dismissed the petition for lack of merit.[31]

covered employees, including those awarded to respondents, would be

curtailed pursuant to the DBM letter. [21] This eventuality compelled

respondents to file for the second time a motion for a writ of execution of
the trial courts April 27, 2001 decision. [22]

motion;

hence,

it

difficult not to consider the issuance of the DBM in this case as a

supervening event that would make the execution of the trial courts

In its October 14, 2003 Order, [23] the trial court found merit in
respondents

In its present recourse, petitioner, on the one hand, insists that it is

directed

the

execution

of

decision

inequitable

and/or

impossible,

since

the

determination

of

the

entitlement to benefits and allowances among government employees is

judgment. Petitioner moved for reconsideration[24] but it was denied.[25] On

within the agencys exclusive authority. It argues that, hence, both the trial

February 16, 2004, the trial court issued a Writ of Execution/Garnishment

court and the Court of Appeals were in error to order the execution of the

with a directive to the sheriff to tender to respondents the amount of their

decision as the same totally disregards the rule that issuances of

collective claim equivalent toP4,806,530.00 to be satisfied out of

administrative agencies are valid and enforceable. [32] Again, it asserts that

petitioners goods and chattels and if the same be not sufficient, out of its

the garnishment of its funds was not in order as there was no existing

existing real property.[26] Respondents then sought the garnishment of its

appropriation therefor.[33]

funds under the custody of the Land Bank of the Philippines. [27]
Bent

petition

as the core issue of whether they were entitled to the schedule of benefits

for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 82637.

under Section 12 of R.A. No. 6758 had already been settled by both the

In it, petitioner ascribed grave abuse of discretion to the trial court in

trial court in Civil Case No. 99-1209 and the Court of Appeals in CA-G.R. SP

ordering the execution of the judgment. It pointed out that the trial court

No. 66303, the DBM letter should not be allowed to interfere with the

disregarded the fact that the DBMs issuance amounted to a supervening

decision and render the same ineffective. Since the said decision had

event, or an occurrence that changed the situation of the parties that

already attained finality, they posit that execution appeared to be the only

would make the continued payment of allowances to respondents

just and equitable measure under the premises [34] and that garnishment

impossible and illegal, and disregarded the DBMs exclusive authority to

lies against petitioners funds inasmuch as it has a personality separate and

allow or disallow the payment of the benefits in question. [29] It likewise

distinct from the government.[35]

[28]

on

preventing

execution,

petitioner

filed

Respondents, on the other hand, argue in the main that inasmuch

a

faulted the trial court in ordering the garnishment of its funds despite the

There is partial merit in the petition.

To begin with, a writ of mandamus is a command issuing from a

While the April 17, 2001 Decision of the trial court ordered petitioner to

court of law of competent jurisdiction, in the name of the state or

pay the benefits claimed by respondents, it by no means ordered the

sovereign, directed to an inferior court, tribunal, or board, or to some

payment of a specific sum of money and instead merely directed petitioner

corporation or person, requiring the performance of a particular duty

to extend to respondents the benefits under R.A. No. 6758 and its

therein specified, which duty results from the official station of the party to

implementing rules. Being a special judgment, the decision may not be

whom the writ is directed, or from operation of law. [36] It is employed to

executed in the same way as a judgment for money handed down in an

compel the performance, when refused, of a ministerial duty [37] which, as

ordinary civil case governed by Section 9, Rule 39 of the Rules Court which

opposed to a discretionary one, is that which an officer or tribunal performs

sanctions garnishment of debts and credits to satisfy a monetary award.

in a given state of facts, in a prescribed manner, in obedience to the

Garnishment is proper only when the judgment to be enforced is one for

mandate of legal authority, without regard to or the exercise of his or its

payment of a sum of money. It cannot be employed to implement a special

own judgment upon the propriety or impropriety of the act done. [38]

judgment such as that rendered in a special civil action for mandamus.[40]

favorable

judgment

rendered

in

special

action

On this score, not only did the trial court exceed the scope of its judgment

for mandamus is in the nature of a special judgment. As such, it requires

when it awarded the benefits claimed by respondents. It also committed a

the performance of any other act than the payment of money or the sale or

blatant error when it issued the February 16, 2004 Order directing the

delivery of real or personal property the execution of which is governed by

garnishment of petitioners funds with the Land Bank of the Philippines

Section 11, Rule 39 of the Rules of Court[39] which states:

equivalent to P4,806,530.00, even though the said amount was not

SECTION 11. Execution of Special

Judgment.When the judgment requires the
performance of any act other than those
mentioned in the two preceding sections, a
certified copy of the judgment shall be
attached to the writ of execution and shall
be served by the officer upon the party
against whom the same is rendered, or
upon any other person required thereby, or
by law, to obey the same, and such party
or person may be punished for contempt if
he disobeys such judgment.

civil

specified in the decision it sought to implement.

Be that as it may, assuming for the sake of argument that execution by
garnishment could proceed in this case against the funds of petitioner, it
must bear stress that the latter is a government-owned or controlled
corporation with a charter of its own. Its juridical personality is separate
and distinct from the government and it can sue and be sued in its name.
[41]

As such, while indeed it cannot evade the effects of the execution of an

adverse judgment and may not ordinarily place its funds beyond an order
of garnishment issued in ordinary cases, [42] it is imperative in order for
execution to ensue that a claim for the payment of the judgment award be
first filed with the Commission on Audit (COA). [43]

Under Commonwealth Act No. 327, [44] as amended by P.D. No.

1445,[45] the

COA, as

one

of

the

three

independent

constitutional

commissions, is specifically vested with the power, authority and duty to

or appropriate to correct the deficiencies. It shall keep the

general accounts of the Government, and for such period
as may be provided by law, preserve the vouchers and
other supporting papers pertaining thereto.
xxxx

examine, audit and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and property owned or held
in trust by the government, or any of its subdivisions, agencies or
instrumentalities,

including

government-owned

and

controlled

Specifically, such jurisdiction shall extend

over but not limited to the following: x x x Money
claims due from or owing to any government
agency x x x.[49]

corporations.[46] To ensure the effective discharge of its functions, it is

vested with ample powers, subject to constitutional limitations, to define
the scope of its audit and examination and establish the techniques and
methods required therefor, to promulgate accounting and auditing rules
and regulations, including those for the prevention and disallowance of
irregular,

unnecessary,

excessive,

extravagant

or

unconscionable

expenditures or uses of government funds and properties.

[48]

[47]

Section 1,

Rule II of the COA Rules of Procedure materially provides:

Section 1. General Jurisdiction.The Commission on
Audit shall have the power, authority and duty to examine,
audit and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to the
Government, or any of its subdivisions, agencies or
instrumentalities, including government owned and
controlled corporations with original charters, and on a
post-audit basis: (a) constitutional bodies, commissions
and offices that have been granted fiscal autonomy under
the Constitution; (b) autonomous state colleges and
universities; (c) other government-owned or controlled
corporations and their subsidiaries; and (d) such nongovernmental entities receiving subsidy or equity directly
or indirectly, from or through the government, which are
required by law or the granting institution to submit to
such audit as a condition of subsidy or equity. However,
where the internal control system of the audited agencies
is inadequate, the Commission may adopt such measures,
including temporary or special pre-audit, as are necessary

