Republic of the Philippines clandestine relations with men, others went to work in different capacities, others assumed a life
SUPREME COURT unknown and disappeared, and a goodly portion found means to return to Manila.
Manila
EN BANC
G.R. No. L-14639 March 25, 1919
ZACARIAS VILLAVICENCIO, ET AL., petitioners,
vs.
JUSTO LUKBAN, ET AL., respondents.
Alfonso Mendoza for petitioners.
City Fiscal Diaz for respondents.
MALCOLM, J.:
The annals of juridical history fail to reveal a case quite as remarkable as the one which this
application for habeas corpus submits for decision. While hardly to be expected to be met with in
this modern epoch of triumphant democracy, yet, after all, the cause presents no great difficulty
if there is kept in the forefront of our minds the basic principles of popular government, and if we
give expression to the paramount purpose for which the courts, as an independent power of
such a government, were constituted. The primary question is Shall the judiciary permit a
government of the men instead of a government of laws to be set up in the Philippine Islands?
Omitting much extraneous matter, of no moment to these proceedings, but which might prove
profitable reading for other departments of the government, the facts are these: The Mayor of
the city of Manila, Justo Lukban, for the best of all reasons, to exterminate vice, ordered the
segregated district for women of ill repute, which had been permitted for a number of years in
the city of Manila, closed. Between October 16 and October 25, 1918, the women were kept
confined to their houses in the district by the police. Presumably, during this period, the city
authorities quietly perfected arrangements with the Bureau of Labor for sending the women to
Davao, Mindanao, as laborers; with some government office for the use of the coastguard
cutters Corregidor and Negros, and with the Constabulary for a guard of soldiers. At any rate,
about midnight of October 25, the police, acting pursuant to orders from the chief of police,
Anton Hohmann and the Mayor of the city of Manila, Justo Lukban, descended upon the houses,
hustled some 170 inmates into patrol wagons, and placed them aboard the steamers that
awaited their arrival. The women were given no opportunity to collect their belongings, and
apparently were under the impression that they were being taken to a police station for an
investigation. They had no knowledge that they were destined for a life in Mindanao. They had
not been asked if they wished to depart from that region and had neither directly nor indirectly
given their consent to the deportation. The involuntary guests were received on board the
steamers by a representative of the Bureau of Labor and a detachment of Constabulary soldiers.
The two steamers with their unwilling passengers sailed for Davao during the night of October
25.
The vessels reached their destination at Davao on October 29. The women were landed and
receipted for as laborers by Francisco Sales, provincial governor of Davao, and by Feliciano
Yigo and Rafael Castillo. The governor and the hacendero Yigo, who appear as parties in the
case, had no previous notification that the women were prostitutes who had been expelled from
the city of Manila. The further happenings to these women and the serious charges growing out
of alleged ill-treatment are of public interest, but are not essential to the disposition of this case.
Suffice it to say, generally, that some of the women married, others assumed more or less
To turn back in our narrative, just about the time the Corregidor and the Negros were putting in
to Davao, the attorney for the relatives and friends of a considerable number of the deportees
presented an application for habeas corpus to a member of the Supreme Court. Subsequently,
the application, through stipulation of the parties, was made to include all of the women who
were sent away from Manila to Davao and, as the same questions concerned them all, the
application will be considered as including them. The application set forth the salient facts, which
need not be repeated, and alleged that the women were illegally restrained of their liberty by
Justo Lukban, Mayor of the city of Manila, Anton Hohmann, chief of police of the city of Manila,
and by certain unknown parties. The writ was made returnable before the full court. The city
fiscal appeared for the respondents, Lukban and Hohmann, admitted certain facts relative to
sequestration and deportation, and prayed that the writ should not be granted because the
petitioners were not proper parties, because the action should have been begun in the Court of
First Instance for Davao, Department of Mindanao and Sulu, because the respondents did not
have any of the women under their custody or control, and because their jurisdiction did not
extend beyond the boundaries of the city of Manila. According to an exhibit attached to the
answer of the fiscal, the 170 women were destined to be laborers, at good salaries, on
the haciendas of Yigo and Governor Sales. In open court, the fiscal admitted, in answer to
question of a member of the court, that these women had been sent out of Manila without their
consent. The court awarded the writ, in an order of November 4, that directed Justo Lukban,
Mayor of the city of Manila, Anton Hohmann, chief of police of the city of Manila, Francisco
Sales, governor of the province of Davao, and Feliciano Yigo, an hacenderoof Davao, to bring
before the court the persons therein named, alleged to be deprived of their liberty, on December
2, 1918.
Before the date mentioned, seven of the women had returned to Manila at their own expense.
On motion of counsel for petitioners, their testimony was taken before the clerk of the Supreme
Court sitting as commissioners. On the day named in the order, December 2nd, 1918, none of
the persons in whose behalf the writ was issued were produced in court by the respondents. It
has been shown that three of those who had been able to come back to Manila through their
own efforts, were notified by the police and the secret service to appear before the court. The
fiscal appeared, repeated the facts more comprehensively, reiterated the stand taken by him
when pleading to the original petition copied a telegram from the Mayor of the city of Manila to
the provincial governor of Davao and the answer thereto, and telegrams that had passed
between the Director of Labor and the attorney for that Bureau then in Davao, and offered
certain affidavits showing that the women were contained with their life in Mindanao and did not
wish to return to Manila. Respondents Sales answered alleging that it was not possible to fulfill
the order of the Supreme Court because the women had never been under his control, because
they were at liberty in the Province of Davao, and because they had married or signed contracts
as laborers. Respondent Yigo answered alleging that he did not have any of the women under
his control and that therefore it was impossible for him to obey the mandate. The court, after due
deliberation, on December 10, 1918, promulgated a second order, which related that the
respondents had not complied with the original order to the satisfaction of the court nor
explained their failure to do so, and therefore directed that those of the women not in Manila be
brought before the court by respondents Lukban, Hohmann, Sales, and Yigo on January 13,
1919, unless the women should, in written statements voluntarily made before the judge of first
instance of Davao or the clerk of that court, renounce the right, or unless the respondents should
demonstrate some other legal motives that made compliance impossible. It was further stated
that the question of whether the respondents were in contempt of court would later be decided
and the reasons for the order announced in the final decision.
Before January 13, 1919, further testimony including that of a number of the women, of certain
detectives and policemen, and of the provincial governor of Davao, was taken before the clerk of
the Supreme Court sitting as commissioner and the clerk of the Court of First Instance of Davao
acting in the same capacity. On January 13, 1919, the respondents technically presented before
the Court the women who had returned to the city through their own efforts and eight others who
had been brought to Manila by the respondents. Attorneys for the respondents, by their returns,
once again recounted the facts and further endeavored to account for all of the persons involved
in the habeas corpus. In substance, it was stated that the respondents, through their
representatives and agents, had succeeded in bringing from Davao with their consent eight
women; that eighty-one women were found in Davao who, on notice that if they desired they
could return to Manila, transportation fee, renounced the right through sworn statements; that
fifty-nine had already returned to Manila by other means, and that despite all efforts to find them
twenty-six could not be located. Both counsel for petitioners and the city fiscal were permitted to
submit memoranda. The first formally asked the court to find Justo Lukban, Mayor of the city of
Manila, Anton Hohmann, chief of police of the city of Manila, Jose Rodriguez and Fernando
Ordax, members of the police force of the city of Manila, Feliciano Yigo, an hacendero of
Davao, Modesto Joaquin, the attorney for the Bureau of Labor, and Anacleto Diaz, fiscal of the
city of Manila, in contempt of court. The city fiscal requested that the replica al memorandum de
los recurridos, (reply to respondents' memorandum) dated January 25, 1919, be struck from the
record.
In the second order, the court promised to give the reasons for granting the writ of habeas
corpus in the final decision. We will now proceed to do so.
One fact, and one fact only, need be recalled these one hundred and seventy women were
isolated from society, and then at night, without their consent and without any opportunity to
consult with friends or to defend their rights, were forcibly hustled on board steamers for
transportation to regions unknown. Despite the feeble attempt to prove that the women left
voluntarily and gladly, that such was not the case is shown by the mere fact that the presence of
the police and the constabulary was deemed necessary and that these officers of the law chose
the shades of night to cloak their secret and stealthy acts. Indeed, this is a fact impossible to
refute and practically admitted by the respondents.
With this situation, a court would next expect to resolve the question By authority of what law
did the Mayor and the Chief of Police presume to act in deporting by duress these persons from
Manila to another distant locality within the Philippine Islands? We turn to the statutes and we
find
Alien prostitutes can be expelled from the Philippine Islands in conformity with an Act of
congress. The Governor-General can order the eviction of undesirable aliens after a hearing
from the Islands. Act No. 519 of the Philippine Commission and section 733 of the Revised
Ordinances of the city of Manila provide for the conviction and punishment by a court of justice
of any person who is a common prostitute. Act No. 899 authorizes the return of any citizen of the
United States, who may have been convicted of vagrancy, to the homeland. New York and other
States have statutes providing for the commitment to the House of Refuge of women convicted
of being common prostitutes. Always a law! Even when the health authorities compel
vaccination, or establish a quarantine, or place a leprous person in the Culion leper colony, it is
done pursuant to some law or order. But one can search in vain for any law, order, or regulation,
which even hints at the right of the Mayor of the city of Manila or the chief of police of that city to
force citizens of the Philippine Islands and these women despite their being in a sense lepers
of society are nevertheless not chattels but Philippine citizens protected by the same
constitutional guaranties as are other citizens to change their domicile from Manila to another
locality. On the contrary, Philippine penal law specifically punishes any public officer who, not
being expressly authorized by law or regulation, compels any person to change his residence.
In other countries, as in Spain and Japan, the privilege of domicile is deemed so important as to
be found in the Bill of Rights of the Constitution. Under the American constitutional system,
liberty of abode is a principle so deeply imbedded in jurisprudence and considered so
elementary in nature as not even to require a constitutional sanction. Even the Governor-
General of the Philippine Islands, even the President of the United States, who has often been
said to exercise more power than any king or potentate, has no such arbitrary prerogative, either
inherent or express. Much less, therefore, has the executive of a municipality, who acts within a
sphere of delegated powers. If the mayor and the chief of police could, at their mere behest or
even for the most praiseworthy of motives, render the liberty of the citizen so insecure, then the
presidents and chiefs of police of one thousand other municipalities of the Philippines have the
same privilege. If these officials can take to themselves such power, then any other official can
do the same. And if any official can exercise the power, then all persons would have just as
much right to do so. And if a prostitute could be sent against her wishes and under no law from
one locality to another within the country, then officialdom can hold the same club over the head
of any citizen.
Law defines power. Centuries ago Magna Charta decreed that "No freeman shall be taken, or
imprisoned, or be disseized of his freehold, or liberties, or free customs, or be outlawed, or
exiled, or any other wise destroyed; nor will we pass upon him nor condemn him, but by lawful
judgment of his peers or by the law of the land. We will sell to no man, we will not deny or defer
to any man either justice or right." (Magna Charta, 9 Hen., 111, 1225, Cap. 29; 1 eng. stat. at
Large, 7.) No official, no matter how high, is above the law. The courts are the forum which
functionate to safeguard individual liberty and to punish official transgressors. "The law," said
Justice Miller, delivering the opinion of the Supreme Court of the United States, "is the only
supreme power in our system of government, and every man who by accepting office
participates in its functions is only the more strongly bound to submit to that supremacy, and to
observe the limitations which it imposes upon the exercise of the authority which it gives."
(U.S. vs. Lee [1882], 106 U.S., 196, 220.) "The very idea," said Justice Matthews of the same
high tribunal in another case, "that one man may be compelled to hold his life, or the means of
living, or any material right essential to the enjoyment of life, at the mere will of another, seems
to be intolerable in any country where freedom prevails, as being the essence of slavery itself."
(Yick Wo vs. Hopkins [1886], 118 U.S., 356, 370.) All this explains the motive in issuing the writ
of habeas corpus, and makes clear why we said in the very beginning that the primary question
was whether the courts should permit a government of men or a government of laws to be
established in the Philippine Islands.
What are the remedies of the unhappy victims of official oppression? The remedies of the citizen
are three: (1) Civil action; (2) criminal action, and (3) habeas corpus.
The first is an optional but rather slow process by which the aggrieved party may recoup money
damages. It may still rest with the parties in interest to pursue such an action, but it was never
intended effectively and promptly to meet any such situation as that now before us.
As to criminal responsibility, it is true that the Penal Code in force in these Islands provides:
Any public officer not thereunto authorized by law or by regulations of a general
character in force in the Philippines who shall banish any person to a place more than
two hundred kilometers distant from his domicile, except it be by virtue of the judgment
of a court, shall be punished by a fine of not less than three hundred and twenty-five
and not more than three thousand two hundred and fifty pesetas.
Any public officer not thereunto expressly authorized by law or by regulation of a
general character in force in the Philippines who shall compel any person to change
his domicile or residence shall suffer the penalty of destierro and a fine of not less
than six hundred and twenty-five and not more than six thousand two hundred and
fifty pesetas. (Art. 211.)
We entertain no doubt but that, if, after due investigation, the proper prosecuting officers find that
any public officer has violated this provision of law, these prosecutors will institute and press a
criminal prosecution just as vigorously as they have defended the same official in this action.
Nevertheless, that the act may be a crime and that the persons guilty thereof can be proceeded
against, is no bar to the instant proceedings. To quote the words of Judge Cooley in a case
which will later be referred to "It would be a monstrous anomaly in the law if to an application
by one unlawfully confined, ta be restored to his liberty, it could be a sufficient answer that the
confinement was a crime, and therefore might be continued indefinitely until the guilty party was
tried and punished therefor by the slow process of criminal procedure." (In the matter of Jackson
[1867], 15 Mich., 416, 434.) The writ of habeas corpus was devised and exists as a speedy and
effectual remedy to relieve persons from unlawful restraint, and as the best and only sufficient
defense of personal freedom. Any further rights of the parties are left untouched by decision on
the writ, whose principal purpose is to set the individual at liberty.
Granted that habeas corpus is the proper remedy, respondents have raised three specific
objections to its issuance in this instance. The fiscal has argued (l) that there is a defect in
parties petitioners, (2) that the Supreme Court should not a assume jurisdiction, and (3) that the
person in question are not restrained of their liberty by respondents. It was finally suggested that
the jurisdiction of the Mayor and the chief of police of the city of Manila only extends to the city
limits and that perforce they could not bring the women from Davao.
The first defense was not presented with any vigor by counsel. The petitioners were relatives
and friends of the deportees. The way the expulsion was conducted by the city officials made it
impossible for the women to sign a petition for habeas corpus. It was consequently proper for
the writ to be submitted by persons in their behalf. (Code of Criminal Procedure, sec. 78; Code
of Civil Procedure, sec. 527.) The law, in its zealous regard for personal liberty, even makes it
the duty of a court or judge to grant a writ of habeas corpus if there is evidence that within the
court's jurisdiction a person is unjustly imprisoned or restrained of his liberty, though no
application be made therefor. (Code of Criminal Procedure, sec. 93.) Petitioners had standing in
court.
The fiscal next contended that the writ should have been asked for in the Court of First Instance
of Davao or should have been made returnable before that court. It is a general rule of good
practice that, to avoid unnecessary expense and inconvenience, petitions for habeas
corpus should be presented to the nearest judge of the court of first instance. But this is not a
hard and fast rule. The writ of habeas corpus may be granted by the Supreme Court or any
judge thereof enforcible anywhere in the Philippine Islands. (Code of Criminal Procedure, sec.
79; Code of Civil Procedure, sec. 526.) Whether the writ shall be made returnable before the
Supreme Court or before an inferior court rests in the discretion of the Supreme Court and is
dependent on the particular circumstances. In this instance it was not shown that the Court of
First Instance of Davao was in session, or that the women had any means by which to advance
their plea before that court. On the other hand, it was shown that the petitioners with their
attorneys, and the two original respondents with their attorney, were in Manila; it was shown that
the case involved parties situated in different parts of the Islands; it was shown that the women
might still be imprisoned or restrained of their liberty; and it was shown that if the writ was to
accomplish its purpose, it must be taken cognizance of and decided immediately by the
appellate court. The failure of the superior court to consider the application and then to grant the
writ would have amounted to a denial of the benefits of the writ.
The last argument of the fiscal is more plausible and more difficult to meet. When the writ was
prayed for, says counsel, the parties in whose behalf it was asked were under no restraint; the
women, it is claimed, were free in Davao, and the jurisdiction of the mayor and the chief of police
did not extend beyond the city limits. At first blush, this is a tenable position. On closer
examination, acceptance of such dictum is found to be perversive of the first principles of the writ
of habeas corpus.
A prime specification of an application for a writ of habeas corpus is restraint of liberty. The
essential object and purpose of the writ of habeas corpus is to inquire into all manner of
involuntary restraint as distinguished from voluntary, and to relieve a person therefrom if such
restraint is illegal. Any restraint which will preclude freedom of action is sufficient. The forcible
taking of these women from Manila by officials of that city, who handed them over to other
parties, who deposited them in a distant region, deprived these women of freedom of locomotion
just as effectively as if they had been imprisoned. Placed in Davao without either money or
personal belongings, they were prevented from exercising the liberty of going when and where
they pleased. The restraint of liberty which began in Manila continued until the aggrieved parties
were returned to Manila and released or until they freely and truly waived his right.
Consider for a moment what an agreement with such a defense would mean. The chief
executive of any municipality in the Philippines could forcibly and illegally take a private citizen
and place him beyond the boundaries of the municipality, and then, when called upon to defend
his official action, could calmly fold his hands and claim that the person was under no restraint
and that he, the official, had no jurisdiction over this other municipality. We believe the true
principle should be that, if the respondent is within the jurisdiction of the court and has it in his
power to obey the order of the court and thus to undo the wrong that he has inflicted, he should
be compelled to do so. Even if the party to whom the writ is addressed has illegally parted with
the custody of a person before the application for the writ is no reason why the writ should not
issue. If the mayor and the chief of police, acting under no authority of law, could deport these
women from the city of Manila to Davao, the same officials must necessarily have the same
means to return them from Davao to Manila. The respondents, within the reach of process, may
not be permitted to restrain a fellow citizen of her liberty by forcing her to change her domicile
and to avow the act with impunity in the courts, while the person who has lost her birthright of
liberty has no effective recourse. The great writ of liberty may not thus be easily evaded.
It must be that some such question has heretofore been presented to the courts for decision.
Nevertheless, strange as it may seem, a close examination of the authorities fails to reveal any
analogous case. Certain decisions of respectable courts are however very persuasive in nature.
A question came before the Supreme Court of the State of Michigan at an early date as to
whether or not a writ of habeas corpus would issue from the Supreme Court to a person within
the jurisdiction of the State to bring into the State a minor child under guardianship in the State,
who has been and continues to be detained in another State. The membership of the Michigan
Supreme Court at this time was notable. It was composed of Martin, chief justice, and Cooley,
Campbell, and Christiancy, justices. On the question presented the court was equally divided.
Campbell, J., with whom concurred Martin, C. J., held that the writ should be quashed. Cooley,
J., one of the most distinguished American judges and law-writers, with whom concurred
Christiancy, J., held that the writ should issue. Since the opinion of Justice Campbell was
predicated to a large extent on his conception of the English decisions, and since, as will
hereafter appear, the English courts have taken a contrary view, only the following eloquent
passages from the opinion of Justice Cooley are quoted:
I have not yet seen sufficient reason to doubt the power of this court to issue the
present writ on the petition which was laid before us. . . .
It would be strange indeed if, at this late day, after the eulogiums of six centuries and
a half have been expended upon the Magna Charta, and rivers of blood shed for its
establishment; after its many confirmations, until Coke could declare in his speech on
the petition of right that "Magna Charta was such a fellow that he will have no
sovereign," and after the extension of its benefits and securities by the petition of right,
bill of rights and habeas corpus acts, it should now be discovered that evasion of that
great clause for the protection of personal liberty, which is the life and soul of the
whole instrument, is so easy as is claimed here. If it is so, it is important that it be
determined without delay, that the legislature may apply the proper remedy, as I can
not doubt they would, on the subject being brought to their notice. . . .
 The second proposition that the statutory provisions are confined to the case of
imprisonment within the state seems to me to be based upon a misconception as to
the source of our jurisdiction. It was never the case in England that the court of king's
bench derived its jurisdiction to issue and enforce this writ from the statute. Statutes
were not passed to give the right, but to compel the observance of rights which
existed. . . .
The important fact to be observed in regard to the mode of procedure upon this writ is,
that it is directed to and served upon, not the person confined, but his jailor. It does not
reach the former except through the latter. The officer or person who serves it does
not unbar the prison doors, and set the prisoner free, but the court relieves him by
compelling the oppressor to release his constraint. The whole force of the writ is spent
upon the respondent, and if he fails to obey it, the means to be resorted to for the
purposes of compulsion are fine and imprisonment. This is the ordinary mode of
affording relief, and if any other means are resorted to, they are only auxiliary to those
which are usual. The place of confinement is, therefore, not important to the relief, if
the guilty party is within reach of process, so that by the power of the court he can be
compelled to release his grasp. The difficulty of affording redress is not increased by
the confinement being beyond the limits of the state, except as greater distance may
affect it. The important question is, where the power of control exercised? And I am
aware of no other remedy. (In the matter of Jackson [1867], 15 Mich., 416.)
The opinion of Judge Cooley has since been accepted as authoritative by other courts.
(Rivers vs. Mitchell [1881], 57 Iowa, 193; Breene vs. People [1911], Colo., 117 Pac. Rep.,
1000; Ex parte Young [1892], 50 Fed., 526.)
The English courts have given careful consideration to the subject. Thus, a child had been taken
out of English by the respondent. A writ of habeas corpus was issued by the Queen's Bench
Division upon the application of the mother and her husband directing the defendant to produce
the child. The judge at chambers gave defendant until a certain date to produce the child, but he
did not do so. His return stated that the child before the issuance of the writ had been handed
over by him to another; that it was no longer in his custody or control, and that it was impossible
for him to obey the writ. He was found in contempt of court. On appeal, the court, through Lord
Esher, M. R., said:
A writ of habeas corpus was ordered to issue, and was issued on January 22. That
writ commanded the defendant to have the body of the child before a judge in
chambers at the Royal Courts of Justice immediately after the receipt of the writ,
together with the cause of her being taken and detained. That is a command to bring
the child before the judge and must be obeyed, unless some lawful reason can be
shown to excuse the nonproduction of the child. If it could be shown that by reason of
his having lawfully parted with the possession of the child before the issuing of the
writ, the defendant had no longer power to produce the child, that might be an answer;
but in the absence of any lawful reason he is bound to produce the child, and, if he
does not, he is in contempt of the Court for not obeying the writ without lawful excuse.
Many efforts have been made in argument to shift the question of contempt to some
anterior period for the purpose of showing that what was done at some time prior to
the writ cannot be a contempt. But the question is not as to what was done before the
issue of the writ. The question is whether there has been a contempt in disobeying the
writ it was issued by not producing the child in obedience to its commands. (The
Queen vs. Bernardo [1889], 23 Q. B. D., 305. See also to the same effect the Irish
case of In re Matthews, 12 Ir. Com. Law Rep. [N. S.], 233; The Queen vs. Barnardo,
Gossage's Case [1890], 24 Q. B. D., 283.)
A decision coming from the Federal Courts is also of interest. A habeas corpus was directed to
the defendant to have before the circuit court of the District of Columbia three colored persons,
with the cause of their detention. Davis, in his return to the writ, stated on oath that he had
purchased the negroes as slaves in the city of Washington; that, as he believed, they were
removed beyond the District of Columbia before the service of the writ of habeas corpus, and
that they were then beyond his control and out of his custody. The evidence tended to show that
Davis had removed the negroes because he suspected they would apply for a writ of habeas
corpus. The court held the return to be evasive and insufficient, and that Davis was bound to
produce the negroes, and Davis being present in court, and refusing to produce them, ordered
that he be committed to the custody of the marshall until he should produce the negroes, or be
otherwise discharged in due course of law. The court afterwards ordered that Davis be released
upon the production of two of the negroes, for one of the negroes had run away and been
lodged in jail in Maryland. Davis produced the two negroes on the last day of the term. (United
States vs. Davis [1839], 5 Cranch C.C., 622, Fed. Cas. No. 14926. See also Robb vs. Connolly
[1883], 111 U.S., 624; Church on Habeas, 2nd ed., p. 170.)
We find, therefore, both on reason and authority, that no one of the defense offered by the
respondents constituted a legitimate bar to the granting of the writ of habeas corpus.
There remains to be considered whether the respondent complied with the two orders of the
Supreme Court awarding the writ of habeas corpus, and if it be found that they did not, whether
the contempt should be punished or be taken as purged.
The first order, it will be recalled, directed Justo Lukban, Anton Hohmann, Francisco Sales, and
Feliciano Yigo to present the persons named in the writ before the court on December 2, 1918.
The order was dated November 4, 1918. The respondents were thus given ample time,
practically one month, to comply with the writ. As far as the record discloses, the Mayor of the
city of Manila waited until the 21st of November before sending a telegram to the provincial
governor of Davao. According to the response of the attorney for the Bureau of Labor to the
telegram of his chief, there were then in Davao women who desired to return to Manila, but who
should not be permitted to do so because of having contracted debts. The half-hearted effort
naturally resulted in none of the parties in question being brought before the court on the day
named.
For the respondents to have fulfilled the court's order, three optional courses were open: (1)
They could have produced the bodies of the persons according to the command of the writ; or
(2) they could have shown by affidavit that on account of sickness or infirmity those persons
could not safely be brought before the court; or (3) they could have presented affidavits to show
that the parties in question or their attorney waived the right to be present. (Code of Criminal
Procedure, sec. 87.) They did not produce the bodies of the persons in whose behalf the writ
was granted; they did not show impossibility of performance; and they did not present writings
that waived the right to be present by those interested. Instead a few stereotyped affidavits
purporting to show that the women were contended with their life in Davao, some of which have
since been repudiated by the signers, were appended to the return. That through ordinary
diligence a considerable number of the women, at least sixty, could have been brought back to
Manila is demonstrated to be found in the municipality of Davao, and that about this number
either returned at their own expense or were produced at the second hearing by the
respondents.
The court, at the time the return to its first order was made, would have been warranted
summarily in finding the respondents guilty of contempt of court, and in sending them to jail until
they obeyed the order. Their excuses for the non-production of the persons were far from
sufficient. The, authorities cited herein pertaining to somewhat similar facts all tend to indicate
with what exactitude a habeas corpus writ must be fulfilled. For example, in Gossage's case,
supra, the Magistrate in referring to an earlier decision of the Court, said: "We thought that,
having brought about that state of things by his own illegal act, he must take the consequences;
and we said that he was bound to use every effort to get the child back; that he must do much
more than write letters for the purpose; that he must advertise in America, and even if necessary
himself go after the child, and do everything that mortal man could do in the matter; and that the
court would only accept clear proof of an absolute impossibility by way of excuse." In other
words, the return did not show that every possible effort to produce the women was made by the
respondents. That the court forebore at this time to take drastic action was because it did not
wish to see presented to the public gaze the spectacle of a clash between executive officials and
the judiciary, and because it desired to give the respondents another chance to demonstrate
their good faith and to mitigate their wrong.
In response to the second order of the court, the respondents appear to have become more
zealous and to have shown a better spirit. Agents were dispatched to Mindanao, placards were
posted, the constabulary and the municipal police joined in rounding up the women, and a
steamer with free transportation to Manila was provided. While charges and counter-charges in
such a bitterly contested case are to be expected, and while a critical reading of the record might
reveal a failure of literal fulfillment with our mandate, we come to conclude that there is a
substantial compliance with it. Our finding to this effect may be influenced somewhat by our
sincere desire to see this unhappy incident finally closed. If any wrong is now being perpetrated
in Davao, it should receive an executive investigation. If any particular individual is still restrained
of her liberty, it can be made the object of separate habeas corpus proceedings.
Since the writ has already been granted, and since we find a substantial compliance with it,
nothing further in this connection remains to be done.
The attorney for the petitioners asks that we find in contempt of court Justo Lukban, Mayor of the
city of Manila, Anton Hohmann, chief of police of the city of Manila, Jose Rodriguez, and
Fernando Ordax, members of the police force of the city of Manila, Modesto Joaquin, the
attorney for the Bureau of Labor, Feliciano Yigo, an hacendero of Davao, and Anacleto Diaz,
Fiscal of the city of Manila.
It would be possible to turn to the provisions of section 546 of the Code of Civil Procedure, which
relates to the penalty for disobeying the writ, and in pursuance thereof to require respondent
Lukban to forfeit to the parties aggrieved as much as P400 each, which would reach to many
thousands of pesos, and in addition to deal with him as for a contempt. Some members of the
court are inclined to this stern view. It would also be possible to find that since respondent
Lukban did comply substantially with the second order of the court, he has purged his contempt
of the first order. Some members of the court are inclined to this merciful view. Between the two
extremes appears to lie the correct finding. The failure of respondent Lukban to obey the first
mandate of the court tended to belittle and embarrass the administration of justice to such an
extent that his later activity may be considered only as extenuating his conduct. A nominal fine
will at once command such respect without being unduly oppressive such an amount is P100.
In resume as before stated, no further action on the writ of habeas corpus is necessary. The
respondents Hohmann, Rodriguez, Ordax, Joaquin, Yigo, and Diaz are found not to be in
contempt of court. Respondent Lukban is found in contempt of court and shall pay into the office
of the clerk of the Supreme Court within five days the sum of one hundred pesos (P100). The
motion of the fiscal of the city of Manila to strike from the record the Replica al Memorandum de
los Recurridos of January 25, 1919, is granted. Costs shall be taxed against respondents. So
ordered.
In concluding this tedious and disagreeable task, may we not be permitted to express the hope
that this decision may serve to bulwark the fortifications of an orderly government of laws and to
protect individual liberty from illegal encroachment.
Arellano, C.J., Avancea and Moir, JJ., concur.
Johnson, and Street, JJ., concur in the result.

The power to punish for contempt of court should be exercised on the preservative and not on
the vindictive principle. Only occasionally should the court invoke its inherent power in order to
retain that respect without which the administration of justice must falter or fail. Nevertheless
when one is commanded to produce a certain person and does not do so, and does not offer a
valid excuse, a court must, to vindicate its authority, adjudge the respondent to be guilty of
contempt, and must order him either imprisoned or fined. An officer's failure to produce the body
of a person in obedience to a writ of habeas corpus when he has power to do so, is a contempt
committed in the face of the court. (Ex parte Sterns [1888], 77 Cal., 156; In re Patterson [1888],
99 N. C., 407.)

With all the facts and circumstances in mind, and with judicial regard for human imperfections,
we cannot say that any of the respondents, with the possible exception of the first named, has
flatly disobeyed the court by acting in opposition to its authority. Respondents Hohmann,
Rodriguez, Ordax, and Joaquin only followed the orders of their chiefs, and while, under the law
of public officers, this does not exonerate them entirely, it is nevertheless a powerful mitigating
circumstance. The hacendero Yigo appears to have been drawn into the case through a
misconstruction by counsel of telegraphic communications. The city fiscal, Anacleto Diaz, would
seem to have done no more than to fulfill his duty as the legal representative of the city Republic of the Philippines
government. Finding him innocent of any disrespect to the court, his counter-motion to strike SUPREME COURT
from the record the memorandum of attorney for the petitioners, which brings him into this Manila
undesirable position, must be granted. When all is said and done, as far as this record discloses,
the official who was primarily responsible for the unlawful deportation, who ordered the police to
accomplish the same, who made arrangements for the steamers and the constabulary, who EN BANC
conducted the negotiations with the Bureau of Labor, and who later, as the head of the city
government, had it within his power to facilitate the return of the unfortunate women to Manila, G.R. No. L-2662 March 26, 1949
was Justo Lukban, the Mayor of the city of Manila. His intention to suppress the social evil was
commendable. His methods were unlawful. His regard for the writ of habeas corpus issued by
the court was only tardily and reluctantly acknowledged.
SHIGENORI KURODA, petitioner,
vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO DUQUE, Colonel
MARGARITO TORALBA, Colonel IRENEO BUENCONSEJO, Colonel PEDRO TABUENA,
Major FEDERICO ARANAS, MELVILLE S. HUSSEY and ROBERT PORT, respondents.
Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.
Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla and S. Melville
Hussey for respondents.
MORAN, C.J.:
Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and
Commanding General of the Japanese Imperial Forces in The Philippines during a period
covering 19433 and 19444 who is now charged before a military Commission convened by the
Chief of Staff of the Armed forces of the Philippines with having unlawfully disregarded and
failed "to discharge his duties as such command, permitting them to commit brutal atrocities and
other high crimes against noncombatant civilians and prisoners of the Imperial Japanese Forces
in violation of the laws and customs of war" comes before this Court seeking to establish the
illegality of Executive Order No. 68 of the President of the Philippines: to enjoin and prohibit
respondents Melville S. Hussey and Robert Port from participating in the prosecution of
petitioner's case before the Military Commission and to permanently prohibit respondents from
proceeding with the case of petitioners.
In support of his case petitioner tenders the following principal arguments.
First. "That Executive Order No. 68 is illegal on the ground that it violates not only the
provision of our constitutional law but also our local laws to say nothing of the fact (that) the
Philippines is not a signatory nor an adherent to the Hague Convention on Rules and
Regulations covering Land Warfare and therefore petitioners is charged of 'crimes' not based on
law, national and international." Hence petitioner argues "That in view off the fact that this
commission has been empanelled by virtue of an unconstitutional law an illegal order this
commission is without jurisdiction to try herein petitioner."
Second. That the participation in the prosecution of the case against petitioner before the
Commission in behalf of the United State of America of attorneys Melville Hussey and Robert
Port who are not attorneys authorized by the Supreme Court to practice law in the Philippines is
a diminution of our personality as an independent state and their appointment as prosecutor are
a violation of our Constitution for the reason that they are not qualified to practice law in the
Philippines.
Third. That Attorneys Hussey and Port have no personality as prosecution the United State
not being a party in interest in the case.
Executive Order No. 68, establishing a National War Crimes Office prescribing rule and
regulation governing the trial of accused war criminals, was issued by the President of the
Philippines on the 29th days of July, 1947 This Court holds that this order is valid and
constitutional. Article 2 of our Constitution provides in its section 3, that
The Philippines renounces war as an instrument of national policy and adopts the
generally accepted principles of international law as part of the of the nation.
In accordance with the generally accepted principle of international law of the present day
including the Hague Convention the Geneva Convention and significant precedents of
international jurisprudence established by the United Nation all those person military or civilian
who have been guilty of planning preparing or waging a war of aggression and of the
commission of crimes and offenses consequential and incidental thereto in violation of the laws
and customs of war, of humanity and civilization are held accountable therefor. Consequently in
the promulgation and enforcement of Execution Order No. 68 the President of the Philippines
has acted in conformity with the generally accepted and policies of international law which are
part of the our Constitution.
The promulgation of said executive order is an exercise by the President of his power as
Commander in chief of all our armed forces as upheld by this Court in the case of
Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when we said
War is not ended simply because hostilities have ceased. After cessation of armed
hostilities incident of war may remain pending which should be disposed of as in time
of war. An importance incident to a conduct of war is the adoption of measure by the
military command not only to repel and defeat the enemies but to seize and subject to
disciplinary measure those enemies who in their attempt to thwart or impede our
military effort have violated the law of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct.,
2.) Indeed the power to create a military commission for the trial and punishment of
war criminals is an aspect of waging war. And in the language of a writer a military
commission has jurisdiction so long as a technical state of war continues. This
includes the period of an armistice or military occupation up to the effective of a treaty
of peace and may extend beyond by treaty agreement. (Cowles Trial of War Criminals
by Military Tribunals, America Bar Association Journal June, 1944.)
Consequently, the President as Commander in Chief is fully empowered to consummate this
unfinished aspect of war namely the trial and punishment of war criminal through the issuance
and enforcement of Executive Order No. 68.
Petitioner argues that respondent Military Commission has no Jurisdiction to try petitioner for
acts committed in violation of the Hague Convention and the Geneva Convention because the
Philippines is not a signatory to the first and signed the second only in 1947. It cannot be denied
that the rules and regulation of the Hague and Geneva conventions form, part of and are wholly
based on the generally accepted principals of international law. In facts these rules and
principles were accepted by the two belligerent nation the United State and Japan who were
signatories to the two Convention, Such rule and principles therefore form part of the law of our
nation even if the Philippines was not a signatory to the conventions embodying them for our
Constitution has been deliberately general and extensive in its scope and is not confined to the
recognition of rule and principle of international law as continued inn treaties to which our
government may have been or shall be a signatory.
Furthermore when the crimes charged against petitioner were allegedly committed the
Philippines was under the sovereignty of United States and thus we were equally bound together
with the United States and with Japan to the right and obligation contained in the treaties
between the belligerent countries. These rights and obligation were not erased by our
assumption of full sovereignty. If at all our emergency as a free state entitles us to enforce the
right on our own of trying and punishing those who committed crimes against crimes against our
people. In this connection it is well to remember what we have said in the case of Laurel vs.
Misa (76 Phil., 372):
. . . The change of our form government from Commonwealth to Republic does not
affect the prosecution of those charged with the crime of treason committed during
then Commonwealth because it is an offense against the same sovereign people. . . .
By the same token war crimes committed against our people and our government while we were
a Commonwealth are triable and punishable by our present Republic.
Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and
Robert Port in the prosecution of his case on the ground that said attorney's are not qualified to
practice law in Philippines in accordance with our Rules of court and the appointment of said
attorneys as prosecutors is violative of our national sovereignty.
In the first place respondent Military Commission is a special military tribunal governed by a
special law and not by the Rules of court which govern ordinary civil court. It has already been
shown that Executive Order No. 68 which provides for the organization of such military
commission is a valid and constitutional law. There is nothing in said executive order which
requires that counsel appearing before said commission must be attorneys qualified to practice
law in the Philippines in accordance with the Rules of Court. In facts it is common in military
tribunals that counsel for the parties are usually military personnel who are neither attorneys nor
even possessed of legal training.
Secondly the appointment of the two American attorneys is not violative of our nation
sovereignty. It is only fair and proper that United States, which has submitted the vindication of
crimes against her government and her people to a tribunal of our nation should be allowed
representation in the trial of those very crimes. If there has been any relinquishment of
sovereignty it has not been by our government but by the United State Government which has
yielded to us the trial and punishment of her enemies. The least that we could do in the spirit of
comity is to allow them representation in said trials.
Alleging that the United State is not a party in interest in the case petitioner challenges the
personality of attorneys Hussey and Port as prosecutors. It is of common knowledge that the
United State and its people have been equally if not more greatly aggrieved by the crimes with
which petitioner stands charged before the Military Commission. It can be considered a privilege
for our Republic that a leader nation should submit the vindication of the honor of its citizens and
its government to a military tribunal of our country.
The Military Commission having been convened by virtue of a valid law with jurisdiction over the
crimes charged which fall under the provisions of Executive Order No. 68, and having said
petitioner in its custody, this Court will not interfere with the due process of such Military
commission.
For all the foregoing the petition is denied with costs de oficio.
Paras, Feria, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-5 September 17, 1945
CO KIM CHAM (alias CO KIM CHAM), petitioner,
vs.
EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance of
Manila, respondents.1
Marcelino Lontok for petitioner.
P. A. Revilla for respondent Valdez Tan Keh.
Respondent Judge Dizon in his own behalf.
FERIA, J.:
This petition for mandamus in which petitioner prays that the respondent judge of the lower court
be ordered to continue the proceedings in civil case No. 3012 of said court, which were initiated
under the regime of the so-called Republic of the Philippines established during the Japanese
military occupation of these Islands.
The respondent judge refused to take cognizance of and continue the proceedings in said case
on the ground that the proclamation issued on October 23, 1944, by General Douglas MacArthur
had the effect of invalidating and nullifying all judicial proceedings and judgements of the court of
the Philippines under the Philippine Executive Commission and the Republic of the Philippines
established during the Japanese military occupation, and that, furthermore, the lower courts
have no jurisdiction to take cognizance of and continue judicial proceedings pending in the
courts of the defunct Republic of the Philippines in the absence of an enabling law granting such
authority. And the same respondent, in his answer and memorandum filed in this Court,
contends that the government established in the Philippines during the Japanese occupation
were no de facto governments.
On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the next
day their Commander in Chief proclaimed "the Military Administration under law over the districts
occupied by the Army." In said proclamation, it was also provided that "so far as the Military
Administration permits, all the laws now in force in the Commonwealth, as well as executive and
judicial institutions, shall continue to be effective for the time being as in the past," and "all public
officials shall remain in their present posts and carry on faithfully their duties as before."
A civil government or central administration organization under the name of "Philippine
Executive Commission was organized by Order No. 1 issued on January 23, 1942, by the
Commander in Chief of the Japanese Forces in the Philippines, and Jorge B. Vargas, who was
appointed Chairman thereof, was instructed to proceed to the immediate coordination of the
existing central administrative organs and judicial courts, based upon what had existed
therefore, with approval of the said Commander in Chief, who was to exercise jurisdiction over
judicial courts.
The Chairman of the Executive Commission, as head of the central administrative organization,
issued Executive Orders Nos. 1 and 4, dated January 30 and February 5, 1942, respectively, in
which the Supreme Court, Court of Appeals, Courts of First Instance, and the justices of the
peace and municipal courts under the Commonwealth were continued with the same jurisdiction,
in conformity with the instructions given to the said Chairman of the Executive Commission by
the Commander in Chief of Japanese Forces in the Philippines in the latter's Order No. 3 of
February 20, 1942, concerning basic principles to be observed by the Philippine Executive
Commission in exercising legislative, executive and judicial powers. Section 1 of said Order
provided that "activities of the administration organs and judicial courts in the Philippines shall be
based upon the existing statutes, orders, ordinances and customs. . . ."
On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but no
substantial change was effected thereby in the organization and jurisdiction of the different
courts that functioned during the Philippine Executive Commission, and in the laws they
administered and enforced.
On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur
issued a proclamation to the People of the Philippines which declared:
1. That the Government of the Commonwealth of the Philippines is, subject to the
supreme authority of the Government of the United States, the sole and only
government having legal and valid jurisdiction over the people in areas of the
Philippines free of enemy occupation and control;
2. That the laws now existing on the statute books of the Commonwealth of the
Philippines and the regulations promulgated pursuant thereto are in full force and
effect and legally binding upon the people in areas of the Philippines free of enemy
occupation and control; and
3. That all laws, regulations and processes of any other government in the Philippines
than that of the said Commonwealth are null and void and without legal effect in areas
of the Philippines free of enemy occupation and control.
On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945,
General MacArthur, on behalf of the Government of the United States, solemnly declared "the
full powers and responsibilities under the Constitution restored to the Commonwealth whose
seat is here established as provided by law."
In the light of these facts and events of contemporary history, the principal questions to be
resolved in the present case may be reduced to the following:(1) Whether the judicial acts and
proceedings of the court existing in the Philippines under the Philippine Executive Commission
and the Republic of the Philippines were good and valid and remained so even after the
liberation or reoccupation of the Philippines by the United States and Filipino forces; (2)Whether
the proclamation issued on October 23, 1944, by General Douglas MacArthur, Commander in
Chief of the United States Army, in which he declared "that all laws, regulations and processes
of any of the government in the Philippines than that of the said Commonwealth are null and
void and without legal effect in areas of the Philippines free of enemy occupation and control,"
has invalidated all judgements and judicial acts and proceedings of the said courts; and (3) If the
said judicial acts and proceedings have not been invalidated by said proclamation, whether the
present courts of the Commonwealth, which were the same court existing prior to, and continued
during, the Japanese military occupation of the Philippines, may continue those proceedings
pending in said courts at the time the Philippines were reoccupied and liberated by the United
States and Filipino forces, and the Commonwealth of the Philippines were reestablished in the
Islands.
We shall now proceed to consider the first question, that is, whether or not under the rules of
international law the judicial acts and proceedings of the courts established in the Philippines
under the Philippine Executive Commission and the Republic of the Philippines were good and
valid and remained good and valid even after the liberation or reoccupation of the Philippines by
the United States and Filipino forces.
1. It is a legal truism in political and international law that all acts and proceedings of the
legislative, executive, and judicial departments of a de facto government are good and valid. The
question to be determined is whether or not the governments established in these Islands under
the names of the Philippine Executive Commission and Republic of the Philippines during the
Japanese military occupation or regime were de facto governments. If they were, the judicial
acts and proceedings of those governments remain good and valid even after the liberation or
reoccupation of the Philippines by the American and Filipino forces.
There are several kinds of de facto governments. The first, or government de facto in a proper
legal sense, is that government that gets possession and control of, or usurps, by force or by the
voice of the majority, the rightful legal governments and maintains itself against the will of the
latter, such as the government of England under the Commonwealth, first by Parliament and
later by Cromwell as Protector. The second is that which is established and maintained by
military forces who invade and occupy a territory of the enemy in the course of war, and which is
denominated a government of paramount force, as the cases of Castine, in Maine, which was
reduced to British possession in the war of 1812, and Tampico, Mexico, occupied during the war
with Mexico, by the troops of the United States. And the third is that established as an
independent government by the inhabitants of a country who rise in insurrection against the
parent state of such as the government of the Southern Confederacy in revolt not concerned in
the present case with the first kind, but only with the second and third kinds of de
facto governments.
Speaking of government "de facto" of the second kind, the Supreme Court of the United States,
in the case of Thorington vs. Smith (8 Wall., 1), said: "But there is another description of
government, called also by publicists a government de facto, but which might, perhaps, be more
aptly denominated a government of paramount force. Its distinguishing characteristics are (1),
that its existence is maintained by active military power with the territories, and against the
rightful authority of an established and lawful government; and (2), that while it exists it
necessarily be obeyed in civil matters by private citizens who, by acts of obedience rendered in
submission to such force, do not become responsible, or wrongdoers, for those acts, though not
warranted by the laws of the rightful government. Actual governments of this sort are established
over districts differing greatly in extent and conditions. They are usually administered directly by
military authority, but they may be administered, also, civil authority, supported more or less
directly by military force. . . . One example of this sort of government is found in the case of
Castine, in Mine, reduced to British possession in the war of 1812 . . . U. S. vs. Rice (4 Wheaton,
253). A like example is found in the case of Tampico, occupied during the war with Mexico, by
the troops of the United States . . . Fleming vs. Page (9 Howard, 614). These were cases of
temporary possessions of territory by lawfull and regular governments at war with the country of
which the territory so possessed was part."
The powers and duties of de facto governments of this description are regulated in Section III of
the Hague Conventions of 1907, which is a revision of the provisions of the Hague Conventions
of 1899 on the same subject of said Section III provides "the authority of the legislative power
having actually passed into the hands of the occupant, the latter shall take steps in his power to
reestablish and insure, as far as possible, public order and safety, while respecting, unless
absolutely prevented, the laws in force in the country."
According to the precepts of the Hague Conventions, as the belligerent occupant has the right
and is burdened with the duty to insure public order and safety during his military occupation, he
possesses all the powers of a de factogovernment, and he can suspended the old laws and
promulgate new ones and make such changes in the old as he may see fit, but he is enjoined to
respect, unless absolutely prevented by the circumstances prevailing in the occupied territory,
the municipal laws in force in the country, that is, those laws which enforce public order and
regulate social and commercial life of the country. On the other hand, laws of a political nature or
affecting political relations, such as, among others, the right of assembly, the right to bear arms,
the freedom of the press, and the right to travel freely in the territory occupied, are considered as
suspended or in abeyance during the military occupation. Although the local and civil
administration of justice is suspended as a matter of course as soon as a country is militarily
occupied, it is not usual for the invader to take the whole administration into his own hands. In
practice, the local ordinary tribunals are authorized to continue administering justice; and judges
and other judicial officers are kept in their posts if they accept the authority of the belligerent
occupant or are required to continue in their positions under the supervision of the military or civil
authorities appointed, by the Commander in Chief of the occupant. These principles and practice
have the sanction of all publicists who have considered the subject, and have been asserted by
the Supreme Court and applied by the President of the United States.
The doctrine upon this subject is thus summed up by Halleck, in his work on International Law
(Vol. 2, p. 444): "The right of one belligerent to occupy and govern the territory of the enemy
while in its military possession, is one of the incidents of war, and flows directly from the right to
conquer. We, therefore, do not look to the Constitution or political institutions of the conqueror,
for authority to establish a government for the territory of the enemy in his possession, during its
military occupation, nor for the rules by which the powers of such government are regulated and
limited. Such authority and such rules are derived directly from the laws war, as established by
the usage of the of the world, and confirmed by the writings of publicists and decisions of courts
in fine, from the law of nations. . . . The municipal laws of a conquered territory, or the laws
which regulate private rights, continue in force during military occupation, excepts so far as they
are suspended or changed by the acts of conqueror. . . . He, nevertheless, has all the powers of
a de facto government, and can at his pleasure either change the existing laws or make new
ones."
And applying the principles for the exercise of military authority in an occupied territory, which
were later embodied in the said Hague Conventions, President McKinley, in his executive order
to the Secretary of War of May 19,1898, relating to the occupation of the Philippines by United
States forces, said in part: "Though the powers of the military occupant are absolute and
supreme, and immediately operate upon the political condition of the inhabitants, the municipal
laws of the conquered territory, such as affect private rights of person and property and provide
for the punishment of crime, are considered as continuing in force, so far as they are compatible
with the new order of things, until they are suspended or superseded by the occupying
belligerent; and in practice they are not usually abrogated, but are allowed to remain in force and
to be administered by the ordinary tribunals, substantially as they were before the occupation.
This enlightened practice is, so far as possible, to be adhered to on the present occasion. The
judges and the other officials connected with the administration of justice may, if they accept the
authority of the United States, continue to administer the ordinary law of the land as between
man and man under the supervision of the American Commander in Chief." (Richardson's
Messages and Papers of President, X, p. 209.)
As to "de facto" government of the third kind, the Supreme Court of the United States, in the
same case of Thorington vs. Smith, supra, recognized the government set up by the
Confederate States as a de factogovernment. In that case, it was held that "the central
government established for the insurgent States differed from the temporary governments at
Castine and Tampico in the circumstance that its authority did no originate in lawful acts of
regular war; but it was not, on the account, less actual or less supreme. And we think that it must
be classed among the governments of which these are examples. . . .
In the case of William vs. Bruffy (96 U. S. 176, 192), the Supreme Court of the United States,
discussing the validity of the acts of the Confederate States, said: "The same general form of
government, the same general laws for the administration of justice and protection of private
rights, which had existed in the States prior to the rebellion, remained during its continuance and
afterwards. As far as the Acts of the States do not impair or tend to impair the supremacy of the
national authority, or the just rights of citizens under the Constitution, they are, in general, to be
treated as valid and binding. As we said in Horn vs. Lockhart (17 Wall., 570; 21 Law. ed., 657):
"The existence of a state of insurrection and war did not loosen the bonds of society, or do away
with civil government or the regular administration of the laws. Order was to be preserved, police
regulations maintained, crime prosecuted, property protected, contracts enforced, marriages
celebrated, estates settled, and the transfer and descent of property regulated, precisely as in
the time of peace. No one, that we are aware of, seriously questions the validity of judicial or
legislative Acts in the insurrectionary States touching these and kindered subjects, where they
were not hostile in their purpose or mode of enforcement to the authority of the National
Government, and did not impair the rights of citizens under the Constitution'. The same doctrine
has been asserted in numerous other cases."
And the same court, in the case of Baldy vs. Hunter (171 U. S., 388, 400), held: "That what
occured or was done in respect of such matters under the authority of the laws of these local de
facto governments should not be disregarded or held to be invalid merely because those
governments were organized in hostility to the Union established by the national Constitution;
this, because the existence of war between the United States and the Confederate States did
not relieve those who are within the insurrectionary lines from the necessity of civil obedience,
nor destroy the bonds of society nor do away with civil government or the regular administration
of the laws, and because transactions in the ordinary course of civil society as organized within
the enemy's territory although they may have indirectly or remotely promoted the ends of the de
facto or unlawful government organized to effect a dissolution of the Union, were without blame
'except when proved to have been entered into with actual intent to further invasion or
insurrection:'" and "That judicial and legislative acts in the respective states composing the so-
called Confederate States should be respected by the courts if they were not hostile in their
purpose or mode of enforcement to the authority of the National Government, and did not impair
the rights of citizens under the Constitution."
In view of the foregoing, it is evident that the Philippine Executive Commission, which was
organized by Order No. 1, issued on January 23, 1942, by the Commander of the Japanese
forces, was a civil government established by the military forces of occupation and therefore
a de facto government of the second kind. It was not different from the government established
by the British in Castine, Maine, or by the United States in Tampico, Mexico. As Halleck says,
"The government established over an enemy's territory during the military occupation may
exercise all the powers given by the laws of war to the conqueror over the conquered, and is
subject to all restrictions which that code imposes. It is of little consequence whether such
government be called a military or civil government. Its character is the same and the source of
its authority the same. In either case it is a government imposed by the laws of war, and so far it
concerns the inhabitants of such territory or the rest of the world, those laws alone determine the
legality or illegality of its acts." (Vol. 2, p. 466.) The fact that the Philippine Executive
Commission was a civil and not a military government and was run by Filipinos and not by
Japanese nationals, is of no consequence. In 1806, when Napoleon occupied the greater part of
Prussia, he retained the existing administration under the general direction of a french official
(Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke of Willington, on
invading France, authorized the local authorities to continue the exercise of their functions,
apparently without appointing an English superior. (Wellington Despatches, XI, 307.). The
Germans, on the other hand, when they invaded France in 1870, appointed their own officials, at
least in Alsace and Lorraine, in every department of administration and of every rank. (Calvo,
pars. 2186-93; Hall, International Law, 7th ed., p. 505, note 2.)
The so-called Republic of the Philippines, apparently established and organized as a sovereign
state independent from any other government by the Filipino people, was, in truth and reality, a
government established by the belligerent occupant or the Japanese forces of occupation. It was
of the same character as the Philippine Executive Commission, and the ultimate source of its
authority was the same the Japanese military authority and government. As General
MacArthur stated in his proclamation of October 23, 1944, a portion of which has been already
quoted, "under enemy duress, a so-called government styled as the 'Republic of the Philippines'
was established on October 14, 1943, based upon neither the free expression of the people's
will nor the sanction of the Government of the United States." Japan had no legal power to grant
independence to the Philippines or transfer the sovereignty of the United States to, or recognize
the latent sovereignty of, the Filipino people, before its military occupation and possession of the
Islands had matured into an absolute and permanent dominion or sovereignty by a treaty of
peace or other means recognized in the law of nations. For it is a well-established doctrine in
International Law, recognized in Article 45 of the Hauge Conventions of 1907 (which prohibits
compulsion of the population of the occupied territory to swear allegiance to the hostile power),
the belligerent occupation, being essentially provisional, does not serve to transfer sovereignty
over the territory controlled although the de jure government is during the period of occupancy
deprived of the power to exercise its rights as such. (Thirty Hogshead of Sugar vs. Boyle, 9
Cranch, 191; United States vs. Rice, 4 Wheat., 246; Fleming vs. Page, 9 Howard, 603;
Downes vs. Bidwell, 182 U. S., 345.) The formation of the Republic of the Philippines was a
scheme contrived by Japan to delude the Filipino people into believing in the apparent
magnanimity of the Japanese gesture of transferring or turning over the rights of government
into the hands of Filipinos. It was established under the mistaken belief that by doing so, Japan
would secure the cooperation or at least the neutrality of the Filipino people in her war against
the United States and other allied nations.
Indeed, even if the Republic of the Philippines had been established by the free will of the
Filipino who, taking advantage of the withdrawal of the American forces from the Islands, and
the occupation thereof by the Japanese forces of invasion, had organized an independent
government under the name with the support and backing of Japan, such government would
have been considered as one established by the Filipinos in insurrection or rebellion against the
parent state or the Unite States. And as such, it would have been a de facto government similar
to that organized by the confederate states during the war of secession and recognized as such
by the by the Supreme Court of the United States in numerous cases, notably those of
Thorington vs. Smith, Williams vs. Bruffy, and Badly vs. Hunter, above quoted; and similar to the
short-lived government established by the Filipino insurgents in the Island of Cebu during the
Spanish-American war, recognized as a de facto government by the Supreme Court of the
United States in the case of McCleod vs. United States (299 U. S., 416). According to the facts
in the last-named case, the Spanish forces evacuated the Island of Cebu on December 25,
1898, having first appointed a provisional government, and shortly afterwards, the Filipinos,
formerly in insurrection against Spain, took possession of the Islands and established a republic,
governing the Islands until possession thereof was surrendered to the United States on February
22, 1898. And the said Supreme Court held in that case that "such government was of the class
of de facto governments described in I Moore's International Law Digest, S 20, . . . 'called also
by publicists a government de facto, but which might, perhaps, be more aptly denominated a
government of paramount force . . '." That is to say, that the government of a country in
possession of belligerent forces in insurrection or rebellion against the parent state, rests upon
the same principles as that of a territory occupied by the hostile army of an enemy at regular war
with the legitimate power.
The governments by the Philippine Executive Commission and the Republic of the Philippines
during the Japanese military occupation being de facto governments, it necessarily follows that
the judicial acts and proceedings of the courts of justice of those governments, which are not of
a political complexion, were good and valid, and, by virtue of the well-known principle of
postliminy (postliminium) in international law, remained good and valid after the liberation or
reoccupation of the Philippines by the American and Filipino forces under the leadership of
General Douglas MacArthur. According to that well-known principle in international law, the fact
that a territory which has been occupied by an enemy comes again into the power of its
legitimate government of sovereignty, "does not, except in a very few cases, wipe out the effects
of acts done by an invader, which for one reason or another it is within his competence to do.
Thus judicial acts done under his control, when they are not of a political complexion,
administrative acts so done, to the extent that they take effect during the continuance of his
control, and the various acts done during the same time by private persons under the sanction of
municipal law, remain good. Were it otherwise, the whole social life of a community would be
paralyzed by an invasion; and as between the state and the individuals the evil would be
scarcely less, it would be hard for example that payment of taxes made under duress should
be ignored, and it would be contrary to the general interest that the sentences passed upon
criminals should be annulled by the disappearance of the intrusive government ." (Hall,
International Law, 7th ed., p. 518.) And when the occupation and the abandonment have been
each an incident of the same war as in the present case, postliminy applies, even though the
occupant has acted as conqueror and for the time substituted his own sovereignty as the
Japanese intended to do apparently in granting independence to the Philippines and
establishing the so-called Republic of the Philippines. (Taylor, International Law, p. 615.)
That not only judicial but also legislative acts of de facto governments, which are not of a political
complexion, are and remain valid after reoccupation of a territory occupied by a belligerent
occupant, is confirmed by the Proclamation issued by General Douglas MacArthur on October
23, 1944, which declares null and void all laws, regulations and processes of the governments
established in the Philippines during the Japanese occupation, for it would not have been
necessary for said proclamation to abrogate them if they were invalid ab initio.
2. The second question hinges upon the interpretation of the phrase "processes of any other
government" as used in the above-quoted proclamation of General Douglas MacArthur of
October 23, 1944 that is, whether it was the intention of the Commander in Chief of the
American Forces to annul and void thereby all judgments and judicial proceedings of the courts
established in the Philippines during the Japanese military occupation.
The phrase "processes of any other government" is broad and may refer not only to the judicial
processes, but also to administrative or legislative, as well as constitutional, processes of the
Republic of the Philippines or other governmental agencies established in the Islands during the
Japanese occupation. Taking into consideration the fact that, as above indicated, according to
the well-known principles of international law all judgements and judicial proceedings, which are
not of a political complexion, of the de facto governments during the Japanese military
occupation were good and valid before and remained so after the occupied territory had come
again into the power of the titular sovereign, it should be presumed that it was not, and could not
have been, the intention of General Douglas MacArthur, in using the phrase "processes of any
other government" in said proclamation, to refer to judicial processes, in violation of said
principles of international law. The only reasonable construction of the said phrase is that it
refers to governmental processes other than judicial processes of court proceedings, for
according to a well-known rule of statutory construction, set forth in 25 R. C. L., p. 1028, "a
statute ought never to be construed to violate the law of nations if any other possible
construction remains."
It is true that the commanding general of a belligerent army of occupation, as an agent of his
government, may not unlawfully suspend existing laws and promulgate new ones in the
occupied territory, if and when the exigencies of the military occupation demand such action. But
even assuming that, under the law of nations, the legislative power of a commander in chief of
military forces who liberates or reoccupies his own territory which has been occupied by an
enemy, during the military and before the restoration of the civil regime, is as broad as that of the
commander in chief of the military forces of invasion and occupation (although the exigencies of
military reoccupation are evidently less than those of occupation), it is to be presumed that
General Douglas MacArthur, who was acting as an agent or a representative of the Government
and the President of the United States, constitutional commander in chief of the United States
Army, did not intend to act against the principles of the law of nations asserted by the Supreme
Court of the United States from the early period of its existence, applied by the Presidents of the
United States, and later embodied in the Hague Conventions of 1907, as above indicated. It is
not to be presumed that General Douglas MacArthur, who enjoined in the same proclamation of
October 23, 1944, "upon the loyal citizens of the Philippines full respect and obedience to the
Constitution of the Commonwealth of the Philippines," should not only reverse the international
policy and practice of his own government, but also disregard in the same breath the provisions
of section 3, Article II, of our Constitution, which provides that "The Philippines renounces war as
an instrument of national policy, and adopts the generally accepted principles of international law
as part of the law of the Nation."
Moreover, from a contrary construction great inconvenience and public hardship would result,
and great public interests would be endangered and sacrificed, for disputes or suits already
adjudged would have to be again settled accrued or vested rights nullified, sentences passed on
criminals set aside, and criminals might easily become immune for evidence against them may
have already disappeared or be no longer available, especially now that almost all court records
in the Philippines have been destroyed by fire as a consequence of the war. And it is another
well-established rule of statutory construction that where great inconvenience will result from a
particular construction, or great public interests would be endangered or sacrificed, or great
mischief done, such construction is to be avoided, or the court ought to presume that such
construction was not intended by the makers of the law, unless required by clear and
unequivocal words. (25 R. C. L., pp. 1025, 1027.)
The mere conception or thought of possibility that the titular sovereign or his representatives
who reoccupies a territory occupied by an enemy, may set aside or annul all the judicial acts or
proceedings of the tribunals which the belligerent occupant had the right and duty to establish in
order to insure public order and safety during military occupation, would be sufficient to paralyze
the social life of the country or occupied territory, for it would have to be expected that litigants
would not willingly submit their litigation to courts whose judgements or decisions may
afterwards be annulled, and criminals would not be deterred from committing crimes or offenses
in the expectancy that they may escaped the penalty if judgments rendered against them may
be afterwards set aside.
That the proclamation has not invalidated all the judgements and proceedings of the courts of
justice during the Japanese regime, is impliedly confirmed by Executive Order No. 37, which has
the force of law, issued by the President of the Philippines on March 10, 1945, by virtue of the
emergency legislative power vested in him by the Constitution and the laws of the
Commonwealth of the Philippines. Said Executive order abolished the Court of Appeals, and
provided "that all case which have heretofore been duly appealed to the Court of Appeals shall
be transmitted to the Supreme Court final decision." This provision impliedly recognizes that the
judgments and proceedings of the courts during the Japanese military occupation have not been
invalidated by the proclamation of General MacArthur of October 23, because the said Order
does not say or refer to cases which have been duly appealed to said court prior to the
Japanese occupation, but to cases which had therefore, that is, up to March 10, 1945, been duly
appealed to the Court of Appeals; and it is to be presumed that almost all, if not all, appealed
cases pending in the Court of Appeals prior to the Japanese military occupation of Manila on
January 2, 1942, had been disposed of by the latter before the restoration of the Commonwealth
Government in 1945; while almost all, if not all, appealed cases pending on March 10, 1945, in
the Court of Appeals were from judgments rendered by the Court of First Instance during the
Japanese regime.
The respondent judge quotes a portion of Wheaton's International Law which say: "Moreover
when it is said that an occupier's acts are valid and under international law should not be
abrogated by the subsequent conqueror, it must be remembered that no crucial instances exist
to show that if his acts should be reversed, any international wrong would be committed. What
does happen is that most matters are allowed to stand by the restored government, but the
matter can hardly be put further than this." (Wheaton, International Law, War, 7th English edition
of 1944, p. 245.) And from this quotion the respondent judge "draws the conclusion that whether
the acts of the occupant should be considered valid or not, is a question that is up to the
restored government to decide; that there is no rule of international law that denies to the
restored government to decide; that there is no rule of international law that denies to the
restored government the right of exercise its discretion on the matter, imposing upon it in its
stead the obligation of recognizing and enforcing the acts of the overthrown government."
There is doubt that the subsequent conqueror has the right to abrogate most of the acts of the
occupier, such as the laws, regulations and processes other than judicial of the government
established by the belligerent occupant. But in view of the fact that the proclamation uses the
words "processes of any other government" and not "judicial processes" prisely, it is not
necessary to determine whether or not General Douglas MacArthur had power to annul and set
aside all judgments and proceedings of the courts during the Japanese occupation. The
question to be determined is whether or not it was his intention, as representative of the
President of the United States, to avoid or nullify them. If the proclamation had, expressly or by
necessary implication, declared null and void the judicial processes of any other government, it
would be necessary for this court to decide in the present case whether or not General Douglas
MacArthur had authority to declare them null and void. But the proclamation did not so provide,
undoubtedly because the author thereof was fully aware of the limitations of his powers as
Commander in Chief of Military Forces of liberation or subsequent conqueror.
Not only the Hague Regulations, but also the principles of international law, as they result from
the usages established between civilized nations, the laws of humanity and the requirements of
the public of conscience, constitute or from the law of nations. (Preamble of the Hague
Conventions; Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the
Hague Regulations or Conventions which we have already quoted in discussing the first
question, imposes upon the occupant the obligation to establish courts; and Article 23 (h),
section II, of the same Conventions, which prohibits the belligerent occupant "to declare . . .
suspended . . . in a Court of Law the rights and action of the nationals of the hostile party,"
forbids him to make any declaration preventing the inhabitants from using their courts to assert
or enforce their civil rights. (Decision of the Court of Appeals of England in the case of
Porter vs. Fruedenburg, L.R. [1915], 1 K.B., 857.) If a belligerent occupant is required to
establish courts of justice in the territory occupied, and forbidden to prevent the nationals thereof
from asserting or enforcing therein their civil rights, by necessary implication, the military
commander of the forces of liberation or the restored government is restrained from nullifying or
setting aside the judgments rendered by said courts in their litigation during the period of
occupation. Otherwise, the purpose of these precepts of the Hague Conventions would be
thwarted, for to declare them null and void would be tantamount to suspending in said courts the
right and action of the nationals of the territory during the military occupation thereof by the
enemy. It goes without saying that a law that enjoins a person to do something will not at the
same time empower another to undo the same. Although the question whether the President or
commanding officer of the United States Army has violated restraints imposed by the
constitution and laws of his country is obviously of a domestic nature, yet, in construing and
applying limitations imposed on the executive authority, the Supreme Court of the United States,
in the case of Ochoa, vs. Hernandez (230 U.S., 139), has declared that they "arise from general
rules of international law and from fundamental principles known wherever the American flag
flies."
In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer in
command of the forces of the United States in South Carolina after the end of the Civil War,
wholly annulling a decree rendered by a court of chancery in that state in a case within its
jurisdiction, was declared void, and not warranted by the acts approved respectively March 2,
1867 (14 Stat., 428), and July 19 of the same year (15 id., 14), which defined the powers and
duties of military officers in command of the several states then lately in rebellion. In the course
of its decision the court said; "We have looked carefully through the acts of March 2, 1867 and
July 19, 1867. They give very large governmental powers to the military commanders
designated, within the States committed respectively to their jurisdiction; but we have found
nothing to warrant the order here in question. . . . The clearest language would be necessary to
satisfy us that Congress intended that the power given by these acts should be so exercised. . . .
It was an arbitrary stretch of authority, needful to no good end that can be imagined. Whether
Congress could have conferred the 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.
(Mithell vs. Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67; Fabrigas vs. Moysten, 1
Cowp., 161; s.c., 1 Smith's L.C., pt. 2, p. 934.) Viewing the subject before us from the standpoint
indicated, we hold that the order was void."
It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, which
declared that "all laws, regulations and processes of any other government in the Philippines
than that of the said Commonwealth are null and void without legal effect in areas of the
Philippines free of enemy occupation and control," has not invalidated the judicial acts and
proceedings, which are not a political complexion, of the courts of justice in the Philippines that
were continued by the Philippine Executive Commission and the Republic of the Philippines
during the Japanese military occupation, and that said judicial acts and proceedings were good
and valid before and now good and valid after the reoccupation of liberation of the Philippines by
the American and Filipino forces.
3. The third and last question is whether or not the courts of the Commonwealth, which are the
same as those existing prior to, and continued during, the Japanese military occupation by the
Philippine Executive Commission and by the so-called Republic of the Philippines, have
jurisdiction to continue now the proceedings in actions pending in said courts at the time the
Philippine Islands were reoccupied or liberated by the American and Filipino forces, and the
Commonwealth Government was restored.
Although in theory the authority the authority of the local civil and judicial administration is
suspended as a matter of course as soon as military occupation takes place, in practice the
invader does not usually take the administration of justice into his own hands, but continues the
ordinary courts or tribunals to administer the laws of the country which he is enjoined, unless
absolutely prevented, to respect. As stated in the above-quoted Executive Order of President
McKinley to the Secretary of War on May 19, 1898, "in practice, they (the municipal laws) are
not usually abrogated but are allowed to remain in force and to be administered by the ordinary
tribunals substantially as they were before the occupation. This enlightened practice is, so far as
possible, to be adhered to on the present occasion." And Taylor in this connection says: "From a
theoretical point of view it may be said that the conqueror is armed with the right to substitute his
arbitrary will for all preexisting forms of government, legislative, executive and judicial. From the
stand-point of actual practice such arbitrary will is restrained by the provision of the law of
nations which compels the conqueror to continue local laws and institution so far as military
necessity will permit." (Taylor, International Public Law, p.596.) Undoubtedly, this practice has
been adopted in order that the ordinary pursuits and business of society may not be
unnecessarily deranged, inasmuch as belligerent occupation is essentially provisional, and the
government established by the occupant of transient character.
Following these practice and precepts of the law of nations, Commander in Chief of the
Japanese Forces proclaimed on January 3, 1942, when Manila was occupied, the military
administration under martial law over the territory occupied by the army, and ordered that "all the
laws now in force in the Commonwealth, as well as executive and judicial institutions, shall
continue to be affective for the time being as in the past," and "all public officials shall remain in
their present post and carry on faithfully their duties as before." When the Philippine Executive
Commission was organized by Order No. 1 of the Japanese Commander in Chief, on January
23, 1942, the Chairman of the Executive Commission, by Executive Orders Nos. 1 and 4 of
January 30 and February 5, respectively, continued the Supreme Court, Court of Appeals, Court
of First Instance, and justices of the peace of courts, with the same jurisdiction in conformity with
the instructions given by the Commander in Chief of the Imperial Japanese Army in Order No. 3
of February 20, 1942. And on October 14, 1943 when the so-called Republic of the Philippines
was inaugurated, the same courts were continued with no substantial change in organization
and jurisdiction thereof.
If the proceedings pending in the different courts of the Islands prior to the Japanese military
occupation had been continued during the Japanese military administration, the Philippine
Executive Commission, and the so-called Republic of the Philippines, it stands to reason that the
same courts, which had become reestablished and conceived of as having in continued
existence upon the reoccupation and liberation of the Philippines by virtue of the principle of
postliminy (Hall, International Law, 7th ed., p. 516), may continue the proceedings in cases then
pending in said courts, without necessity of enacting a law conferring jurisdiction upon them to
continue said proceedings. As Taylor graphically points out in speaking of said principles "a
state or other governmental entity, upon the removal of a foreign military force, resumes its old
place with its right and duties substantially unimpaired. . . . Such political resurrection is the
result of a law analogous to that which enables elastic bodies to regain their original shape upon
removal of the external force, and subject to the same exception in case of absolute crushing
of the whole fibre and content." (Taylor, International Public Law, p. 615.)
The argument advanced by the respondent judge in his resolution in support in his conclusion
that the Court of First Instance of Manila presided over by him "has no authority to take
cognizance of, and continue said proceedings (of this case) to final judgment until and unless
the Government of the Commonwealth of the Philippines . . . shall have provided for the transfer
of the jurisdiction of the courts of the now defunct Republic of the Philippines, and the cases
commenced and the left pending therein," is "that said courts were a government alien to the
Commonwealth Government. The laws they enforced were, true enough, laws of the
Commonwealth prior to Japanese occupation, but they had become the laws and the courts
had become the institutions of Japan by adoption (U.S. vs.Reiter. 27 F. Cases, No. 16146),
as they became later on the laws and institutions of the Philippine Executive Commission and
the Republic of the Philippines."
The court in the said case of U.S. vs. Reiter did not and could not say that the laws and
institutions of the country occupied if continued by the conqueror or occupant, become the laws
and the courts, by adoption, of the sovereign nation that is militarily occupying the territory.
Because, as already shown, belligerent or military occupation is essentially provisional and does
not serve to transfer the sovereignty over the occupied territory to the occupant. What the court
said was that, if such laws and institutions are continued in use by the occupant, they become
his and derive their force from him, in the sense that he may continue or set them aside. The
laws and institution or courts so continued remain the laws and institutions or courts of the
occupied territory. The laws and the courts of the Philippines, therefore, did not become, by
being continued as required by the law of nations, laws and courts of Japan. The provision of
Article 45, section III, of the Hague Conventions of 1907 which prohibits any compulsion of the
population of occupied territory to swear allegiance to the hostile power, "extends to prohibit
everything which would assert or imply a change made by the invader in the legitimate
sovereignty. This duty is neither to innovate in the political life of the occupied districts, nor
needlessly to break the continuity of their legal life. Hence, so far as the courts of justice are
allowed to continue administering the territorial laws, they must be allowed to give their
sentences in the name of the legitimate sovereign " (Westlake, Int. Law, Part II, second ed., p.
102). According to Wheaton, however, the victor need not allow the use of that of the legitimate
government. When in 1870, the Germans in France attempted to violate that rule by ordering, provost courts in the City of Manila was abolished by section 3 of Act No. 186, the same section
after the fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name of provided that criminal cases pending therein within the jurisdiction of the municipal court created
the "High German Powers occupying Alsace and Lorraine," upon the ground that the exercise of by Act No. 183 were transferred to the latter.
their powers in the name of French people and government was at least an implied recognition
of the Republic, the courts refused to obey and suspended their sitting. Germany originally
That the present courts as the same courts which had been functioning during the Japanese
ordered the use of the name of "High German Powers occupying Alsace and Lorraine," but later
regime and, therefore, can continue the proceedings in cases pending therein prior to the
offered to allow use of the name of the Emperor or a compromise. (Wheaton, International Law,
restoration of the Commonwealth of the Philippines, is confirmed by Executive Order No. 37
War, 7th English ed. 1944, p. 244.)
which we have already quoted in support of our conclusion in connection with the second
question. Said Executive Order provides"(1) that the Court of Appeals created and established
Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established under Commonwealth Act No. 3 as amended, be abolished, as it is hereby abolished," and "(2)
continues until changed by the some competent legislative power. It is not change merely by that all cases which have heretofore been duly appealed to the Court of Appeals shall be
change of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III, Summary Section 9, transmitted to the Supreme Court for final decision. . . ." In so providing, the said Order
citing Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on considers that the Court of Appeals abolished was the same that existed prior to, and continued
the Conflict on Laws (Cambridge, 1916, Section 131): "There can no break or interregnum in after, the restoration of the Commonwealth Government; for, as we have stated in discussing the
law. From the time the law comes into existence with the first-felt corporateness of a primitive previous question, almost all, if not all, of the cases pending therein, or which had theretofore
people it must last until the final disappearance of human society. Once created, it persists until (that is, up to March 10, 1945) been duly appealed to said court, must have been cases coming
a change take place, and when changed it continues in such changed condition until the next from the Courts of First Instance during the so-called Republic of the Philippines. If the Court of
change, and so forever. Conquest or colonization is impotent to bring law to an end; in spite of Appeals abolished by the said Executive Order was not the same one which had been
change of constitution, the law continues unchanged until the new sovereign by legislative acts functioning during the Republic, but that which had existed up to the time of the Japanese
creates a change." occupation, it would have provided that all the cases which had, prior to and up to that
occupation on January 2, 1942, been dully appealed to the said Court of Appeals shall be
transmitted to the Supreme Court for final decision.
As courts are creatures of statutes and their existence defends upon that of the laws which
create and confer upon them their jurisdiction, it is evident that such laws, not being a political
nature, are not abrogated by a change of sovereignty, and continue in force "ex proprio vigore" It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment,
unless and until repealed by legislative acts. A proclamation that said laws and courts are the proceedings in cases, not of political complexion, pending therein at the time of the
expressly continued is not necessary in order that they may continue in force. Such restoration of the Commonwealth Government.
proclamation, if made, is but a declaration of the intention of respecting and not repealing those
laws. Therefore, even assuming that Japan had legally acquired sovereignty over these Islands,
Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has
which she had afterwards transferred to the so-called Republic of the Philippines, and that the
jurisdiction to continue to final judgment the proceedings in civil case No. 3012, which involves
laws and the courts of these Islands had become the courts of Japan, as the said courts of the
civil rights of the parties under the laws of the Commonwealth Government, pending in said
laws creating and conferring jurisdiction upon them have continued in force until now, it
court at the time of the restoration of the said Government; and that the respondent judge of the
necessarily follows that the same courts may continue exercising the same jurisdiction over
court, having refused to act and continue him does a duty resulting from his office as presiding
cases pending therein before the restoration of the Commonwealth Government, unless and
judge of that court, mandamus is the speedy and adequate remedy in the ordinary course of law,
until they are abolished or the laws creating and conferring jurisdiction upon them are repealed
especially taking into consideration the fact that the question of jurisdiction herein involved does
by the said government. As a consequence, enabling laws or acts providing that proceedings
affect not only this particular case, but many other cases now pending in all the courts of these
pending in one court be continued by or transferred to another court, are not required by the
Islands.
mere change of government or sovereignty. They are necessary only in case the former courts
are abolished or their jurisdiction so change that they can no longer continue taking cognizance
of the cases and proceedings commenced therein, in order that the new courts or the courts In view of all the foregoing it is adjudged and decreed that a writ of mandamus issue, directed to
having jurisdiction over said cases may continue the proceedings. When the Spanish the respondent judge of the Court of First Instance of Manila, ordering him to take cognizance of
sovereignty in the Philippine Islands ceased and the Islands came into the possession of the and continue to final judgment the proceedings in civil case No. 3012 of said court. No
United States, the "Audiencia" or Supreme Court was continued and did not cease to exist, and pronouncement as to costs. So ordered.
proceeded to take cognizance of the actions pending therein upon the cessation of the Spanish
sovereignty until the said "Audiencia" or Supreme Court was abolished, and the Supreme Court
created in Chapter II of Act No. 136 was substituted in lieu thereof. And the Courts of First Moran, C.J., Ozaeta, Paras, Jaranilla and Pablo, JJ., concur.
Instance of the Islands during the Spanish regime continued taking cognizance of cases pending
therein upon the change of sovereignty, until section 65 of the same Act No. 136 abolished them
and created in its Chapter IV the present Courts of First Instance in substitution of the former.
Similarly, no enabling acts were enacted during the Japanese occupation, but a mere
proclamation or order that the courts in the Island were continued.

On the other hand, during the American regime, when section 78 of Act No. 136 was enacted
abolishing the civil jurisdiction of the provost courts created by the military government of
occupation in the Philippines during the Spanish-American War of 1898, the same section 78
provided for the transfer of all civil actions then pending in the provost courts to the proper
tribunals, that is, to the justices of the peace courts, Court of First Instance, or Supreme Court
having jurisdiction over them according to law. And later on, when the criminal jurisdiction of

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 173034 October 9, 2007
PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES, petitioner,
vs.
HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES DR.
ETHELYN P. NIETO, DR. MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, & DR.
JADE F. DEL MUNDO; and ASSISTANT SECRETARIES DR. MARIO C. VILLAVERDE, DR.
DAVID J. LOZADA, AND DR. NEMESIO T. GAKO,respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
The Court and all parties involved are in agreement that the best nourishment for an infant is
mother's milk. There is nothing greater than for a mother to nurture her beloved child straight
from her bosom. The ideal is, of course, for each and every Filipino child to enjoy the unequaled
benefits of breastmilk. But how should this end be attained?
Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify
Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and
Regulations of Executive Order No. 51, Otherwise Known as The "Milk Code," Relevant
International Agreements, Penalizing Violations Thereof, and for Other Purposes (RIRR).
Petitioner posits that the RIRR is not valid as it contains provisions that are not constitutional and
go beyond the law it is supposed to implement.
Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of
the Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded
as a co-respondent since respondents issued the questioned RIRR in their capacity as officials
of said executive agency.1
Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28,
1986 by virtue of the legislative powers granted to the president under the Freedom Constitution.
One of the preambular clauses of the Milk Code states that the law seeks to give effect to Article
112 of the International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by
the World Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several
Resolutions to the effect that breastfeeding should be supported, promoted and protected,
hence, it should be ensured that nutrition and health claims are not permitted for breastmilk
substitutes.
In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24
of said instrument provides that State Parties should take appropriate measures to diminish
infant and child mortality, and ensure that all segments of society, specially parents and children,
are informed of the advantages of breastfeeding.
On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7,
2006.
However, on June 28, 2006, petitioner, representing its members that are manufacturers of
breastmilk substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the
Issuance of a Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.
The main issue raised in the petition is whether respondents officers of the DOH acted without or
in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and in violation of the provisions of the Constitution in promulgating the RIRR. 3
On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from
implementing the questioned RIRR.
After the Comment and Reply had been filed, the Court set the case for oral arguments on June
19, 2007. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to
wit:
The Court hereby sets the following issues:
1. Whether or not petitioner is a real party-in-interest;
2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules
and Regulations (RIRR) issued by the Department of Health (DOH) is not
constitutional;
2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk
Code);
2.2 Whether pertinent international agreements1 entered into by the Philippines are
part of the law of the land and may be implemented by the DOH through the RIRR; If
in the affirmative, whether the RIRR is in accord with the international agreements;
 2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process
clause and are in restraint of trade; and
2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards.
_____________
1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef
"2002 Global Strategy on Infant and Young Child Feeding;" and (3) various World
Health Assembly (WHA) Resolutions.
The parties filed their respective memoranda.
The petition is partly imbued with merit.
On the issue of petitioner's standing
With regard to the issue of whether petitioner may prosecute this case as the real party-in-
interest, the Court adopts the view enunciated in Executive Secretary v. Court of Appeals, 4 to
wit:
The modern view is that an association has standing to complain of injuries to its
members. This view fuses the legal identity of an association with that of its
members. An association has standing to file suit for its workers despite its lack
of direct interest if its members are affected by the action. An organization has
standing to assert the concerns of its constituents.
xxxx
x x x We note that, under its Articles of Incorporation, the respondent was organized x
x x to act as the representative of any individual, company, entity or association on
matters related to the manpower recruitment industry, and to perform other acts and
activities necessary to accomplish the purposes embodied therein. The respondent
is, thus, the appropriate party to assert the rights of its members, because it and
its members are in every practical sense identical. x x x The respondent
[association] is but the medium through which its individual members seek to
make more effective the expression of their voices and the redress of their
grievances. 5 (Emphasis supplied)
which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,6 where the Court
ruled that an association has the legal personality to represent its members because the results
of the case will affect their vital interests.7
Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in
Executive Secretary, that the association is formed "to represent directly or through approved
representatives the pharmaceutical and health care industry before the Philippine Government
and any of its agencies, the medical professions and the general public." 8 Thus, as an
organization, petitioner definitely has an interest in fulfilling its avowed purpose of representing
members who are part of the pharmaceutical and health care industry. Petitioner is duly
authorized9 to take the appropriate course of action to bring to the attention of government
agencies and the courts any grievance suffered by its members which are directly affected by
the RIRR. Petitioner, which is mandated by its Amended Articles of Incorporation to represent
the entire industry, would be remiss in its duties if it fails to act on governmental action that
would affect any of its industry members, no matter how few or numerous they are. Hence,
petitioner, whose legal identity is deemed fused with its members, should be considered as a
real party-in-interest which stands to be benefited or injured by any judgment in the present
action.
On the constitutionality of the provisions of the RIRR
First, the Court will determine if pertinent international instruments adverted to by respondents
are part of the law of the land.
Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby
amending and expanding the coverage of said law. The defense of the DOH is that the RIRR
implements not only the Milk Code but also various international instruments 10 regarding infant
and young child nutrition. It is respondents' position that said international instruments are
deemed part of the law of the land and therefore the DOH may implement them through the
RIRR.
The Court notes that the following international instruments invoked by respondents, namely: (1)
The United Nations Convention on the Rights of the Child; (2) The International Covenant on
Economic, Social and Cultural Rights; and (3) the Convention on the Elimination of All Forms of
Discrimination Against Women, only provide in general terms that steps must be taken by State
Parties to diminish infant and child mortality and inform society of the advantages of
breastfeeding, ensure the health and well-being of families, and ensure that women are provided
with services and nutrition in connection with pregnancy and lactation. Said instruments do not
contain specific provisions regarding the use or marketing of breastmilk substitutes.
The international instruments that do have specific provisions regarding breastmilk substitutes
are the ICMBS and various WHA Resolutions.
Under the 1987 Constitution, international law can become part of the sphere of domestic law
either by transformation or incorporation.11 The transformation method requires that an
international law be transformed into a domestic law through a constitutional mechanism such as
local legislation. The incorporation method applies when, by mere constitutional declaration,
international law is deemed to have the force of domestic law.12
Treaties become part of the law of the land through transformation pursuant to Article VII,
Section 21 of the Constitution which provides that "[n]o treaty or international agreement shall be
valid and effective unless concurred in by at least two-thirds of all the members of the Senate."
Thus, treaties or conventional international law must go through a process prescribed by the
Constitution for it to be transformed into municipal law that can be applied to domestic
conflicts.13
The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at
least two-thirds of all members of the Senate as required under Section 21, Article VII of the
1987 Constitution.
However, the ICMBS which was adopted by the WHA in 1981 had been transformed into
domestic law through local legislation, the Milk Code. Consequently, it is the Milk Code that has
the force and effect of law in this jurisdiction and not the ICMBS per se.
The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this
point that the Code did not adopt the provision in the ICMBS absolutely prohibiting
advertising or other forms of promotion to the general public of products within the scope of the
ICMBS. Instead, the Milk Code expressly provides that advertising, promotion, or other
marketing materials may be allowed if such materials are duly authorized and approved
by the Inter-Agency Committee (IAC).
On the other hand, Section 2, Article II of the 1987 Constitution, to wit:
SECTION 2. The Philippines renounces war as an instrument of national
policy, adopts the generally accepted principles of international law as part of
the law of the land and adheres to the policy of peace, equality, justice, freedom,
cooperation and amity with all nations. (Emphasis supplied)
embodies the incorporation method.14
In Mijares v. Ranada,15 the Court held thus:
[G]enerally accepted principles of international law, by virtue of the incorporation
clause of the Constitution, form part of the laws of the land even if they do not derive
from treaty obligations. The classical formulation in international law sees
those customary rules accepted as binding result from the combination [of] two
elements: the established, widespread, and consistent practice on the part of States;
and a psychological element known as the opinion juris sive necessitates (opinion as
to law or necessity). Implicit in the latter element is a belief that the practice in
question is rendered obligatory by the existence of a rule of law requiring
it.16 (Emphasis supplied)
"Generally accepted principles of international law" refers to norms of general or customary
international law which are binding on all states,17 i.e., renunciation of war as an instrument of
national policy, the principle of sovereign immunity,18 a person's right to life, liberty and due
process,19 and pacta sunt servanda,20 among others. The concept of "generally accepted
principles of law" has also been depicted in this wise:
Some legal scholars and judges look upon certain "general principles of law" as a primary
source of international law because they have the "character of jus rationale" and are "valid
through all kinds of human societies."(Judge Tanaka in his dissenting opinion in the 1966
South West Africa Case, 1966 I.C.J. 296). O'Connell holds that certain priniciples are part of
international law because they are "basic to legal systems generally" and hence part of the
jus gentium. These principles, he believes, are established by a process of reasoning based on
the common identity of all legal systems. If there should be doubt or disagreement, one must
look to state practice and determine whether the municipal law principle provides a just and
acceptable solution. x x x 21 (Emphasis supplied)
Fr. Joaquin G. Bernas defines customary international law as follows:
Custom or customary international law means "a general and consistent practice of
states followed by them from a sense of legal obligation [opinio juris]."
(Restatement) This statement contains the two basic elements of custom:
the material factor, that is, how states behave, and the psychological
or subjective factor, that is, why they behave the way they do.
xxxx
The initial factor for determining the existence of custom is the actual behavior of
states. This includes several elements: duration, consistency, and generality of the
practice of states.
The required duration can be either short or long. x x x
xxxx
Duration therefore is not the most important element. More important is the
consistency and the generality of the practice. x x x
xxxx
Once the existence of state practice has been established, it becomes necessary to
determine why states behave the way they do. Do states behave the way they do
because they consider it obligatory to behave thus or do they do it only as a
matter of courtesy? Opinio juris, or the belief that a certain form of behavior is
obligatory, is what makes practice an international rule. Without it, practice is not
law.22(Underscoring and Emphasis supplied)
Clearly, customary international law is deemed incorporated into our domestic system. 23
WHA Resolutions have not been embodied in any local legislation. Have they attained the status
of customary law and should they then be deemed incorporated as part of the law of the land?
The World Health Organization (WHO) is one of the international specialized agencies allied with
the United Nations (UN) by virtue of Article 57,24 in relation to Article 6325 of the UN Charter.
Under the 1946 WHO Constitution, it is the WHA which determines the policies of the
WHO,26 and has the power to adopt regulations concerning "advertising and labeling of
biological, pharmaceutical and similar products moving in international commerce," 27and to
"make recommendations to members with respect to any matter within the competence of the
Organization."28 The legal effect of its regulations, as opposed to recommendations, is quite
different.
Regulations, along with conventions and agreements, duly adopted by the WHA bind member
states thus:
Article 19. The Health Assembly shall have authority to adopt conventions or
agreements with respect to any matter within the competence of the Organization. A
two-thirds vote of the Health Assembly shall be required for the adoption of
such conventions or agreements, which shall come into force for each Member
when accepted by it in accordance with its constitutional processes.
Article 20. Each Member undertakes that it will, within eighteen months after the
adoption by the Health Assembly of a convention or agreement, take action relative
to the acceptance of such convention or agreement. Each Member shall notify the
Director-General of the action taken, and if it does not accept such convention or
agreement within the time limit, it will furnish a statement of the reasons for non-
acceptance. In case of acceptance, each Member agrees to make an annual report to
the Director-General in accordance with Chapter XIV.
 Article 21. The Health Assembly shall have authority to adopt regulations concerning:
(a) sanitary and quarantine requirements and other procedures designed to prevent
the international spread of disease; (b) nomenclatures with respect to diseases,
causes of death and public health practices; (c) standards with respect to diagnostic
procedures for international use; (d) standards with respect to the safety, purity and
potency of biological, pharmaceutical and similar products moving in international
commerce; (e) advertising and labeling of biological, pharmaceutical and similar
products moving in international commerce.
Article 22. Regulations adopted pursuant to Article 21 shall come into force for all
Members after due notice has been given of their adoption by the Health Assembly
except for such Members as may notify the Director-General of rejection or
reservations within the period stated in the notice. (Emphasis supplied)
On the other hand, under Article 23, recommendations of the WHA do not come into
force for members, in the same way that conventions or agreements under Article 19
and regulations under Article 21 come into force. Article 23 of the WHO Constitution reads:
Article 23. The Health Assembly shall have authority to make recommendations to
Members with respect to any matter within the competence of the Organization.
(Emphasis supplied)
The absence of a provision in Article 23 of any mechanism by which the recommendation would
come into force for member states is conspicuous.
The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are
generally not binding, but they "carry moral and political weight, as they constitute the judgment
on a health issue of the collective membership of the highest international body in the field of
health."29 Even the ICMBS itself was adopted as a mere recommendation, as WHA Resolution
No. 34.22 states:
"The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of
the Constitution, the International Code of Marketing of Breastmilk Substitutes
annexed to the present resolution." (Emphasis supplied)
The Introduction to the ICMBS also reads as follows:
In January 1981, the Executive Board of the World Health Organization at its sixty-
seventh session, considered the fourth draft of the code, endorsed it, and unanimously
recommended to the Thirty-fourth World Health Assembly the text of a resolution by
which it would adopt the code in the form of a recommendation rather than a
regulation. x x x (Emphasis supplied)
The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the
WHO Constitution, to wit:
Art. 62. Each member shall report annually on the action taken with respect to
recommendations made to it by the Organization, and with respect to conventions,
agreements and regulations.
Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging
member states to implement the ICMBS are merely recommendatory and legally non-
binding. Thus, unlike what has been done with the ICMBS whereby the legislature enacted
most of the provisions into law which is the Milk Code, the subsequent WHA
Resolutions,30 specifically providing for exclusive breastfeeding from 0-6 months,
continued breastfeeding up to 24 months, and absolutely prohibiting advertisements and
promotions of breastmilk substitutes, have not been adopted as a domestic law.
It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms,
principles and practices that influence state behavior.31
"Soft law" does not fall into any of the categories of international law set forth in Article 38,
Chapter III of the 1946 Statute of the International Court of Justice. 32 It is, however, an
expression of non-binding norms, principles, and practices that influence state
behavior.33 Certain declarations and resolutions of the UN General Assembly fall under this
category.34 The most notable is the UN Declaration of Human Rights, which this Court has
enforced in various cases, specifically, Government of Hongkong Special Administrative Region
v. Olalia,35 Mejoff v. Director of Prisons,36 Mijares v. Raada37 and Shangri-la International Hotel
Management, Ltd. v. Developers Group of Companies, Inc..38
The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN
with the mandate to promote and protect intellectual property worldwide, has resorted to soft law
as a rapid means of norm creation, in order "to reflect and respond to the changing needs and
demands of its constituents."39 Other international organizations which have resorted to soft law
include the International Labor Organization and the Food and Agriculture Organization (in the
form of the Codex Alimentarius).40
WHO has resorted to soft law. This was most evident at the time of the Severe Acute
Respiratory Syndrome (SARS) and Avian flu outbreaks.
Although the IHR Resolution does not create new international law binding on
WHO member states, it provides an excellent example of the power of "soft law"
in international relations. International lawyers typically distinguish binding
rules of international law-"hard law"-from non-binding norms, principles, and
practices that influence state behavior-"soft law." WHO has during its existence
generated many soft law norms, creating a "soft law regime" in international
governance for public health.
The "soft law" SARS and IHR Resolutions represent significant steps in laying the
political groundwork for improved international cooperation on infectious diseases.
These resolutions clearly define WHO member states' normative duty to cooperate
fully with other countries and with WHO in connection with infectious disease
surveillance and response to outbreaks.
This duty is neither binding nor enforceable, but, in the wake of the SARS
epidemic, the duty is powerful politically for two reasons. First, the SARS outbreak
has taught the lesson that participating in, and enhancing, international cooperation on
infectious disease controls is in a country's self-interest x x x if this warning is heeded,
the "soft law" in the SARS and IHR Resolution could inform the development of
general and consistent state practice on infectious disease surveillance and outbreak
response, perhaps crystallizing eventually into customary international law on
infectious disease prevention and control.41
In the Philippines, the executive department implemented certain measures recommended by
WHO to address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No.
201 on April 26, 2003 and E.O. No. 280 on February 2, 2004, delegating to various departments
broad powers to close down schools/establishments, conduct health surveillance and only pursuant to a law amending the Milk Code passed by the constitutionally authorized
monitoring, and ban importation of poultry and agricultural products. branch of government, the legislature.

It must be emphasized that even under such an international emergency, the duty of a state to Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions,
implement the IHR Resolution was still considered not binding or enforceable, although said can be validly implemented by the DOH through the subject RIRR.
resolutions had great political influence.
Third, the Court will now determine whether the provisions of the RIRR are in accordance with
As previously discussed, for an international rule to be considered as customary law, it must be those of the Milk Code.
established that such rule is being followed by states because they consider it obligatory to
comply with such rules (opinio juris). Respondents have not presented any evidence to prove
In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the
that the WHA Resolutions, although signed by most of the member states, were in fact enforced
following:
or practiced by at least a majority of the member states; neither have respondents proven that
any compliance by member states with said WHA Resolutions was obligatory in nature.
1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR
extended its coverage to "young children" or those from ages two years old and
Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary
beyond:
international law that may be deemed part of the law of the land.

Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into MILK MILK CODE RIRR
domestic law. The provisions of the WHA Resolutions cannot be considered as part of the WHEREAS, in order to ensure that safe and Section 2. Purpose These Revised Rules
law of the land that can be implemented by executive agencies without the need of a law adequate nutrition for infants is provided, there is and Regulations are hereby promulgated to
enacted by the legislature. a need to protect and promote breastfeeding and ensure the provision of safe and adequate
to inform the public about the proper use of nutrition for infants and young children by the
breastmilk substitutes and supplements and promotion, protection and support of
Second, the Court will determine whether the DOH may implement the provisions of the WHA related products through adequate, consistent breastfeeding and by ensuring the proper use
Resolutions by virtue of its powers and functions under the Revised Administrative Code even in and objective information and appropriate of breastmilk substitutes, breastmilk
the absence of a domestic law. regulation of the marketing and distribution of the supplements and related products when these
said substitutes, supplements and related are medically indicated and only when
Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH products; necessary, on the basis of adequate
shall define the national health policy and implement a national health plan within the information and through appropriate
framework of the government's general policies and plans, and issue orders and regulations marketing and distribution.
SECTION 4(e). "Infant" means a person falling
concerning the implementation of established health policies. within the age bracket of 0-12 months.
Section 5(ff). "Young Child" means a person
It is crucial to ascertain whether the absolute prohibition on advertising and other forms of from the age of more than twelve (12) months
promotion of breastmilk substitutes provided in some WHA Resolutions has been adopted as up to the age of three (3) years (36 months).
part of the national health policy.
2. The Milk Code recognizes that infant formula may be a proper and possible
Respondents submit that the national policy on infant and young child feeding is embodied in substitute for breastmilk in certain instances; but the RIRR provides "exclusive
A.O. No. 2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the breastfeeding for infants from 0-6 months" and declares that "there is no substitute nor
following policy guidelines: (1) ideal breastfeeding practices, such as early initiation of replacement for breastmilk":
breastfeeding, exclusive breastfeeding for the first six months, extended breastfeeding up to two
years and beyond; (2) appropriate complementary feeding, which is to start at age six months;
(3) micronutrient supplementation; (4) universal salt iodization; (5) the exercise of other feeding MILK CODE RIRR
options; and (6) feeding in exceptionally difficult circumstances. Indeed, the primacy of WHEREAS, in order to ensure that safe and Section 4. Declaration of Principles The
breastfeeding for children is emphasized as a national health policy. However, nowhere in A.O. adequate nutrition for infants is provided, there following are the underlying principles from
No. 2005-0014 is it declared that as part of such health policy, the advertisement or is a need to protect and promote breastfeeding which the revised rules and regulations are
promotion of breastmilk substitutes should be absolutely prohibited. and to inform the public about the proper use of premised upon:
breastmilk substitutes and supplements and
related products through adequate, consistent
The national policy of protection, promotion and support of breastfeeding cannot automatically a. Exclusive breastfeeding is for infants from 0
and objective information and appropriate
be equated with a total ban on advertising for breastmilk substitutes. to six (6) months.
regulation of the marketing and distribution of
the said substitutes, supplements and related
In view of the enactment of the Milk Code which does not contain a total ban on the advertising products; b. There is no substitute or replacement for
and promotion of breastmilk substitutes, but instead, specifically creates an IAC which will breastmilk.
regulate said advertising and promotion, it follows that a total ban policy could be implemented
 3. The Milk Code only regulates and does not impose unreasonable requirements for
advertising and promotion; RIRR imposes an absolute ban on such activities for
breastmilk substitutes intended for infants from 0-24 months old or beyond, and
forbids the use of health and nutritional claims. Section 13 of the RIRR, which
provides for a "total effect" in the promotion of products within the scope of the Code,
is vague:
MILK CODE
SECTION 6. The General Public and
Mothers.
(a) No advertising, promotion or other
marketing materials, whether written, audio
or visual, for products within the scope of
this Code shall be printed, published,
distributed, exhibited and broadcast unless
such materials are duly authorized and
approved by an inter-agency
committee created herein pursuant to the
applicable standards provided for in this
Code.
RIRR
Section 4. Declaration of Principles The
following are the underlying principles from
which the revised rules and regulations are
premised upon:
xxxx
f. Advertising, promotions, or sponsor-
ships of infant formula, breastmilk
substitutes and other related products are
prohibited.
Section 11. Prohibition No advertising,
promotions, sponsorships, or marketing
materials and activities for breastmilk
substitutes intended for infants and young
children up to twenty-four (24) months, shall
be allowed, because they tend to convey or
give subliminal messages or impressions
that undermine breastmilk and breastfeeding
or otherwise exaggerate breastmilk
substitutes and/or replacements, as well as
related products covered within the scope of
this Code.
Section 13. "Total Effect" - Promotion of
products within the scope of this Code must
be objective and should not equate or make
the product appear to be as good or equal to
breastmilk or breastfeeding in the advertising
concept. It must not in any case undermine
breastmilk or breastfeeding. The "total
effect" should not directly or indirectly
suggest that buying their product would
produce better individuals, or resulting in
greater love, intelligence, ability, harmony or
in any manner bring better health to the baby
or other such exaggerated and
unsubstantiated claim.
Section 15. Content of Materials. - The
following shall not be included in advertising,
promotional and marketing materials:
a. Texts, pictures, illustrations or information
which discourage or tend to undermine the
4. The RIRR imposes additional labeling requirements not found in the Milk Code:
MILK CODE
SECTION 10. Containers/Label.
(a) Containers and/or labels shall be
designed to provide the necessary
information about the appropriate use of
the products, and in such a way as not to
discourage breastfeeding.
(b) Each container shall have a clear,
conspicuous and easily readable and
understandable message in Pilipino or
English printed on it, or on a label, which
message can not readily become
separated from it, and which shall
include the following points:
(i) the words "Important Notice" or their
equivalent;
(ii) a statement of the superiority of
breastfeeding;
(iii) a statement that the product shall be
benefits or superiority of breastfeeding or
which idealize the use of breastmilk
substitutes and milk supplements. In this
connection, no pictures of babies and
children together with their mothers, fathers,
siblings, grandparents, other relatives or
caregivers (or yayas) shall be used in any
advertisements for infant formula and
breastmilk supplements;
b. The term "humanized," "maternalized,"
"close to mother's milk" or similar words in
describing breastmilk substitutes or milk
supplements;
c. Pictures or texts that idealize the use of
infant and milk formula.
Section 16. All health and nutrition claims
for products within the scope of the Code are
absolutely prohibited. For this purpose, any
phrase or words that connotes to increase
emotional, intellectual abilities of the infant
and young child and other like phrases shall
not be allowed.
RIRR
Section 26. Content Each container/label
shall contain such message, in both Filipino
and English languages, and which message
cannot be readily separated therefrom, relative
the following points:
(a) The words or phrase "Important Notice" or
"Government Warning" or their equivalent;
(b) A statement of the superiority of
breastfeeding;
(c) A statement that there is no substitute for
breastmilk;
(d) A statement that the product shall be used
only on the advice of a health worker as to the
need for its use and the proper methods of use;
(e) Instructions for appropriate prepara-tion,
and a warning against the health hazards of
inappropriate preparation; and
 used only on the advice of a health (f) The health hazards of unnecessary or advancement of breasfeeding.
worker as to the need for its use and the improper use of infant formula and other
proper methods of use; and related products including information that
SECTION 22. No manufacturer, distributor, or
powdered infant formula may contain
representatives of products covered by the
pathogenic microorganisms and must be
(iv) instructions for appropriate Code shall be allowed to conduct or be
prepared and used appropriately.
preparation, and a warning against the involved in any activity on breastfeeding
health hazards of inappropriate promotion, education and production of
preparation. Information, Education and Communication
(IEC) materials on breastfeeding, holding of or
participating as speakers in classes or
5. The Milk Code allows dissemination of information on infant formula to health seminars for women and children activitiesand
professionals; the RIRR totally prohibits such activity: to avoid the use of these venues to market
their brands or company names.
MILK CODE RIRR
SECTION 7. Health Care System. Section 22. No manufacturer, distributor, or SECTION 32. Primary Responsibility of
representatives of products covered by the Health Workers - It is the primary
Code shall be allowed to conduct or be responsibility of the health workers to promote,
(b) No facility of the health care system protect and support breastfeeding and
involved in any activity on breastfeeding
shall be used for the purpose of appropriate infant and young child feeding. Part
promotion, education and production of
promoting infant formula or other of this responsibility is to continuously update
Information, Education and Communication
products within the scope of this their knowledge and skills on breastfeeding. No
(IEC) materials on breastfeeding, holding of or
Code. This Code does not, however, assistance, support, logistics or training from
participating as speakers in classes or
preclude the dissemination of information milk companies shall be permitted.
seminars for women and children activities and
to health professionals as provided in
to avoid the use of these venues to market
Section 8(b).
their brands or company names.
7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.
SECTION 8. Health Workers. -
SECTION 16. All health and nutrition claims for
products within the scope of the Code are MILK CODE RIRR
(b) Information provided by absolutely prohibited. For this purpose, any SECTION 6. The General Public and Section 51. Donations Within the Scope of
manufacturers and distributors to health phrase or words that connotes to increase Mothers. This Code - Donations of products, materials,
professionals regarding products within emotional, intellectual abilities of the infant and defined and covered under the Milk Code and
the scope of this Code shall be restricted young child and other like phrases shall not be these implementing rules and regulations,
(f) Nothing herein contained shall
to scientific and factual matters and such allowed. shall be strictly prohibited.
prevent donations from manufacturers
information shall not imply or create a
and distributors of products within the
belief that bottle-feeding is equivalent or
scope of this Code upon request by or Section 52. Other Donations By Milk
superior to breastfeeding. It shall also
with the approval of the Ministry of Companies Not Covered by this Code. -
include the information specified in
Health. Donations of products, equipments, and the
Section 5(b).
like, not otherwise falling within the scope of
this Code or these Rules, given by milk
6. The Milk Code permits milk manufacturers and distributors to extend assistance in companies and their agents, representatives,
research and continuing education of health professionals; RIRR absolutely forbids whether in kind or in cash, may only be
the same. coursed through the Inter Agency Committee
(IAC), which shall determine whether such
donation be accepted or otherwise.
MILK CODE RIRR
SECTION 8. Health Workers Section 4. Declaration of Principles
8. The RIRR provides for administrative sanctions not imposed by the Milk Code.

(e) Manufacturers and distributors of
products within the scope of this Code may
assist in the research, scholarships and
continuing education, of health
professionals, in accordance with the rules
and regulations promulgated by the
Ministry of Health.
The following are the underlying principles from
which the revised rules and regulations are
premised upon:
i. Milk companies, and their
representatives, should not form part of any
policymaking body or entity in relation to the
MILK CODE RIRR
Section 46. Administrative Sanctions. The
following administrative sanctions shall be imposed
upon any person, juridical or natural, found to have
violated the provisions of the Code and its
implementing Rules and Regulations:
 a) 1st violation Warning;
b) 2nd violation Administrative fine of a minimum
of Ten Thousand (P10,000.00) to Fifty Thousand
(P50,000.00) Pesos, depending on the gravity and
extent of the violation, including the recall of the
offending product;
c) 3rd violation Administrative Fine of a minimum
of Sixty Thousand (P60,000.00) to One Hundred
Fifty Thousand (P150,000.00) Pesos, depending
on the gravity and extent of the violation, and in
addition thereto, the recall of the offending product,
and suspension of the Certificate of Product
Registration (CPR);
d) 4th violation Administrative Fine of a minimum
of Two Hundred Thousand (P200,000.00) to Five
Hundred (P500,000.00) Thousand Pesos,
depending on the gravity and extent of the
violation; and in addition thereto, the recall of the
product, revocation of the CPR, suspension of the
License to Operate (LTO) for one year;
e) 5th and succeeding repeated violations
Administrative Fine of One Million (P1,000,000.00)
Pesos, the recall of the offending product,
cancellation of the CPR, revocation of the License
to Operate (LTO) of the company concerned,
including the blacklisting of the company to be
furnished the Department of Budget and
Management (DBM) and the Department of Trade
and Industry (DTI);
f) An additional penalty of Two Thou-sand Five
Hundred (P2,500.00) Pesos per day shall be made
for every day the violation continues after having
received the order from the IAC or other such
appropriate body, notifying and penalizing the
company for the infraction.
For purposes of determining whether or not there is
"repeated" violation, each product violation
belonging or owned by a company, including those
of their subsidiaries, are deemed to be violations of
the concerned milk company and shall not be
based on the specific violating product alone.
9. The RIRR provides for repeal of existing laws to the contrary.
The Court shall resolve the merits of the allegations of petitioner seriatim.
1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12
months old. Section 3 of the Milk Code states:
SECTION 3. Scope of the Code The Code applies to the marketing, and practices
related thereto, of the following products: breastmilk substitutes, including infant
formula; other milk products, foods and beverages, including bottle-fed
complementary foods, when marketed or otherwise represented to be suitable, with or
without modification, for use as a partial or total replacement of breastmilk; feeding
bottles and teats. It also applies to their quality and availability, and to information
concerning their use.
Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind
of product being marketed to the public. The law treats infant formula, bottle-fed
complementary food, and breastmilk substitute as separate and distinct product categories.
Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy
the normal nutritional requirements of infants up to between four to six months of age, and
adapted to their physiological characteristics"; while under Section 4(b), bottle-fed
complementary food refers to "any food, whether manufactured or locally prepared, suitable as a
complement to breastmilk or infant formula, when either becomes insufficient to satisfy the
nutritional requirements of the infant." An infant under Section 4(e) is a person falling within the
age bracket 0-12 months. It is the nourishment of this group of infants or children aged 0-12
months that is sought to be promoted and protected by the Milk Code.
But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any
food being marketed or otherwise presented as a partial or total replacement for breastmilk,
whether or not suitable for that purpose." This section conspicuously lacks reference to any
particular age-group of children. Hence, the provision of the Milk Code cannot be
considered exclusive for children aged 0-12 months. In other words, breastmilk substitutes
may also be intended for young children more than 12 months of age. Therefore, by regulating
breastmilk substitutes, the Milk Code also intends to protect and promote the nourishment of
children more than 12 months old.
Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided
in Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be
used by children aged over 12 months.
There is, therefore, nothing objectionable with Sections 242 and 5(ff)43 of the RIRR.
2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize
that breastmilk substitutes may be a proper and possible substitute for breastmilk.
The entirety of the RIRR, not merely truncated portions thereof, must be considered and
construed together. As held in De Luna v. Pascual,44 "[t]he particular words, clauses and
phrases in the Rule should not be studied as detached and isolated expressions, but the whole
and every part thereof must be considered in fixing the meaning of any of its parts and in order
to produce a harmonious whole."
Section 7 of the RIRR provides that "when medically indicated and only when necessary, the
use of breastmilk substitutes is proper if based on complete and updated information."
Section 8 of the RIRR also states that information and educational materials should include
information on the proper use of infant formula when the use thereof is needed.
Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of
breastmilk substitutes may be proper.
3. The Court shall ascertain the merits of allegations 345 and 446 together as they are interlinked
with each other.
To resolve the question of whether the labeling requirements and advertising regulations under
the RIRR are valid, it is important to deal first with the nature, purpose, and depth of the
regulatory powers of the DOH, as defined in general under the 1987 Administrative Code, 47 and
as delegated in particular under the Milk Code.
Health is a legitimate subject matter for regulation by the DOH (and certain other administrative
agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that
matter precludes the need to further discuss it..48 However, health information, particularly
advertising materials on apparently non-toxic products like breastmilk substitutes and
supplements, is a relatively new area for regulation by the DOH. 49
50
As early as the 1917 Revised Administrative Code of the Philippine Islands, health information
was already within the ambit of the regulatory powers of the predecessor of DOH. 51 Section 938
thereof charged it with the duty to protect the health of the people, and vested it with such
powers as "(g) the dissemination of hygienic information among the people and especially the
inculcation of knowledge as to the proper care of infants and the methods of preventing and
combating dangerous communicable diseases."
Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state
policy pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and
promote the right to health of the people and instill health consciousness among them."52 To
that end, it was granted under Section 3 of the Administrative Code the power to "(6) propagate
health information and educate the population on important health, medical and environmental
matters which have health implications."53
When it comes to information regarding nutrition of infants and young children, however, the Milk
Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power
to ensure that there is adequate, consistent and objective information on breastfeeding and use
of breastmilk substitutes, supplements and related products; and the power to control such
information. These are expressly provided for in Sections 12 and 5(a), to wit:
SECTION 12. Implementation and Monitoring
xxxx
(b) The Ministry of Health shall be principally responsible for the implementation and
enforcement of the provisions of this Code. For this purpose, the Ministry of Health
shall have the following powers and functions:
(1) To promulgate such rules and regulations as are necessary or proper for
the implementation of this Code and the accomplishment of its purposes
and objectives.
xxxx
(4) To exercise such other powers and functions as may be necessary for or
incidental to the attainment of the purposes and objectives of this Code.
SECTION 5. Information and Education
(a) The government shall ensure that objective and consistent information is
provided on infant feeding, for use by families and those involved in the field of infant
nutrition. This responsibility shall cover the planning, provision, design and
dissemination of information, and the control thereof, on infant nutrition. (Emphasis
supplied)
Further, DOH is authorized by the Milk Code to control the content of any information on
breastmilk vis--visbreastmilk substitutes, supplement and related products, in the following
manner:
SECTION 5. x x x
(b) Informational and educational materials, whether written, audio, or visual, dealing
with the feeding of infants and intended to reach pregnant women and mothers of
infants, shall include clear information on all the following points: (1) the benefits and
superiority of breastfeeding; (2) maternal nutrition, and the preparation for and
maintenance of breastfeeding; (3) the negative effect on breastfeeding of introducing
partial bottlefeeding; (4) the difficulty of reversing the decision not to breastfeed; and
(5) where needed, the proper use of infant formula, whether manufactured industrially
or home-prepared. When such materials contain information about the use of
infant formula, they shall include the social and financial implications of its use;
the health hazards of inappropriate foods or feeding methods; and, in particular,
the health hazards of unnecessary or improper use of infant formula and other
breastmilk substitutes. Such materials shall not use any picture or text which
may idealize the use of breastmilk substitutes.
SECTION 8. Health Workers
xxxx
(b) Information provided by manufacturers and distributors to health professionals
regarding products within the scope of this Code shall be restricted to scientific and
factual matters, and such information shall not imply or create a belief that
bottlefeeding is equivalent or superior to breastfeeding. It shall also include the
information specified in Section 5(b).
SECTION 10. Containers/Label
(a) Containers and/or labels shall be designed to provide the necessary information
about the appropriate use of the products, and in such a way as not to discourage
breastfeeding.
xxxx
(d) The term "humanized," "maternalized" or similar terms shall not be used.
(Emphasis supplied)
The DOH is also authorized to control the purpose of the information and to whom such
information may be disseminated under Sections 6 through 9 of the Milk Code54 to ensure that
the information that would reach pregnant women, mothers of infants, and health professionals
and workers in the health care system is restricted to scientific and factual matters and
shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding.
It bears emphasis, however, that the DOH's power under the Milk Code to control information
regarding breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control
does not encompass the power to absolutely prohibit the advertising, marketing, and promotion
of breastmilk substitutes.
The following are the provisions of the Milk Code that unequivocally indicate that the control over
information given to the DOH is not absolute and that absolute prohibition is not contemplated by
the Code:
a) Section 2 which requires adequate information and appropriate marketing and
distribution of breastmilk substitutes, to wit:
SECTION 2. Aim of the Code The aim of the Code is to contribute to the
provision of safe and adequate nutrition for infants by the protection and
promotion of breastfeeding and by ensuring the proper use of breastmilk
substitutes and breastmilk supplements when these are necessary, on the
basis of adequate information and through appropriate marketing and
distribution.
b) Section 3 which specifically states that the Code applies to the marketing of and
practices related to breastmilk substitutes, including infant formula, and to information
concerning their use;
c) Section 5(a) which provides that the government shall ensure that objective and
consistent information is provided on infant feeding;
d) Section 5(b) which provides that written, audio or visual informational and
educational materials shall not use any picture or text which may idealize the use of
breastmilk substitutes and should include information on the health hazards of
unnecessary or improper use of said product;
e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to
review and examine advertising, promotion, and other marketing materials;
f) Section 8(b) which states that milk companies may provide information to health
professionals but such information should be restricted to factual and scientific matters
and shall not imply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding; and
g) Section 10 which provides that containers or labels should not contain information
that would discourage breastfeeding and idealize the use of infant formula.
It is in this context that the Court now examines the assailed provisions of the RIRR regarding
labeling and advertising.
Sections 1355 on "total effect" and 2656 of Rule VII of the RIRR contain some labeling
requirements, specifically: a) that there be a statement that there is no substitute to breastmilk;
and b) that there be a statement that powdered infant formula may contain pathogenic
microorganisms and must be prepared and used appropriately. Section 1657of the RIRR
prohibits all health and nutrition claims for products within the scope of the Milk Code, such as
claims of increased emotional and intellectual abilities of the infant and young child.
These requirements and limitations are consistent with the provisions of Section 8 of the Milk
Code, to wit:
SECTION 8. Health workers -
xxxx
(b) Information provided by manufacturers and distributors to health professionals
regarding products within the scope of this Code shall be restricted to scientific and
factual matters, and such information shall notimply or create a belief that
bottlefeeding is equivalent or superior to breastfeeding. It shall also include the
information specified in Section 5.58 (Emphasis supplied)
and Section 10(d)59 which bars the use on containers and labels of the terms "humanized,"
"maternalized," or similar terms.
These provisions of the Milk Code expressly forbid information that would imply or create a belief
that there is any milk product equivalent to breastmilk or which is humanized or maternalized, as
such information would be inconsistent with the superiority of breastfeeding.
It may be argued that Section 8 of the Milk Code refers only to information given to health
workers regarding breastmilk substitutes, not to containers and labels thereof. However, such
restrictive application of Section 8(b) will result in the absurd situation in which milk companies
and distributors are forbidden to claim to health workers that their products are substitutes or
equivalents of breastmilk, and yet be allowed to display on the containers and labels of their
products the exact opposite message. That askewed interpretation of the Milk Code is precisely
what Section 5(a) thereof seeks to avoid by mandating that all information regarding
breastmilk vis-a-vis breastmilk substitutes be consistent, at the same time giving the
government control over planning, provision, design, and dissemination of information on infant
feeding.
Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product
offered is not a substitute for breastmilk, is a reasonable means of enforcing Section 8(b) of the
Milk Code and deterring circumvention of the protection and promotion of breastfeeding as
embodied in Section 260 of the Milk Code.
Section 26(f)61 of the RIRR is an equally reasonable labeling requirement. It implements Section
5(b) of the Milk Code which reads:
SECTION 5. x x x
xxxx
(b) Informational and educational materials, whether written, audio, or visual, dealing
with the feeding of infants and intended to reach pregnant women and mothers of
 infants, shall include clear information on all the following points: x x x (5) where
needed, the proper use of infant formula, whether manufactured industrially or home-
prepared. When such materials contain information about the use of infant formula,
they shall include the social and financial implications of its use; the health hazards
of inappropriate foods or feeding methods; and, in particular, the health hazards
of unnecessary or improper use of infant formula and other breastmilk
substitutes. Such materials shall not use any picture or text which may idealize the
use of breastmilk substitutes. (Emphasis supplied)
The label of a product contains information about said product intended for the buyers thereof.
The buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely
adds a fair warning about the likelihood of pathogenic microorganisms being present in infant
formula and other related products when these are prepared and used inappropriately.
Petitioners counsel has admitted during the hearing on June 19, 2007 that formula milk is prone
to contaminations and there is as yet no technology that allows production of powdered infant
formula that eliminates all forms of contamination.62
Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message
regarding health hazards including the possibility of contamination with pathogenic
microorganisms is in accordance with Section 5(b) of the Milk Code.
The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes
and supplements and related products cannot be questioned. It is its intervention into the area of
advertising, promotion, and marketing that is being assailed by petitioner.
In furtherance of Section 6(a) of the Milk Code, to wit:
SECTION 6. The General Public and Mothers.
(a) No advertising, promotion or other marketing materials, whether written, audio or
visual, for products within the scope of this Code shall be printed, published,
distributed, exhibited and broadcast unless such materials are duly authorized and
approved by an inter-agency committee created herein pursuant to the applicable
standards provided for in this Code.
the Milk Code invested regulatory authority over advertising, promotional and marketing
materials to an IAC, thus:
SECTION 12. Implementation and Monitoring -
(a) For purposes of Section 6(a) of this Code, an inter-agency committee composed of
the following members is hereby created:
Minister of Health ------------------- Chairman
Minister of Trade and Industry ------------------- Member
Minister of Justice ------------------- Member
Minister of Social Services and Development ------------------- Member
The members may designate their duly authorized representative to every meeting of
the Committee.
The Committee shall have the following powers and functions:
(1) To review and examine all advertising. promotion or other marketing
materials, whether written, audio or visual, on products within the scope of
this Code;
(2) To approve or disapprove, delete objectionable portions from and
prohibit the printing, publication, distribution, exhibition and broadcast of, all
advertising promotion or other marketing materials, whether written, audio
or visual, on products within the scope of this Code;
(3) To prescribe the internal and operational procedure for the exercise of its
powers and functions as well as the performance of its duties and
responsibilities; and
(4) To promulgate such rules and regulations as are necessary or
proper for the implementation of Section 6(a) of this Code. x x x
(Emphasis supplied)
However, Section 11 of the RIRR, to wit:
SECTION 11. Prohibition No advertising, promotions, sponsorships, or marketing
materials and activities for breastmilk substitutes intended for infants and young
children up to twenty-four (24) months, shall be allowed, because they tend to convey
or give subliminal messages or impressions that undermine breastmilk and
breastfeeding or otherwise exaggerate breastmilk substitutes and/or replacements, as
well as related products covered within the scope of this Code.
prohibits advertising, promotions, sponsorships or marketing materials and activities for
breastmilk substitutes in line with the RIRRs declaration of principle under Section 4(f), to wit:
SECTION 4. Declaration of Principles
xxxx
(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes
and other related products are prohibited.
The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory
authority given to the IAC but also imposed absolute prohibition on advertising, promotion, and
marketing.
Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in
Section 6 thereof for prior approval by IAC of all advertising, marketing and promotional
materials prior to dissemination.
Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly x x x Don't you think that the Department of Health overstepped its rule making
insisted, during the oral arguments on June 19, 2007, that the prohibition under Section 11 is not authority when it totally banned advertising and promotion under Section 11
actually operational, viz: prescribed the total effect rule as well as the content of materials under Section 13
and 15 of the rules and regulations?
SOLICITOR GENERAL DEVANADERA:
SOLICITOR GENERAL DEVANADERA:
xxxx
Your Honor, please, first we would like to stress that there is no total absolute ban.
Second, the Inter-Agency Committee is under the Department of Health, Your Honor.
x x x Now, the crux of the matter that is being questioned by Petitioner is whether or
not there is an absolute prohibition on advertising making AO 2006-12
unconstitutional. We maintained that what AO 2006-12 provides is not an absolute xxxx
prohibition because Section 11 while it states and it is entitled prohibition it states that
no advertising, promotion, sponsorship or marketing materials and activities for breast
ASSOCIATE JUSTICE NAZARIO:
milk substitutes intended for infants and young children up to 24 months shall be
allowed because this is the standard they tend to convey or give subliminal messages
or impression undermine that breastmilk or breastfeeding x x x. x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on
advertising of breastmilk substitutes in the Revised Rules?
We have to read Section 11 together with the other Sections because the other
Section, Section 12, provides for the inter agency committee that is empowered to SOLICITOR GENERAL DEVANADERA:
process and evaluate all the advertising and promotion materials.
Yes, your Honor.
xxxx
ASSOCIATE JUSTICE NAZARIO:
What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it
simply regulates the advertisement and the promotions of breastfeeding milk
But, would you nevertheless agree that there is an absolute ban on advertising of
substitutes.
breastmilk substitutes intended for children two (2) years old and younger?

xxxx
SOLICITOR GENERAL DEVANADERA:

Now, the prohibition on advertising, Your Honor, must be taken together with the
provision on the Inter-Agency Committee that processes and evaluates because there
may be some information dissemination that are straight forward information
dissemination. What the AO 2006 is trying to prevent is any material that will
undermine the practice of breastfeeding, Your Honor.
It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee
that can evaluate some advertising and promotional materials, subject to the
standards that we have stated earlier, which are- they should not undermine
breastfeeding, Your Honor.

xxxx xxxx

ASSOCIATE JUSTICE SANTIAGO:
Madam Solicitor General, under the Milk Code, which body has authority or power to
promulgate Rules and Regulations regarding the Advertising, Promotion and
Marketing of Breastmilk Substitutes?
x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other
Sections, particularly 12 and 13 and 15, Your Honor, because it is recognized that the
Inter-Agency Committee has that power to evaluate promotional materials, Your
Honor.
ASSOCIATE JUSTICE NAZARIO:

SOLICITOR GENERAL DEVANADERA:

So in short, will you please clarify there's no absolute ban on advertisement regarding
milk substitute regarding infants two (2) years below?
Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.
SOLICITOR GENERAL DEVANADERA:
xxxx
We can proudly say that the general rule is that there is a prohibition, however, we
ASSOCIATE JUSTICE SANTIAGO: take exceptions and standards have been set. One of which is that, the Inter-Agency
 Committee can allow if the advertising and promotions will not undermine breastmilk
and breastfeeding, Your Honor.63
Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code.
However, although it is the IAC which is authorized to promulgate rules and regulations for the
approval or rejection of advertising, promotional, or other marketing materials under Section
12(a) of the Milk Code, said provision must be related to Section 6 thereof which in turn provides
that the rules and regulations must be "pursuant to the applicable standards provided for in this
Code." Said standards are set forth in Sections 5(b), 8(b), and 10 of the Code, which, at the risk
of being repetitious, and for easy reference, are quoted hereunder:
SECTION 5. Information and Education
xxxx
(b) Informational and educational materials, whether written, audio, or visual, dealing
with the feeding of infants and intended to reach pregnant women and mothers of
infants, shall include clear information on all the following points: (1) the benefits and
superiority of breastfeeding; (2) maternal nutrition, and the preparation for and
maintenance of breastfeeding; (3) the negative effect on breastfeeding of introducing
partial bottlefeeding; (4) the difficulty of reversing the decision not to breastfeed; and
(5) where needed, the proper use of infant formula, whether manufactured industrially
or home-prepared. When such materials contain information about the use of infant
formula, they shall include the social and financial implications of its use; the health
hazards of inappropriate foods of feeding methods; and, in particular, the health
hazards of unnecessary or improper use of infant formula and other breastmilk
substitutes. Such materials shall not use any picture or text which may idealize the
use of breastmilk substitutes.
xxxx
SECTION 8. Health Workers.
xxxx
(b) Information provided by manufacturers and distributors to health professionals
regarding products within the scope of this Code shall be restricted to scientific and
factual matters and such information shall not imply or create a belief that bottle
feeding is equivalent or superior to breastfeeding. It shall also include the information
specified in Section 5(b).
xxxx
SECTION 10. Containers/Label
(a) Containers and/or labels shall be designed to provide the necessary information
about the appropriate use of the products, and in such a way as not to discourage
breastfeeding.
(b) Each container shall have a clear, conspicuous and easily readable and
understandable message in Pilipino or English printed on it, or on a label, which
message can not readily become separated from it, and which shall include the
following points:
(i) the words "Important Notice" or their equivalent;
(ii) a statement of the superiority of breastfeeding;
(iii) a statement that the product shall be used only on the advice of a health
worker as to the need for its use and the proper methods of use; and
(iv) instructions for appropriate preparation, and a warning against the
health hazards of inappropriate preparation.
Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the
enforcement of the provisions of the Code. In relation to such responsibility of the DOH, Section
5(a) of the Milk Code states that:
SECTION 5. Information and Education
(a) The government shall ensure that objective and consistent information is
provided on infant feeding, for use by families and those involved in the field of infant
nutrition. This responsibility shall cover the planning, provision, design and
dissemination of information, and the control thereof, on infant nutrition. (Emphasis
supplied)
Thus, the DOH has the significant responsibility to translate into operational terms the
standards set forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall
screen advertising, promotional, or other marketing materials.
It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR
which reads as follows:
SECTION 13. "Total Effect" - Promotion of products within the scope of this Code
must be objective and should not equate or make the product appear to be as good or
equal to breastmilk or breastfeeding in the advertising concept. It must not in any case
undermine breastmilk or breastfeeding. The "total effect" should not directly or
indirectly suggest that buying their product would produce better individuals, or
resulting in greater love, intelligence, ability, harmony or in any manner bring better
health to the baby or other such exaggerated and unsubstantiated claim.
Such standards bind the IAC in formulating its rules and regulations on advertising, promotion,
and marketing. Through that single provision, the DOH exercises control over the information
content of advertising, promotional and marketing materials on breastmilk vis-a-vis breastmilk
substitutes, supplements and other related products. It also sets a viable standard against which
the IAC may screen such materials before they are made public.
In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,64 the Court held:
 x x x [T]his Court had, in the past, accepted as sufficient standards the following:
"public interest," "justice and equity," "public convenience and welfare," and
"simplicity, economy and welfare."65
In this case, correct information as to infant feeding and nutrition is infused with public interest
and welfare.
Petitioner complains that Section 3273 of the RIRR prohibits milk companies from giving
assistance, support, logistics or training to health workers. This provision is within the
prerogative given to the DOH under Section 8(e)74of the Milk Code, which provides that
manufacturers and distributors of breastmilk substitutes may assist in researches, scholarships
and the continuing education, of health professionals in accordance with the rules and
regulations promulgated by the Ministry of Health, now DOH.

6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk
4. With regard to activities for dissemination of information to health professionals, the Court also
Code. Section 6(f) of the Milk Code provides that donations may be made by manufacturers and
finds that there is no inconsistency between the provisions of the Milk Code and the RIRR.
distributors of breastmilk substitutes upon the request or with the approval of the DOH. The
Section 7(b)66 of the Milk Code, in relation to Section 8(b)67 of the same Code, allows
law does not proscribe the refusal of donations. The Milk Code leaves it purely to the discretion
dissemination of information to health professionals but such information is restricted to
of the DOH whether to request or accept such donations. The DOH then appropriately exercised
scientific and factual matters.
its discretion through Section 5175 of the RIRR which sets forth its policy not to request or
approve donations from manufacturers and distributors of breastmilk substitutes.
Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of
information to health professionals on scientific and factual matters. What it prohibits is the
It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any
involvement of the manufacturer and distributor of the products covered by the Code in activities
donation from milk companies not covered by the Code should be coursed through the IAC
for the promotion, education and production of Information, Education and Communication (IEC)
which shall determine whether such donation should be accepted or refused. As reasoned out
materials regarding breastfeeding that are intended for women and children. Said provision
by respondents, the DOH is not mandated by the Milk Code to accept donations. For that matter,
cannot be construed to encompass even the dissemination of information to health
no person or entity can be forced to accept a donation. There is, therefore, no real inconsistency
professionals, as restricted by the Milk Code.
between the RIRR and the law because the Milk Code does not prohibit the DOH from refusing
donations.
5. Next, petitioner alleges that Section 8(e)68 of the Milk Code permits milk manufacturers and
distributors to extend assistance in research and in the continuing education of health
7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found
professionals, while Sections 22 and 32 of the RIRR absolutely forbid the same. Petitioner also
in the Milk Code, the Court upholds petitioner's objection thereto.
assails Section 4(i)69 of the RIRR prohibiting milk manufacturers' and distributors' participation in
any policymaking body in relation to the advancement of breastfeeding.
Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc.76 is misplaced. The
glaring difference in said case and the present case before the Court is that, in the Civil
Section 4(i) of the RIRR provides that milk companies and their representatives should not form
Aeronautics Board, the Civil Aeronautics Administration (CAA) was expressly granted by the
part of any policymaking body or entity in relation to the advancement of breastfeeding. The
law (R.A. No. 776) the power to impose fines and civil penalties, while the Civil Aeronautics
Court finds nothing in said provisions which contravenes the Milk Code. Note that under Section
Board (CAB) was granted by the same law the power to review on appeal the order or decision
12(b) of the Milk Code, it is the DOH which shall be principally responsible for the
of the CAA and to determine whether to impose, remit, mitigate, increase or compromise such
implementation and enforcement of the provisions of said Code. It is entirely up to the DOH to
fine and civil penalties. Thus, the Court upheld the CAB's Resolution imposing administrative
decide which entities to call upon or allow to be part of policymaking bodies on breastfeeding.
fines.
Therefore, the RIRR's prohibition on milk companies participation in any policymaking body in
relation to the advancement of breastfeeding is in accord with the Milk Code.
In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc.,77 the Court
upheld the Department of Energy (DOE) Circular No. 2000-06-10
Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from
implementing Batas Pambansa (B.P.) Blg. 33. The circular provided for fines for the commission
giving reasearch assistance and continuing education to health professionals. Section 2270 of
of prohibited acts. The Court found that nothing in the circular contravened the law because the
the RIRR does not pertain to research assistance to or the continuing education of health
DOE was expressly authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.
professionals; rather, it deals with breastfeeding promotion and education for women and
children. Nothing in Section 22 of the RIRR prohibits milk companies from giving assistance for
research or continuing education to health professionals; hence, petitioner's argument against In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH
this particular provision must be struck down. the authority to fix or impose administrative fines. Thus, without any express grant of power to fix
or impose such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the
DOH again exceeded its authority by providing for such fines or sanctions in Section 46 of the
It is Sections 971 and 1072 of the RIRR which govern research assistance. Said sections of the
RIRR. Said provision is, therefore, null and void.
RIRR provide that research assistance for health workers and researchers may be allowed
upon approval of an ethics committee, and with certain disclosure requirements imposed
on the milk company and on the recipient of the research award. The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of
the Milk Code authorizes the DOH to "cause the prosecution of the violators of this Code and
other pertinent laws on products covered by this Code." Section 13 of the Milk Code provides for
The Milk Code endows the DOH with the power to determine how such research or educational
the penalties to be imposed on violators of the provision of the Milk Code or the rules and
assistance may be given by milk companies or under what conditions health workers may
regulations issued pursuant to it, to wit:
accept the assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of
research done or extent of assistance given by milk companies are completely in accord with the
Milk Code. SECTION 13. Sanctions
 (a) Any person who violates the provisions of this Code or the rules and regulations
issued pursuant to this Code shall, upon conviction, be punished by a penalty of two
(2) months to one (1) year imprisonment or a fine of not less than One Thousand
Pesos (P1,000.00) nor more than Thirty Thousand Pesos (P30,000.00) or both.
Should the offense be committed by a juridical person, the chairman of the Board of
Directors, the president, general manager, or the partners and/or the persons directly
responsible therefor, shall be penalized.
(b) Any license, permit or authority issued by any government agency to any health
worker, distributor, manufacturer, or marketing firm or personnel for the practice of
their profession or occupation, or for the pursuit of their business, may, upon
recommendation of the Ministry of Health, be suspended or revoked in the event of
repeated violations of this Code, or of the rules and regulations issued pursuant to this
Code. (Emphasis supplied)
8. Petitioners claim that Section 57 of the RIRR repeals existing laws that are contrary to the
RIRR is frivolous.
Section 57 reads:
SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or
parts thereof inconsistent with these revised rules and implementing regulations are
hereby repealed or modified accordingly.
Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and
rules and regulations. Thus, said provision is valid as it is within the DOH's rule-making power.
An administrative agency like respondent possesses quasi-legislative or rule-making power or
the power to make rules and regulations which results in delegated legislation that is within the
confines of the granting statute and the Constitution, and subject to the doctrine of non-
delegability and separability of powers.78 Such express grant of rule-making power necessarily
includes the power to amend, revise, alter, or repeal the same. 79 This is to allow administrative
agencies flexibility in formulating and adjusting the details and manner by which they are to
implement the provisions of a law,80 in order to make it more responsive to the times. Hence, it is
a standard provision in administrative rules that prior issuances of administrative agencies that
are inconsistent therewith are declared repealed or modified.
In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to
promulgate and in contravention of the Milk Code and, therefore, null and void. The rest of the
provisions of the RIRR are in consonance with the Milk Code.
Lastly, petitioner makes a "catch-all" allegation that:
x x x [T]he questioned RIRR sought to be implemented by the Respondents
is unnecessary and oppressive, and is offensive to the due process clause of
the Constitution, insofar as the same is in restraint of trade and because a
provision therein is inadequate to provide the public with a comprehensible basis to
determine whether or not they have committed a violation.81 (Emphasis supplied)
Petitioner refers to Sections 4(f),82 4(i),83 5(w),84 11,85 22,86 32,87 46,88 and 5289 as the provisions
that suppress the trade of milk and, thus, violate the due process clause of the Constitution.
The framers of the constitution were well aware that trade must be subjected to some form of
regulation for the public good. Public interest must be upheld over business interests. 90 In Pest
Management Association of the Philippines v. Fertilizer and Pesticide Authority,91 it was held
thus:
x x x Furthermore, as held in Association of Philippine Coconut Desiccators v.
Philippine Coconut Authority, despite the fact that "our present Constitution
enshrines free enterprise as a policy, it nonetheless reserves to the government
the power to intervene whenever necessary to promote the general welfare."
There can be no question that the unregulated use or proliferation of pesticides would
be hazardous to our environment. Thus, in the aforecited case, the Court declared that
"free enterprise does not call for removal of protective regulations." x x x It
must be clearly explained and proven by competent evidence just exactly how
such protective regulation would result in the restraint of trade. [Emphasis and
underscoring supplied]
In this case, petitioner failed to show that the proscription of milk manufacturers participation in
any policymaking body (Section 4(i)), classes and seminars for women and children (Section
22); the giving of assistance, support and logistics or training (Section 32); and the giving of
donations (Section 52) would unreasonably hamper the trade of breastmilk substitutes.
Petitioner has not established that the proscribed activities are indispensable to the trade of
breastmilk substitutes. Petitioner failed to demonstrate that the aforementioned provisions of the
RIRR are unreasonable and oppressive for being in restraint of trade.
Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and
oppressive. Said section provides for the definition of the term "milk company," to wit:
SECTION 5 x x x. (w) "Milk Company" shall refer to the owner, manufacturer,
distributor of infant formula, follow-up milk, milk formula, milk supplement, breastmilk
substitute or replacement, or by any other description of such nature, including their
representatives who promote or otherwise advance their commercial interests in
marketing those products;
On the other hand, Section 4 of the Milk Code provides:
(d) "Distributor" means a person, corporation or any other entity in the public or private
sector engaged in the business (whether directly or indirectly) of marketing at the
wholesale or retail level a product within the scope of this Code. A "primary distributor"
is a manufacturer's sales agent, representative, national distributor or broker.
xxxx
(j) "Manufacturer" means a corporation or other entity in the public or private sector
engaged in the business or function (whether directly or indirectly or through an agent
or and entity controlled by or under contract with it) of manufacturing a products within
the scope of this Code.
Notably, the definition in the RIRR merely merged together under the term "milk company" the
entities defined separately under the Milk Code as "distributor" and "manufacturer." The RIRR
also enumerated in Section 5(w) the products manufactured or distributed by an entity that
would qualify it as a "milk company," whereas in the Milk Code, what is used is the phrase
"products within the scope of this Code." Those are the only differences between the definitions
given in the Milk Code and the definition as re-stated in the RIRR.
Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and
distributors, the Court sees no harm in the RIRR providing for just one term to encompass both
entities. The definition of "milk company" in the RIRR and the definitions of "distributor" and
"manufacturer" provided for under the Milk Code are practically the same.
The Court is not convinced that the definition of "milk company" provided in the RIRR would
bring about any change in the treatment or regulation of "distributors" and "manufacturers" of
breastmilk substitutes, as defined under the Milk Code.
Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with
the objective, purpose and intent of the Milk Code, constituting reasonable regulation of an
industry which affects public health and welfare and, as such, the rest of the RIRR do not
constitute illegal restraint of trade nor are they violative of the due process clause of the
Constitution.
WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of
Administrative Order No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for
being ultra vires. The Department of Health and respondents are PROHIBITED from
implementing said provisions.
The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of
the provisions of Administrative Order No. 2006-0012 is concerned.
SO ORDERED.
Puno, (Chief Justice), Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Corona,
Carpio-Morales, Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura, Reyes,
JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-7995 May 31, 1957
LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations
and partnerships adversely affected. by Republic Act No. 1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer
of Manila,respondents.
Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for
respondent Secretary of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City
Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.
LABRADOR, J.:
I. The case and issue, in general
This Court has before it the delicate task of passing upon the validity and constitutionality of a
legislative enactment, fundamental and far-reaching in significance. The enactment poses
questions of due process, police power and equal protection of the laws. It also poses an
important issue of fact, that is whether the conditions which the disputed law purports to remedy
really or actually exist. Admittedly springing from a deep, militant, and positive nationalistic
impulse, the law purports to protect citizen and country from the alien retailer. Through it, and
within the field of economy it regulates, Congress attempts to translate national aspirations for
economic independence and national security, rooted in the drive and urge for national survival
and welfare, into a concrete and tangible measures designed to free the national retailer from
the competing dominance of the alien, so that the country and the nation may be free from a requirements of due process and equal protection of the laws. But before proceeding to the
supposed economic dependence and bondage. Do the facts and circumstances justify the consideration and resolution of the ultimate issue involved, it would be well to bear in mind
enactment? certain basic and fundamental, albeit preliminary, considerations in the determination of the ever
recurrent conflict between police power and the guarantees of due process and equal protection
of the laws. What is the scope of police power, and how are the due process and equal
II. Pertinent provisions of Republic Act No. 1180
protection clauses related to it? What is the province and power of the legislature, and what is
the function and duty of the courts? These consideration must be clearly and correctly
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it understood that their application to the facts of the case may be brought forth with clarity and the
nationalizes the retail trade business. The main provisions of the Act are: (1) a prohibition issue accordingly resolved.
against persons, not citizens of the Philippines, and against associations, partnerships, or
corporations the capital of which are not wholly owned by citizens of the Philippines, from
It has been said the police power is so far - reaching in scope, that it has become almost
engaging directly or indirectly in the retail trade; (2) an exception from the above prohibition in
impossible to limit its sweep. As it derives its existence from the very existence of the State itself,
favor of aliens actually engaged in said business on May 15, 1954, who are allowed to continue
it does not need to be expressed or defined in its scope; it is said to be co-extensive with self-
to engaged therein, unless their licenses are forfeited in accordance with the law, until their
protection and survival, and as such it is the most positive and active of all governmental
death or voluntary retirement in case of natural persons, and for ten years after the approval of
processes, the most essential, insistent and illimitable. Especially is it so under a modern
the Act or until the expiration of term in case of juridical persons; (3) an exception therefrom in
democratic framework where the demands of society and of nations have multiplied to almost
favor of citizens and juridical entities of the United States; (4) a provision for the forfeiture of
unimaginable proportions; the field and scope of police power has become almost boundless,
licenses (to engage in the retail business) for violation of the laws on nationalization, control
just as the fields of public interest and public welfare have become almost all-embracing and
weights and measures and labor and other laws relating to trade, commerce and industry; (5) a
have transcended human foresight. Otherwise stated, as we cannot foresee the needs and
prohibition against the establishment or opening by aliens actually engaged in the retail business
demands of public interest and welfare in this constantly changing and progressive world, so we
of additional stores or branches of retail business, (6) a provision requiring aliens actually
cannot delimit beforehand the extent or scope of police power by which and through which the
engaged in the retail business to present for registration with the proper authorities a verified
State seeks to attain or achieve interest or welfare. So it is that Constitutions do not define the
statement concerning their businesses, giving, among other matters, the nature of the business,
scope or extent of the police power of the State; what they do is to set forth the limitations
their assets and liabilities and their offices and principal offices of judicial entities; and (7) a
thereof. The most important of these are the due process clause and the equal protection
provision allowing the heirs of aliens now engaged in the retail business who die, to continue
clause.
such business for a period of six months for purposes of liquidation.

b. Limitations on police power.

III. Grounds upon which petition is based-Answer thereto

The basic limitations of due process and equal protection are found in the following provisions of
Petitioner, for and in his own behalf and on behalf of other alien residents corporations and
our Constitution:
partnerships adversely affected by the provisions of Republic Act. No. 1180, brought this action
to obtain a judicial declaration that said Act is unconstitutional, and to enjoin the Secretary of
Finance and all other persons acting under him, particularly city and municipal treasurers, from SECTION 1.(1) No person shall be deprived of life, liberty or property without due
enforcing its provisions. Petitioner attacks the constitutionality of the Act, contending that: (1) it process of law, nor any person be denied the equal protection of the laws. (Article III,
denies to alien residents the equal protection of the laws and deprives of their liberty and Phil. Constitution)
property without due process of law ; (2) the subject of the Act is not expressed or
comprehended in the title thereof; (3) the Act violates international and treaty obligations of the
These constitutional guarantees which embody the essence of individual liberty and freedom in
Republic of the Philippines; (4) the provisions of the Act against the transmission by aliens of
democracies, are not limited to citizens alone but are admittedly universal in their application,
their retail business thru hereditary succession, and those requiring 100% Filipino capitalization
without regard to any differences of race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L.
for a corporation or entity to entitle it to engage in the retail business, violate the spirit of
ed. 220, 226.)
Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.

c. The, equal protection clause.

In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was
passed in the valid exercise of the police power of the State, which exercise is authorized in the
Constitution in the interest of national economic survival; (2) the Act has only one subject
embraced in the title; (3) no treaty or international obligations are infringed; (4) as regards
hereditary succession, only the form is affected but the value of the property is not impaired, and
the institution of inheritance is only of statutory origin.
IV. Preliminary consideration of legal principles involved
a. The police power.
There is no question that the Act was approved in the exercise of the police power, but petitioner
claims that its exercise in this instance is attended by a violation of the constitutional
The equal protection of the law clause is against undue favor and individual or class privilege, as
well as hostile discrimination or the oppression of inequality. It is not intended to prohibit
legislation, which is limited either in the object to which it is directed or by territory within which is
to operate. It does not demand absolute equality among residents; it merely requires that all
persons shall be treated alike, under like circumstances and conditions both as to privileges
conferred and liabilities enforced. The equal protection clause is not infringed by legislation
which applies only to those persons falling within a specified class, if it applies alike to all
persons within such class, and reasonable grounds exists for making a distinction between
those who fall within such class and those who do not. (2 Cooley, Constitutional Limitations,
824-825.)
d. The due process clause.
The due process clause has to do with the reasonableness of legislation enacted in pursuance
of the police power. Is there public interest, a public purpose; is public welfare involved? Is the
Act reasonably necessary for the accomplishment of the legislature's purpose; is it not
unreasonable, arbitrary or oppressive? Is there sufficient foundation or reason in connection with
the matter involved; or has there not been a capricious use of the legislative power? Can the
aims conceived be achieved by the means used, or is it not merely an unjustified interference
with private interest? These are the questions that we ask when the due process test is applied.
The conflict, therefore, between police power and the guarantees of due process and equal
protection of the laws is more apparent than real. Properly related, the power and the
guarantees are supposed to coexist. The balancing is the essence or, shall it be said, the
indispensable means for the attainment of legitimate aspirations of any democratic society.
There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there can
neither be absolute liberty, for that would mean license and anarchy. So the State can deprive
persons of life, liberty and property, provided there is due process of law; and persons may be
classified into classes and groups, provided everyone is given the equal protection of the law.
The test or standard, as always, is reason. The police power legislation must be firmly grounded
on public interest and welfare, and a reasonable relation must exist between purposes and
means. And if distinction and classification has been made, there must be a reasonable basis for
said distinction.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing, what is the proper place and role of the courts? It
must not be overlooked, in the first place, that the legislature, which is the constitutional
repository of police power and exercises the prerogative of determining the policy of the State, is
by force of circumstances primarily the judge of necessity, adequacy or reasonableness and
wisdom, of any law promulgated in the exercise of the police power, or of the measures adopted
to implement the public policy or to achieve public interest. On the other hand, courts, although
zealous guardians of individual liberty and right, have nevertheless evinced a reluctance to
interfere with the exercise of the legislative prerogative. They have done so early where there
has been a clear, patent or palpable arbitrary and unreasonable abuse of the legislative
prerogative. Moreover, courts are not supposed to override legitimate policy, and courts never
inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into the issue
involved. If the disputed legislation were merely a regulation, as its title indicates, there would be
no question that it falls within the legitimate scope of legislative power. But it goes further and
prohibits a group of residents, the aliens, from engaging therein. The problem becomes more
complex because its subject is a common, trade or occupation, as old as society itself, which
from the immemorial has always been open to residents, irrespective of race, color or
citizenship.
a. Importance of retail trade in the economy of the nation.
In a primitive economy where families produce all that they consume and consume all that they
produce, the dealer, of course, is unknown. But as group life develops and families begin to live
in communities producing more than what they consume and needing an infinite number of
things they do not produce, the dealer comes into existence. As villages develop into big
communities and specialization in production begins, the dealer's importance is enhanced.
Under modern conditions and standards of living, in which man's needs have multiplied and
diversified to unlimited extents and proportions, the retailer comes as essential as the producer,
because thru him the infinite variety of articles, goods and needed for daily life are placed within
the easy reach of consumers. Retail dealers perform the functions of capillaries in the human
body, thru which all the needed food and supplies are ministered to members of the
communities comprising the nation.
There cannot be any question about the importance of the retailer in the life of the community.
He ministers to the resident's daily needs, food in all its increasing forms, and the various little
gadgets and things needed for home and daily life. He provides his customers around his store
with the rice or corn, the fish, the salt, the vinegar, the spices needed for the daily cooking. He
has cloths to sell, even the needle and the thread to sew them or darn the clothes that wear out.
The retailer, therefore, from the lowly peddler, the owner of a small sari-sari store, to the
operator of a department store or, a supermarket is so much a part of day-to-day existence.
b. The alien retailer's trait.
The alien retailer must have started plying his trades in this country in the bigger centers of
population (Time there was when he was unknown in provincial towns and villages). Slowly but
gradually be invaded towns and villages; now he predominates in the cities and big centers of
population. He even pioneers, in far away nooks where the beginnings of community life appear,
ministering to the daily needs of the residents and purchasing their agricultural produce for sale
in the towns. It is an undeniable fact that in many communities the alien has replaced the native
retailer. He has shown in this trade, industry without limit, and the patience and forbearance of a
slave.
Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred
and insolent neighbors and customers are made in his face, but he heeds them not, and he
forgets and forgives. The community takes note of him, as he appears to be harmless and
extremely useful.
c. Alleged alien control and dominance.
There is a general feeling on the part of the public, which appears to be true to fact, about the
controlling and dominant position that the alien retailer holds in the nation's economy. Food and
other essentials, clothing, almost all articles of daily life reach the residents mostly through him.
In big cities and centers of population he has acquired not only predominance, but apparent
control over distribution of almost all kinds of goods, such as lumber, hardware, textiles,
groceries, drugs, sugar, flour, garlic, and scores of other goods and articles. And were it not for
some national corporations like the Naric, the Namarco, the Facomas and the Acefa, his control
over principal foods and products would easily become full and complete.
Petitioner denies that there is alien predominance and control in the retail trade. In one breath it
is said that the fear is unfounded and the threat is imagined; in another, it is charged that the law
is merely the result of radicalism and pure and unabashed nationalism. Alienage, it is said, is not
an element of control; also so many unmanageable factors in the retail business make control
virtually impossible. The first argument which brings up an issue of fact merits serious
consideration. The others are matters of opinion within the exclusive competence of the
legislature and beyond our prerogative to pass upon and decide.
The best evidence are the statistics on the retail trade, which put down the figures in black and
white. Between the constitutional convention year (1935), when the fear of alien domination and
control of the retail trade already filled the minds of our leaders with fears and misgivings, and
the year of the enactment of the nationalization of the retail trade act (1954), official statistics
unmistakably point out to the ever-increasing dominance and control by the alien of the retail
trade, as witness the following tables:
 Assets Gross Sales Chinese ........................................... 7,707 14,934
Year and Retailers No.- Per cent Per cent
Pesos Pesos
Nationality Establishments Distribution Distribution Others .............................................. 24,749 13,919
1941:
1948: (Census)
Filipino .......... 106,671 200,323,138 55.82 174,181,924 51.74
Chinese ........... 15,356 118,348,692 32.98 148,813,239 44.21 Filipino ............................................. 1,878 4,111
Others ............ 1,646 40,187,090 11.20 13,630,239 4.05
Chinese ............................................. 7,707 24,398
1947:
Filipino .......... 111,107 208,658,946 65.05 279,583,333 57.03 Others .............................................. 24,916 23,686

Chinese ........... 13,774 106,156,218 33.56 205,701,134 41.96

1949:
Others ........... 354 8,761,260 .49 4,927,168 1.01
Filipino ............................................. 1,878 4,069
1948: (Census)
Filipino .......... 113,631 213,342,264 67.30 467,161,667 60.51 Chinese .............................................. 7,707 24,152
Chinese .......... 12,087 93,155,459 29.38 294,894,227 38.20
Others .............................................. 24,807 20,737
Others .......... 422 10,514,675 3.32 9,995,402 1.29
1949: 1951:
Filipino .......... 113,659 213,451,602 60.89 462,532,901 53.47
Filipino ............................................. 1,877 3,905
Chinese .......... 16,248 125,223,336 35.72 392,414,875 45.36
Others .......... 486 12,056,365 3.39 10,078,364 1.17 Chinese ............................................. 7,707 33,207

1951: Others ............................................... 24,824 22,033

Filipino ......... 119,352 224,053,620 61.09 466,058,052 53.07
Chinese .......... 17,429 134,325,303 36.60 404,481,384 46.06
(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality
Others .......... 347 8,614,025 2.31 7,645,327 of
87Owners, Benchmark: 1948 Census, issued by the Bureau of Census and Statistics,
Department of Commerce and Industry; pp. 18-19 of Answer.)