Clearly, the matter of allowing or disallowing a money claim

against petitioner is within the primary power of the COA to decide. This no
doubt includes money claims arising from the implementation of R.A. No.
6758.[50] Respondents claim against petitioner, although it has already
been validated by the trial courts final decision, likewise belongs to that
class of claims; hence, it must first be filed with the COA before execution
could proceed. And from the decision therein, the aggrieved party is
afforded a remedy by elevating the matter to this Court via a petition
for certiorari[51] in accordance with Section 1 Rule XI, of the COA Rules of
Procedure. It states:
Section 1. Petition for Certiorari. - Any decision,
order or resolution of the Commission may be brought to
the Supreme Court oncertiorari by the aggrieved party
within thirty (30) days from receipt of a copy thereof in the
manner provided by law, the Rules of Court and these
Rules.
When the decision, order or resolution adversely
affects the interest of any government agency, the appeal
may be taken by the proper head of the agency.
At

this

juncture,

it

is

unmistakable

that

the

recourse

of

respondents in CA-G.R. SP No. 82637 as well as in the petition before us is

at best premature. Thus, the Court cannot possibly rule on the merits of
the petition lest we would only be preempting the action of the COA on the
matter. Suffice it to say that the propriety or regularity of respondents
claim under the judgment of the trial court may properly be addressed by
the COA in an appropriate action. And even if we endeavor to take great
lengths in deciding the merits of the case and determine the propriety of
the DBMs issuance, its sufficiency to prevent the execution of the final
judgment rendered in this case, and the entitlement or non-entitlement of
each one of the respondents to the benefits under R.A. No. 6758, the same
would nevertheless be a futile exercise. This, because after having pored
over the records of the case, we found nothing sufficient to support
respondents uniform claim that they were incumbents as of July 1, 1989
the date provided in Section 12 of R.A. 6758 except perhaps their bare
contention that they were all hired after June 30, 1989.
With

this

disquisition,

we

find

no

compelling

reason

to

unnecessarily lengthen the discussion by undeservingly proceeding further

with the other issues propounded by the parties.
WHEREFORE, the petition is GRANTED IN PART. The Writ of

Banahaw Broadcasting Corporation vs Cayetano Pacana III, GR No

171673, May 30, 2011
May 30, 2011
DECISION

Execution dated February 16, 2004 issued in Civil Case No. 99-1209 is
hereby SET ASIDE. The Regional Trial Court of Makati, Branch 138

LEONARDO-DE CASTRO, J.:

is DIRECTED to issue a writ of execution in accordance with this Decision

This is a Petition for Review on Certiorari under Rule 45 of the

1997 Rules of Civil Procedure assailing the Decision [1]dated April 15, 2005
of the Court of Appeals in CA-G.R. SP No. 57847, and its Resolution [2] dated
January 27, 2006 denying petitioners Motion for Reconsideration.

and execute the judgment pursuant to Section 11, Rule 39, of the Rules of
Court.
SO ORDERED.

The factual and procedural antecedents of this case are as follows:

Respondents in the case at bar, Cayetano Pacana III, Noe U. Dacer,
Johnny B. Racaza, Leonardo S. Orevillo, Araceli T. Libre, Genovevo E.
Romitman, Porferia M. Valmores, Meneleo G. Lactuan, Dionisio G. Bangga,

Francisco D. Manga, Nestor A. Amplayo, Leilani B. Gasataya, Loreta G.

before the Labor Arbiter or a copy of the Decision therein; (2) since the

Lactuan, Ricardo B. Pido, Resigolo M. Nacua and Anacleto C. Remedio

liability of IBC and BBC is solidary, the release and quitclaim issued by the

(collectively, the DXWG personnel), are supervisory and rank and file

DXWG personnel in favor of IBC totally extinguished BBCs liability; (3) it

employees of the DXWG-Iligan City radio station which is owned by

was

petitioner

employment; (4) the DXWG personnel are members of the IBC union and

Banahaw

Broadcasting

Corporation

(BBC),

corporation

managed by Intercontinental Broadcasting Corporation (IBC).

On August 29, 1995, the DXWG personnel filed with the Sub-

IBC

that

effected

the

termination

of

the

DXWG

personnels

are not employees of BBC; and (5) the sequestered properties of BBC
cannot be levied upon.

regional Arbitration Branch No. XI, Iligan City a complaint for illegal

On December 12, 1997, the NLRC issued a Resolution vacating the

dismissal, unfair labor practice, reimbursement of unpaid Collective

Decision of Labor Arbiter Alug and remanding the case to the arbitration

Bargaining Agreement (CBA) benefits, and attorneys fees against IBC and

branch of origin on the ground that while the complaint was filed against

BBC.

both IBC and BBC, only IBC was served with summons, ordered to submit a
On June 21, 1996, Labor Arbiter Abdullah L. Alug rendered his

position paper, and furnished a copy of the assailed decision. [7]

Decision[3] awarding the DXWG personnel a total ofP12,002,157.28 as

On October 15, 1998, Labor Arbiter Nicodemus G. Palangan

unpaid CBA benefits consisting of unpaid wages and increases, 13 th month

rendered a Decision adjudging BBC to be liable for the same amount

pay, longevity pay, sick leave cash conversion, rice and sugar subsidy,

discussed in the vacated Decision of Labor Arbiter Alug:

retirement pay, loyalty reward and separation pay. [4] The Labor Arbiter
denied the other claims of the DXWG personnel for Christmas bonus,
educational assistance, medical check-up and optical expenses. Both sets
of parties appealed to the National Labor Relations Commission (NLRC).
On May 15, 1997, a Motion to Dismiss, Release, Waiver and
Quitclaim,

[5]

was jointly filed by IBC and the DXWG personnel based on the

latters admission that IBC is not their employer as it does not own DXWGIligan City. On April 21, 1997, the NLRC granted the Motion and dismissed
the case with respect to IBC.[6]
BBC filed a Motion for Reconsideration alleging that (1) neither BBC
nor its duly authorized representatives or officers were served with
summons and/or a copy of the complaint when the case was pending

WHEREFORE, premises considered, judgment is

hereby rendered ordering the respondent Banahaw
Broadcasting Corporation to pay complainants the
following:
1. Cayetano Pacana III
2. Noe U. Dacer

P 1,730,535.75
886,776.43

3. Johnny B. Racaza

1,271,739.34

4. Leonardo S. Orevillo

1,097,752.70

5. Araceli T. Libre

543,467.22

6. Genovevo E. Romitman

716,455.72

7. Porferia M. Valmores

562,564.78

8. Meneleo G. Lactuan

678,995.91

9. Dionisio G. Bangga

580,873.78

10. Francisco D. Manga

29,286.65

11. Nestor A. Amplayo

583,798.51

12. Leilani B. Gasataya

42,669.75

a Motion for Reconsideration,[13] alleging this time that since it is wholly

owned by the Republic of the Philippines, it need not post an appeal bond.

13. Loreta G. Lactuan

757,252.52

14. Ricardo B. Pido

756,835.64

15. Resigolo M. Nacua

887,344.75

16. Anacleto C. Remedio

887,345.39

On November 22, 1999, the NLRC rendered its Decision [14] in NLRC

____________________
_______

CA No. M-004419-98. In said Decision, the NLRC denied the Motion for

GRAND TOTAL

P 12,002,157.28

Reconsideration of BBC on its September 16, 1999 Order and accordingly

dismissed the appeal of BBC for non-perfection. The NLRC likewise

Respondent is likewise ordered to pay 10% of the total award as

attorneys fee.[8]

dismissed the appeal of the DXWG personnel for lack of merit in the same
Decision.
BBC filed a Motion for Reconsideration of the above Decision. On

Both BBC and respondents appealed to the NLRC anew. The appeal
was docketed as NLRC CA No. M-004419-98. In their appeal, the DXWG

January 13, 2000, the NLRC issued a Resolution[15]denying the Motion.

personnel reasserted their claim for the remaining CBA benefits not
awarded to them, and alleged error in the reckoning date of the
computation of the monetary award. BBC, in its own Memorandum of
Appeal, challenged the monetary award itself, claiming that such benefits