The above statistics do not include corporations and partnerships, while the figures on Filipino
establishments already include mere market vendors, whose capital is necessarily small..
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT The above figures reveal that in percentage distribution of assests and gross sales, alien
participation has steadily increased during the years. It is true, of course, that Filipinos have the
Item edge in the number of retailers, but aliens more than make up for the numerical gap through
Year and Retailer's Gross Sales
Assets their assests and gross sales which average between six and seven times those of the very
Nationality (Pesos)
(Pesos) many Filipino retailers. Numbers in retailers, here, do not imply superiority; the alien invests
more capital, buys and sells six to seven times more, and gains much more. The same official
1941: report, pointing out to the known predominance of foreign elements in the retail trade, remarks
that the Filipino retailers were largely engaged in minor retailer enterprises. As observed by
Filipino ............................................. 1,878 1,633 respondents, the native investment is thinly spread, and the Filipino retailer is practically
helpless in matters of capital, credit, price and supply.
Chinese .............................................. 7,707 9,691
d. Alien control and threat, subject of apprehension in Constitutional convention.
Others ............................................... 24,415 8,281
It is this domination and control, which we believe has been sufficiently shown to exist, that is the
1947: legislature's target in the enactment of the disputed nationalization would never have been
adopted. The framers of our Constitution also believed in the existence of this alien dominance
Filipino ............................................. 1,878 2,516 and control when they approved a resolution categorically declaring among other things, that "it
is the sense of the Convention that the public interest requires the nationalization of the retail
trade; . . . ." (II Aruego, The Framing of the Philippine Constitution, 662-663, quoted on page 67 interests of truth and justice, that there exists a general feeling on the part of the public that alien
of Petitioner.) That was twenty-two years ago; and the events since then have not been either participation in the retail trade has been attended by a pernicious and intolerable practices, the
pleasant or comforting. Dean Sinco of the University of the Philippines College of Law, mention of a few of which would suffice for our purposes; that at some time or other they have
commenting on the patrimony clause of the Preamble opines that the fathers of our Constitution cornered the market of essential commodities, like corn and rice, creating artificial scarcities to
were merely translating the general preoccupation of Filipinos "of the dangers from alien justify and enhance profits to unreasonable proportions; that they have hoarded essential foods
interests that had already brought under their control the commercial and other economic to the inconvenience and prejudice of the consuming public, so much so that the Government
activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114); and analyzing the concern has had to establish the National Rice and Corn Corporation to save the public from their
of the members of the constitutional convention for the economic life of the citizens, in continuous hoarding practices and tendencies; that they have violated price control laws,
connection with the nationalistic provisions of the Constitution, he says: especially on foods and essential commodities, such that the legislature had to enact a law (Sec.
9, Republic Act No. 1168), authorizing their immediate and automatic deportation for price
control convictions; that they have secret combinations among themselves to control prices,
But there has been a general feeling that alien dominance over the economic life of
cheating the operation of the law of supply and demand; that they have connived to boycott
the country is not desirable and that if such a situation should remain, political
honest merchants and traders who would not cater or yield to their demands, in unlawful
independence alone is no guarantee to national stability and strength. Filipino private
restraint of freedom of trade and enterprise. They are believed by the public to have evaded tax
capital is not big enough to wrest from alien hands the control of the national
laws, smuggled goods and money into and out of the land, violated import and export
economy. Moreover, it is but of recent formation and hence, largely inexperienced,
prohibitions, control laws and the like, in derision and contempt of lawful authority. It is also
timid and hesitant. Under such conditions, the government as the instrumentality of
believed that they have engaged in corrupting public officials with fabulous bribes, indirectly
the national will, has to step in and assume the initiative, if not the leadership, in the
causing the prevalence of graft and corruption in the Government. As a matter of fact appeals to
struggle for the economic freedom of the nation in somewhat the same way that it did
unscrupulous aliens have been made both by the Government and by their own lawful
in the crusade for political freedom. Thus . . . it (the Constitution) envisages an
diplomatic representatives, action which impliedly admits a prevailing feeling about the existence
organized movement for the protection of the nation not only against the possibilities
of many of the above practices.
of armed invasion but also against its economic subjugation by alien interests in the
economic field. (Phil. Political Law by Sinco, 10th ed., p. 476.)
The circumstances above set forth create well founded fears that worse things may come in the
future. The present dominance of the alien retailer, especially in the big centers of population,
Belief in the existence of alien control and predominance is felt in other quarters. Filipino
therefore, becomes a potential source of danger on occasions of war or other calamity. We do
businessmen, manufacturers and producers believe so; they fear the dangers coming from alien
not have here in this country isolated groups of harmless aliens retailing goods among nationals;
control, and they express sentiments of economic independence. Witness thereto is Resolution
what we have are well organized and powerful groups that dominate the distribution of goods
No. 1, approved on July 18, 1953, of the Fifth National convention of Filipino Businessmen, and
and commodities in the communities and big centers of population. They owe no allegiance or
a similar resolution, approved on March 20, 1954, of the Second National Convention of
loyalty to the State, and the State cannot rely upon them in times of crisis or emergency. While
Manufacturers and Producers. The man in the street also believes, and fears, alien
the national holds his life, his person and his property subject to the needs of his country, the
predominance and control; so our newspapers, which have editorially pointed out not only to
alien may even become the potential enemy of the State.
control but to alien stranglehold. We, therefore, find alien domination and control to be a fact, a
reality proved by official statistics, and felt by all the sections and groups that compose the
Filipino community. f. Law enacted in interest of national economic survival and security.

e. Dangers of alien control and dominance in retail. We are fully satisfied upon a consideration of all the facts and circumstances that the disputed
law is not the product of racial hostility, prejudice or discrimination, but the expression of the
legitimate desire and determination of the people, thru their authorized representatives, to free
But the dangers arising from alien participation in the retail trade does not seem to lie in the
the nation from the economic situation that has unfortunately been saddled upon it rightly or
predominance alone; there is a prevailing feeling that such predominance may truly endanger
wrongly, to its disadvantage. The law is clearly in the interest of the public, nay of the national
the national interest. With ample capital, unity of purpose and action and thorough organization,
security itself, and indisputably falls within the scope of police power, thru which and by which
alien retailers and merchants can act in such complete unison and concert on such vital matters
the State insures its existence and security and the supreme welfare of its citizens.
as the fixing of prices, the determination of the amount of goods or articles to be made available
in the market, and even the choice of the goods or articles they would or would not patronize or
distribute, that fears of dislocation of the national economy and of the complete subservience of VI. The Equal Protection Limitation
national economy and of the consuming public are not entirely unfounded. Nationals, producers
and consumers alike can be placed completely at their mercy. This is easily illustrated. Suppose
a. Objections to alien participation in retail trade. The next question that now poses solution
an article of daily use is desired to be prescribed by the aliens, because the producer or importer
is, Does the law deny the equal protection of the laws? As pointed out above, the mere fact of
does not offer them sufficient profits, or because a new competing article offers bigger profits for
alienage is the root and cause of the distinction between the alien and the national as a trader.
its introduction. All that aliens would do is to agree to refuse to sell the first article, eliminating it
The alien resident owes allegiance to the country of his birth or his adopted country; his stay
from their stocks, offering the new one as a substitute. Hence, the producers or importers of the
here is for personal convenience; he is attracted by the lure of gain and profit. His aim or
prescribed article, or its consumers, find the article suddenly out of the prescribed article, or its
purpose of stay, we admit, is neither illegitimate nor immoral, but he is naturally lacking in that
consumers, find the article suddenly out of circulation. Freedom of trade is thus curtailed and
spirit of loyalty and enthusiasm for this country where he temporarily stays and makes his living,
free enterprise correspondingly suppressed.
or of that spirit of regard, sympathy and consideration for his Filipino customers as would
prevent him from taking advantage of their weakness and exploiting them. The faster he makes
We can even go farther than theoretical illustrations to show the pernicious influences of alien his pile, the earlier can the alien go back to his beloved country and his beloved kin and
domination. Grave abuses have characterized the exercise of the retail trade by aliens. It is a countrymen. The experience of the country is that the alien retailer has shown such utter
fact within judicial notice, which courts of justice may not properly overlook or ignore in the
disregard for his customers and the people on whom he makes his profit, that it has been found
necessary to adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really makes a genuine
contribution to national income and wealth. He undoubtedly contributes to general distribution,
but the gains and profits he makes are not invested in industries that would help the country's
economy and increase national wealth. The alien's interest in this country being merely transient
and temporary, it would indeed be ill-advised to continue entrusting the very important function
of retail distribution to his hands.
The practices resorted to by aliens in the control of distribution, as already pointed out above,
their secret manipulations of stocks of commodities and prices, their utter disregard of the
welfare of their customers and of the ultimate happiness of the people of the nation of which they
are mere guests, which practices, manipulations and disregard do not attend the exercise of the
trade by the nationals, show the existence of real and actual, positive and fundamental
differences between an alien and a national which fully justify the legislative classification
adopted in the retail trade measure. These differences are certainly a valid reason for the State
to prefer the national over the alien in the retail trade. We would be doing violence to fact and
reality were we to hold that no reason or ground for a legitimate distinction can be found
between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade by the aliens, which
are actual and real, furnish sufficient grounds for legislative classification of retail traders into
nationals and aliens. Some may disagree with the wisdom of the legislature's classification. To
this we answer, that this is the prerogative of the law-making power. Since the Court finds that
the classification is actual, real and reasonable, and all persons of one class are treated alike,
and as it cannot be said that the classification is patently unreasonable and unfounded, it is in
duty bound to declare that the legislature acted within its legitimate prerogative and it can not
declare that the act transcends the limit of equal protection established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and classifications among
persons is not curtailed or denied by the equal protection of the laws clause. The legislative
power admits of a wide scope of discretion, and a law can be violative of the constitutional
limitation only when the classification is without reasonable basis. In addition to the authorities
we have earlier cited, we can also refer to the case of Linsey vs. Natural Carbonic Fas Co.
(1911), 55 L. ed., 369, which clearly and succinctly defined the application of equal protection
clause to a law sought to be voided as contrary thereto:
. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from
the state the power to classify in the adoption of police laws, but admits of the exercise
of the wide scope of discretion in that regard, and avoids what is done only when it is
without any reasonable basis, and therefore is purely arbitrary. 2. A classification
having some reasonable basis does not offend against that clause merely because it
is not made with mathematical nicety, or because in practice it results in some
inequality. 3. When the classification in such a law is called in question, if any state of
facts reasonably can be conceived that would sustain it, the existence of that state of
facts at the time the law was enacted must be assumed. 4. One who assails the
classification in such a law must carry the burden of showing that it does not rest upon
any reasonable basis but is essentially arbitrary."
c. Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for classification has
already been affirmatively decided in this jurisdiction as well as in various courts in the United
States. In the case of Smith Bell & Co. vs. Natividad, 40 Phil. 136, where the validity of Act No.
2761 of the Philippine Legislature was in issue, because of a condition therein limiting the
ownership of vessels engaged in coastwise trade to corporations formed by citizens of the
Philippine Islands or the United States, thus denying the right to aliens, it was held that the
Philippine Legislature did not violate the equal protection clause of the Philippine Bill of Rights.
The legislature in enacting the law had as ultimate purpose the encouragement of Philippine
shipbuilding and the safety for these Islands from foreign interlopers. We held that this was a
valid exercise of the police power, and all presumptions are in favor of its constitutionality. In
substance, we held that the limitation of domestic ownership of vessels engaged in coastwise
trade to citizens of the Philippines does not violate the equal protection of the law and due
process or law clauses of the Philippine Bill of Rights. In rendering said decision we quoted with
approval the concurring opinion of Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat.,
I, as follows:
"Licensing acts, in fact, in legislation, are universally restraining acts; as, for example,
acts licensing gaming houses, retailers of spirituous liquors, etc. The act, in this
instance, is distinctly of that character, and forms part of an extensive system, the
object of which is to encourage American shipping, and place them on an equal
footing with the shipping of other nations. Almost every commercial nation reserves to
its own subjects a monopoly of its coasting trade; and a countervailing privilege in
favor of American shipping is contemplated, in the whole legislation of the United
States on this subject. It is not to give the vessel an American character, that the
license is granted; that effect has been correctly attributed to the act of her enrollment.
But it is to confer on her American privileges, as contra distinguished from foreign; and
to preserve the Government from fraud by foreigners; in surreptitiously intruding
themselves into the American commercial marine, as well as frauds upon the revenue
in the trade coastwise, that this whole system is projected."
The rule in general is as follows:
Aliens are under no special constitutional protection which forbids a classification
otherwise justified simply because the limitation of the class falls along the lines of
nationality. That would be requiring a higher degree of protection for aliens as a class
than for similar classes than for similar classes of American citizens. Broadly
speaking, the difference in status between citizens and aliens constitutes a basis for
reasonable classification in the exercise of police power. (2 Am., Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of
hawkers and peddlers, which provided that no one can obtain a license unless he is, or has
declared his intention, to become a citizen of the United States, was held valid, for the following
reason: It may seem wise to the legislature to limit the business of those who are supposed to
have regard for the welfare, good order and happiness of the community, and the court cannot
question this judgment and conclusion. In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a
statute which prevented certain persons, among them aliens, from engaging in the traffic of
liquors, was found not to be the result of race hatred, or in hospitality, or a deliberate purpose to
discriminate, but was based on the belief that an alien cannot be sufficiently acquainted with "our
institutions and our life as to enable him to appreciate the relation of this particular business to
our entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach,
274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had under consideration an
ordinance of the city of Cincinnati prohibiting the issuance of licenses (pools and billiard rooms)
to aliens. It held that plainly irrational discrimination against aliens is prohibited, but it does not
follow that alien race and allegiance may not bear in some instances such a relation to a
legitimate object of legislation as to be made the basis of permitted classification, and that it
could not state that the legislation is clearly wrong; and that latitude must be allowed for the
legislative appraisement of local conditions and for the legislative choice of methods for
controlling an apprehended evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a
parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington, 1922), the
business of pawn brooking was considered as having tendencies injuring public interest, and
limiting it to citizens is within the scope of police power. A similar statute denying aliens the right
to engage in auctioneering was also sustained in Wright vs. May, L.R.A., 1915 P. 151
(Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said
that aliens are judicially known to have different interests, knowledge, attitude, psychology and
loyalty, hence the prohibitions of issuance of licenses to them for the business of pawnbroker,
pool, billiard, card room, dance hall, is not an infringement of constitutional rights. In Templar vs.
Michigan State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the
licensing of aliens as barbers was held void, but the reason for the decision was the court's
findings that the exercise of the business by the aliens does not in any way affect the morals, the
health, or even the convenience of the community. In Takahashi vs. Fish and Game
Commission, 92 L. ed. 1479 (1947), a California statute banning the issuance of commercial
fishing licenses to person ineligible to citizenship was held void, because the law conflicts with
Federal power over immigration, and because there is no public interest in the mere claim of
ownership of the waters and the fish in them, so there was no adequate justification for the
discrimination. It further added that the law was the outgrowth of antagonism toward the persons
of Japanese ancestry. However, two Justices dissented on the theory that fishing rights have
been treated traditionally as natural resources. In Fraser vs. McConway & Tarley Co., 82 Fed.
257 (Pennsylvania, 1897), a state law which imposed a tax on every employer of foreign-born
unnaturalized male persons over 21 years of age, was declared void because the court found
that there was no reason for the classification and the tax was an arbitrary deduction from the
daily wage of an employee.
d. Authorities contra explained.
It is true that some decisions of the Federal court and of the State courts in the United States
hold that the distinction between aliens and citizens is not a valid ground for classification. But in
this decision the laws declared invalid were found to be either arbitrary, unreasonable or
capricious, or were the result or product of racial antagonism and hostility, and there was no
question of public interest involved or pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059
(1925), the United States Supreme Court declared invalid a Philippine law making unlawful the
keeping of books of account in any language other than English, Spanish or any other local
dialect, but the main reasons for the decisions are: (1) that if Chinese were driven out of
business there would be no other system of distribution, and (2) that the Chinese would fall prey
to all kinds of fraud, because they would be deprived of their right to be advised of their business
and to direct its conduct. The real reason for the decision, therefore, is the court's belief that no
public benefit would be derived from the operations of the law and on the other hand it would
deprive Chinese of something indispensable for carrying on their business. In Yick Wo vs.
Hopkins, 30 L. ed 220 (1885) an ordinance conferring powers on officials to withhold consent in
the operation of laundries both as to persons and place, was declared invalid, but the court said
that the power granted was arbitrary, that there was no reason for the discrimination which
attended the administration and implementation of the law, and that the motive thereof was mere
racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to
engage as hawkers and peddlers was declared void, because the discrimination bore no
reasonable and just relation to the act in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we already have said,
aliens do not naturally possess the sympathetic consideration and regard for the customers with
whom they come in daily contact, nor the patriotic desire to help bolster the nation's economy,
except in so far as it enhances their profit, nor the loyalty and allegiance which the national owes
to the land. These limitations on the qualifications of the aliens have been shown on many
occasions and instances, especially in times of crisis and emergency. We can do no better than
borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and
significance of the distinction between the alien and the national, thus:
. . . . It may be judicially known, however, that alien coming into this country are
without the intimate knowledge of our laws, customs, and usages that our own people
have. So it is likewise known that certain classes of aliens are of different psychology
from our fellow countrymen. Furthermore, it is natural and reasonable to suppose that
the foreign born, whose allegiance is first to their own country, and whose ideals of
governmental environment and control have been engendered and formed under
entirely different regimes and political systems, have not the same inspiration for the
public weal, nor are they as well disposed toward the United States, as those who by
citizenship, are a part of the government itself. Further enlargement, is unnecessary. I
have said enough so that obviously it cannot be affirmed with absolute confidence that
the Legislature was without plausible reason for making the classification, and
therefore appropriate discriminations against aliens as it relates to the subject of
legislation. . . . .
VII. The Due Process of Law Limitation.
a. Reasonability, the test of the limitation; determination by legislature decisive.
We now come to due process as a limitation on the exercise of the police power. It has been
stated by the highest authority in the United States that:
. . . . And the guaranty of due process, as has often been held, demands only that the
law shall not be unreasonable, arbitrary or capricious, and that the means selected
shall have a real and substantial relation to the subject sought to be attained. . . . .
xxx xxx xxx
So far as the requirement of due process is concerned and in the absence of other
constitutional restriction a state is free to adopt whatever economic policy may
reasonably be deemed to promote public welfare, and to enforce that policy by
legislation adapted to its purpose. The courts are without authority either to declare
such policy, or, when it is declared by the legislature, to override it. If the laws passed
are seen to have a reasonable relation to a proper legislative purpose, and are neither
arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial
determination to that effect renders a court functus officio. . . . (Nebbia vs. New York,
78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
. . . . Too much significance cannot be given to the word "reasonable" in considering
the scope of the police power in a constitutional sense, for the test used to determine
the constitutionality of the means employed by the legislature is to inquire whether the
restriction it imposes on rights secured to individuals by the Bill of Rights are
unreasonable, and not whether it imposes any restrictions on such rights. . . .
xxx xxx xxx
. . . . A statute to be within this power must also be reasonable in its operation upon
the persons whom it affects, must not be for the annoyance of a particular class, and
must not be unduly oppressive. (11 Am. Jur. Sec. 302., 1:1)- 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:
 . . . . To justify the state in thus interposing its authority in behalf of the public, it must
appear, first, that the interests of the public generally, as distinguished from those of a
particular class, require such interference; and second, that the means are reasonably
necessary for the accomplishment of the purpose, and not unduly oppressive upon
individuals. . . .
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of
constitutionality:
In determining whether a given act of the Legislature, passed in the exercise of the
police power to regulate the operation of a business, is or is not constitutional, one of
the first questions to be considered by the court is whether the power as exercised
has a sufficient foundation in reason in connection with the matter involved, or is an
arbitrary, oppressive, and capricious use of that power, without substantial relation to
the health, safety, morals, comfort, and general welfare of the public.
b. Petitioner's argument considered.
Petitioner's main argument is that retail is a common, ordinary occupation, one of those
privileges long ago recognized as essential to the orderly pursuant of happiness by free men;
that it is a gainful and honest occupation and therefore beyond the power of the legislature to
prohibit and penalized. This arguments overlooks fact and reality and rests on an incorrect
assumption and premise, i.e., that in this country where the occupation is engaged in by
petitioner, it has been so engaged by him, by the alien in an honest creditable and
unimpeachable manner, without harm or injury to the citizens and without ultimate danger to
their economic peace, tranquility and welfare. But the Legislature has found, as we have also
found and indicated, that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic control of
the occupation and threatens a deadly stranglehold on the nation's economy endangering the
national security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which overlooks and
ignores the facts and circumstances, but this, Is the exclusion in the future of aliens from the
retail trade unreasonable. Arbitrary capricious, taking into account the illegitimate and pernicious
form and manner in which the aliens have heretofore engaged therein? As thus correctly stated
the answer is clear. The law in question is deemed absolutely necessary to bring about the
desired legislative objective, i.e., to free national economy from alien control and dominance. It is
not necessarily unreasonable because it affects private rights and privileges (11 Am. Jur. pp.
1080-1081.) The test of reasonableness of a law is the appropriateness or adequacy under all
circumstances of the means adopted to carry out its purpose into effect (Id.) Judged by this test,
disputed legislation, which is not merely reasonable but actually necessary, must be considered
not to have infringed the constitutional limitation of reasonableness.
The necessity of the law in question is explained in the explanatory note that accompanied the
bill, which later was enacted into law:
This bill proposes to regulate the retail business. Its purpose is to prevent persons
who are not citizens of the Philippines from having a strangle hold upon our economic
life. If the persons who control this vital artery of our economic life are the ones who
owe no allegiance to this Republic, who have no profound devotion to our free
institutions, and who have no permanent stake in our people's welfare, we are not
really the masters of our destiny. All aspects of our life, even our national security, will
be at the mercy of other people.
In seeking to accomplish the foregoing purpose, we do not propose to deprive persons
who are not citizens of the Philippines of their means of livelihood. While this bill seeks
to take away from the hands of persons who are not citizens of the Philippines a
power that can be wielded to paralyze all aspects of our national life and endanger our
national security it respects existing rights.
The approval of this bill is necessary for our national survival.
If political independence is a legitimate aspiration of a people, then economic independence is
none the less legitimate. Freedom and liberty are not real and positive if the people are subject
to the economic control and domination of others, especially if not of their own race or country.
The removal and eradication of the shackles of foreign economic control and domination, is one
of the noblest motives that a national legislature may pursue. It is impossible to conceive that
legislation that seeks to bring it about can infringe the constitutional limitation of due process.
The attainment of a legitimate aspiration of a people can never be beyond the limits of legislative
authority.
c. Law expressly held by Constitutional Convention to be within the sphere of legislative action.
The framers of the Constitution could not have intended to impose the constitutional restrictions
of due process on the attainment of such a noble motive as freedom from economic control and
domination, thru the exercise of the police power. The fathers of the Constitution must have
given to the legislature full authority and power to enact legislation that would promote the
supreme happiness of the people, their freedom and liberty. On the precise issue now before us,
they expressly made their voice clear; they adopted a resolution expressing their belief that the
legislation in question is within the scope of the legislative power. Thus they declared the their
Resolution:
That it is the sense of the Convention that the public interest requires the
nationalization of retail trade; but it abstain from approving the amendment introduced
by the Delegate for Manila, Mr. Araneta, and others on this matter because it is
convinced that the National Assembly is authorized to promulgate a law which limits to
Filipino and American citizens the privilege to engage in the retail trade. (11 Aruego,
The Framing of the Philippine Constitution, quoted on pages 66 and 67 of the
Memorandum for the Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various provisions of the
Constitution. Thus in the preamble, a principle objective is the conservation of the patrimony of
the nation and as corollary the provision limiting to citizens of the Philippines the exploitation,
development and utilization of its natural resources. And in Section 8 of Article XIV, it is provided
that "no franchise, certificate, or any other form of authorization for the operation of the public
utility shall be granted except to citizens of the Philippines." The nationalization of the retail trade
is only a continuance of the nationalistic protective policy laid down as a primary objective of the
Constitution. Can it be said that a law imbued with the same purpose and spirit underlying many
of the provisions of the Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as manifested in the
approval of the radical measures is, therefore, fully justified. It would have been recreant to its
duties towards the country and its people would it view the sorry plight of the nationals with the
complacency and refuse or neglect to adopt a remedy commensurate with the demands of
public interest and national survival. As the repository of the sovereign power of legislation, the
Legislature was in duty bound to face the problem and meet, through adequate measures, the
danger and threat that alien domination of retail trade poses to national economy.
d. Provisions of law not unreasonable.
A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable
the Legislature has been. The law is made prospective and recognizes the right and privilege of
those already engaged in the occupation to continue therein during the rest of their lives; and
similar recognition of the right to continue is accorded associations of aliens. The right or
privilege is denied to those only upon conviction of certain offenses. In the deliberations of the
Court on this case, attention was called to the fact that the privilege should not have been
denied to children and heirs of aliens now engaged in the retail trade. Such provision would
defeat the law itself, its aims and purposes. Beside, the exercise of legislative discretion is not
subject to judicial review. It is well settled that the Court will not inquire into the motives of the
Legislature, nor pass upon general matters of legislative judgment. The Legislature is primarily
the judge of the necessity of an enactment or of any of its provisions, and every presumption is
in favor of its validity, and though the Court may hold views inconsistent with the wisdom of the
law, it may not annul the legislation if not palpably in excess of the legislative power.
Furthermore, the test of the validity of a law attacked as a violation of due process, is not its
reasonableness, but its unreasonableness, and we find the provisions are not unreasonable.
These principles also answer various other arguments raised against the law, some of which
are: that the law does not promote general welfare; that thousands of aliens would be thrown out
of employment; that prices will increase because of the elimination of competition; that there is
no need for the legislation; that adequate replacement is problematical; that there may be
general breakdown; that there would be repercussions from foreigners; etc. Many of these
arguments are directed against the supposed wisdom of the law which lies solely within the
legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the claim that the title
thereof is misleading or deceptive, as it conceals the real purpose of the bill which is to
nationalize the retail business and prohibit aliens from engaging therein. The constitutional
provision which is claimed to be violated in Section 21 (1) of Article VI, which reads:
No bill which may be enacted in the law shall embrace more than one subject which
shall be expressed in the title of the bill.
What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the
legislators or the public of the nature, scope and consequences of the law or its operation (I
Sutherland, Statutory Construction, Sec. 1707, p. 297.) A cursory consideration of the title and
the provisions of the bill fails to show the presence of duplicity. It is true that the term "regulate"
does not and may not readily and at first glance convey the idea of "nationalization" and
"prohibition", which terms express the two main purposes and objectives of the law. But
"regulate" is a broader term than either prohibition or nationalization. Both of these have always
been included within the term regulation.
Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature
may prohibit the sale of intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7;
quoted in page 41 of Answer.)
Within the meaning of the Constitution requiring that the subject of every act of the
Legislature shall be stated in the tale, the title to regulate the sale of intoxicating
liquors, etc." sufficiently expresses the subject of an actprohibiting the sale of such
liquors to minors and to persons in the habit of getting intoxicated; such matters being
properly included within the subject of regulating the sale. (Williams vs. State, 48 Ind.
306, 308, quoted in p. 42 of Answer.)
The word "regulate" is of broad import, and necessarily implies some degree of
restraint and prohibition of acts usually done in connection with the thing to be
regulated. While word regulate does not ordinarily convey meaning of prohibit, there is
no absolute reason why it should not have such meaning when used in delegating
police power in connection with a thing the best or only efficacious regulation of which
involves suppression. (State vs. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of
Answer.)
The general rule is for the use of general terms in the title of a bill; it has also been said that the
title need not be an index to the entire contents of the law (I Sutherland, Statutory Construction,
See. 4803, p. 345.) The above rule was followed the title of the Act in question adopted the more
general term "regulate" instead of "nationalize" or "prohibit". Furthermore, the law also contains
other rules for the regulation of the retail trade which may not be included in the terms
"nationalization" or "prohibition"; so were the title changed from "regulate" to "nationalize" or
"prohibit", there would have been many provisions not falling within the scope of the title which
would have made the Act invalid. The use of the term "regulate", therefore, is in accord with the
principle governing the drafting of statutes, under which a simple or general term should be
adopted in the title, which would include all other provisions found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill should be embraced in its title
is to apprise the legislators of the purposes, the nature and scope of its provisions, and prevent
the enactment into law of matters which have received the notice, action and study of the
legislators or of the public. In the case at bar it cannot be claimed that the legislators have been
appraised of the nature of the law, especially the nationalization and the prohibition provisions.
The legislators took active interest in the discussion of the law, and a great many of the persons
affected by the prohibitions in the law conducted a campaign against its approval. It cannot be
claimed, therefore, that the reasons for declaring the law invalid ever existed. The objection must
therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the supposed violation thereby of
the Charter of the United Nations and of the Declaration of the Human Rights adopted by the
United Nations General Assembly. We find no merit in the Nations Charter imposes no strict or
legal obligations regarding the rights and freedom of their subjects (Hans Kelsen, The Law of the
United Nations, 1951 ed. pp. 29-32), and the Declaration of Human Rights contains nothing
more than a mere recommendation or a common standard of achievement for all peoples and all
nations (Id. p. 39.) That such is the import of the United Nations Charter aid of the Declaration of
Human Rights can be inferred the fact that members of the United Nations Organizations, such
as Norway and Denmark, prohibit foreigners from engaging in retail trade, and in most nations of
the world laws against foreigners engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the Republic of China of April
18, 1947 is also claimed to be violated by the law in question. All that the treaty guarantees is
equality of treatment to the Chinese nationals "upon the same terms as the nationals of any
other country." But the nationals of China are not discriminating against because nationals of all
other countries, except those of the United States, who are granted special rights by the
Constitution, are all prohibited from engaging in the retail trade. But even supposing that the law
infringes upon the said treaty, the treaty is always subject to qualification or amendment by a
subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or
restrict the scope of the police power of the State (plaston vs. Pennsylvania, 58 L. ed. 539.)
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was enacted to remedy a
real actual threat and danger to national economy posed by alien dominance and control of the
retail business and free citizens and country from dominance and control; that the enactment
clearly falls within the scope of the police power of the State, thru which and by which it protects
its own personality and insures its security and future; that the law does not violate the equal
protection clause of the Constitution because sufficient grounds exist for the distinction between
alien and citizen in the exercise of the occupation regulated, nor the due process of law clause,
because the law is prospective in operation and recognizes the privilege of aliens already
engaged in the occupation and reasonably protects their privilege; that the wisdom and efficacy
of the law to carry out its objectives appear to us to be plainly evident as a matter of fact it
seems not only appropriate but actually necessary and that in any case such matter falls
within the prerogative of the Legislature, with whose power and discretion the Judicial
department of the Government may not interfere; that the provisions of the law are clearly
embraced in the title, and this suffers from no duplicity and has not misled the legislators or the
segment of the population affected; and that it cannot be said to be void for supposed conflict
with treaty obligations because no treaty has actually been entered into on the subject and the
police power may not be curtailed or surrendered by any treaty or any other conventional
agreement.

Some members of the Court are of the opinion that the radical effects of the law could have
been made less harsh in its impact on the aliens. Thus it is stated that the more time should
have been given in the law for the liquidation of existing businesses when the time comes for
them to close. Our legal duty, however, is merely to determine if the law falls within the scope of
legislative authority and does not transcend the limitations of due process and equal protection
guaranteed in the Constitution. Remedies against the harshness of the law should be addressed
to the Legislature; they are beyond our power and jurisdiction.

The petition is hereby denied, with costs against petitioner.

Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and
Felix, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-21897 October 22, 1963

RAMON A. GONZALES, petitioner,

vs.
RUFINO G. HECHANOVA, as Executive Secretary, MACARIO PERALTA, JR., as Secretary
of Defense, PEDRO GIMENEZ, as Auditor General, CORNELIO BALMACEDA, as Secretary
of Commerce and Industry, and SALVADOR MARINO, Secretary of Justice, respondents.
Ramon A. Gonzales in his own behalf as petitioner.
Office of the Solicitor General and Estanislao Fernandez for respondents.
CONCEPCION, J.:
This is an original action for prohibition with preliminary injunction.
It is not disputed that on September 22, 1963, respondent Executive Secretary authorized the
importation of 67,000 tons of foreign rice to be purchased from private sources, and created a
rice procurement committee composed of the other respondents herein1 for the implementation
of said proposed importation. Thereupon, or September 25, 1963, herein petitioner, Ramon A.
Gonzales a rice planter, and president of the Iloilo Palay and Corn Planters Association,
whose members are, likewise, engaged in the production of rice and corn filed the petition
herein, averring that, in making or attempting to make said importation of foreign rice, the
aforementioned respondents "are acting without jurisdiction or in excess of jurisdiction", because
Republic Act No. 3452 which allegedly repeals or amends Republic Act No. 220 explicitly
prohibits the importation of rice and corn "the Rice and Corn Administration or any other
government agency;" that petitioner has no other plain, speedy and adequate remedy in the
ordinary course of law; and that a preliminary injunction is necessary for the preservation of the
rights of the parties during the pendency this case and to prevent the judgment therein from
coming ineffectual. Petitioner prayed, therefore, that said petition be given due course; that a writ
of preliminary injunction be forthwith issued restraining respondent their agents or
representatives from implementing the decision of the Executive Secretary to import the
aforementioned foreign rice; and that, after due hearing, judgment be rendered making said
injunction permanent.
Forthwith, respondents were required to file their answer to the petition which they did, and
petitioner's pray for a writ of preliminary injunction was set for hearing at which both parties
appeared and argued orally. Moreover, a memorandum was filed, shortly thereafter, by the
respondents. Considering, later on, that the resolution said incident may require some
pronouncements that would be more appropriate in a decision on the merits of the case, the
same was set for hearing on the merits thereafter. The parties, however, waived the right to
argue orally, although counsel for respondents filed their memoranda.
I. Sufficiency of petitioner's interest.
Respondents maintain that the status of petitioner as a rice planter does not give him sufficient
interest to file the petition herein and secure the relief therein prayed for. We find no merit in this
pretense. Apart from prohibiting the importation of rice and corn "by the Rice and Corn
Administration or any other government agency". Republic Act No. 3452 declares, in Section 1
thereof, that "the policy of the Government" is to "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 products at a price that will afford them a fair and just
return for their labor and capital investment. ... ." Pursuant to this provision, petitioner, as a
planter with a rice land of substantial proportion,2 is entitled to a chance to sell to the
Government the rice it now seeks to buy abroad. Moreover, since the purchase of said
commodity will have to be effected with public funds mainly raised by taxation, and as a rice
producer and landowner petitioner must necessarily be a taxpayer, it follows that he has
sufficient personality and interest to seek judicial assistance with a view to restraining what he
believes to be an attempt to unlawfully disburse said funds.
II. Exhaustion of administrative remedies.
Respondents assail petitioner's right to the reliefs prayed for because he "has not exhausted all
administrative remedies available to him before coming to court". We have already held,
however, that the principle requiring the previous exhaustion of administrative remedies is not
applicable where the question in dispute is purely a legal one",3 or where the controverted act is
"patently illegal" or was performed without jurisdiction or in excess of jurisdiction, 4 or where the
respondent is a department secretary, whose acts as an alter-ego of the President bear the
implied or assumed approval of the latter,5 unless actually disapproved by him,6 or where there
are circumstances indicating the urgency of judicial intervention.7 The case at bar fails under
each one of the foregoing exceptions to the general rule. Respondents' contention is, therefore,
untenable.
III. Merits of petitioner's cause of action.
Respondents question the sufficiency of petitioner's cause of action upon the theory that the
proposed importation in question is not governed by Republic Acts Nos. 2207 and 3452, but was
authorized by the President as Commander-in-Chief "for military stock pile purposes" in the
exercise of his alleged authority under Section 2 of Commonwealth Act No. 1; 8 that in cases of
necessity, the President "or his subordinates may take such preventive measure for the
restoration of good order and maintenance of peace"; and that, as Commander-in-Chief of our
armed forces, "the President ... is duty-bound to prepare for the challenge of threats of war or
emergency without waiting for any special authority".
Regardless of whether Republic Act No. 3452 repeals Republic Act No. 2207, as contended by
petitioner herein - on which our view need not be expressed we are unanimously of the
opinion - assuming that said Republic Act No. 2207 is still in force that the two Acts are
applicable to the proposed importation in question because the language of said laws is such as
to include within the purview thereof all importations of rice and corn into the Philippines".
Pursuant to Republic Act No. 2207, "it shall be unlawful for any person, association, corporation
or government agency to import rice and corn into any point in the Philippines", although, by way
of exception, it adds, that "the President of the Philippines may authorize the importation of
these commodities through any government agency that he may designate", is the conditions
prescribed in Section 2 of said Act are present. Similarly, Republic Act No. 3452 explicitly
enjoins "the Rice and Corn Administration or any government agency" from importing rice and
corn.
Respondents allege, however, that said provisions of Republic Act Nos. 2207 and 3452,
prohibiting the importation of rice and corn by any "government agency", do not apply to
importations "made by the Government itself", because the latter is not a "government agency".
This theory is devoid of merit. The Department of National Defense and the Armed Forces of the
Philippines, as well as respondents herein, and each and every officer and employee of our
Government, our government agencies and/or agents. The applicability of said laws even to
importations by the Government as such, becomes more apparent when we consider that:
1. The importation permitted in Republic Act No. 2207 is to be authorized by the "President of
the Philippines" and, hence, by or on behalf of the Government of the Philippines;
2. Immediately after enjoining the Rice and Corn administration and any other government
agency from importing rice and corn, Section 10 of Republic Act No. 3452 adds "that the
importation of rice and corn is left to private parties upon payment of the corresponding taxes",
thus indicating that only "private parties" may import rice under its provisions; and
3. Aside from prescribing a fine not exceeding P10,000.00 and imprisonment of not more than
five (5) years for those who shall violate any provision of Republic Act No. 3452 or any rule and
regulation promulgated pursuant thereto, Section 15 of said Act provides that "if the offender is
a public official and/or employees", he shall be subject to the additional penalty specified therein.
A public official is an officer of the Government itself, as distinguished from officers or employees
of instrumentalities of the Government. Hence, the duly authorized acts of the former are those
of the Government, unlike those of a government instrumentality which may have a personality
of its own, distinct and separate from that of the Government, as such. The provisions of
Republic Act No. 2207 are, in this respect, even more explicit. Section 3 thereof provides a
similar additional penalty for any "officer or employee of the Government" who "violates, abets or
tolerates the violation of any provision" of said Act. Hence, the intent to apply the same to
transactions made by the very government is patent.
Indeed, the restrictions imposed in said Republic Acts are merely additional to those prescribed
in Commonwealth Act No. 138, entitled "An Act to give native products and domestic entities the
preference in the purchase of articles for the Government." Pursuant to Section 1 thereof:
The Purchase and Equipment Division of the Government of the Philippines and other
officers and employees of the municipal and provincial governments and the
Government of the Philippines and of chartered cities, boards, commissions, bureaus,
departments, offices, agencies, branches, and bodies of any description, including
government-owned companies, authorized to requisition, purchase, or contract or
make disbursements for articles, materials, and supplies for public use, public
buildings, or public works shall give preference to materials ... produced ... in the
Philippines or in the United States, and to domestic entities, subject to the conditions
hereinbelow specified. (Emphasis supplied.)
Under this provision, in all purchases by the Government, including those made by and/or for the
armed forces, preference shall be given to materials produced in the Philippines. The
importation involved in the case at bar violates this general policy of our Government, aside from
the provisions of Republic Acts Nos. 2207 and 3452.
The attempt to justify the proposed importation by invoking reasons of national security
predicated upon the "worsening situation in Laos and Vietnam", and "the recent tension created
by the Malaysia problem" - and the alleged powers of the President as Commander-in-Chief of
all armed forces in the Philippines, under Section 2 of the National Defense Act (Commonwealth
Act No. 1), overlooks the fact that the protection of local planters of rice and corn in a manner
that would foster and accelerate self-sufficiency in the local production of said commodities
constitutes a factor that is vital to our ability to meet possible national emergency. Even if the
intent in importing goods in anticipation of such emergency were to bolster up that ability, the
latter would, instead, be impaired if the importation were so made as to discourage our farmers
from engaging in the production of rice.
Besides, the stockpiling of rice and corn for purpose of national security and/or national
emergency is within the purview of Republic Act No. 3452. Section 3 thereof expressly
authorizes the Rice and Corn Administration "to accumulate stocks as a national reserve in such
quantities as it may deem proper and necessary to meet any contingencies". Moreover, it
ordains that "the buffer stocks held as a national reserve ... be deposited by the administration
throughout the country under the proper dispersal plans ... and may be released only upon the
occurrence of calamities or emergencies ...". (Emphasis applied.)
Again, the provisions of Section 2 of Commonwealth Act No. 1, upon which respondents rely so
much, are not self-executory. They merely outline the general objectives of said legislation. The
means for the attainment of those objectives are subject to congressional legislation. Thus, the
conditions under which the services of citizens, as indicated in said Section 2, may be availed of,
are provided for in Sections 3, 4 and 51 to 88 of said Commonwealth Act No. 1. Similarly,
Section 5 thereof specifies the manner in which resources necessary for our national defense
may be secured by the Government of the Philippines, but only "during a national
mobilization",9 which does not exist. Inferentially, therefore, in the absence of a national
mobilization, said resources shall be produced in such manner as Congress may by other laws
provide from time to time. Insofar as rice and corn are concerned, Republic Acts Nos. 2207 and
3452, and Commonwealth Act No. 138 are such laws.
Respondents cite Corwin in support of their pretense, but in vain. An examination of the work
cited10 shows that Corwin referred to the powers of the President during "war time" 11 or when he
has placed the country or a part thereof under "martial law". 12 Since neither condition obtains in
the case at bar, said work merely proves that respondents' theory, if accepted, would, in effect,
place the Philippines under martial law, without a declaration of the Executive to that effect.
What is worse, it would keep us perpetually under martial law.
It has been suggested that even if the proposed importation violated Republic Acts Nos. 2207
and 3452, it should, nevertheless, be permitted because "it redounds to the benefit of the
people". Salus populi est suprema lex, it is said.
If there were a local shortage of rice, the argument might have some value. But the respondents,
as officials of this Government, have expressly affirmed again and again that there is no rice
shortage. And the importation is avowedly for stockpile of the Army not the civilian population.
But let us follow the respondents' trend of thought. It has a more serious implication that appears
on the surface. It implies that if an executive officer believes that compliance with a certain
statute will not benefit the people, he is at liberty to disregard it. That idea must be rejected - we
still live under a rule of law.
And then, "the people" are either producers or consumers. Now as respondents explicitly
admit Republic Acts Nos. 2207 and 3452 were approved by the Legislature for the benefit of
producers and consumers, i.e., the people, it must follow that the welfare of the people lies
precisely in the compliance with said Acts.
It is not for respondent executive officers now to set their own opinions against that of the
Legislature, and adopt means or ways to set those Acts at naught. Anyway, those laws permit
importation but under certain conditions, which have not been, and should be complied with.
IV. The contracts with Vietnam and Burma
It is lastly contended that the Government of the Philippines has already entered into two (2)
contracts for the Purchase of rice, one with the Republic of Vietnam, and another with the
Government of Burma; that these contracts constitute valid executive agreements under
international law; that such agreements became binding effective upon the signing thereof by
representatives the parties thereto; that in case of conflict between Republic Acts Nos. 2207 and
3452 on the one hand, and aforementioned contracts, on the other, the latter should prevail,
because, if a treaty and a statute are inconsistent with each other, the conflict must be resolved
under the American jurisprudence in favor of the one which is latest in point of time; that
petitioner herein assails the validity of acts of the Executive relative to foreign relations in the
conduct of which the Supreme Court cannot interfere; and the aforementioned contracts have
already been consummated, the Government of the Philippines having already paid the price of
the rice involved therein through irrevocable letters of credit in favor of the sell of the said
commodity. We find no merit in this pretense.
The Court is not satisfied that the status of said tracts as alleged executive agreements has WHEREFORE, judgment is hereby rendered declaring that respondent Executive Secretary had
been sufficiently established. The parties to said contracts do not pear to have regarded the and has no power to authorize the importation in question; that he exceeded his jurisdiction in
same as executive agreements. But, even assuming that said contracts may properly granting said authority; said importation is not sanctioned by law and is contrary to its provisions;
considered as executive agreements, the same are unlawful, as well as null and void, from a and that, for lack of the requisite majority, the injunction prayed for must be and is, accordingly
constitutional viewpoint, said agreements being inconsistent with the provisions of Republic Acts denied. It is so ordered.
Nos. 2207 and 3452. Although the President may, under the American constitutional system
enter into executive agreements without previous legislative authority, he may not, by executive
Bengzon, CJ, Padilla, Labrador, Reyes, J.B.L., Dizon and Makalintal, JJ., concur.
agreement, enter into a transaction which is prohibited by statutes enacted prior thereto. Under
Paredes and Regala, JJ., concur in the result.
the Constitution, the main function of the Executive is to enforce laws enacted by Congress. The
former may not interfere in the performance of the legislative powers of the latter, except in the
exercise of his veto power. He may not defeat legislative enactments that have acquired the
status of law, by indirectly repealing the same through an executive agreement providing for the
performance of the very act prohibited by said laws.

The American theory to the effect that, in the event of conflict between a treaty and a statute, the
one which is latest in point of time shall prevail, is not applicable to the case at bar, for
respondents not only admit, but, also insist that the contracts adverted to are not treaties. Said
theory may be justified upon the ground that treaties to which the United States is signatory
require the advice and consent of its Senate, and, hence, of a branch of the legislative
department. No such justification can be given as regards executive agreements not authorized
by previous legislation, without completely upsetting the principle of separation of powers and
the system of checks and balances which are fundamental in our constitutional set up and that
of the United States.

As regards the question whether an international agreement may be invalidated by our courts,
suffice it to say that the Constitution of the Philippines has clearly settled it in the affirmative, by
providing, in Section 2 of Article VIII thereof, that the Supreme Court may not be deprived "of its
jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or writ of error as the
law or the rules of court may provide, final judgments and decrees of inferior courts in (1) All
cases in which the constitutionality or validity of any treaty, law, ordinance, or executive order or
regulation is in question". In other words, our Constitution authorizes the nullification of a treaty,
not only when it conflicts with the fundamental law, but, also, when it runs counter to an act of
Congress.

The alleged consummation of the aforementioned contracts with Vietnam and Burma
does not render this case academic, Republic Act No. 2207 enjoins our Government not
from entering into contracts for the purchase of rice, but from importing rice, except under the
conditions Prescribed in said Act. Upon the other hand, Republic Act No. 3452 has two (2) main
features, namely: (a) it requires the Government to purchase rice and corn directly from our local
planters, growers or landowners; and (b) it prohibits importations of rice by the Government, and
leaves such importations to private parties. The pivotal issue in this case is whether the
proposed importation which has not been consummated as yet is legally feasible.

Lastly, a judicial declaration of illegality of the proposed importation would not compel our
Government to default in the performance of such obligations as it may have contracted with the
sellers of the rice in question, because, aside from the fact that said obligations may be complied
with without importing the commodity into the Philippines, the proposed importation may still be
legalized by complying with the provisions of the aforementioned laws.

V. The writ of preliminary injunction.

The members of the Court have divergent opinions on the question whether or not respondents
herein should be enjoined from implementing the aforementioned proposed importation.
However, the majority favors the negative view, for which reason the injunction prayed for
cannot be granted.
 that he had taken and finished in Spain, the course of "Bachillerato Superior"; that he was
approved, selected and qualified by the "Instituto de Cervantes" for admission to the Central
University of Madrid where he studied and finished the law course graduating there as
"Licenciado En Derecho"; that thereafter he was allowed to practice the law profession in Spain;
and that under the provision of the Treaty of Academic Degrees and the Exercise of Professions
between the Republic of the Philippines and the Spanish state, he is entitled to practice the law
profession in the Philippines without submitting to the required bar examinations.

After due consideration, the Court resolved to deny the petition on the following grounds:

(1) the provisions of the Treaty on Academic Degrees and the Exercise of Professions between
the Republic of the Philippines and the Spanish State can not be invoked by applicant. Under
Article 11 thereof;

The Nationals of each of the two countries who shall have obtained recognition of the
validity of their academic degrees by virtue of the stipulations of this Treaty, can
practice their professions within the territory of the Other, . . .. (Emphasis supplied).

from which it could clearly be discerned that said Treaty was intended to govern Filipino citizens
desiring to practice their profession in Spain, and the citizens of Spain desiring to practice their
professions in the Philippines. Applicant is a Filipino citizen desiring to practice the legal
profession in the Philippines. He is therefore subject to the laws of his own country and is not
entitled to the privileges extended to Spanish nationals desiring to practice in the Philippines.

(2) Article I of the Treaty, in its pertinent part, provides .

The nationals of both countries who shall have obtained degree or diplomas to
practice the liberal professions in either of the Contracting States, issued by
competent national authorities, shall be deemed competent to exercise said
professions in the territory of the Other, subject to the laws and regulations of the
latter. . . ..

It is clear, therefore, that the privileges provided in the Treaty invoked by the applicant are made
expressly subject to the laws and regulations of the contracting State in whose territory it is
Republic of the Philippines desired to exercise the legal profession; and Section 1 of Rule 127, in connection with Sections
SUPREME COURT 2,9, and 16 thereof, which have the force of law, require that before anyone can practice the
Manila legal profession in the Philippine he must first successfully pass the required bar examinations;
and
EN BANC
(3) The aforementioned Treaty, concluded between the Republic of the Philippines and the
August 15, 1961 Spanish State could not have been intended to modify the laws and regulations governing
admission to the practice of law in the Philippines, for the reason that the Executive Department
may not encroach upon the constitutional prerogative of the Supreme Court to promulgate rules
IN RE: PETITION OF ARTURO EFREN GARCIA for admission to the Philippine Bar without for admission to the practice of law in the Philippines, the lower to repeal, alter or supplement
taking the examination. ARTURO EFREN GARCIA, petitioner. such rules being reserved only to the Congress of the Philippines. (See Sec. 13, Art VIII, Phil.
Constitution).
RESOLUTION
Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Paredes, Dizon, De Leon and Natividad,
BARRERA, J.: JJ., concur.
Bautista Angelo, J., on leave, took no part.
Concepcion, J., took no part.
Arturo E. Garcia has applied for admission to the practice of law in the Philippines without
submitting to the required bar examinations. In his verified petition, he avers, among others, that
he is a Filipino citizen born in Bacolor City, Province of Negros Occidental, of Filipino parentage;

EN BANC
[G.R. No. 139465. January 18, 2000]
SECRETARY OF JUSTICE, petitioner, vs. HON. RALPH C. LANTION, Presiding Judge,
Regional Trial Court of Manila, Branch 25, and MARK B. JIMENEZ, respondents. Esmso
DECISION
MELO, J.:
The individual citizen is but a speck of particle or molecule vis--vis the vast and overwhelming
powers of government. His only guarantee against oppression and tyranny are his fundamental
liberties under the Bill of Rights which shield him in times of need. The Court is now called to
decide whether to uphold a citizens basic due process rights, or the governments ironclad duties
under a treaty. The bugle sounds and this Court must once again act as the faithful guardian of
the fundamental writ.
The petition at our doorstep is cast against the following factual backdrop:
On January 13, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1069
"Prescribing the Procedure for the Extradition of Persons Who Have Committed Crimes in a
Foreign Country". The Decree is founded on: the doctrine of incorporation under the
Constitution; the mutual concern for the suppression of crime both in the state where it was
committed and the state where the criminal may have escaped; the extradition treaty with the
Republic of Indonesia and the intention of the Philippines to enter into similar treaties with other
interested countries; and the need for rules to guide the executive department and the courts in
the proper implementation of said treaties.
On November 13, 1994, then Secretary of Justice Franklin M. Drilon, representing the
Government of the Republic of the Philippines, signed in Manila the "Extradition Treaty Between
the Government of the Republic of the Philippines and the Government of the United States of
America" (hereinafter referred to as the RP-US Extradition Treaty). The Senate, by way of
Resolution No. 11, expressed its concurrence in the ratification of said treaty. It also expressed
its concurrence in the Diplomatic Notes correcting Paragraph (5)(a), Article 7 thereof (on the
admissibility of the documents accompanying an extradition request upon certification by the
principal diplomatic or consular officer of the requested state resident in the Requesting
State). Kycalr
On June 18, 1999, the Department of Justice received from the Department of Foreign Affairs U.
S. Note Verbale No. 0522 containing a request for the extradition of private respondent Mark
Jimenez to the United States. Attached to the Note Verbale were the Grand Jury Indictment, the
warrant of arrest issued by the U.S. District Court, Southern District of Florida, and other
supporting documents for said extradition. Based on the papers submitted, private respondent
appears to be charged in the United States with violation of the following provisions of the United
States Code (USC):
A)......18 USC 371 (Conspiracy to commit offense or to defraud the United
States; two [2] counts; Maximum Penalty 5 years on each count);
B)......26 USC 7201 (Attempt to evade or defeat tax; four [4] counts;
Maximum Penalty 5 years on each count);
C)......18 USC 1343 (Fraud by wire, radio, or television; two [2] counts;
Maximum Penalty 5 years on each count);
D)......18 USC 1001 (False statement or entries; six [6] counts; Maximum
Penalty 5 years on each count);
E)......2 USC 441f (Election contributions in name of another; thirty-three
[33] counts; Maximum Penalty less than one year).
(p. 14, Rollo.)
On the same day, petitioner issued Department Order No. 249 designating and authorizing a
panel of attorneys to take charge of and to handle the case pursuant to Section 5(1) of
Presidential Decree No. 1069. Accordingly, the panel began with the "technical evaluation and
assessment" of the extradition request and the documents in support thereof. The panel found
that the "official English translation of some documents in Spanish were not attached to the
request and that there are some other matters that needed to be addressed" (p. 15,
Rollo). Calrky
Pending evaluation of the aforestated extradition documents, private respondent, through
counsel, wrote a letter dated July 1, 1999 addressed to petitioner requesting copies of the official
extradition request from the U. S. Government, as well as all documents and papers submitted
therewith; and that he be given ample time to comment on the request after he shall have
received copies of the requested papers. Private respondent also requested that the
proceedings on the matter be held in abeyance in the meantime.
Later, private respondent requested that preliminarily, he be given at least a copy of, or access
to, the request of the United States Government, and after receiving a copy of the Diplomatic
Note, a period of time to amplify on his request.
In response to private respondents July 1, 1999 letter, petitioner, in a reply-letter dated July 13,
1999 (but received by private respondent only on August 4, 1999), denied the foregoing
requests for the following reasons:
1. We find it premature to furnish you with copies of the extradition request
and supporting documents from the United States Government, pending
evaluation by this Department of the sufficiency of the extradition
documents submitted in accordance with the provisions of the extradition
treaty and our extradition law. Article 7 of the Extradition Treaty between the
Philippines and the United States enumerates the documentary
requirements and establishes the procedures under which the documents
submitted shall be received and admitted as evidence. Evidentiary
requirements under our domestic law are also set forth in Section 4 of P.D.
No. 1069.
Justice, the Secretary of Foreign Affairs, and the Director of the National Bureau of Investigation,
for mandamus (to compel herein petitioner to furnish private respondent the extradition
documents, to give him access thereto, and to afford him an opportunity to comment on, or
oppose, the extradition request, and thereafter to evaluate the request impartially, fairly and
objectively); certiorari (to set aside herein petitioners letter dated July 13, 1999); and prohibition
(to restrain petitioner from considering the extradition request and from filing an extradition
petition in court; and to enjoin the Secretary of Foreign Affairs and the Director of the NBI from
performing any act directed to the extradition of private respondent to the United States), with an
application for the issuance of a temporary restraining order and a writ of preliminary injunction
(pp. 104-105, Rollo). Scslx
The aforementioned petition was docketed as Civil Case No. 99-94684 and thereafter raffled to
Branch 25 of said regional trial court stationed in Manila which is presided over by the Honorable
Ralph C. Lantion.

Evaluation by this Department of the aforementioned documents is not a After due notice to the parties, the case was heard on August 9, 1999. Petitioner, who appeared
preliminary investigation nor akin to preliminary investigation of criminal in his own behalf, moved that he be given ample time to file a memorandum, but the same was
cases. We merely determine whether the procedures and requirements denied.
under the relevant law and treaty have been complied with by the
Requesting Government. The constitutionally guaranteed rights of the
On August 10, 1999, respondent judge issued an order dated the previous day, disposing:
accused in all criminal prosecutions are therefore not available.

WHEREFORE, this Court hereby Orders the respondents, namely: the

It is only after the filing of the petition for extradition when the person sought
Secretary of Justice, the Secretary of Foreign Affairs and the Director of the
to be extradited will be furnished by the court with copies of the petition,
National Bureau of Investigation, their agents and/or representatives to
request and extradition documents and this Department will not pose any
maintain the status quo by refraining from committing the acts complained
objection to a request for ample time to evaluate said documents. Mesm
of; from conducting further proceedings in connection with the request of the
United States Government for the extradition of the petitioner; from filing the
2. The formal request for extradition of the United States contains grand jury corresponding Petition with a Regional Trial court; and from performing any
information and documents obtained through grand jury process covered by act directed to the extradition of the petitioner to the United States, for a
strict secrecy rules under United States law. The United States had to period of twenty (20) days from service on respondents of this Order,
secure orders from the concerned District Courts authorizing the United pursuant to Section 5, Rule 58 of the 1997 Rules of Court.
States to disclose certain grand jury information to Philippine government
and law enforcement personnel for the purpose of extradition of Mr.
The hearing as to whether or not this Court shall issue the preliminary
Jimenez. Any further disclosure of the said information is not authorized by
injunction, as agreed upon by the counsels for the parties herein, is set on
the United States District Courts. In this particular extradition request the
August 17, 1999 at 9:00 oclock in the morning. The respondents are,
United States Government requested the Philippine Government to prevent
likewise, ordered to file their written comment and/or opposition to the
unauthorized disclosure of the subject information. This Departments denial
issuance of a Preliminary Injunction on or before said date.
of your request is consistent with Article 7 of the RP-US Extradition Treaty
which provides that the Philippine Government must represent the interests
of the United States in any proceedings arising out of a request for SO ORDERED.
extradition. The Department of Justice under P.D. No. 1069 is the counsel
of the foreign governments in all extradition requests.
(pp. 110-111, Rollo.)

3. This Department is not in a position to hold in abeyance proceedings in

connection with an extradition request. Article 26 of the Vienna Convention
on the Law of Treaties, to which we are a party provides that "[E]very treaty
in force is binding upon the parties to it and must be performed by them in
good faith". Extradition is a tool of criminal law enforcement and to be
effective, requests for extradition or surrender of accused or convicted
persons must be processed expeditiously.
Forthwith, petitioner initiated the instant proceedings, arguing that:
PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE
TEMPORARY RESTRAINING ORDER BECAUSE: Slxs c

(pp. 77-78, Rollo.) I.

Such was the state of affairs when, on August 6, 1999, private respondent filed with the
Regional Trial Court of the National Capital Judicial Region a petition against the Secretary of
 BY ORDERING HEREIN PETITIONER TO REFRAIN FROM COMMITTING
THE ACTS COMPLAINED OF, I. E., TO DESIST FROM REFUSING
PRIVATE RESPONDENT ACCESS TO THE OFFICIAL EXTRADITION
REQUEST AND DOCUMENTS AND FROM DENYING PRIVATE
RESPONDENT AN OPPORTUNITY TO FILE A COMMENT ON, OR
OPPOSITION TO, THE REQUEST, THE MAIN PRAYER FOR A WRIT OF
MANDAMUS IN THE PETITION FOR MANDAMUS, CERTIORARI AND
PROHIBITION WAS, IN EFFECT, GRANTED SO AS TO CONSTITUTE AN
ADJUDICATION ON THE MERITS OF THE MANDAMUS ISSUES;
II.
PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM PERFORMING
LEGAL DUTIES UNDER THE EXTRADITION TREATY AND THE
PHILIPPINE EXTRADITION LAW;
III.
THE PETITION FOR (MANDAMUS), CERTIORARI AND PROHIBITION IS,
ON ITS FACE, FORMALLY AND SUBSTANTIALLY DEFICIENT; AND
IV.
PRIVATE RESPONDENT HAS NO RIGHT IN ESSE THAT NEEDS
PROTECTION AND ENFORCEMENT, AND WILL NOT SUFFER ANY
IRREPARABLE INJURY.
(pp. 19-20, Rollo.)
On August 17, 1999, the Court required private respondent to file his comment. Also issued, as
prayed for, was a temporary restraining order (TRO) providing: slx mis
NOW, THEREFORE, effective immediately and continuing until further
orders from this Court, You, Respondent Judge Ralph C. Lantion, your
agents, representatives or any person or persons acting in your place or
stead are hereby ORDERED to CEASE and DESIST from enforcing the
assailed order dated August 9, 1999 issued by public respondent in Civil
Case No. 99-94684.
GIVEN by the Honorable HILARIO G. DAVIDE, JR., Chief Justice, Supreme
Court of the Philippines, this 17th day of August 1999.
(pp. 120-121, Rollo.)
The case was heard on oral argument on August 31, 1999, after which the parties, as directed,
filed their respective memoranda.
From the pleadings of the opposing parties, both procedural and substantive issues are patent.
However, a review of these issues as well as the extensive arguments of both parties, compel us
to delineate the focal point raised by the pleadings: During the evaluation stage of the extradition
proceedings, is private respondent entitled to the two basic due process rights of notice and
hearing? An affirmative answer would necessarily render the proceedings at the trial court, moot
and academic (the issues of which are substantially the same as those before us now), while a
negative resolution would call for the immediate lifting of the TRO issued by this Court dated
August 24, 1999, thus allowing petitioner to fast-track the process leading to the filing of the
extradition petition with the proper regional trial court. Corollarily, in the event that private
respondent is adjudged entitled to basic due process rights at the evaluation stage of the
extradition proceedings, would this entitlement constitute a breach of the legal commitments and
obligations of the Philippine Government under the RP-US Extradition Treaty? And assuming
that the result would indeed be a breach, is there any conflict between private respondents basic
due process rights and the provisions of the RP-US Extradition Treaty?
The issues having transcendental importance, the Court has elected to go directly into the
substantive merits of the case, brushing aside peripheral procedural matters which concern the
proceedings in Civil Case No. 99-94684, particularly the propriety of the filing of the petition
therein, and of the issuance of the TRO of August 17, 1999 by the trial court. Missdaa
To be sure, the issues call for a review of the extradition procedure. The RP-US Extradition
Treaty which was executed only on November 13, 1994, ushered into force the implementing
provisions of Presidential Decree No. 1069, also called as the Philippine Extradition Law.
Section 2(a) thereof defines extradition as "the removal of an accused from the Philippines with
the object of placing him at the disposal of foreign authorities to enable the requesting state or
government to hold him in connection with any criminal investigation directed against him or the
execution of a penalty imposed on him under the penal or criminal law of the requesting state or
government." The portions of the Decree relevant to the instant case which involves a charged
and not convicted individual, are abstracted as follows:
The Extradition Request
The request is made by the Foreign Diplomat of the Requesting State, addressed to the
Secretary of Foreign Affairs, and shall be accompanied by:
1. The original or an authentic copy of the criminal charge and the warrant of arrest issued by
the authority of the Requesting State having jurisdiction over the matter, or some other
instruments having equivalent legal force;
2. A recital of the acts for which extradition is requested, with the fullest particulars as to the
name and identity of the accused, his whereabouts in the Philippines, if known, the acts or
omissions complained of, and the time and place of the commission of these acts; Sda adsc
3. The text of the applicable law or a statement of the contents of said law, and the designation
or description of the offense by the law, sufficient for evaluation of the request; and
4. Such other documents or information in support of the request.
(Section 4, Presidential Decree No. 1069.)
Section 5 of the Presidential Decree, which sets forth the duty of the Secretary of Foreign
Affairs, pertinently provides:
. . . (1) Unless it appears to the Secretary of Foreign Affairs that the request
fails to meet the requirements of this law and the relevant treaty or
convention, he shall forward the request together with the related
 documents to the Secretary of Justice, who shall immediately designate and
authorize an attorney in his office to take charge of the case.
The above provision shows only too clearly that the executive authority given the task of
evaluating the sufficiency of the request and the supporting documents is the Secretary of
Foreign Affairs. What then is the coverage of this task?
In accordance with Paragraphs 2 and 3, Article 7 of the RP-US Extradition Treaty, the executive
authority must ascertain whether or not the request is supported by:
1. Documents, statements, or other types of information which describe the identity and probable
location of the person sought;
2. A statement of the facts of the offense and the procedural history of the case;
3. A statement of the provisions of the law describing the essential elements of the offense for
which extradition is requested;
4. A statement of the provisions of law describing the punishment for the offense; Rtc spped
5. A statement of the provisions of the law describing any time limit on the prosecution or the
execution of punishment for the offense;
6. Documents, statements, or other types of information specified in paragraph 3 or paragraph 4
of said Article, as applicable.
(Paragraph 2, Article 7, Presidential Decree No. 1069.)
7. Such evidence as, according to the law of the Requested State, would provide probable
cause for his arrest and committal for trial if the offense had been committed there;
8. A copy of the warrant or order of arrest issued by a judge or other competent authority; and
9. A copy of the charging document.
(Paragraph 3, ibid.)
The executive authority (Secretary of Foreign Affairs) must also see to it that the accompanying
documents received in support of the request had been certified by the principal diplomatic or
consular officer of the Requested State resident in the Requesting State (Embassy Note No. 052
from U. S. Embassy; Embassy Note No. 951309 from the Department of Foreign Affairs).
In this light, Paragraph 3, Article 3 of the Treaty provides that "[e]xtradition shall not be granted if
the executive authority of the Requested State determines that the request is politically
motivated, or that the offense is a military offense which is not punishable under non-military
penal legislation."
The Extradition Petition
Upon a finding made by the Secretary of Foreign Affairs that the extradition request and its
supporting documents are sufficient and complete in form and substance, he shall deliver the
same to the Secretary of Justice, who shall immediately designate and authorize an attorney in
his office to take charge of the case (Paragraph [1], Section 5, P. D. No. 1069). The lawyer
designated shall then file a written petition with the proper regional trial court of the province or
city, with a prayer that the court take the extradition request under consideration (Paragraph
[2], ibid.). Korte
The presiding judge of the regional trial court, upon receipt of the petition for extradition, shall, as
soon as practicable, issue an order summoning the prospective extraditee to appear and to
answer the petition on the day and hour fixed in the order. The judge may issue a warrant of
arrest if it appears that the immediate arrest and temporary detention of the accused will best
serve the ends of justice (Paragraph [1], Section 6, ibid.), particularly to prevent the flight of the
prospective extraditee.
The Extradition Hearing
The Extradition Law does not specifically indicate whether the extradition proceeding is criminal,
civil, or a special proceeding. Nevertheless, Paragraph [1], Section 9 thereof provides that in the
hearing of the extradition petition, the provisions of the Rules of Court, insofar as practicable and
not inconsistent with the summary nature of the proceedings, shall apply. During the hearing,
Section 8 of the Decree provides that the attorney having charge of the case may, upon
application by the Requesting State, represent the latter throughout the proceedings.
Upon conclusion of the hearing, the court shall render a decision granting the extradition and
giving the reasons therefor upon a showing of the existence of a prima facie case, or dismiss the
petition (Section 10, ibid.). Said decision is appealable to the Court of Appeals, whose decision
shall be final and immediately executory (Section 12, ibid.). The provisions of the Rules of Court
governing appeal in criminal cases in the Court of Appeals shall apply in the aforementioned
appeal, except for the required 15-day period to file brief (Section 13, ibid.).
The trial court determines whether or not the offense mentioned in the petition is extraditable
based on the application of the dual criminality rule and other conditions mentioned in Article 2 of
the RP-US Extradition Treaty. The trial court also determines whether or not the offense for
which extradition is requested is a political one (Paragraph [1], Article 3, RP-US Extradition
Treaty).
With the foregoing abstract of the extradition proceedings as backdrop, the following query
presents itself: What is the nature of the role of the Department of Justice at the evaluation stage
of the extradition proceedings? Sclaw
A strict observance of the Extradition Law indicates that the only duty of the Secretary of Justice
is to file the extradition petition after the request and all the supporting papers are forwarded to
him by the Secretary of Foreign Affairs. It is the latter official who is authorized to evaluate the
extradition papers, to assure their sufficiency, and under Paragraph [3], Article 3 of the Treaty, to
determine whether or not the request is politically motivated, or that the offense is a military
offense which is not punishable under non-military penal legislation. Ipso facto, as expressly
provided in Paragraph [1], Section 5 of the Extradition Law, the Secretary of Justice has the
ministerial duty of filing the extradition papers.
However, looking at the factual milieu of the case before us, it would appear that there was
failure to abide by the provisions of Presidential Decree No. 1069. For while it is true that the
extradition request was delivered to the Department of Foreign Affairs on June 17, 1999, the
following day or less than 24 hours later, the Department of Justice received the request,
apparently without the Department of Foreign Affairs discharging its duty of thoroughly The power of investigation consists in gathering, organizing, and analyzing evidence, which is a
evaluating the same and its accompanying documents. The statement of an assistant secretary useful aid or tool in an administrative agencys performance of its rule-making or quasi-judicial
at the Department of Foreign Affairs that his Department, in this regard, is merely acting as a functions. Notably, investigation is indispensable to prosecution.
post office, for which reason he simply forwarded the request to the Department of Justice,
indicates the magnitude of the error of the Department of Foreign Affairs in taking lightly its
In Ruperto v. Torres (100 Phil. 1098 [1957], unreported), the Court had occasion to rule on the
responsibilities. Thereafter, the Department of Justice took it upon itself to determine the
functions of an investigatory body with the sole power of investigation. It does not exercise
completeness of the documents and to evaluate the same to find out whether they comply with
judicial functions and its power is limited to investigating the facts and making findings in respect
the requirements laid down in the Extradition Law and the RP-US Extradition Treaty. Petitioner
thereto. The Court laid down the test of determining whether an administrative body is exercising
ratiocinates in this connection that although the Department of Justice had no obligation to
judicial functions or merely investigatory functions: Adjudication signifies the exercise of power
evaluate the extradition documents, the Department also had to go over them so as to be able to
and authority to adjudicate upon the rights and obligations of the parties before it. Hence, if the
prepare an extradition petition (tsn, August 31, 1999, pp. 24-25). Notably, it was also at this
only purpose for investigation is to evaluate evidence submitted before it based on the facts and
stage where private respondent insisted on the following: (1) the right to be furnished the request
circumstances presented to it, and if the agency is not authorized to make a final
and the supporting papers; (2) the right to be heard which consists in having a reasonable period
pronouncement affecting the parties, then there is an absence of judicial discretion and
of time to oppose the request, and to present evidence in support of the opposition; and (3) that
judgment. Mse sm
the evaluation proceedings be held in abeyance pending the filing of private respondent's
opposition to the request. Kyle
The above description in Ruperto applies to an administrative body authorized to evaluate
extradition documents. The body has no power to adjudicate in regard to the rights and
The two Departments seem to have misread the scope of their duties and authority, one
obligations of both the Requesting State and the prospective extraditee. Its only power is to
abdicating its powers and the other enlarging its commission. The Department of Foreign Affairs,
determine whether the papers comply with the requirements of the law and the treaty and,
moreover, has, through the Solicitor General, filed a manifestation that it is adopting the instant
therefore, sufficient to be the basis of an extradition petition. Such finding is thus merely initial
petition as its own, indirectly conveying the message that if it were to evaluate the extradition
and not final. The body has no power to determine whether or not the extradition should be
request, it would not allow private respondent to participate in the process of evaluation.
effected. That is the role of the court. The bodys power is limited to an initial finding of whether
or not the extradition petition can be filed in court.
Plainly then, the record cannot support the presumption of regularity that the Department of
Foreign Affairs thoroughly reviewed the extradition request and supporting documents and that it
It is to be noted, however, that in contrast to ordinary investigations, the evaluation procedure is
arrived at a well-founded judgment that the request and its annexed documents satisfy the
characterized by certain peculiarities. Primarily, it sets into motion the wheels of the extradition
requirements of law. The Secretary of Justice, eminent as he is in the field of law, could not
process. Ultimately, it may result in the deprivation of liberty of the prospective extraditee. This
privately review the papers all by himself. He had to officially constitute a panel of attorneys.
deprivation can be effected at two stages: First, the provisional arrest of the prospective
How then could the DFA Secretary or his undersecretary, in less than one day, make the more
extraditee pending the submission of the request. This is so because the Treaty provides that in
authoritative determination?
case of urgency, a contracting party may request the provisional arrest of the person sought
pending presentation of the request (Paragraph [1], Article 9, RP-US Extradition Treaty), but he
The evaluation process, just like the extradition proceedings proper, belongs to a class by itself. shall be automatically discharged after 60 days if no request is submitted (Paragraph 4).
It is sui generis. It is not a criminal investigation, but it is also erroneous to say that it is purely an Presidential Decree No. 1069 provides for a shorter period of 20 days after which the arrested
exercise of ministerial functions. At such stage, the executive authority has the power: (a) to person could be discharged (Section 20[d]). Logically, although the Extradition Law is silent on
make a technical assessment of the completeness and sufficiency of the extradition papers; (b) this respect, the provisions only mean that once a request is forwarded to the Requested State,
to outrightly deny the request if on its face and on the face of the supporting documents the the prospective extraditee may be continuously detained, or if not, subsequently rearrested
crimes indicated are not extraditable; and (c) to make a determination whether or not the request (Paragraph [5], Article 9, RP-US Extradition Treaty), for he will only be discharged if no request
is politically motivated, or that the offense is a military one which is not punishable under non- is submitted. Practically, the purpose of this detention is to prevent his possible flight from the
military penal legislation (tsn, August 31, 1999, pp. 28-29; Article 2 & and Paragraph [3], Article Requested State. Second, the temporary arrest of the prospective extraditee during the
3, RP-US Extradition Treaty). Hence, said process may be characterized as an investigative or pendency of the extradition petition in court (Section 6, Presidential Decree No. 1069).
inquisitorial process in contrast to a proceeding conducted in the exercise of an administrative
bodys quasi-judicial power. Ex sm
Clearly, there is an impending threat to a prospective extraditees liberty as early as during the
evaluation stage. It is not only an imagined threat to his liberty, but a very imminent one. Sc lex
In administrative law, a quasi-judicial proceeding involves: (a) taking and evaluation of evidence;
(b) determining facts based upon the evidence presented; and (c) rendering an order or decision
Because of these possible consequences, we conclude that the evaluation process is akin to an
supported by the facts proved (De Leon, Administrative Law: Text and Cases, 1993 ed., p. 198,
administrative agency conducting an investigative proceeding, the consequences of which are
citing Morgan vs. United States, 304 U.S. 1). Inquisitorial power, which is also known as
essentially criminal since such technical assessment sets off or commences the procedure for,
examining or investigatory power, is one of the determinative powers of an administrative body
and ultimately, the deprivation of liberty of a prospective extraditee. As described by petitioner
which better enables it to exercise its quasi-judicial authority (Cruz, Phil. Administrative Law,
himself, this is a "tool" for criminal law enforcement (p. 78, Rollo). In essence, therefore, the
1996 ed., p. 26). This power allows the administrative body to inspect the records and premises,
evaluation process partakes of the nature of a criminal investigation. In a number of cases, we
and investigate the activities, of persons or entities coming under its jurisdiction (Ibid., p. 27), or
had occasion to make available to a respondent in an administrative case or investigation certain
to require disclosure of information by means of accounts, records, reports, testimony of
constitutional rights that are ordinarily available only in criminal prosecutions. Further, as pointed
witnesses, production of documents, or otherwise (De Leon, op. cit., p. 64).
out by Mr. Justice Mendoza during the oral arguments, there are rights formerly available only at
the trial stage that had been advanced to an earlier stage in the proceedings, such as the right
to counsel and the right against self-incrimination (tsn, August 31, 1999, p. 135;Escobedo vs.
Illinois, 378 U.S. 478; Gideon vs. Wainwright, 372 U.S. 335; Miranda vs. Arizona, 384 U.S. 436).
In Pascual v. Board of Medical Examiners (28 SCRA 344 [1969]), we held that the right against
self-incrimination under Section 17, Article III of the 1987 Constitution which is ordinarily
available only in criminal prosecutions, extends to administrative proceedings which possess a
criminal or penal aspect, such as an administrative investigation of a licensed physician who is
charged with immorality, which could result in his loss of the privilege to practice medicine if
found guilty. The Court, citing the earlier case of Cabal vs. Kapunan (6 SCRA 1059 [1962]),
pointed out that the revocation of ones license as a medical practitioner, is an even greater
deprivation than forfeiture of property.
Cabal vs. Kapunan (supra) involved an administrative charge of unexplained wealth against a
respondent which was filed under Republic Act No. 1379, or the Anti-Graft Law. Again, we
therein ruled that since the investigation may result in forfeiture of property, the administrative
proceedings are deemed criminal or penal, and such forfeiture partakes the nature of a penalty.
There is also the earlier case of Almeda, Sr. vs. Perez (5 SCRA 970 [1962]), where the Court,
citing American jurisprudence, laid down the test to determine whether a proceeding is civil or
criminal: If the proceeding is under a statute such that if an indictment is presented the forfeiture
can be included in the criminal case, such proceeding is criminal in nature, although it may be
civil in form; and where it must be gathered from the statute that the action is meant to be
criminal in its nature, it cannot be considered as civil. If, however, the proceeding does not
involve the conviction of the wrongdoer for the offense charged, the proceeding is civil in
nature. x law
The cases mentioned above refer to an impending threat of deprivation of ones property or
property right. No less is this true, but even more so in the case before us, involving as it does
the possible deprivation of liberty, which, based on the hierarchy of constitutionally protected
rights, is placed second only to life itself and enjoys precedence over property, for while forfeited
property can be returned or replaced, the time spent in incarceration is irretrievable and beyond
recompense.
By comparison, a favorable action in an extradition request exposes a person to eventual
extradition to a foreign country, thus saliently exhibiting the criminal or penal aspect of the
process. In this sense, the evaluation procedure is akin to a preliminary investigation since both
procedures may have the same result the arrest and imprisonment of the respondent or the
person charged. Similar to the evaluation stage of extradition proceedings, a preliminary
investigation, which may result in the filing of an information against the respondent, can
possibly lead to his arrest, and to the deprivation of his liberty.
Petitioners reliance on Wright vs. Court of Appeals (235 SCRA 241 [1992]) (p. 8, Petitioners
Memorandum) that the extradition treaty is neither a piece of criminal legislation nor a criminal
procedural statute is not well-taken. Wright is not authority for petitioners conclusion that his
preliminary processing is not akin to a preliminary investigation. The characterization of a treaty
in Wright was in reference to the applicability of the prohibition against an ex post facto law. It
had nothing to do with the denial of the right to notice, information, and hearing.
As early as 1884, the United States Supreme Court ruled that "any legal proceeding enforced by
public authority, whether sanctioned by age or custom, or newly devised in the discretion of the
legislative power, in furtherance of the general public good, which regards and preserves these
principles of liberty and justice, must be held to be due process of law" (Hurtado vs. California,
110 U.S. 516). Compliance with due process requirements cannot be deemed non-compliance
with treaty commitments.
The United States and the Philippines share a mutual concern about the suppression and
punishment of crime in their respective jurisdictions. At the same time, both States accord
common due process protection to their respective citizens. Sc
The due process clauses in the American and Philippine Constitutions are not only worded in
exactly identical language and terminology, but more importantly, they are alike in what their
respective Supreme Courts have expounded as the spirit with which the provisions are informed
and impressed, the elasticity in their interpretation, their dynamic and resilient character which
make them capable of meeting every modern problem, and their having been designed from
earliest time to the present to meet the exigencies of an undefined and expanding future. The
requirements of due process are interpreted in both the United States and the Philippines as not
denying to the law the capacity for progress and improvement. Toward this effect and in order to
avoid the confines of a legal straitjacket, the courts instead prefer to have the meaning of the
due process clause "gradually ascertained by the process of inclusion and exclusion in the
course of the decisions of cases as they arise" (Twining vs. New Jersey, 211 U.S. 78).
Capsulized, it refers to "the embodiment of the sporting idea of fair play" (Ermita-Malate Hotel
and Motel Owners Association vs. City Mayor of Manila, 20 SCRA 849 [1967]). It relates to
certain immutable principles of justice which inhere in the very idea of free government (Holden
vs. Hardy, 169 U.S. 366).
Due process is comprised of two components substantive due process which requires the
intrinsic validity of the law in interfering with the rights of the person to his life, liberty, or property,
and procedural due process which consists of the two basic rights of notice and hearing, as well
as the guarantee of being heard by an impartial and competent tribunal (Cruz, Constitutional
Law, 1993 Ed., pp. 102-106).
True to the mandate of the due process clause, the basic rights of notice and hearing pervade
not only in criminal and civil proceedings, but in administrative proceedings as well. Non-
observance of these rights will invalidate the proceedings. Individuals are entitled to be notified
of any pending case affecting their interests, and upon notice, they may claim the right to appear
therein and present their side and to refute the position of the opposing parties (Cruz, Phil.
Administrative Law, 1996 ed., p. 64).
In a preliminary investigation which is an administrative investigatory proceeding, Section 3,
Rule 112 of the Rules of Court guarantees the respondents basic due process rights, granting
him the right to be furnished a copy of the complaint, the affidavits, and other supporting
documents, and the right to submit counter-affidavits and other supporting documents within ten
days from receipt thereof. Moreover, the respondent shall have the right to examine all other
evidence submitted by the complainant. Scmis
These twin rights may, however, be considered dispensable in certain instances, such as:
1. In proceedings where there is an urgent need for immediate action, like the summary
abatement of a nuisance per se (Article 704, Civil Code), the preventive suspension of a public
servant facing administrative charges (Section 63, Local Government Code, B. P. Blg. 337), the
padlocking of filthy restaurants or theaters showing obscene movies or like establishments which
are immediate threats to public health and decency, and the cancellation of a passport of a
person sought for criminal prosecution;
2. Where there is tentativeness of administrative action, that is, where the respondent is not
precluded from enjoying the right to notice and hearing at a later time without prejudice to the
person affected, such as the summary distraint and levy of the property of a delinquent taxpayer,
and the replacement of a temporary appointee; and
3. Where the twin rights have previously been offered but the right to exercise them had not
been claimed.
Applying the above principles to the case at bar, the query may be asked: Does the evaluation
stage of the extradition proceedings fall under any of the described situations mentioned above?
Let us take a brief look at the nature of American extradition proceedings which are quite
noteworthy considering that the subject treaty involves the U.S. Government. Mis sc
American jurisprudence distinguishes between interstate rendition or extradition which is based
on the Extradition Clause in the U.S. Constitution (Art. IV, 2 cl 2), and international extradition
proceedings. In interstate rendition or extradition, the governor of the asylum state has the duty
to deliver the fugitive to the demanding state. The Extradition Clause and the implementing
statute are given a liberal construction to carry out their manifest purpose, which is to effect the
return as swiftly as possible of persons for trial to the state in which they have been charged with
crime (31A Am Jur 2d 754-755). In order to achieve extradition of an alleged fugitive, the
requisition papers or the demand must be in proper form, and all the elements or jurisdictional
facts essential to the extradition must appear on the face of the papers, such as the allegation
that the person demanded was in the demanding state at the time the offense charged was
committed, and that the person demanded is charged with the commission of the crime or that
prosecution has been begun in the demanding state before some court or magistrate
(35 C.J.S. 406-407). The extradition documents are then filed with the governor of the asylum
state, and must contain such papers and documents prescribed by statute, which essentially
include a copy of the instrument charging the person demanded with a crime, such as an
indictment or an affidavit made before a magistrate. Statutory requirements with respect to said
charging instrument or papers are mandatory since said papers are necessary in order to confer
jurisdiction on the governor of the asylum state to effect the extradition (35 C.J.S. 408-410). A
statutory provision requiring duplicate copies of the indictment, information, affidavit, or
judgment of conviction or sentence and other instruments accompanying the demand or
requisitions be furnished and delivered to the fugitive or his attorney is directory.
However, the right being such a basic one has been held to be a right mandatory on
demand (Ibid., p. 410, citing Ex parte Moore, 256 S.W. 2d 103, 158 Tex. Cr. 407 and Ex parte
Tucker, Cr., 324, S.W.2d 853). Mis spped
In international proceedings, extradition treaties generally provide for the presentation to the
executive authority of the Requested State of a requisition or demand for the return of the
alleged offender, and the designation of the particular officer having authority to act in behalf of
the demanding nation (31A Am Jur 2d 815).
In petitioners memorandum filed on September 15, 1999, he attached thereto a letter dated
September 13, 1999 from the Criminal Division of the U.S. Department of Justice, summarizing
the U.S. extradition procedures and principles, which are basically governed by a combination of
treaties (with special reference to the RP-US Extradition Treaty), federal statutes, and judicial
decisions, to wit:
1. All requests for extradition are transmitted through the diplomatic channel. In urgent cases,
requests for the provisional arrest of an individual may be made directly by the Philippine
Department of Justice to the U.S. Department of Justice, and vice-versa. In the event of a
provisional arrest, a formal request for extradition is transmitted subsequently through the
diplomatic channel.
2. The Department of State forwards the incoming Philippine extradition request to the
Department of Justice. Before doing so, the Department of State prepares a declaration
confirming that a formal request has been made, that the treaty is in full force and effect, that
under Article 17 thereof the parties provide reciprocal legal representation in extradition
proceedings, that the offenses are covered as extraditable offenses under Article 2 thereof, and
that the documents have been authenticated in accordance with the federal statute that ensures
admissibility at any subsequent extradition hearing.
3. A judge or magistrate judge is authorized to issue a warrant for the arrest of the prospective
extraditee (18 U.S.C. 3184). Said judge or magistrate is authorized to hold a hearing to consider
the evidence offered in support of the extradition request (Ibid.)
4. At the hearing, the court must determine whether the person arrested is extraditable to the
foreign country. The court must also determine that (a) it has jurisdiction over the defendant and
jurisdiction to conduct the hearing; (b) the defendant is being sought for offenses for which the
applicable treaty permits extradition; and (c) there is probable cause to believe that the
defendant is the person sought and that he committed the offenses charged (Ibid.) Spped
5. The judge or magistrate judge is vested with jurisdiction to certify extraditability after having
received a "complaint made under oath, charging any person found within his jurisdiction" with
having committed any of the crimes provided for by the governing treaty in the country
requesting extradition (Ibid.) [In this regard, it is noted that a long line of American decisions
pronounce that international extradition proceedings partake of the character of a preliminary
examination before a committing magistrate, rather than a trial of the guilt or innocence of the
alleged fugitive (31A Am Jur 2d 826).]
6. If the court decides that the elements necessary for extradition are present, it incorporates its
determinations in factual findings and conclusions of law and certifies the persons extraditability.
The court then forwards this certification of extraditability to the Department of State for
disposition by the Secretary of State. The ultimate decision whether to surrender an individual
rests with the Secretary of State (18 U.S.C. 3186).
7. The subject of an extradition request may not litigate questions concerning the motives of the
requesting government in seeking his extradition. However, a person facing extradition may
present whatever information he deems relevant to the Secretary of State, who makes the final
determination whether to surrender an individual to the foreign government concerned.
From the foregoing, it may be observed that in the United States, extradition begins and ends
with one entity the Department of State which has the power to evaluate the request and the
extradition documents in the beginning, and, in the person of the Secretary of State, the power
to act or not to act on the courts determination of extraditability. In the Philippine setting, it is the
Department of Foreign Affairs which should make the initial evaluation of the request, and
having satisfied itself on the points earlier mentioned (see pp. 10-12), then forwards the request
to the Department of Justice for the preparation and filing of the petition for extradition. Sadly,
however, the Department of Foreign Affairs, in the instant case, perfunctorily turned over the
request to the Department of Justice which has taken over the task of evaluating the request as
well as thereafter, if so warranted, preparing, filing, and prosecuting the petition for
extradition. Jo spped
Private respondent asks what prejudice will be caused to the U.S. Government should the
person sought to be extradited be given due process rights by the Philippines in the evaluation
stage. He emphasizes that petitioners primary concern is the possible delay in the evaluation
process.
We agree with private respondents citation of an American Supreme Court ruling:
The establishment of prompt efficacious procedures to achieve legitimate
state ends is a proper state interest worthy of cognizance in constitutional
adjudication. But the Constitution recognizes higher values than speed and
efficiency. Indeed, one might fairly say of the Bill of Rights in general, and
the Due Process Clause, in particular, that they were designed to protect
the fragile values of a vulnerable citizenry from the overbearing concern for
 efficiency and efficacy that may characterize praiseworthy government period of time due to its intricacies, how then can we say that it is a proceeding that urgently
officials no less, and perhaps more, than mediocre ones. necessitates immediate and prompt action where notice and hearing can be dispensed with?

(Stanley vs. Illinois, 404 U.S. 645, 656) Worthy of inquiry is the issue of whether or not there is tentativeness of administrative action. Is
private respondent precluded from enjoying the right to notice and hearing at a later time without
prejudice to him? Here lies the peculiarity and deviant characteristic of the evaluation procedure.
The United States, no doubt, shares the same interest as the Philippine
On one hand, there is yet no extraditee, but ironically on the other, it results in an administrative
Government that no right that of liberty secured not only by the Bills of
determination which, if adverse to the person involved, may cause his immediate incarceration.
Rights of the Philippines Constitution but of the United States as well, is
The grant of the request shall lead to the filing of the extradition petition in court. The "accused"
sacrificed at the altar of expediency.
(as Section 2[c] of Presidential Decree No. 1069 calls him), faces the threat of arrest, not only
after the extradition petition is filed in court, but even during the evaluation proceeding itself by
(pp. 40-41, Private Respondents Memorandum.) Spped jo virtue of the provisional arrest allowed under the treaty and the implementing law. The prejudice
to the "accused" is thus blatant and manifest.
In the Philippine context, this Courts ruling is invoked:
Plainly, the notice and hearing requirements of administrative due process cannot be dispensed
with and shelved aside.
One of the basic principles of the democratic system is that where the rights
of the individual are concerned, the end does not justify the means. It is not
enough that there be a valid objective; it is also necessary that the means Apart from the due process clause of the Constitution, private respondent likewise invokes
employed to pursue it be in keeping with the Constitution. Mere expediency Section 7 of Article III which reads: Nex old
will not excuse constitutional shortcuts. There is no question that not even
the strongest moral conviction or the most urgent public need, subject only
Sec. 7. The right of the people to information on matters of public concern
to a few notable exceptions, will excuse the bypassing of an individuals
shall be recognized. Access to official records, and to documents and
rights. It is no exaggeration to say that a person invoking a right guaranteed
papers pertaining to official acts, transactions, or decisions, as well as to
under Article III of the Constitution is a majority of one even as against the
government research data used as basis for policy development, shall be
rest of the nation who would deny him that right (Association of Small
afforded the citizen, subject to such limitations as may be provided by law.
Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 175
SCRA 343, 375-376 [1989]).
The above provision guarantees political rights which are available to citizens of the Philippines,
namely: (1) the right to information on matters of public concern, and (2) the corollary right of
There can be no dispute over petitioners argument that extradition is a tool of criminal law
access to official records and documents. The general right guaranteed by said provision is the
enforcement. To be effective, requests for extradition or the surrender of accused or convicted
right to information on matters of public concern. In its implementation, the right of access to
persons must be processed expeditiously. Nevertheless, accelerated or fast-tracked
official records is likewise conferred. These cognate or related rights are "subject to limitations
proceedings and adherence to fair procedures are, however, not always incompatible. They do
as may be provided by law" (Bernas, The 1987 Phil. Constitution A Reviewer-Primer, 1997 ed.,
not always clash in discord. Summary does not mean precipitous haste. It does not carry a
p. 104) and rely on the premise that ultimately it is an informed and critical public opinion which
disregard of the basic principles inherent in "ordered liberty." Miso
alone can protect the values of democratic government (Ibid.).

Is there really an urgent need for immediate action at the evaluation stage? At that point, there is
Petitioner argues that the matters covered by private respondents letter-request dated July 1,
no extraditee yet in the strict sense of the word. Extradition may or may not occur. In interstate
1999 do not fall under the guarantee of the foregoing provision since the matters contained in
extradition, the governor of the asylum state may not, in the absence of mandatory statute, be
the documents requested are not of public concern. On the other hand, private respondent
compelled to act favorably (37 C.J.S. 387) since after a close evaluation of the extradition
argues that the distinction between matters vested with public interest and matters which are of
papers, he may hold that federal and statutory requirements, which are significantly
purely private interest only becomes material when a third person, who is not directly affected by
jurisdictional, have not been met (31 Am Jur 2d 819). Similarly, under an extradition treaty, the
the matters requested, invokes the right to information. However, if the person invoking the right
executive authority of the requested state has the power to deny the behest from the requesting
is the one directly affected thereby, his right to information becomes absolute.
state. Accordingly, if after a careful examination of the extradition documents the Secretary of
Foreign Affairs finds that the request fails to meet the requirements of the law and the treaty, he
shall not forward the request to the Department of Justice for the filing of the extradition petition The concept of matters of public concern escapes exact definition. Strictly speaking, every act of
since non-compliance with the aforesaid requirements will not vest our government with a public officer in the conduct of the governmental process is a matter of public concern (Bernas,
jurisdiction to effect the extradition. The 1987 Constitution of the Republic of the Philippines, 1996 ed., p. 336). This concept
embraces a broad spectrum of subjects which the public may want to know, either because
these directly affect their lives or simply because such matters arouse the interest of an ordinary
In this light, it should be observed that the Department of Justice exerted notable efforts in
citizen (Legaspi v. Civil Service Commission, 150 SCRA 530 [1987]). Hence, the real party in
assuring compliance with the requirements of the law and the treaty since it even informed the
interest is the people and any citizen has "standing".Mani kx
U.S. Government of certain problems in the extradition papers (such as those that are in
Spanish and without the official English translation, and those that are not properly
authenticated). In fact, petitioner even admits that consultation meetings are still supposed to When the individual himself is involved in official government action because said action has a
take place between the lawyers in his Department and those from the U.S. Justice Department. direct bearing on his life, and may either cause him some kind of deprivation or injury, he
With the meticulous nature of the evaluation, which cannot just be completed in an abbreviated actually invokes the basic right to be notified under Section 1 of the Bill of Rights and not exactly
the right to information on matters of public concern. As to an accused in a criminal proceeding,
he invokes Section 14, particularly the right to be informed of the nature and cause of the
accusation against him.
The right to information is implemented by the right of access to information within the control of
the government (Bernas, The 1987 Constitution of the Republic of the Philippines, 1996 ed., p.
337). Such information may be contained in official records, and in documents and papers
pertaining to official acts, transactions, or decisions.
In the case at bar, the papers requested by private respondent pertain to official government
action from the U. S. Government. No official action from our country has yet been taken.
Moreover, the papers have some relation to matters of foreign relations with the U. S.
Government. Consequently, if a third party invokes this constitutional provision, stating that the
extradition papers are matters of public concern since they may result in the extradition of a
Filipino, we are afraid that the balance must be tilted, at such particular time, in favor of the
interests necessary for the proper functioning of the government. During the evaluation
procedure, no official governmental action of our own government has as yet been done; hence
the invocation of the right is premature. Later, and in contrast, records of the extradition hearing
would already fall under matters of public concern, because our government by then shall have
already made an official decision to grant the extradition request. The extradition of a fellow
Filipino would be forthcoming.
We now pass upon the final issue pertinent to the subject matter of the instant controversy:
Would private respondents entitlement to notice and hearing during the evaluation stage of the
proceedings constitute a breach of the legal duties of the Philippine Government under the RP-
Extradition Treaty? Assuming the answer is in the affirmative, is there really a conflict between
the treaty and the due process clause in the Constitution?
First and foremost, let us categorically say that this is not the proper time to pass upon the
constitutionality of the provisions of the RP-US Extradition Treaty nor the Extradition Law
implementing the same. We limit ourselves only to the effect of the grant of the basic rights of
notice and hearing to private respondent on foreign relations. Maniks
The rule of pacta sunt servanda, one of the oldest and most fundamental maxims of international
law, requires the parties to a treaty to keep their agreement therein in good faith. The
observance of our country's legal duties under a treaty is also compelled by Section 2, Article II
of the Constitution which provides that "[t]he Philippines renounces war as an instrument of
national policy, adopts the generally accepted principles of international law as part of the law of
the land, and adheres to the policy of peace, equality, justice, freedom, cooperation and amity
with all nations." Under the doctrine of incorporation, rules of international law form part of the
law of the land and no further legislative action is needed to make such rules applicable in the
domestic sphere (Salonga & Yap, Public International Law, 1992 ed., p. 12).
The doctrine of incorporation is applied whenever municipal tribunals (or local courts) are
confronted with situations in which there appears to be a conflict between a rule of international
law and the provisions of the constitution or statute of the local state. Efforts should first be
exerted to harmonize them, so as to give effect to both since it is to be presumed that municipal
law was enacted with proper regard for the generally accepted principles of international law in
observance of the Incorporation Clause in the above-cited constitutional provision
(Cruz, Philippine Political Law, 1996 ed., p. 55). In a situation, however, where the conflict is
irreconcilable and a choice has to be made between a rule of international law and municipal
law, jurisprudence dictates that municipal law should be upheld by the municipal courts (Ichong
vs. Hernandez, 101 Phil. 1155 [1957]; Gonzales vs. Hechanova, 9 SCRA 230 [1963]; In re:
Garcia, 2 SCRA 984 [1961]) for the reason that such courts are organs of municipal law and are
accordingly bound by it in all circumstances (Salonga & Yap, op. cit., p. 13). The fact that
international law has been made part of the law of the land does not pertain to or imply the
primacy of international law over national or municipal law in the municipal sphere. The doctrine
of incorporation, as applied in most countries, decrees that rules of international law are given
equal standing with, but are not superior to, national legislative enactments. Accordingly, the
principle lex posterior derogat priori takes effect a treaty may repeal a statute and a statute may
repeal a treaty. In states where the constitution is the highest law of the land, such as the
Republic of the Philippines, both statutes and treaties may be invalidated if they are in conflict
with the constitution (Ibid.). Manikan
In the case at bar, is there really a conflict between international law and municipal or national
law? En contrario, these two components of the law of the land are not pitted against each other.
There is no occasion to choose which of the two should be upheld. Instead, we see a void in the
provisions of the RP-US Extradition Treaty, as implemented by Presidential Decree No. 1069, as
regards the basic due process rights of a prospective extraditee at the evaluation stage of
extradition proceedings. From the procedures earlier abstracted, after the filing of the extradition
petition and during the judicial determination of the propriety of extradition, the rights of notice
and hearing are clearly granted to the prospective extraditee. However, prior thereto, the law is
silent as to these rights. Reference to the U.S. extradition procedures also manifests this silence.
Petitioner interprets this silence as unavailability of these rights. Consequently, he describes the
evaluation procedure as an "ex parte technical assessment" of the sufficiency of the extradition
request and the supporting documents.
We disagree.
In the absence of a law or principle of law, we must apply the rules of fair play. An application of
the basic twin due process rights of notice and hearing will not go against the treaty or the
implementing law. Neither the Treaty nor the Extradition Law precludes these rights from a
prospective extraditee. Similarly, American jurisprudence and procedures on extradition pose no
proscription. In fact, in interstate extradition proceedings as explained above, the prospective
extraditee may even request for copies of the extradition documents from the governor of the
asylum state, and if he does, his right to be supplied the same becomes a demandable right
(35 C.J.S. 410).
Petitioner contends that the United States requested the Philippine Government to prevent
unauthorized disclosure of confidential information. Hence, the secrecy surrounding the action of
the Department of Justice Panel of Attorneys. The confidentiality argument is, however,
overturned by petitioners revelation that everything it refuses to make available at this stage
would be obtainable during trial. The Department of Justice states that the U.S. District Court
concerned has authorized the disclosure of certain grand jury information. If the information is
truly confidential, the veil of secrecy cannot be lifted at any stage of the extradition proceedings.
Not even during trial. Oldmis o
A libertarian approach is thus called for under the premises.
One will search in vain the RP-US Extradition Treaty, the Extradition Law, as well as American
jurisprudence and procedures on extradition, for any prohibition against the conferment of the
two basic due process rights of notice and hearing during the evaluation stage of the extradition
proceedings. We have to consider similar situations in jurisprudence for an application by
analogy.
Earlier, we stated that there are similarities between the evaluation process and a preliminary
investigation since both procedures may result in the arrest of the respondent or the prospective
extraditee. In the evaluation process, a provisional arrest is even allowed by the Treaty and the
Extradition Law (Article 9, RP-US Extradition Treaty; Sec. 20, Presidential Decree No. 1069).
Following petitioners theory, because there is no provision of its availability, does this imply that
for a period of time, the privilege of the writ of habeas corpus is suspended, despite Section 15,
Article III of the Constitution which states that "[t]he privilege of the writ of habeas corpus shall
not be suspended except in cases of invasion or rebellion when the public safety requires it"?
Petitioners theory would also infer that bail is not available during the arrest of the prospective
extraditee when the extradition petition has already been filed in court since Presidential Decree
No. 1069 does not provide therefor, notwithstanding Section 13, Article III of the Constitution
which provides that "[a]ll persons, except those charged with offenses punishable by reclusion
perpetua when evidence of guilt is strong, shall, before conviction, be bailable by sufficient
sureties, or be released on recognizance as may be provided by law. The right to bail shall not
be impaired even when the privilege of the writ of habeas corpus is suspended " Can petitioner
validly argue that since these contraventions are by virtue of a treaty and hence affecting foreign
relations, the aforestated guarantees in the Bill of Rights could thus be subservient thereto? Ncm
The basic principles of administrative law instruct us that "the essence of due process in
administrative proceedings is an opportunity to explain ones side or an opportunity to seek
reconsideration of the actions or ruling complained of (Mirano vs. NLRC, 270 SCRA 96
[1997]; Padilla vs. NLRC, 273 SCRA 457 [1997]; PLDT vs. NLRC, 276 SCRA 1
[1997]; Helpmate, Inc. vs. NLRC, 276 SCRA 315 [1997]; Aquinas School vs. Magnaye, 278
SCRA 602 [1997]; Jamer vs. NLRC, 278 SCRA 632 [1997]). In essence, procedural due process
refers to the method or manner by which the law is enforced (Corona vs. United Harbor Pilots
Association of the Phils., 283 SCRA 31 [1997]). This Court will not tolerate the least disregard of
constitutional guarantees in the enforcement of a law or treaty. Petitioners fears that the
Requesting State may have valid objections to the Requested States non-performance of its
commitments under the Extradition Treaty are insubstantial and should not be given paramount
consideration.
How then do we implement the RP-US Extradition Treaty? Do we limit ourselves to the four
corners of Presidential Decree No. 1069?
(at p. 671)
Said summary dismissal proceedings are also non-litigious in nature, yet we upheld the due
process rights of the respondent.
In the case at bar, private respondent does not only face a clear and present danger of loss of
property or employment, but of liberty itself, which may eventually lead to his forcible banishment
to a foreign land. The convergence of petitioners favorable action on the extradition request and
the deprivation of private respondents liberty is easily comprehensible.
We have ruled time and again that this Courts equity jurisdiction, which is aptly described as
"justice outside legality," may be availed of only in the absence of, and never against, statutory
law or judicial pronouncements (Smith Bell & Co., Inc. vs. Court of Appeals, 267 SCRA 530
[1997]; David-Chan vs. Court of Appeals, 268 SCRA 677 [1997]). The constitutional issue in the
case at bar does not even call for "justice outside legality," since private respondents due
process rights, although not guaranteed by statute or by treaty, are protected by constitutional
guarantees. We would not be true to the organic law of the land if we choose strict construction
over guarantees against the deprivation of liberty. That would not be in keeping with the
principles of democracy on which our Constitution is premised.
Verily, as one traverses treacherous waters of conflicting and opposing currents of liberty and
government authority, he must ever hold the oar of freedom in the stronger arm, lest an errant
and wayward course be laid.
WHEREFORE, in view of the foregoing premises, the instant petition is hereby DISMISSED for
lack of merit. Petitioner is ordered to furnish private respondent copies of the extradition request
and its supporting papers, and to grant him a reasonable period within which to file his comment
with supporting evidence. The incidents in Civil Case No. 99-94684 having been rendered moot
and academic by this decision, the same is hereby ordered dismissed.

Of analogous application are the rulings in Government Service Insurance System vs. Court of
Appeals (201 SCRA 661 [1991]) and Go vs. National Police Commission (271 SCRA 447
[1997]) where we ruled that in summary proceedings under Presidential Decree No. 807
(Providing for the Organization of the Civil Service Commission in Accordance with Provisions of
the Constitution, Prescribing its Powers and Functions and for Other Purposes), and Presidential
Decree No. 971 (Providing Legal Assistance for Members of the Integrated National Police who
may be charged for Service-Connected Offenses and Improving the Disciplinary System in the
Integrated National Police, Appropriating Funds Therefor and for other purposes), as amended
by Presidential Decree No. 1707, although summary dismissals may be effected without the
necessity of a formal investigation, the minimum requirements of due process still operate. As
held in GSIS vs. Court of Appeals:

... [I]t is clear to us that what the opening sentence of Section 40 is saying is
that an employee may be removed or dismissed even without formal
investigation, in certain instances. It is equally clear to us that an employee
must be informed of the charges preferred against him, and that the normal
way by which the employee is so informed is by furnishing him with a copy
of the charges against him. This is a basic procedural requirement that a
statute cannot dispense with and still remain consistent with the
constitutional provision on due process. The second minimum requirement
is that the employee charged with some misfeasance or malfeasance must
have a reasonable opportunity to present his side of the matter, that is to
say, his defenses against the charges levelled against him and to present
evidence in support of his defenses. Ncmmis
 CRUZ, J.:

On November 25, 1984, a contingent of more than two hundred Philippine marines and
elements of the home defense forces raided the compound occupied by the petitioners at Gov.
Alvarez street, Zamboanga City, in search of loose firearms, ammunition and other explosives. 1

The military operation was commonly known and dreaded as a "zona," which was not unlike the
feared practice of the kempeitai during the Japanese Occupation of rounding up the people in a
locality, arresting the persons fingered by a hooded informer, and executing them outright
(although the last part is not included in the modern refinement).

The initial reaction of the people inside the compound was to resist the invasion with a burst of
gunfire. No one was hurt as presumably the purpose was merely to warn the intruders and deter
them from entering. Unfortunately, as might be expected in incidents like this, the situation
aggravated soon enough. The soldiers returned fire and a bloody shoot-out ensued, resulting in
a number of casualties. 2

The besieged compound surrendered the following morning, and sixteen male occupants were
arrested, later to be finger-printed, paraffin-tested and photographed over their objection. The
military also inventoried and confiscated nine M16 rifles, one M14 rifle, nine rifle grenades, and
several rounds of ammunition found in the premises. 3

On December 21, 1984, the petitioners came to this Court in a petition for prohibition
and mandamus with preliminary injunction and restraining order. Their purpose was to recover
the articles seized from them, to prevent these from being used as evidence against them, and
to challenge their finger-printing, photographing and paraffin-testing as violative of their right
against self-incrimination.4
EN BANC
The Court, treating the petition as an injunction suit with a prayer for the return of the articles
June 23, 1987
alleged to have been illegally seized, referred it for hearing to Judge Omar U. Amin of the
regional trial court, Zamboanga City. 5 After receiving the testimonial and documentary evidence
G.R. No. L-69401
of the parties, he submitted the report and recommendations on which this opinion is based. 6
RIZAL ALIH, NASIM ALIH, AISAN ALIH, MIJAL ALIH, OMAR ALIH, EDRIS MUKSAN,
The petitioners demand the return of the arms and ammunition on the ground that they were
MULSIDI WARADIL, BILLY ASMAD RAMSID ASALI, BANDING USMAN, ANGGANG
taken without a search warrant as required by the Bill of Rights. This is confirmed by the said
HADANI, WARMIKHAN HAPA, GABRAL JIKIRI, ALLAN TAN, MUJAHIRIN MARAJUKI,
report and in fact admitted by the respondents, "but with avoidance. 7
KENNEDY GONZALES, URDUJA ALIH, MERLA ALIH, and NURAISA ALIH VDA DE
FEROLINO, petitioners,
Article IV, Section 3, of the 1973 Constitution, which was in force at the time of the incident in
vs.
question, provided as follows:
MAJOR GENERAL DELFIN C. CASTRO, IN HIS CAPACITY AS COMMANDER SOUTHCOM
AND REGIONAL UNIFIED COMMAND, REGION IX, ZAMBOANGA CITY, COLONEL
Sec. 3. The right of the people to be secure in their persons, houses, papers, and effects against
ERNESTO CALUPIG, IN HIS CAPACITY AS COMMANDING OFFICER OF THE SPECIAL
unreasonable searches and seizures of whatever nature and for any purpose shall not be
FORCES GROUP (AIRBORNE) AND INTERNAL DEFENSE COMMAND, OTHERWISE
violated, and no search warrant or warrant of arrest shall issue except upon probable cause to
KNOWN AS IdC MAJOR ARNOLD BLANCO IN HIS CAPACITY AS COMMANDING
be determined by the judge, or such other responsible officer as may be authorized by law, after
OFFICER OF THE PHILIPPINE MARINES AND 1ST LIEUTENANT DARWIN GUERRA IN HIS
examination under oath or affirmation of the complainant and the witnesses he may produce,
CAPACITY AS ACTS SUPERVISOR, INTERNAL DEFENSE COMMAND, ARMED FORCES
and particularly describing the place to be searched, and the persons or things to be seized.
OF THE PHILIPPINES, respondents.
It was also declared in Article IV, Section 4(2) that-
Sec. 4(2) Any evidence obtained in violation of this or the preceding section shall be
inadmissible for any purpose in any proceeding.
The respondents, while admitting the absence of the required such warrant, sought to justify
their act on the ground that they were acting under superior orders. 8 There was also the
suggestion that the measure was necessary because of the aggravation of the peace and order
problem generated by the assassination of Mayor Cesar Climaco. 9
Superior orders" cannot, of course, countermand the Constitution. The fact that the petitioners
were suspected of the Climaco killing did not excuse the constitutional short-cuts the
respondents took. As eloquently affirmed by the U.S. Supreme Court in Ex parte Milligan: 10
The Constitution is a law for rulers and people, equally in war and in peace, and covers with the
shield of its protection all classes of men, at all times and under all circumstances. No doctrine,
involving more pernicious consequences, was ever invented by the wit of man than that any of
its provisions can be suspended during any of the great exigencies of government.
The precarious state of lawlessness in Zamboanga City at the time in question certainly did not
excuse the non-observance of the constitutional guaranty against unreasonable searches and
seizures. There was no state of hostilities in the area to justify, assuming it could, the
repressions committed therein against the petitioners.
It is so easy to say that the petitioners were outlaws and deserved the arbitrary treatment they
received to take them into custody; but that is a criminal argument. It is also fallacious. Its
obvious flaw lies in the conclusion that the petitioners were unquestionably guilty on the strength
alone of unsubstantiated reports that they were stockpiling weapons.
The record does not disclose that the petitioners were wanted criminals or fugitives from justice.
At the time of the "zona," they were merely suspected of the mayor's slaying and had not in fact
even been investigated for it. As mere suspects, they were presumed innocent and not guilty as
summarily pronounced by the military.
Indeed, even if were assumed for the sake of argument that they were guilty, they would not
have been any less entitled to the protection of the Constitution, which covers both the innocent
and the guilty. This is not to say, of course, that the Constitution coddles criminals. What it does
simply signify is that, lacking the shield of innocence, the guilty need the armor of the
Constitution, to protect them, not from a deserved sentence, but from arbitrary punishment.
Every person is entitled to due process. It is no exaggeration that the basest criminal, ranged
against the rest of the people who would condemn him outright, is still, under the Bill of Rights, a
majority of one.
If the respondents did not actually disdain the Constitution when they made their illegal raid, they
certainly gave every appearance of doing so. This is truly regrettable for it was incumbent on
them, especially during those tense and tindery times, to encourage rather than undermine
respect for the law, which it was their duty to uphold.
In acting as they did, they also defied the precept that "civilian authority is at all times supreme
over the military" so clearly proclaimed in the 1973 Constitution. 11 In the instant case, the
respondents simply by-passed the civil courts, which had the authority to determine whether or
not there was probable cause to search the petitioner's premises. Instead, they proceeded to
make the raid without a search warrant on their own unauthorized determination of the
petitioner's guilt.
The respondents cannot even plead the urgency of the raid because it was in fact not urgent.
They knew where the petitioners were. They had every opportunity to get a search warrant
before making the raid. If they were worried that the weapons inside the compound would be
spirited away, they could have surrounded the premises in the meantime, as a preventive
measure. There was absolutely no reason at all why they should disregard the orderly processes
required by the Constitution and instead insist on arbitrarily forcing their way into the petitioner's
premises with all the menace of a military invasion.
Conceding that the search was truly warrantless, might not the search and seizure be
nonetheless considered valid because it was incidental to a legal arrest? Surely not. If all the law
enforcement authorities have to do is force their way into any house and then pick up anything
they see there on the ground that the occupants are resisting arrest, then we might as well
delete the Bill of Rights as a fussy redundancy.
When the respondents could have easily obtained a search warrant from any of the TEN civil
courts then open and functioning in Zamboanga City, 12 they instead simply barged into the
beleaguered premises on the verbal order of their superior officers. One cannot just force his
way into any man's house on the illegal orders of a superior, however lofty his rank. Indeed,
even the humblest hovel is protected from official intrusion because of the ancient rule, revered
in all free regimes, that a man's house is his castle.
It may be frail; its roof may shake; the wind may enter; the rain may enter. But the King of
England may not enter. All the forces of the Crown dare not cross the threshold of the ruined
tenement. 13
If the arrest was made under Rule 113, Section 5, of the Rules of Court in connection with a
crime about to be committed, being committed, or just committed, what was that crime? There is
no allegation in the record of such a justification. Parenthetically, it may be observed that under
the Revised Rule 113, Section 5(b), the officer making the arrest must have personal knowledge
of the ground therefor as stressed in the recent case of People v. Burgos.14
If follows that as the search of the petitioners' premises was violative of the Constitution, all the
firearms and ammunition taken from the raided compound are inadmissible in evidence in any of
the proceedings against the petitioners. These articles are "fruits of the poisonous tree. 15 As
Judge Learned Hand observed, "Only in case the prosecution which itself controls the seizing
officials, knows that it cannot profit by their wrong, will the wrong be repressed. 16 Pending
determination of the legality of such articles, however, they shall remain in custodia legis, subject
to such appropriate disposition as the corresponding courts may decide. 17
The objection to the photographing, fingerprinting and paraffin-testing of the petitioners deserves
slight comment. The prohibition against self-incrimination applies to testimonial compulsion only.
As Justice Holmes put it in Holt v. United States, 18 "The prohibition of compelling a man in a
criminal court to be a witness against himself is a prohibition of the use of physical or moral
compulsion to extort communications from him, not an exclusion of his body as evidence when it
may be material."
The fearful days of hamleting salvaging, "zona" and other dreaded operations should remain in
the past, banished with the secret marshals and their covert license to kill without trial. We must
be done with lawlessness in the name of law enforcement. Those who are supposed to uphold
the law must not be the first to violate it. As Chief Justice Claudio Teehankee stressed in his
concurring opinion in Lacanilao v. De Leon, 19 "It is time that the martial law regime's legacy of
the law of force be discarded and that there be a return to the force and rule of law."

All of us must exert efforts to make our country truly free and democratic, where every individual
is entitled to the full protection of the Constitution and the Bill of Rights can stand as a stolid
sentinel for all, the innocent as well as the guilty, including the basest of criminals.

WHEREFORE, the search of the petitioners' premises on November 25, 1984, is hereby
declared ILLEGAL and all the articles seized as a result thereof are inadmissible in evidence
against the petitioners in any proceedings. However, the said articles shall remain in custodia
legis pending the outcome of the criminal cases that have been or may later be filed against the
petitioners.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-45892 July 13, 1938

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
TRANQUILINO LAGMAN, defendant-appellant.

-----------------------------

G.R. No. L-45893 July 13, 1938

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
PRIMITIVO DE SOSA, defendant-appellant.
Severino P. Izon for appellants.
Office of the Solicitor-General Tuason for appellee.
AVANCEA, J.:
In these two cases (G.R. Nos. L-45892 and 45893), the appellants Tranquilino and Primitivo de
Sosa are charged with a violation of section 60 of Commonwealth Act No. 1, known as the
National Defense Law. It is alleged that these two appellants, being Filipinos and having reached
the age of twenty years in 1936, willfully and unlawfully refused to register in the military service
between the 1st and 7th of April of said year, notwithstanding the fact that they had been
required to do so. The evidence shows that these two appellants were duly notified by the
corresponding authorities to appear before the Acceptance Board in order to register for military
service in accordance with law, and that the said appellants, in spite of these notices, had not
registered up to the date of the filing of the information.
The appellants do not deny these facts, but they allege in defense that they have not registered
in the military service because Primitivo de Sosa is fatherless and has a mother and a brother
eight years old to support, and Tranquilino Lagman also has a father to support, has no military
learnings, and does not wish to kill or be killed.
Each of these appellants was sentenced by the Court of First Instance to one month and one
day of imprisonment, with the costs.
In this instance, the validity of the National Defense Law, under which the accused were
sentenced, is impugned on the ground that it is unconstitutional. Section 2, Article II of the
Constitution of the Philippines provides as follows:
SEC. 2. The defense of the state is a prime duty of government, and in the fulfillment of this duty
all citizens may be required by law to render personal military or civil service.
The National Defense Law, in so far as it establishes compulsory military service, does not go
against this constitutional provision but is, on the contrary, in faithful compliance therewith. The
duty of the Government to defend the State cannot be performed except through an army. To
leave the organization of an army to the will of the citizens would be to make this duty of the
Government excusable should there be no sufficient men who volunteer to enlist
therein.1vvphl.nt
In the United States the courts have held in a series of decisions that the compulsory military
service adopted by reason of the civil war and the world war does not violate the Constitution,
because the power to establish it is derived from that granted to Congress to declare war and to
organize and maintain an army. This is so because the right of the Government to require
compulsory military service is a consequence of its duty to defend the State and is reciprocal
with its duty to defend the life, liberty, and property of the citizen. In the case of Jacobson vs.
Massachusetts (197 U.S., 11; 25 Sup. Ct. Rep., 385), it was said that, without violating the
Constitution, a person may be compelled by force, if need be, against his will, against his
pecuniary interests, and even against his religious or political convictions, to take his place in the
ranks of the army of his country, and risk the chance of being shot down in its defense. In the
case of United States vs. Olson (253 Fed., 233), it was also said that this is not deprivation of
property without due process of law, because, in its just sense, there is no right of property to an
office or employment.
The circumstance that these decisions refer to laws enacted by reason on the actual existence
of war does not make our case any different, inasmuch as, in the last analysis, what justifies
compulsory military service is the defense of the State, whether actual or whether in preparation
to make it more effective, in case of need. The circumstance that the appellants have dependent
families to support does not excuse them from their duty to present themselves before the
Acceptance Board because, if such circumstance exists, they can ask for determent in
complying with their duty and, at all events, they can obtain the proper pecuniary allowance to
attend to these family responsibilities (secs. 65 and 69 of Commonwealth Act No. 1).
The appealed judgment rendered in these two cases is affirmed, with the costs to the appellants.
So ordered.
Villa-Real, Imperial, Diaz, Laurel and Concepcion, JJ., concur.
FRANCISCO I. CHAVEZ, petitioner, vs. HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS
EXECUTIVE SECRETARY; DIRECTOR GENERAL HERMOGENES E. EBDANE, JR., IN HIS
CAPACITY AS THE CHIEF OF THE PNP, et al., respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
The right of individuals to bear arms is not absolute, but is subject to regulation. The
maintenance of peace and order[1] and the protection of the people against violence are
constitutional duties of the State, and the right to bear arms is to be construed in connection and
in harmony with these constitutional duties.
Before us is a petition for prohibition and injunction seeking to enjoin the implementation of
the Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of
Residence[2] (Guidelines) issued on January 31, 2003, by respondent Hermogenes E. Ebdane,
Jr., Chief of the Philippine National Police (PNP).
The facts are undisputed:
In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members of
the PNP stressing the need for a nationwide gun ban in all public places to avert the rising crime
incidents. She directed the then PNP Chief, respondent Ebdane, to suspend the issuance of
Permits to Carry Firearms Outside of Residence (PTCFOR), thus:
THERE IS ALSO NEED TO FOCUS ON THE HIGH PROFILE CRIMES THAT TEND TO
DISTURB THE PSYCHOLOGICAL PERIMETERS OF THE COMMUNITY THE LATEST BEING
THE KILLING OF FORMER NPA LEADER ROLLY KINTANAR. I UNDERSTAND WE
ALREADY HAVE THE IDENTITY OF THE CULPRIT. LET US BRING THEM TO THE BAR OF
JUSTICE.
THE NPA WILL FIND IT MORE DIFFICULT TO CARRY OUT THEIR PLOTS IF OUR LAW
ENFORCEMENT AGENCIES CAN RID THEMSELVES OF RASCALS IN UNIFORM, AND
ALSO IF WE ENFORCE A GUN BAN IN PUBLIC PLACES.
THUS, I AM DIRECTING THE PNP CHIEF TO SUSPEND INDEFINITELY THE ISSUANCE OF
PERMIT TO CARRY FIREARMS IN PUBLIC PLACES. THE ISSUANCE OF PERMITS WILL
NOW BE LIMITED ONLY TO OWNERSHIP AND POSSESSION OF GUNS AND NOT TO
CARRYING THEM IN PUBLIC PLACES. FROM NOW ON, ONLY THE UNIFORMED MEN IN
THE MILITARY AND AUTHORIZED LAW ENFORCEMENT OFFICERS CAN CARRY
FIREARMS IN PUBLIC PLACES, AND ONLY PURSUANT TO EXISTING LAW.CIVILIAN
OWNERS MAY NO LONGER BRING THEIR FIREARMS OUTSIDE THEIR
RESIDENCES. THOSE WHO WANT TO USE THEIR GUNS FOR TARGET PRACTICE WILL
BE GIVEN SPECIAL AND TEMPORARY PERMITS FROM TIME TO TIME ONLY FOR THAT
PURPOSE. AND THEY MAY NOT LOAD THEIR GUNS WITH BULLETS UNTIL THEY ARE IN
THE PREMISES OF THE FIRING RANGE.
WE CANNOT DISREGARD THE PARAMOUNT NEED FOR LAW AND ORDER. JUST AS WE
CANNOT BE HEEDLESS OF OUR PEOPLES ASPIRATIONS FOR PEACE.
Acting on President Arroyos directive, respondent Ebdane issued the assailed Guidelines
quoted as follows:
TO : All Concerned
FROM : Chief, PNP
SUBJECT : Guidelines in the Implementation of the Ban on the Carrying of Firearms
Outside of Residence.
DATE : January 31, 2003
1. Reference: PD 1866 dated June 29, 1983 and its Implementing Rules and Regulations.
2. General:
The possession and carrying of firearms outside of residence is a privilege granted by the State
to its citizens for their individual protection against all threats of lawlessness and security.
As a rule, persons who are lawful holders of firearms (regular license, special permit, certificate
of registration or MR) are prohibited from carrying their firearms outside of residence. However,
the Chief, Philippine National Police may, in meritorious cases as determined by him and under
conditions as he may impose, authorize such person or persons to carry firearms outside of
residence.
3. Purposes:
This Memorandum prescribes the guidelines in the implementation of the ban on the carrying of
firearms outside of residence as provided for in the Implementing Rules and Regulations,
Presidential Decree No. 1866, dated June 29, 1983 and as directed by PGMA. It also
prescribes the conditions, requirements and procedures under which exemption from the ban
may be granted.
4. Specific Instructions on the Ban on the Carrying of Firearms:
a. All PTCFOR are hereby revoked. Authorized holders of licensed firearms covered with
valid PTCFOR may re-apply for a new PTCFOR in accordance with the conditions
hereinafter prescribed.
b. All holders of licensed or government firearms are hereby prohibited from carrying
their firearms outside their residence except those covered with mission/letter orders and
duty detail orders issued by competent authority pursuant to Section 5, IRR, PD 1866,
provided, that the said exception shall pertain only to organic and regular employees.
5. The following persons may be authorized to carry firearms outside of residence.
a. All persons whose application for a new PTCFOR has been approved, provided, that the
persons and security of those so authorized are under actual threat, or by the nature of their
position, occupation and profession are under imminent danger.
b. All organic and regular employees with Mission/Letter Orders granted by their respective
agencies so authorized pursuant to Section 5, IRR, PD 1866, provided, that such Mission/Letter
Orders is valid only for the duration of the official mission which in no case shall be more than
ten (10) days.
c. All guards covered with Duty Detail Orders granted by their respective security agencies so
authorized pursuant to Section 4, IRR, PD 1866, provided, that such DDO shall in no case
exceed 24-hour duration.
d. Members of duly recognized Gun Clubs issued Permit to Transport (PTT) by the PNP for
purposes of practice and competition, provided, that such firearms while in transit must not be
loaded with ammunition and secured in an appropriate box or case detached from the person.
e. Authorized members of the Diplomatic Corps.
6. Requirements for issuance of new PTCFOR:
a. Written request by the applicant addressed to Chief, PNP stating his qualification to possess
firearm and the reasons why he needs to carry firearm outside of residence.
b. Xerox copy of current firearm license duly authenticated by Records Branch, FED;
c. Proof of actual threat, the details of which should be issued by the Chief of Police/Provincial or
City Directors and duly validated by C, RIID;
d. Copy of Drug Test Clearance, duly authenticated by the Drug Testing Center, if photocopied;
e. Copy of DI/ RIID clearance, duly authenticated by ODI/RIID, if photocopied;
f. Copy of Neuro-Psychiatric Clearance duly authenticated by NP Testing Center, if photocopied;
g. Copy of Certificate of Attendance to a Gun Safety Seminar, duly validated by Chief,
Operations Branch, FED;
h. NBI Clearance;
i. Two (2) ID pictures (2 x 2) taken not earlier than one (1) year from date of filing of application;
and
j. Proof of Payment
7. Procedures:
a. Applications may be filed directly to the Office of the PTCFOR Secretariat in Camp Crame. In
the provinces, the applications may also be submitted to the Police Regional Offices (PROs) and
Provincial/City Police Offices (P/CPOs) for initial processing before they are forwarded to the
office of the PTCFOR Secretariat. The processors, after ascertaining that the documentary
requirements are in order, shall issue the Order of Payment (OP) indicating the amount of fees
payable by the applicant, who in turn shall pay the fees to the Land Bank.
b. Applications, which are duly processed and prepared in accordance with existing rules and
regulations, shall be forwarded to the OCPNP for approval.
c. Upon approval of the application, OCPNP will issue PTCFOR valid for one (1) year from date
of issue.
d. Applications for renewal of PTCFOR shall be processed in accordance with the provisions of
par. 6 above.
e. Application for possession and carrying of firearms by diplomats in the Philippines shall be
processed in accordance with NHQ PNP Memo dated September 25, 2000, with Subj:
Possession and Carrying of Firearms by Diplomats in the Philippines.
8. Restrictions in the Carrying of Firearms:
a. The firearm must not be displayed or exposed to public view, except those authorized in
uniform and in the performance of their official duties.
b. The firearm shall not be brought inside public drinking and amusement places, and all other
commercial or public establishments.
Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued,
requested the Department of Interior and Local Government (DILG) to reconsider the
implementation of the assailed Guidelines. However, his request was denied. Thus, he filed the
present petition impleading public respondents Ebdane, as Chief of PNP; Alberto G. Romulo, as
Executive Secretary; and Gerry L. Barias, as Chief of the PNP-Firearms and Explosives
Division. He anchored his petition on the following grounds:
I A) THE PNP GUIDELINES DEPRIVE PETITIONER OF HIS MOST POTENT, IF NOT HIS
THE PRESIDENT HAS NO POWER OR AUTHORITY MUCH LESS BY A MERE SPEECH TO
ALTER, MODIFY OR AMEND THE LAW ON FIREARMS BY IMPOSING A GUN BAN AND
CANCELING EXISTING PERMITS FOR GUNS TO BE CARRIED OUTSIDE RESIDENCES.
II
OFFICIALLY, THERE IS NO PRESIDENTIAL ISSUANCE ON THE GUN BAN; THE
PRESIDENTIAL SPEECH NEVER INVOKED POLICE POWER TO JUSTIFY THE GUN BAN;
THE PRESIDENTS VERBAL DECLARATION ON GUN BAN VIOLATED THE PEOPLES RIGHT
TO PROTECT LIFE AND THEIR PROPERTY RIGHT TO CARRY FIREARMS.
III
THE PNP CHIEF HAS NO POWER OR AUTHORITY TO ISSUE THE QUESTIONED
GUIDELINES BECAUSE:
1) THERE IS NO LAW, STATUTE OR EXECUTIVE ORDER WHICH GRANTS THE PNP CHIEF
THE AUTHORITY TO PROMULGATE THE PNP GUIDELINES.
2) THE IMPLEMENTING RULES AND REGULATIONS OF PD 1866 CANNOT BE THE
SUBJECT OF ANOTHER SET OF IMPLEMENTING GUIDELINES.
3) THE PRESIDENTS SPEECH CANNOT BE A BASIS FOR THE PROMULGATION OF
IMPLEMENTNG GUIDELINES ON THE GUN BAN.
IV
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES IMPLEMENT PD 1866, AND THE
AMENDMENTS THERETO, THE PNP CHIEF STILL HAS NO POWER OR AUTHORITY TO
ISSUE THE SAME BECAUSE
1) PER SEC 6, RA 8294, WHICH AMENDS PD 1866, THE IRR SHALL BE
PROMULGATED JOINTLY BY THE DOJ AND THE DILG.
2) SEC. 8, PD 1866 STATES THAT THE IRR SHALL BE PROMULGATED BY THE CHIEF OF
THE PHILIPPINE CONSTABULARY.
V
THE PNP GUIDELINES VIOLATE THE DUE PROCESS CLAUSE OF THE CONSTITUTION
BECAUSE:
1) THE RIGHT TO OWN AND CARRY A FIREARM IS NECESSARILY INTERTWINED WITH
THE PEOPLES INHERENT RIGHT TO LIFE AND TO PROTECT LIFE. THUS, THE PNP
GUIDELINES DEPRIVE PETITIONER OF THIS RIGHT WITHOUT DUE PROCESS OF LAW
FOR:
ONLY, MEANS TO DEFEND HIMSELF.
B) THE QUESTIONED GUIDELINES STRIPPED PETITIONER OF HIS MEANS OF
PROTECTION AGAINST CRIME DESPITE THE FACT THAT THE STATE COULD NOT
POSSIBLY PROTECT ITS CITIZENS DUE TO THE INADEQUACY AND INEFFICIENCY OF
THE POLICE FORCE.
2) THE OWNESHIP AND CARRYING OF FIREARMS ARE CONSTITUTIONALLY
PROTECTED PROPERTY RIGHTS WHICH CANNOT BE TAKEN AWAY WITHOUT DUE
PROCESS OF LAW AND WITHOUT JUST CAUSE.
VI
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES WERE ISSUED IN THE EXERCISE
OF POLICE POWER, THE SAME IS AN INVALID EXERCISE THEREOF SINCE THE MEANS
USED THEREFOR ARE UNREASONABLE AND UNNCESSARY FOR THE
ACCOMPLISHMENT OF ITS PURPOSE TO DETER AND PREVENT CRIME THEREBY
BECOMING UNDULY OPPRESSIVE TO LAW-ABIDING GUN-OWNERS.
VII
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND CONFISCATORY SINCE IT
REVOKED ALL EXISTING PERMITS TO CARRY WITHOUT, HOWEVER, REFUNDING THE
PAYMENT THE PNP RECEIVED FROM THOSE WHO ALREADY PAID THEREFOR.
VIII
THE PNP GUIDELINES VIOLATE THE EQUAL PROTECTION CLAUSE OF THE
CONSTITUTION BECAUSE THEY ARE DIRECTED AT AND OPPRESSIVE ONLY TO LAW-
ABIDING GUN OWNERS WHILE LEAVING OTHER GUN-OWNERS THE LAWBREAKERS
(KIDNAPPERS, ROBBERS, HOLD-UPPERS, MNLF, MILF, ABU SAYYAF COLLECTIVELY,
AND NPA) UNTOUCHED.
IX
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND UNFAIR BECAUSE THEY WERE
IMPLEMENTED LONG BEFORE THEY WERE PUBLISHED.
X
THE PNP GUIDELINES ARE EFFECTIVELY AN EX POST FACTO LAW SINCE THEY APPLY
RETROACTIVELY AND PUNISH ALL THOSE WHO WERE ALREADY GRANTED PERMITS
TO CARRY OUTSIDE OF RESIDENCE LONG BEFORE THEIR PROMULGATION.
Petitioners submissions may be synthesized into five (5) major issues:
First, whether respondent Ebdane is authorized to issue the assailed Guidelines;
Second, whether the citizens right to bear arms is a constitutional right?;
Third, whether the revocation of petitioners PTCFOR pursuant to the assailed Guidelines is a
violation of his right to property?;
Fourth, whether the issuance of the assailed Guidelines is a valid exercise of police power?; and
Fifth, whether the assailed Guidelines constitute an ex post facto law?
The Solicitor General seeks the dismissal of the petition pursuant to the doctrine of hierarchy of
courts. Nonetheless, in refutation of petitioners arguments, he contends that: (1) the PNP Chief
is authorized to issue the assailed Guidelines; (2) petitioner does not have a constitutional right
to own and carry firearms; (3) the assailed Guidelines do not violate the due process clause of
the Constitution; and (4) the assailed Guidelines do not constitute an ex post facto law.
Initially, we must resolve the procedural barrier.
On the alleged breach of the doctrine of hierarchy of courts, suffice it to say that the doctrine is
not an iron-clad dictum. In several instances where this Court was confronted with cases of
national interest and of serious implications, it never hesitated to set aside the rule and proceed
with the judicial determination of the cases.[3] The case at bar is of similar import as it involves
the citizens right to bear arms.
I
Authority of the PNP Chief
Relying on the principle of separation of powers, petitioner argues that only Congress can
withhold his right to bear arms. In revoking all existing PTCFOR, President Arroyo and
respondent Ebdane transgressed the settled principle and arrogated upon themselves a power
they do not possess the legislative power.
We are not persuaded.
It is true that under our constitutional system, the powers of government are distributed among
three coordinate and substantially independent departments: the legislative, the executive and
the judiciary. Each has exclusive cognizance of the matters within its jurisdiction and is supreme
within its own sphere.[4]
Pertinently, the power to make laws the legislative power is vested in Congress. [5] Congress may
not escape its duties and responsibilities by delegating that power to any other body or
authority. Any attempt to abdicate the power is unconstitutional and void, on the principle
that delegata potestas non potest delegari delegated power may not be delegated.[6]
The rule which forbids the delegation of legislative power, however, is not absolute and
inflexible. It admits of exceptions. An exception sanctioned by immemorial practice permits the
legislative body to delegate its licensing power to certain persons, municipal corporations, towns,
boards, councils, commissions, commissioners, auditors, bureaus and directors.[7] Such
licensing power includes the power to promulgate necessary rules and regulations. [8]
The evolution of our laws on firearms shows that since the early days of our Republic, the
legislatures tendency was always towards the delegation of power. Act No. 1780,[9] delegated
upon the Governor-General (now the President) the authority (1) to approve or disapprove
applications of any person for a license to deal in firearms or to possess the same for personal
protection, hunting and other lawful purposes; and (2) to revoke such license any
time.[10] Further, it authorized him to issue regulations which he may deem necessary for the
proper enforcement of the Act. [11] With the enactment of Act No. 2711, the Revised
Administrative Code of 1917, the laws on firearms were integrated. [12] The Act retained the
authority of the Governor General provided in Act No. 1780. Subsequently, the growing
complexity in the Office of the Governor-General resulted in the delegation of his authority to the
Chief of the Constabulary. On January 21, 1919, Acting Governor-General Charles E. Yeater
issued Executive Order No. 8[13] authorizing and directing the Chief of Constabulary to act on his
behalf in approving and disapproving applications for personal, special and hunting
licenses. This was followed by Executive Order No. 61[14] designating the Philippine
Constabulary (PC) as the government custodian of all firearms, ammunitions and
explosives. Executive Order No. 215,[15] issued by President Diosdado Macapagal on December
3, 1965, granted the Chief of the Constabulary, not only the authority to approve or disapprove
applications for personal, special and hunting license, but also the authority to revoke the
same. With the foregoing developments, it is accurate to say that the Chief of the Constabulary
had exercised the authority for a long time. In fact, subsequent issuances such as Sections 2
and 3 of the Implementing Rules and Regulations of Presidential Decree No. 1866[16] perpetuate
such authority of the Chief of the Constabulary. Section 2 specifically provides that any person
or entity desiring to possess any firearm shall first secure the necessary
permit/license/authority from the Chief of the Constabulary. With regard to the issuance of
PTCFOR, Section 3 imparts: The Chief of Constabulary may, in meritorious cases as
determined by him and under such conditions as he may impose, authorize lawful
holders of firearms to carry them outside of residence. These provisions are issued
pursuant to the general power granted by P.D. No. 1866 empowering him to promulgate rules
and regulations for the effective implementation of the decree.[17] At this juncture, it bears
emphasis that P.D. No. 1866 is the chief law governing possession of firearms in the Philippines
and that it was issued by President Ferdinand E. Marcos in the exercise of his legislative
power.[18]
In an attempt to evade the application of the above-mentioned laws and regulations, petitioner
argues that the Chief of the PNP is not the same as the Chief of the Constabulary, the PC being
a mere unit or component of the newly established PNP. He contends further that Republic Act
No. 8294[19] amended P.D. No. 1866 such that the authority to issue rules and regulations
regarding firearms is now jointly vested in the Department of Justice and the DILG, not the Chief
of the Constabulary.[20]
Petitioners submission is bereft of merit.
By virtue of Republic Act No. 6975,[21] the Philippine National Police (PNP) absorbed the
Philippine Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the
Constabulary and, therefore, assumed the latters licensing authority. Section 24 thereof
specifies, as one of PNPs powers, the issuance of licenses for the possession of firearms
and explosives in accordance with law.[22] This is in conjunction with the PNP Chiefs power to
issue detailed implementing policies and instructions on such matters as may be necessary to
effectively carry out the functions, powers and duties of the PNP.[23]
Contrary to petitioners contention, R.A. No. 8294 does not divest the Chief of the Constabulary
(now the PNP Chief) of his authority to promulgate rules and regulations for the effective
implementation of P.D. No. 1866. For one, R.A. No. 8294 did not repeal entirely P.D. No. 1866.
It merely provides for the reduction of penalties for illegal possession of firearms. Thus, the
provision of P.D. No. 1866 granting to the Chief of the Constabulary the authority to issue rules
and regulations regarding firearms remains effective. Correspondingly, the Implementing Rules
and Regulations dated September 15, 1997 jointly issued by the Department of Justice and the
DILG pursuant to Section 6 of R.A. No. 8294 deal only with the automatic review, by the Director
of the Bureau of Corrections or the Warden of a provincial or city jail, of the records of convicts
for violations of P.D. No. 1866. The Rules seek to give effect to the beneficent provisions of R.A.
No. 8294, thereby ensuring the early release and reintegration of the convicts into the
community.
Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the assailed
guidelines.
Corollarily, petitioner disputes President Arroyos declaration of a nationwide gun ban, arguing
that she has no authority to alter, modify, or amend the law on firearms through a mere speech.
First, it must be emphasized that President Arroyos speech was just an expression of her policy
and a directive to her subordinate. It cannot, therefore, be argued that President Arroyo enacted
a law through a mere speech.
Second, at the apex of the entire executive officialdom is the President. Section 17, Article VII of
the Constitution specifies his power as Chief Executive, thus: The President shall have control
of all the executive departments, bureaus and offices. He shall ensure that the laws be
faithfully executed. As Chief Executive, President Arroyo holds the steering wheel that controls
the course of her government. She lays down policies in the execution of her plans and
programs. Whatever policy she chooses, she has her subordinates to implement them. In short,
she has the power of control. Whenever a specific function is entrusted by law or regulation
to her subordinate, she may act directly or merely direct the performance of a
duty.[24] Thus, when President Arroyo directed respondent Ebdane to suspend the issuance of
PTCFOR, she was just directing a subordinate to perform an assigned duty. Such act is well
within the prerogative of her office.
II
Right to bear arms: Constitutional or Statutory?
Petitioner earnestly contends that his right to bear arms is a constitutionally-protected right. This,
he mainly anchors on various American authorities. We therefore find it imperative to determine
the nature of the right in light of American jurisprudence.
The bearing of arms is a tradition deeply rooted in the English and American society. It
antedates not only the American Constitution but also the discovery of firearms. [25]
A provision commonly invoked by the American people to justify their possession of firearms is
the Second Amendment of the Constitution of the United States of America, which reads:
A well regulated militia, being necessary for the security of free state, the right of the people to
keep and bear Arms, shall not be infringed.
An examination of the historical background of the foregoing provision shows that it pertains to
the citizens collective right to take arms in defense of the State, not to the citizens individual right
to own and possess arms. The setting under which the right was contemplated has a profound
connection with the keeping and maintenance of a militia or an armed citizenry. That this is how
the right was construed is evident in early American cases.
The first case involving the interpretation of the Second Amendment that reached the United
States Supreme Court is United States vs. Miller.[26] Here, the indictment charged the defendants
with transporting an unregistered Stevens shotgun without the required stamped written order,
contrary to the National Firearms Act. The defendants filed a demurrer challenging the facial
validity of the indictment on the ground that the National Firearms Act offends the inhibition of
the Second Amendment. The District Court sustained the demurrer and quashed the
indictment. On appeal, the Supreme Court interpreted the right to bear arms under the
Second Amendment as referring to the collective right of those comprising the Militia a
body of citizens enrolled for military discipline. It does not pertain to the individual right
of citizen to bear arm. Miller expresses its holding as follows:
In the absence of any evidence tending to show that possession or use of a shotgun having a
barrel of less than eighteen inches in length at this time has some reasonable relationship to
the preservation or efficiency of a well regulated militia, we cannot say that the Second
Amendment guarantees the right to keep and bear such an instrument. Certainly it is not
within judicial notice that this weapon is any part of the ordinary military equipment or that its use
could contribute to the common defense.
The same doctrine was re-echoed in Cases vs. United States.[27] Here, the Circuit Court of
Appeals held that the Federal Firearms Act, as applied to appellant, does not conflict with the
Second Amendment. It ruled that:
While [appellants] weapon may be capable of military use, or while at least familiarity with it
might be regarded as of value in training a person to use a comparable weapon of military type
and caliber, still there is no evidence that the appellant was or ever had been a member of
any military organization or that his use of the weapon under the circumstances
disclosed was in preparation for a military career. In fact, the only inference possible is
that the appellant at the time charged in the indictment was in possession of,
transporting, and using the firearm and ammunition purely and simply on a frolic of his
own and without any thought or intention of contributing to the efficiency of the well
regulated militia which the Second amendment was designed to foster as necessary to
the security of a free state.
With the foregoing jurisprudence, it is erroneous to assume that the US Constitution grants upon
the American people the right to bear arms. In a more explicit language, the United States vs.
Cruikshank[28] decreed: The right of the people to keep and bear arms is not a right granted
by the Constitution. Neither is it in any way dependent upon that instrument. Likewise,
in People vs. Persce,[29] the Court of Appeals said: Neither is there any constitutional provision
securing the right to bear arms which prohibits legislation with reference to such weapons as are
specifically before us for consideration. The provision in the Constitution of the United
States that the right of the people to keep and bear arms shall not be infringed is not
designed to control legislation by the state.
With more reason, the right to bear arms cannot be classified as fundamental under the 1987
Philippine Constitution. Our Constitution contains no provision similar to the Second
Amendment, as we aptly observed in the early case of United States vs. Villareal:[30]
The only contention of counsel which would appear to necessitate comment is the claim that the
statute penalizing the carrying of concealed weapons and prohibiting the keeping and the use of
firearms without a license, is in violation of the provisions of section 5 of the Philippine Bill of
Rights.
Counsel does not expressly rely upon the prohibition in the United States Constitution
against the infringement of the right of the people of the United States to keep and bear
arms (U. S. Constitution, amendment 2), which is not included in the Philippine Bill. But it
may be well, in passing, to point out that in no event could this constitutional guaranty
have any bearing on the case at bar, not only because it has not been expressly extended
to the Philippine Islands, but also because it has been uniformly held that both this and
similar provisions in State constitutions apply only to arms used in civilized warfare (see
cases cited in 40 Cyc., 853, note 18); x x x.
Evidently, possession of firearms by the citizens in the Philippines is the exception, not
the rule. The right to bear arms is a mere statutory privilege, not a constitutional right. It is a
mere statutory creation. What then are the laws that grant such right to the Filipinos? The
first real firearm law is Act No. 1780 enacted by the Philippine Commission on October 12,
1907. It was passed to regulate the importation, acquisition, possession, use and transfer of
firearms. Section 9 thereof provides:
SECTION 9. Any person desiring to possess one or more firearms for personal
protection, or for use in hunting or other lawful purposes only, and ammunition therefor,
shall make application for a license to possess such firearm or firearms or ammunition as
hereinafter provided. Upon making such application, and before receiving the license, the
applicant shall make a cash deposit in the postal savings bank in the sum of one hundred pesos
for each firearm for which the license is to be issued, or in lieu thereof he may give a bond in
such form as the Governor-General may prescribe, payable to the Government of the Philippine
Islands, in the sum of two hundred pesos for each such firearm: PROVIDED, HOWEVER, That
persons who are actually members of gun clubs, duly formed and organized at the time of the
passage of this Act, who at such time have a license to possess firearms, shall not be required
to make the deposit or give the bond prescribed by this section, and the bond duly executed by
such person in accordance with existing law shall continue to be security for the safekeeping of
such arms.
The foregoing provision was restated in Section 887[31] of Act No. 2711 that integrated the
firearm laws. Thereafter, President Ferdinand E. Marcos issued P.D. No. 1866. It codified the
laws on illegal possession, manufacture, dealing in, acquisition of firearms, ammunitions or
explosives and imposed stiffer penalties for their violation. R.A. No. 8294 amended some of the
provisions of P.D. No. 1866 by reducing the imposable penalties. Being a mere statutory
creation, the right to bear arms cannot be considered an inalienable or absolute right.
III
Vested Property Right
Section 1, Article III of the Constitution provides that no person shall be deprived of life, liberty or
property without due process of law. Petitioner invokes this provision, asserting that the
revocation of his PTCFOR pursuant to the assailed Guidelines deprived him of his vested
property right without due process of law and in violation of the equal protection of law.
Petitioner cannot find solace to the above-quoted Constitutional provision.
In evaluating a due process claim, the first and foremost consideration must be whether life,
liberty or property interest exists.[32] The bulk of jurisprudence is that a license authorizing a
person to enjoy a certain privilege is neither a property nor property right. In Tan vs. The Director
of Forestry,[33] we ruled that a license is merely a permit or privilege to do what otherwise would
be unlawful, and is not a contract between the authority granting it and the person to whom it is
granted; neither is it property or a property right, nor does it create a vested right. In a
more emphatic pronouncement, we held in Oposa vs. Factoran, Jr.[34] that:
Needless to say, all licenses may thus be revoked or rescinded by executive action. It is
not a contract, property or a property right protected by the due process clause of the
Constitution.
Petitioner, in arguing that his PTCFOR is a constitutionally protected property right, relied heavily
on Bell vs. Burson[35] wherein the U.S. Supreme Court ruled that once a license is issued,
continued possession may become essential in the pursuit of livelihood. Suspension of issued
licenses thus involves state action that adjudicates important interest of the licensees.
Petitioners reliance on Bell is misplaced. This case involves a drivers license, not a license to
bear arms. The catena of American jurisprudence involving license to bear arms is perfectly in
accord with our ruling that a PTCFOR is neither a property nor a property right. In Erdelyi vs.
OBrien,[36] the plaintiff who was denied a license to carry a firearm brought suit against the
defendant who was the Chief of Police of the City of Manhattan Beach, on the ground that the
denial violated her constitutional rights to due process and equal protection of the laws. The
United States Court of Appeals Ninth Circuit ruled that Erdelyi did not have a property interest in
obtaining a license to carry a firearm, ratiocinating as follows:
Property interests protected by the Due Process Clause of the Fourteenth Amendment do
not arise whenever a person has only an abstract need or desire for, or unilateral
expectation of a benefit.x x x Rather, they arise from legitimate claims of entitlement
defined by existing rules or understanding that stem from an independent source, such
as state law. x x x
Concealed weapons are closely regulated by the State of California. x x x Whether the statute
creates a property interest in concealed weapons licenses depends largely upon the
extent to which the statute contains mandatory language that restricts the discretion of
the [issuing authority] to deny licenses to applicants who claim to meet the minimum
eligibility requirements. x x x Where state law gives the issuing authority broad discretion
to grant or deny license application in a closely regulated field, initial applicants do not
have a property right in such licenses protected by the Fourteenth Amendment. See
Jacobson, supra, 627 F.2d at 180 (gaming license under Nevada law);
Similar doctrine was announced in Potts vs. City of Philadelphia,[37] Conway vs. King,[38] Nichols
vs. County of Sta. Clara,[39] and Gross vs. Norton.[40] These cases enunciated that the test
whether the statute creates a property right or interest depends largely on the extent of
discretion granted to the issuing authority.
In our jurisdiction, the PNP Chief is granted broad discretion in the issuance of PTCFOR. This is
evident from the tenor of the Implementing Rules and Regulations of P.D. No. 1866 which state
that the Chief of Constabulary may, in meritorious cases as determined by him and under
such conditions as he may impose, authorize lawful holders of firearms to carry them outside
of residence. Following the American doctrine, it is indeed logical to say that a PTCFOR does
not constitute a property right protected under our Constitution.
Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked
any time. It does not confer an absolute right, but only a personal privilege to be exercised under
existing restrictions, and such as may thereafter be reasonably imposed. [41] A licensee takes his
license subject to such conditions as the Legislature sees fit to impose, and one of the statutory
conditions of this license is that it might be revoked by the selectmen at their pleasure. Such
a license is not a contract, and a revocation of it does not deprive the defendant of any
property, immunity, or privilege within the meaning of these words in the Declaration of
Rights.[42] The US Supreme Court, in Doyle vs. Continental Ins. Co,[43]held: The correlative
power to revoke or recall a permission is a necessary consequence of the main power. A
mere license by the State is always revocable.
The foregoing jurisprudence has been resonating in the Philippines as early as 1908. Thus,
in The Government of the Philippine Islands vs. Amechazurra[44] we ruled:
x x x no private person is bound to keep arms. Whether he does or not is entirely optional with
himself, but if, for his own convenience or pleasure, he desires to possess arms, he must do so
upon such terms as the Government sees fit to impose, for the right to keep and bear arms is
not secured to him by law. The Government can impose upon him such terms as it pleases. If he
is not satisfied with the terms imposed, he should decline to accept them, but, if for the purpose
of securing possession of the arms he does agree to such conditions, he must fulfill them.
IV
Police Power
At any rate, assuming that petitioners PTCFOR constitutes a property right protected by the
Constitution, the same cannot be considered as absolute as to be placed beyond the reach of
the States police power. All property in the state is held subject to its general regulations,
necessary to the common good and general welfare.
In a number of cases, we laid down the test to determine the validity of a police measure, thus:
(1) The interests of the public generally, as distinguished from those of a particular class, require
the exercise of the police power; and
(2) The means employed are reasonably necessary for the accomplishment of the purpose and
not unduly oppressive upon individuals.
Deeper reflection will reveal that the test merely reiterates the essence of the constitutional
guarantees of substantive due process, equal protection, and non-impairment of property rights.
It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace
and order in the society. Owing to the proliferation of crimes, particularly those committed by the
New Peoples Army (NPA), which tends to disturb the peace of the community, President Arroyo
deemed it best to impose a nationwide gun ban. Undeniably, the motivating factor in the
issuance of the assailed Guidelines is the interest of the public in general.
The only question that can then arise is whether the means employed are appropriate and
reasonably necessary for the accomplishment of the purpose and are not unduly oppressive.In
the instant case, the assailed Guidelines do not entirely prohibit possession of firearms. What
they proscribe is merely the carrying of firearms outside of residence. However, those who wish
to carry their firearms outside of their residences may re-apply for a new PTCFOR. This we
believe is a reasonable regulation. If the carrying of firearms is regulated, necessarily, crime
incidents will be curtailed. Criminals carry their weapon to hunt for their victims; they do not wait
in the comfort of their homes. With the revocation of all PTCFOR, it would be difficult for
criminals to roam around with their guns. On the other hand, it would be easier for the PNP to
apprehend them.
Notably, laws regulating the acquisition or possession of guns have frequently been upheld as
reasonable exercise of the police power.[45] In State vs. Reams,[46] it was held that the legislature
may regulate the right to bear arms in a manner conducive to the public peace. With the
promotion of public peace as its objective and the revocation of all PTCFOR as the means, we
are convinced that the issuance of the assailed Guidelines constitutes a reasonable exercise of
police power. The ruling in United States vs. Villareal,[47] is relevant, thus:
We think there can be no question as to the reasonableness of a statutory regulation prohibiting
the carrying of concealed weapons as a police measure well calculated to restrict the too
frequent resort to such weapons in moments of anger and excitement. We do not doubt that the
strict enforcement of such a regulation would tend to increase the security of life and limb, and to
suppress crime and lawlessness, in any community wherein the practice of carrying concealed
weapons prevails, and this without being unduly oppressive upon the individual owners of these
weapons. It follows that its enactment by the legislature is a proper and legitimate exercise of the
police power of the state.
V are for 2, 6, 16, 20, 36 and 50 centavos." The said stamps were actually issued and sold though
Ex post facto law
In Mekin vs. Wolfe,[48] an ex post facto law has been defined as one (a) which makes an action
done before the passing of the law and which was innocent when done criminal, and punishes
such action; or (b) which aggravates a crime or makes it greater than it was when committed;
or (c) which changes the punishment and inflicts a greater punishment than the law annexed to
the crime when it was committed; or (d) which alters the legal rules of evidence and receives
less or different testimony than the law required at the time of the commission of the offense in
order to convict the defendant.
We see no reason to devote much discussion on the matter. Ex post facto law prohibits
retrospectivity of penal laws.[49] The assailed Guidelines cannot be considered as an ex post
facto law because it is prospective in its application. Contrary to petitioners argument, it would
not result in the punishment of acts previously committed.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-45459 March 13, 1937
GREGORIO AGLIPAY, petitioner,
vs.
JUAN RUIZ, respondent.
Vicente Sotto for petitioner.
Office of the Solicitor-General Tuason for respondent.
LAUREL, J.:
The petitioner, Mons. Gregorio Aglipay, Supreme Head of the Philippine Independent Church,
seeks the issuance from this court of a writ of prohibition to prevent the respondent Director of
Posts from issuing and selling postage stamps commemorative of the Thirty-third International
Eucharistic Congress.
In May, 1936, the Director of Posts announced in the dailies of Manila that he would order the
issues of postage stamps commemorating the celebration in the City of Manila of the Thirty-third
international Eucharistic Congress, organized by the Roman Catholic Church. The petitioner, in
the fulfillment of what he considers to be a civic duty, requested Vicente Sotto, Esq., member of
the Philippine Bar, to denounce the matter to the President of the Philippines. In spite of the
protest of the petitioner's attorney, the respondent publicly announced having sent to the United
States the designs of the postage stamps for printing as follows:
"In the center is chalice, with grape vine and stalks of wheat as border design. The stamps are
blue, green, brown, cardinal red, violet and orange, 1 inch by 1,094 inches. The denominations
the greater part thereof, to this day, remains unsold. The further sale of the stamps is sought to
be prevented by the petitioner herein.
The Solicitor-General contends that the writ of prohibition is not the proper legal remedy in the
instant case, although he admits that the writ may properly restrain ministerial functions. While,
generally, prohibition as an extraordinary legal writ will not issue to restrain or control the
performance of other than judicial or quasi-judicial functions (50 C. J., 6580, its issuance and
enforcement are regulated by statute and in this jurisdiction may issue to . . . inferior tribunals,
corporations, boards, or persons, whether excercising functions judicial or ministerial, which are
without or in excess of the jurisdiction of such tribunal, corporation, board, or person, . . . ."
(Secs. 516 and 226, Code of Civil Procedure.) The terms "judicial" and "ministerial" used with
reference to "functions" in the statute are undoubtedly comprehensive and include the
challenged act of the respondent Director of Posts in the present case, which act because
alleged to be violative of the Constitution is a fortiorari "without or in excess of . . . jurisdiction."
The statutory rule, therefore, in the jurisdiction is that the writ of prohibition is not confined
exclusively to courts or tribunals to keep them within the limits of their own jurisdiction and to
prevent them from encroaching upon the jurisdiction of other tribunals, but will issue, in
appropriate cases, to an officer or person whose acts are without or in excess of his authority.
Not infrequently, "the writ is granted, where it is necessary for the orderly administration of
justice, or to prevent the use of the strong arm of the law in an oppressive or vindictive manner,
or a multiplicity of actions." (Dimayuga and Fajardo vs. Fernandez [1923], 43 Phil., 304, 307.)
The more important question raised refers to the alleged violation of the Constitution by the
respondent in issuing and selling postage stamps commemorative of the Thirty-third
International Eucharistic Congress. It is alleged that this action of the respondent is violative of
the provisions of section 23, subsection 3, Article VI, of the Constitution of the Philippines, which
provides as follows:
 No public money or property shall ever be appropriated, applied, or used, directly or
indirectly, for the use, benefit, or support of any sect, church, denomination,
secretarian, institution, or system of religion, or for the use, benefit, or support of any
priest, preacher, minister, or other religious teacher or dignitary as such, except when
such priest, preacher, minister, or dignitary is assigned to the armed forces or to any
penal institution, orphanage, or leprosarium.
The prohibition herein expressed is a direct corollary of the principle of separation of church and
state. Without the necessity of adverting to the historical background of this principle in our
country, it is sufficient to say that our history, not to speak of the history of mankind, has taught
us that the union of church and state is prejudicial to both, for ocassions might arise when the
estate will use the church, and the church the state, as a weapon in the furtherance of their
recognized this principle of separation of church and state in the early stages of our
constitutional development; it was inserted in the Treaty of Paris between the United States and
Spain of December 10, 1898, reiterated in President McKinley's Instructions of the Philippine
Commission, reaffirmed in the Philippine Bill of 1902 and in the autonomy Act of August 29,
1916, and finally embodied in the constitution of the Philippines as the supreme expression of
the Filipino people. It is almost trite to say now that in this country we enjoy both religious and
civil freedom. All the officers of the Government, from the highest to the lowest, in taking their
oath to support and defend the constitution, bind themselves to recognize and respect the
constitutional guarantee of religious freedom, with its inherent limitations and recognized
implications. It should be stated that what is guaranteed by our Constitution is religious liberty,
not mere religious toleration.
Religious freedom, however, as a constitutional mandate is not inhibition of profound reverence
for religion and is not denial of its influence in human affairs. Religion as a profession of faith to
an active power that binds and elevates man to his Creator is recognized. And, in so far as it
instills into the minds the purest principles of morality, its influence is deeply felt and highly
appreciated. When the Filipino people, in the preamble of their Constitution, implored "the aid
of Divine Providence, in order to establish a government that shall embody their ideals, conserve
and develop the patrimony of the nation, promote the general welfare, and secure to themselves
and their posterity the blessings of independence under a regime of justice, liberty and
democracy," they thereby manifested reliance upon Him who guides the destinies of men and
nations. The elevating influence of religion in human society is recognized here as elsewhere. In
fact, certain general concessions are indiscriminately accorded to religious sects and
denominations. Our Constitution and laws exempt from taxation properties devoted exclusively
to religious purposes (sec. 14, subsec. 3, Art. VI, Constitution of the Philippines and sec. 1,
subsec. 4, Ordinance appended thereto; Assessment Law, sec. 344, par. [c]. Adm. Code).
Sectarian aid is not prohibited when a priest, preacher, minister or other religious teacher or
dignitary as such is assigned to the armed forces or to any penal institution, orphanage or
leprosarium 9 sec. 13, subsec. 3, Art. VI, Constitution of the Philippines). Optional religious
instruction in the public schools is by constitutional mandate allowed (sec. 5, Art. XIII,
Constitution of the Philippines, in relation to sec. 928, Adm. Code). Thursday and Friday of Holy
Week, Thanksgiving Day, Christmas Day, and Sundays and made legal holidays (sec. 29, Adm.
Code) because of the secular idea that their observance is conclusive to beneficial moral results.
The law allows divorce but punishes polygamy and bigamy; and certain crimes against religious
worship are considered crimes against the fundamental laws of the state (see arts. 132 and 133,
Revised Penal Code).
In the case at bar, it appears that the respondent Director of Posts issued the postage stamps in
question under the provisions of Act No. 4052 of the Philippine Legislature. This Act is as
follows:
No. 4052. AN ACT APPROPRIATING THE SUM OF SIXTY THOUSAND PESOS
AND MAKING THE SAME AVAILABLE OUT OF ANY FUNDS IN THE INSULAR
TREASURY NOT OTHERWISE APPROPRIATED FOR THE COST OF PLATES AND
PRINTING OF POSTAGE STAMPS WITH NEW DESIGNS, AND FOR OTHER
PURPOSES.
Be it enacted by the Senate and House of Representatives of the Philippines in
Legislature assembled and by the authority of the same:
SECTION 1. The sum of sixty thousand pesos is hereby appropriated and made immediately
available out of any funds in the Insular Treasury not otherwise appropriated, for the costs of
plates and printing of postage stamps with new designs, and other expenses incident thereto.
SEC. 2. The Director of Posts, with the approval of the Secretary of Public Works and
Communications, is hereby authorized to dispose of the whole or any portion of the amount
herein appropriated in the manner indicated and as often as may be deemed advantageous to
the Government.
SEC. 3. This amount or any portion thereof not otherwise expended shall not revert to the
Treasury.
SEC. 4. This act shall take effect on its approval.
Approved, February 21, 1933.
It will be seen that the Act appropriates the sum of sixty thousand pesos for the costs of plates
and printing of postage stamps with new designs and other expenses incident thereto, and
authorizes the Director of Posts, with the approval of the Secretary of Public Works and
Communications, to dispose of the amount appropriated in the manner indicated and "as often
as may be deemed advantageous to the Government". The printing and issuance of the postage
stamps in question appears to have been approved by authority of the President of the
Philippines in a letter dated September 1, 1936, made part of the respondent's memorandum as
Exhibit A. The respondent alleges that the Government of the Philippines would suffer losses if
the writ prayed for is granted. He estimates the revenue to be derived from the sale of the
postage stamps in question at P1,618,17.10 and states that there still remain to be sold stamps
worth P1,402,279.02.
Act No. 4052 contemplates no religious purpose in view. What it gives the Director of Posts is
the discretionary power to determine when the issuance of special postage stamps would be
"advantageous to the Government." Of course, the phrase "advantageous to the Government"
does not authorize the violation of the Constitution. It does not authorize the appropriation, use
or application of public money or property for the use, benefit or support of a particular sect or
church. In the present case, however, the issuance of the postage stamps in question by the
Director of Posts and the Secretary of Public Works and Communications was not inspired by
any sectarian denomination. The stamps were not issue and sold for the benefit of the Roman
Catholic Church. Nor were money derived from the sale of the stamps given to that church. On
the contrary, it appears from the latter of the Director of Posts of June 5, 1936, incorporated on
page 2 of the petitioner's complaint, that the only purpose in issuing and selling the stamps was
"to advertise the Philippines and attract more tourist to this country." The officials concerned
merely, took advantage of an event considered of international importance "to give publicity to
the Philippines and its people" (Letter of the Undersecretary of Public Works and
Communications to the President of the Philippines, June 9, 1936; p. 3, petitioner's complaint). It
is significant to note that the stamps as actually designed and printed (Exhibit 2), instead of
showing a Catholic Church chalice as originally planned, contains a map of the Philippines and
the location of the City of Manila, and an inscription as follows: "Seat XXXIII International
Eucharistic Congress, Feb. 3-7,1937." What is emphasized is not the Eucharistic Congress itself
but Manila, the capital of the Philippines, as the seat of that congress. It is obvious that while the
issuance and sale of the stamps in question may be said to be inseparably linked with an event
of a religious character, the resulting propaganda, if any, received by the Roman Catholic
Church, was not the aim and purpose of the Government. We are of the opinion that the
Government should not be embarassed in its activities simply because of incidental results,
more or less religious in character, if the purpose had in view is one which could legitimately be
undertaken by appropriate legislation. The main purpose should not be frustrated by its
subordinate to mere incidental results not contemplated. (Vide Bradfield vs. Roberts, 175 U. S.,
295; 20 Sup. Ct. Rep., 121; 44 Law. ed., 168.)