BBC filed with the Court of Appeals a Petition for Certiorari under
Rule 65 of the Rules of Court assailing the above dispositions by the
NLRC. The Petition was docketed as CA-G.R. SP No. 57847.

were only due to IBC, not BBC, employees. [9] In the same Memorandum of

On April 15, 2005, the Court of Appeals rendered the assailed

Appeal, BBC incorporated a Motion for the Recomputation of the Monetary

Decision denying BBCs Petition for Certiorari. The Court of Appeals held

Award (of the Labor Arbiter),[10] in order that the appeal bond may be

that BBC, though owned by the government, is a corporation with a

reduced.

personality distinct from

On September 16, 1999, the NLRC issued an Order[11] denying the

Motion for the Recomputation of the Monetary Award.According to the
NLRC, such recomputation would result in the premature resolution of the
issue raised on appeal. The NLRC ordered BBC to post the required bond
within 10 days from receipt of said Order, with a warning that
noncompliance will cause the dismissal of the appeal for non-perfection.
[12]

Instead of complying with the Order to post the required bond, BBC filed

the Republic or any of its

agencies

or

instrumentalities, and therefore do not partake in the latters exemption

from the posting of appeal bonds. The dispositive portion of the Decision
states:
WHEREFORE, finding no grave abuse of discretion
on the part of public respondents, We DENY the
petition. The challenged decision of public respondent
dated November 22, 1999, as well as its subsequent
resolution dated January 13, 2000, in NLRC Case No. M004419-98 are hereby AFFIRMED. The decision of the Labor
Arbiter dated October 15, 1998 in RAB Case No. 12-0900309-95 is hereby declared FINAL AND EXECUTORY. [16]

On January 27, 2006, the Court of Appeals rendered the assailed

Resolution denying the Motion for Reconsideration. Hence, this Petition for

Benedicto of a Petition for Prohibition with this Court in 1989, which was
docketed as G.R. No. 87710.

Review.

In the meantime, it was in 1987 when the Republic, represented by

As stated above, both the NLRC and the Court of Appeals dealt with

the

PCGG,

filed

the

case

for

recovery/reconveyance/reversion

and

only one issue whether BBC is exempt from posting an appeal bond. To

damages against Benedicto. Following our ruling in Bataan Shipyard &

recall,

the

Engineering Co., Inc. (BASECO) v. Presidential Commission on Good

Recomputation of the Monetary Award and ordered BBC to post the

Government,[20] the institution of this suit necessarily placed BBC, IBC and

required bond within 10 days from receipt of said Order, with a warning

RPN-9 under custodia legis of the Sandiganbayan.

the

NLRC

issued

an

Order

denying

BBCs

Motion

for

that noncompliance will cause the dismissal of the appeal for nonperfection.[17] However, instead of heeding the warning, BBC filed a Motion
for Reconsideration, alleging that it need not post an appeal bond since it
is wholly owned by the Republic of the Philippines.

On November 3, 1990, Benedicto and the Republic executed

a Compromise Agreement whereby Benedicto, in exchange for immunity
from civil and criminal actions, ceded to the government certain pieces of
property listed in Annex A of the agreement and assigned or transferred

There is no dispute as regards the history of the ownership of BBC

whatever rights he may have, if any, to the government over all corporate

and IBC. Both BBC and IBC, together with Radio Philippines Network (RPN-

assets listed in Annex B of the agreement. [21] BBC is one of the properties

9), were formerly owned by Roberto S. Benedicto (Benedicto). In the

listed in Annex B.[22] Annex A, on the other hand, includes the following

aftermath of the 1986 people power revolution, the three companies,

entry:

collectively denominated as Broadcast City, were sequestered and placed

under the control and management of the Board of Administrators (BOA).
[18]

CESSION TO THE GOVERNMENT:

I.

PHILIPPINE ASSETS:

The BOA was tasked to operate and manage its business and affairs

subject to the control and supervision of the Presidential Commission on

Good Government (PCGG).[19] In December 1986, Benedicto and PCGG
allegedly executed a Management Agreement whereby the Boards of
Directors of BBC, IBC and RPN-9 were agreed to be reconstituted. Under
the agreement, 2/3 of the membership of the Boards of Directors will be
PCGG nominees, and 1/3 will be Benedicto nominees. A reorganized Board
of Directors was thus elected for each of the three corporations. The BOA,
however, refused to relinquish its function, paving for the filing by

xxxx
7.

Inter-Continental Broadcasting Corporation

(IBC), 100% of total assets estimated at P450
million, consisting of 41,000 sq.mtrs. of land,
more or less, located at Broadcast City Quezon
City, other land and buildings in various
Provinces, and operates the following TV
stations:
a.

TV 13 (Manila)

b.

DY/TV 13 (Cebu)

c.

DX/TV 13 (Davao)

d.

DYOB/TV 12 (Iloilo)

e.

DWLW/TV 13 (Laoag)

as well as the following Radio Stations

The Sandiganbayan subsequently approved the Compromise

Agreement on October 31, 1992, and the approval was affirmed by this
Court on September 10, 1993 in Republic v. Sandiganbayan.[27] Thus, both
BBC and IBC were government-owned and controlled during the time the

a.

DZMZ-FM Manila

b.

DYBQ Iloilo

c.

DYOO Roxas

d.

DYRG Kalibo

e.

DWLW Laoag

f.

DWGW Legaspi

of Forestry) v. Court of Appeals,[29] BBC adds before us that it is not even

g.

DWDW Dagupan

necessary for BBC to raise its exempt status as the NLRC should have

h.

DWNW Naga

DXWG personnel filed their original complaint on August 29, 1995.

In the present Petition, BBC reiterates its argument that since it is
now wholly and solely owned by the government, the posting of the appeal
bond was unnecessary on account of the fact that it is presumed that the

i.

DXWG
Iligan . . . . . . . . . . P352,455,286.00[23]
(Emphasis supplied.)

Then Senator Teofisto T. Guingona, Jr. filed a Petition

for Certiorari and Prohibition seeking to invalidate the Compromise
Agreement, which was docketed as G.R. No. 96087. The Petition
was consolidated with G.R. No. 87710.
On March 31, 1992, this Court, in Benedicto v. Board of
Administrators of Television Stations RPN, BBC and IBC,
[24]
promulgated its Decision on the consolidated petitions in G.R.
No. 87710 and G.R. No. 96087. Holding that the authority of the
BOA had become functus oficio, we granted the Petition in G.R. No.
87710, ordering the BOA to cease and desist from further
exercising management, operation and control of Broadcast City
and is hereby directed to surrender the management, operation
and control of Broadcast City to the reorganized Board of Directors
of each of the Broadcast City television stations.[25] We denied the
Petition in G.R. No. 96087 for being premature, since the approval
of the Compromise Agreement was still pending in the
Sandiganbayan.[26]

government is always solvent.[28]Citing the 1975 case of Republic (Bureau

taken cognizance of the same.[30]