We are much impressed with the vehement appeal of counsel for the petitioner to maintain
inviolate the complete separation of church and state and curb any attempt to infringe by
indirection a constitutional inhibition. Indeed, in the Philippines, once the scene of religious
intolerance and prescription, care should be taken that at this stage of our political development
nothing is done by the Government or its officials that may lead to the belief that the Government
is taking sides or favoring a particular religious sect or institution. But, upon very serious
reflection, examination of Act No. 4052, and scrutiny of the attending circumstances, we have
come to the conclusion that there has been no constitutional infraction in the case at bar, Act No.
4052 grants the Director of Posts, with the approval of the Secretary of Public Works and
Communications, discretion to misuse postage stamps with new designs "as often as may be
deemed advantageous to the Government." Even if we were to assume that these officials made
use of a poor judgment in issuing and selling the postage stamps in question still, the case of the
petitioner would fail to take in weight. Between the exercise of a poor judgment and the
unconstitutionality of the step taken, a gap exists which is yet to be filled to justify the court in
setting aside the official act assailed as coming within a constitutional inhibition.

The petition for a writ of prohibition is hereby denied, without pronouncement as to costs. So
ordered.

Avancea, C.J., Villa-Real, Abad Santos, Imperial, Diaz and Concepcion, JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-53487 May 25, 1981
ANDRES GARCES, Reverend Father SERGIO MARILAO OSMEA, NICETAS DAGAR and
JESUS EDULLANTES, petitioners,
vs.
Hon. NUMERIANO G. ESTENZO, Presiding Judge of the Court of First Instance of Leyte,
Ormoc City Branch V, BARANGAY COUNCIL of Valencia, Ormoc City, Barangay Captain
MANUEL C. VELOSO, Councilmen GAUDENCIO LAVEZARES, TOMAS CABATINGAN and
MAXIMINO NAVARRO, Barangay Secretary CONCHITA MARAYA and Barangay Treasurer
LUCENA BALTAZAR, respondents.
AQUINO, J.:1wph1.t
This case is about the constitutionality of four resolutions of the barangay council of Valencia,
Ormoc City, regarding the acquisition of the wooden image of San Vicente Ferrer to be used in
the celebration of his annual feast day. That issue was spawned by the controversy as to
whether the parish priest or a layman should have the custody of the image.
On March 23, 1976, the said barangay council adopted Resolution No. 5, "reviving the traditional
socio-religious celebration" every fifth day of April "of the feast day of Seor San Vicente Ferrer,
the patron saint of Valencia".
That resolution designated the members of nine committees who would take charge of the 1976
festivity. lt provided for (1) the acquisition of the image of San Vicente Ferrer and (2) the
construction of a waiting shed as the barangay's projects. Funds for the two projects would be
obtained through the selling of tickets and cash donations " (Exh A or 6).
On March 26, 1976, the barangay council passed Resolution No. 6 which specified that, in
accordance with the practice in Eastern Leyte, Councilman Tomas Cabatingan, the Chairman
or hermano mayor of the fiesta, would be the caretaker of the image of San Vicente Ferrer and
that the image would remain in his residence for one year and until the election of his successor
as chairman of the next feast day.
It was further provided in the resolution that the image would be made available to the Catholic
parish church during the celebration of the saint's feast day (Exh. B or 7).
Resolutions Nos. 5 and 6 were submitted to a plebiscite and were duly ratified by the barangay
general assembly on March 26, 1976. Two hundred seventy-two voters ratified the two
resolutions (Exh. 2 and 5).
Funds were raised by means of solicitations0 and cash donations of the barangay residents and
those of the neighboring places of Valencia. With those funds, the waiting shed was constructed
and the wooden image of San Vicente Ferrer was acquired in Cebu City by the barangay council
for four hundred pesos (Exh. F-l, 3 and 4).
On April 5, 1976, the image was temporarily placed in the altar of the Catholic church of
Barangay Valencia so that the devotees could worship the saint during the mass for the fiesta.
A controversy arose after the mass when the parish priest, Father Sergio Marilao Osmea
refused to return that image to the barangay council on the pretext that it was the property of the
church because church funds were used for its acquisition.
Several days after the fiesta or on April 11, 1976, on the occasion of his sermon during a mass,
Father Osmea allegedly uttered defamatory remarks against the barangay captain, Manuel C.
Veloso, apparently in connection with the disputed image. That incident provoked Veloso to file
against Father Osmea in the city court of Ormoc City a charge for grave oral defamation.
Father Osmea retaliated by filing administrative complaints against Veloso with the city mayor's
office and the Department of Local Government and Community Development on the grounds of
immorality, grave abuse of authority, acts unbecoming a public official and ignorance of the law.
Meanwhile, the image of San Vicente Ferrer remained in the Catholic church of Valencia.
Because Father Osmea did not accede to the request of Cabatingan to have custody of the
image and "maliciously ignored" the council's Resolution No. 6, the council enacted on May 12,
1976 Resolution No. 10, authorizing the hiring of a lawyer to file a replevin case against Father
Osmea for the recovery of the image (Exh. C or 8). On June 14, 1976, the barangay council
passed Resolution No. 12, appointing Veloso as its representative in the replevin case (Exh. D
or 9).
The replevin case was filed in the city court of Ormoc City against Father Osmea and Bishop
Cipriano Urgel (Exh. F). After the barangay council had posted a cash bond of eight hundred
pesos, Father Osmea turned over the image to the council (p. 10, Rollo). ln his answer to the
complaint for replevin, he assailed the constitutionality of the said resolutions (Exh. F-1).
Later, he and three other persons, Andres Garces, a member of the Aglipayan Church, and two
Catholic laymen, Jesus Edullantes and Nicetas Dagar, filed against the barangay council and its
members (excluding two members) a complaint in the Court of First Instance at Ormoc City,
praying for the annulment of the said resolutions (Civil Case No. 1680-0).
The lower court dismissed the complaint. lt upheld the validity of the resolutions. The petitioners
appealed under Republic Act No. 5440. The petitioners contend that the barangay council was
not duly constituted because lsidoro M. Maago, Jr., the chairman of the kabataang barangay,
was not allowed to participate in its sessions.
Barangays used to be known as citizens assemblies (Presidential Decrees Nos. 86 and 86-A).
Presidential Decree No. 557, which took effect on September 21, 1974, 70 O.G. 8450-L,
directed that all barrios should be known as barangays and adopted the Revised Barrio Charter
as the Barangay Charter.
Barrios are units of municipalities or municipal districts in which they are situated. They are
quasi-municipal corporations endowed with such powers" as are provided by law "for the
performance of particular government functions, to be exercised by and through their respective
barrio governments in conformity with law" (Sec. 2, Revised Barrio Charter, R.A. No. 3590).
The barrio assembly consists of all persons who are residents of the barrio for at least six
months, eighteen years of age or over and Filipino citizens duly registered in the list kept by the
barrio secretary (Sec. 4, Ibid).
The barrio council, now barangay council, is composed of the barangay captain and six
councilmen (Sec. 7, Ibid). Section 3 of Presidential Decree No. 684, which took effect on April
15, 1975, provides that "the barangay youth chairman shall be an ex-officio member of the
barangay council", having the same powers and functions as a barangay councilman.
In this case, Maago, the barangay youth chairman, was notified of the sessions of the barangay
council to be held on March 23 and 26, 1976 but he was not able to attend those sessions
because he was working with a construction company based at Ipil, Ormoc City (Par. 2[d] Exh.
1).
Maago's absence from the sessions of the barangay council did not render the said resolutions
void. There was a quorum when the said resolutions were passed.
The other contention of the petitioners is that the resolutions contravene the constitutional
provisions that "no law shall be made respecting an establishment of religion" and that "no public
money or property shall ever be appropriated, applied, paid, or used, directly or indirectly, for the
use, benefit, or support of any sect, church, denomination, sectarian institution, or system of
religion, or for the use, benefit, or support of any priest, preacher, minister, or other religious
teacher or dignitary as such. except when such priest, preacher, minister, or dignitary is
assigned to the armed forces, or to any penal institution, or government orphanage or
leprosarium (Sec. 8, Article IV and sec. 18[2], Article VIII, Constitution).
That contention is glaringly devoid of merit. The questioned resolutions do not directly or
indirectly establish any religion, nor abridge religious liberty, nor appropriate public money or
property for the benefit of any sect, priest or clergyman. The image was purchased with private
funds, not with tax money. The construction of a waiting shed is entirely a secular matter.
Manifestly puerile and flimsy is Petitioners argument that the barangay council favored the
Catholic religion by using the funds raised by solicitations and donations for the purchase of the
patron saint's wooden image and making the image available to the Catholic church.
The preposterousness of that argument is rendered more evident by the fact that counsel
advanced that argument in behalf of the petitioner, Father Osmea the parish priest.
The wooden image was purchased in connection with the celebration of the barrio fiesta
honoring the patron saint, San Vicente Ferrer, and not for the purpose of favoring any religion
nor interfering with religious matters or the religious beliefs of the barrio residents. One of the
highlights of the fiesta was the mass. Consequently, the image of the patron saint had to be
placed in the church when the mass was celebrated.
If there is nothing unconstitutional or illegal in holding a fiesta and having a patron saint for the
barrio, then any activity intended to facilitate the worship of the patron saint (such as the
acquisition and display of his image) cannot be branded as illegal.
As noted in the first resolution, the barrio fiesta is a socio-religious affair. Its celebration is an
ingrained tradition in rural communities. The fiesta relieves the monotony and drudgery of the
lives of the masses.
The barangay council designated a layman as the custodian of the wooden image in order to
forestall any suspicion that it is favoring the Catholic church. A more practical reason for that
arrangement would be that the image, if placed in a layman's custody, could easily be made
available to any family desiring to borrow the image in connection with prayers and novenas.
The contradictory positions of the petitioners are shown in their affidavits. Petitioner Garces
swore that the said resolutions favored the Catholic church. On the other hand, petitioners Dagar
and Edullantes swore that the resolutions prejudiced the Catholics because they could see the
image in the church only once a year or during the fiesta (Exh. H and J).
We find that the momentous issues of separation of church and state, freedom of religion annd
the use of public money to favor any sect or church are not involved at all in this case even
remotely or indirectly. lt is not a microcosmic test case on those issues.
This case is a petty quarrel over the custody of a saint's image. lt would never have arisen if the
parties had been more diplomatic and tactful and if Father Osmea had taken the trouble of
causing contributions to be solicited from his own parishioners for the purchase of another
image of San Vicente Ferrer to be installed in his church.
There can be no question that the image in question belongs to the barangay council. Father
Osmea claim that it belongs to his church is wrong. The barangay council, as owner of the
image, has the right to determine who should have custody thereof.
If it chooses to change its mind and decides to give the image to the Catholic church. that action
would not violate the Constitution because the image was acquired with private funds and is its
private property.
The council has the right to take measures to recover possession of the image by enacting
Resolutions Nos. 10 and 12.
Not every governmental activity which involves the expenditure of public funds and which has
some religious tint is violative of the constitutional provisions regarding separation of church and
state, freedom of worship and banning the use of public money or property.
In Aglipay vs. Ruiz, 64 Phil. 201, what was involved was Act No. 4052 which appropriated sixty
thousand pesos for the cost of plates and the printing of postage stamps with new designs.
Under the law, the Director of Posts, with the approval of the Department Head and the
President of the Philippines, issued in 1936 postage stamps to commemorate the celebration in
Manila of the 33rd International Eucharistic Congress sponsored by the Catholic Church.
The purpose of the stamps was to raise revenue and advertise the Philippines. The design of the
stamps showed a map of the Philippines and nothing about the Catholic Church. No religious
purpose was intended.
Monsignor Gregorio Aglipay, the founder and head of the Philippine Independent Church,
sought to enjoin the sale of those commemorative postage stamps.
It was held that the issuance of the stamps, while linked inseparably with an event of a religious
character, was not designed as a propaganda for the Catholic Church. Aglipay's prohibition suit
was dismissed.

The instant case is easily distinguishable from Verzosa vs. Fernandez, 49 Phil., 627 and 55 Phil.
307, where a religious brotherhood, La Archicofradia del Santisimo Sacramento, organized for
the purpose of raising funds to meet the expenses for the annual fiesta in honor of the Most Holy United States Supreme Court
Sacrament and the Virgin Lady of Guadalupe, was held accountable for the funds which it held EVERSON v. BOARD OF EDUCATION OF EWING TP., (1947)
as trustee. 0 No. 52
Argued: November 20, 1946 Decided: February 10, 1947
Finding that the petitioners have no cause of action for the annulment of the barangay
resolutions, the lower court's judgment dismissing their amended petition is affirmed. No costs. Rehearing Denied March 10, 1947

SO ORDERED. Appeal from the Court of Errors and Appeals of the State of New jersey. [330 U.S. 1, 2] Messrs.
Edward R. Burke and E. Hilton Jackson, both of Washington, D. C., for appellant.
Fernando C.J., Barredo, Makasiar, Guerrero, De Castro and Melencio-Herrera, JJ.,
concur.1wph1.t Mr. William H. Speer, of Jersey City, for appellees.

Teehankee, J., concur in the result. Mr. Justice BLACK delivered the opinion of the Court.

Fernandez, J., Concepcion Jr. J., are on leave. A New Jersey statute authorizes its local school districts to make rules and contracts for the
transportation of children to and from schools. 1 The appellee, a township board of education,
acting pursuant to this statute authorized reimbursement to parents of money expended by them
for the bus transportation of their children on regular busses operated by the public
transportation system. Part of this money was for the payment of transportation of some children
in the community to Catholic parochial schools. These church schools give their students, in
addition to secular education, regular religious instruction conforming to the religious tenets and
modes of worship of the Catholic Faith. The superintendent of these schools is a Catholic priest.

The appellant, in his capacity as a district taxpayer, filed suit in a State court challenging the
right of the Board to reimburse parents of parochial school students. He [330 U.S. 1,
4] contended that the statute and the resolution passed pursuant to it violated both the State
and the Federal Constitutions. That court held hat the legislature was without power to authorize
such payment under the State constitution. 132 N.J.L. 98, 39 A.2d 75. The New Jersey Court of
Errors and Appeals reversed, holding that neither the statute nor the resolution passed pursuant
to it was in conflict with the State constitution or the provisions of the Federal Constitution in
issue. 133 N. J.L. 350, 44 A.2d 333. The case is here on appeal under 28 U.S.C. 344(a), 28
U.S.C.A. 344(a).

Since there has been no attack on the statute on the ground that a part of its language excludes
children attending private schools operated for profit from enjoying state payment for their
transportation, we need not consider this exclusionary language; it has no relevancy to any
constitutional question here presented. 2Furthermore, if the exclusion clause had been properly
challenged, we do not know whether New Jersey's highest court would construe its statutes as
precluding payment of the school [330 U.S. 1, 5] transportation of any group of pupils, even
those of a private school run for profit. 3 Consequently, we put to one side the question as to the
validity of the statute against the claim that it does not authorize payment for the transportation
generally of school children in New Jersey.

The only contention here is that the State statute and the resolution, in so far as they authorized
reimbursement to parents of children attending parochial schools, violate the Federal
Constitution in these two respects, which to some extent, overlap. First. They authorize the State
to take by taxation the private property of some and bestow it upon others, to be used for their
own private purposes. This, it is alleged violates the due process clause of the F urteenth
Amendment. Second. The statute and the resolution forced inhabitants to pay taxes to help
support and maintain schools which are dedicated to, and which regularly teach, the Catholic
Faith. This is alleged to be a use of State power to support church schools contrary to the
prohibition of the First Amendment which the Fourteenth Amendment made applicable to the
states.
First. The due process argument that the State law taxes some people to help others carry out
their private[330 U.S. 1, 6] purposes is framed in two phases. The first phase is that a state
cannot tax A to reimburse B for the cost of transporting his children to church schools. This is
said to violate the due process clause because the children are sent to these church schools to
satisfy the personal desires of their parents, rather than the public's interest in the general
education of all children. This argument, if valid, would apply equally to prohibit state payment
for the transportation of children to any non- public school, whether operated by a church, or any
other nongovernment individual or group. But, the New Jersey legislature has decided that a
public purpose will be served by using tax-raised funds to pay the bus fares of all school
children, including those who attend parochial schools. The New Jersey Court of Errors and
Appeals has reached the same conclusion. The fact that a state law, passed to satisfy a public
need, coincides with the personal desires of the individuals most directly affected is certainly an
inadequate reason for us to say that a legislature has erroneously appraised the public need.
It is true that this Court has, in rare instances, struck down state statutes on the ground that the
purpose for which tax-raised funds were to be expended was not a public one. Citizens' Savings
& Loan Association v. City of Topeka, 20 Wall. 655; City of Parkersburg v. Brown, 106 U.S. 487 ,
1 S.Ct. 442; Thompson v. Consolidated Gas Utilities Corp., 300 U.S. 55 , 57 S.Ct. 364. But the
Court has also pointed out that this far-reaching authority must be exercised with the most
extreme caution. Green v. Frazier, 253 U.S. 233, 240 , 40 S. Ct. 499, 501. Otherwise, a state's
power to legislate for the public welfare might be seriously curtailed, a power which is a primary
reason for the existence of states. Changing local conditions create new local problems which
may lead a state's people and its local authorities to believe that laws authorizing new types of
public services are necessary to promote the general well-being [330 U.S. 1, 7] of the people.
The Fourteenth Amendment did not strip the states of their power to meet problems previously
left for individual solution. Davidson v. New Orleans, 96 U.S. 97, 103 , 104 S.; Barbier v.
Connolly, 113 U.S. 27, 31 , 32 S., 5 S.Ct. 357, 360; Fallbrook Irrigation District v. Bradley, 164
U.S. 112, 157 , 158 S., 17 S.Ct. 56, 62, 63.
It is much too late to argue that legislation intended to facilitate the opportunity of children to get
a secular education serves no public purpose. Cochran v. Louisiana State Board of
Education, 281 U.S. 370 , 50 S. Ct. 335; Holmes, J., in Interstate Consolidated Street Ry. Co. v.
Commonwealth of Massachusetts, 207 U.S. 79, 87 , 28 S.Ct. 26, 27, 12 Ann.Cas. 555. See
opinion of Cooley, J., in Stuart v. School District No. 1 of Village of Kalamazoo, 1878, 30 Mich.
69. The same thing is no less true of legislation to reimburse needy parents, or all parents, for
payment of the fares of their children so that they can ride in public busses to and from schools
rather than run the risk of traffic and other hazards incident to walking or 'hitchhiking.' See
Barbier v. Connolly, supra, 113 U.S. at page 31, 5 S.Ct. at page 359. See also cases collected
63 A.L.R. 413; 118 A.L.R. 806. Nor does it follow that a law has a private rather than a public
purpose because it provides that tax-raised funds will be paid to reimburse i dividuals on account
of money spent by them in a way which furthers a public program. See Carmichael v. Southern
Coal & Coke Co., 301 U.S. 495, 518 , 57 S.Ct. 868, 876, 109 A.L.R. 1327. Subsidies and loans
to individuals such as farmers and home owners, and to privately owned transportation systems,
as well as many other kinds of businesses, have been commonplace practices in our state and
national history.
Insofar as the second phase of the due process argument may differ from the first, it is by
suggesting that taxation for transportation of children to church schools constitutes support of a
religion by the State. But if the law is invalid for this reason, it is because it violates the First
Amendment's prohibition against the establishment of religion [330 U.S. 1, 8] by law. This is the
exact question raised by appellant's second contention, to consideration of which we now turn.
Second. The New Jersey statute is challenged as a 'law respecting an establishment of religion.'
The First Amendment, as made applicable to the states by the Fourteenth, Murdock v.
Commonwealth of Pennsylvania,319 U.S. 105 , 63 S.Ct. 870, 872, 146 A.L.R. 81, commands
that a state 'shall make no law respecting an establishment of religion, or prohibiting the free
exercise thereof.' These words of the First Amendment reflected in the minds of early Americans
a vivid mental picture of conditions and practices which they fervently wished to stamp out in
order to preserve liberty for themselves and for their posterity. Doubtless their goal has not been
entirely reached; but so far has the Nation moved toward it that the expression 'law respecting
an establishment of religion,' probably does not so vividly remind present-day Americans of the
evils, fears, and political problems that caused that expression to be written into our Bill of
Rights. Whether this New Jersey law is one respecting the 'establishment of religion' requires an
understanding of the meaning of that language, particularly with respect to the imposition of
taxes. Once again,4 therefore, it is not inappropriate briefly to review the background and
environment of the period in which that constitutional language was fashioned and adopted.
A large proportion of the early settlers of this country came here from Europe to escape the
bondage of laws which compelled them to support and attend government favored churches.
The centuries immediately before and contemporaneous with the colonization of America had
been filled with turmoil, civil strife, and persecutions, generated in large part by established sects
determined to [330 U.S. 1, 9] maintain their absolute political and religious supremacy. With the
power of government supporting them, at various times and places, Catholics had persecuted
Protestants, Protestants had persecuted Catholics, Protestant sects had persecuted other
Protestant sects, Catholics of one shade of belief had persecuted Catholics of another shade of
belief, and all of these had from time to time persecuted Jews. In efforts to force loyalty to
whatever religious group happened to be on top and in league with the government of a
particular time and place, men and women had been fined, cast in jail, cruelly tortured, and
killed. Among the offenses for which these punishments had been inflicted were such things as
speaking disrespectfully of the views of ministers of government-established churches,
nonattendance at those churches, expressions of non-belief in their doctrines, and failure to pay
taxes and tithes to support them. 5
These practices of the old world were transplanted to and began to thrive in the soil of the new
America. The very charters granted by the English Crown to the individuals and companies
designated to make the laws which would control the destinies of the colonials authorized these
individuals and companies to erect religious establishments which all, whether believers or non-
believers, would be required to support and attend. 6 An exercise of [330 U.S. 1, 10] this
authority was accompanied by a repetition of many of the old world practices and persecutions.
Catholics found themselves hounded and proscribed because of their faith; Quakers who
followed their conscience went to jail; Baptists were peculiarly obnoxious to certain dominant
Protestant sects; men and women of varied faiths who happened to be in a minority in a
particular locality were persecuted because they steadfastly persisted in worshipping God only
as their own consciences dictated.7 And all of these dissenters were compelled to pay tithes and
taxes8 to support government-sponsored churches whose ministers preached inflammatory
sermons designed to strengthen and consolidate the established faith by generating a burning
hatred against dissenters. [330 U.S. 1, 11] These practices became so commonplace as to
shock the freedom-loving colonials into a feeling of abhorrence. 9 The imposition of taxes to pay
ministers' salaries and to build and maintain churches and church property aroused their
indignation.10 It was these feelings which found expression in the First Amendment. No one
locality and no one group throughout the Colonies can rightly be given entire credit for having
aroused the sentiment that culminated in adoption of the Bill of Rights' provisions embracing
religious liberty. But Virginia, where the established church had achieved a dominant influence in
political affairs and where many excesses attracted wide public attention, p ovided a great
stimulus and able leadership for the movement. The people there, as elsewhere, reached the
conviction that individual religious liberty could be achieved best under a government which was
stripped of all power to tax, to support, or otherwise to assist any or all religions, or to interfere
with the beliefs of any religious individual or group.
The movement toward this end reached its dramatic climax in Virginia in 1785-86 when the
Virginia legislative body was about to renew Virginia's tax levy for the support of the established
church. Thomas Jeffer- [330 U.S. 1, 12] son and James Madison led the fight against this tax.
Madison wrote his great Memorial and Remonstrance against the law. 11 In it, he eloquently
argued that a true religion did not need the support of law; that no person, either believer or non-
believer, should be taxed to support a religious institution of any kind; that the best interest of a
society required that the minds of men always be wholly free; and that cruel persecutions were
the inevitable result of government-established religions. Madison's Remonstrance received
strong support throughout Virginia, 12 and the Assembly postponed consideration of the
proposed tax measure until its next session. When the proposal came up for consideration at
that session, it not only died in committee, but the Assembly enacted the famous 'Virginia Bill for
Religious Liberty' originally written by Thomas Jefferson. 13 The preamble to that Bill stated
among other things that
'Almighty God hath created the mind free; that all attempts to influence it by temporal
punishments, or burthens, or by civil incapacitations, tend only to beget habits of hypocrisy and
meanness, and are [330 U.S. 1, 13] a departure from the plan of the Holy author of our religion
who being Lord both of body and mind, yet chose not to propagate it by coercions on either . . .;
that to compel a man to furnish contributions of money for the propagation of opinions which he
disbelieves, is sinful and tyrannical; that even the forcing him to support this or that teacher of
his own religious persuasion, is depriving him of the comfortable liberty of giving his
contributions to the particular pastor, whose morals he would make his pattern ...'
And the statute itself enacted
'That no man shall be compelled to frequent or support any religious worship, place, or ministry
whatsoever, nor shall be enforced, restrained, molested, or burthened, in his body or goods, nor
shall otherwise suffer on account of his religious opinions or belief. . . .'14
This Court has previously recognized that the provisions of the First Amendment, in the drafting
and adoption of which Madison and Jefferson played such leading roles, had the same objective
and were intended to provide the same protection against governmental intrusion on religious
liberty as the Virginia statute. Reynolds v. United States, supra, 98 U.S. at page 164; Watson v.
Jones, 13 Wall. 679; Davis v. Beason, 133 U.S. 333, 342 , 10 S.Ct. 299, 300. Prior to the
adoption of the Fourteenth Amendment, the First Amendment did not apply as a restraint against
the states. 15 Most of them did soon provide similar constitutional protections[330 U.S. 1,
14] for religious liberty. 16 But some states persisted for about half a century in imposing
restraints upon the free exercise of religion and in discriminating against particular religious
groups. 17 In recent years, so far as the provision against the establishment of a religion is
concerned, the question has most frequently arisen in connection with proposed state aid to
church schools and efforts to carry on religious teachings in the public schools in accordance
with the tenets of a particular sect. 18 Some churches have either sought or accepted state
financial support for their schools. Here again the efforts to obtain state aid or acceptance of it
have not been limited to any one particular faith. 19 The state courts, in the main, have remained
faithful to the language of their own constitutional provisions designed to protect religious
freedom and to separate religious and governments. Their decisions, however, show the
difficulty in drawing the line between tax legislation which provides funds for the welfare of the
general public and that which is designed to support institutions which teach religion. 20
The meaning and scope of the First Amendment, preventing establishment of religion or
prohibiting the free exercise thereof, in the light of its history and the evils it [330 U.S. 1,
15] was designed forever to suppress, have been several times elaborated by the decisions of
this Court prior to the application of the First Amendment to the states by the Fourteenth. 21 The
broad meaning given the Amendment by these earlier cases has been accepted by this Court in
its decisions concerning an individual's religious freedom rendered since the Fourteenth
Amendment was interpreted to make the prohibitions of the First applicable to state action
abridging religious freedom. 22 There is every reason to give the sam application and broad
interpretation to the 'establishment of religion' clause. The interrelation of these complementary
clauses was well summarized in a statement of the Court of Appeals of South Carolina,23
quoted with approval by this Court, in Watson v. Jones, 13 Wall. 679, 730: 'The structure of our
government has, for the preservation of civil liberty, rescued the temporal institutions from
religious interference. On the other hand, it has secured religious liberty from the invasions of
the civil authority.'
The 'establishment of religion' clause of the First Amendment means at least this: Neither a state
nor the Federal Government can set up a church. Neither can pass laws which aid one religion,
aid all religions, or prefer one religion over another. Neither can force nor influence a person to
go to or to remain away from church against his will or force him to profess a belief or disbelief in
any religion. No person can be punished for entertain- [330 U.S. 1, 16] ing or professing
religious beliefs or disbeliefs, for church attendance or non-attendance. No tax in any amount,
large or small, can be levied to support any religious activities or institutions, whatever they may
be called, or whatever from they may adopt to teach or practice religion. Neither a state nor the
Federal Government can, openly or secretly, participate in the affairs of any religious
organizations or groups and vice versa. In the words of Jefferson, the clause against
establishment of religion by law was intended to erect 'a wall of separation between Church and
State.' Reynolds v. United States, supra, 98 U.S. at page 164.
We must consider the New Jersey statute in accordance with the foregoing limitations imposed
by the First Amendment. But we must not strike that state statute down if it is within the state's
constitutional power even though it approaches the verge of that power. See Interstate
Consolidated Street Ry. Co. v. Commonwealth of Massachusetts, Holmes, J., supra 207 U.S. at
85, 88, 28 S.Ct. 26, 27, 28, 12 Ann.Cas. 555. New Jersey cannot consistently with the
'establishment of religion' clause of the First Amendment contribute tax-raised funds to the
support of an institution which teaches the tenets and faith of any church. On the other hand,
other language of the amendment commands that New Jersey cannot hamper its citizens in the
free exercise of their own religion. Consequently, it cannot exclude individual Catholics,
Lutherans, Mohammedans, Baptists, Jews, Methodists, Non-believers, Presbyterians, or the
members of any other faith, because of their faith, or lack of it, from receiving the benefits of
public welfare legislation. While we do not mean to intimate that a state could not provide
transportation only to children attending public schools, we must be careful, in protecting the
citizens of New Jersey against state-established churches, to be sure that we do not
inadvertently prohibit New Jersey from extending its general State law benefits to all its citizens
without regard to their religious belief[330 U.S. 1, 17] Measured by these standards, we cannot
say that the First Amendment prohibits New Jersey from spending taxraised funds to pay the
bus fares of parochial school pupils as a part of a general program under which it pays the fares
of pupils attending public and other schools. It is undoubtedly true that children are helped to get
to church schools. There is even a possibility that some of the children might not be sent to the
church schools if the parents were compelled to pay their children's bus fares out of their own
pockets when transportation to a public school would have been paid for by the State. The same
possibility exists where the state requires a local transit company to provide reduced fares to
school children including those attending parochial schools,24 or where a municipally owned
transportation system undertakes to carry all school children free of charge. Moreover, state-
paid policemen, detailed to protect children going to and from church schools from the very real
hazards of traffic, would serve much the same purpose and accomplish much the same result as
state provisions intended to guarantee free transportation of a kind which the state deems to be
best for the school children's welfare. And parents might refuse to risk their children to the
serious danger of traffic accidents going to and from parochial schools, the approaches to which
were not protected by policemen. Similarly, parents might be reluctant to permit their children to
attend schools which the state had cut off from such general government services as ordinary
police and fire protection, connections for sewage disposal, public [330 U.S. 1, 18] highways
and sidewalks. Of course, cutting off church schools from these services, so separate and so
indisputably marked off from the religious function, would make it far more difficult for the
schools to operate. But such is obviously not the purpose of the First Amendment. That
Amendment requires the state to be a neutral in its relations with groups of religious believers
and non-believers; it does not require the state to be their adversary. State power is no more to
be used so as to handicap religions, than it is to favor them.
This Court has said that parents may, in the discharge of their duty under state compulsory
education laws, send their children to a religious rather than a public school if the school meets
the secular educational requirements which the state has power to impose. See Pierce v.
Society of Sisters, 268 U.S. 510 , 45 S.Ct. 571, 39 A.L.R. 468. It appears that these parochial
schools meet New Jersey's requirements. The State contributes no money to the schools. It
does not support them. Its legislation, as applied, does no more than provide a general program
to help parents get their children, regardless of their religion, safely and expeditiously to and
from accredited schools.
The First Amendment has erected a wall between church and state. That wall must be kept high
and impregnable. We could not approve the slightest breach. New Jersey has not breached it
here.
AFFIRMED.
Mr. Justice JACKSON, dissenting.
I find myself, contrary to first impressions, unable to join in this decision. I have a sympathy,
though it is not ideological, with Catholic citizens who are compelled by law to pay taxes for
public schools, and also feel constrained by conscience and discipline to support other schools
for their own children. Such reli f to them as[330 U.S. 1, 19] this case involves is not in itself a
serious burden to taxpayers and I had assumed it to be as little serious in principle. Study of this
case convinces me otherwise. The Court's opinion marshals every argument in favor of state aid
and puts the case in its most favorable light, but much of its reasoning confirms my conclusions
that there are no good grounds upon which to support the present legislation. In fact, the
undertones of the opinion, advocating complete and uncompromising separation of Church from
State, seem utterly discordant with its conclusion yielding support to their commingling in
educational matters. The case which irresistibly comes to mind as the most fitting precedent is
that of Julia who, according to Byron's reports, 'whispering 'I will ne'er consent,'- consented.'
I.
The Court sustains this legislation by assuming two deviations from the facts of this particular
case; first, it assumes a state of facts the record does not support, and secondly, it refuses to
consider facts which are inescapable on the record.
The Court concludes that this 'legislation, as applied, does no more than provide a general
program to help parents get their children, regardless of their religion, safely and expeditiously to
and from accredited schools,' and it draws a comparison between 'state provisions intended to
guarantee free transportation' for school children with services such as police and fire protection,
and implies that we are here dealing with 'laws authorizing new types of public services ...' This
hypothesis permeates the opinion. The facts will not bear that construction.
The Township of Ewing is not furnishing transportation to the children in any form; it is not
operating school busses itself or contracting for their operation; and it is not performing any
public service of any kind with this[330 U.S. 1, 20] taxpayer's money. All school children are left
to ride as ordinary paying passengers on the regular busses operated by the public
transportation system. What the Township does, and what the taxpayer complains of, is at
stated intervals to reimburse parents for the fares paid, provided the children attend either public
schools or Catholic Church schools. This expenditure of tax funds has no possible effect on the
child's safety or expedition in transit. As passengers on the public busses they travel as fast and
no faster, and are as safe and no safer, since their parents are reimbursed as before.
In addition to thus assuming a type of service that does not exist, the Court also insists that we
must close our eyes to a discrimination which does exist. The resolution which authorizes
disbursement of this taxpayer's money limits reimbursement to those who attend public schools
and Catholic schools. That is the way the Act is applied to this taxpayer.
The New Jersey Act in question makes the character of the school, not the needs of the children
determine the eligibility of parents to reimbursement. The Act permits payment for transportation
to parochial schools or public schools but prohibits it to private schools operated in whole or in
part for profit. Children often are sent to private schools because their parents feel that they
require more individual instruction than public schools can provide, or because they are
backward or defective and need special attention. If all children of the state were objects of
impartial solicitude, no reason is obvious for denying transportation reimbursement to students
of this class, for these often are as needy and as worthy as those who go to public or parochial
schools. Refusal to reimburse those who attend such schools is understandable only in the light
of a purpose to aid the schools, because the state might well abstain from aiding a profit-making
private enterprise. Thus, under the Act [330 U.S. 1, 21] and resolution brought to us by this
case children are classified according to the schools they attend and are to be aided if they
attend the public schools or private C tholic schools, and they are not allowed to be aided if they
attend private secular schools or private religious schools of other faiths.
Of course, this case is not one of a Baptist or a Jew or an Episcopalian or a pupil of a private
school complaining of discrimination. It is one of a taxpayer urging that he is being taxed for an
unconstitutional purpose. I think he is entitled to have us consider the Act just as it is written. The
statement by the New Jersey court that it holds the Legislature may authorize use of local funds
'for the transportation of pupils to any school,' 133 N.J.L. 350, 354, 44 A.2d 333, 337, in view of
the other constitutional views expressed, is not a holding that this Act authorizes transportation
of all pupils to all schools. As applied to this taxpayer by the action he complains of, certainly the
Act does not authorize reimbursement to those who choose any alternative to the public school
except Catholic Church schools.
If we are to decide this case on the facts before us, our question is simply this: Is it constitutional
to tax this complainant to pay the cost of carrying pupils to Church schools of one specified
denomination?
II.
Whether the taxpayer constitutionally can be made to contribute aid to parents of students
because of their attendance at parochial schools depends upon the nature of those schools and
their relation to the Church. The Constitution says nothing of education. It lays no obligation on
the states to provide schools and does not undertake to regulate state systems of education if
they see fit to maintain them. But they cannot, through school policy any more than through
other means, invade rights secured [330 U.S. 1, 22] to citizens by the Constitution of the United
States. West Virginia State Board of Education v. Barnette, 319 U.S. 624 , 63 S.Ct. 1178, 147
A.L.R. 674. One of our basic rights is to be free of taxation to support a transgression of the
constitutional command that the authorities 'shall make no law respecting an establishment of
religion, or prohibiting the free exercise thereof.' U.S.Const., Amend. I; Cantwell v. State of
Connecticut, 310 U.S. 296 , 60 S.Ct. 900, 128 A.L.R. 1352.
The function of the Church school is a subject on which this record is meager. It shows only that
the schools are under superintendence of a priest and that 'religion is taught as part of the
curriculum.' But we know that such schools are parochial only in name-they, in fact, represent a
worldwide and age-old policy of the Roman Catholic Church. Under the rubric 'Catholic Schools,'
the Canon Law of the Church by which all Catholics are bound, provides:
'1215. Catholic children are to be educated in schools where not only nothing contrary to
Catholic faith and morals is taught, but rather in schools where religious and moral training
occupy the first place. ... ( Canon 1372.)'
'1216. In every elementary school the children must, according to their age, be instructed in
Christian doctrine.
'The young people who attend the higher schools are to receive a deeper religious knowledge,
and the bishops shall appoint priests qualified for such work by their learning and piety. (Canon
1373.)'
'1217. Catholic children shall not attend non-Catholic, indifferent, schools that are mixed, that is
to say, schools open to Catholic and non- Catholics alike. The bishop of the diocese only has the
right, in harmony with the instructions of the Holy See, to decide under what circumstances, and
with what safe- [330 U.S. 1, 23] guards to prevent loss of faith, it may be tolerated that Catholic
children go to such schools. (Canon 1374.)'
'1224. The religious teaching of youth in any schools is subject to the authority and inspection of
the Church.
'The local Ordinaries have the right and duty to watch that nothing is taught contrary to faith or
good morals, in any of the schools of their territory.
'They, moreover, have the right to approve the books of Christian doctrine and the teachers of
religion, and to demand, for the sake of safeguarding religion and morals, the removal of
teachers and books. ( Canon 1381.)' (Woywod, Rev. Stanislaus, The New Canon Law, under
imprimatur of Most Rev. Francis J. Spellman, Archbishop of New York and others, 1940.)
It is no exaggeration to say that the whole historic conflict in temporal policy between the
Catholic Church and non-Catholics comes to a focus in their respective school policies. The
Roman Catholic Church, counseled by experience in many ages and many lands and with all
sorts and conditions of men, takes what, from the viewpoint of its own progress and the success
of its mission, is a wise estimate of the importance of education to religion. It does not leave the
individual to pick up religion by chance. It relies on early and indelible indoctrination in the faith
and order of the Church by the word and example of persons consecrated to the task.
Our public school, if not a product of Protestantism, at least is more consistent with it than with
the Catholic culture and scheme of values. It is a relatively recent development dating from
about 1840.1 It is organized on[330 U.S. 1, 24] the premise that secular education can be
isolated from all religious teaching so that the school can inculcate all needed temporal
knowledge and also maintain a strict and lofty neutrality as to religion. The assumption is that
after the individual has been instructed in worldly wisdom he will be better fitted to choose his
religion. Whether such a disjunction is possible, and if possible whether it is wise, are questions I
need not try to answer.
I should be surprised if any Catholic would deny that the parochial school is a vital, if not the
most vital, part of the Roman Catholic Church. If put to the choice, that venerable institution, I
should expect, would forego its whole service for mature persons before it would give up
education of the young, and it would be a wise choice. Its growth and cohesion, discipline and
loyalty, spring from its schools. Catholic education is the rock on which the whole structure rests,
and to render tax aid to its Church school is indistinguishable to me from rendering the same aid
to the Church itself.
III.
It is of no importance in this situation whether the beneficiary of this expenditure of tax-raised
funds is primarily the parochial school and incidentally the pupil, or whether the aid is directly
bestowed on the pupil with indirect benefits to the school. The state cannot maintain a Church
and it can no more tax its citizens to furnish free carriage to those who attend a Church The
prohibition against establishment of religion cannot be circumvented by a subsidy, bonus or
reimbursement of expense to individuals for receiving religious instruction and indoctrination.
The Court, however, compares this to other subsidies and loans to individuals and says, 'Nor
does it follow that a law has a private rather than a public purpose because [330 U.S. 1, 25] it
provides that tax-raised funds will be paid to reimburse individuals on account of money spent by
them in a way which furthers a public program. See Carmichael v. Southern Coal & Coke
Co., 301 U.S. 495, 518 , 57 S.Ct. 868, 876, 109 A.L.R. 1327.' Of course, the state may pay out
tax-raised funds to relieve pauperism, but it may not under our Constitution do so to induce or
reward piety. It may spend funds to secure old age against want, but it may not spend funds to
secure religion against skepticism. It may compensate individuals for loss of employment, but it
cannot compensate them for adherence to a creed.
It seems to me that the basic fallacy in the Court's reasoning, which accounts for its failure to
apply the principles it avows, is in ignoring the essentially religious test by which beneficiaries of
this expenditure are selected. A policeman protects a Catholic, of course-but not because he is a
Catho ic; it is because he is a man and a member of our society. The fireman protects the
Church school-but not because it is a Church school; it is because it is property, part of the
assets of our society. Neither the fireman nor the policeman has to ask before he renders aid 'Is
this man or building identified with the Catholic Church.' But before these school authorities draw
a check to reimburse for a student's fare they must ask just that question, and if the school is a
Catholic one they may render aid because it is such, while if it is of any other faith or is run for
profit, the help must be withheld. To consider the converse of the Court's reasoning will best
disclose its fallacy. That there is no parallel between police and fire protection and this plan of
reimbursement is apparent from the incongruity of the limitation of this Act if applied to police
and fire service. Could we sustain an Act that said police shall protect pupils on the way to or
from public schools and Catholic schools but not [330 U.S. 1, 26] while going to and coming
from other schools, and firemen shall extinguish a blaze in public or Catholic school buildings but
shall not put out a blaze in Protestant Church schools or private schools operated for profit? That
is the true analogy to the case we have before us and I should think it pretty plain that such a
scheme would not be valid.
The Court's holding is that this taxpayer has no grievance because the state has decided to
make the reimbursement a public purpose and therefore we are bound to regard it as such. I
agree that this Court has left, and always should leave to each state, great latitude in deciding
for itself, in the light of its own conditions, what shall be public purposes in its scheme of things.
It may socialize utilities and economic enterprises and make taxpayers' business out of what
conventionally had been private business. It may make public business of individual welfare,
health, education, entertainment or security. But it cannot make public business of religious
worship or instruction, or of attendance at religious institutions of any character. There is no
answer to the proposition more fully expounded by Mr. Justice RUTLEDGE that the effect of the
religious freedom Amendment to our Constitution was to take every form of propagation of
religion out of the realm of things which could directly or indirectly be made public business and
thereby be supported in whole or in part at taxpayers' expense. That is a difference which the
Constitution sets up between religion and almost every other subject matter of legislation, a
difference which goes to the very root of religious freedom and which the Court is overlooking
today. This freedom was first in the Bill of Rights because it was first in the forefathers' minds; it
was set forth in absolute terms, and its strength is its rigidity. It was intended not only to keep the
states' hands out of religion, but to [330 U.S. 1, 27] keep religion's hands off the state, and
above all, to keep bitter religious controversy out of public life by denying to every denomination
any advantage from getting control of public policy or the public purse. Those great ends I
cannot but think are immeasurably compromised by today's decision.
This policy of our Federal Constitution has never been wholly pleasing to most religious groups.
They all are quick to invoke its protections; they all are irked when they feel its restraints. This
Court has gone a long way, if not an unreasonable way, to hold that public business of such
paramount importance as maintenance of public order, protection of the privacy of the home,
and taxation may not be pursued by a state in a way that even indirectly will interfere with
religious proselyting. See dissent in Douglas v. Jeannette, 319 U.S. 157, 166 , 63 S. Ct. 877,
882, 146 A.L.R. 81; Murdock v. Pennsylvania, 319 U.S. 105 , 63 S.Ct. 870, 146 A.L.R. 81;
Martin v. Struthers, 319 U.S. 141 , 63 S.Ct. 862; Jones v. Opelika, 316 U.S. 584 , 6 S.Ct. 1231,
141 A.L.R. 514, reversed on rehearing 319 U.S. 103 , 63 S.Ct. 890.
But we cannot have it both ways. Religious teaching cannot be a private affair when the state
seeks to impose regulations which infringe on it indirectly, and a public affair when it comes to
taxing citizens of one faith to aid another, or those of no faith to aid all. If these principles seem
harsh in prohibiting aid to Catholic education, it must not be forgotten that it is the same
Constitution that alone assures Catholics the right to maintain these schools at all when
predominant local sentiment would forbid them. Pierce v. Society of Sisters,268 U.S. 510 , 45
S.Ct. 571, 39 A.L.R. 468. Nor should I think that those who have done so well without this aid
would want to see this separation between Church and State broken down. If the state may aid
these religious schools, it may therefore regulate them. Many groups have sought aid from tax
funds only to find that it carried political controls with it. Indeed this Court has [330 U.S. 1,
28] declared that 'It is hardly lack of due process for the Government to regulate that which it
subsidizes.' Wickard v. Filburn, 317 U.S. 111, 131 , 63 S.Ct. 82, 92.
But in any event, the great purposes of the Constitution do not depend on the approval or
convenience of those they restrain. I cannot read the history of the struggle to separate political
from ecclesiastical affairs, well summarized in the opinion of Mr. Justice RUTLEDGE in which I
generally concur, without a conviction that the Court today is unconsciously giving the clock's
hands a backward turn.
Mr. Justice FRANKFURTER joins in this opinion.
Mr. Justice RUTLEDGE, with whom Mr. Justice FRANKFURTER, Mr. Justice JACKSON and Mr.
Justice BURTON agree, dissenting.
'Congress shall make no law respecting an establishment of religion, or prohibiting the free
exercise thereof. ....' U.S.Const.Am. Art. I.
'Well aware that Almighty God hath created the mind free; ... that to compel a man to furnish
contributions of money for the propagation of opinions which he disbelieves, is sinful and
tyrannical; ...
'We, the General Assembly, do enact, That no man shall be compelled to frequent or support
any religious worship, place, or ministry whatsoever, nor shall be enforced, restrained, molested,
or burthened in his body or goods, nor shall otherwise suffer on account of his religious opinions
or belief. ...'1 [330 U.S. 1, 29] I cannot believe that the great author of those words, or the men
who made them law, could have joined in this decision. Neither so high nor so impregnable
today as yesterday is the wall raised between church and state by Virginia's great statute of
religious freedom and the First Amendment, now made applicable to all the states by the
Fourteenth. 2 New Jersey's statute sustained is the first, if indeed it is not the second breach to
be made by this Court's action. That a third, and a fourth, and still others will be attempted, we
may be sure. For just as Cochran v. Louisiana State Board of Education, 281 U.S. 370 , 50 S.Ct.
335, has opened the way by oblique ruling3 for this decision, so will the two make wider the
breach for a third. Thus with time the most solid freedom steadily gives way before continuing
corrosive decision.
This case forces us to determine squarely for the first time4 what was 'an establishment of
religion' in the First Amendment's conception; and by that measure to decide whether New
Jersey's action violates its command. The facts may be stated shortly, to give setting and color
to the constitutional problem.
By statute New Jersey has authorized local boards of education to provide for the transportation
of children 'to and from school other than a public school' except one [330 U.S. 1, 30] operated
for profit wholly or in part over established public school routes, or by other means when the
child lives 'remote from any school.' 5 The school board of Ewing Township has provided by
resolution for 'the transportation of pupils of Ewing to the Trenton and Pennington High Schools
and Catholic Schools by way of public carrier. ...'6
Named parents have paid the cost of public conveyance of their children from their homes in
Ewing to three public high schools and four parochial schools outside the
district. 7 Semiannually the Board has reimbursed the parents from public school funds raised by
general taxation. Religion is taught as part of the curriculum in each [330 U.S. 1, 31] of the four
private schools, as appears affirmatively by the testimony of the superintendent of parochial
schools in the Diocese of Trenton.
The Court of Errors and Appeals of New Jersey, reversing the Supreme Court's decision, 132
N.J.L. 98, 39 A.2d 75, has held the Ewing board's action not in contravention of the state
constitution or statutes or of the Federal Constitution. 133 N.J.L. 350, 44 A.2d 333. We have to
consider only whether this ruling accords with the prohibition of the First Amendment implied in
the due process clause of the Fourteenth.
I.
Not simply an established church, but any law respecting an establishment of religion is forbidd
n. The Amendment was broadly but not loosely phrased. It is the compact and exact summation
of its author's views formed during his long struggle for religious freedom. In Madison's own
words characterizing Jefferson's Bill for Establishing Religious Freedom, the guaranty he put in
our national charter, like the bill he piloted through the Virginia Assembly, was 'a Model of
technical precision, and perspicuous brevity.' 8 Madison could not have confused 'church' and
'religion,' or 'an established church' and 'an establishment or religion.'
The Amendment's purpose was not to strike merely at the official establishment of a single sect,
creed or religion, outlawing only a formal relation such as had prevailed in England and some of
the colonies. Necessarily it was to uproot all such relationships. But the object was broader than
separating church and state in this narrow sense. It was to create a complete and permanent
separation of the [330 U.S. 1, 32] spheres of religious activity and civil authority by
comprehensively forbidding every form of public aid or support for religion. In proof the
Amendment's wording and history unite with this Court's consistent utterances whenever
attention has been fixed directly upon the question.
'Religion' appears only once in the Amendment. But the word governs two prohibitions and
governs them alike. It does not have two meanings, one narrow to forbid 'an establishment' and
another, much broader, for securing 'the free exercise thereof.' 'Thereof' brings down 'religion'
with its entire and exact content, no more and no less, from the first into the second guaranty, so
that Congress and now the states are as broadly restricted concerning the one as they are
regarding the other.
No one would claim today that the Amendment is constricted, in 'prohibiting the free exercise' of
religion, to securing the free exercise of some formal or creedal observance, of one sect or of
many. It secures all forms of religious expression, creedal, sectarian or nonsectarian wherever
and however taking place, except conduct which trenches upon the like freedoms of others or
clearly and presently endangers the community's good order and security. 9 For the protective
purposes of this phase of the basic freedom street preaching, oral or by distribution of [330 U.S.
1, 33] literature, has been given 'the same high estate under the First Amendment as ...
worship in the churches and preaching from the pulpits.' 10 And on this basis parents have been
held entitled to send their children to private, religious schools. Pierce v. Society of Sisters, 268
U.S. 510 , 45 S.Ct. 571, 39 A.L.R. 468. Accordingly, daily religious education commingled with
secular is 'religion' within the guaranty's comprehensive scope. So are religious training and
teaching in whatever form. The word connotes the broadest content, determined not by the form
or formality of the teaching or where it occurs, but by its essential nature regardless of those
details.
'Religion' has the same broad significance in the twin prohibition concerning 'an establishment.'
The Amendment was not duplicitous. 'Religion' and 'establishment' were not used in any formal
or technical sense. The prohibition broadly forbids state support, financial or other, of religion in
any guise, form or degree. It outlaws all use of public funds for religious purposes.
II.
No provision of the Constitution is more closely tied to or given content by its generating history
than the religious clause of the First Amendment. It is at once the refined product and the terse
summation of that history. The history includes not only Madison's authorship and the
proceedings before the First Congress, but also the long and intensive struggle for religious
freedom in America, more especially in Virginia,11 of which the Amend- [330 U.S. 1, 34] ment
was the direct culmination. 12 In the documents of the times, particularly of Madison, who was
leader in the Virginia struggle before he became the Amendment's sponsor, but also in the
writings of Jefferson and others and in the issues which engendered them is to be found
irrefutable confirmation of the Amendment's sweeping content.
For Madison, as also for Jefferson, religious freedom was the crux of the struggle for freedom in
general. Remonstrance, Par. 15, Appendix hereto. Madison was coauthor with George Mason of
the religious clause in Virginia's great Declaration of Rights of 1776. He is credited with changing
it from a mere statement of the principle of tolerance to the first official legislative
pronouncement that freedom of conscience and religion are inherent rights of the
individual. 13 He sought also to have the Declara- [330 U.S. 1, 35] tion expressly condemn the
existing Virginia establishment. 14 But the forces supporting it were then too strong.
Accordingly Madison yielded on this phase but not for long. At once he resumed the fight,
continuing it before succeeding legislative sessions. As a member of the General Assembly in
1779 he threw his full weight behind Jefferson's historic Bill for Establishing Religious Freedom.
That bill was a prime phase of Jefferson's broad program of democratic reform undertaken on
his return from the Continental Congress in 1776 and submitted for the General Assembly's
consideration in 1779 as his proposed revised Virginia code. 15 With Jefferson's departure for
Europe in 1784, Madison became the Bill's prime [330 U.S. 1, 36] sponser. 16 Enactment failed
in successive legislatures from its introduction in June 1779, until its adoption in January, 1786.
But during all this time the fight for religious freedom moved forward in Virginia on various fronts
with growing intensity. Madison led throughout, against Patrick Henry's powerful opposing
leadership until Henry was elected governor in November, 1784.
The climax came in the legislative struggle of 1784-1785 over the Assessment Bill. See
Supplemental Appendix hereto. This was nothing more nor less than a taxing measure for the
support of religion, designed to revive the payment of tithes suspended since 1777. So long as it
singled out a particular sect for preference it incurred the active and general hostility of
dissentient groups. It was broadened to include them, with the result that some subsided
temporarily in their opposition. 17 As altered, the bill gave to each taxpayer the privilege of
designating which church should receive his share of the tax. In default of designation the
legislature applied it to pious uses. 18 But what is of the utmost significance here, 'in [330 U.S.
1, 37] its final form the bill left the taxpayer the option of giving his tax to education.' 19
Madison was unyielding at all times, opposing with all his vigor the general and
nondiscriminatory as he had the earlier particular and discriminatory assessments proposed.
The modified Assessment Bill passed second reading in December, 1784, and was all but
enacted. Madison and his followers, however, maneuvered deferment of final consideration until
November, 1785. And before the Assembly reconvened in the fall he issued his historic
Memorial and Remonstrance. 20
This is Madison's complete, though not his only, interpretation of religious liberty. 21 It is a
broadside attack upon all forms of 'establishment' of religion, both general and particular,
nondiscriminatory or selective. Reflecting not only the many legislative conflicts over the
Assessment Bill and the Bill for Establishing Religious Freedom but also, for example, the
struggles for religious incorporations and the continued maintenance of the glebes, the
Remonstrance is at once the most concise and the most accurate statement of the views of the
First Amendment's author concerning what is 'an establishment of religion.' Because it behooves
us in the dimming distance of time not [330 U.S. 1, 38] to lose sight of what he and his
coworkers had in mind when, by a single sweeping stroke of the pen, they forbade an
establishment of religion and secured its free exercise, the text of the Remonstrance is
appended at the end of this opinion for its wider current reference, together with a copy of the bill
against which it was directed.
The Remonstrance, stirring up a storm of popular protest, killed the Assessment Bill. 22 It
collapsed in committee shortly before Christmas, 1785. With this, the way was cleared at last for
enactment of Jefferson's Bill for Establishing Religious Freedom. Madison promptly drove it
through in January of 1786, seven years from the time it was first introduced. This dual victory
substantially ended the fight over establishments, settling the issue against them. See note 33.
The next year Madison became a member of the Constitutional Convention. Its work done, he
fought valiantly to secure the ratification of its great product in Virginia as elsewhere, and
nowhere else more effectively. 23Madison was certain in his own mind that under the
Constitution 'there is not a shadow of right in the general government to intermeddle with
religion'24 and that 'this subject is, for the honor of America, perfectly free and [330 U.S. 1,
39] unshackled. The Government has no jurisdiction over it. . . .'25 Nevertheless he pledged
that he would work for a Bill of Rights, including a specific guaranty of religious freedom, and
Virginia, ith other states, ratified the Constitution on this assurance. 26
Ratification thus accomplished, Madison was sent to the first Congress. There he went at once
about performing his pledge to establish freedom for the nation as he had done in Virginia.
Within a little more than three years from his legislative victory at home he had proposed and
secured the submission and ratification of the First Amendment as the first article of our Bill of
Rights. 27
All the great instruments of the Virginia struggle for religious liberty thus became warp and woof
of our constitutional tradition, not simply by the course of history, but by the common unifying
force of Madison's life, thought and sponsorship. He epitomized the whole of that tradition in the
Amendment's compact, but nonetheless comprehensive, phrasing.
As the Remonstrance discloses throughout, Madison opposed every form and degree of official
relation between religion and civil authority. For him religion was a wholly private matter beyond
the scope of civil power [330 U.S. 1, 40] either to restrain or to support. 28 Denial or
abridgment of religious freedom was a violation of rights both of conscience and of natural
equality. State aid was no less obnoxious or destructive to freedom and to religion itself than
other forms of state interference. 'Establishment' and 'free exercise' were correlative and
coextensive ideas, representing only different facets of the single great and fundamental
freedom. The Remonstrance, following the Virginia statute's example, referred to the history of
religious conflicts and the effects of all sorts of establishments, current and historical, to
suppress religion's free exercise. With Jefferson, Madison believed that to tolerate any fragment
of establishment would be by so much to perpetuate restraint upon that freedom. Hence he
sought to tear out the institution not partially but root and branch, and to bar its return forever.
In no phase was he more unrelentingly absolute than in opposing state support or aid by
taxation. Not even 'three pence' contribution was thus to be exacted from any citizen for such a
purpose. Remonstrance, Par. 3.29[330 U.S. 1, 41] Tithes had been the life blood of
establishment before and after other compulsions disappeared. Madison and his coworkers
made no exceptions or abridgments to the complete separation they created. Their objection
was not to small tithes. It was to any tithes whatsoever. 'If it were lawful to impose a small tax for
religion the admission would pave the way for oppressive levies.' 30 Not the amount but 'the
principle of assessment was wrong.' And the principle was as much to prevent 'the interference
of law in religion' as to restrain religious intervention in political matters. 31 In this field the
authors of our freedom would not tolerate 'the first experiment on our liberties' or 'wait till
usurped power had strengthened itself by exercise, and entangled the question in precedents.'
Remonstrance, Par. 3. Nor should we.
In view of this history no further proof is needed that the Amendment forbids any appropriation,
large or small, from public funds to aid or support any and all religious exercises. But if more
were called for, the debates in the First Congress and this Court's consistent expressions,
whenever it has touched on the matter directly,32 supply it. [330 U.S. 1, 42] By contrast with
the Virginia history, the congressional debates on consideration of the Amendment reveal only
sparse discussion, reflecting the fact that the essential issues had been settled. 33 Indeed the
matter had become so well understood as to have been taken for granted in all but formal
phrasing. Hence, the only enlightening reference shows concern, not to preserve any power to
use public funds in aid of religion, but to prevent the Amendment from outlawing private gifts
inadvertently by virtue of the breadth of its wording. 34 In the [330 U.S. 1, 43] margin are noted
also the principal decisions in which expressions of this Court confirm the Amendment's broad
prohibition. 35 [330 U.S. 1, 44] III.
Compulsory attendance upon religious exercises went out early in the process of separating
church and state, together with forced observance of religious forms and ceremonies. 36 Test
oaths and religious qualification for office followed later. 37 These things none devoted to our
great tradition of religious liberty would think of bringing back. Hence today, apart from efforts to
inject religious training or exercises and sectarian issues into the public schools, the only serious
surviving threat to maintaining that complete and permanent separation of religion and civil
power which the First Amendment commands is through use of the taxing power to support
religion, religious establishments, or establishments having a religious foundation whatever their
form or special religious function.
Does New Jersey's action furnish support for religion by use of the taxing power? Certainly it
does, if the test remains undiluted as Jefferson and Madison made it, that money taken by
taxation from one is not to be used or given to support another's religious training or belief, or
indeed one's own. 38 Today as then the furnishing of 'con- [330 U.S. 1, 45] tributions of money
for the propagation of opinions which he disbelieves' is the forbidden exaction; and the
prohibition is absolute for whatever measure brings that consequence and whatever mount may
be sought or given to that end.
The funds used here were raised by taxation. The Court does not dispute nor could it that their
use does in fact give aid and encouragement to religious instruction. It only concludes that this
aid is not 'support' in law. But Madison and Jefferson were concerned with aid and support in
fact not as a legal conclusion 'entangled in precedents.' Remonstrance, Par. 3. Here parents pay
money to send their children to parochial schools and funds raised by taxation are used to
reimburse them. This not only helps the children to get to school and the parents to send them. It
aids them in a substantial way to get the very thing which they are sent to the particular school to
secure, namely, religious training and teaching.
Believers of all faiths, and others who do not express their feeling toward ultimate issues of
existence in any creedal form, pay the New Jersey tax. When the money so raised is used to
pay for transportation to religious schools, the Catholic taxpayer to the extent of his
proportionate share pays for the transportation of Lutheran, Jewish and otherwise religiously
affiliated children to receive their non-Catholic religious instruction. Their parents likewise pay
proportionately for the transportation of Catholic children to receive Catholic instruction. Each
thus contributes to 'the propagation of opinions which he disbelieves' in so far as their religious
differ, as do others who accept no creed without regard to those differences. Each [330 U.S. 1,
46] thus pays taxes also to support the teaching of his own religion, an exaction equally
forbidden since it denies 'the comfortable liberty' of giving one's contribution to the particular
agency of instruction he approves. 39
New Jersey's action therefore exactly fits the type of exaction and the kind of evil at which
Madison and Jefferson struck. Under the test they framed it cannot be said that the cost of
transportation is no part of the cost of education or of the religious instruction given. That it is a
substantial and a necessary element is shown most plainly by the continuing and increasing
demand for the state to assume it. Nor is there pretense that it relates only to the secular
instruction given in religious schools or that any attempt is or could be made toward allocating
proportional shares as between the secular and the religious instruction. It is precisely because
th instruction is religious and relates to a particular faith, whether one or another, that parents
send their children to religious schools under the Pierce doctrine. And the very purpose of the
state's contribution is to defray the cost of conveying the pupil to the place where he will receive
not simply secular, but also and primarily religious, teaching and guidance.
Indeed the view is sincerely avowed by many of various faiths,40 that the basic purpose of all
education is or should be religious, that the secular cannot be and should not be separated from
the religious phase and emphasis. Hence, [330 U.S. 1, 47] the inadequacy of public or secular
education and the necessity for sending the child to a school where religion is taught. But
whatever may be the philosophy or its justification, there is undeniably an admixture of religious
with secular teaching in all such institutions. That is the very reason for their being. Certainly for
purposes of constitutionality we cannot contradict the whole basis of the ethical and educational
convictions of people who believe in religious schooling.
Yet this very admixture is what was disestablished when the First Amendment forbade 'an
establishment of religion.' Commingling the religious with the secular teaching does not divest
the whole of its religious permeation and emphasis or make them of minor part, if proportion
were material. Indeed, on any other view, the constitutional prohibition always could be brought
to naught by adding a modicum of the secular.
An appropriation from the public treasury to pay the cost of transportation to Sunday school, to
weekday special classes at the church or parish house, or to the meetings of various young
people's religious societies, such as the Y.M.C.A., the Y.M.C.A., the Y.M.H.A., the Epworth
League, could not withstand the constitutional attack. This would be true, whether or not secular
activities were mixed with the religious. If such an appropriation could not stand, then it is hard to
see how one becomes valid for the same thing upon the more extended scale of daily
instruction. Surely constitutionality does not turn on where or how often the mixed teaching
occurs.
Finally, transportation, where it is needed, is as essential to education as any other element. Its
cost is as much a part of the total expense, except at times in amount, as the cost of textbooks,
of school lunches, of athletic equipment, of writing and other materials; indeed of all other [330
U.S. 1, 48] items composing the total burden. Now as always the core of the educational
process is the teacher-pupil relationship. Without this the richest equipment and facilities would
go for naught. See Judd v. Board of Education, 278 N.Y. 200, 212, 15 N.E.2d 576, 118 A.L.R.
789. But the proverbial Mark Hopkins conception no longer suffices for the country's
requirements. Without buildings, without equipment, without library, textbooks and other
materials, and without transportation to bring teacher and pupil together in such an effective
teaching environment, there can be not even the skeleton of what our times require. Hardly can
it be maintained that transportation is the least essential of these items, or that it does not in fact
aid, encourage, sustain and support, just as they do, the very process which is its purpose to
accomplish. No less essential is it, or the payment of its cost, than the very teaching in the
classroom or payment of the teacher's sustenance. Many types of equipment, now considered
essential, better could be done without.
For me, therefore, the feat is impossible to select so indispensable an item from the composite
of total costs, and characterize it as not aiding, contributing to, promoting or sustaining the
propagation of beliefs which it is the very end of all to bring about. Unless this can be
maintained, and the Court does not maintain it, the aid thus given is outlawed. Payment of
transportation is no more, nor is it any the less essential to education, whether religious or
secular, than payment for tuitions, for teachers' salaries, for buildings, equipment and necessary
materials. Nor is it any the less directly related, in a school giving religious instruction, to the
primary religious objective all those essential items of cost are intended to achieve. No rational
line can be drawn between payment for such larger, but not more necessary, items and payment
for transportation. The only line that can be so drawn is one between more dollars and less.
Certainly in this [330 U.S. 1, 49] realm such a line can be no valid constitutional measure.
Murdock v. Pennsylvania, 319 U.S. 105 , 63 S.Ct. 870, 146 A.L.R. 81; Thomas v. Collins, 323
U.S. 516 , 65 S.Ct. 315. 41 Now, as in Madison's time, not the amount but the principle of
assessment is wrong. Remonstrance, Par. 3.
IV.
But we are told that the New Jersey statute is valid in its present application because the
appropriation is for a public, not a private purpose, namely, the promotion of education, and the
majority accept this idea in the conclusion that all we have here is 'public welfare legislation.' If
that is true and the Amendment's force can be thus destroyed, what has been said becomes all
the more pertinent. For then there could be no possible objection to more extensive support of
religious education by New Jersey.
If the fact alone be determinative that religious schools are engaged in education, thus
promoting the general and individual welfare, together with the legislature's decision that the
payment of public moneys for their aid makes their work a public function, then I can see no
possible basis, except one of dubious legislative policy, for the state's refusal to make full
appropriation for support of private, religious schools, just as is done for public [330 U.S. 1,
50] instruction. There could not be, on that basis, valid constitutional objection. 42
Of course paying the cost of transportation promotes the general cause of education and the
welfare of the individual. So does paying all other items of educational expense. And obviously,
as the majority say, it is much too late to urge that legislation designed to facilitate the
opportunities of children to secure a secular education serves no public purpose. Our nationwide
system of public education rests on the contrary view, as do all grants in aid of education, public
or private, which is not religious in character.
These things are beside the real question. They have no possible materiality except to obscure
the all-pervading inescapable issue. Cf. Cochran v. Louisiana State Board of Education, supra.
Stripped of its religious phase, the case presents no substantial federal question. Id. The public
function argument, by casting the issue in terms of promoting the general cause of education
and the welfare of the individual, ignores the religious factor and its essential connection with the
transportation, thereby leaving out the only vital element in the case. So of course do the 'public
welfare' and 'social legislation' ideas, for they come to the same thing. [330 U.S. 1, 51] We
have here then one substantial issue, not two. To say that New Jersey's appropriation and her
use of the power of taxation for raising the funds appropriated are not for public purposes but are
for private ends, is to say that they are for the support of religion and religious teaching.
Conversely, to say that they are for public purposes is to say that they are not for religious ones.
This is precisely for the reason that education which includes religious training and teaching, and
its support, have been made matters of private right and function not public, by the very terms of
the First Amendment. That is the effect not only in its guaranty of religion's free exercise, but
also in the prohibition of establishments. It was on this basis of the private character of the
function of religious education that this Court held parents entitled to send their children to
private, religious schools. Pierce v. Society of Sisters, supra. Now it declares in effect that the
appropriation of public funds to defray part of the cost of attending those schools is for a public
purpose. If so, I do not understand why the state cannot go father or why this case approaches
the verge of its power.
In truth this view contradicts the whole purpose and effect of the First Amendment as heretofore
conceived. The 'public function'-'public welfare'-' social legislation' argument seeks in Madison's
words, to 'employ Religion (that is, here, religious education) as an engine of Civil policy.'
Remonstrance, Par. 5. It is of one piece with the Assessment Bill's preamble, although with the
vital difference that it wholly ignores what that preamble explicitly states. 43 [330 U.S. 1,
52] Our constitutional policy is exactly the opposite. It does not deny the value or the necessity
for religious training, teaching or observance. Rather it secures the r free exercise. But to that
end it does deny that the state can undertake or sustain them in any form or degree. For this
reason the sphere of religious activity, ad distinguished from the secular intellectual liberties, has
been given the twofold protection and, as the state cannot forbid, neither can it perform or aid in
performing the religious function. The dual prohibition makes that function altogether private. It
cannot be made a public one by legislative act. This was the very heart of Madison's
Remonstrance, as it is of the Amendment itself.
It is not because religious teaching does not promote the public or the individual's welfare, but
because neither is furthered when the state promotes religious education, that the Constitution
forbids it to do so. Both legislatures and courts are bound by that distinction. In failure to observe
it lies the fallacy of the 'public function'-'social legislation' argument, a fallacy facilitated by easy
transference of the argument's basing from due process unrelated to any religious aspect to the
First Amendment.
By no declaration that a gift of public money to religious uses will promote the general or
individual welfare, or the cause of education generally, can legislative bodies overcome the
Amendment's bar. Nor may the courts sustain their attempts to do so by finding such
consequences for appropriations which in fact give aid to or promote religious uses. Cf. Norris v.
Alabama, 294 U.S. 587, 590 , 55 S.Ct. 579, 580; Hooven & Allison Co. v. Evatt, 324 U.S. 652,
659 , 65 S.Ct. 870, 874; Akins v. Texas, 325 U.S. 398, 402 , 65 S.Ct. 1276, 1278. Legislatures
are free to make, [330 U.S. 1, 53] and courts to sustain, appropriations only when it can be
found that in fact they do not aid, promote, encourage or sustain religious teaching or
observances, be the amount large or small. No such finding has been or could be made in this
case. The Amendment has removed this form of promoting the public welfare from legislative
and judicial competence to make a public function. It is exclusively a private affair.
The reasons underlying the Amendment's policy have not vanished with time or diminished in
force. Now as when it was adopted the price of religious freedom is double. It is that the church
and religion shall live both within and upon that freedom. There cannot be freedom of religion,
safeguarded by the state, and intervention by the church or its agencies in the state's domain or
dependency on its largesse. Madison's Remonstrance, Par. 6, 8.44 The great condition of
religious liberty is that it be maintained free from sustenance, as also from other interferences,
by the state. For when it comes to rest upon that secular foundation it vanishes with the resting.
Id., Par. 7, 8.45 Public money devoted to payment of religious costs, educational or other, brings
the quest for more. It brings too the struggle of sect against sect for the larger share or for any.
Here one by numbers alone will benefit most, there another. That is precisely the history of
societies which have had an established religion and dissident [330 U.S. 1, 54] groups. Id., Par.
8, 11. It is the very thing Jefferson and Madison experienced and sought to guard against,
whether in its blunt or in its more screened forms. Ibid. The end of such strife cannot be other
than to destroy the cherished liberty. The dominating group will achieve the dominant benefit; or V.
all will embroil the state in their dissensions. Id., Par. 11.46
No one conscious of religious values can by unsympathetic toward the burden which our
Exactly such conflicts have centered of late around providing transportation to religious schools constitutional separation puts on parents who desire religious instruction mixed with secular for
from public funds. 47 The issue and the dissension work typically, in Madison's phrase, to their children. They pay taxes for others' children's education, at the same time the added cost of
'destroy that moderation and harmony which the forbearance of our laws to intermeddle with instruction for their own. Nor can one happily see benefits denied to children which others
Religion, has produced amongst its several sects.' Id., Par. 11. This occurs, as he well knew receive, because in conscience they or their parents for them desire a different kind of training
over measures [330 U.S. 1, 55] at the very threshold of departure from the principle. Id., Par. 3, others do not demand.
9, 11.
But if those feelings should prevail, there would be an end to our historic constitutional policy
In these conflicts wherever success has been obtained it has been upon the contention that by and command. No more unjust or discriminatory in fact is it to deny attendants at religious
providing the transportation the general cause of education, the general welfare, and the welfare schools the cost of their transportation than it is to deny them tuitions, sustenance for their
of the individual will be forwarded; hence that the matter lies within the realm of public function, teachers, or any other educational expense which others receive at public cost. Hardship in fact
for legislative determination. 48State courts have divided upon the issue, some taking the view there is which none can blink. But, for assuring to those who undergo it the greater, the most
that only the individual, others that the institution receives the benefit. 49 A few have recognized comprehensive freedom, it is one written by design and firm intent into our basic law.
that this dichotomy is false, that both in fact are aided. 50 [330 U.S. 1, 56] The majority here
does not accept in terms any of those views. But neither does it deny that the individual or the Of course discrimination in the legal sense does not exist. The child attending the religious
school, or indeed both, are benefited directly and substantially. 51 To do so would cut the school has the same right as any other to attend the public school. But he foregoes exercising it
ground from under the public function-social legislation thesis. On the contrary, the opinion because the same guaranty which assures this freedom forbids the public school or any agency
concedes that the children are aided by being helped to get to the religious schooling. By of the [330 U.S. 1, 59] state to give or aid him in securing the religious instruction he seeks.
converse necessary implication as well as by the absence of express denial, it must be taken to
concede also that the school is helped to reach the child with its religious teaching. The religious
Were he to accept the common school, he would be the first to protest the teaching there of any
enterprise is common to both, as is the interest in having transportation for its religious purposes
creed or faith not his own. And it is precisely for the reason that their atmosphere is wholly
provided.
secular that children are not sent to public schools under the Pierce doctrine. But that is a
constitutional necessity, because we have staked the very existence of our country on the faith
Notwithstanding the recognition that this two-way aid is given and the absence of any denial that that complete separation between the state and religion is best for the state and best for religion.
religious teaching is thus furthered, the Court concludes that the aid so given is not 'support' of Remonstrance, Par. 8, 12.
religion. It is rather only support of education as such, without reference to its religious content,
and thus becomes public welfare legislation. To this elision of the religious element from the
That policy necessarily entails hardship upon persons who forego the right to educational
case is added gloss in two respects, one that the aid extended partakes of the nature of a safety
advantages the state can supply in order to secure others it is precluded from giving. Indeed this
measure, the other that failure to provide it would make the state unneutral in religious matters,
may hamper the parent and the child forced by conscience to that choice. But it does not make
discriminating against or hampering such children concerning public benefits all others
the state unneutral to withhold what the Constitution forbids it to give. On the contrary it is only
receive. [330 U.S. 1, 57] As will be noted, the one gloss is contradicted by the facts of record
by observing the prohibition rigidly that the state can maintain its neutrality and avoid
and the other is of whole cloth with the 'public function' argument's excision of the religious
partisanship in the dissensions inevitable when sect opposes sect over demands for public
factor. 52 But most important is that this approach, if valid, supplies a ready method for nullifying
moneys to further religious education, teaching or training in any form or degree, directly or
the Amendment's guaranty, not only for this case and others involving small grants in aid for
indirectly. Like St. Paul's freedom, religious liberty with a great price must be bought. And for
religious education, but equally for larger ones. The only thing needed will be for the Court again
those who exercise it most fully, by insisting upon religious education for their children mixed
to transplant the 'public welfare-public function' view from its proper nonreligious due process
with secular, by the terms of our Constitution the price is greater than for others.
bearing to First Amendment application, holding that religious education is not 'supported'
though it may be aided by the appropriation, and that the cause of education generally is
furthered by helping the pupil to secure that type of training. The problem then cannot be cast in terms of legal discrimination or its absence. This would be
true, even though the state in giving aid should treat all religious instruction al ke. Thus, if the
present statute and its application were shown to apply equally to all religious schools [330 U.S.
This is not therefore just a little case over bus fares. In paraphrase of Madison, distant as it may
1, 60] of whatever faith,55 yet in the light of our tradition it could not stand. For then the
be in its present form from a complete establishment of religion, it differs from it only in degree;
adherent of one creed still would pay for the support of another, the childless taxpayer with
and is the first step in that direction. Id., Par. 9.53 Today as in his time 'the same authority which
others more fortunate. Then too there would seem to be no bar to making appropriations for
can force a citizen to contribute three pence only ... for the support of any one religious
transportation and other expenses of children attending public or other secular schools, after
establishment, may force him' to pay more; or 'to conform to any other establishment in all cases
hours in separate places and classes for their exclusively religious instruction. The person who
whatsoever.' And n w, as then, 'either ... we must say, that the will of the Legislature is the only
embraches no creed also would be forced to pay for teaching what he does not believe. Again, it
measure of their authority; and that in the plenitude of this authority, they may sweep away all
was the furnishing of 'contributions of money for the propagation of opinions which he
our fundamental rights; or, that they are bound to leave this particular right untouched and
disbelieves' that the fathers outlawed. That consequence and effect are not removed by
sacred.' Remonstrance, Par. 15.
multiplying to all-inclusiveness the sects for which support is exacted. The Constitution requires,
not comprehensive identification of state with religion, but complete separation.
The realm of religious training and belief remains, as the Amendment made it, the kingdom of
the individual[330 U.S. 1, 58] man and his God. It should be kept inviolately private, not
VI.
'entangled ... in precedents'54 or confounded with what legislatures legitimately may take over
into the public domain.
Short treatment will dispose of what remains. Whatever might be said of some other application No. 468
of New Jersey's statute, the one made here has no semblance of bearing as a safety measure
or, indeed, for securing expeditious conveyance. The transportation supplied is by public Argued April 3, 1962
conveyance, subject to all the hazards and delays of the highway and the streets incurred by the
public generally in going about its multifarious business.
Decided June 25, 1962

Nor is the case comparable to one of furnishing fire or police protection, or access to public
370 U.S. 421
highways. These things are matters of common right, part of the general [330 U.S. 1, 61] need
for safety. 56 Certainly the fire department must not stand idly by while the church burns. Nor is
this reason why the state should pay the expense of transportation or other items of the cost of CERTIORARI TO THE COURT OF APPEALS OF NEW YORK
religious education. 57
Syllabus
Needless to add, we have no such case as Green v. Frazie , 253 U.S. 233 , 40 S.Ct. 499, or
Carmichael v. Southern Coal Co., 301 U.S. 495 , 57 S.Ct. 868, 109 A.L.R. 1327, which dealt Because of the prohibition of the First Amendment against the enactment of any law "respecting
with matters wholly unrelated to the First Amendment, involving only situations where the 'public an establishment of religion," which is made applicable to the States by the Fourteenth
function' issue was determinative. Amendment, state officials may not compose an official state prayer and require that it be recited
in the public schools of the State at the beginning of each school day -- even if the prayer is
I have chosen to place my dissent upon the broad ground I think decisive, though strictly denominationally neutral and pupils who wish to do so may remain silent or be excused from the
speaking the case might be decided on narrower issues. The New Jersey statute might be held
room while the prayer is being recited. Pp. 370 U. S. 422-436.
invalid on its face for the exclusion of chil- [330 U.S. 1, 62] dren who attend private, profit-
making schools. 58 I cannot assume, as does the majority, that the New Jersey courts would
write off this explicit limitation from the statute. Moreover, the resolution by which the statute was 10 N.Y.2d 174, 176 N.E.2d 579, reversed.
applied expressly limits its benefits to students of public and Catholic schools. 59 There is no
showing that there are no other private or religious schools in this populous district. 60I do not Page 370 U. S. 422
think it can be assumed there were none. 61 But in the view I have taken, it is unnecessary to
limit grounding to these matters. [330 U.S. 1, 63] Two great drives are constantly in motion to MR. JUSTICE BLACK delivered the opinion of the Court.
abridge, in the name of education, the complete division of religion and civil authority which our
forefathers made. One is to introduce religious education and observances into the public
The respondent Board of Education of Union Free School District No. 9, New Hyde Park, New
schools. The other, to obtain public funds for the aid and support of various private religious
schools. See Johnson, The Legal Status of Church-State Relationships in the United States York, acting in its official capacity under state law, directed the School District's principal to
(1934); Thayer, Religion in Public Education (1947); Note (1941) 50 Yale L.J. 917. In my opinion cause the following prayer to be said aloud by each class in the presence of a teacher at the
both avenues were closed by the Constitution. Neither should be opened by this Court. The beginning of each school day:
matter is not one of quantity, to be measured by the amount of money expended. Now as in
Madison's day it is one of principle, to keep separate the separate spheres as the First "Almighty God, we acknowledge our dependence upon Thee, and we beg Thy blessings upon
Amendment drew them; to prevent the first experiment upon our liberties; and to keep the us, our parents, our teachers and our Country."
question from becoming entangled in corrosive precedents. We should not be less strict to keep
strong and untarnished the one side of the shield of religious freedom than we have been of the
This daily procedure was adopted on the recommendation of the State Board of Regents, a
other.
governmental agency created by the State Constitution to which the New York Legislature has
The judgment should be reversed. granted broad supervisory, executive, and

Page 370 U. S. 423

legislative powers over the State's public school system. [Footnote 1] These state officials
composed the prayer which they recommended and published as a part of their "Statement on
Moral and Spiritual Training in the Schools," saying:

"We believe that this Statement will be subscribed to by all men and women of good will, and we
call upon all of them to aid in giving life to our program."
U.S. Supreme Court
Shortly after the practice of reciting the Regents' prayer was adopted by the School District, the
Engel v. Vitale, 370 U.S. 421 (1962) parents of ten pupils brought this action in a New York State Court insisting that use of this
official prayer in the public schools was contrary to the beliefs, religions, or religious practices of
Engel v. Vitale both themselves and their children. Among other things, these parents challenged the
constitutionality of both the state law authorizing the School District to direct the use of prayer in
public schools and the School District's regulation ordering the recitation of this particular prayer
on the ground that these actions of official governmental agencies violate that part of the First
Amendment of the Federal Constitution which commands that "Congress shall make no law
respecting an establishment of religion" -- a command which was "made applicable to the State
of New York by the Fourteenth Amendment of the said Constitution." The New York Court of
Appeals, over the dissents of Judges Dye and Fuld, sustained an order of the lower state courts
which had upheld the power of New York to use the Regents' prayer as a part of the daily
procedures of its public schools so long as the schools did not compel any pupil to join in the
prayer over his or his parents' objection. [Footnote 2]
Page 370 U. S. 424
We granted certiorari to review this important decision involving rights protected by the First and
Fourteenth Amendments. [Footnote 3]
We think that, by using its public school system to encourage recitation of the Regents' prayer,
the State of New York has adopted a practice wholly inconsistent with the Establishment Clause.
There can, of course, be no doubt that New York's program of daily classroom invocation of
God's blessings as prescribed in the Regents' prayer is a religious activity. It is a solemn avowal
of divine faith and supplication for the blessings of the Almighty. The nature of such a prayer has
always been
Page 370 U. S. 425
religious, none of the respondents has denied this, and the trial court expressly so found:
"The religious nature of prayer was recognized by Jefferson, and has been concurred in by
theological writers, the United States Supreme Court, and State courts and administrative
officials, including New York's Commissioner of Education. A committee of the New York
Legislature has agreed."
"The Board of Regents as amicus curiae, the respondents, and intervenors all concede the
religious nature of prayer, but seek to distinguish this prayer because it is based on our spiritual
heritage. . . . [Footnote 4]"
The petitioners contend, among other things, that the state laws requiring or permitting use of
the Regents' prayer must be struck down as a violation of the Establishment Clause because
that prayer was composed by governmental officials as a part of a governmental program to
further religious beliefs. For this reason, petitioners argue, the State's use of the Regents' prayer
in its public school system breaches the constitutional wall of separation between Church and
State. We agree with that contention, since we think that the constitutional prohibition against
laws respecting an establishment of religion must at least mean that, in this country, it is no part
of the business of government to compose official prayers for any group of the American people
to recite as a part of a religious program carried on by government.
It is a matter of history that this very practice of establishing governmentally composed prayers
for religious services was one of the reasons which caused many of our early colonists to leave
England and seek religious freedom in America. The Book of Common Prayer,
Page 370 U. S. 426
which was created under governmental direction and which was approved by Acts of Parliament
in 1548 and 1549, [Footnote 5] set out in minute detail the accepted form and content of prayer
and other religious ceremonies to be used in the established, tax supported Church of England.
[Footnote 6] The controversies over the Book and what should be its content repeatedly
threatened to disrupt the peace of that country as the accepted forms of prayer in the
established church changed with the views of the particular ruler that happened to be in control
at the time. [Footnote 7] Powerful groups representing some of the varying religious views of the
people struggled among themselves to impress their particular views upon the Government and
Page 370 U. S. 427
obtain amendments of the Book more suitable to their respective notions of how religious
services should be conducted in order that the official religious establishment would advance
their particular religious beliefs. [Footnote 8] Other groups, lacking the necessary political power
to influence the Government on the matter, decided to leave England and its established church
and seek freedom in America from England's governmentally ordained and supported religion.
It is an unfortunate fact of history that, when some of the very groups which had most
strenuously opposed the established Church of England found themselves sufficiently in control
of colonial governments in this country to write their own prayers into law, they passed laws
making their own religion the official religion of their respective colonies. [Footnote 9] Indeed, as
late as the time of the Revolutionary
Page 370 U. S. 428
War, there were established churches in at least eight of the thirteen former colonies and
established religions in at least four of the other five. [Footnote 10] But the successful Revolution
against English political domination was shortly followed by intense opposition to the practice of
establishing religion by law. This opposition crystallized rapidly into an effective political force in
Virginia, where the minority religious groups such as Presbyterians, Lutherans, Quakers and
Baptists had gained such strength that the adherents to the established Episcopal Church were
actually a minority themselves. In 1785-1786, those opposed to the established Church, led by
James Madison and Thomas Jefferson, who, though themselves not members of any of these
dissenting religious groups, opposed all religious establishments by law on grounds of principle,
obtained the enactment of the famous "Virginia Bill for Religious Liberty" by which all religious
groups were placed on an equal footing so far as the State was concerned. [Footnote 11] Similar
though less far-reaching
Page 370 U. S. 429
legislation was being considered and passed in other states. [Footnote 12]
By the time of the adoption of the Constitution, our history shows that there was a widespread
awareness among many Americans of the dangers of a union of Church and State. These
people knew, some of them from bitter personal experience, that one of the greatest dangers to
the freedom of the individual to worship in his own way lay in the Government's placing its
official stamp of approval upon one particular kind of prayer or one particular form of religious
services. They knew the anguish, hardship and bitter strife that could come when zealous
religious groups struggled with one another to obtain the Government's stamp of approval from
each King, Queen, or Protector that came to temporary power. The Constitution was intended to
avert a part of this danger by leaving the government of this country in the hands of the people,
rather than in the hands of any monarch. But this safeguard was not enough. Our Founders
were no more willing to let the content of their prayers and their privilege of praying whenever
they pleased be influenced by the ballot box than they were to let these vital matters of personal
conscience depend upon the succession of monarchs. The First Amendment was added to the
Constitution to stand as a guarantee that neither the power nor the prestige of the Federal
Government would be used to control, support or influence the kinds of prayer the American
people can say --
Page 370 U. S. 430
that the people's religions must not be subjected to the pressures of government for change
each time a new political administration is elected to office. Under that Amendment's prohibition
against governmental establishment of religion, as reinforced by the provisions of the Fourteenth
Amendment, government in this country, be it state or federal, is without power to prescribe by
law any particular form of prayer which is to be used as an official prayer in carrying on any
program of governmentally sponsored religious activity.
There can be no doubt that New York's state prayer program officially establishes the religious
beliefs embodied in the Regents' prayer. The respondents' argument to the contrary, which is
largely based upon the contention that the Regents' prayer is "nondenominational" and the fact
that the program, as modified and approved by state courts, does not require all pupils to recite
the prayer, but permits those who wish to do so to remain silent or be excused from the room,
ignores the essential nature of the program's constitutional defects. Neither the fact that the
prayer may be denominationally neutral nor the fact that its observance on the part of the
students is voluntary can serve to free it from the limitations of the Establishment Clause, as it
might from the Free Exercise Clause, of the First Amendment, both of which are operative
against the States by virtue of the Fourteenth Amendment. Although these two clauses may, in
certain instances, overlap, they forbid two quite different kinds of governmental encroachment
upon religious freedom. The Establishment Clause, unlike the Free Exercise Clause, does not
depend upon any showing of direct governmental compulsion and is violated by the enactment
of laws which establish an official religion whether those laws operate directly to coerce
nonobserving individuals or not. This is not to say, of course, that
Page 370 U. S. 431
laws officially prescribing a particular form of religious worship do not involve coercion of such
individuals. When the power, prestige and financial support of government is placed behind a
particular religious belief, the indirect coercive pressure upon religious minorities to conform to
the prevailing officially approved religion is plain. But the purposes underlying the Establishment
Clause go much further than that. Its first and most immediate purpose rested on the belief that
a union of government and religion tends to destroy government and to degrade religion. The
history of governmentally established religion, both in England and in this country, showed that
whenever government had allied itself with one particular form of religion, the inevitable result
had been that it had incurred the hatred, disrespect and even contempt of those who held
contrary beliefs. [Footnote 13] That same history showed that many people had lost their respect
for any religion that had relied upon the support of government to spread its faith. [Footnote 14]
The Establishment Clause
Page 370 U. S. 432
thus stands as an expression of principle on the part of the Founders of our Constitution that
religion is too personal, too sacred, too holy, to permit its "unhallowed perversion" by a civil
magistrate. [Footnote 15] Another purpose of the Establishment Clause rested upon an
awareness of the historical fact that governmentally established religions and religious
persecutions go hand in hand. [Footnote 16] The Founders knew that, only a few years after the
Book of Common Prayer became the only accepted form of religious services in the established
Church of England, an Act of Uniformity was passed to compel all Englishmen to attend those
services and to make it a criminal offense to conduct or attend religious gatherings of any other
kind [Footnote 17] -- a law
Page 370 U. S. 433
which was consistently flouted by dissenting religious groups in England and which contributed
to widespread persecutions of people like John Bunyan who persisted in holding "unlawful
[religious] meetings . . . to the great disturbance and distraction of the good subjects of this
kingdom. . . ." [Footnote 18] And they knew that similar persecutions had received the sanction
of law in several of the colonies in this country soon after the establishment of official religions in
those colonies. [Footnote 19] It was in large part to get completely away from this sort of
systematic religious persecution that the Founders brought into being our Nation, our
Constitution, and our Bill of Rights, with its prohibition against any governmental establishment
of religion. The New York laws officially prescribing the Regents' prayer are inconsistent both
with the purposes of the Establishment Clause and with the Establishment Clause itself.
It has been argued that to apply the Constitution in such a way as to prohibit state laws
respecting an
Page 370 U. S. 434
establishment of religious services in public schools is to indicate a hostility toward religion or
toward prayer. Nothing, of course, could be more wrong. The history of man is inseparable from
the history of religion. And perhaps it is not too much to say that, since the beginning of that
history, many people have devoutly believed that "More things are wrought by prayer than this
world dreams of." It was doubtless largely due to men who believed this that there grew up a
sentiment that caused men to leave the cross-currents of officially established state religions and
religious persecution in Europe and come to this country filled with the hope that they could find
a place in which they could pray when they pleased to the God of their faith in the language they
chose. [Footnote 20] And there were men of this same faith in the
Page 370 U. S. 435
power of prayer who led the fight for adoption of our Constitution and also for our Bill of Rights
with the very guarantees of religious freedom that forbid the sort of governmental activity which
New York has attempted here. These men knew that the First Amendment, which tried to put an
end to governmental control of religion and of prayer, was not written to destroy either. They
knew, rather, that it was written to quiet well justified fears which nearly all of them felt arising out
of an awareness that governments of the past had shackled men's tongues to make them speak
only the religious thoughts that government wanted them to speak and to pray only to the God
that government wanted them to pray to. It is neither sacrilegious nor anti-religious to say that
each separate government in this country should stay out of the business of writing or
sanctioning official prayers and leave that purely religious function to the people themselves and
to those the people choose to look to for religious guidance. [Footnote 21]
Page 370 U. S. 436

It is true that New York's establishment of its Regents' prayer as an officially approved religious
doctrine of that State does not amount to a total establishment of one particular religious sect to
the exclusion of all others -- that, indeed, the governmental endorsement of that prayer seems
relatively insignificant when compared to the governmental encroachments upon religion which
were commonplace 200 years ago. To those who may subscribe to the view that, because the
Regents' official prayer is so brief and general there can be no danger to religious freedom in its
governmental establishment, however, it may be appropriate to say in the words of James
Madison, the author of the First Amendment:

"[I]t is proper to take alarm at the first experiment on our liberties. . . . Who does not see that the
same authority which can establish Christianity, in exclusion of all other Religions, may establish
with the same ease any particular sect of Christians, in exclusion of all other Sects? That the
same authority which can force a citizen to contribute three pence only of his property for the
support of any one establishment may force him to conform to any other establishment in all
cases whatsoever? [Footnote 22]"

The judgment of the Court of Appeals of New York is reversed, and the cause remanded for
further proceedings not inconsistent with this opinion.

Reversed and remanded.

MR. JUSTICE FRANKFURTER took no part in the decision of this case.

MR. JUSTICE WHITE took no part in the consideration or decision of this case.

EN BANC

[G.R. No. 153888. July 9, 2003]

ISLAMIC DAWAH COUNCIL OF THE PHILIPPINES, INC., herein represented by PROF.

ABDULRAFIH H. SAYEDY, petitioner, vs. OFFICE OF THE EXECUTIVE SECRETARY of the
Office of the President of the Philippines, herein represented by HON. ALBERTO G.
ROMULO, Executive Secretary, and the OFFICE ON MUSLIM AFFAIRS, herein represented
by its Executive Director, HABIB MUJAHAB HASHIM, respondents.

DECISION

CORONA, J.:
Before us is a petition for prohibition filed by petitioner Islamic Dawah Council of the Philippines,
Inc. (IDCP) praying for the declaration of nullity of Executive Order (EO) 46, s. 2001 and the
prohibition of herein respondents Office of the Executive Secretary and Office of Muslim Affairs
(OMA) from implementing the subject EO.
Petitioner IDCP, a corporation that operates under Department of Social Welfare and
Development License No. SB-01-085, is a non-governmental organization that extends voluntary
services to the Filipino people, especially to Muslim communities. It claims to be a federation of
national Islamic organizations and an active member of international organizations such as the
Regional Islamic Dawah Council of Southeast Asia and the Pacific (RISEAP)[1] and The World
Assembly of Muslim Youth. The RISEAP accredited petitioner to issue halal[2] certifications in the
Philippines. Thus, among the functions petitioner carries out is to conduct seminars, orient
manufacturers on halal food and issue halal certifications to qualified products and
manufacturers.
Petitioner alleges that, on account of the actual need to certify food products as halal and also
due to halal food producers request, petitioner formulated in 1995 internal rules and procedures
based on the Quran[3] and the Sunnah[4] for the analysis of food, inspection thereof and issuance
of halal certifications. In that same year, petitioner began to issue, for a fee, certifications to
qualified products and food manufacturers. Petitioner even adopted for use on its halal
certificates a distinct sign or logo registered in the Philippine Patent Office under Patent No. 4-
2000-03664.
On October 26, 2001, respondent Office of the Executive Secretary issued EO 46[5] creating the
Philippine Halal Certification Scheme and designating respondent OMA to oversee its
implementation. Under the EO, respondent OMA has the exclusive authority to issue halal
certificates and perform other related regulatory activities.
On May 8, 2002, a news article entitled OMA Warns NGOs Issuing Illegal Halal Certification was
published in the Manila Bulletin, a newspaper of general circulation. In said article, OMA warned
Muslim consumers to buy only products with its official halal certification since those without said
certification had not been subjected to careful analysis and therefore could contain pork or its
derivatives. Respondent OMA also sent letters to food manufacturers asking them to secure the
halal certification only from OMA lest they violate EO 46 and RA 4109. [6]As a result, petitioner
lost revenues after food manufacturers stopped securing certifications from it.
Hence, this petition for prohibition.
Petitioner contends that the subject EO violates the constitutional provision on the separation of
Church and State.[7] It is unconstitutional for the government to formulate policies and guidelines
on the halal certification scheme because said scheme is a function only religious organizations,
entity or scholars can lawfully and validly perform for the Muslims. According to petitioner, a food
product becomes halal only after the performance of Islamic religious ritual and prayer. Thus,
only practicing Muslims are qualified to slaughter animals for food. A government agency like
herein respondent OMA cannot therefore perform a religious function like certifying qualified
food products as halal.
Petitioner also maintains that the respondents violated Section 10, Article III of the 1987
Constitution which provides that (n)o law impairing the obligation of contracts, shall be passed.
After the subject EO was implemented, food manufacturers with existing contracts with petitioner
ceased to obtain certifications from the latter.
Moreover, petitioner argues that the subject EO violates Sections 15 and 16 of Article XIII of the
1987 Constitution which respectively provide:
ROLE AND RIGHTS OF PEOPLES ORGANIZATIONS
Sec. 15. The State shall respect the role of independent peoples organizations to enable the
people to pursue and protect, within the democratic framework, their legitimate and collective
interests and aspirations through peaceful and lawful means.
Peoples organizations are bona fide associations of citizens with demonstrated capacity to
promote the public interest and with identifiable leadership, membership, and structure.
Sec. 16. The rights of the people and their organizations to effective and reasonable
participation at all levels of social, political, and economic decision-making shall not be
abridged. The State shall, by law, facilitate, the establishment of adequate consultation
mechanisms.
According to petitioner, the subject EO was issued with utter haste and without even consulting
Muslim peoples organizations like petitioner before it became effective.
We grant the petition.
OMA was created in 1981 through Executive Order No. 697 (EO 697) to ensure the integration
of Muslim Filipinos into the mainstream of Filipino society with due regard to their beliefs,
customs, traditions, and institutions.[8] OMA deals with the societal, legal, political and economic
concerns of the Muslim community as a national cultural community and not as a religious
group. Thus, bearing in mind the constitutional barrier between the Church and State, the latter
must make sure that OMA does not intrude into purely religious matters lest it violate the non-
establishment clause and the free exercise of religion provision found in Article III, Section 5 of
the 1987 Constitution.[9]
Freedom of religion was accorded preferred status by the framers of our fundamental law. And
this Court has consistently affirmed this preferred status, well aware that it is "designed to
protect the broadest possible liberty of conscience, to allow each man to believe as his
conscience directs, to profess his beliefs, and to live as he believes he ought to live, consistent
with the liberty of others and with the common good.[10]
Without doubt, classifying a food product as halal is a religious function because the standards
used are drawn from the Quran and Islamic beliefs. By giving OMA the exclusive power to
classify food products as halal, EO 46 encroached on the religious freedom of Muslim
organizations like herein petitioner to interpret for Filipino Muslims what food products are fit for
Muslim consumption. Also, by arrogating to itself the task of issuing halal certifications, the State
has in effect forced Muslims to accept its own interpretation of the Quran and Sunnah on halal
food.
To justify EO 46s intrusion into the subject religious activity, the Solicitor General argues that the
freedom of religion is subservient to the police power of the State. By delegating to OMA the
authority to issue halal certifications, the government allegedly seeks to protect and promote the
muslim Filipinos right to health, and to instill health consciousness in them.
We disagree.
Only the prevention of an immediate and grave danger to the security and welfare of the
community can justify the infringement of religious freedom.[11] If the government fails to show
the seriousness and immediacy of the threat, State intrusion is constitutionally unacceptable. In
a society with a democratic framework like ours, the State must minimize its interference with the
affairs of its citizens and instead allow them to exercise reasonable freedom of personal and
religious activity.
In the case at bar, we find no compelling justification for the government to deprive Muslim
organizations, like herein petitioner, of their religious right to classify a product as halal, even on
the premise that the health of Muslim Filipinos can be effectively protected by assigning to OMA
the exclusive power to issue halal certifications. The protection and promotion of the Muslim
Filipinos right to health are already provided for in existing laws and ministered to by government
agencies charged with ensuring that food products released in the market are fit for human
consumption, properly labeled and safe. Unlike EO 46, these laws do not encroach on the
religious freedom of Muslims.
their Islamic beliefs, are not fit for human intake. These are the non-secular steps put in place by
the State to ensure that the Muslim consumers right to health is protected. The halal
certifications issued by petitioner and similar organizations come forward as the official religious
approval of a food product fit for Muslim consumption.
We do not share respondents apprehension that the absence of a central administrative body to
regulate halal certifications might give rise to schemers who, for profit, will issue certifications for
products that are not actually halal. Aside from the fact that Muslim consumers can actually
verify through the labels whether a product contains non-food substances, we believe that they
are discerning enough to know who the reliable and competent certifying organizations in their
community are. Before purchasing a product, they can easily avert this perceived evil by a
diligent inquiry on the reliability of the concerned certifying organization.
WHEREFORE, the petition is GRANTED. Executive Order 46, s. 2001, is hereby declared NULL
AND VOID. Consequently, respondents are prohibited from enforcing the same.

Section 48(4) of the Administrative Code of 1987 gives to the National Meat Inspection SO ORDERED.
Commission (NMIC) of the Department of Agriculture (DOA) the power to inspect slaughtered
animals intended for human consumption to ensure the safety of the meat released in the Davide, Jr., C.J., Bellosillo, Panganiban, Ynares-Santiago, Carpio, Austria-Martinez, Carpio-
market. Another law, RA 7394, otherwise known as The Consumer Act of 1992, gives to certain Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.
government departments the duty to protect the interests of the consumer, promote his general
welfare and to establish standards of conduct for business and industry. [12] To this end, a food Puno, J., concur with the opinion of J., Vitug.
product, before its distribution to the market, is required to secure the Philippine Standard
Certification Mark after the concerned department inspects and certifies its compliance with Vitug, J., please see Separate Opinion.
quality and safety standards.[13]
Quisumbing, Sandoval-Gutierrez, J., on official leave
One such government agency designated by RA 7394 is the Bureau of Food and Drugs (BFD)
of the Department of Health (DOH). Under Article 22 of said law, BFD has the duty to
promulgate and enforce rules and regulations fixing and establishing a reasonable definition and
standard of identity, a standard of quality and a standard of fill of containers for food. The BFD
also ensures that food products released in the market are not adulterated.[14]

Furthermore, under Article 48 of RA 7394, the Department of Trade and Industry (DTI) is tasked
to protect the consumer against deceptive, unfair and unconscionable sales acts or practices as
defined in Article 50.[15] DTI also enforces compulsory labeling and fair packaging to enable the
consumer to obtain accurate information as to the nature, quality and quantity of the contents of
consumer products and to facilitate his comparison of the value of such products. [16]

With these regulatory bodies given detailed functions on how to screen and check the quality
and safety of food products, the perceived danger against the health of Muslim and non-Muslim
Filipinos alike is totally avoided. Of great help are the provisions on labeling of food products
(Articles 74 to 85)[17] of RA 7394. In fact, through these labeling provisions, the State ably
informs the consuming public of the contents of food products released in the market. Stiff
sanctions are imposed on violators of said labeling requirements.

Through the laws on food safety and quality, therefore, the State indirectly aids Muslim
consumers in differentiating food from non-food products. The NMIC guarantees that the meat
sold in the market has been thoroughly inspected and fit for consumption. Meanwhile, BFD
ensures that food products are properly categorized and have passed safety and quality
standards. Then, through the labeling provisions enforced by the DTI, Muslim consumers are
adequately apprised of the products that contain substances or ingredients that, according to

EN BANC
[G.R. No. 138570. October 10, 2000]
BAYAN (Bagong Alyansang Makabayan), a JUNK VFA MOVEMENT, BISHOP TOMAS
MILLAMENA (Iglesia Filipina Independiente), BISHOP ELMER BOLOCAN (United Church
of Christ of the Phil.), DR. REYNALDO LEGASCA, MD, KILUSANG MAMBUBUKID NG
PILIPINAS, KILUSANG MAYO UNO, GABRIELA, PROLABOR, and the PUBLIC INTEREST
LAW CENTER, petitioners, vs. EXECUTIVE SECRETARY RONALDO ZAMORA, FOREIGN
AFFAIRS SECRETARY DOMINGO SIAZON, DEFENSE SECRETARY ORLANDO
MERCADO, BRIG. GEN. ALEXANDER AGUIRRE, SENATE PRESIDENT MARCELO
FERNAN, SENATOR FRANKLIN DRILON, SENATOR BLAS OPLE, SENATOR RODOLFO
BIAZON, and SENATOR FRANCISCO TATAD, respondents.
[G.R. No. 138572. October 10, 2000]
PHILIPPINE CONSTITUTION ASSOCIATION, INC.(PHILCONSA), EXEQUIEL B. GARCIA,
AMADOGAT INCIONG, CAMILO L. SABIO, AND RAMON A. GONZALES, petitioners,
vs. HON. RONALDO B. ZAMORA, as Executive Secretary, HON. ORLANDO MERCADO, as
Secretary of National Defense, and HON. DOMINGO L. SIAZON, JR., as Secretary of
Foreign Affairs, respondents.
[G.R. No. 138587. October 10, 2000]
TEOFISTO T. GUINGONA, JR., RAUL S. ROCO, and SERGIO R. OSMEA III, petitioners,
vs. JOSEPH E. ESTRADA, RONALDO B. ZAMORA, DOMINGO L. SIAZON, JR., ORLANDO
B. MERCADO, MARCELO B. FERNAN, FRANKLIN M. DRILON, BLAS F. OPLE and
RODOLFO G. BIAZON, respondents.
[G.R. No. 138680. October 10, 2000]
INTEGRATED BAR OF THE PHILIPPINES, Represented by its National President, Jose
Aguila Grapilon, petitioners, vs. JOSEPH EJERCITO ESTRADA, in his capacity as
President, Republic of the Philippines, and HON. DOMINGO SIAZON, in his capacity as
Secretary of Foreign Affairs, respondents.
[G.R. No. 138698. October 10, 2000]
JOVITO R. SALONGA, WIGBERTO TAADA, ZENAIDA QUEZON-AVENCEA, ROLANDO
SIMBULAN, PABLITO V. SANIDAD, MA. SOCORRO I. DIOKNO, AGAPITO A. AQUINO,
JOKER P. ARROYO, FRANCISCO C. RIVERA JR., RENE A.V. SAGUISAG, KILOSBAYAN,
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.
(MABINI), petitioners, vs. THE EXECUTIVE SECRETARY, THE SECRETARY OF FOREIGN
AFFAIRS, THE SECRETARY OF NATIONAL DEFENSE, SENATE PRESIDENT MARCELO B.
FERNAN, SENATOR BLAS F. OPLE, SENATOR RODOLFO G. BIAZON, AND ALL OTHER
PERSONS ACTING THEIR CONTROL, SUPERVISION, DIRECTION, AND INSTRUCTION IN
RELATION TO THE VISITING FORCES AGREEMENT (VFA), respondents.
DECISION
BUENA, J.:
Confronting the Court for resolution in the instant consolidated petitions for certiorari and
prohibition are issues relating to, and borne by, an agreement forged in the turn of the last
century between the Republic of the Philippines and the United States of America -the Visiting
Forces Agreement.
The antecedents unfold.
On March 14, 1947, the Philippines and the United States of America forged a Military Bases The VFA, which consists of a Preamble and nine (9) Articles, provides for the mechanism for
Agreement which formalized, among others, the use of installations in the Philippine territory by regulating the circumstances and conditions under which US Armed Forces and defense
United States military personnel. To further strengthen their defense and security relationship, personnel may be present in the Philippines, and is quoted in its full text, hereunder:
the Philippines and the United States entered into a Mutual Defense Treaty on August 30, 1951.
Under the treaty, the parties agreed to respond to any external armed attack on their territory, Article I
armed forces, public vessels, and aircraft.[1]
Definitions
In view of the impending expiration of the RP-US Military Bases Agreement in 1991, the
Philippines and the United States negotiated for a possible extension of the military bases As used in this Agreement, United States personnel means United States military and civilian
agreement. On September 16, 1991, the Philippine Senate rejected the proposed RP-US Treaty personnel temporarily in the Philippines in connection with activities approved by the Philippine
of Friendship, Cooperation and Security which, in effect, would have extended the presence of Government.
US military bases in the Philippines.[2] With the expiration of the RP-US Military Bases
Agreement, the periodic military exercises conducted between the two countries were held in Within this definition:
abeyance. Notwithstanding, the defense and security relationship between the Philippines and
the United States of America continued pursuant to the Mutual Defense Treaty. 1. The term military personnel refers to military members of the United States Army, Navy,
Marine Corps, Air Force, and Coast Guard.
On July 18, 1997, the United States panel, headed by US Defense Deputy Assistant Secretary
for Asia Pacific Kurt Campbell, met with the Philippine panel, headed by Foreign Affairs 2. The term civilian personnel refers to individuals who are neither nationals of, nor ordinary
Undersecretary Rodolfo Severino Jr., to exchange notes on the complementing strategic residents in the Philippines and who are employed by the United States armed forces or who are
interests of the United States and the Philippines in the Asia-Pacific region. Both sides accompanying the United States armed forces, such as employees of the American Red Cross
discussed, among other things, the possible elements of the Visiting Forces Agreement (VFA for and the United Services Organization.
brevity). Negotiations by both panels on the VFA led to a consolidated draft text, which in turn
resulted to a final series of conferences and negotiations[3] that culminated in Manila on January Article II
12 and 13, 1998. Thereafter, then President Fidel V. Ramos approved the VFA, which was
respectively signed by public respondent Secretary Siazon and Unites States Ambassador Respect for Law
Thomas Hubbard on February 10, 1998.
It is the duty of the United States personnel to respect the laws of the Republic of the Philippines
On October 5, 1998, President Joseph E. Estrada, through respondent Secretary of Foreign and to abstain from any activity inconsistent with the spirit of this agreement, and, in particular,
Affairs, ratified the VFA.[4] from any political activity in the Philippines. The Government of the United States shall take all
measures within its authority to ensure that this is done.
On October 6, 1998, the President, acting through respondent Executive Secretary Ronaldo
Zamora, officially transmitted to the Senate of the Philippines,[5] the Instrument of Ratification, Article III
the letter of the President[6] and the VFA, for concurrence pursuant to Section 21, Article VII of
Entry and Departure
the 1987 Constitution. The Senate, in turn, referred the VFA to its Committee on Foreign
Relations, chaired by Senator Blas F. Ople, and its Committee on National Defense and
1. The Government of the Philippines shall facilitate the admission of United States personnel
Security, chaired by Senator Rodolfo G. Biazon, for their joint consideration and
and their departure from the Philippines in connection with activities covered by this agreement.
recommendation. Thereafter, joint public hearings were held by the two Committees.[7]
2. United States military personnel shall be exempt from passport and visa regulations upon
On May 3, 1999, the Committees submitted Proposed Senate Resolution No.
entering and departing the Philippines.
443[8] recommending the concurrence of the Senate to the VFA and the creation of a Legislative
Oversight Committee to oversee its implementation. Debates then ensued.
3. The following documents only, which shall be presented on demand, shall be required in
respect of United States military personnel who enter the Philippines:
On May 27, 1999, Proposed Senate Resolution No. 443 was approved by the Senate, by a two-
thirds (2/3) vote[9] of its members. Senate Resolution No. 443 was then re-numbered as Senate
(a) personal identity card issued by the appropriate United States authority showing full name,
Resolution No. 18.[10]
date of birth, rank or grade and service number (if any), branch of service and photograph;
On June 1, 1999, the VFA officially entered into force after an Exchange of Notes between
(b) individual or collective document issued by the appropriate United States authority,
respondent Secretary Siazon and United States Ambassador Hubbard.
authorizing the travel or visit and identifying the individual or group as United States military
personnel; and
(c) the commanding officer of a military aircraft or vessel shall present a declaration of health,
and when required by the cognizant representative of the Government of the Philippines, shall
conduct a quarantine inspection and will certify that the aircraft or vessel is free from
quarantinable diseases. Any quarantine inspection of United States aircraft or United States
vessels or cargoes thereon shall be conducted by the United States commanding officer in
accordance with the international health regulations as promulgated by the World Health
Organization, and mutually agreed procedures.
4. United States civilian personnel shall be exempt from visa requirements but shall present,
upon demand, valid passports upon entry and departure of the Philippines.
5. If the Government of the Philippines has requested the removal of any United States
personnel from its territory, the United States authorities shall be responsible for receiving the
person concerned within its own territory or otherwise disposing of said person outside of the
Philippines.
Article IV
Driving and Vehicle Registration
1. Philippine authorities shall accept as valid, without test or fee, a driving permit or license
issued by the appropriate United States authority to United States personnel for the operation of
military or official vehicles.
2. Vehicles owned by the Government of the United States need not be registered, but shall
have appropriate markings.
Article V
Criminal Jurisdiction
1. Subject to the provisions of this article:
(a) Philippine authorities shall have jurisdiction over United States personnel with respect to
offenses committed within the Philippines and punishable under the law of the Philippines.
(b) United States military authorities shall have the right to exercise within the Philippines all
criminal and disciplinary jurisdiction conferred on them by the military law of the United States
over United States personnel in the Philippines.
2. (a) Philippine authorities exercise exclusive jurisdiction over United States personnel with
respect to offenses, including offenses relating to the security of the Philippines, punishable
under the laws of the Philippines, but not under the laws of the United States.
(b) United States authorities exercise exclusive jurisdiction over United States personnel with
respect to offenses, including offenses relating to the security of the United States, punishable
under the laws of the United States, but not under the laws of the Philippines.
(c) For the purposes of this paragraph and paragraph 3 of this article, an offense relating to
security means:
(1) treason;
(2) sabotage, espionage or violation of any law relating to national defense.
3. In cases where the right to exercise jurisdiction is concurrent, the following rules shall apply:
(a) Philippine authorities shall have the primary right to exercise jurisdiction over all offenses
committed by United States personnel, except in cases provided for in paragraphs 1(b), 2 (b),
and 3 (b) of this Article.
(b) United States military authorities shall have the primary right to exercise jurisdiction over
United States personnel subject to the military law of the United States in relation to.
(1) offenses solely against the property or security of the United States or offenses solely against
the property or person of United States personnel; and
(2) offenses arising out of any act or omission done in performance of official duty.
(c) The authorities of either government may request the authorities of the other government to
waive their primary right to exercise jurisdiction in a particular case.
(d) Recognizing the responsibility of the United States military authorities to maintain good order
and discipline among their forces, Philippine authorities will, upon request by the United States,
waive their primary right to exercise jurisdiction except in cases of particular importance to the
Philippines. If the Government of the Philippines determines that the case is of particular
importance, it shall communicate such determination to the United States authorities within
twenty (20) days after the Philippine authorities receive the United States request.
(e) When the United States military commander determines that an offense charged by
authorities of the Philippines against United states personnel arises out of an act or omission
done in the performance of official duty, the commander will issue a certificate setting forth such
determination. This certificate will be transmitted to the appropriate authorities of the Philippines
and will constitute sufficient proof of performance of official duty for the purposes of paragraph
3(b)(2) of this Article. In those cases where the Government of the Philippines believes the
circumstances of the case require a review of the duty certificate, United States military
authorities and Philippine authorities shall consult immediately. Philippine authorities at the
highest levels may also present any information bearing on its validity. United States military
authorities shall take full account of the Philippine position. Where appropriate, United States
military authorities will take disciplinary or other action against offenders in official duty cases,
and notify the Government of the Philippines of the actions taken.
(f) If the government having the primary right does not exercise jurisdiction, it shall notify the
authorities of the other government as soon as possible.
(g) The authorities of the Philippines and the United States shall notify each other of the
disposition of all cases in which both the authorities of the Philippines and the United States
have the right to exercise jurisdiction.
4. Within the scope of their legal competence, the authorities of the Philippines and United
States shall assist each other in the arrest of United States personnel in the Philippines and in
handling them over to authorities who are to exercise jurisdiction in accordance with the
provisions of this article.
5. United States military authorities shall promptly notify Philippine authorities of the arrest or
detention of United States personnel who are subject of Philippine primary or exclusive
jurisdiction. Philippine authorities shall promptly notify United States military authorities of the
arrest or detention of any United States personnel.
6. The custody of any United States personnel over whom the Philippines is to exercise
jurisdiction shall immediately reside with United States military authorities, if they so request,
from the commission of the offense until completion of all judicial proceedings. United States
military authorities shall, upon formal notification by the Philippine authorities and without delay,
make such personnel available to those authorities in time for any investigative or judicial
proceedings relating to the offense with which the person has been charged in extraordinary
cases, the Philippine Government shall present its position to the United States Government
regarding custody, which the United States Government shall take into full account. In the event
Philippine judicial proceedings are not completed within one year, the United States shall be
relieved of any obligations under this paragraph. The one-year period will not include the time
necessary to appeal. Also, the one-year period will not include any time during which scheduled
trial procedures are delayed because United States authorities, after timely notification by
Philippine authorities to arrange for the presence of the accused, fail to do so.
7. Within the scope of their legal authority, United States and Philippine authorities shall assist
each other in the carrying out of all necessary investigation into offenses and shall cooperate in
providing for the attendance of witnesses and in the collection and production of evidence,
including seizure and, in proper cases, the delivery of objects connected with an offense.
8. When United States personnel have been tried in accordance with the provisions of this
Article and have been acquitted or have been convicted and are serving, or have served their
sentence, or have had their sentence remitted or suspended, or have been pardoned, they may
not be tried again for the same offense in the Philippines. Nothing in this paragraph, however,
shall prevent United States military authorities from trying United States personnel for any
violation of rules of discipline arising from the act or omission which constituted an offense for
which they were tried by Philippine authorities.
9. When United States personnel are detained, taken into custody, or prosecuted by Philippine
authorities, they shall be accorded all procedural safeguards established by the law of the
Philippines. At the minimum, United States personnel shall be entitled:
(a) To a prompt and speedy trial;
(b) To be informed in advance of trial of the specific charge or charges made against them and
to have reasonable time to prepare a defense;
(c) To be confronted with witnesses against them and to cross examine such witnesses;
(d) To present evidence in their defense and to have compulsory process for obtaining
witnesses;
(e) To have free and assisted legal representation of their own choice on the same basis as
nationals of the Philippines;
(f) To have the service of a competent interpreter; and
(g) To communicate promptly with and to be visited regularly by United States authorities, and to
have such authorities present at all judicial proceedings. These proceedings shall be public
unless the court, in accordance with Philippine laws, excludes persons who have no role in the
proceedings.
10. The confinement or detention by Philippine authorities of United States personnel shall be
carried out in facilities agreed on by appropriate Philippine and United States authorities. United
States Personnel serving sentences in the Philippines shall have the right to visits and material
assistance.
11. United States personnel shall be subject to trial only in Philippine courts of ordinary
jurisdiction, and shall not be subject to the jurisdiction of Philippine military or religious courts.
Article VI
Claims
1. Except for contractual arrangements, including United States foreign military sales letters of
offer and acceptance and leases of military equipment, both governments waive any and all
claims against each other for damage, loss or destruction to property of each others armed
forces or for death or injury to their military and civilian personnel arising from activities to which
this agreement applies.
2. For claims against the United States, other than contractual claims and those to which
paragraph 1 applies, the United States Government, in accordance with United States law
regarding foreign claims, will pay just and reasonable compensation in settlement of meritorious
claims for damage, loss, personal injury or death, caused by acts or omissions of United States
personnel, or otherwise incident to the non-combat activities of the United States forces.
Article VII
Importation and Exportation
1. United States Government equipment, materials, supplies, and other property imported into or
acquired in the Philippines by or on behalf of the United States armed forces in connection with
activities to which this agreement applies, shall be free of all Philippine duties, taxes and other
similar charges. Title to such property shall remain with the United States, which may remove
such property from the Philippines at any time, free from export duties, taxes, and other similar
charges. The exemptions provided in this paragraph shall also extend to any duty, tax, or other
similar charges which would otherwise be assessed upon such property after importation into, or
acquisition within, the Philippines. Such property may be removed from the Philippines, or
disposed of therein, provided that disposition of such property in the Philippines to persons or
entities not entitled to exemption from applicable taxes and duties shall be subject to payment of
such taxes, and duties and prior approval of the Philippine Government.
2. Reasonable quantities of personal baggage, personal effects, and other property for the
personal use of United States personnel may be imported into and used in the Philippines free of
all duties, taxes and other similar charges during the period of their temporary stay in the
Philippines. Transfers to persons or entities in the Philippines not entitled to import privileges
may only be made upon prior approval of the appropriate Philippine authorities including
payment by the recipient of applicable duties and taxes imposed in accordance with the laws of
the Philippines. The exportation of such property and of property acquired in the Philippines by
United States personnel shall be free of all Philippine duties, taxes, and other similar charges.
Article VIII
Movement of Vessels and Aircraft
1. Aircraft operated by or for the United States armed forces may enter the Philippines upon
approval of the Government of the Philippines in accordance with procedures stipulated in
implementing arrangements.
2. Vessels operated by or for the United States armed forces may enter the Philippines upon
approval of the Government of the Philippines. The movement of vessels shall be in accordance
with international custom and practice governing such vessels, and such agreed implementing
arrangements as necessary.
3. Vehicles, vessels, and aircraft operated by or for the United States armed forces shall not be
subject to the payment of landing or port fees, navigation or over flight charges, or tolls or other
use charges, including light and harbor dues, while in the Philippines. Aircraft operated by or for
the United States armed forces shall observe local air traffic control regulations while in the
Philippines. Vessels owned or operated by the United States solely on United States
Government non-commercial service shall not be subject to compulsory pilotage at Philippine
ports.
Article IX
Duration and Termination
This agreement shall enter into force on the date on which the parties have notified each other in
writing through the diplomatic channel that they have completed their constitutional requirements
for entry into force. This agreement shall remain in force until the expiration of 180 days from the
date on which either party gives the other party notice in writing that it desires to terminate the
agreement.
Via these consolidated[11] petitions for certiorari and prohibition, petitioners - as legislators, non-
governmental organizations, citizens and taxpayers - assail the constitutionality of the VFA and
impute to herein respondents grave abuse of discretion in ratifying the agreement.
We have simplified the issues raised by the petitioners into the following:
I public funds derived from taxation.[16] Thus, in Bugnay Const. & Development Corp. vs.
Do petitioners have legal standing as concerned citizens, taxpayers, or legislators to question
the constitutionality of the VFA?
II
Is the VFA governed by the provisions of Section 21, Article VII or of Section 25, Article XVIII of
the Constitution?
III
Does the VFA constitute an abdication of Philippine sovereignty?
a. Are Philippine courts deprived of their jurisdiction to hear and try offenses committed by US
military personnel?
b. Is the Supreme Court deprived of its jurisdiction over offenses punishable by reclusion
perpetua or higher?
IV
Does the VFA violate:
a. the equal protection clause under Section 1, Article III of the Constitution?
b. the Prohibition against nuclear weapons under Article II, Section 8?
c. Section 28 (4), Article VI of the Constitution granting the exemption from taxes and duties for
the equipment, materials supplies and other properties imported into or acquired in the
Philippines by, or on behalf, of the US Armed Forces?
LOCUS STANDI
At the outset, respondents challenge petitioners standing to sue, on the ground that the latter
have not shown any interest in the case, and that petitioners failed to substantiate that they have
sustained, or will sustain direct injury as a result of the operation of the VFA.[12] Petitioners, on
the other hand, counter that the validity or invalidity of the VFA is a matter of transcendental
importance which justifies their standing.[13]
A party bringing a suit challenging the constitutionality of a law, act, or statute must show not
only that the law is invalid, but also that he has sustained or in is in immediate, or imminent
danger of sustaining some direct injury as a result of its enforcement, and not merely that he
suffers thereby in some indefinite way. He must show that he has been, or is about to be, denied
some right or privilege to which he is lawfully entitled, or that he is about to be subjected to some
burdens or penalties by reason of the statute complained of.[14]
In the case before us, petitioners failed to show, to the satisfaction of this Court, that they have
sustained, or are in danger of sustaining any direct injury as a result of the enforcement of the
VFA. As taxpayers, petitioners have not established that the VFA involves the exercise by
Congress of its taxing or spending powers.[15] On this point, it bears stressing that a taxpayers
suit refers to a case where the act complained of directly involves the illegal disbursement of
Laron[17], we held:
x x x it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured
by the judgment or entitled to the avails of the suit as a real party in interest. Before he can
invoke the power of judicial review, he must specifically prove that he has sufficient interest in
preventing the illegal expenditure of money raised by taxation and that he will sustain a direct
injury as a result of the enforcement of the questioned statute or contract. It is not sufficient that
he has merely a general interest common to all members of the public.
Clearly, inasmuch as no public funds raised by taxation are involved in this case, and in the
absence of any allegation by petitioners that public funds are being misspent or illegally
expended, petitioners, as taxpayers, have no legal standing to assail the legality of the VFA.
Similarly, Representatives Wigberto Taada, Agapito Aquino and Joker Arroyo, as petitioners-
legislators, do not possess the requisite locus standi to maintain the present suit. While this
Court, in Phil. Constitution Association vs. Hon. Salvador Enriquez,[18] sustained the legal
standing of a member of the Senate and the House of Representatives to question the validity of
a presidential veto or a condition imposed on an item in an appropriation bull, we cannot, at this
instance, similarly uphold petitioners standing as members of Congress, in the absence of a
clear showing of any direct injury to their person or to the institution to which they belong.
Beyond this, the allegations of impairment of legislative power, such as the delegation of the
power of Congress to grant tax exemptions, are more apparent than real. While it may be true
that petitioners pointed to provisions of the VFA which allegedly impair their legislative powers,
petitioners failed however to sufficiently show that they have in fact suffered direct injury.
In the same vein, petitioner Integrated Bar of the Philippines (IBP) is stripped of standing in
these cases. As aptly observed by the Solicitor General, the IBP lacks the legal capacity to bring
this suit in the absence of a board resolution from its Board of Governors authorizing its National
President to commence the present action.[19]
Notwithstanding, in view of the paramount importance and the constitutional significance of the
issues raised in the petitions, this Court, in the exercise of its sound discretion, brushes aside
the procedural barrier and takes cognizance of the petitions, as we have done in the
early Emergency Powers Cases,[20] where we had occasion to rule:
x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several
executive orders issued by President Quirino although they were involving only an indirect and
general interest shared in common with the public. The Court dismissed the objection that they
were not proper parties and ruled that transcendental importance to the public of these
cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure. We have since then applied the exception in many other
cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175
SCRA 343). (Underscoring Supplied)
This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC,[21] Daza vs.
Singson,[22] and Basco vs. Phil. Amusement and Gaming Corporation,[23] where we
emphatically held:
Considering however the importance to the public of the case at bar, and in keeping with the
Courts duty, under the 1987 Constitution, to determine whether or not the other branches of the
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 this petition. x x x
Again, in the more recent case of Kilosbayan vs. Guingona, Jr.,[24] thisCourt ruled that in cases
of transcendental importance, the Court may relax the standing requirements and allow a
suit to prosper even where there is no direct injury to the party claiming the right of
judicial review.
Although courts generally avoid having to decide a constitutional question based on the doctrine
of separation of powers, which enjoins upon the departments of the government a becoming
respect for each others acts,[25] this Court nevertheless resolves to take cognizance of the
instant petitions.
APPLICABLE CONSTITUTIONAL PROVISION
One focal point of inquiry in this controversy is the determination of which provision of the
Constitution applies, with regard to the exercise by the senate of its constitutional power to
concur with the VFA. Petitioners argue that Section 25, Article XVIII is applicable considering
that the VFA has for its subject the presence of foreign military troops in the
Philippines.Respondents, on the contrary, maintain that Section 21, Article VII should apply
inasmuch as the VFA is not a basing arrangement but an agreement which involves merely the
temporary visits of United States personnel engaged in joint military exercises.
The 1987 Philippine Constitution contains two provisions requiring the concurrence of the
Senate on treaties or international agreements. Section 21, Article VII, which herein respondents
invoke, reads:
No treaty or international agreement shall be valid and effective unless concurred in by at least
two-thirds of all the Members of the Senate.
Section 25, Article XVIII, provides:
After the expiration in 1991 of the Agreement between the Republic of the Philippines and the
United States of America concerning Military Bases, foreign military bases, troops, or facilities
shall not be allowed in the Philippines except under a treaty duly concurred in by the senate and,
when the Congress so requires, ratified by a majority of the votes cast by the people in a
national referendum held for that purpose, and recognized as a treaty by the other contracting
State.
Section 21, Article VII deals with treatise or international agreements in general, in which case,
the concurrence of at least two-thirds (2/3) of all the Members of the Senate is required to make
the subject treaty, or international agreement, valid and binding on the part of the
Philippines. This provision lays down the general rule on treatise or international agreements
and applies to any form of treaty with a wide variety of subject matter, such as, but not limited to,
extradition or tax treatise or those economic in nature. All treaties or international agreements
entered into by the Philippines, regardless of subject matter, coverage, or particular designation
or appellation, requires the concurrence of the Senate to be valid and effective.
In contrast, Section 25, Article XVIII is a special provision that applies to treaties which involve
the presence of foreign military bases, troops or facilities in the Philippines. Under this provision,
the concurrence of the Senate is only one of the requisites to render compliance with the
constitutional requirements and to consider the agreement binding on the Philippines.Section 25,
Article XVIII further requires that foreign military bases, troops, or facilities may be allowed in the
Philippines only by virtue of a treaty duly concurred in by the Senate, ratified by a majority of the
votes cast in a national referendum held for that purpose if so required by Congress, and
recognized as such by the other contracting state.
It is our considered view that both constitutional provisions, far from contradicting each other,
actually share some common ground. These constitutional provisions both embody phrases in
the negative and thus, are deemed prohibitory in mandate and character. In particular, Section
21 opens with the clause No treaty x x x, and Section 25 contains the phrase shall not be
allowed. Additionally, in both instances, the concurrence of the Senate is indispensable to render
the treaty or international agreement valid and effective.
To our mind, the fact that the President referred the VFA to the Senate under Section 21, Article
VII, and that the Senate extended its concurrence under the same provision, is immaterial. For in
either case, whether under Section 21, Article VII or Section 25, Article XVIII, the fundamental
law is crystalline that the concurrence of the Senate is mandatory to comply with the strict
constitutional requirements.
On the whole, the VFA is an agreement which defines the treatment of United States troops and
personnel visiting the Philippines. It provides for the guidelines to govern such visits of military
personnel, and further defines the rights of the United States and the Philippine government in
the matter of criminal jurisdiction, movement of vessel and aircraft, importation and exportation
of equipment, materials and supplies.
Undoubtedly, Section 25, Article XVIII, which specifically deals with treaties involving foreign
military bases, troops, or facilities, should apply in the instant case. To a certain extent and in a
limited sense, however, the provisions of section 21, Article VII will find applicability with regard
to the issue and for the sole purpose of determining the number of votes required to obtain the
valid concurrence of the Senate, as will be further discussed hereunder.
It is a finely-imbedded principle in statutory construction that a special provision or law prevails
over a general one. Lex specialis derogat generali. Thus, where there is in the same statute a
particular enactment and also a general one which, in its most comprehensive sense, would
include what is embraced in the former, the particular enactment must be operative, and the
general enactment must be taken to affect only such cases within its general language which are
not within the provision of the particular enactment.[26]
In Leveriza vs. Intermediate Appellate Court,[27] we enunciated:
x x x that another basic principle of statutory construction mandates that general legislation must
give way to a special legislation on the same subject, and generally be so interpreted as to
embrace only cases in which the special provisions are not applicable (Sto. Domingo vs. de los
Angeles, 96 SCRA 139), that a specific statute prevails over a general statute (De Jesus vs.
People, 120 SCRA 760) and that where two statutes are of equal theoretical application to a
particular case, the one designed therefor specially should prevail (Wil Wilhensen Inc. vs.
Baluyot, 83 SCRA 38).
Moreover, it is specious to argue that Section 25, Article XVIII is inapplicable to mere transient
agreements for the reason that there is no permanent placing of structure for the establishment
of a military base. On this score, the Constitution makes no distinction between transient and
permanent. Certainly, we find nothing in Section 25, Article XVIII that requires foreign troops or
facilities to be stationed or placed permanently in the Philippines.
It is a rudiment in legal hermenuetics that when no distinction is made by law, the Court should
not distinguish- Ubi lex non distinguit nec nos distinguire debemos.
In like manner, we do not subscribe to the argument that Section 25, Article XVIII is not
controlling since no foreign military bases, but merely foreign troops and facilities, are involved in
the VFA. Notably, a perusal of said constitutional provision reveals that the proscription
covers foreign military bases, troops, or facilities. Stated differently, this prohibition is not limited
to the entry of troops and facilities without any foreign bases being established. The clause does
not refer to foreign military bases, troops, or facilities collectively but treats them as separate
and independent subjects. The use of comma and the disjunctive word or clearly signifies
disassociation and independence of one thing from the others included in the
enumeration,[28]such that, the provision contemplates three different situations - a military treaty
the subject of which could be either (a) foreign bases, (b) foreign troops, or (c) foreign facilities -
any of the three standing alone places it under the coverage of Section 25, Article XVIII.
To this end, the intention of the framers of the Charter, as manifested during the deliberations of
the 1986 Constitutional Commission, is consistent with this interpretation:
MR. MAAMBONG. I just want to address a question or two to Commissioner Bernas.
This formulation speaks of three things: foreign military bases, troops or facilities. My first
question is: If the country does enter into such kind of a treaty, must it cover the three-
bases, troops or facilities-or could the treaty entered into cover only one or two?
FR. BERNAS. Definitely, it can cover only one. Whether it covers only one or it covers
three, the requirement will be the same.
MR. MAAMBONG. In other words, the Philippine government can enter into a treaty
covering not bases but merely troops?
FR. BERNAS. Yes.
MR. MAAMBONG. I cannot find any reason why the government can enter into a treaty covering
only troops.
FR. BERNAS. Why not? Probably if we stretch our imagination a little bit more, we will find
some. We just want to cover everything.[29] (Underscoring Supplied)
Moreover, military bases established within the territory of another state is no longer viable
because of the alternatives offered by new means and weapons of warfare such as nuclear
weapons, guided missiles as well as huge sea vessels that can stay afloat in the sea even for
months and years without returning to their home country. These military warships are actually
used as substitutes for a land-home base not only of military aircraft but also of military
personnel and facilities. Besides, vessels are mobile as compared to a land-based military
headquarters.
At this juncture, we shall then resolve the issue of whether or not the requirements of Section 25
were complied with when the Senate gave its concurrence to the VFA.
Section 25, Article XVIII disallows foreign military bases, troops, or facilities in the country,
unless the following conditions are sufficiently met, viz: (a) it must be under a treaty; (b) the
treaty must be duly concurred in by the Senate and, when so required by congress, ratified by
a majority of the votes cast by the people in a national referendum; and (c) recognized as a
treaty by the other contracting state.
There is no dispute as to the presence of the first two requisites in the case of the VFA. The
concurrence handed by the Senate through Resolution No. 18 is in accordance with the
provisions of the Constitution, whether under the general requirement in Section 21, Article VII,
or the specific mandate mentioned in Section 25, Article XVIII, the provision in the latter article
requiring ratification by a majority of the votes cast in a national referendum being unnecessary
since Congress has not required it.
As to the matter of voting, Section 21, Article VII particularly requires that a treaty or
international agreement, to be valid and effective, must be concurred in by at least two-thirds
of all the members of the Senate. On the other hand, Section 25, Article XVIII simply provides
that the treaty be duly concurred in by the Senate.
Applying the foregoing constitutional provisions, a two-thirds vote of all the members of the
Senate is clearly required so that the concurrence contemplated by law may be validly obtained
and deemed present. While it is true that Section 25, Article XVIII requires, among other things,
that the treaty-the VFA, in the instant case-be duly concurred in by the Senate, it is very true
however that said provision must be related and viewed in light of the clear mandate embodied
in Section 21, Article VII, which in more specific terms, requires that the concurrence of a treaty,
or international agreement, be made by a two -thirds vote of all the members of the
Senate. Indeed, Section 25, Article XVIII must not be treated in isolation to section 21, Article,
VII.
As noted, the concurrence requirement under Section 25, Article XVIII must be construed in
relation to the provisions of Section 21, Article VII. In a more particular language, the
concurrence of the Senate contemplated under Section 25, Article XVIII means that at least two-
thirds of all the members of the Senate favorably vote to concur with the treaty-the VFA in the
instant case.
Under these circumstances, the charter provides that the Senate shall be composed of twenty-
four (24) Senators.[30] Without a tinge of doubt, two-thirds (2/3) of this figure, or not less than
sixteen (16) members, favorably acting on the proposal is an unquestionable compliance with
the requisite number of votes mentioned in Section 21 of Article VII. The fact that there were
actually twenty-three (23) incumbent Senators at the time the voting was made,[31] will not alter in
any significant way the circumstance that more than two-thirds of the members of the Senate
concurred with the proposed VFA, even if the two-thirds vote requirement is based on this figure
of actual members (23). In this regard, the fundamental law is clear that two-thirds of the 24
Senators, or at least 16 favorable votes, suffice so as to render compliance with the strict
constitutional mandate of giving concurrence to the subject treaty.
Having resolved that the first two requisites prescribed in Section 25, Article XVIII are present,
we shall now pass upon and delve on the requirement that the VFA should be recognized as a
treaty by the United States of America.
Petitioners content that the phrase recognized as a treaty, embodied in section 25, Article XVIII,
means that the VFA should have the advice and consent of the United States Senate pursuant
to its own constitutional process, and that it should not be considered merely an executive
agreement by the United States.
In opposition, respondents argue that the letter of United States Ambassador Hubbard stating
that the VFA is binding on the United States Government is conclusive, on the point that the VFA
is recognized as a treaty by the United States of America. According to respondents, the VFA, to
be binding, must only be accepted as a treaty by the United States.
This Court is of the firm view that the phrase recognized as a treaty means that the other
contracting party accepts or acknowledges the agreement as a treaty.[32] To require the other
contracting state, the United States of America in this case, to submit the VFA to the United
States Senate for concurrence pursuant to its Constitution,[33] is to accord strict meaning to the
phrase.
Well-entrenched is the principle that the words used in the Constitution are to be given their
ordinary meaning except where technical terms are employed, in which case the significance
thus attached to them prevails. Its language should be understood in the sense they have in
common use.[34]
Moreover, it is inconsequential whether the United States treats the VFA only as an executive
agreement because, under international law, an executive agreement is as binding as a
treaty.[35] To be sure, as long as the VFA possesses the elements of an agreement under
international law, the said agreement is to be taken equally as a treaty.
A treaty, as defined by the Vienna Convention on the Law of Treaties, is an international
instrument 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.[36] There are many other terms used for a treaty or international
agreement, some of which are: act, protocol, agreement, compromis d arbitrage, concordat,
convention, declaration, exchange of notes, pact, statute, charter and modus vivendi. All writers,
from Hugo Grotius onward, have pointed out that the names or titles of international agreements
included under the general term treaty have little or no legal significance. Certain terms are
useful, but they furnish little more than mere description.[37]
Article 2(2) of the Vienna Convention provides that the provisions of paragraph 1 regarding the
use of terms in the present Convention are without prejudice to the use of those terms, or to the
meanings which may be given to them in the internal law of the State.
Thus, in international law, there is no difference between treaties and executive agreements in
their binding effect upon states concerned, as long as the negotiating functionaries have
remained within their powers.[38] International law continues to make no distinction between
treaties and executive agreements: they are equally binding obligations upon nations.[39]
In our jurisdiction, we have recognized the binding effect of executive agreements even without
the concurrence of the Senate or Congress. In Commissioner of Customs vs. Eastern Sea
Trading,[40] we had occasion to pronounce:
x x x the right of the Executive to enter into binding agreements without the necessity of
subsequent congressional approval has been confirmed by long usage. From the earliest days
of our history we have entered into executive agreements covering such subjects as commercial
and consular relations, most-favored-nation rights, patent rights, trademark and copyright
protection, postal and navigation arrangements and the settlement of claims. The validity of
these has never been seriously questioned by our courts.
xxxxxxxxx
Furthermore, the United States Supreme Court has expressly recognized the validity and
constitutionality of executive agreements entered into without Senate approval. (39 Columbia
Law Review, pp. 753-754) (See, also, U.S. vs. Curtis Wright Export Corporation, 299 U.S.
304, 81 L. ed. 255; U.S. vs. Belmont, 301 U.S. 324, 81 L. ed. 1134; U.S. vs. Pink, 315 U.S.
203, 86 L. ed. 796; Ozanic vs. U.S. 188 F. 2d. 288; Yale Law Journal, Vol. 15 pp. 1905-1906;
California Law Review, Vol. 25, pp. 670-675; Hyde on International Law [revised Edition],
Vol. 2, pp. 1405, 1416-1418; willoughby on the U.S. Constitution Law, Vol. I [2d ed.], pp.
537-540; Moore, International Law Digest, Vol. V, pp. 210-218; Hackworth, International
Law Digest, Vol. V, pp. 390-407). (Italics Supplied) (Emphasis Ours)
The deliberations of the Constitutional Commission which drafted the 1987 Constitution is
enlightening and highly-instructive:
MR. MAAMBONG. Of course it goes without saying that as far as ratification of the other state is
concerned, that is entirely their concern under their own laws.
FR. BERNAS. Yes, but we will accept whatever they say. If they say that we have done
everything to make it a treaty, then as far as we are concerned, we will accept it as a treaty. [41]
The records reveal that the United States Government, through Ambassador Thomas C.
Hubbard, has stated that the United States government has fully committed to living up to the
terms of the VFA.[42] For as long as the united States of America accepts or acknowledges the
VFA as a treaty, and binds itself further to comply with its obligations under the treaty, there is
indeed marked compliance with the mandate of the Constitution.
Worth stressing too, is that the ratification, by the President, of the VFA and the concurrence of
the Senate should be taken as a clear an unequivocal expression of our nations consent to be
bound by said treaty, with the concomitant duty to uphold the obligations and responsibilities
embodied thereunder.
Ratification is generally held to be an executive act, undertaken by the head of the state or of the
government, as the case may be, through which the formal acceptance of the treaty is
proclaimed.[43] A State may provide in its domestic legislation the process of ratification of a
treaty. The consent of the State to be bound by a treaty is expressed by ratification when: (a) the
treaty provides for such ratification, (b) it is otherwise established that the negotiating States
agreed that ratification should be required, (c) the representative of the State has signed the
treaty subject to ratification, or (d) the intention of the State to sign the treaty subject to
ratification appears from the full powers of its representative, or was expressed during the
negotiation.[44]
In our jurisdiction, the power to ratify is vested in the President and not, as commonly believed,
in the legislature. The role of the Senate is limited only to giving or withholding its consent, or
concurrence, to the ratification.[45]
With the ratification of the VFA, which is equivalent to final acceptance, and with the exchange of
notes between the Philippines and the United States of America, it now becomes obligatory and
incumbent on our part, under the principles of international law, to be bound by the terms of the
agreement. Thus, no less than Section 2, Article II of the Constitution,[46]declares that the
Philippines adopts the generally accepted principles of international law as part of the law of the
land and adheres to the policy of peace, equality, justice, freedom, cooperation and amity with
all nations.
As a member of the family of nations, the Philippines agrees to be bound by generally accepted
rules for the conduct of its international relations. While the international obligation devolves
upon the state and not upon any particular branch, institution, or individual member of its
government, the Philippines is nonetheless responsible for violations committed by any branch
or subdivision of its government or any official thereof. As an integral part of the community of
nations, we are responsible to assure that our government, Constitution and laws will carry out
our international obligation.[47] Hence, we cannot readily plead the Constitution as a convenient
excuse for non-compliance with our obligations, duties and responsibilities under international
law.
Beyond this, Article 13 of the Declaration of Rights and Duties of States adopted by the
International Law Commission in 1949 provides: Every State has the duty to carry out in good
faith its obligations arising from treaties and other sources of international law, and it may not
invoke provisions in its constitution or its laws as an excuse for failure to perform this duty.[48]
Equally important is Article 26 of the convention which provides that Every treaty in force is
binding upon the parties to it and must be performed by them in good faith. This is known as the
principle of pacta sunt servanda which preserves the sanctity of treaties and have been one of
the most fundamental principles of positive international law, supported by the jurisprudence of
international tribunals.[49]
NO GRAVE ABUSE OF DISCRETION
In the instant controversy, the President, in effect, is heavily faulted for exercising a power and
performing a task conferred upon him by the Constitution-the power to enter into and ratify
treaties. Through the expediency of Rule 65 of the Rules of Court, petitioners in these
consolidated cases impute grave abuse of discretion on the part of the chief Executive in
ratifying the VFA, and referring the same to the Senate pursuant to the provisions of Section 21,
Article VII of the Constitution.
On this particular matter, grave abuse of discretion implies such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction, or, when the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent
and gross as to amount to an evasion of positive duty enjoined or to act at all in contemplation of
law.[50]
By constitutional fiat and by the intrinsic nature of his office, the President, as head of State, is
the sole organ and authority in the external affairs of the country. In many ways, the President is
the chief architect of the nations foreign policy; his dominance in the field of foreign relations is
(then) conceded.[51] Wielding vast powers an influence, his conduct in the external affairs of the
nation, as Jefferson describes, is executive altogether."[52]
As regards the power to enter into treaties or international agreements, the Constitution vests
the same in the President, subject only to the concurrence of at least two-thirds vote of all the
members of the Senate. In this light, the negotiation of the VFA and the subsequent ratification
of the agreement are exclusive acts which pertain solely to the President, in the lawful exercise
of his vast executive and diplomatic powers granted him no less than by the fundamental law
itself. Into the field of negotiation the Senate cannot intrude, and Congress itself is powerless to
invade it.[53] Consequently, the acts or judgment calls of the President involving the VFA-
specifically the acts of ratification and entering into a treaty and those necessary or incidental to
the exercise of such principal acts - squarely fall within the sphere of his constitutional powers
and thus, may not be validly struck down, much less calibrated by this Court, in the absence of
clear showing of grave abuse of power or discretion.
It is the Courts considered view that the President, in ratifying the VFA and in submitting the
same to the Senate for concurrence, acted within the confines and limits of the powers vested in
him by the Constitution. It is of no moment that the President, in the exercise of his wide latitude
of discretion and in the honest belief that the VFA falls within the ambit of Section 21, Article VII
of the Constitution, referred the VFA to the Senate for concurrence under the aforementioned
provision. Certainly, no abuse of discretion, much less a grave, patent and whimsical abuse of
judgment, may be imputed to the President in his act of ratifying the VFA and referring the same
to the Senate for the purpose of complying with the concurrence requirement embodied in the
fundamental law. In doing so, the President merely performed a constitutional task and
exercised a prerogative that chiefly pertains to the functions of his office. Even if he erred in
submitting the VFA to the Senate for concurrence under the provisions of Section 21 of Article
VII, instead of Section 25 of Article XVIII of the Constitution, still, the President may not be
faulted or scarred, much less be adjudged guilty of committing an abuse of discretion in some
patent, gross, and capricious manner.
For while it is conceded that Article VIII, Section 1, of the Constitution has broadened the scope
of judicial inquiry into areas normally left to the political departments to decide, such as those
relating to national security, it has not altogether done away with political questions such as
those which arise in the field of foreign relations.[54] The High Tribunals function, as sanctioned
by Article VIII, Section 1, is merely (to) check whether or not the governmental branch or agency
has gone beyond the constitutional limits of its jurisdiction, not that it erred or has a different
view. In the absence of a showing (of) grave abuse of discretion amounting to lack of jurisdiction,
there is no occasion for the Court to exercise its corrective powerIt has no power to look into
what it thinks is apparent error.[55]
legislative in character and nature. For the Constitution no less, maps out the distinct boundaries
and limits the metes and bounds within which each of the three political branches of government
may exercise the powers exclusively and essentially conferred to it by law.
WHEREFORE, in light of the foregoing disquisitions, the instant petitions are hereby
DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Kapunan, Quisumbing, Purisima, Pardo, Gonzaga-Reyes, Ynares-
Santiago, and De Leon, Jr., JJ., concur.
ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCEY GLORIA
MACAPAGAL-ARROYO, and HONORABLE ANGELO REYES in his capacity as Secretary
of National Defense, respondents.
----------------------------------------
SANLAKAS and PARTIDO NG MANGGAGAWA, petitioners-intervenors,
vs.
GLORIA MACAPAGA-ARROYO, ALBERTO ROMULO, ANGELO REYES, respondents.
DISSENTING OPINION