When the Court of Appeals affirmed the dismissal by the NLRC of
BBCs appeal for failure of the latter to post an appeal bond, it relied to the
ruling of this Court in Republic v. Presiding Judge, Branch XV, Court of First
Instance of Rizal.[31] The appellate court, noting that BBCs primary purpose
as stated in its Articles of Incorporation is to engage in commercial radio
and television broadcasting, held that BBC did not meet the criteria
enunciated in Republic v. Presiding Judge for exemption from the appeal
bond.[32]
We pertinently held in Republic v. Presiding Judge:
The sole issue implicit in this petition is whether or
not the RCA is exempt from paying the legal fees and from
posting an appeal bond.
We find merit in the petition.
To begin with, We have to determine whether the
RCA is a governmental agency of the Republic of the
Philippines without a separate, distinct and independent
legal personality from the latter. We maintain the

affirmative. The legal character of the RCA as a

governmental agency had already been passed upon in the
case of Ramos vs. Court of Industrial Relations wherein this
Court held:
Congress, by said Republic Act
3452 approved on June 14, 1962, created
RCA, in pursuance of its declared
policy,viz:
SECTION 1. It is
hereby declared to be the
policy of the Government
that in order to stabilize the
price of palay, rice and
corn, it shall engage in the
'purchase of these basic
foods directly from those
tenants, farmers, growers,
producers and landowners
in the Philippines who wish
to dispose of their produce
at a price that will afford
them a fair and just
return for their labor and
capital
investment
and
whenever
circumstances
brought about by any
cause, natural or artificial,
should so require, shall sell
and
dispose
of
these
commodities
to
the
consumers at areas of
consumption at a price that
is within their reach.
RCA is, therefore, a government
machinery to carry out a declared
government policy just noted, and not for
profit.
And more. By law, RCA depends for
its continuous operation on appropriations
yearly
set
aside
by
the
General

Appropriations Act. So says Section 14 of

Republic Act 3452:
SECTION 14. The
sum of one hundred million
pesos
is
hereby
appropriated, out of any
funds in the National
Treasury
not
otherwise
appropriated,
for
the
capitalization
of
the
Administration: Provided, T
hat the annual operational
expenses
of
the
Administration shall not
exceed three million pesos
of
the
said
amount:Provided
further,
That the budget of the Rice
and Corn Administration for
the fiscal year nineteen
hundred and sixty-three to
nineteen
hundred
and
sixty-four and the years
thereafter shall be included
in
the
General
appropriations submitted to
Congress.
RCA is not possessed of a separate
and distinct corporate existence. On the
contrary, by the law of its creation, it is an
office directly under the Office of the
President of the Philippines.
Respondent, however, contends that the RCA has
been created to succeed to the corporate assets, liabilities,
functions and powers of the abolished National Rice & Corn
Corporation which is a government-owned and controlled
corporation separate and distinct from the Government of
the Republic of the Philippines. He further contends that
the RCA, being a duly capitalized entity doing mercantile
activity engaged in the buying and selling of palay, rice,
and corn cannot be the same as the Republic of the
Philippines; rather, it is an entity separate and distinct from

the Republic of the Philippines. These contentions are

patently erroneous.
xxxx
The mercantile activity of RCA in the buying and
selling of palay, rice, and corn is only incident to its
primary governmental function which is to carry out its
declared policy of subsidizing and stabilizing the price
of palay, rice, and corn in order to make it well within the
reach of average consumers, an object obviously identified
with the primary function of government to serve the wellbeing of the people.
As a governmental agency under the Office of the
President the RCA is thus exempt from the payment of
legal fees as well as the posting of an appeal bond. Under
the decisional laws which form part of the legal system of
the Philippines the Republic of the Philippines is exempt
from the requirement of filing an appeal bond on taking an
appeal from an adverse judgment, since there could be no
doubt, as to the solvency of the Government. This wellsettled doctrine of the Government's exemption from the
requirement of posting an appeal bond was first
enunciated as early as March 7, 1916 in Government of the
Philippine Island vs. Judge of the Court of First Instance of
Iloilo and has since been so consistently enforced that it
has become practically a matter of public knowledge and
certainly a matter of judicial notice on the part of the
courts of the land.[33]

from paying the legal fees provided in this

rule. Local governments and governmentowned or controlled corporations with or
without independent charters are not
exempt from paying such fees.
On the other hand, the NHA contends that it is
exempt from paying all kinds of fees and charges, because
it performs governmental functions. It cites Public Estates
Authority v. Yujuico, which holds that the Public Estates
Authority (PEA), a government-owned and controlled
corporation, is exempt from paying docket fees whenever it
files a suit in relation to its governmental functions.

We agree. x x x.[35]
We can infer from the foregoing jurisprudential precedents that, as
a general rule, the government and all the attached agencies with no legal
personality distinct from the former are exempt from posting appeal bonds,
whereas government-owned and controlled corporations (GOCCs) are not
similarly exempted. This distinction is brought about by the very reason of
the appeal bond itself: to protect the presumptive judgment creditor
against the insolvency of the presumptive judgment debtor. When the
State litigates, it is not required to put up an appeal bond because it is
presumed to be always solvent.[36] This exemption, however, does not, as a

In the subsequent case of Badillo v. Tayag,

[34]

we further discussed

that:

general rule, apply to GOCCs for the reason that the latter has a
personality distinct from its shareholders. Thus, while a GOCCs majority

Created by virtue of PD No. 757, the NHA is a

government-owned and controlled corporation with an
original charter. As a general rule, however, such
corporations -- with or without independent charters -- are
required to pay legal fees under Section 21 of Rule 141 of
the 1997 Rules of Civil Procedure:
SEC. 21. Government Exempt. The Republic of the Philippines, its
agencies and instrumentalities, are exempt

stockholder, the State, will always be presumed solvent, the presumption

does not necessarily extend to the GOCC itself. However, when a GOCC
becomes a government machinery to carry out a declared government
policy,[37] it becomes similarly situated as its majority stockholder as there
is the assurance that the government will necessarily fund its primary
functions. Thus, a GOCC that is sued in relation to its governmental

functions may be, under appropriate circumstances, exempted from the

payment of appeal fees.
In the case at bar, BBC was organized as a private corporation,
sequestered in the 1980s and the ownership of which was subsequently
transferred to the government in a compromise agreement. Further, it is
stated in its Amended Articles of Incorporation that BBC has the following
primary function:
To engage in commercial radio and television
broadcasting, and for this purpose, to establish, operate
and maintain such stations, both terrestrial and satellite or
interplanetary, as may be necessary for broadcasting on a
network wide or international basis.[38]
It is therefore crystal clear that BBCs function is purely commercial
or proprietary and not governmental. As such, BBC cannot be deemed
entitled to an exemption from the posting of an appeal bond.

(d) If serious errors in the findings of facts are

raised which would cause grave or irreparable damage or
injury to the appellant.
In case of a judgment involving a monetary award,
an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in
the amount equivalent to the monetary award in the
judgment appealed from. (Italization supplied.)
The posting of the appeal bond within the period provided by law is
not merely mandatory but jurisdictional. The failure on the part of BBC to
perfect the appeal thus had the effect of rendering the judgment final and
executory.[39]
Neither was there an interruption of the period to perfect the
appeal when BBC filed (1) its Motion for the Recomputation of the
Monetary Award in order to reduce the appeal bond, and (2) its Motion for
Reconsideration of the denial of the same. In Lamzon v. National Labor

Consequently, the NLRC did not commit an error, and much less

Relations Commission,[40] where the petitioner argued that the NLRC

grave abuse of discretion, in dismissing the appeal of BBC on account of

gravely abused its discretion in dismissing her appeal on the ground of

non-perfection of the same. In doing so, the NLRC was merely applying

non-perfection despite the fact that she filed a Motion for Extension of

Article 223 of the Labor Code, which provides:

Time to File an Appeal Bond, we held:

ART. 223. Appeal. - Decisions, awards, or orders of

the Labor Arbiter are final and executory unless appealed
to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or
orders. Such appeal may be entertained only on any of the
following grounds:
(a) If there is prima facie evidence of abuse of
discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured
through fraud or coercion, including graft and corruption
(c) If made purely on questions of law; and

The pertinent provision of Rule VI, NLRC Rules of Procedure, as

amended, provides as follows:
xxxx
Section 6. Bond. - In case the
decision of a Labor Arbiter, POEA
Administrator and Regional Director or his
duly authorized hearing officer involves a
monetary award, an appeal by the
employer shall be perfected only upon the
posting of a cash or surety bond issued by
a reputable bonding company duly
accredited by the Commission or the