As to the power to concur with treaties, the constitution lodges the same with the Senate SEPARATE OPINION
alone. Thus, once the Senate[56] performs that power, or exercises its prerogative within the
DE LEON, JR., J.:
boundaries prescribed by the Constitution, the concurrence cannot, in like manner, be viewed to
constitute an abuse of power, much less grave abuse thereof. Corollarily, the Senate, in the
This case involves a petition for certiorari and prohibition as well as a petition-in-intervention,
exercise of its discretion and acting within the limits of such power, may not be similarly faulted
praying that respondents be restrained from proceeding with the so-called "Balikatan 02-1" and
for having simply performed a task conferred and sanctioned by no less than the fundamental
that after due notice and hearing, that judgment be rendered issuing a permanent writ of
law.
injunction and/or prohibition against the deployment of U.S. troops in Basilan and Mindanao for
For the role of the Senate in relation to treaties is essentially legislative in character;[57] the being illegal and in violation of the Constitution.
Senate, as an independent body possessed of its own erudite mind, has the prerogative to either
The facts are as follows:
accept or reject the proposed agreement, and whatever action it takes in the exercise of its wide
latitude of discretion, pertains to the wisdom rather than the legality of the act. In this sense, the
Beginning January of this year 2002, personnel from the armed forces of the United States of
Senate partakes a principal, yet delicate, role in keeping the principles of separation of
America started arriving in Mindanao to take part, in conjunction with the Philippine military, in
powers and of checks and balances alive and vigilantly ensures that these cherished rudiments
"Balikatan 02-1." These so-called "Balikatan" exercises are the largest combined training
remain true to their form in a democratic government such as ours. The Constitution thus
operations involving Filipino and American troops. In theory, they are a simulation of joint military
animates, through this treaty-concurring power of the Senate, a healthy system of checks and
maneuvers pursuant to the Mutual Defense Treaty,1 a bilateral defense agreement entered into
balances indispensable toward our nations pursuit of political maturity and growth. True enough,
by the Philippines and the United States in 1951.
rudimentary is the principle that matters pertaining to the wisdom of a legislative act are beyond
the ambit and province of the courts to inquire.
Prior to the year 2002, the last "Balikatan" was held in 1995. This was due to the paucity of any
formal agreement relative to the treatment of United States personnel visiting the Philippines. In
In fine, absent any clear showing of grave abuse of discretion on the part of respondents, this
the meantime, the respective governments of the two countries agreed to hold joint exercises on
Court- as the final arbiter of legal controversies and staunch sentinel of the rights of the people -
is then without power to conduct an incursion and meddle with such affairs purely executive and
a reduced scale. The lack of consensus was eventually cured when the two nations concluded
the Visiting Forces Agreement (V FA) in 1999.
The entry of American troops into Philippine soil is proximately rooted in the international anti-
terrorism campaign declared by President George W. Bush in reaction to the tragic events that
occurred on September 11, 2001. On that day, three (3) commercial aircrafts were hijacked,
flown and smashed into the twin towers of the World Trade Center in New York City and the
Pentagon building in Washington, D.C. by terrorists with alleged links to the al-Qaeda ("the
Base"), a Muslim extremist organization headed by the infamous Osama bin Laden. Of no
comparable historical parallels, these acts caused billions of dollars worth of destruction of
property and incalculable loss of hundreds of lives.
On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando filed this petition for
certiorari and prohibition, attacking the constitutionality of the joint exercise.2 They were joined
subsequently by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-Iist organizations,
who filed a petition-in-intervention on February 11, 2002.
Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and
PARTIDO, on the other hand, aver that certain members of their organization are residents of
Zamboanga and Sulu, and hence will be directly affected by the operations being conducted in
Mindanao. They likewise pray for a relaxation on the rules relative to locus standi citing the
unprecedented importance of the issue involved.
On February 71 2002 the Senate conducted a hearing on the "Balikatan" exercise wherein Vice-
President Teofisto T. Guingona, Jr., who is concurrently Secretary of Foreign. Affairs, presented
the Draft Terms of Reference (TOR).3Five days later, he approved the TOR, which we quote
hereunder:
I. POLICY LEVEL
1. The Exercise shall be consistent with the Philippine Constitution and all its activities shall be in
consonance with the laws of the land and the provisions of the RP-US Visiting Forces
Agreement (VFA).
2. The conduct of this training Exercise is in accordance with pertinent United Nations
resolutions against global terrorism as understood by the respective parties.
3. No permanent US basing and support facilities shall be established. Temporary structures
such as those for troop billeting, classroom instruction and messing may be set up for use by RP
and US Forces during the Exercise.
4. The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the
authority of the Chief of Staff, AFP. In no instance will US Forces operate independently during
field training exercises (FTX). AFP and US Unit Commanders will retain command over their
respective forces under the overall authority of the Exercise Co-Directors. RP and US
participants shall comply with operational instructions of the AFP during the FTX.
5. The exercise shall be conducted and completed within a period of not more than six months,
with the projected participation of 660 US personnel and 3,800 RP Forces. The Chief of Staff,
AFP shall direct the Exercise Co-Directors to wind up and terminate the Exercise and other
activities within the six month Exercise period.
6. The Exercise is a mutual counter-terrorism advising, assisting and training Exercise relative to
Philippine efforts against the ASG, and will be conducted on the Island of Basilan. Further
advising, assisting and training exercises shall be conducted in Malagutay and the Zamboanga
area. Related activities in Cebu will be for support of the Exercise.
7. Only 160 US Forces organized in 12-man Special Forces Teams shall be deployed with AFP
field, commanders. The US teams shall remain at the Battalion Headquarters and, when
approved, Company Tactical headquarters where they can observe and assess the performance
of the AFP Forces.
8. US exercise participants shall not engage in combat, without prejudice to their right of self-
defense.
9. These terms of Reference are for purposes of this Exercise only and do not create additional
legal obligations between the US Government and the Republic of the Philippines.
II. EXERCISE LEVEL
1. TRAINING
a. The Exercise shall involve the conduct of mutual military assisting, advising and training of RP
and US Forces with the primary objective of enhancing the operational capabilities of both forces
to combat terrorism.
b. At no time shall US Forces operate independently within RP territory.
c. Flight plans of all aircraft involved in the exercise will comply with the local air traffic
regulations.
2. ADMINISTRATION & LOGISTICS
a. RP and US participants shall be given a country and area briefing at the start of the Exercise.
This briefing shall acquaint US Forces on the culture and sensitivities of the Filipinos and the
provisions of the VF A. The briefing shall also promote the full cooperation on the part of the RP
and US participants for the successful conduct of the Exercise.
b. RP and US participating forces may share, in accordance with their respective laws and
regulations, in the use of their resources, equipment and other assets. They will use their
respective logistics channels.
c. Medical evaluation shall be jointly planned and executed utilizing RP and US assets and
resources.
d. Legal liaison officers from each respective party shall be appointed by the Exercise Directors.
3. PUBLIC AFFAIRS
a. Combined RP-US Information Bureaus shall be established at the Exercise Directorate in
Zamboanga City and at GHQ, AFP in Camp Aguinaldo, Quezon City.
b. Local media relations will be the concern of the AFP and all public affairs guidelines shall be
jointly developed by RP and US Forces.
c. Socio-Economic Assistance Projects shall be planned and executed jointly by RP and US
Forces in accordance with their respective laws and regulations, and in consultation with
community and local government officials.
Contemporaneously, Assistant Secretary for American Affairs Minerva Jean A. Falcon and
United States Charge d' Affaires Robert Fitts signed the Agreed Minutes of the discussion
between the Vice-President and Assistant Secretary Kelly.4
Petitioners Lim and Ersando present the following arguments:
I
THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY
(MDT) in 1951 TO PROVIDE MUTUAL MILITARY ASSIST ANCE IN ACCORDANCE WITH
THE 'CONSTITUTIONAL PROCESSE-S' OF EACH COUNTRY ONLY IN THE CASE OF AN
ARMED ATTACK BY AN EXTERNAL AGGRESSOR, MEANING A THIRD COUNTRY
AGAINST ONE OF THEM.
BY NO STRETCH OF THE IMAGINA TION CAN IT BE SAID THAT THE ABU SAYYAF
BANDITS IN BASILAN CONSTITUTE AN EXTERNAL ARMED FORCE THAT HAS SUBJECT
THE PHILIPPINES TO AN ARMED EXTERNAL ATTACK TO WARRANT U.S. MILITARY
ASSISTANCE UNDER THE MDT OF 1951.
II
NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN SOLDIERS TO ENGAGE IN
COMBAT OPERATIONS IN PHILIPPINE TERRITORY, NOT EVEN TO FIRE BACK "IF FIRED
UPON".
Substantially the same points are advanced by petitioners SANLAKAS and PARTIDO.
In his Comment, the Solicitor General points to infirmities in the petitions regarding, inter
alia, Lim and Ersando's standing to file suit, the prematurity of the action, as well as the
impropriety of availing of certiorari to ascertain a question of fact. Anent their locus standi, the
Solicitor General argues that first, they may not file suit in their capacities as, taxpayers
inasmuch as it has not been shown that "Balikatan 02-1 " involves the exercise of Congress'
taxing or spending powers. Second, their being lawyers does not invest them with sufficient
personality to initiate the case, citing our ruling in Integrated Bar of the Philippines v.
Zamora.5 Third, Lim and Ersando have failed to demonstrate the requisite showing of direct
personal injury. We agree.
It is also contended that the petitioners are indulging in speculation. The Solicitor General is of
the view that since the Terms of Reference are clear as to the extent and duration of "Balikatan
02-1," the issues raised by petitioners are premature, as they are based only on a fear
of future violation of the Terms of Reference. Even petitioners' resort to a special civil action for
certiorari is assailed on the ground that the writ may only issue on the basis of established facts.
Apart from these threshold issues, the Solicitor General claims that there is actually no question
of constitutionality involved. The true object of the instant suit, it is said, is to obtain an
interpretation of the V FA. The Solicitor General asks that we accord due deference to the
executive determination that "Balikatan 02-1" is covered by the VFA, considering the President's
monopoly in the field of foreign relations and her role as commander-in-chief of the Philippine
armed forces.
Given the primordial importance of the issue involved, it will suffice to reiterate our view on this
point in a related case:
Notwithstanding, in view of the paramount importance and the constitutional significance of the
issues raised in the petitions, this Court, in the exercise of its sound discretion, brushes aside
the procedural barrier and takes cognizance of the petitions, as we have done in the early
Emergency Powers Cases, where we had occasion to rule:
'x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several
executive orders issued by President Quirino although they were involving only an indirect and
general interest shared in common with the public. The Court dismissed the objection that they
were not proper parties and ruled that 'transcendental importance to the public of these
cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure.' We have since then applied the exception in many other cases.
[citation omitted]
This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC, Daza vs.
Singson, and Basco vs. Phil, Amusement and Gaming Corporation, where we emphatically
held:
Considering however the importance to the public of the case at bar, and in keeping with the
Court's duty, under the 1987 Constitution, to determine whether or not the other branches of the
government have kept themselves within the limits of the Constitution and the laws that they
have not abused the discretion given to them, the Court has brushed aside technicalities of
procedure and has taken cognizance of this petition. xxx'
Again, in the more recent case of Kilosbayan vs. Guingona, Jr., this Court ruled that in cases
of transcendental importance, the Court may relax the standing requirements and allow a
suit to prosper even where there is no direct injury to the party claiming the right of
judicial review.
Although courts generally avoid having to decide a constitutional question based on the doctrine
of separation of powers, which enjoins upon the department of the government a becoming
respect for each other's act, this Court nevertheless resolves to take cognizance of the instant
petition.6
Hence, we treat with similar dispatch the general objection to the supposed prematurity of the
action. At any rate, petitioners' concerns on the lack of any specific regulation on the latitude of
activity US personnel may undertake and the duration of their stay has been addressed in the
Terms of Reference.
The holding of "Balikatan 02-1" must be studied in the framework of the treaty antecedents to
which the Philippines bound itself. The first of these is the Mutual Defense Treaty (MDT, for
brevity). The MDT has been described as the "core" of the defense relationship between the
Philippines and its traditional ally, the United States. Its aim is to enhance the strategic and
technological capabilities of our armed forces through joint training with its American
counterparts; the "Balikatan" is the largest such training exercise directly supporting the MDT's
objectives. It is this treaty to which the V FA adverts and the obligations thereunder which it
seeks to reaffirm.
The lapse of the US-Philippine Bases Agreement in 1992 and the decision not to renew it
created a vacuum in US-Philippine defense relations, that is, until it was replaced by the Visiting
Forces Agreement. It should be recalled that on October 10, 2000, by a vote of eleven to three,
this Court upheld the validity of the VFA.7 The V FA provides the "regulatory mechanism" by
which "United States military and civilian personnel [may visit] temporarily in the Philippines in
connection with activities approved by the Philippine Government." It contains provisions relative
to entry and departure of American personnel, driving and vehicle registration, criminal
jurisdiction, claims, importation and exportation, movement of vessels and aircraft, as well as the
duration of the agreement and its termination. It is the VFA which gives continued relevance to
the MDT despite the passage of years. Its primary goal is to facilitate the promotion of optimal
cooperation between American and Philippine military forces in the event of an attack by a
common foe.
The first question that should be addressed is whether "Balikatan 02-1" is covered by the Visiting
Forces Agreement. To resolve this, it is necessary to refer to the V FA itself: Not much help can
be had therefrom, unfortunately, since the terminology employed is itself the source of the
problem. The VFA permits United States personnel to engage, on an impermanent basis, in
"activities," the exact meaning of which was left undefined. The expression is ambiguous,
permitting a wide scope of undertakings subject only to the approval of the Philippine
government.8 The sole encumbrance placed on its definition is couched in the negative, in that
United States personnel must "abstain from any activity inconsistent with the spirit of this
agreement, and in particular, from any political activity."9 All other activities, in other words, are
fair game.
We are not left completely unaided, however. The Vienna Convention on the Law of Treaties,
which contains provisos governing interpretations of international agreements, state:
SECTION 3. INTERPRETATION OF TREATIES
Article 31
General rule of interpretation
1. A treaty shall be interpreted in good faith ill accordance with the ordinary meaning to be given
to the tenus of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the
text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connexion
with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of
the treaty and accepted by the other parties as an instrument related to the party .
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or
the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of
the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Article 32
Supplementary means of interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory work
of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting
from the application of article 31, or to determine the meaning when the interpretation according
to article 31 :
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd unreasonable.
It is clear from the foregoing that the cardinal rule of interpretation must involve an examination
of the text, which is presumed to verbalize the parties' intentions. The Convention likewise
dictates what may be used as aids to deduce the meaning of terms, which it refers to as the
context of the treaty, as well as other elements may be taken into account alongside the
aforesaid context. As explained by a writer on the Convention ,
[t]he Commission's proposals (which were adopted virtually without change by the conference
and are now reflected in Articles 31 and 32 of the Convention) were clearly based on the view
that the text of a treaty must be presumed to be the authentic expression of the intentions of the
parties; the Commission accordingly came down firmly in favour of the view that 'the starting
point of interpretation is the elucidation of the meaning of the text, not an investigation ab
initio into the intentions of the parties'. This is not to say that the travauxpreparatoires of a treaty
, or the circumstances of its conclusion, are relegated to a subordinate, and wholly ineffective,
role. As Professor Briggs points out, no rigid temporal prohibition on resort to travaux
preparatoires of a treaty was intended by the use of the phrase 'supplementary means of
interpretation' in what is now Article 32 of the Vienna Convention. The distinction between the
general rule of interpretation and the supplementary means of interpretation is intended rather to
ensure that the supplementary means do not constitute an alternative, autonomous method of
interpretation divorced from the general rule.10
The Terms of Reference rightly fall within the context of the VFA.
After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the
word .'activities" arose from accident. In our view, it was deliberately made that way to give both
parties a certain leeway in negotiation. In this manner, visiting US forces may sojourn in
Philippine territory for purposes other than military. As conceived, the joint exercises may include
training on new techniques of patrol and surveillance to protect the nation's marine resources,
sea search-and-rescue operations to assist vessels in distress, disaster relief operations, civic
action projects such as the building of school houses, medical and humanitarian missions, and
the like.
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only
logical to assume that .'Balikatan 02-1," a "mutual anti- terrorism advising, assisting and training
exercise," falls under the umbrella of sanctioned or allowable activities in the context of the
agreement. Both the history and intent of the Mutual Defense Treaty and the V FA support the
conclusion that combat-related activities -as opposed to combat itself -such as the one subject of
the instant petition, are indeed authorized.
That is not the end of the matter, though. Granted that "Balikatan 02-1" is permitted under the
terms of the VFA, what may US forces legitimately do in furtherance of their aim to provide
advice, assistance and training in the global effort against terrorism? Differently phrased, may
American troops actually engage in combat in Philippine territory? The Terms of Reference are
explicit enough. Paragraph 8 of section I stipulates that US exercise participants
may not engage in combat "except in self-defense." We wryly note that this sentiment is
admirable in the abstract but difficult in implementation. The target of "Balikatan 02-1 I" the Abu
Sayyaf, cannot reasonably be expected to sit idly while the battle is brought to their very
doorstep. They cannot be expected to pick and choose their targets for they will not have the
luxury of doing so. We state this point if only to signify our awareness that the parties straddle a
fine line, observing the honored legal maxim "Nemo potest facere per alium quod non potest
facere per directum."11 The indirect violation is actually petitioners' worry, that in reality,
"Balikatan 02-1 " is actually a war principally conducted by the United States government, and
that the provision on self-defense serves only as camouflage to conceal the true nature of the
exercise. A clear pronouncement on this matter thereby becomes crucial.
In our considered opinion, neither the MDT nor the V FA allow foreign troops to engage in an
offensive war on Philippine territory. We bear in mind the salutary proscription stated in the
Charter of the United Nations, to wit:
Article 2
The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in
accordance with the following Principles.
xxx xxx xxx xxx
4. All Members shall refrain in their international relations from the threat or use of force against
the territorial integrity or political independence of any state, or in any other manner inconsistent
with the Purposes of the United Nations.
xxx xxx xxx xxx
In the same manner, both the Mutual Defense Treaty and the Visiting Forces Agreement, as in
all other treaties and international agreements to which the Philippines is a party, must be read
in the context of the 1987 Constitution. In particular, the Mutual Defense Treaty was concluded
way before the present Charter, though it nevertheless remains in effect as a valid source of
international obligation. The present Constitution contains key provisions useful in determining
the extent to which foreign military troops are allowed in Philippine territory. Thus, in the
Declaration of Principles and State Policies, it is provided that:
xxx xxx xxx xxx
SEC. 2. The Philippines renounces war as an instrument of national policy, adopts the generally
accepted principles of international law as part of the law of the land and adheres to the policy of
peace, equality, justice, freedom, cooperation, and amity with all nations.
xxx xxx xxx xxx
SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states
the paramount consideration shall be national sovereignty, territorial integrity, national interest,
and the right to self- determination.
SEC. 8. The Philippines, consistent with the national interest, adopts and pursues a policy of
freedom from nuclear weapons in the country.
xxx xxx xxx xxx
The Constitution also regulates the foreign relations powers of the Chief Executive when it
provides that "[n]o treaty or international agreement shall be valid and effective unless concurred
in by at least two-thirds of all the members of the Senate."12 Even more pointedly, the Transitory
Provisions state:
Sec. 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines
and the United States of America concerning Military Bases, foreign military bases, troops or
facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the
Senate and, when the Congress so requires, ratified by a majority of the votes cast by the
people in a national referendum held for that purpose, and recognized as a treaty by the other
contracting state.
The aforequoted provisions betray a marked antipathy towards foreign military presence in the
country, or of foreign influence in general. Hence, foreign troops are allowed entry into the
Philippines only by way of direct exception. Conflict arises then between the fundamental law
and our obligations arising from international agreements.
A rather recent formulation of the relation of international law vis-a-vis municipal law was
expressed in Philip Morris, Inc. v. Court of Appeals,13 to wit:
xxx Withal, the fact that international law has been made part of the law of the land does not by
any means imply the primacy of international law over national law in the municipal sphere.
Under the doctrine of incorporation as applied in most countries, rules of international law are
given a standing equal, not superior, to national legislation.
This is not exactly helpful in solving the problem at hand since in trying to find a middle ground, it
favors neither one law nor the other, which only leaves the hapless seeker with an unsolved
dilemma. Other more traditional approaches may offer valuable insights.
From the perspective of public international law, a treaty is favored over municipal law pursuant
to the principle of pacta sunt servanda. Hence, "[e]very treaty in force is binding upon the parties
to it and must be performed by them in good faith."14 Further, a party to a treaty is not allowed to
"invoke the provisions of its internal law as justification for its failure to perform a treaty." 15
Our Constitution espouses the opposing view. Witness our jurisdiction as I stated in section 5 of
Article VIII:
The Supreme Court shall have the following powers:
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of
Court may provide, final judgments and order of lower courts in:
(A) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is
in question.
In Ichong v. Hernandez,16 we ruled that the provisions of a treaty are always subject to
qualification or amendment by a subsequent law, or that it is subject to the police power of the
State. In Gonzales v. Hechanova,17
xxx As regards the question whether an international agreement may be invalidated by our
courts, suffice it to say that the Constitution of the Philippines has clearly settled it in the
affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not be
deprived "of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or
writ of error as the law or the rules of court may provide, final judgments and decrees of inferior
courts in -( I) All cases in which the constitutionality or validity of any treaty, law, ordinance, or
executive order or regulation is in question." In other words, our Constitution authorizes the
nullification of a treaty, not only when it conflicts with the fundamental law, but, also, when it runs
counter to an act of Congress.
The foregoing premises leave us no doubt that US forces are prohibited / from engaging in an
offensive war on Philippine territory.
Yet a nagging question remains: are American troops actively engaged in combat alongside
Filipino soldiers under the guise of an alleged training and assistance exercise? Contrary to what
petitioners would have us do, we cannot take judicial notice of the events transpiring down
south,18 as reported from the saturation coverage of the media. As a rule, we do not take
cognizance of newspaper or electronic reports per se, not because of any issue as to their truth,
accuracy, or impartiality, but for the simple reason that facts must be established in accordance
with the rules of evidence. As a result, we cannot accept, in the absence of concrete proof,
petitioners' allegation that the Arroyo government is engaged in "doublespeak" in trying to pass
off as a mere training exercise an offensive effort by foreign troops on native soil. The petitions
invite us to speculate on what is really happening in Mindanao, to issue I make factual findings
on matters well beyond our immediate perception, and this we are understandably loath to do.
It is all too apparent that the determination thereof involves basically a question of fact. On this
point, we must concur with the Solicitor General that the present subject matter is not a fit topic
for a special civil action for certiorari. We have held in too many instances that questions of fact
are not entertained in such a remedy. The sole object of the writ is to correct errors of jurisdiction
or grave abuse of discretion: The phrase "grave abuse of discretion" has a precise meaning in
law, denoting abuse of discretion "too patent and gross as to amount to an evasion of a positive
duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law, or where the
power is exercised in an arbitrary and despotic manner by reason of passion and personal
hostility."19
In this connection, it will not be amiss to add that the Supreme Court is not a trier of facts. 20
Under the expanded concept of judicial power under the Constitution, courts are charged with
the duty "to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
government."21 From the facts obtaining, we find that the holding of "Balikatan 02-1" joint military
exercise has not intruded into that penumbra of error that would otherwise call for correction on
our part. In other words, respondents in the case at bar have not committed grave abuse of
discretion amounting to lack or excess of jurisdiction.
WHEREFORE, the petition and the petition-in-intervention are hereby DISMISSED without
prejudice to the filing of a new petition sufficient in form and substance in the proper Regional
Trial Court.
SO ORDERED.
FIRST DIVISION
[G.R. No. 47800. December 2, 1940.]
MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.
Maximo Calalang in his own behalf.
Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents
Williams, Fragante and Bayan
City Fiscal Mabanag for the other respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648;
DELEGATION OF LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS
AND SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS TO PROMULGATE RULES
AND REGULATIONS. The provisions of section 1 of Commonwealth Act No. 648 do not
confer legislative power upon the Director of Public Works and the Secretary of Public Works
and Communications. The authority therein conferred upon them and under which they
promulgated the rules and regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the National Assembly in said
Act, to wit, "to promote safe transit upon, and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines" and to close them temporarily to any or all classes of traffic
"whenever the condition of the road or the traffic thereon makes such action necessary or
advisable in the public convenience and interest." The delegated power, if at all, therefore, is not
the determination of what the law shall be, but merely the ascertainment of the facts and
circumstances upon which the application of said law is to be predicated. To promulgate rules
and regulations on the use of national roads and to determine when and how long a national
road should be closed to traffic, in view of the condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an administrative function which cannot be
directly discharged by the National Assembly. It must depend on the discretion of some other
government official to whom is confided the duty of determining whether the proper occasion
exists for executing the law. But it cannot be said that the exercise of such discretion is the
making of the law.
2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY.
Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the
paramount police power of the state. Said Act, by virtue of which the rules and regulations
complained of were promulgated, aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting said law, therefore, the
National Assembly was prompted by considerations of public convenience and welfare. It was
inspired by a desire to relieve congestion of traffic, which is, to say the least, a menace to public
safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in
order to promote the general welfare may interfere with personal liberty, with property, and with
business and occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state (U.S. v.
Gomer Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights of the
individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should
not be made to prevail over authority because then society will fall into anarchy. Neither should
authority be made to prevail over liberty because then the individual will fall into slavery. The
citizen should achieve the required balance of liberty and authority in his mind through education
and, personal discipline, so that there may be established the resultant equilibrium, which means
peace and order and happiness for all. The moment greater authority is conferred upon the
government, logically so much is withdrawn from the residuum of liberty which resides in the
people. The paradox lies in the fact that the apparent curtailment of liberty is precisely the very
means of insuring its preservation.
3. ID.; ID.; SOCIAL JUSTICE. Social justice is "neither communism, nor despotism, nor
atomism, nor anarchy," but the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure economic stability of
all the competent elements of society, through the maintenance of a proper economic and social
equilibrium in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle of salus populi est
suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that should
be equally and evenly extended to all groups as a combined force in our social and economic
life, consistent with the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest
number."
DECISION
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before
this court this petition for a writ of prohibition against the respondents, A. D. Williams, as
Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works;
Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as
Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.
It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940,
resolved to recommend to the Director of Public Works and to the Secretary of Public Works and
Communications that animal-drawn vehicles be prohibited from passing along Rosario Street
extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m.
and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at
Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the
date of the opening of the Colgante Bridge to traffic; that the Chairman of the National Traffic
Commission, on July 18, 1940 recommended to the Director of Public Works the adoption of the
measure proposed in the resolution aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548 which authorizes said Director of Public Works, with the approval of
the Secretary of Public Works and Communications, to promulgate rules and regulations to
regulate and control the use of and traffic on national roads; that on August 2, 1940, the Director
of Public Works, in his first indorsement to the Secretary of Public Works and Communications,
recommended to the latter the approval of the recommendation made by the Chairman of the
National Traffic Commission as aforesaid, with the modification that the closing of Rizal Avenue
to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad
crossing at Antipolo Street to Azcarraga Street; that on August 10, 1940, the Secretary of Public
Works and Communications, in his second indorsement addressed to the Director of Public
Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be
closed to traffic of animal-drawn vehicles, between the points and during the hours as above
indicated, for a period of one year from the date of the opening of the Colgante Bridge to traffic;
that the Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to
be enforced the rules and regulations thus adopted; that as a consequence of such
enforcement, all animal-drawn vehicles are not allowed to pass and pick up passengers in the
places above-mentioned to the detriment not only of their owners but of the riding public as well.
It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public
Works, with the approval of the Secretary of Public Works and Communications, is authorized to
promulgate rules and regulations for the regulation and control of the use of and traffic on
national roads and streets is unconstitutional because it constitutes an undue delegation of
legislative power. This contention is untenable. As was observed by this court in Rubi v.
Provincial Board of Mindoro (39 Phil, 660, 700), "The rule has nowhere been better stated than
in the early Ohio case decided by Judge Ranney, and since followed in a multitude of cases,
namely: The true distinction therefore is between the delegation of power to make the law,
which necessarily involves a discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot
be done; to the latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. v. Commrs.
Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman v.
Southard (10 Wheat., 1) may be committed by the Legislature to an executive department or
official. The Legislature may make decisions of executive departments or subordinate officials
thereof, to whom it has committed the execution of certain acts, final on questions of fact. (U.S.
v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is to give prominence to the
necessity of the case."cralaw virtua1aw library
Section 1 of Commonwealth Act No. 548 reads as follows:jgc:chanrobles.com.ph
"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines, the Director of Public Works, with the approval of the Secretary of
Public Works and Communications, shall promulgate the necessary rules and regulations to
regulate and control the use of and traffic on such roads and streets. Such rules and regulations,
with the approval of the President, may contain provisions controlling or regulating the
construction of buildings or other structures within a reasonable distance from along the national
roads. Such roads may be temporarily closed to any or all classes of traffic by the Director of
Public Works and his duly authorized representatives whenever the condition of the road or the
traffic thereon makes such action necessary or advisable in the public convenience and interest,
or for a specified period, with the approval of the Secretary of Public Works and
Communications."cralaw virtua1aw library
The above provisions of law do not confer legislative power upon the Director of Public Works
and the Secretary of Public Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations now complained of is not to
determine what public policy demands but merely to carry out the legislative policy laid down by
the National Assembly in said Act, to wit, "to promote safe transit upon and avoid obstructions
on, roads and streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines" and to close them temporarily to any or all
classes of traffic "whenever the condition of the road or the traffic makes such action necessary
or advisable in the public convenience and interest." The delegated power, if at all, therefore, is
not the determination of what the law shall be, but merely the ascertainment of the facts and
circumstances upon which the application of said law is to be predicated. To promulgate rules
and regulations on the use of national roads and to determine when and how long a national
road should be closed to traffic, in view of the condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an administrative function which cannot be
directly discharged by the National Assembly. It must depend on the discretion of some other
government official to whom is confided the duty of determining whether the proper occasion
exists for executing the law. But it cannot be said that the exercise of such discretion is the
making of the law. As was said in Lockes Appeal (72 Pa. 491): "To assert that a law is less than
a law, because it is made to depend on a future event or act, is to rob the Legislature of the
power to act wisely for the public welfare whenever a law is passed relating to a state of affairs
not yet developed, or to things future and impossible to fully know." The proper distinction the
court said was this: "The Legislature cannot delegate its power to make the law; but it can make
a law to delegate a power to determine some fact or state of things upon which the law makes,
or intends to make, its own action depend. To deny this would be to stop the wheels of
government. There are many things upon which wise and useful legislation must depend which
cannot be known to the law-making power, and, must, therefore, be a subject of inquiry and
determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed.
294.)
In the case of People v. Rosenthal and Osmea, G.R. Nos. 46076 and 46077, promulgated
June 12, 1939, and in Pangasinan Transportation v. The Public Service Commission, G.R. No.
47065, promulgated June 26, 1940, this Court had occasion to observe that the principle of
separation of powers has been made to adapt itself to the complexities of modern governments,
giving rise to the adoption, within certain limits, of the principle of "subordinate legislation," not
only in the United States and England but in practically all modern governments. Accordingly,
with the growing complexity of modern life, the multiplication of the subjects of governmental
regulations, and the increased difficulty of administering the laws, the rigidity of the theory of
separation of governmental powers has, to a large extent, been relaxed by permitting the
delegation of greater powers by the legislative and vesting a larger amount of discretion in
administrative and executive officials, not only in the execution of the laws, but also in the
promulgation of certain rules and regulations calculated to promote public interest.
The petitioner further contends that the rules and regulations promulgated by the respondents
pursuant to the provisions of Commonwealth Act No. 548 constitute an unlawful interference
with legitimate business or trade and abridge the right to personal liberty and freedom of
locomotion. Commonwealth Act No. 548 was passed by the National Assembly in the exercise
of the paramount police power of the state.
Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to
promote safe transit upon and avoid obstructions on national roads, in the interest and
convenience of the public. In enacting said law, therefore, the National Assembly was prompted
by considerations of public convenience and welfare. It was inspired by a desire to relieve
congestion of traffic. which is, to say the least, a menace to public safety. Public welfare, then,
lies at the bottom of the enactment of said law, and the state in order to promote the general
welfare may interfere with personal liberty, with property, and with business and occupations.
Persons and property may be subjected to all kinds of restraints and burdens, in order to secure
the general comfort, health, and prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To
this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a
blessing without which life is a misery, but liberty should not be made to prevail over authority
because then society will fall into anarchy. Neither should authority be made to prevail over
liberty because then the individual will fall into slavery. The citizen should achieve the required
balance of liberty and authority in his mind through education and personal discipline, so that
there may be established the resultant equilibrium, which means peace and order and
happiness for all. The moment greater authority is conferred upon the government, logically so
much is withdrawn from the residuum of liberty which resides in the people. The paradox lies in
the fact that the apparent curtailment of liberty is precisely the very means of insuring its
preservation.
The scope of police power keeps expanding as civilization advances. As was said in the case of
Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police
power is a continuing one, and a business lawful today may in the future, because of the
changed situation, the growth of population or other causes, become a menace to the public
health and welfare, and be required to yield to the public good." And in People v. Pomar (46
Phil., 440), it was observed that "advancing civilization is bringing within the police power of the
state today things which were not thought of as being within such power yesterday. The
development of civilization, the rapidly increasing population, the growth of public opinion, with
an increasing desire on the part of the masses and of the government to look after and care for
the interests of the individuals of the state, have brought within the police power many questions
for regulation which formerly were not so considered."cralaw virtua1aw library
The petitioner finally avers that the rules and regulations complained of infringe upon the
constitutional precept regarding the promotion of social justice to insure the well-being and
economic security of all the people. The promotion of social justice, however, is to be achieved
not through a mistaken sympathy towards any given group. Social justice is "neither
communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the
equalization of social and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social justice means the promotion
of the welfare of all the people, the adoption by the Government of measures calculated to
insure economic stability of all the competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments on the time-honored
principle of salus populi est suprema lex.

Social justice, therefore, must be founded on the recognition of the necessity of interdependence
among divers and diverse units of a society and of the protection that should be equally and
evenly extended to all groups as a combined force in our social and economic life, consistent
with the fundamental and paramount objective of the state of promoting the health, comfort, and
quiet of all persons, and of bringing about "the greatest good to the greatest number."cralaw
virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against the
petitioner. So ordered.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-43800 July 29, 1977
LEONILA LAUREL ALMEDA and VENANCIO ALMEDA, Petitioners,
vs.
THE HONORABLE COURT OF APPEALS and EULOGIO GONZALES, respondents.
Dizon & Vitug and Cornell S. Valdez for petitioners.
Dennis B. Recon Juanito Hernandez and Oseas A. Martin for private respondent,
MARTIN, J.:
This is an agrarian case. Three questions of consequential effects are raised: first is there a
tenant's right of redemption in sugar and coconut lands; second, is prior tender or judicial
consignation of the redemption price a condition precedent for the valid exercise of the right of
redemption; and third, does the Court of Agrarian Relations have jurisdiction over complaints for
redemption of sugar and coconut lands.
Respondent Eulogio Gonzales is an agricultural share tenant of Glicerio, Sinfroso, Susana,
Maria, Sebastian, Rufina, Bienvenido, Besmark and Cesar, all surnamed Angeles, on their
46,529-square land situated in Tanauan, Batangas, and devoted to sugar cane and coconuts.
On September 30, 1968, the landowners sold the property to petitioners-spouses Leonila Laurel
Almeda and Venancio Almeda without notifying respondent-tenant in writing of the sale. The
document of sale was registered with the Register of Deeds of Tanauan, Batangas on March 27,
1969. Respondent-tenant thus seeks the redemption of the land in a complaint filed on March
27, 1971, pursuant to the provisions of Sections 11 and 12 of the Code of Agrarian Reforms,
with the Court of Agrarian Relations at Lipa City.
Answering the complaint, petitioners-spouses state, among other things, that long before the
execution of the deed of sale, Glicerio Angeles and his nephew Cesar Angeles first offered the
sale of the land to respondent Gonzales, but the latter said that he had no money; that
respondent-tenant, instead, went personally to the house of petitioners-spouses and implored
them to buy the land for fear that if someone else would buy the land, he may not be taken in as
tenant; that respondent-tenant is a mere dummy of someone deeply interested in buying the
land, that respondent-tenant made to tender of payment or any valid consignation in court at the
time he filed the complaint for redemption.
At the hearing of May 29, 1973 the parties waived their right to present evidence and, instead,
agreed to file simultaneous memoranda upon which the decision of the court would be based.
On October 10, 1973, the Agrarian Court rendered judgment authorizing, the respondent-tenant,
Eulogio Gonzales, to redeem the tenanted land for P24,000.00, the said amount to be deposited
by him with the Clerk of Court within fifteen (15) days from receipt of the decision.
Petitioners-spouses excepted to the ruling of the Agrarian Court and appealed the case to the
Court of Appeals. On January 30, 1976, the Appellate Court, however, affirmed the decision of
the Agrarian Court. Denied of their motions for reconsideration, petitioners- spouses instituted
the present petition for review.
We find the appeal to be impressed with merits.
1. Prior to the enactment of the Agricultural Land Reform Code RA 3844), no right of preference
in the sale of the land under cultivation was enjoyed by the tenant-farmer. The absence of this
right freely opened the way to the landlords to ease out their tenants from the land by ostensible
conveyance of said land to another tenant who, in turn, sues for the ejectment of the first tenant
on ground of personal cultivation. While many of these sales were simulated, the tenant is
oftenly evicted from the land because of the formal transfer of ownership in the land. 1 On August
8, 1963, the Agricultural Land Reform Code was passed, impressed with the policy of the State,
among other things, "(t)o establish owner-cultivatorship and the economic family-size farm as
the basis of Philippine agriculture; to achieve a dignified existence of the small farmers free from
pernicious institutional restraints and practices; to make the small farmers more independent,
self-reliant and responsible citizens, and a source of genuine strength in our democratic
society."2 More importantly, a new right was given to the tenants-farmers: the right of pre-
emption and redemption. It bolsters their security of tenure and further encourages them to
become owner-cultivators.3 Thus, Section II provides: "In case the agricultural lessor decides to
sell the landholding, the agricultural lessee shall have the preferential right to buy the same
under reasonable terms and conditions. ... The right of pre-emption under this Section may be
exercised within one hundred eighty days from notice in writing, which shall be served by the
owner on all lessees affected and the Department of Agrarian Reform.. If the agricultural lessee
agrees with the terms and conditions of the sale, he must give notice in writing to the agricultural
lessor of his intention to exercise his right of pre-emption within the balance of one hundred
eighty days' period still available to him, but in any case not less than thirty days. He must either
tender payment of, or present a certificate of the land bank that t shall make payment pursuant
to section eighty of this Code on the price of the landholding to the agricultural lessor. If the latter
refuses to accept such tender or presentment, he may consign it with the court." As protection of
this right, Section 12 was inserted: "In case the landholding is sold to a third person without the
knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a
reasonable price and consideration. ... The right of redemption under this section may be
exercised within one hundred eighty days from notice in writing which shall be served by the
vendee on all lessees affected and the Department of Agrarian Reform upon the registration of
the sale, and shall have priority over any other right of legal redemption. The redemption price
shall be the reasonable price of the land at the time of the sale. 4 In the precedential case
of Hidalgo v. Hidalgo, 5 this right was held applicable to both leasehold tenants
and share tenants.
Presently, We are faced with an intricate question: is this right of redemption available to tenants
in sugar and coconut lands? We answer yes. Among those exempted from the automatic
conversion to agricultural leasehold upon the effectivity of the Agricultural Land Reform Code in
1963 or even after its amendments (Code of Agrarian Reforms) are sugar lands. Section 4
thereof states: Agricultural share tenancy throughout the country, as herein defined, is hereby
declared contrary to public policy and shall be automatically converted to agricultural leasehold
upon the effectivity of this section. ... Provided, That in order not to jeopardize international
commitments, lands devoted to crops covered by marketing allotments shall be made the
subject of a separate proclamation by the President upon recommendation of' the department
head that adequate provisions, such as the organization of cooperatives marketing agreement,
or similar other workable arrangements, have been made to insure efficient management on all
matters requiring synchronization of the agricultural with the processing phases of such crops ..."
Sugar is, of course, one crop covered by marketing allotments. In other words this section
recognizes sharetenancy in sugar lands until after a special proclamation is made, which
proclamation shall have the same effect of an executive proclamation of the operation of the
Department of Agrarian Reform in any region or locality; the share tenants in the lands affected
will become agricultural lessees at the beginning of the agricultural year next succeeding the
year in which the proclamation is made. 6 But, there is nothing readable or even discernible in
the law denying to tenants in sugar lands the right of pre-emption and redemption under the
Code. The exemption is purely limited to the tenancy system; it does not exclude the other rights
conferred by the Code, such as the right of pre-emption and redemption. In the same manner,
coconut lands are exempted from the Code only with respect to the consideration and tenancy
system prevailing, implying that in other matters the right of pre-emption and redemption
which does not refer to the consideration of the tenancy the provisions of the Code apply.
Thus, Section 35 states: "Notwithstanding the provisions of the preceding Sections, in the case
of fishponds, saltbeds and lands principally planted to citrus, coconuts, cacao, coffee, durian,
and other similar permanent trees at the time of the approval of this Code, the consideration as
well as the tenancy system prevailing, shall be governed by the provisions of Republic Act
Numbered Eleven Hundred and Ninety-Nine, as amended."
It is to be noted that under the new Constitution, property ownership is impressed with social
function. Property use must not only be for the benefit of the owner but of society as well. The
State, in the promotion of social justice, may "regulate the acquisition, ownership, use,
enjoyment and disposition of private property, and equitably diffuse property ... ownership and
profits." 7 One governmental policy of recent date project emancipation of tenants from the
bondage of the soil and the transfer to them of the ownership of the land they till. This is
Presidential Decree No. 27 of October 21, 1972, ordaining that all tenant farmers "of private
agricultural lands devoted to rice and corn under a system of sharecrop or lease tenancy
whether classified as landed estates or not shall be deemed "owner of a portion constituting a
family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated." 8
2. Nevertheless, while the Code secures to the tenant-farmer this right of redemption, in
particular, the exercise thereof must be in accordance with law in order to be valid. "The timely
exercise of the right of legal redemption," said the Court in Basbas v. Entena.9 "requires either
tender of the price or valid consignation thereof." The statutory periods within which the right
must be exercised "would be rendered meaningless and of easy evasion unless the
redemptioner is required to make an actual tender in good faith of what he believed to be
reasonable price of the land sought to be redeemed." "The existence of the right of redemption
operates to depress the market value of the land until the period expires, and to render that
period indefinite by permitting the tenant to file a suit for redemption, with either party unable to
foresee when final judgment will terminate the action, would render nugatory the period of two
years (180 days under the new law) fixed by the statute for making the redemption and virtually
paralyze any efforts of the landowner to realize the value of his land. No buyer can be expected
to acquire it without any certainty as to the amount for which least his investment in case of
redemption. In the meantime, the landowner's needs and obligations cannot be met. It is
doubtful if any such result was intended by the statute, absent clear wording to that
effect."10 Bona fide redemption necessarily imports a seasonable and valid tender of the entire
repurchase price. The right of a redemptioner to pay a "reasonable price" does not excuse him
from the duty to make proper tender of the price that can be honestly deemed reasonable under
the circumstances, without prejudice to final arbitration by the courts. "It is not difficult to discern
why the redemption price should either be fully offered in legal tender or else validly consigned
in court. Only by such means can the buyer become certain that the offer to redeem is one made
seriously and in good faith. A buyer cannot be expected to entertain an offer of redemption
without attendant evidence that the redemptioner can, and is willing to accomplish the
repurchase immediately. A different rule would leave the buyer open to harassment by
speculators or crackpots as well as to unnecessary prolongation of the redemption period,
contrary to the policy of the law. While consignation of the tendered price is not always
necessary because legal redemption is not made to discharge a pre-existing debt (Asturias
Sugar Central v. Cane Molasses Co., 60 Phil. 253), a valid tender is indispensable, for the
reasons already stated. Of course, consignation of the price would remove all controversy as to
the redemptioner's ability to pay at the proper time." 11
In the case before Us, neither prior tender nor judicial consignation of the redemption price
accompanied the filing of the redemption suit. In fact, the Agrarian court had yet to order, when it
rendered its decision on October 10, 1973 (complaint was filed on March 27, 1971), respondent-
tenant to deposit the amount of M,000.00 as redemption price with the Clerk of Court within
fifteen (15) days from receipt of the decision. The absence of such tender or consignation leaves
Us, therefore, with no alternative but to declare that respondent-tenant had failed to exercise his
right of redemption in accordance with law.
3. Reliance cannot be placed upon the case of Hidalgo v. Hidalgo 12 as excuse for the failure to
make the requisite tender or consignation in court, because the Court did not rule therein that
prior tender or judicial consignation of the redemption price is not required for the valid exercise
of the right of redemption. In that case, the spouse Igmidio Hidalgo and Martina Resales were
the share tenants of Policarpio Hidalgo on his 22, 876-square meter agricultural land in Lumil,
San Jose, Batangas, while the spouses Hilario Aguila and Adela Hidalgo were his tenants on a
square meter land. Policarpio Hidalgo sold these lands without notifying his tenants: and so, the
tenants filed petitions before the Court of Agrarian Relations seeking the redemption of the lands
under Section 12 of the Code. The Agrarian Court dismiss the petitioners for the reason that the
right of redemption is available to leasehold tenants only but not to share tenants. On review, the
Court ruled that while the Agrarian Court "correctly focused on the sole issue of law" whether
the right of redemption granted 12 of Republic Act No. 3844 is applicable to share tenants it
(Agrarian Court) "arrived at its erroneous conclusion that the right of redemption granted by
Section 12 of the Land Reform Code is available to leasehold tenants only but not to share
tenants." The Court said that '(t)he Code intended ... to afford the farmers
who transitionally continued to be share tenants after its enactment but who inexorably would be
agricultural lessees by virtue of the Code's proclaimed abolition of tenancy, the same priority and
preferential right as those other share tenants, who upon the enactment of the Code or soon
thereafter were earlier converted by fortuitous circumstance into agricultural lessees, to acquire
the lands under their cultivation in the event of their voluntary sale by the owner or of their
acquisition, by expropriation or otherwise, by the Land Authority." But, the Court did not rule that
tender of payment or consignation of the redemption price in court is not a requisite in the valid
exercise of the right of redemption. In fact, it said that "(i)n the absence of any provision in the
Code as to the manner of and amounts payable on redemption, the pertinent provisions of the
Civil Code apply in a suppletory character" which, of course, imposes tender of payment or
judicial consignation of the repurchase price as condition for valid redemption. Besides, it is
noteworthy that in that case petitioners-tenants' possession of funds and compliance the
requirements of redemption were not questioned, the case having been submitted and decided
on the sole legal issue of the right of redemption being available to them as share tenants.
4. As a consequence, the Court of Agrarian Relations has jurisdiction over suits for redemption,
like the present case, of sugar and coconut lands. Section 154 of the Agricultural Land Reform
Code, as amended, states: "The Court of Agrarian Relations shall have original and exclusive
jurisdiction over (1) all cases or actions involving matters, controversies, disputes, or
money claims arising from agrarian relations ..." Since this case involves a matter, controversy
or dispute "arising from agrarian relations" whether respondent-tenant on sugar and coconut
lands has the right of redemption it is definite that the Agrarian Court has jurisdiction to hear
and decide the same. 13 The Court of Agrarian Relations came into being for the enforcement of
all laws and regulations governing the relations between capital and labor on all agricultural
lands under any system of cultivation with original and exclusive jurisdiction over the entire
Philippines, to consider, investigate, decide and settle all questions, matters, controversies, or
disputes involving or arising from such relationship. 14
ACCORDINGLY, the appealed decision of the Court of Appeals is hereby reversed and set
aside. Respondent Eulogio Gonzales is hereby held not to have validly exercised his right of
redemption over his tenanted agricultural land. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-47178 May 16, 1980
ESTRELLA B. ONDOY, petitioner,
vs.
VIRGILIO IGNACIO, Proprietor M/B LADY ESTRELLITA and/or IMPERIAL FISHING
ENTERPRISES and/or THE SECRETARY OF LABOR and/or THE COMPENSATION
APPEALS AND REVIEW STAFF, Department of Labor, respondents.
Fernardo R. Moreno for petitioner.
Feliciano Tumale for private respondents.
E. V. Espanol for public respondent.
FERNANDO, C.J.:t.hqw
The undisputed facts argue strongly for the granting of the claim for compensation filed by
petitioner, the mother of one Jose Ondoy, who was drowned while in the employ of private
respondent, Virgilio Ignacio. Whatever be the cause for the failure to do so, it is admitted that
there was no controversion. Such omission, fatal in character, was sought to be minimized by
the filing of a motion to dismissed based on the alleged absence of an employment relationship.
What cannot be ignored, however, is that subsequently, in the hearing of such claim private
respondent submitted affidavits executed by the chief engineer and oiler of the fishing vessel
that the deceased a fisherman, was in that ship, undeniably a member of the working force, but
after being invited by friends to a drinking spree, left the vessel, and thereafter was found dead.
The referee summarily ignored the affidavit of the chief-mate of respondent employer to the
effect "that sometime in October, 1968, while Jose Ondoy, my co-worker, was in the actual
performance of his work with said fishing enterprises, he was drowned and died on October 22,
1968. That the deceased died in line of Duty." 1 The hearing officer or referee dismissed the
claim for lack of merit. 2 A motion for reconsideration was duly filed, but in an order dated August
29, 1977, the then Secretary of Labor, now Minister Blas F. Ople, denied such motion for
reconsideration for lack of merit. 3 Hence this petition for review.
1. In La Mallorca v. Workmen's Compensation Commission, 4 this Court explicitly held that the
failure to controvert "is fatal to any defense that petitioner could interpose. So we have held in a
host of decisions in compliance with the clear and express language of the Workmen's
Compensation Act. Any Assertion to the contrary is doomed to futility. 5 The opinion noted thirty
decisions starting from Bachrach Motor Co. v. Workmen's Compensation
Commission 6 to Northwest Orient Airlines, Inc. v. Workmen's Compensation
Commission. 7 Thereafter, in Regal Auto Works, Inc. v. Workmen's Compensation
Commission, 8 such a doctrine was reaffirmed. It was further noted that nine more decisions had
been rendered by this Court starting from Republic v. Workmen's Compensation
Commission 9 to Abong v. Workmen's Compensation Commission. 10 By the time respondent
secretary of Labor denied the motion for reconsideration, a host of decisions that speaks to the
same effect had been promulgated. 11 It clearly, appears, therefore, that the failure of the referee
to grant the award ought to have been remedied and the motion for reconsideration granted.
2. The deceased in this case met his death because of drowning. In Camotes Shipping
Corporation v. Otadoy, 12there was not even any direct testimony that the deceased was
drowned while in the performance of his duty. All that could be alleged was that he "was lost at Antonio, Aquino, Concepcion, Jr., Abad Santos and De Castro, JJ., concur.1wph1.t
sea while in the employ of petitioner. 13 Nonetheless, the award for compensation was
sustained. Likewise, the ruling in Caltex (Phil.) Inc. v. Villanueva 14 was cited with approval. Barredo, J., is on leave.
Thus: "The fact that the employee was found missing while on board the petitioner's vessel MV
'Caltex Mindanao' became known to the captain of the vessel on 10 October 1956 but it was
only on 6 November 1956 when the petitioner transmitted to the respondent Compensation
WCC For in No. 3 stating that the employee was 'Lost at sea and presumed dead as of October
10, 1956,' and that it was controverting the respondent's claim. 15 In the present case, there is
evidence of the fact of death due to drowning. That was not controverted. Under the
circumstances, the failure to grant the claim finds no justification in law.

3. It bears repeating that there is evidence, direct and categorical, to the effect that the deceased
was drowned while "in the actual performance of his work" with the shipping enterprise of private
respondent. Even without such evidence, the petitioner could have relied on the presumption of
compensability under the Act once it is shown that the death or disability arose in the course of
employment, with the burden of overthrowing it being cast on the person or entity resisting the
claim. Time and time again this Court has stressed such statutory provision. It suffices to
mention cases decided from January to April of this year. 16 An appraisal of the counter-affidavits
submitted by two employees of private respondent and thereafter beholden to him to the effect
that the deceased left the vessel for a drinking spree certainly cannot meet the standard required
to negate the force of the presumption of compensability.

4. Nor is an affirmance of the finding of the referee adverse to the claim warranted because of
the doctrine that the findings of facts of an administrative agency must be accorded due weight
and consideration. An excerpt from the recent case of Uy v. Workmen's Compensation
Commission 17 finds pertinence: "The claim merits scant consideration for this Court is
authorized to inquire into the facts when the conclusions are not supported by substantial or
credible evidence. 18

5. This Court, in recognizing the right of petitioner to the award, merely adheres to the
interpretation uninterruptedly followed by this Court resolving all doubts in favor of the claimant.
So it has been since the first leading case of Francisco v. Conching 19 decided a year after the
1935 Constitution took effect. What was said in Victorias Milling Co., Inc. v. Workmen's
Compensation Commission 20 is not amiss: "There is need, it seems, even at this late date, for
[private respondent] and other employers to be reminded of the high estate accorded the
Workmen's Compensation Act in the constitutional scheme of social justice and protection to
labor. 21 Further: "No other judicial attitude may be expected in the face of a clearly expressed
legislative determination which antedated the constitutionally avowed concern for social justice
and protection to labor. It is easily understandable why the judiciary frowns on resort to
doctrines, which even if deceptively plausible, would result in frustrating such a national
policy. 22 Lastly, to quote from the opinion therein rendered: "To be more specific, the principle of
social justice is in this sphere strengthened and vitalized. A realistic view is that expressed
in Agustin v. Workmen's Compensation Commission: 'As between a laborer, usually poor and
unlettered, and the employer, who has resources to secure able legal advice, the law has reason
to demand from the latter stricter compliance. Social justice in these cases is not equality but
protection.' 23

WHEREFORE, the petition for review is granted and petitioner Estrelita B. Ondoy is awarded the
sum of, P6,000.00 as compensation for the death of her son, Jose Ondoy; P300.00 for burial
expenses; and P600.00 as attorney's fees. This decision is immediately executory. Costs
against private respondent Virgilio Ignacio.