Supreme Court in an amount equivalent to

the monetary award, exclusive of moral
and exemplary damages and attorney's
fees.
The employer as well as counsel
shall submit a joint declaration under oath
attesting that the surety bond posted is
genuine and that it shall be in effect until
final disposition of the case.
The
Commission
may,
in
meritorious cases and upon Motion of the
Appellant, reduce the amount of the
bond. The filing, however, of the motion to
reduce bond shall not stop the running of
the period to perfect appeal.
Section 7. No Extension of Period. No motion or request for extension of the
period within which to perfect an appeal
shall be allowed."
As correctly observed by the NLRC, petitioner is
presumptuous in assuming that the 10-day period for
perfecting an appeal, during which she was to post her
appeal bond, could be easily extended by the mere filing of
an appropriate motion for extension to file the bond and
even without the said motion being granted. It bears
emphasizing that an appeal is only a statutory privilege
and it may only be exercised in the manner provided by
law. Nevertheless, in certain cases, we had occasion to
declare that while the rule treats the filing of a cash or
surety bond in the amount equivalent to the monetary
award in the judgment appealed from, as a jurisdictional
requirement to perfect an appeal, the bond requirement on
appeals involving monetary awards is sometimes given a
liberal interpretation in line with the desired objective of
resolving controversies on the merits. However, we find no
cogent reason to apply this same liberal interpretation in
this case. Considering that the motion for extension to file
appeal bond remained unacted upon, petitioner, pursuant
to the NLRC rules, should have seasonably filed the appeal
bond within the ten (10) day reglementary period following
receipt of the order, resolution or decision of the NLRC to

forestall the finality of such order, resolution or

decision. Besides, the rule mandates that no motion or
request for extension of the period within which to perfect
an appeal shall be allowed. The motion filed by petitioner
in this case is tantamount to an extension of the period for
perfecting an appeal. As payment of the appeal bond is an
indispensable and jurisdictional requisite and not a mere
technicality of law or procedure, we find the challenged
NLRC Resolution of October 26, 1993 and Order dated
January 11, 1994 in accordance with law. The appeal filed
by petitioner was not perfected within the reglementary
period because the appeal bond was filed out of
time. Consequently, the decision sought to be reconsidered
became final and executory. Unless there is a clear and
patent grave abuse of discretion amounting to lack or
excess of jurisdiction, the NLRC's denial of the appeal and
the motion for reconsideration may not be disturbed.
[41]
(Underscoring supplied.)
In the case at bar, BBC already took a risk when it filed its Motion
for the Recomputation of the Monetary Award without posting the bond
itself. The Motion for the Recomputation of the Monetary Award filed by
BBC, like the Motion for Extension to File the Appeal Bond in Lamzon, was
itself tantamount to a motion for extension to perfect the appeal, which is
prohibited by the rules. The NLRC already exhibited leniency when, instead
of dismissing the appeal outright, it merely ordered BBC to post the
required bond within 10 days from receipt of said Order, with a warning
that noncompliance will cause the dismissal of the appeal for nonperfection. When

BBC

further

demonstrated

its

unwillingness

by

completely ignoring this warning and by filing a Motion for Reconsideration

on an entirely new ground, the NLRC cannot be said to have committed
grave abuse of discretion by making good its warning to dismiss the
appeal. Therefore, the Court of Appeals committed no error when it upheld
the NLRCs dismissal of petitioners appeal.

WHEREFORE,

the

instant

Petition

for

Review

on Certiorari is DENIED. The Decision of the Court of Appeals dated April

15, 2005 in CA-G.R. SP No. 57847, and its Resolution dated January 27,
2006 are hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

SPECIAL FIRST DIVISION

G.R. No. 182431

February 27, 2013

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
ESTHER ANSON RIVERA, ANTONIO G. ANSON AND CESAR G.
ANSON, Respondents.
RESOLUTION
PEREZ, J.:
The Case
Before the Court is a Motion for Reconsideration 1 filed by the Land Bank of
the Philippines (LBP) alleging error on the part of this Court in affirming the
award of 12% interest on just compensation due to the landowner.
The Facts
We reiterate the facts from the assailed 17 November 2010 Decision:
The respondents are the co-owners of a parcel of agricultural land
embraced by Original Certificate of Title No. P-082, and later transferred in
their names under Transfer Certificate of Title No. T-95690 that was placed
under the Operation Land Transfer pursuant to Presidential Decree No. 27
in 1972. Only 18.8704 hectares of the total area of 20.5254 hectares were
subject of the coverage.
After the Department of Agrarian Reform (DAR) directed payment, LBP
approved the payment of P265,494.20, exclusive of the advance payments
made in the form of lease rental amounting to P75,415.88 but inclusive of
6% increment of P191,876.99 pursuant to DAR Administrative Order No.
13, series of 1994.
On 1 December 1994, the respondents instituted Civil Case No. 94-03 for
determination and payment of just compensation before the Regional Trial
Court (RTC), Branch 3 of Legaspi City, claiming that the landholding
involved was irrigated with two cropping seasons a year with an average
gross production per season of 100cavans of 50 kilos/hectare, equivalent
of 200 cavans/year/hectare; and that the fair market value of the property
was not less than P130,000.00/hectare, or P2,668,302.00 for the entire
landholding of 20.5254 hectares.
LBP filed its Answer, stating that rice and corn lands placed under the
coverage of Presidential Decree No. 27 [PD 27]2 were governed and valued
in accordance with the provisions of Executive Order No. 228 [EO 228] 3 as
implemented by DAR Administrative Order No. 2, Series of 1987 and other
statutes and administrative issuances; that the administrative valuation of
lands covered by [PD 27] and [EO 228] rested solely in DAR and LBP was
the only financing arm; that the funds that LBP would use to pay
compensation were public funds to be disbursed only in accordance with
existing laws and regulations; that the supporting documents were not yet
received by LBP; and that the constitutionality of [PD 27] and [EO 228] was
already settled.4

The Trial Courts Ruling

On 6 October 2004, the trial court rendered its decision which reads:
ACCORDINGLY, the just compensation of the land partly covered by TCT
No. T-95690 is fixed at Php1,297,710. 63. Land Bank of the Philippines is
hereby ordered to pay Esther Anson, Cesar Anson and Antonio Anson the
aforesaid value of the land, plus interest of 12% per annum or Php194.36
per day effective October 7, 2004, until the value is fully paid, in cash or in
bond or in any other mode of payment at the option of the landowners in
accordance with Sec. 18, R.A. 6657.5
Discontented, LBP filed an appeal before the Court of Appeals (CA). It
argued that the trial court erred in disregarding the lease rentals already
paid by the farmer beneficiaries as part of the just compensation as well as
the imposition of 12% interest despite the increment of 6% interest
allowed under the EO 228 and DAR Administrative Order (A.O.) No. 13
Series of 1994 (A.O. 13-94).
The Court of Appeals Ruling
The appellate court partly granted the petition of the LBP, the fallo of the
decision reading:
WHEREFORE, the DECISION DATED OCTOBER 6, 2004 is
MODIFIED, ordering petitioner LAND BANK OF THE PHILIPPINES to pay
to the respondents just compensation (inclusive of interests as of October
6, 2004) in the amount of P823, 957.23, plus interest of 12% per annum in
the amount of P515, 777.57 or P61, 893.30 per annum, beginning October
7, 2004 until just compensation is fully paid in accordance with this
decision.
Costs of suit to be paid by the petitioner.6
In its petition7 before this Court, LBP alleged error in the imposition of 12%
interest per annum beginning from 7 October 2004 until full payment of
just compensation for subject property and the liability of the bank for
costs of suit.
17 November 2010 Decision
In its argument, LBP cited the applicability of the DAR A.O. No. 2, Series of
2004 (A.O. 02-04) which provides for the 6% interest imposition to the just
compensation until actual payment. Further, it added that the 12% interest
finds application in cases of undue delay, which is not present in the case.
As to the payment of costs, the bank argued that it was performing a
governmental function when it disbursed the Agrarian Reform Fund (ARF)
as the financial intermediary of the agrarian program of the government.
In our 17 November 2010 Decision, this Court partly granted the prayers of
LBP and deleted the costs adjudged. We agreed that the bank was indeed
performing a governmental function in agrarian reform proceeding
pursuant to Section 1, Rule 1428 of the Rules of Court.9 However, we

upheld the imposition of 12% interest on the just compensation beginning

7 October 2004 until full payment. We anchored our decision following the
ruling inRepublic of the Philippines v. Court of Appeals. 10
As a conclusion, the Court rendered the assailed decision which reads:
WHEREFORE, premises considered, the petition is GRANTED. The
decision of the Court of Appeals in C.A. G.R. SP No. 87463 dated 9 October
2007 is AFFIRMED with the MODIFICATION that LBP is hereby held
exempted from the payment of costs of suit. In all other respects, the
Decision of the Court of Appeals is AFFIRMED. No costs.11
Aggrieved, LBP filed this present Motion for Reconsideration and argued
once again the erroneous imposition of 12% interest. The bank reiterated
its previous argument that the imposition is justifiable only in case of
undue delay in the payment of just compensation. 12 It argued13 against the
application of the A.O. No. 6, Series of 2008 (A.O. 06-08) 14 to the instant
case because it claims that the 6% interest does not apply to agricultural
lands valued under R.A. 6657, such as the subject properties, following the
Courts ruling in Land Bank of the Philippines v. Chico.15
We deny the prayers of LBP.
In many cases16 decided by this Court, it has been repeated time and again
that the award of 12% interest is imposed in the nature of damages for
delay in payment which in effect makes the obligation on the part of the
government one of forbearance. This is to ensure prompt payment of the
value of the land and limit the opportunity loss of the owner that can drag
from days to decades.
In this case, LBP is adamant in contending that the landowners were
promptly paid of their just compensation. It argues that, "there is no
factual finding whatsoever indicating undue delay on the part of LBP." 17
We disagree.
It is true that LBP approved the amount of P265,494.20 in favor of the
landowners on 23 August 2004.18However, that amount is way below the
amount that should have been received by the landowners based on the
valuations adjudged by the agrarian court, CA and this Court. To be
considered as just compensation, it must be fair and equitable and the
landowners must have received it without any delay.19
The contention that there can be no delay when there is a deposit of the
amount of the government valuation in favor of the landowners was also
the same argument raised in the second Motion for Reconsideration
addressing the 12 October 2010 and 23 November 2010 Resolutions
in Apo Fruits20 case. LBP contended then that landowners APO Fruits and
Hijo Plantation did not suffer from any delay in payment since the LBP
made partial payments prior to the taking of the parcels of land. The Court
there ruled that twelve years passed after the Government took the
properties, before full payment was settled. The Court took into account

that the partial payment made by LBP only amounted to 5% of the actual
value of property.21
Similar to Apo Fruits, the delay in this case is traceable to the
undervaluation of the property of the government. Had the landholdings
been properly valued, the landowners would have accepted the payment
and there would have been no need for a judicial determination of just
compensation.22 The landowners could not possibly acceptP265,494.20 as
full payment for their entire 18 hectare-property. It must be noted that the
landowners, since the deprivation of their property, have been waiting for
four decades to get the just compensation due to them.
As in several other just compensation cases, respondents faced the difficult
problem whether to accept a low valuation or file a case for determination
of just compensation before the court. Before the choice is made, and for a
longer period if the judicial course is taken, the landowners already are
deprived of the income that could have been yielded by their lands.
The Imperial case23 is an applicable precedent.
Juan H. Imperial (Imperial) was the owner of five parcels of land with a total
land area of 151.7168 hectares. Upon the effectivity of P.D. No. 27 and EO
228, the parcels of land were placed under the Land Reform Program and
distributed to the farmer-beneficiaries on 21 October 1972. On 20 July
1994, Imperial filed a complaint for determination and payment of just
compensation before the Agrarian Court of Legazpi City, Albay. As the
amount fixed by the agrarian court was found to be inacceptable by the
parties, the case went up all the way to the Supreme Court. Before this
Court, LBP claimed that a 6% annual interest in the concept of damages
should not be imposed because (1) the delay in the payment of the just
compensation was not its fault, and (2) DAR A.O. No. 13 already provides
for the payment of a 6% annual interest, compounded annually, provided
that the just compensation is computed in accordance with its prescribed
formula.24 The Court partly granted the claim of LBP and directed the trial
court to re-compute the just compensation by using the formula prescribed
by DAR A.O. No. 13, as amended, which imposed a 6% interest
compounded annually from the date of the compensable taking on 21
October 1972 until 31 December 2006; and thereafter, at the rate of 12%
per annum, until full payment is made.25 This is to mean that from 1
January 2007 onwards, there shall be an imposition of 12% interest per
annum until full payment in the nature of damages for the delay. The
reason given was that it would be inequitable to determine the just
compensation based solely on the formula provided by DAR A.O. No. 13, as
amended. Just compensation does not only pertain to the amount to be
paid to the owners of the land, but also its payment within a reasonable
time from the taking of the land; hence the imposition of interest in the
nature of damages for the delay.26

In this case, LBP pointed out the error made by this Court in Imperial in
determining the extent of the period of applicability of the 6% compounded
interest.27 It asserts that:
"Based on the foregoing, this Court deemed the day after the expiration of
DAR A.O. No. 13, meaning 1 January 2007, as the date of finality,
constraining it to impose the 12% interest per annum.
However, beyond the knowledge of the Supreme Court, a subsequent DAR
A.O. extended the applicability of the imposition of 6% interest
compounded annually from 1 January 2007 until 31 December 2009.
Following the new DAR A.O., only 6% interest compounded annually would
have been the correct interest to be imposed. This was not imposed,
however, simply because the day after 31 December 2006 or 01 January
2007 was deemed by the Supreme Court as the date of finality, leading to
the imposition of 12% interest."28
Contrary to the position of LBP, this Court did not commit a mistake in not
applying the extension thru A.O. 06-08 of the 6% interest until 31
December 2009. It must be understood that at the time of the
promulgation of theImperial Decision on 12 February 2007, A.O. 06-08 was
not yet effective, as it was signed only on 30 July 2008.
Likewise, it is erroneous for LBP to anchor its motion on the contention that
the 6% interest compounded annually does not apply to agricultural lands
valued under R.A. 6657 such as the subject properties. 29 The fact is that
the valuation in the instant case was under P.D. 27 and E.O. 228, as
adjudged by the trial court, because even if at the time of valuation R.A.
6657 was already effective, the respondents failed to present any evidence
on the valuation factors under Section 17 of R.A. 6657.
The Computation

interpreted as "full payment" pursuant to the ruling in Land Bank of the

Philippines v. Obias33 and Land Bank of the Philippines v. Soriano.34
The amount of land value of P164,059.26 was already settled before the
lower courts.35 There is no need for a new computation.
Applying the rules under A.O. 13-94, A.O. 02-04 and A.O. 06-08 the formula
to determine the increment of 6% interest per annum compounded
annually beginning 21 October 1972 up to 31 December 2009 is:
CI = P (1+R) n
(CI as compounded interest; P as the Principal; R is the Rate of 6% and
n = number of years from date of tenancy starting from.)
Where:
P = P164,059. 26
R = 6%
n = 37 years
COMPUTATION:
CI

=
=
=
=

P (1+R) n
P164,059.26 (1+ 6%) 37 years
P164,059. 26 (1.06) 37 years
P1,252,770.80

Then we add the compounded interest to the land value P164,059.26:

Compounded Amount

= Land Value + Compounded Interest

= P164,059.26 + P1,252,770.80
= P1,416,830.06

The purpose of A.O. No. 13 is to compensate the landowners for unearned

interests.1wphi1 Had they been paid in 1972 when the Government
Support Price (GSP) for rice and corn was valued at P35.00 and P31.00,
respectively, and such amounts were deposited in a bank, they would have
earned a compounded interest of 6% per annum. Thus, if the [Provincial
Agrarian Reform Adjudicator] [(]PARAD[)] used the 1972 GSP, then the
product of (2.5 x Average Gross Production (AGP) x P35.00 or P31.00) could
be multiplied by (1.06) to determine the value of the land plus the
additional 6% compounded interest it would have earned from 1972. 30

To compute the compounded amount to be paid, we subtract the amount

of lease rental ofP75,415.88 as adjudged by the appellate court to the
compounded amount:36

Following A.O. 13-94, the 6% yearly interest compounded annually shall be

reckoned from 21 October 1972 up to the effectivity date of this Order
which was on 21 October 1994. However, A.O. 02-04 31 extended the period
of application of 6% interest from 21 October 1972 up to the time of actual
payment but not later than December 2006. Then, under A.O. 06-08, 32 the
application of 6% interest was further until 31 December 2009. It must be
noted that the term "actual payment" in the administrative orders is to be

I=PxRxT

Compounded Amount

= P1,416,830.06 less P75,415.88

= P1,341,414.18

We add a simple interest of 12% to the compounded amount from 31

December 2009 until the promulgation of this decision due to the delay
incurred by LBP in not paying the full just compensation to the Spouses:
(I = Interest, R = Rate, T = Time)
Where:
P = Compounded Amount
R = 12%
T = 31 December 2009 to 31 December 2012

1. COMPUTATION: 31 December 2009 to 31 December 2012

= P1,846,373.70

I=PxRxT
WHEREFORE, premises considered, we PARTIALLY GRANT the petitioner's
Motion for Reconsideration. The Decision dated 17 November 2010 of the
Court's First Division is hereby MODIFIED.

I = (Compounded Amount) (.12) (3 years)

I = P1,341,414.18 (.12) (3years)
I = P482,909.1048

The petitioner Land Bank of the Philippines is hereby ORDERED to pay

Esther Anson Rivera, Antonio G. Anson and Cesar G. Anson P1,846,373.70
as final just compensation plus interest at the rate of 12% per annum from
the finality of this decision until full payment.

2. COMPUTATION: 31 December 2012 to 20 February 2013

I

PxRxT

SO ORDERED.

(Compounded Amount) (12% interest)

=

x No. of Days
365 days
(Compounded Amount) (.12)

x 50 days
365 days
(P1,341,414.18) (.12)

x 50 days

P160,969.69

365
P441.01 x 50 days

P22,050.50

Final Just Compensation

Eriberto Seno for petitioners.

FERNANDO, J.:
x 50 days

ANGEL MINISTERIO and ASUNCION SADAYA, petitioners,

vs.
THE COURT OF FIRST INSTANCE OF CEBU, Fourth Branch, Presided
by the Honorable, Judge JOSE C. BORROMEO, THE PUBLIC HIGHWAY
COMMISSIONER, and THE AUDITOR GENERAL, respondents.
Office of the Solicitor General Felix Q. Antonio, Acting First Assistant
Solicitor General Antonio A. Torres and Solicitor Norberto P. Eduardo for
respondents.

365 days

G.R. No. L-31635 August 31, 1971

= Compounded Amount + Interest

= P1,341,414.18
+ P482,909.1048+ P22,050.50

What is before this Court for determination in this appeal by certiorari to

review a decision of the Court of First Instance of Cebu is the question of
whether or not plaintiffs, now petitioners, seeking the just compensation to
which they are entitled under the Constitution for the expropriation of their
property necessary for the widening of a street, no condemnation
proceeding having been filed, could sue defendants Public Highway
Commissioner and the Auditor General, in their capacity as public officials
without thereby violating the principle of government immunity from suit
without its consent. The lower court, relying on what it considered to be
authoritative precedents, held that they could not and dismissed the suit.
The matter was then elevated to us. After a careful consideration and with
a view to avoiding the grave inconvenience, not to say possible injustice
contrary to the constitutional mandate, that would be the result if no such
suit were permitted, this Court arrives at a different conclusion, and

sustains the right of the plaintiff to file a suit of this character. Accordingly,
we reverse.
Petitioners as plaintiffs in a complaint filed with the Court of First Instance
of Cebu, dated April 13, 1966, sought the payment of just compensation
for a registered lot, containing an area of 1045 square meters, alleging that
in 1927 the National Government through its authorized representatives
took physical and material possession of it and used it for the widening of
the Gorordo Avenue, a national road, Cebu City, without paying just
compensation and without any agreement, either written or verbal. There
was an allegation of repeated demands for the payment of its price or
return of its possession, but defendants Public Highway Commissioner and
the Auditor General refused to restore its possession. It was further alleged
that on August 25, 1965, the appraisal committee of the City of Cebu
approved Resolution No. 90, appraising the reasonable and just price of Lot
No. 647-B at P50.00 per square meter or a total price of P52,250.00.
Thereafter, the complaint was amended on June 30, 1966 in the sense that
the remedy prayed for was in the alternative, either the restoration of
possession or the payment of the just compensation.
In the answer filed by defendants, now respondents, through the then
Solicitor General, now Associate Justice, Antonio P. Barredo, the principal
defense relied upon was that the suit in reality was one against the
government and therefore should be dismissed, no consent having been
shown. Then on July 11, 1969, the parties submitted a stipulation of facts
to this effect: "That the plaintiffs are the registered owners of Lot 647-B of
the Banilad estate described in the Survey plan RS-600 GLRO Record No.
5988 and more particularly described in Transfer Certificate of Title No. RT5963 containing an area of 1,045 square meters; That the National
Government in 1927 took possession of Lot 647-B Banilad estate, and used
the same for the widening of Gorordo Avenue; That the Appraisal
Committee of Cebu City approved Resolution No. 90, Series of 1965 fixing
the price of Lot No. 647-B at P50.00 per square meter; That Lot No. 647-B
is still in the possession of the National Government the same being
utilized as part of the Gorordo Avenue, Cebu City, and that the National
Government has not as yet paid the value of the land which is being
utilized for public use." 1
The lower court decision now under review was promulgated on January
30, 1969. As is evident from the excerpt to be cited, the plea that the suit
was against the government without its consent having been manifested
met with a favorable response. Thus: "It is uncontroverted that the land in
question is used by the National Government for road purposes. No
evidence was presented whether or not there was an agreement or
contract between the government and the original owner and whether
payment was paid or not to the original owner of the land. It may be
presumed that when the land was taken by the government the payment

of its value was made thereafter and no satisfactory explanation was given
why this case was filed only in 1966. But granting that no compensation
was given to the owner of the land, the case is undoubtedly against the
National Government and there is no showing that the government has
consented to be sued in this case. It may be contended that the present
case is brought against the Public Highway Commissioner and the Auditor
General and not against the National Government. Considering that the
herein defendants are sued in their official capacity the action is one
against the National Government who should have been made a party in
this case, but, as stated before, with its consent." 2
Then came this petition for certiorari to review the above decision. The
principal error assigned would impugn the holding that the case being
against the national government which was sued without its consent
should be dismissed, as it was in fact dismissed. As was indicated in the
opening paragraph of this opinion, this assignment of error is justified. The
decision of the lower court cannot stand. We shall proceed to explain why.
1. The government is immune from suit without its consent. 3 Nor is it
indispensable that it be the party proceeded against. If it appears that the
action, would in fact hold it liable, the doctrine calls for application. It
follows then that even if the defendants named were public officials, such a
principle could still be an effective bar. This is clearly so where a litigation
would result in a financial responsibility for the government, whether in the
disbursements of funds or loss of property. Under such circumstances, the
liability of the official sued is not personal. The party that could be
adversely affected is government. Hence the defense of non-suability may
be interposed. 4
So it has been categorically set forth in Syquia v. Almeda
Lopez: 5 "However, and this is important, where the judgment in such a
case would result not only in the recovery of possession of the property in
favor of said citizen but also in a charge against or financial liability to the
Government, then the suit should be regarded as one against the
government itself, and, consequently, it cannot prosper or be validly
entertained by the courts except with the consent of said Government." 6
2. It is a different matter where the public official is made to account in his
capacity as such for acts contrary to law and injurious to the rights of
plaintiff. As was clearly set forth by Justice Zaldivar in Director of
the Bureau of Telecommunications v. Aligean: 7 "Inasmuch as the State
authorizes only legal acts by its officers, unauthorized acts of government
officials or officers are not acts of the State, and an action against the
officials or officers by one whose rights have been invaded or violated by
such acts, for the protection of his rights, is not a suit against the State
within the rule of immunity of the State from suit. In the same tenor, it has
been said that an action at law or suit in equity against a State officer or
the director of a State department on the ground that, while claiming to act

for the State, he violates or invades the personal and property rights of the
plaintiff, under an unconstitutional act or under an assumption of authority
which he does not have, is not a suit against the State within the
constitutional provision that the State may not be sued without its
consent." 8
3. It would follow then that the prayer in the amended complaint of
petitioners being in the alternative, the lower court, instead of dismissing
the same, could have passed upon the claim of plaintiffs there, now
petitioners, for the recovery of the possession of the disputed lot, since no
proceeding for eminent domain, as required by the then Code of Civil
Procedure, was instituted. 9 However, as noted in Alfonso v. Pasay
City, 10 this Court speaking through Justice Montemayor, restoration would
be "neither convenient nor feasible because it is now and has been used
for road purposes." 11 The only relief, in the opinion of this Court, would be
for the government "to make due compensation, ..."12 It was made clear in
such decision that compensation should have been made "as far back as
the date of the taking." Does it result, therefore, that petitioners would be
absolutely remediless since recovery of possession is in effect barred by
the above decision? If the constitutional mandate that the owner be
compensated for property taken for public use 13 were to be respected, as
it should, then a suit of this character should not be summarily dismissed.
The doctrine of governmental immunity from suit cannot serve as an
instrument for perpetrating an injustice on a citizen. Had the government
followed the procedure indicated by the governing law at the time, a
complaint would have been filed by it, and only upon payment of the
compensation fixed by the judgment, or after tender to the party entitled
to such payment of the amount fixed, may it "have the right to enter in
and upon the land so condemned" to appropriate the same to the public
use defined in the judgment." 14If there were an observance of procedural
regularity, petitioners would not be in the sad plaint they are now. It is
unthinkable then that precisely because there was a failure to abide by
what the law requires, the government would stand to benefit. It is just as
important, if not more so, that there be fidelity to legal norms on the part
of officialdom if the rule of law were to be maintained. It is not too much to
say that when the government takes any property for public use, which is
conditioned upon the payment of just compensation, to be judicially
ascertained, it makes manifest that it submits to the jurisdiction of a court.
There is no thought then that the doctrine of immunity from suit could still
be appropriately invoked. 15
Accordingly, the lower court decision is reversed so that the court may
proceed with the complaint and determine the compensation to which
petitioners are entitled, taking into account the ruling in the above Alfonso
case: "As to the value of the property, although the plaintiff claims the
present market value thereof, the rule is that to determine due

compensation for lands appropriated by the Government, the basis should

be the price or value at the time that it was taken from the owner and
appropriated by the Government." 16
WHEREFORE, the lower court decision of January 30, 1969 dismissing the
complaint is reversed and the case remanded to the lower court for
proceedings in accordance with law.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Teehankee, Villamor and
Makasiar, JJ., concur.
Concepcion, C.J., and Barredo, J., took no part.
3 Cf. Providence Washington Insurance Co. v. Republic, L-26386, Sept. 30,
1969, 29 SCRA 598; Fireman's Fund Insurance Co. v. United States Lines
Co., L-26533, Jan. 30, 1970, 31 SCRA 309; Switzerland General Insurance
Company, Ltd. v. Republic, L-27389, March 30, 1970; 32 SCRA 227.
4 Cf. Begosa v. Chairman Philippine Veterans Administration, L-25916, April
30, 1970, 32 SCRA 466, citing Ruiz v. Cabahug, 102 Phil. 110 (1957) and
Syquia v. Almeda Lopez, 84 Phil. 312 (1949).
5 84 Phil. 312 (1949) affirmed in Marvel Building Corp. v. Phil. War Damage
Commission, 85 Phil. 27 (1949) and Johnson v. Turner, 94 Phil. 807 (1954).
Such a doctrine goes back to Tan Te v. Bell, 27 Phil. 354 (1914). Cf. L. S.
Moon v. Harrison, 43 Phil 27 (1922).
9 Act No. 190 (1901). According to Section 241 of such Code: "The
Government of the Philippine Islands, or of any province or department
thereof, or of any municipality, and any person, or public or private
corporation having by law the right to condemn private property for public
use shall exercise that right in the manner hereinafter prescribed." The
next section reads: "The complaint in condemnation proceedings shall
state with certainty the right of condemnation, and describe the property
sought to be condemned, showing the interest of each defendant
separately." Sec. 242.
13 "According to Article III, Section 1, paragraph 2 of the Constitution:
"Private property shall not be taken for public use without just
compensation."
14 Section 247 of Act No. 190 reads in full: "Upon payment by the plaintiff
to the defendant of compensation as fixed by the judgment, or after
tender to him of the amount so fixed and payment of the costs, the
plaintiff shall have the right to enter in and upon the land so condemned,
to appropriate the same to the public use defined in the judgment. In case
the defendant and his attorney absent themselves from the court or
decline to receive the same, payment may be made to the clerk of the
court for him, and such officer shall be responsible on his bond therefor
and shall be compelled to receive it."

15 Cf. Merrit v. Government of the Philippine Islands, 34 Phil. 311 (1916);

Compania General de Tabacos v. Government, 45 Phil. 663 (1924); Salgado
v. Ramos, 64 Phil. 724 (1937); Bull v. Yatco, 67 Phil. 728 (1939); Santos vs.
Santos, 92 Phil. 281 (1952) ; Froilan v. Pan Oriental Shipping Co., 95 Phil.
905 (1954); Angat River Irrigation v. Angat River Workers' Union, 102 Phil.
789 (1957); Concepcion, J., diss.; Lyons, Inc. v. United States of America,
104 Phil. 593 (1958); Mobil Philippines Exploration, Inc. v. Customs Arrastre

Service, L-23139, December 17, 1966, 18 SCRA 1120; Hartford Insurance

Co. v. P. D. Marchessini & Co., L-24544, November 15, 1967, 21 SCRA 860;
Firemen's Fund Insurance Co. v. Maersk Line Far East Service, L-27189,
March 28, 1969, 27 SCRA 519; Insurance Co. of North America v. Osaka
Shosen Kaisha, L-22784, March 28, 1969, 27 SCRA 780; Providence
Washington Insurance Co. v. Republic of the Philippines, L-26386, Sept. 30,
1969, 29 SCRA 598.