CONSOLACION DUQUE SALONGA, assisted by her husband WENCESLAO
SALONGA, plaintiff-appellant,
vs.
JULITA B. FARRALES, and THE SHERIFF OF OLONGAPO CITY, defendants-appellees.
FERNANDEZ, J.:
This is an appeal certified to this Court by the Court of Appeals 1 from the decision of the Court
of First Instance of Zambales and Olongapo City, Third Judicial District, Branch III, Olongapo
City, in Civil Case No. 1144-0, entitled "Consolacion Duque Salonga, assisted by her husband,
Wenceslao Salonga, Plaintiff, versus Julita B. Farrales, and The Sheriff of Olongapo City,
Defendants," the dispositive part of which reads:
FOR THE REASONS GIVEN, judgment is hereby rendered dismissing plaintiff's complaint, as
well as defendants' counterclaim.
Costs against plaintiff.
SO ORDERED. 2
The records disclose that on January 2, 1973; the appellant, Consolacion Duque Salonga
assisted by her husband, filed a complaint against Julita B. Farrales and the Sheriff of Olongapo
City with the Court of First Instance of Zambales and Olongapo City, Third Judicial District,
Branch III, Olongapo City, seeking the following relief:
WHEREFORE, plaintiff most respectfully prays for the following relief:
a) Ordering defendant Julita Farrales to sell to plaintiff the parcel of land containing an area of
156 Square Meters, more or less, where the house of strong materials of plaintiff exists.
b) Ordering the defendants not to disturb nor interfere in the peaceful possession or occupation
of the land by plaintiff, until a final decision is rendered in this case.
c) Ordering defendants jointly and severally to pay costs; and
d) Granting plaintiff such other relief conformable to law, justice and equity.
Sta. Rita, Olongapo City, December 28, 1972. 3
that on January 9, 1973, plaintiff-appellant, Salonga filed an urgent petition for the issuance of a
writ of preliminary injunction which was duly amended on January 16, 1973, 4 with the following
prayer:
WHEREFORE, plaintiff assisted by counsel most respectfully prays the Hon. Court the following
relief:
a) That a restraining order be issued pending resolution of the instant petition for issuance of a
Writ of Preliminary Injunction enjoining defendants, particularly the Sheriff of Olongapo City to
restrain from enforcing the Writ of Execution issued in connection with the judgment rendered in
Civil Case 650 for ejectment in the City Court of Olongapo City;
b) That after due hearing of the present amended petition, a Writ of Preliminary Injunction
conditioned upon a reasonable bond be issued enjoining the defendants, particularly, the Sheriff
of Olongapo City, to restrain from enforcing the Writ of Execution issued in connection with the
judgment rendered in Civil Case No. 650 for ejectment in the City Court of Olongapo City, in
order to maintain the status of the parties; in order to prevent the infliction of irreparable injury to
plaintiff; and in order that whatever judgment may be rendered in this case, may not become
moot, academic, illusory and ineffectual, and
c) Granting plaintiff such other relief conformable to law, justice and equity;
that on January 22, 1973, the court a quo issued an order temporarily restraining the carrying
out of the writ of execution issued pursuant to the judgment rendered by the City Court of
Olongapo City in Civil Case No. 650, a suit for ejectment filed by defendant-appellee Farrales
against five defendants, among whom the herein appellant, Consolacion Duque Salonga; 5 that
on January 23, 1973, defendant-appellee Farrales filed a motion to deny the motion for the
issuance of a preliminary injunction for being vague and her answer with counterclaim to the
complaint; 6 that an opposition to the amended petition for the issuance of a writ of preliminary
injunction was also filed by the defendant-appellee Farrales on January 25, 1973; 7 that in an
order dated January 20, 1973, the court a quo denied the petition for the issuance of a
preliminary injunction and lifted the restraining order issued on January 22, 1973; 8 that plaintiff-
appellant moved for reconsideration of the order denying the motion for issuance of a
preliminary injunction on January 5, 1973; 9 which was also denied by the court a quo on
February 21, 1973; 10 that after the trial on the merits of Civil Case No. 1144-0, the trial court
rendered the judgment under review, dismissing plaintiff's complaint; 11 that on August 13, 1973,
the plaintiff, Consolacion Duque Salonga, appealed from the said decision to the Court of
Appeals; 12 that on February 25, 1974, the plaintiff-appellant, Consolacion Duque Salonga, filed
with the Court of Appeals a motion for the issuance of a writ of preliminary injunction in aid of
appeal; 13 that in a resolution dated March 6, 1974, the Court of Appeals denied the said motion
on the ground that "the writ of preliminary injunction prayed for being intended to restrain the
enforcement of the writ of execution issued in Civil Case No. 650 for Ejectment, which is not
involved in this appeal, and there being no justification for the issuance of the writ ... " 14 that on
January 13, 1975, the defendant-appellee Julita B. Farrales filed a motion to dismiss the appeal
on the ground that the appeal has become moot and academic because "the house of the
plaintiffs-appellants, subject matter of this appeal was demolished on October 21, 1974, Annex
"A", Sheriff's return and the land where this house was built was delivered to her and she is now
the one in possession ... ; 15 that the plaintiffs-appellants having failed to comment on the said
motion to dismiss when required by the Court of Appeals in its resolution dated January 16,
1975, 16 the Court of Appeals resolved to submit the motion for decision in a resolution dated
April 17, 1975; 17 and that, likewise, the plaintiffs-appellants having failed to show cause why the
case should not be submitted for decision without the benefit of appellant's reply brief when
required to do so in a Court of Appeals resolution dated May 14, 1975, 18 the Court of Appeals
resolved on July 8, 1975 to submit the case for decision without the benefit of appellants' reply
brief. 19
In a resolution promulgated on September 15, 1977 the Court of Appeals certified the case to
the Supreme Court because the issue raised in the appeal is purely legal. 20
The plaintiffs-appellants assign the following errors:
I THE COURT A QUO SERIOUSLY ERRED IN DISMISSING APPELLANTS' COMPLAINT
AND IN DENYING SAID APPELLANTS' RELIEF TO PURCHASE FROM DEFENDANT-
APPELLEE JULITA FARRALES THE PIECE OF LAND IN QUESTION.
II THE COURT A QUO SERIOUSLY ERRED IN NOT APPLYING TO THE SUIT AT BAR,
SECTION 6, UNDER ARTICLE 11 OF THE NEW CONSTITUTION, WHICH CONTROLS,
DELIMITS AND REGULATES PROPERTY RIGHTS AND PRIVATE GAINS. 21
The main legal question involved in this appeal is whether or not the court a quo erred in
dismissing the complaint for specific performance or the ground that there exists no legally
enforceable compromise agreement upon which the defendant-appellee Farrales can be
compelled to sell the piece of land in question to plaintiff-appellant, Consolacion Duque Salonga.
The facts, as found by the trial court, are:
At the pre-trial conference, the parties stipulated on the following facts -
(1) THAT the personal circumstances of the parties as alleged in the complaint are admitted:
(2) THAT defendant Farrales is the titled owner of a parcel of residential land situated in Sta.
Rita, Olongapo City, Identity of which is not disputed, formerly acquired by her from one Leoncio
Dytuco who, in turn, acquired the same from the Corpuz Family of which only 361 square
meters, more or less, not actually belong to said defendant after portions thereof had been sold
to Marciala Zarsadias, Catalino Pascual and Rosanna Quiocson*; (*Per Deed of Absolute Sale,
Exhibit B, the vendee is actually Dionisio Quiocson);
3) THAT even prior to the acquisition by defendant Farrales (if the land aforesaid, plaintiff was
already in possession as lessee of some 156 square meters thereof, on which she had erected a
house, paying rentals thereon first to the original owners and later to defendant Farrales.
(4) THAT, sometime prior to November, 1968, defendant Farrales filed an ejectment case for
non-payment of rentals against plaintiff and her husband-jointly with other lessees of other
portions of the land, to wit, Jorge Carvajal, Catalino Pascua, Marciala Zarsadias, and the
spouses Cesar and Rosalina Quiocson - Civil Case No. 650 of the Olongapo City Court, Branch
1, in which, on November 20, 1968, and reiterated on February 4, 1970, a decision was
rendered in favor of defendant Farrales and ordering the therein defendants, including plaintiff
herein and her husband, to vacate the portion occupied by them and to pay rentals in arrears,
attorney's fees and costs;
(5) THAT the decision aforesaid was elevated on appeal to the Court of First Instance of
Zambales and Olongapo City, Civil Case No. 581-0 thereof, and, in a Decision dated November
11, 1971 of Branch III thereof, the same was affirmed with modification only as to the amount of
rentals arrears to be paid;
(6) THAT the affirmatory decision of the Court of First Instance aforesaid is now final and
executory the records of the case had been remanded to the Court for execution, and the
corresponding writ of execution had been issued partially satisfied, as far as plaintiff herein is
concerned, by the payment of all rentals in arrears although the removal of said plaintiff's house
from the land still remains to be carried out by defendant Sheriff: and
(7) THAT, even before the rendition of the affirmatory decision of the Court of First Instance, by
common consent amongst themselves defendant sold to Catalino Pascua, Marciala Zarsadias
and the spouses Cesar and Rosalina Quiocson the areas respectly occupied by them; while,
with respect to Jorge Carvajal, in a suit thereafter filed between him and defendant Farrales, a
compromise. agreement was entered into whereunder said defendant undertook to pay for
Carvajal's house on her land, so that the decision aforesaid is now being executed, as far as
ejectment is concerned, only against plaintiff herein. (Pre-Trial Order, May 17, 1973, pp. 2-5) 22
The lower court explained its conclusion thus:
... From the very allegations of the complaint, it is clearly admitted -
5. That plaintiff herein, in view of the sale to three tenants defendants of the portions of land
occupied by each of said three tenant-defendants, by defendant Julita B. Farrales, also offered
to purchase from said defendant the area of One Hundred Fifty-Six (156) Square Meters, more
or less, where plaintiff's house of strong materials exists, but, defendant Julita B. Farrales,
despite the fact that said plaintiff's order to purchase was just, fair and reasonable persistently
refused such offer, and instead insisted to execute the judgment rendered in the ejectment case,
before the City Court of Olongapo City, thru the herein defendant Sheriff of Olongapo City, with
the sole and only purpose of causing damage and prejudice to the plaintiff (Complaint, p. 3
emphasis supplied).
Being a judicial admission, the foregoing binds plaintiff who cannot subsequently take a position
contradictory thereto or inconsistent therewith (Section 2, Rule 129, Rules of Court; McDaniel vs.
Apacible, 44 Phil. 248 Cunanan vs. Amparo, 80 Phil., 227). Hence, if plaintiff's offer to purchase
was, as aforesaid persistently refused by defendant, it is obvious that no meeting of the and,
took place and, accordingly, no contract, either to sell or of sale, was ever perfected between
them. This is only firmed up even more by plaintiff's admission on the witness stand that no
agreement respecting the purchase and sale of the disputed land was finalized because, while
defendant Farrales purportedly wanted payment in cash, plaintiff did not have any money for that
purpose and neither were negotiations ever had respecting any possible arrangement for
payment in installments. On all fours to the case at bar, therefore, is Velasco et al., vs. Court of
Appeals, et al, G.R. No. L-31018, June 29, 1973, which was a case for specific performance to
compel the therein respondent Magdalena Estate, Inc. to sell a parcel of land to petitioner per an
alleged contract of sale in which the Supreme Court ruled:
It is not difficult to glean from the aforequoted averments that the petitioners themselves admit
that they and the respondent still had to meet and agree on how and when the down payment
and the installment payments were to be paid. Such being the situation, it cannot, therefore be
said that a definite and firm sales agreement between the parties had been perfected over the
lot in question. Indeed this Court has already ruled before that a definite agreement on the
manner of payment of the purchase price is an essential element in the formation of a binding
and enforceable contract of sale.
Since contracts are enforceable only from the moment of perfection (Articles 1315 and 1475,
Civil Code of the Philippines; Pacific Oxygen and Acetylene Co. vs. Central Bank, G.R. No. L-
21881, March 1, 1968; Atkins, Kroll and Co., Inc. vs. B. Cua Hian Teck G.R. No. L-9817,
January 31, 1958), and there is here no perfected contract at all, it goes without saying that
plaintiff has absolutely nothing to enforce against defendant Farrales, and the fact that
defendant Farrales previously sold portions of the land to other lessees similarly situated as
plaintiff herein, does not change the situation because, as to said other lessees, a perfected
contract existed - which is not the case with plaintiff. 23
The trial court found as a fact that no compromise agreement to sell the land in question was
ever perfected between the defendant-appellee as vendor and the plaintiffs-appellants as
vendees. 24
It is elementary that consent is an essential element for the existence of a contract, and where it
is wanting, the contract is non-existent. The essence of consent is the conformity of the parties
on the terms of the contract, the acceptance by one of the offer made by the other. The contract
to sell is a bilateral contract. Where there is merely an offer by one party, without the acceptance
of the other, there is no consent. 25
It appears in this case that the offeree, the defendant-appellee Julita B. Farrales not only did not
accept, but rejected the offer of plaintiffs-appellants, spouses Salonga to buy the land in
question. There being no consent there is. therefore, no contract to sell to speak of.
Likewise, it must be borne in mind that the alleged compromise agreement to sell the land in
question is unenforceable under the Statute of Frauds, 26 and thus, renders all the more
ineffective the action for specific performance in the court a quo.
Moreover, as correctly found by the trial court, the plaintiffs-appellants, as lessees, are neither
builders in good faith nor in bad faith. Their rights are governed not by Article 448 but by Art.
1678 of the New Civil Code. 27 As lessees, they may remove the improvements should the
lessor refuse to reimburse them, but the lessee does not have the right to buy the land. 28
Anent the appellants' claim that since the appellee sold to the three (3) other defendants in the
ejectment suit the three (3) portions of the land in question occupied by them, it follows that "she
must also sell that portion of the land where appellants' residential house was found to
appellants" is unmeritorious. The trial court correctly ruled that the fact that defendant-appellee
sold portions of the land to the other lessees similarly situated as plaintiffs-appellants Salonga
does not change the situation because as to said other lessees, a perfected contract of sale
existed which, as previously shown was not the case with the plaintiff. 29
As to the contention that Sec. 6, Article II of the New Constitution is applicable to the case at bar,
it must be remembered that social justice cannot be invoked to trample on the rights of property
owners who under our Constitution and laws are also entitled to protection. The social justice
consecrated in our constitution was not intended to take away rights from a person and give
them to another who is not entitled thereto. Evidently, the plea for social justice cannot nullify the
law on obligations and contracts, and is, therefore, beyond the power of the Court to grant.
There is no showing that the trial court committed any reversible error.
WHEREFORE, the appeal is DISMISSED for lack of merit and the judgment appealed from is
hereby affirmed, without pronouncement as to costs.
SO ORDERED
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 100150 January 5, 1994
BRIGIDO R. SIMON, JR., CARLOS QUIMPO, CARLITO ABELARDO, AND GENEROSO
OCAMPO, petitioners,
vs.
COMMISSION ON HUMAN RIGHTS, ROQUE FERMO, AND OTHERS AS JOHN
DOES, respondents.
The City Attorney for petitioners.
The Solicitor General for public respondent.
VITUG, J.:
The extent of the authority and power of the Commission on Human Rights ("CHR") is again
placed into focus in this petition for prohibition, with prayer for a restraining order and preliminary
injunction. The petitioners ask us to prohibit public respondent CHR from further hearing and
investigating CHR Case No. 90-1580, entitled "Fermo, et al. vs. Quimpo, et al."
The case all started when a "Demolition Notice," dated 9 July 1990, signed by Carlos Quimpo
(one of the petitioners) in his capacity as an Executive Officer of the Quezon City Integrated
Hawkers Management Council under the Office of the City Mayor, was sent to, and received by,
the private respondents (being the officers and members of the North EDSA Vendors
Association, Incorporated). In said notice, the respondents were given a grace-period of three
(3) days (up to 12 July 1990) within which to vacate the questioned premises of North
EDSA.1Prior to their receipt of the demolition notice, the private respondents were informed by
petitioner Quimpo that their stalls should be removed to give way to the "People's Park".2 On 12
July 1990, the group, led by their President Roque Fermo, filed a letter-complaint (Pinag-
samang Sinumpaang Salaysay) with the CHR against the petitioners, asking the late CHR
Chairman Mary Concepcion Bautista for a letter to be addressed to then Mayor Brigido Simon,
Jr., of Quezon City to stop the demolition of the private respondents' stalls, sari-sari stores,
and carinderia along North EDSA. The complaint was docketed as CHR Case No. 90-1580.3 On
23 July 1990, the CHR issued an Order, directing the petitioners "to desist from demolishing the
stalls and shanties at North EDSA pending resolution of the vendors/squatters' complaint before
the Commission" and ordering said petitioners to appear before the CHR. 4
On the basis of the sworn statements submitted by the private respondents on 31 July 1990, as
well as CHR's own ocular inspection, and convinced that on 28 July 1990 the petitioners carried
out the demolition of private respondents' stalls, sari-sari stores and carinderia,5 the CHR, in its
resolution of 1 August 1990, ordered the disbursement of financial assistance of not more than
P200,000.00 in favor of the private respondents to purchase light housing materials and food
under the Commission's supervision and again directed the petitioners to "desist from further
demolition, with the warning that violation of said order would lead to a citation for contempt and
arrest."6
A motion to dismiss,7 dated 10 September 1990, questioned CHR's jurisdiction. The motion also
averred, among other things, that:
1. this case came about due to the alleged violation by the (petitioners) of
the Inter-Agency Memorandum of Agreement whereby Metro-Manila
Mayors agreed on a moratorium in the demolition of the dwellings of poor
dwellers in Metro-Manila;
xxx xxx xxx
3. . . . , a perusal of the said Agreement (revealed) that the moratorium
referred to therein refers to moratorium in the demolition of the structures of
poor dwellers;
4. that the complainants in this case (were) not poor dwellers but
independent business entrepreneurs even this Honorable Office admitted in
its resolution of 1 August 1990 that the complainants are indeed, vendors;
5. that the complainants (were) occupying government land, particularly the
sidewalk of EDSA corner North Avenue, Quezon City; . . . and
6. that the City Mayor of Quezon City (had) the sole and exclusive discretion
and authority whether or not a certain business establishment (should) be
allowed to operate within the jurisdiction of Quezon City, to revoke or cancel
a permit, if already issued, upon grounds clearly specified by law and
ordinance.8
During the 12 September 1990 hearing, the petitioners moved for postponement, arguing that
the motion to dismiss set for 21 September 1990 had yet to be resolved. The petitioners likewise
manifested that they would bring the case to the courts.
On 18 September 1990 a supplemental motion to dismiss was filed by the petitioners, stating
that the Commission's authority should be understood as being confined only to the investigation
of violations of civil and political rights, and that "the rights allegedly violated in this case (were)
not civil and political rights, (but) their privilege to engage in business." 9
On 21 September 1990, the motion to dismiss was heard and submitted for resolution, along
with the contempt charge that had meantime been filed by the private respondents, albeit
vigorously objected to by petitioners (on the ground that the motion to dismiss was still then
unresolved).10
In an Order,11 dated 25 September 1990, the CHR cited the petitioners in contempt for carrying
out the demolition of the stalls, sari-sari stores and carinderia despite the "order to desist", and it
imposed a fine of P500.00 on each of them.
On 1 March 1991,12 the CHR issued an Order, denying petitioners' motion to dismiss and
supplemental motion to dismiss, in this wise:
Clearly, the Commission on Human Rights under its constitutional mandate
had jurisdiction over the complaint filed by the squatters-vendors who
complained of the gross violations of their human and constitutional rights.
The motion to dismiss should be and is hereby DENIED for lack of merit. 13
The CHR opined that "it was not the intention of the (Constitutional) Commission to create only a
paper tiger limited only to investigating civil and political rights, but it (should) be (considered) a
quasi-judicial body with the power to provide appropriate legal measures for the protection of
human rights of all persons within the Philippines . . . ." It added:
The right to earn a living is a right essential to one's right to development, to
life and to dignity. All these brazenly and violently ignored and trampled
upon by respondents with little regard at the same time for the basic rights
of women and children, and their health, safety and welfare. Their actions
have psychologically scarred and traumatized the children, who were
witness and exposed to such a violent demonstration of Man's inhumanity to
man.
In an Order,14 dated 25 April 1991, petitioners' motion for reconsideration was denied.
Hence, this recourse.
The petition was initially dismissed in our resolution15 of 25 June 1991; it was subsequently
reinstated, however, in our resolution16 of 18 June 1991, in which we also issued a temporary
restraining order, directing the CHR to "CEASE and DESIST from further hearing CHR No. 90-
1580."17
The petitioners pose the following:
Whether or not the public respondent has jurisdiction:
a) to investigate the alleged violations of the "business rights" of the private respondents whose
stalls were demolished by the petitioners at the instance and authority given by the Mayor of
Quezon City;
b) to impose the fine of P500.00 each on the petitioners; and
c) to disburse the amount of P200,000.00 as financial aid to the vendors affected by the
demolition.
In the Court's resolution of 10 October 1991, the Solicitor-General was excused from filing his
comment for public respondent CHR. The latter thus filed its own comment, 18 through Hon.
Samuel Soriano, one of its Commissioners. The Court also resolved to dispense with the
comment of private respondent Roque Fermo, who had since failed to comply with the
resolution, dated 18 July 1991, requiring such comment.
The petition has merit.
The Commission on Human Rights was created by the 1987
Constitution.19 It was formally constituted by then President Corazon Aquino via Executive Order
No. 163,20 issued on 5 May 1987, in the exercise of her legislative power at the time. It
succeeded, but so superseded as well, the Presidential Committee on Human Rights.21
The powers and functions of the Commission are defined by the 1987 Constitution, thus: to
22
(1) Investigate, on its own or on complaint by any party, all forms of human
rights violations involving civil and political rights;
(2) Adopt its operational guidelines and rules of procedure, and cite for
contempt for violations thereof in accordance with the Rules of Court;
(3) Provide appropriate legal measures for the protection of human rights of
all persons within the Philippines, as well as Filipinos residing abroad, and
provide for preventive measures and legal aid services to the
underprivileged whose human rights have been violated or need protection;
(4) Exercise visitorial powers over jails, prisons, or detention facilities;
(5) Establish a continuing program of research, education, and information
to enhance respect for the primacy of human rights;
(6) Recommend to the Congress effective measures to promote human
rights and to provide for compensation to victims of violations of human
rights, or their families;
(7) Monitor the Philippine Government's compliance with international treaty
obligations on human rights;
(8) Grant immunity from prosecution to any person whose testimony or
whose possession of documents or other evidence is necessary or
convenient to determine the truth in any investigation conducted by it or
under its authority;
(9) Request the assistance of any department, bureau, office, or agency in
the performance of its functions;
(10) Appoint its officers and employees in accordance with law; and
(11) Perform such other duties and functions as may be provided by law.
In its Order of 1 March 1991, denying petitioners' motion to dismiss, the CHR theorizes that the
intention of the members of the Constitutional Commission is to make CHR a quasi-judicial
body.23 This view, however, has not heretofore been shared by this Court. In Cario v.
Commission on Human Rights,24 the Court, through then Associate Justice, now Chief Justice
Andres Narvasa, has observed that it is "only the first of the enumerated powers and functions
that bears any resemblance to adjudication or adjudgment," but that resemblance can in no way
be synonymous to the adjudicatory power itself. The Court explained:
. . . (T)he Commission on Human Rights . . . was not meant by the
fundamental law to be another court or quasi-judicial agency in this country,
or duplicate much less take over the functions of the latter.
The most that may be conceded to the Commission in the way of
adjudicative power is that it may investigate, i.e., receive evidence and
make findings of fact as regards claimed human rights violations involving
civil and political rights. But fact finding is not adjudication, and cannot be
likened to the judicial function of a court of justice, or even a quasi-judicial
agency or official. The function of receiving evidence and ascertaining
therefrom the facts of a controversy is not a judicial function, properly
speaking. To be considered such, the faculty of receiving evidence and
making factual conclusions in a controversy must be accompanied by the
authority of applying the law to those factual conclusions to the end that the
controversy may be decided or determined authoritatively, finally and
definitively, subject to such appeals or modes of review as may be provided
by law. This function, to repeat, the Commission does not have.
After thus laying down at the outset the above rule, we now proceed to the other kernel of this
controversy and, its is, to determine the extent of CHR's investigative power.
It can hardly be disputed that the phrase "human rights" is so generic a term that any attempt to
define it, albeit not a few have tried, could at best be described as inconclusive. Let us observe.
In a symposium on human rights in the Philippines, sponsored by the University of the
Philippines in 1977, one of the questions that has been propounded is "(w)hat do you
understand by "human rights?" The participants, representing different sectors of the society,
have given the following varied answers:
Human rights are the basic rights which inhere in man by virtue of his
humanity. They are the same in all parts of the world, whether the
Philippines or England, Kenya or the Soviet Union, the United States or
Japan, Kenya or Indonesia . . . .
Human rights include civil rights, such as the right to life, liberty, and
property; freedom of speech, of the press, of religion, academic freedom,
and the rights of the accused to due process of law; political rights, such as
the right to elect public officials, to be elected to public office, and to form
political associations and engage in politics; and social rights, such as the
right to an education, employment, and social services.25
Human rights are the entitlement that inhere in the individual person from
the sheer fact of his humanity. . . . Because they are inherent, human rights
are not granted by the State but can only be recognized and protected by
it.26
 (Human rights include all) the civil, political, economic, social, and cultural
rights defined in the Universal Declaration of Human Rights.27
Human rights are rights that pertain to man simply because he is human.
They are part of his natural birth, right, innate and inalienable.28
The Universal Declaration of Human Rights, as well as, or more specifically, the International
Covenant on Economic, Social and Cultural Rights and International Covenant on Civil and
Political Rights, suggests that the scope of human rights can be understood to include those that
relate to an individual's social, economic, cultural, political and civil relations. It thus seems to
closely identify the term to the universally accepted traits and attributes of an individual, along
with what is generally considered to be his inherent and inalienable rights, encompassing almost
all aspects of life.
Have these broad concepts been equally contemplated by the framers of our 1986 Constitutional
Commission in adopting the specific provisions on human rights and in creating an independent
commission to safeguard these rights? It may of value to look back at the country's experience
under the martial law regime which may have, in fact, impelled the inclusions of those provisions
in our fundamental law. Many voices have been heard. Among those voices, aptly represented
perhaps of the sentiments expressed by others, comes from Mr. Justice J.B.L. Reyes, a
respected jurist and an advocate of civil liberties, who, in his paper, entitled "Present State of
Human Rights in the Philippines,"29 observes:
But while the Constitution of 1935 and that of 1973 enshrined in their Bill of
Rights most of the human rights expressed in the International Covenant,
these rights became unavailable upon the proclamation of Martial Law on
21 September 1972. Arbitrary action then became the rule. Individuals by
the thousands became subject to arrest upon suspicion, and were detained
and held for indefinite periods, sometimes for years, without charges, until
ordered released by the Commander-in-Chief or this representative. The
right to petition for the redress of grievances became useless, since group
actions were forbidden. So were strikes. Press and other mass media were
subjected to censorship and short term licensing. Martial law brought with it
the suspension of the writ of habeas corpus, and judges lost independence
and security of tenure, except members of the Supreme Court. They were
required to submit letters of resignation and were dismissed upon the
acceptance thereof. Torture to extort confessions were practiced as
declared by international bodies like Amnesty International and the
International Commission of Jurists.
Converging our attention to the records of the Constitutional Commission, we can see the
following discussions during its 26 August 1986 deliberations:
MR. GARCIA . . . , the primacy of its (CHR) task must be made clear in view
of the importance of human rights and also because civil and political rights
have been determined by many international covenants and human rights
legislations in the Philippines, as well as the Constitution, specifically the Bill
of Rights and subsequent legislation. Otherwise, if we cover such a wide
territory in area, we might diffuse its impact and the precise nature of its
task, hence, its effectivity would also be curtailed.
So, it is important to delienate the parameters of its tasks so that the
commission can be most effective.
MR. BENGZON. That is precisely my difficulty because civil and political
rights are very broad. The Article on the Bill of Rights covers civil and
political rights. Every single right of an individual involves his civil right or his
political right. So, where do we draw the line?
MR. GARCIA. Actually, these civil and political rights have been made clear
in the language of human rights advocates, as well as in the Universal
Declaration of Human Rights which addresses a number of articles on the
right to life, the right against torture, the right to fair and public hearing, and
so on. These are very specific rights that are considered enshrined in many
international documents and legal instruments as constituting civil and
political rights, and these are precisely what we want to defend here.
MR. BENGZON. So, would the commissioner say civil and political rights as
defined in the Universal Declaration of Human Rights?
MR. GARCIA. Yes, and as I have mentioned, the International Covenant of
Civil and Political Rights distinguished this right against torture.
MR. BENGZON. So as to distinguish this from the other rights that we
have?
MR. GARCIA. Yes, because the other rights will encompass social and
economic rights, and there are other violations of rights of citizens which
can be addressed to the proper courts and authorities.
xxx xxx xxx
MR. BENGZON. So, we will authorize the commission to define its
functions, and, therefore, in doing that the commission will be authorized to
take under its wings cases which perhaps heretofore or at this moment are
under the jurisdiction of the ordinary investigative and prosecutorial
agencies of the government. Am I correct?
MR. GARCIA. No. We have already mentioned earlier that we would like to
define the specific parameters which cover civil and political rights as
covered by the international standards governing the behavior of
governments regarding the particular political and civil rights of citizens,
especially of political detainees or prisoners. This particular aspect we have
experienced during martial law which we would now like to safeguard.
MR. BENGZON. Then, I go back to that question that I had. Therefore, what
we are really trying to say is, perhaps, at the proper time we could specify
all those rights stated in the Universal Declaration of Human Rights and
defined as human rights. Those are the rights that we envision here?
MR. GARCIA. Yes. In fact, they are also enshrined in the Bill of Rights of
our Constitution. They are integral parts of that.
MR. BENGZON. Therefore, is the Gentleman saying that all the rights under
the Bill of Rights covered by human rights?
MR. GARCIA. No, only those that pertain to civil and political rights.
xxx xxx xxx
MR. RAMA. In connection with the discussion on the scope of human rights,
I would like to state that in the past regime, everytime we invoke the
violation of human rights, the Marcos regime came out with the defense
that, as a matter of fact, they had defended the rights of people to decent
living, food, decent housing and a life consistent with human dignity.
So, I think we should really limit the definition of human rights to political
rights. Is that the sense of the committee, so as not to confuse the issue?
MR. SARMIENTO. Yes, Madam President.
MR. GARCIA. I would like to continue and respond also to repeated points
raised by the previous speaker.
There are actually six areas where this Commission on Human Rights could
act effectively: 1) protection of rights of political detainees; 2) treatment of
prisoners and the prevention of tortures; 3) fair and public trials; 4) cases of
disappearances; 5) salvagings and hamletting; and 6) other crimes
committed against the religious.
xxx xxx xxx
The PRESIDENT. Commissioner Guingona is recognized.
MR. GUINGONA. Thank You Madam President.
I would like to start by saying that I agree with Commissioner Garcia that we
should, in order to make the proposed Commission more effective, delimit
as much as possible, without prejudice to future expansion. The coverage of
the concept and jurisdictional area of the term "human rights". I was actually
disturbed this morning when the reference was made without qualification to
the rights embodied in the universal Declaration of Human Rights, although
later on, this was qualified to refer to civil and political rights contained
therein.
If I remember correctly, Madam President, Commissioner Garcia, after
mentioning the Universal Declaration of Human Rights of 1948, mentioned
or linked the concept of human right with other human rights specified in
other convention which I do not remember. Am I correct?
MR. GARCIA. Is Commissioner Guingona referring to the Declaration of
Torture of 1985?
MR. GUINGONA. I do not know, but the commissioner mentioned another.
MR. GARCIA. Madam President, the other one is the International
Convention on Civil and Political Rights of which we are signatory.
MR. GUINGONA. I see. The only problem is that, although I have a copy of
the Universal Declaration of Human Rights here, I do not have a copy of the
other covenant mentioned. It is quite possible that there are rights specified
in that other convention which may not be specified here. I was wondering
whether it would be wise to link our concept of human rights to general
terms like "convention," rather than specify the rights contained in the
convention.
As far as the Universal Declaration of Human Rights is concerned, the
Committee, before the period of amendments, could specify to us which of
these articles in the Declaration will fall within the concept of civil and
political rights, not for the purpose of including these in the proposed
constitutional article, but to give the sense of the Commission as to what
human rights would be included, without prejudice to expansion later on, if
the need arises. For example, there was no definite reply to the question of
Commissioner Regalado as to whether the right to marry would be
considered a civil or a social right. It is not a civil right?
MR. GARCIA. Madam President, I have to repeat the various specific civil
and political rights that we felt must be envisioned initially by this provision
freedom from political detention and arrest prevention of torture, right to
fair and public trials, as well as crimes involving disappearance, salvagings,
hamlettings and collective violations. So, it is limited to politically related
crimes precisely to protect the civil and political rights of a specific group of
individuals, and therefore, we are not opening it up to all of the definite
areas.
MR. GUINGONA. Correct. Therefore, just for the record, the Gentlemen is
no longer linking his concept or the concept of the Committee on Human
Rights with the so-called civil or political rights as contained in the Universal
Declaration of Human Rights.
MR. GARCIA. When I mentioned earlier the Universal Declaration of Human
Rights, I was referring to an international instrument.
MR. GUINGONA. I know.
MR. GARCIA. But it does not mean that we will refer to each and every
specific article therein, but only to those that pertain to the civil and
politically related, as we understand it in this Commission on Human Rights.
MR. GUINGONA. Madam President, I am not even clear as to the
distinction between civil and social rights.
MR. GARCIA. There are two international covenants: the International
Covenant and Civil and Political Rights and the International Covenant on
Economic, Social and Cultural Rights. The second covenant contains all the
different rights-the rights of labor to organize, the right to education,
housing, shelter, et cetera.
MR. GUINGONA. So we are just limiting at the moment the sense of the
committee to those that the Gentlemen has specified.
 MR. GARCIA. Yes, to civil and political rights.
MR. GUINGONA. Thank you.
xxx xxx xxx
SR. TAN. Madam President, from the standpoint of the victims of human
rights, I cannot stress more on how much we need a Commission on
Human Rights. . . .
. . . human rights victims are usually penniless. They cannot pay and very
few lawyers will accept clients who do not pay. And so, they are the ones
more abused and oppressed. Another reason is, the cases involved are
very delicate torture, salvaging, picking up without any warrant of arrest,
massacre and the persons who are allegedly guilty are people in power
like politicians, men in the military and big shots. Therefore, this Human
Rights Commission must be independent.
I would like very much to emphasize how much we need this commission,
especially for the little Filipino, the little individual who needs this kind of
help and cannot get it. And I think we should concentrate only on civil and
political violations because if we open this to land, housing and health, we
will have no place to go again and we will not receive any response. . .
.30 (emphasis supplied)
The final outcome, now written as Section 18, Article XIII, of the 1987 Constitution, is a provision
empowering the Commission on Human Rights to "investigate, on its own or on complaint by
any party, all forms of human rights violations involving civil and political rights" (Sec. 1).
The term "civil rights,"31 has been defined as referring
(t)o those (rights) that belong to every citizen of the state or country, or, in
wider sense, to all its inhabitants, and are not connected with the
organization or administration of the government. They include the rights of
property, marriage, equal protection of the laws, freedom of contract, etc.
Or, as otherwise defined civil rights are rights appertaining to a person by
virtue of his citizenship in a state or community. Such term may also refer, in
its general sense, to rights capable of being enforced or redressed in a civil
action.
Also quite often mentioned are the guarantees against involuntary servitude, religious
persecution, unreasonable searches and seizures, and imprisonment for debt. 32
Political rights,33 on the other hand, are said to refer to the right to participate, directly or
indirectly, in the establishment or administration of government, the right of suffrage, the right to
hold public office, the right of petition and, in general, the rights appurtenant to citizenship vis-a-
vis the management of government.34
Recalling the deliberations of the Constitutional Commission, aforequoted, it is readily apparent
that the delegates envisioned a Commission on Human Rights that would focus its attention to
the more severe cases of human rights violations. Delegate Garcia, for instance, mentioned
such areas as the "(1) protection of rights of political detainees, (2) treatment of prisoners and
the prevention of tortures, (3) fair and public trials, (4) cases of disappearances, (5) salvagings
and hamletting, and (6) other crimes committed against the religious." While the enumeration
has not likely been meant to have any preclusive effect, more than just expressing a statement
of priority, it is, nonetheless, significant for the tone it has set. In any event, the delegates did not
apparently take comfort in peremptorily making a conclusive delineation of the CHR's scope of
investigatorial jurisdiction. They have thus seen it fit to resolve, instead, that "Congress may
provide for other cases of violations of human rights that should fall within the authority of the
Commission, taking into account its recommendation."35
In the particular case at hand, there is no cavil that what are sought to be demolished are the
stalls, sari-sari stores and carinderia, as well as temporary shanties, erected by private
respondents on a land which is planned to be developed into a "People's Park". More than that,
the land adjoins the North EDSA of Quezon City which, this Court can take judicial notice of, is a
busy national highway. The consequent danger to life and limb is not thus to be likewise simply
ignored. It is indeed paradoxical that a right which is claimed to have been violated is one that
cannot, in the first place, even be invoked, if it is, in fact, extant. Be that as it may, looking at the
standards hereinabove discoursed vis-a-vis the circumstances obtaining in this instance, we are
not prepared to conclude that the order for the demolition of the stalls, sari-sari stores
and carinderia of the private respondents can fall within the compartment of "human rights
violations involving civil and political rights" intended by the Constitution.
On its contempt powers, the CHR is constitutionally authorized to "adopt its operational
guidelines and rules of procedure, and cite for contempt for violations thereof in accordance with
the Rules of Court." Accordingly, the CHR acted within its authority in providing in its revised
rules, its power "to cite or hold any person in direct or indirect contempt, and to impose the
appropriate penalties in accordance with the procedure and sanctions provided for in the Rules
of Court." That power to cite for contempt, however, should be understood to apply only to
violations of its adopted operational guidelines and rules of procedure essential to carry out its
investigatorial powers. To exemplify, the power to cite for contempt could be exercised against
persons who refuse to cooperate with the said body, or who unduly withhold relevant
information, or who decline to honor summons, and the like, in pursuing its investigative work.
The "order to desist" (a semantic interplay for a restraining order) in the instance before us,
however, is not investigatorial in character but prescinds from an adjudicative power that it does
not possess. In Export Processing Zone Authority vs. Commission on Human Rights,36 the
Court, speaking through Madame Justice Carolina Grio-Aquino, explained:
The constitutional provision directing the CHR to "provide for preventive
measures and legal aid services to the underprivileged whose human rights
have been violated or need protection" may not be construed to confer
jurisdiction on the Commission to issue a restraining order or writ of
injunction for, it that were the intention, the Constitution would have
expressly said so. "Jurisdiction is conferred only by the Constitution or by
law". It is never derived by implication.
Evidently, the "preventive measures and legal aid services" mentioned in
the Constitution refer to extrajudicial and judicial remedies (including a writ
of preliminary injunction) which the CHR may seek from proper courts on
behalf of the victims of human rights violations. Not being a court of justice,
the CHR itself has no jurisdiction to issue the writ, for a writ of preliminary
injunction may only be issued "by the judge of any court in which the action
is pending [within his district], or by a Justice of the Court of Appeals, or of
the Supreme Court. . . . A writ of preliminary injunction is an ancillary
remedy. It is available only in a pending principal action, for the preservation
or protection of the rights and interests of a party thereto, and for no other
purpose." (footnotes omitted).
The Commission does have legal standing to indorse, for appropriate action, its findings and
recommendations to any appropriate agency of government.37
The challenge on the CHR's disbursement of the amount of P200,000.00 by way of financial aid
to the vendors affected by the demolition is not an appropriate issue in the instant petition. Not
only is there lack of locus standi on the part of the petitioners to question the disbursement but,
more importantly, the matter lies with the appropriate administrative agencies concerned to
initially consider.
The public respondent explains that this petition for prohibition filed by the petitioners has
become moot and academic since the case before it (CHR Case No. 90-1580) has already been
fully heard, and that the matter is merely awaiting final resolution. It is true that prohibition is a
preventive remedy to restrain the doing of an act about to be done, and not intended to provide
a remedy for an act already accomplished. 38 Here, however, said Commission admittedly has
yet to promulgate its resolution in CHR Case No. 90-1580. The instant petition has been
intended, among other things, to also prevent CHR from precisely doing that. 39
WHEREFORE, the writ prayed for in this petition is GRANTED. The Commission on Human
Rights is hereby prohibited from further proceeding with CHR Case No. 90-1580 and from
implementing the P500.00 fine for contempt. The temporary restraining order heretofore issued
by this Court is made permanent. No costs.
SO ORDERED.
FIRST DIVISION
[G.R. No. 120095. August 5, 1996]
JMM PROMOTION AND MANAGEMENT, INC., and KARY INTERNATIONAL,
INC., petitioner, vs. HON. COURT OF APPEALS, HON. MA. NIEVES
CONFESSOR, then Secretary of the Department of the Labor and
Employment, HON. JOSE BRILLANTES, in his capacity as acting
Secretary of the Department of Labor and Employment and
HON. FELICISIMO JOSON, in his capacity as Administrator of the
Philippine Overseas Employment Administration, respondents.
DECISION
KAPUNAN, J.:
The limits of government regulation under the State's Police Power are once
again at the vortex of the instant controversy. Assailed is the government's power to
control deployment of female entertainers to Japan by requiring an Artist Record
Book (ARB) as a precondition to the processing by the POEA of any contract for
overseas employment. By contending that the right to overseas employment, is a
property right within the meaning of the Constitution, petitioners vigorously aver that
deprivation thereof allegedly through the onerous requirement of an ARB violates the
due process clause and constitutes an invalid exercise of the police power.
The factual antecedents are undisputed.
Following the much-publicized death of Maricris Sioson in 1991, former
President Corazon C. Aquino ordered a total ban against the deployment of
performing artists to Japan and other foreign destinations. The ban was, however,
rescinded after leaders of the overseas employment industry promised to extend full
support for a program aimed at removing kinks in the system of deployment. In its
place, the government, through the Secretary of Labor and Employment,
subsequently issued Department Order No. 28, creating the Entertainment Industry
Advisory Council (EIAC), which was tasked with issuing guidelines on the training,
testing certification and deployment of performing artists abroad.
Pursuant to the EIAC's recommendations,[1] the Secretary of Labor, on January
6, 1994, issued Department Order No. 3 establishing various procedures and
requirements for screening performing artists under a new system of training, testing,
certification and deployment of the former. Performing artists successfully hurdling the
test, training and certification requirement were to be issued an Artist's Record Book
(ARB), a necessary prerequisite to processing of any contract of employment by the
POEA. Upon request of the industry, implementation of the process, originally
scheduled for April 1, 1994, was moved to October 1, 1994.
Thereafter, the Department of Labor, following the EIAC's recommendation,
issued a series of orders fine-tuning and implementing the new system. Prominent
among these orders were the following issuances:
1. Department Order No. 3-A, providing for additional guidelines on the training,
testing, certification and deployment of performing artists.
2. Department Order No. 3-B, pertaining to the Artist Record Book (ARB)
requirement, which could be processed only after the artist could show proof of
academic and skills training and has passed the required tests.
3. Department Order No. 3-E, providing the minimum salary a performing artist ought
to receive (not less than US$600.00 for those bound for Japan) and the authorized
deductions therefrom.
4. Department Order No. 3-F, providing for the guidelines on the issuance and use of
the ARB by returning performing artists who, unlike new artists, shall only undergo a
Special Orientation Program (shorter than the basic program) although they must
pass the academic test.
In Civil Case No. 95-72750, the Federation of Entertainment Talent Managers of
the Philippines (FETMOP), on January 27, 1995 filed a class suit assailing these
department orders, principally contending that said orders 1) violated the
constitutional right to travel; 2) abridged existing contracts for employment; and 3)
deprived individual artists of their licenses without due process of law. FETMOP,
likewise, averred that the issuance of the Artist Record Book (ARB) was
discriminatory and illegal and "in gross violation of the constitutional right... to life
liberty and property." Said Federation consequently prayed for the issuance of a writ
of preliminary injunction against the aforestated orders.
On February 2, 1992, JMM Promotion and Management, Inc. and Kary
International, Inc., herein petitioners, filed a Motion for Intervention in said civil case,
which was granted by the trial court in an Order dated 15 February, 1995.
However, on February 21, 1995, the trial court issued an Order denying
petitioners' prayer for a writ of preliminary injunction and dismissed the complaint.
On appeal from the trial court's Order, respondent court, in CA G.R. SP No.
36713 dismissed the same. Tracing the circumstances which led to the issuance of
the ARB requirement and the assailed Department Order, respondent court
concluded that the issuances constituted a valid exercise by the state of the police
power.
We agree.
The latin maxim salus populi est suprema lex embodies the character of the
entire spectrum of public laws aimed at promoting the general welfare of the people
under the State's police power. As an inherent attribute of sovereignty which virtually
"extends to all public needs,"[2] this "least limitable"[3] of governmental powers grants a
wide panoply of instruments through which the state, as parens patriae gives effect to
a host of its regulatory powers.
Describing the nature and scope of the police power, Justice Malcolm, in the
early case of Rubi v. Provincial Board of Mindoro[4] wrote:
"The police power of the State," one court has said...'is a power coextensive with self-
protection, and is not inaptly termed 'the law of overruling necessity.' It may be said to
be that inherent and plenary power in the state which enables it to prohibit all things
hurtful to the comfort, safety and welfare of society.' Carried onward by the current of
legislature, the judiciary rarely attempts to dam the onrushing power of legislative
discretion, provided the purposes of the law do not go beyond the great principles that
mean security for the public welfare or do not arbitrarily interfere with the right of the
individual."[5]
Thus, police power concerns government enactments which precisely interfere
with personal liberty or property in order to promote the general welfare or the
common good. As the assailed Department Order enjoys a presumed validity, it
follows that the burden rests upon petitioners to demonstrate that the said order,
particularly, its ARB requirement, does not enhance the public welfare or was
exercised arbitrarily or unreasonably.
A thorough review of the facts and circumstances leading to the issuance of the
assailed orders compels us to rule that the Artist Record Book requirement and the
questioned Department Order related to its issuance were issued by the Secretary of
Labor pursuant to a valid exercise of the police power.
In 1984, the Philippines emerged as the largest labor sending country in Asia
dwarfing the labor export of countries with mammoth populations such as India and
China. According to the National Statistics Office, this diaspora was augmented
annually by over 450,000 documented and clandestine or illegal (undocumented)
workers who left the country for various destinations abroad, lured by higher salaries,
better work opportunities and sometimes better living conditions.
Of the hundreds of thousands of workers who left the country for greener
pastures in the last few years, women composed slightly close to half of those
deployed, constituting 47% between 1987-1991, exceeding this proportion (58%) by
the end of 1991,[6] the year former President Aquino instituted the ban on deployment
of performing artists to Japan and other countries as a result of the gruesome death
of Filipino entertainer Maricris Sioson.
It was during the same period that this Court took judicial notice not only of the
trend, but also of the fact that most of our women, a large number employed as
domestic helpers and entertainers, worked under exploitative conditions "marked by
physical and personal abuse."[7] Even then, we noted that "[t]he sordid tales of
maltreatment suffered by migrant Filipina workers, even rape and various forms of
torture, confirmed by testimonies of returning workers" compelled "urgent government
action."[8]
Pursuant to the alarming number of reports that a significant number of Filipina
performing artists ended up as prostitutes abroad (many of whom were beaten,
drugged and forced into prostitution), and following the deaths of a number of these
women, the government began instituting measures aimed at deploying only those
individuals who met set standards which would qualify them as legitimate performing
artists. In spite of these measures, however, a number of our countrymen have
nonetheless fallen victim to unscrupulous recruiters, ending up as virtual slaves
controlled by foreign crime syndicates and forced into jobs other than those indicated
in their employment contracts. Worse, some of our women have been forced into
prostitution.
Thus, after a number of inadequate and failed accreditation schemes, the
Secretary of Labor issued on August 16, 1993, D.O. No. 28, establishing the
Entertainment Industry Advisory Council (EIAC), the policy advisory body of DOLE on
entertainment industry matters.[9] Acting on the recommendations of the said body,
the Secretary of Labor, on January 6, 1994, issued the assailed orders. These orders
embodied EIAC's Resolution No. 1, which called for guidelines on screening, testing
and accrediting performing overseas Filipino artists. Significantly, as the respondent
court noted, petitioners were duly represented in the EIAC, [10] which gave the
recommendations on which the ARB and other requirements were based.
Clearly, the welfare of Filipino performing artists, particularly the women was
paramount in the issuance of Department Order No. 3. Short of a total and absolute
ban against the deployment of performing artists to "high risk" destinations, a
measure which would only drive recruitment further underground, the new scheme at
the very least rationalizes the method of screening performing artists by requiring
reasonable educational and artistic skills from them and limits deployment to only
those individuals adequately prepared for the unpredictable demands of employment
as artists abroad. It cannot be gainsaid that this scheme at least lessens the room for
exploitation by unscrupulous individuals and agencies.
Moreover, here or abroad, selection of performing artists is usually
accomplished by auditions, where those deemed unfit are usually weeded out
through a process which is inherently subjective and vulnerable to bias and
differences in taste. The ARB requirement goes one step further, however, attempting
to minimize the subjectivity of the process by defining the minimum skills required
from entertainers and performing artists. As the Solicitor General observed, this
should be easily met by experienced artists possessing merely basic skills. The tests
are aimed at segregating real artists or performers from those passing themselves off
as such, eager to accept any available job and therefore exposing themselves to
possible exploitation.
As to the other provisions of Department Order No. 3 questioned by petitioners,
we see nothing wrong with the requirement for document and booking confirmation
(D.O. 3-C), a minimum salary scale (D.O. 3-E), or the requirement for registration of
returning performers. The requirement for a venue certificate or other documents
evidencing the place and nature of work allows the government closer monitoring of
foreign employers and helps keep our entertainers away from prostitution fronts and
other worksites associated with unsavory, immoral, illegal or exploitative
practices. Parenthetically, none of these issuances appear to us, by any stretch of the
imagination, even remotely unreasonable or arbitrary. They address a felt need of
according greater protection for an oft-exploited segment of our OCW's. They
respond to the industry's demand for clearer and more practicable rules and
guidelines. Many of these provisions were fleshed out following recommendations by,
and after consultations with, the affected sectors and non-government
organizations. On the whole, they are aimed at enhancing the safety and security of
entertainers and artists bound for Japan and other destinations, without stifling the
industry's concerns for expansion and growth.
In any event, apart from the State's police power, the Constitution itself
mandates government to extend the fullest protection to our overseas workers. The
basic constitutional statement on labor, embodied in Section 18 of Article II of the
Constitution provides:
Sec. 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
More emphatically, the social justice provision on labor of the 1987 Constitution
in its first paragraph states:
The State shall afford full protection to labor, local and overseas, organized and
unorganized and promote full employment and equality of employment opportunities
for all.
Obviously, protection to labor does not indicate promotion of employment
alone. Under the welfare and social justice provisions of the Constitution, the
promotion of full employment, while desirable, cannot take a backseat to the
government's constitutional duty to provide mechanisms for the protection of our
workforce, local or overseas. As this Court explained in Philippine Association of
Service Exporters (PASEI) v. Drilon,[11] in reference to the recurring problems faced
by our overseas workers:
What concerns the Constitution more paramountly is that such an employment be
above all, decent, just, and humane. It is bad enough that the country has to send its
sons and daughters to strange lands because it cannot satisfy their employment
needs at home. Under these circumstances, the Government is duty-bound to insure
that our toiling expatriates have adequate protection, personally and economically,
while away from home.
We now go to petitioners' assertion that the police power cannot, nevertheless,
abridge the right of our performing workers to return to work abroad after having
earlier qualified under the old process, because, having previously been accredited,
their accreditation became a property right," protected by the due process clause. We
find this contention untenable.
A profession, trade or calling is a property right within the meaning of our
constitutional guarantees. One cannot be deprived of the right to work and the right to
make a living because these rights are property rights, the arbitrary and unwarranted
deprivation of which normally constitutes an actionable wrong. [12]
Nevertheless, no right is absolute, and the proper regulation of a profession,
calling, business or trade has always been upheld as a legitimate subject of a valid
exercise of the police power by the state particularly when their conduct affects either
the execution of legitimate governmental functions, the preservation of the State, the
public health and welfare and public morals. According to the maxim, sic utere tuo ut
alienum non laedas, it must of course be within the legitimate range of legislative
action to define the mode and manner in which every one may so use his own
property so as not to pose injury to himself or others.[13]
In any case, where the liberty curtailed affects at most the rights of property, the
permissible scope of regulatory measures is certainly much wider.[14] To pretend that
licensing or accreditation requirements violates the due process clause is to ignore
the settled practice, under the mantle of the police power, of regulating entry to the
practice of various trades or professions. Professionals leaving for abroad are
required to pass rigid written and practical exams before they are deemed fit to
practice their trade. Seamen are required to take tests determining their
seamanship. Locally, the Professional Regulation Commission has began to require
previously licensed doctors and other professionals to furnish documentary proof that
they had either re-trained or had undertaken continuing education courses as a
requirement for renewal of their licenses. It is not claimed that these requirements
pose an unwarranted deprivation of a property right under the due process clause. So
long as Professionals and other workers meet reasonable regulatory standards no
such deprivation exists.
Finally, it is a futile gesture on the part of petitioners to invoke the non-
impairment clause of the Constitution to support their argument that the government
cannot enact the assailed regulatory measures because they abridge the freedom to
contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that
"[t]he non-impairment clause of the Constitution... must yield to the loftier purposes
targeted by the government."[15] Equally important, into every contract is read
provisions of existing law, and always, a reservation of the police power for so long as
the agreement deals with a subject impressed with the public welfare.
A last point. Petitioners suggest that the singling out of entertainers and
performing artists under the assailed department orders constitutes class legislation
which violates the equal protection clause of the Constitution. We do not agree.
The equal protection clause is directed principally against undue favor and
individual or class privilege. It is not intended to prohibit legislation which is limited to
the object to which it is directed or by the territory in which it is to operate. It does not
require absolute equality, but merely that all persons be treated alike under like
conditions both as to privileges conferred and liabilities imposed. [16] We have held,
time and again, that the equal protection clause of the Constitution does not forbid
classification for so long as such classification is based on real and substantial
differences having a reasonable relation to the subject of the particular
legislation.[17] If classification is germane to the purpose of the law, concerns all
members of the class, and applies equally to present and future conditions, the
classification does not violate the equal protection guarantee.
In the case at bar, the challenged Department Order clearly applies to all
performing artists and entertainers destined for jobs abroad. These orders, we
stressed hereinbefore, further the Constitutional mandate requiring Government to
protect our workforce, particularly those who may be prone to abuse and exploitation
as they are beyond the physical reach of government regulatory agencies. The tragic
incidents must somehow stop, but short of absolutely curtailing the right of these
performers and entertainers to work abroad, the assailed measures enable our
government to assume a measure of control.
WHEREFORE, finding no reversible error in the decision sought to be reviewed,
petition is hereby DENIED.
SO ORDERED.
Padilla (Chairman), Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and
TOMAS D. ACHACOSO, as Administrator of the Philippine Overseas
Employment Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.
SARMIENTO, J.:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a
firm "engaged principally in the recruitment of Filipino workers, male and female, for
overseas placement," 1 challenges the Constitutional validity of Department Order No.
1, Series of 1988, of the Department of Labor and Employment, in the character of
"GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT
OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for
certiorari and prohibition. Specifically, the measure is assailed for "discrimination
against males or females;" 2 that it "does not apply to all Filipino workers but only to
domestic helpers and females with similar skills;" 3 and that it is violative of the right to
travel. It is held likewise to be an invalid exercise of the lawmaking power, police
power being legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation "in policy and decision-making
processes affecting their rights and benefits as may be provided by
law." 4 Department Order No. 1, it is contended, was passed in the absence of prior
consultations. It is claimed, finally, to be in violation of the Charter's non-impairment
clause, in addition to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of
Labor and Administrator of the Philippine Overseas Employment Administration, filed
a Comment informing the Court that on March 8, 1988, the respondent Labor
Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada,
Hongkong, United States, Italy, Norway, Austria, and Switzerland. * In submitting the
validity of the challenged "guidelines," the Solicitor General invokes the police power
of the Philippine State.
It is admitted that Department Order No. 1 is in the nature of a police power measure.
The only question is whether or not it is valid under the Constitution.
The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare." 5 As defined, it consists of (1) an
imposition of restraint upon liberty or property, (2) in order to foster the common good.
It is not capable of an exact definition but has been, purposely, veiled in general
terms to underscore its all-comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits." 6
It finds no specific Constitutional grant for the plain reason that it does not owe its
origin to the Charter. Along with the taxing power and eminent domain, it is inborn in
the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, 7 refers to it succinctly as the plenary power
of the State "to govern its citizens." 8
"The police power of the State ... is a power coextensive with self- protection, and it is
not inaptly termed the "law of overwhelming necessity." It may be said to be that
inherent and plenary power in the State which enables it to prohibit all things hurtful to
the comfort, safety, and welfare of society." 9
It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is
"rooted in the conception that men in organizing the state and imposing upon its
government limitations to safeguard constitutional rights did not intend thereby to
enable an individual citizen or a group of citizens to obstruct unreasonably the
enactment of such salutary measures calculated to ensure communal peace, safety,
good order, and welfare." 10 Significantly, the Bill of Rights itself does not purport to
be an absolute guaranty of individual rights and liberties "Even liberty itself, the
greatest of all rights, is not unrestricted license to act according to one's will." 11 It is
subject to the far more overriding demands and requirements of the greater number.
Notwithstanding its extensive sweep, police power is not without its own limitations.
For all its awesome consequences, it may not be exercised arbitrarily or
unreasonably. Otherwise, and in that event, it defeats the purpose for which it is
exercised, that is, to advance the public good. Thus, when the power is used to
further private interests at the expense of the citizenry, there is a clear misuse of the
power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. 13 In the absence of clear
and convincing evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should
be nullified. There is no question that Department Order No. 1 applies only to "female
contract workers," 14 but it does not thereby make an undue discrimination between
the sexes. It is well-settled that "equality before the law" under the Constitution 15does
not import a perfect Identity of rights among all men and women. It admits of
classifications, provided that (1) such classifications rest on substantial distinctions;
(2) they are germane to the purposes of the law; (3) they are not confined to existing
conditions; and (4) they apply equally to all members of the same class. 16
The Court is satisfied that the classification made-the preference for female workers
rests on substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that has
befallen our female labor force abroad, especially domestic servants, amid
exploitative working conditions marked by, in not a few cases, physical and personal
abuse. The sordid tales of maltreatment suffered by migrant Filipina workers, even
rape and various forms of torture, confirmed by testimonies of returning workers, are
compelling motives for urgent Government action. As precisely the caretaker of
Constitutional rights, the Court is called upon to protect victims of exploitation. In
fulfilling that duty, the Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first place, there is no
evidence that, except perhaps for isolated instances, our men abroad have been
afflicted with an Identical predicament. The petitioner has proffered no argument that
the Government should act similarly with respect to male workers. The Court, of
course, is not impressing some male chauvinistic notion that men are superior to
women. What the Court is saying is that it was largely a matter of evidence (that
women domestic workers are being ill-treated abroad in massive instances) and not
upon some fanciful or arbitrary yardstick that the Government acted in this case. It is
evidence capable indeed of unquestionable demonstration and evidence this Court
accepts. The Court cannot, however, say the same thing as far as men are
concerned. There is simply no evidence to justify such an inference. Suffice it to state,
then, that insofar as classifications are concerned, this Court is content that
distinctions are borne by the evidence. Discrimination in this case is justified.
As we have furthermore indicated, executive determinations are generally final on the
Court. Under a republican regime, it is the executive branch that enforces policy. For
their part, the courts decide, in the proper cases, whether that policy, or the manner
by which it is implemented, agrees with the Constitution or the laws, but it is not for
them to question its wisdom. As a co-equal body, the judiciary has great respect for
determinations of the Chief Executive or his subalterns, especially when the
legislature itself has specifically given them enough room on how the law should be
effectively enforced. In the case at bar, there is no gainsaying the fact, and the Court
will deal with this at greater length shortly, that Department Order No. 1 implements
the rule-making powers granted by the Labor Code. But what should be noted is the
fact that in spite of such a fiction of finality, the Court is on its own persuaded that
prevailing conditions indeed call for a deployment ban.
There is likewise no doubt that such a classification is germane to the purpose behind
the measure. Unquestionably, it is the avowed objective of Department Order No. 1 to
"enhance the protection for Filipino female overseas workers" 17 this Court has no
quarrel that in the midst of the terrible mistreatment Filipina workers have suffered
abroad, a ban on deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended to
apply indefinitely so long as those conditions exist. This is clear from the Order itself
("Pending review of the administrative and legal measures, in the Philippines and in
the host countries . . ."18), meaning to say that should the authorities arrive at a
means impressed with a greater degree of permanency, the ban shall be lifted. As a
stop-gap measure, it is possessed of a necessary malleability, depending on the
circumstances of each case. Accordingly, it provides:
9. LIFTING OF SUSPENSION. The Secretary of Labor and Employment (DOLE)
may, upon recommendation of the Philippine Overseas Employment Administration
(POEA), lift the suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and
protection of Filipino workers. 19
The Court finds, finally, the impugned guidelines to be applicable to all female
domestic overseas workers. That it does not apply to "all Filipina workers" 20 is not an
argument for unconstitutionality. Had the ban been given universal applicability, then
it would have been unreasonable and arbitrary. For obvious reasons, not all of them
are similarly circumstanced. What the Constitution prohibits is the singling out of a
select person or group of persons within an existing class, to the prejudice of such a
person or group or resulting in an unfair advantage to another person or group of
persons. To apply the ban, say exclusively to workers deployed by A, but not to those
recruited by B, would obviously clash with the equal protection clause of the Charter.
It would be a classic case of what Chase refers to as a law that "takes property from
A and gives it to B." 21 It would be an unlawful invasion of property rights and freedom
of contract and needless to state, an invalid act. 22 (Fernando says: "Where the
classification is based on such distinctions that make a real difference as infancy, sex,
and stage of civilization of minority groups, the better rule, it would seem, is to
recognize its validity only if the young, the women, and the cultural minorities are
singled out for favorable treatment. There would be an element of unreasonableness
if on the contrary their status that calls for the law ministering to their needs is made
the basis of discriminatory legislation against them. If such be the case, it would be
difficult to refute the assertion of denial of equal protection." 23 In the case at bar, the
assailed Order clearly accords protection to certain women workers, and not the
contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas
deployment. From scattered provisions of the Order, it is evident that such a total ban
has hot been contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers
of similar skills defined herein to the following [sic] are authorized under these
guidelines and are exempted from the suspension.
5.1 Hirings by immediate members of the family of Heads of State and Government;
5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and
5.3 Hirings by senior officials of the diplomatic corps and duly accredited international
organizations.
5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral
labor agreements or understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS--
Vacationing domestic helpers and/or workers of similar skills shall be allowed to
process with the POEA and leave for worksite only if they are returning to the same
employer to finish an existing or partially served employment contract. Those workers
returning to worksite to serve a new employer shall be covered by the suspension
and the provision of these guidelines.
xxx xxx xxx
9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may,
upon recommendation of the Philippine Overseas Employment Administration
(POEA), lift the suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and
protection of Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel does not impair the
right. The right to travel is subject, among other things, to the requirements of "public
safety," "as may be provided by law." 25 Department Order No. 1 is a valid
implementation of the Labor Code, in particular, its basic policy to "afford protection to
labor," 26 pursuant to the respondent Department of Labor's rule-making authority
vested in it by the Labor Code. 27 The petitioner assumes that it is unreasonable
simply because of its impact on the right to travel, but as we have stated, the right
itself is not absolute. The disputed Order is a valid qualification thereto.
Neither is there merit in the contention that Department Order No. 1 constitutes an
invalid exercise of legislative power. It is true that police power is the domain of the
legislature, but it does not mean that such an authority may not be lawfully delegated.
As we have mentioned, the Labor Code itself vests the Department of Labor and
Employment with rulemaking powers in the enforcement whereof. 28
The petitioners's reliance on the Constitutional guaranty of worker participation "in
policy and decision-making processes affecting their rights and benefits" 29 is not well-
taken. The right granted by this provision, again, must submit to the demands and
necessities of the State's power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
opportunities for all. 30
"Protection to labor" does not signify the promotion of employment alone. What
concerns the Constitution more paramountly is that such an employment be above
all, decent, just, and humane. It is bad enough that the country has to send its sons
and daughters to strange lands because it cannot satisfy their employment needs at
home. Under these circumstances, the Government is duty-bound to insure that our
toiling expatriates have adequate protection, personally and economically, while away
from home. In this case, the Government has evidence, an evidence the petitioner
cannot seriously dispute, of the lack or inadequacy of such protection, and as part of
its duty, it has precisely ordered an indefinite ban on deployment.
The Court finds furthermore that the Government has not indiscriminately made use
of its authority. It is not contested that it has in fact removed the prohibition with
respect to certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield
to the loftier purposes targetted by the Government. 31 Freedom of contract and
enterprise, like all other freedoms, is not free from restrictions, more so in this
jurisdiction, where laissez faire has never been fully accepted as a controlling
economic way of life.
This Court understands the grave implications the questioned Order has on the
business of recruitment. The concern of the Government, however, is not necessarily
to maintain profits of business firms. In the ordinary sequence of events, it is profits
that suffer as a result of Government regulation. The interest of the State is to provide
a decent living to its citizens. The Government has convinced the Court in this case
that this is its intent. We do not find the impugned Order to be tainted with a grave
abuse of discretion to warrant the extraordinary relief prayed for.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.

THIRD DIVISION
[G.R. No. 122917. July 12, 1999]
MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P.
PASCUAL, RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ,
JOSELITO O. AGDON GEORGE P. LIGUTAN JR., CELSO M. YAZAR, ALEX G.
CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C.
DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F.
TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA
CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E.
SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY
V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R. CORTEZ,
MA. ISABEL B. CONCEPCION, DINDO VALERIO, ZENAIDA MATA, ARIEL DEL
PILAR, MARGARET CECILIA CANOZA, THELMA SEBASTIAN, MA. JEANETTE
CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY BALOLOA,
ELIZABETH VENTURA, GRACE S. PARDO & RICO TIMOSA, petitioners vs.
NATIONAL LABOR RELATIONS COMMISSION & FAR EAST BANK AND TRUST
COMPANY, respondents.
DECISION
PANGANIBAN, J.:
The Magna Carta for Disabled Persons mandates that qualified disabled persons be
granted the same terms and conditions of employment as qualified able-bodied
employees. Once they have attained the status of regular workers, they should be
accorded all the benefits granted by law, notwithstanding written or verbal contracts to
the contrary. This treatment is rooted not merely on charity or accommodation, but on
justice for all.
The Case
Challenged in the Petition for Certiorari[1] before us is the June 20, 1995 Decision[2] of
the National Labor Relations Commission (NLRC),[3] which affirmed the August, 22
1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiters Decision
disposed as follows:[4]
WHEREFORE, judgment is hereby rendered dismissing the above-mentioned
complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution[5] of the NLRC, which denied the
Motion for Reconsideration.
The Facts
The facts were summarized by the NLRC in this wise:[6]
Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
Employment Contract for Handicapped Workers. (pp. 68 & 69, Records) The full text
of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
organized and existing under and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla, Intramuros, Manila, represented herein
by its Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter referred
to as the BANK);
- and -
________________, ________________ years old, of legal age, _____________,
and residing at __________________ (hereinafter referred to as the (EMPLOYEE).
WITNESSETH: That
WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a
need to provide disabled and handicapped persons gainful employment and
opportunities to realize their potentials, uplift their socio-economic well being and
welfare and make them productive, self-reliant and useful citizens to enable them to
fully integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK which may be filled-up by
disabled and handicapped persons, particularly deaf-mutes, and the BANK ha[s]
been approached by some civic-minded citizens and authorized government
agencies [regarding] the possibility of hiring handicapped workers for these positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]
recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing premises and in
compliance with Article 80 of the Labor Code of the Philippines as amended, the
BANK and the EMPLOYEE have entered into this Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK, as Money Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:
i Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the aid of a counting
machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month, after which the
BANK shall determine whether or not he/she should be allowed to finish the
remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,
subject to adjustment in the sole judgment of the BANK, payable every 15 th and end
of the month.
5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from
Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may be required to
perform overtime work as circumstance may warrant, for which overtime work he/she
[shall] be paid an additional compensation of 125% of his daily rate if performed
during ordinary days and 130% if performed during Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13th month pay based on his basic daily wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK
Rules and Regulations and Policies, and to conduct himself/herself in a manner
expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed under a
special employment program of the BANK, for which reason the standard hiring
requirements of the BANK were not applied in his/her case. Consequently, the
EMPLOYEE acknowledges and accepts the fact that the terms and conditions of the
employment generally observed by the BANK with respect to the BANKs regular
employee are not applicable to the EMPLOYEE, and that therefore, the terms and
conditions of the EMPLOYEEs employment with the BANK shall be governed solely
and exclusively by this Contract and by the applicable rules and regulations that the
Department of Labor and Employment may issue in connection with the employment
of disabled and handicapped workers. More specifically, the EMPLOYEE hereby
acknowledges that the provisions of Book Six of the Labor Code of the Philippines as
amended, particularly on regulation of employment and separation pay are not
applicable to him/her.
9. The Employment Contract shall be for a period of six (6) months or from ____ to
____ unless earlier terminated by the BANK for any just or reasonable cause. Any
continuation or extension of this Contract shall be in writing and therefore this
Contract will automatically expire at the end of its terms unless renewed in writing by
the BANK.
IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this
____ day of _________________, ____________ at Intramuros, Manila, Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
(2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one
(21). Their employment[s] were renewed every six months such that by the time this
case arose, there were fifty-six (56) deaf-mutes who were employed by respondent
under the said employment agreement. The last one was Thelma Malindoy who was
employed in 1992 and whose contract expired on July 1993.
xxxxxxxxx
Disclaiming that complainants were regular employees, respondent Far East Bank
and Trust Company maintained that complainants who are a special class of workers
the hearing impaired employees were hired temporarily under [a] special employment
arrangement which was a result of overtures made by some civic and political
personalities to the respondent Bank; that complainant[s] were hired due to pakiusap
which must be considered in the light of the context of the respondent Banks
corporate philosophy as well as its career and working environment which is to
maintain and strengthen a corps of professionals trained and qualified officers and
regular employees who are baccalaureate degree holders from excellent schools
which is an unbending policy in the hiring of regular employees; that in addition to
this, training continues so that the regular employee grows in the corporate ladder;
that the idea of hiring handicapped workers was acceptable to them only on a special
arrangement basis; that it adopted the special program to help tide over a group of
handicapped workers such as deaf-mutes like the complainants who could do manual
work for the respondent Bank; that the task of counting and sorting of bills which was
being performed by tellers could be assigned to deaf-mutes; that the counting and
sorting of money are tellering works which were always logically and naturally part
and parcel of the tellers normal functions; that from the beginning there have been no
separate items in the respondent Bank plantilla for sorters or counters; that the tellers
themselves already did the sorting and counting chore as a regular feature and
integral part of their duties (p. 97, Records); that through the pakiusap of Arturo
Borjal, the tellers were relieved of this task of counting and sorting bills in favor of
deaf-mutes without creating new positions as there is no position either in the
respondent or in any other bank in the Philippines which deals with purely counting
and sorting of bills in banking operations.
Petitioners specified when each of them was hired and dismissed, viz: [7]
NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed
1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93
2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94
3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93
4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94
5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94
6. ALBERT HALLARE West 4 JAN 91 9 JAN 94
7. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 93
8. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 93
9. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 94
10. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 93
11. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 93
12. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 93
13. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 93
14. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 93
15. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 93
16. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93
17. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93
18. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93
19. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93
20. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93
21. ROBERT MARCELO West 31 JUL 93[8] 1 AUG 93
22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 93
23. JOSE E. SALES West 6 AUG 92 12 OCT 93
24. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93
25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 94
26. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93
27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93
28. BERNADETH D. AGERO West 19 DEC 90 27 DEC 93
29. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93
30. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 93
31. MA. ISABEL B. CONCEPCION West 6 SEPT 90 6 FEB 94
32. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93

33. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93
34. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93
35. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94
36. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93
37. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93
38. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93
39. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93
40. PINKY BALOLOA West 3 JUN 91 2 DEC 93
41. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [SIC]
42. GRACE S. PARDO West 4 APR 90 13 MAR 94
43. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein
petitioners. Hence, this recourse to this Court.[9]
The Ruling of the NLRC
In affirming the ruling of the labor arbiter that herein petitioners could not be deemed
regular employees under Article 280 of the Labor Code, as amended, Respondent
Commission ratiocinated as follows:
We agree that Art. 280 is not controlling herein. We give due credence to the
conclusion that complainants were hired as an accommodation to [the]
recommendation of civic oriented personalities whose employment[s] were covered
by xxx Employment Contract[s] with special provisions on duration of contract as
specified under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the terms
of the contract shall be the law between the parties.[10]
The NLRC also declared that the Magna Carta for Disabled Persons was not
applicable, considering the prevailing circumstances/milieu of the case.
Issues
In their Memorandum, petitioners cite the following grounds in support of their cause:
I. The Honorable Commission committed grave abuse of discretion in holding that the
petitioners - money sorters and counters working in a bank - were not regular
employees.
II. The Honorable Commission committed grave abuse of discretion in holding that
the employment contracts signed and renewed by the petitioners - which provide for a
period of six (6) months - were valid.
III. The Honorable Commission committed grave abuse of discretion in not applying
the provisions of the Magna Carta for the Disabled (Republic Act No. 7277), on
proscription against discrimination against disabled persons. [11]
In the main, the Court will resolve whether petitioners have become regular
employees.
This Courts Ruling
The petition is meritorious. However, only the employees, who worked for more than
six months and whose contracts were renewed are deemed regular. Hence, their
dismissal from employment was illegal.
Preliminary Matter: Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of the findings of
facts of the NLRC is not allowed in a petition for certiorari. Specifically, it maintains
that the Court cannot pass upon the findings of public respondents that petitioners
were not regular employees.
True, the Court, as a rule, does not review the factual findings of public respondents
in a certiorari proceeding. In resolving whether the petitioners have become regular
employees, we shall not change the facts found by the public respondent. Our task is
merely to determine whether the NLRC committed grave abuse of discretion in
applying the law to the established facts, as above-quoted from the assailed Decision.
Main Issue: Are Petitioners Regular Employees?
Petitioners maintain that they should be considered regular employees, because their
task as money sorters and counters was necessary and desirable to the business of
respondent bank. They further allege that their contracts served merely to preclude
the application of Article 280 and to bar them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as
special workers and should not in any way be considered as part of the regular
complement of the Bank.[12] Rather, they were special workers under Article 80 of the
Labor Code. Private respondent contends that it never solicited the services of
petitioners, whose employment was merely an accommodation in response to the
requests of government officials and civic-minded citizens. They were told from the
start, with the assistance of government representatives, that they could not become
regular employees because there were no plantilla positions for money sorters,
whose task used to be performed by tellers. Their contracts were renewed several
times, not because of need but merely for humanitarian reasons. Respondent submits
that as of the present, the special position that was created for the petitioners no
longer exist[s] in private respondent [bank], after the latter had decided not to renew
anymore their special employment contracts.
At the outset, let it be known that this Court appreciates the nobility of private
respondents effort to provide employment to physically impaired individuals and to
make them more productive members of society. However, we cannot allow it to
elude the legal consequences of that effort, simply because it now deems their
employment irrelevant. The facts, viewed in light of the Labor Code and the Magna
Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of
them, should be deemed regular employees. As such, they have acquired legal rights
that this Court is duty-bound to protect and uphold, not as a matter of compassion but
as a consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they shall be
trained for a period of one month, after which the employer shall determine whether
or not they should be allowed to finish the 6-month term of the contract. Furthermore,
the employer may terminate the contract at any time for a just and reasonable
cause. Unless renewed in writing by the employer, the contract shall automatically
expire at the end of the term.
According to private respondent, the employment contracts were prepared in
accordance with Article 80 of the Labor Code, which provides:
ART. 80. Employment agreement. Any employer who employs handicapped workers
shall enter into an employment agreement with them, which agreement shall include:
(a) The names and addresses of the handicapped workers to be employed;
(b) The rate to be paid the handicapped workers which shall be not less than seventy
five (75%) per cent of the applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of Labor
or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with the aforecited
provision. Succeeding events and the enactment of RA No. 7277 (the Magna Carta
for Disabled Persons),[13]however, justify the application of Article 280 of the Labor
Code.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from
1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and the
hiring of others lead to the conclusion that their tasks were beneficial and necessary
to the bank. More important, these facts show that they were qualified to perform the
responsibilities of their positions. In other words, their disability did not render them
unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms and conditions of employment as
a qualified able-bodied person. Section 5 of the Magna Carta provides:
Section 5. Equal Opportunity for Employment.No disabled person shall be denied
access to opportunities for suitable employment. A qualified disabled employee shall
be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords
them the rights of qualified able-bodied persons, they are thus covered by Article 280
of the Labor Code, which provides:
ART. 280. Regular and Casual Employment. -- The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered as regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC,[14] in
which this Court held:
The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection
can be determined by considering the nature of the work performed and its relation to
the scheme of the particular business or trade in its entirety. Also if the employee has
been performing the job for at least one year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for
its performance as sufficient evidence of the necessity if not indispensability of that
activity to the business. Hence, the employment is considered regular, but only with
respect to such activity, and while such activity exists.
Without a doubt, the task of counting and sorting bills is necessary and desirable to
the business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months. Thus, the following twenty-seven
petitioners should be deemed regular employees: Marites Bernardo, Elvira Go
Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare,
Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo,
Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V.
Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B.
Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S.
Pardo.
As held by the Court, Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the
simple expedient of extending to them probationary appointments, ad
infinitum.[15] The contract signed by petitioners is akin to a probationary employment,
during which the bank determined the employees fitness for the job. When the bank
renewed the contract after the lapse of the six-month probationary period, the
employees thereby became regular employees.[16] No employer is allowed to
determine indefinitely the fitness of its employees.
As regular employees, the twenty-seven petitioners are entitled to security of tenure;
that is, their services may be terminated only for a just or authorized cause. Because
respondent failed to show such cause,[17] these twenty-seven petitioners are deemed
illegally dismissed and therefore entitled to back wages and reinstatement without
loss of seniority rights and other privileges.[18] Considering the allegation of
respondent that the job of money sorting is no longer available because it has been
assigned back to the tellers to whom it originally belonged,[19] petitioners are hereby
awarded separation pay in lieu of reinstatement.[20]
Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
Applicability of the Brent Ruling
Respondent bank, citing Brent School v. Zamora[21] in which the Court upheld the
validity of an employment contract with a fixed term, argues that the parties entered
into the contract on equal footing. It adds that the petitioners had in fact an
advantage, because they were backed by then DSWD Secretary Mita Pardo de
Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that
the petitioners were disabled, and that the bank had to determine their fitness for the
position. Indeed, its validity is based on Article 80 of the Labor Code. But as noted
earlier, petitioners proved themselves to be qualified disabled persons who, under the
Magna Carta for Disabled Persons, are entitled to terms and conditions of
employment enjoyed by qualified able-bodied individuals; hence, Article 80 does not
apply because petitioners are qualified for their positions. The validation of the limit
imposed on their contracts, imposed by reason of their disability, was a glaring
instance of the very mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with
public interest.[22] Provisions of applicable statutes are deemed written into the
contract, and the parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with
each other.[23] Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled
Persons, which mandate that petitioners must be treated as qualified able-bodied
employees.
Respondents reason for terminating the employment of petitioners is
instructive. Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the
bank be turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m.,
respondent resorted to nighttime sorting and counting of money. Thus, it reasons that
this task could not be done by deaf mutes because of their physical limitations as it is
very risky for them to travel at night.[24] We find no basis for this argument. Travelling
at night involves risks to handicapped and able-bodied persons alike. This excuse
cannot justify the termination of their employment.
Other Grounds Cited by Respondent
Respondent argues that petitioners were merely accommodated employees. This fact
does not change the nature of their employment. As earlier noted, an employee is
regular because of the nature of work and the length of service, not because of the Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela,
mode or even the reason for hiring them. Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion,
Equally unavailing are private respondents arguments that it did not go out of its way Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil,
to recruit petitioners, and that its plantilla did not contain their positions. In L. T. Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC is
Datu v. NLRC,[25] the Court held that the determination of whether employment is hereby directed to compute the exact amount due each of said employees, pursuant
casual or regular does not depend on the will or word of the employer, and the to existing laws and regulations, within fifteen days from the finality of this
procedure of hiring x x x but on the nature of the activities performed by the Decision. No costs.
employee, and to some extent, the length of performance and its continued existence. SO ORDERED.
Private respondent argues that the petitioners were informed from the start that they Romero, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
could not become regular employees. In fact, the bank adds, they agreed with the
stipulation in the contract regarding this point. Still, we are not persuaded. The well-
settled rule is that the character of employment is determined not by stipulations in
the contract, but by the nature of the work performed. [26] Otherwise, no employee can
become regular by the simple expedient of incorporating this condition in the contract
of employment.
In this light, we iterate our ruling in Romares v. NLRC:[27]
Article 280 was emplaced in our statute books to prevent the circumvention of the
employees right to be secure in his tenure by indiscriminately and completely ruling
out all written and oral agreements inconsistent with the concept of regular
employment defined therein. Where an employee has been engaged to perform
activities which are usually necessary or desirable in the usual business of the
employer, such employee is deemed a regular employee and is entitled to security of
tenure notwithstanding the contrary provisions of his contract of employment.
xxxxxxxxx
At this juncture, the leading case of Brent School, Inc. v. Zamora proves
instructive. As reaffirmed in subsequent cases, this Court has upheld the legality of
fixed-term employment. It ruled that the decisive determinant in term employment
should not be the activities that the employee is called upon to perform but the day
certain agreed upon the parties for the commencement and termination of their
employment relationship. But this Court went on to say that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down or
disregarded as contrary to public policy and morals.
In rendering this Decision, the Court emphasizes not only the constitutional bias in
favor of the working class, but also the concern of the State for the plight of the
disabled. The noble objectives of Magna Carta for Disabled Persons are not based
merely on charity or accommodation, but on justice and the equal treatment
of qualified persons, disabled or not. In the present case, the handicap of petitioners
(deaf-mutes) is not a hindrance to their work. The eloquent proof of this statement is
the repeated renewal of their employment contracts. Why then should they be
dismissed, simply because they are physically impaired? The Court believes, that,
after showing their fitness for the work assigned to them, they should be treated and
granted the same rights like any other regular employees.
In this light, we note the Office of the Solicitor Generals prayer joining the petitioners
cause.[28]
WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20,
1995 Decision and the August 4, 1995 Resolution of the NLRC
are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is
hereby ORDERED to pay back wages and separation pay to each of the following
twenty-seven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante,
Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M.
Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E.
 Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his
capacity as Secretary of Budget and Management; CARIDAD VALDEHUESA, in
her capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as
Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity as
Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary
of Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs;
and TEOFISTO T. GUINGONA, in his capacity as Executive
Secretary, respondents.

DECISION

PANGANIBAN, J.:

The emergence on January 1, 1995 of the World Trade Organization, abetted by the
membership thereto of the vast majority of countries has revolutionized international
business and economic relations amongst states. It has irreversibly propelled the
world towards trade liberalization and economic globalization. Liberalization,
globalization, deregulation and privatization, the third-millennium buzz words, are
ushering in a new borderless world of business by sweeping away as mere historical
relics the heretofore traditional modes of promoting and protecting national
economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax
exemptions and currency controls. Finding market niches and becoming the best in
specific industries in a market-driven and export-oriented global scenario are
replacing age-old beggar-thy-neighbor policies that unilaterally protect weak and
inefficient domestic producers of goods and services. In the words of Peter Drucker,
EN BANC
the well-known management guru, Increased participation in the world economy has
[G.R. No. 118295. May 2, 1997] become the key to domestic economic growth and prosperity.

WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Brief Historical Background
Philippine Senate and as taxpayers; GREGORIO ANDOLANA and JOKER
To hasten worldwide recovery from the devastation wrought by the Second World
ARROYO as members of the House of Representatives and as taxpayers;
War, plans for the establishment of three multilateral institutions -- inspired by that
NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL
LIBERTIES UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION, grand political body, the United Nations -- were discussed at Dumbarton Oaks and
Bretton Woods. The first was the World Bank (WB) which was to address the
CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG
rehabilitation and reconstruction of war-ravaged and later developing countries;
KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION
the second, the International Monetary Fund (IMF) which was to deal with currency
MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS,
problems; and the third, the International Trade Organization (ITO), which was to
INC., and PHILIPPINE PEASANT INSTITUTE, in representation of various
foster order and predictability in world trade and to minimize unilateral protectionist
taxpayers and as non-governmental organizations, petitioners, vs. EDGARDO
policies that invite challenge, even retaliation, from other states. However, for a
ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON
variety of reasons, including its non-ratification by the United States, the ITO, unlike
ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES,
the IMF and WB, never took off. What remained was only GATT -- the General
ERNESTO HERRERA, JOSE LINA, GLORIA MACAPAGAL-ARROYO, ORLANDO
Agreement on Tariffs and Trade. GATT was a collection of treaties governing access
MERCADO, BLAS OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON
to the economies of treaty adherents with no institutionalized body administering the
REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their
respective capacities as members of the Philippine Senate who concurred in agreements or dependable system of dispute settlement.
the ratification by the President of the Philippines of the Agreement
After half a century and several dizzying rounds of negotiations, principally the
Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally gave
birth to that administering body -- the World Trade Organization -- with the signing of
the Final Act in Marrakesh, Morocco and the ratification of the WTO Agreement by its
members.[1]
Like many other developing countries, the Philippines joined WTO as a founding
member with the goal, as articulated by President Fidel V. Ramos in two letters to the
Senate (infra), of improving Philippine access to foreign markets, especially its major
trading partners, through the reduction of tariffs on its exports, particularly agricultural
and industrial products. The President also saw in the WTO the opening of new
opportunities for the services sector x x x, (the reduction of) costs and uncertainty
associated with exporting x x x, and (the attraction of) more investments into the
country. Although the Chief Executive did not expressly mention it in his letter, the
Philippines - - and this is of special interest to the legal profession - - will benefit from
the WTO system of dispute settlement by judicial adjudication through the
independent WTO settlement bodies called (1) Dispute Settlement Panels and (2)
Appellate Tribunal.Heretofore, trade disputes were settled mainly through
negotiations where solutions were arrived at frequently on the basis of relative
bargaining strengths, and where naturally, weak and underdeveloped countries were
at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines to place nationals and
products of member-countries on the same footing as Filipinos and local products and
(2) that the WTO intrudes, limits and/or impairs the constitutional powers of both
Congress and the Supreme Court, the instant petition before this Court assails the
WTO Agreement for violating the mandate of the 1987 Constitution to develop a self-
reliant and independent national economy effectively controlled by Filipinos x x x (to)
give preference to qualified Filipinos (and to) promote the preferential use of Filipino
labor, domestic materials and locally produced goods.
Simply stated, does the Philippine Constitution prohibit Philippine participation in
worldwide trade liberalization and economic globalization? Does it prescribe
Philippine integration into a global economy that is liberalized, deregulated and
privatized? These are the main questions raised in this petition for certiorari,
prohibition and mandamus under Rule 65 of the Rules of Court praying (1) for the
nullification, on constitutional grounds, of the concurrence of the Philippine Senate in
the ratification by the President of the Philippines of the Agreement Establishing the
World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of
its implementation and enforcement through the release and utilization of public
funds, the assignment of public officials and employees, as well as the use of
government properties and resources by respondent-heads of various executive
offices concerned therewith. This concurrence is embodied in Senate Resolution No.
97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of
the Department of Trade and Industry (Secretary Navarro, for brevity), representing
the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the
Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations
(Final Act, for brevity).
By signing the Final Act,[2] Secretary Navarro on behalf of the Republic of the
Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities, with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a letter dated
August 11, 1994 from the President of the Philippines,[3] stating among others that the
Uruguay Round Final Act is hereby submitted to the Senate for its concurrence
pursuant to Section 21, Article VII of the Constitution.
On August 13, 1994, the members of the Philippine Senate received another letter
from the President of the Philippines[4] likewise dated August 11, 1994, which stated
among others that the Uruguay Round Final Act, the Agreement Establishing the
World Trade Organization, the Ministerial Declarations and Decisions, and the
Understanding on Commitments in Financial Services are hereby submitted to the
Senate for its concurrence pursuant to Section 21, Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the necessity of the
immediate adoption of P.S. 1083, a resolution entitled Concurring in the Ratification of
the Agreement Establishing the World Trade Organization.[5]
On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which
Resolved, as it is hereby resolved, that the Senate concur, as it hereby concurs, in
the ratification by the President of the Philippines of the Agreement Establishing the
World Trade Organization.[6] The text of the WTO Agreement is written on pages
137 et seq. of Volume I of the 36-volume Uruguay Round of Multilateral Trade
Negotiations and includes various agreements and associated legal instruments
(identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively
referred to as Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994
Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines signed [7] the Instrument of
Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic
of the Philippines, after having seen and considered the aforementioned Agreement
Establishing the World Trade Organization and the agreements and associated legal
instruments included in Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof, signed at Marrakesh, Morocco on 15 April 1994, do
hereby ratify and confirm the same and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is
composed of the Agreement Proper and the associated legal instruments included in
Annexes one (1), two (2) and three (3) of that Agreement which are integral parts
thereof.
On the other hand, the Final Act signed by Secretary Navarro embodies not only the
WTO Agreement (and its integral annexes aforementioned) but also (1) the Ministerial
Declarations and Decisions and (2) the Understanding on Commitments in Financial
Services. In his Memorandum dated May 13, 1996,[8] the Solicitor General describes
these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five declarations and decisions
on a wide range of matters, such as measures in favor of least developed countries,
notification procedures, relationship of WTO with the International Monetary Fund
(IMF), and agreements on technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on, among other
things, standstill or limitations and qualifications of commitments to existing non-
conforming measures, market access, national treatment, and definitions of non-
resident supplier of financial services, commercial presence and new financial
service.
On December 29, 1994, the present petition was filed. After careful deliberation on
respondents comment and petitioners reply thereto, the Court resolved on December
12, 1995, to give due course to the petition, and the parties thereafter filed their
respective memoranda. The Court also requested the Honorable Lilia R. Bautista, the
Philippine Ambassador to the United Nations stationed in Geneva, Switzerland, to
submit a paper, hereafter referred to as Bautista Paper,[9] for brevity, (1) providing a
historical background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in
controversy and (2) the transcript of proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine
treaties signed prior to the Philippine adherence to the WTO Agreement, which
derogate from Philippine sovereignty and (2) copies of the multi-volume WTO
Agreement and other documents mentioned in the Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider the case
submitted for resolution. In a Compliance dated September 16, 1996, the Solicitor
General submitted a printed copy of the 36-volume Uruguay Round of Multilateral
Trade Negotiations, and in another Compliance dated October 24, 1996, he listed the
various bilateral or multilateral treaties or international instruments involving
derogation of Philippine sovereignty. Petitioners, on the other hand, submitted their
Compliance dated January 28, 1997, on January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as
follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who participated in the deliberations
and voting leading to the concurrence are estopped from impugning the validity of the
Agreement Establishing the World Trade Organization or of the validity of the
concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade
Organization contravene the provisions of Sec. 19, Article II, and Secs. 10 and 12,
Article XII, all of the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade Organization
unduly limit, restrict and impair Philippine sovereignty specifically the legislative power
which, under Sec. 2, Article VI, 1987 Philippine Constitution is vested in the Congress
of the Philippines;
E. Whether provisions of the Agreement Establishing the World Trade Organization
interfere with the exercise of judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of discretion
amounting to lack or excess of jurisdiction when they voted for concurrence in the
ratification of the constitutionally-infirm Agreement Establishing the World Trade
Organization.
G. Whether the respondent members of the Senate acted in grave abuse of discretion
amounting to lack or excess of jurisdiction when they concurred only in the ratification
of the Agreement Establishing the World Trade Organization, and not with the
Presidential submission which included the Final Act, Ministerial Declaration and
Decisions, and the Understanding on Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents synthesized the
several issues raised by petitioners into the following:[10]
1. Whether or not the provisions of the Agreement Establishing the World Trade
Organization and the Agreements and Associated Legal Instruments included in
Annexes one (1), two (2) and three (3) of that agreement cited by petitioners directly
contravene or undermine the letter, spirit and intent of Section 19, Article II and
Sections 10 and 12, Article XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair
the exercise of legislative power by Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial
power by this Honorable Court in promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate in the ratification by the President of
the Philippines of the Agreement establishing the World Trade Organization implied
rejection of the treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by petitioners,
the Solicitor General has effectively ignored three, namely: (1) whether the petition
presents a political question or is otherwise not justiciable; (2) whether petitioner-
members of the Senate (Wigberto E. Taada and Anna Dominique Coseteng) are
estopped from joining this suit; and (3) whether the respondent-members of the
Senate acted in grave abuse of discretion when they voted for concurrence in the
ratification of the WTO Agreement. The foregoing notwithstanding, this Court resolved
to deal with these three issues thus:
(1) The political question issue -- being very fundamental and vital, and being a
matter that probes into the very jurisdiction of this Court to hear and decide this case -
- was deliberated upon by the Court and will thus be ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is waivable and
the respondents have effectively waived it by not pursuing it in any of their pleadings;
in any event, this issue, even if ruled in respondents favor, will not cause the petitions
dismissal as there are petitioners other than the two senators, who are not vulnerable
to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent
senators will be taken up as an integral part of the disposition of the four issues raised
by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did not
question the locus standi of petitioners. Hence, they are also deemed to have waived
the benefit of such issue. They probably realized that grave constitutional issues,
expenditures of public funds and serious international commitments of the nation are
involved here, and that transcendental public interest requires that the substantive
issues be met head on and decided on the merits, rather than skirted or deflected by
procedural matters.[11]
To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE
CONTROVERSY? OTHERWISE STATED, DOES THE PETITION INVOLVE A
POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES
CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF
THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT,
RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY
CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE
EXERCISE OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES
ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND
ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT
INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS AND DECISIONS, AND
THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?
The First Issue: Does the Court Have Jurisdiction Over the Controversy?
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.[12] Once a controversy as to the application or interpretation of a 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.[13]
The jurisdiction of this Court to adjudicate the matters [14] raised in the petition is
clearly set out in the 1987 Constitution,[15] as follows:
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the government.
The foregoing text emphasizes the judicial departments duty and power to strike
down grave abuse of discretion on the part of any branch or instrumentality of
government including Congress. It is an innovation in our political law.[16] As explained
by former Chief Justice Roberto Concepcion,[17] the judiciary is the final arbiter on the
question of whether or not a branch of government or any of its officials has acted
without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an
abuse of discretion amounting to excess of jurisdiction. This is not only a judicial
power but a duty to pass judgment on matters of this nature.
As this Court has repeatedly and firmly emphasized in many cases, [18] it will not shirk,
digress from or abandon its sacred duty and authority to uphold the Constitution in
matters that involve grave abuse of discretion brought before it in appropriate cases,
committed by any officer, agency, instrumentality or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain,
speedy or adequate remedy in the ordinary course of law, we have no hesitation at all
in holding that this petition should be given due course and the vital questions raised
therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition
and mandamus are appropriate remedies to raise constitutional issues and to review
and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this,
we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will
not review the wisdom of the decision of the President and the Senate in enlisting the
country into the WTO, or pass upon the merits of trade liberalization as a policy
espoused by said international body. Neither will it rule on the propriety of the
governments economic policy of reducing/removing tariffs, taxes, subsidies,
quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its
constitutional duty to determine whether or not there had been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the Senate in
ratifying the WTO Agreement and its three annexes.
Second Issue: The WTO Agreement and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of the Constitution
mandating economic nationalism are violated by the so-called parity provisions and
national treatment clauses scattered in various parts not only of the WTO Agreement
and its annexes but also in the Ministerial Decisions and Declarations and in the
Understanding on Commitments in Financial Services.
Specifically, the flagship constitutional provisions referred to are Sec. 19, Article II,
and Secs. 10 and 12, Article XII, of the Constitution, which are worded as follows:
Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
xx xx xx xx
Sec. 19. The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos.
xx xx xx xx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xx xx xx xx
Sec. 10. x x x. The Congress shall enact measures that will encourage the formation
and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.
xx xx xx xx
Sec. 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.
Petitioners aver that these sacred constitutional principles are desecrated by the
following WTO provisions quoted in their memorandum:[19]
a) In the area of investment measures related to trade in goods (TRIMS, for
brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994. no Member
shall apply any TRIM that is inconsistent with the provisions of Article III or Article XI
of GATT 1994.
2. An Illustrative list of TRIMS that are inconsistent with the obligations of general
elimination of quantitative restrictions provided for in paragraph I of Article XI of GATT
1994 is contained in the Annex to this Agreement. (Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p.22121,
emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national treatment
provided for in paragraph 4 of Article III of GATT 1994 include those which are
mandatory or enforceable under domestic law or under administrative rulings,
or compliance with which is necessary to obtain an advantage, and which
require:
(a) the purchase or use by an enterprise of products of domestic origin or from any
domestic source, whether specified in terms of particular products, in terms of volume
or value of products, or in terms of proportion of volume or value of its local
production; or
(b) that an enterprises purchases or use of imported products be limited to an amount
related to the volume or value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of
quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 include
those which are mandatory or enforceable under domestic laws or under
administrative rulings, or compliance with which is necessary to obtain an advantage,
and which restrict:
(a) the importation by an enterprise of products used in or related to the local
production that it exports;
(b) the importation by an enterprise of products used in or related to its local
production by restricting its access to foreign exchange inflows attributable to the
enterprise; or
(c) the exportation or sale for export specified in terms of particular products, in terms
of volume or value of products, or in terms of a preparation of volume or value of its
local production. (Annex to the Agreement on Trade-Related Investment Measures,
Vol. 27, Uruguay Round Legal Documents, p.22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any
other contracting party shall be accorded treatment no less favorable than that
accorded to like products of national origin in respect of laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use. the provisions of this paragraph shall not prevent the application of
differential internal transportation charges which are based exclusively on the
economic operation of the means of transport and not on the nationality of the
product. (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and
Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to paragraph
1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round,
Legal Instruments p.177, emphasis supplied).
b) In the area of trade related aspects of intellectual property rights (TRIPS, for
brevity):
Each Member shall accord to the nationals of other Members treatment no less
favourable than that it accords to its own nationals with regard to the protection of
intellectual property... (par. 1, Article 3, Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p.25432
(emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and
qualifications set out therein, each Member shall accord to services and service
suppliers of any other Member, in respect of all measures affecting the supply of
services, treatment no less favourable than it accords to its own like services
and service suppliers.
2. A Member may meet the requirement of paragraph I by according to services and
service suppliers of any other Member, either formally identical treatment or formally
different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less
favourable if it modifies the conditions of completion in favour of services or service
suppliers of the Member compared to like services or service suppliers of any other
Member. (Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay
Round Legal Instruments, p.22610 emphasis supplied).
It is petitioners position that the foregoing national treatment and parity provisions of
the WTO Agreement place nationals and products of member countries on the same
footing as Filipinos and local products, in contravention of the Filipino First policy of
the Constitution. They allegedly render meaningless the phrase effectively controlled
by Filipinos. The constitutional conflict becomes more manifest when viewed in the
context of the clear duty imposed on the Philippines as a WTO member to ensure the
conformity of its laws, regulations and administrative procedures with its obligations
as provided in the annexed agreements.[20] Petitioners further argue that these
provisions contravene constitutional limitations on the role exports play in national
development and negate the preferential treatment accorded to Filipino labor,
domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor General counter (1) that such
Charter provisions are not self-executing and merely set out general policies; (2) that
these nationalistic portions of the Constitution invoked by petitioners should not be
read in isolation but should be related to other relevant provisions of Art. XII,
particularly Secs. 1 and 13 thereof; (3) that read properly, the cited WTO clauses do
not conflict with the Constitution; and (4) that the WTO Agreement contains sufficient
provisions to protect developing countries like the Philippines from the harshness of
sudden trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles Not Self-Executing
By its very title, Article II of the Constitution is a declaration of principles and state
policies. The counterpart of this article in the 1935 Constitution[21] is called the basic
political creed of the nation by Dean Vicente Sinco.[22] These principles in Article II are
not intended to be self-executing principles ready for enforcement through the
courts.[23] They are used by the judiciary as aids or as guides in the exercise of its
power of judicial review, and by the legislature in its enactment of laws. As held in the
leading case of Kilosbayan, Incorporated vs. Morato,[24] the principles and state
policies enumerated in Article II and some sections of Article XII are not self-
executing provisions, the disregard of which can give rise to a cause of action in the
courts.They do not embody judicially enforceable constitutional rights but guidelines
for legislation.
In the same light, we held in Basco vs. Pagcor[25] that broad constitutional principles
need legislative enactments to implement them, thus:
On petitioners allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12
(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII
and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to
state also that these are merely statements of principles and policies. As such, they
are basically not self-executing, meaning a law should be passed by Congress to
clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and to the legislature. If the executive and the legislature
failed to heed the directives of the article, the available remedy was not judicial but
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of broad
constitutional principles are sourced from basic considerations of due process and the
lack of judicial authority to wade into the uncharted ocean of social and economic
policy making. Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa
vs. Factoran, Jr.,[26] explained these reasons as follows:
My suggestion is simply that petitioners must, before the trial court, show a more
specific legal right -- a right cast in language of a significantly lower order of generality
than Article II (15) of the Constitution -- that is or may be violated by the actions, or
failures to act, imputed to the public respondent by petitioners so that the trial court
can validly render judgment granting all or part of the relief prayed for. To my mind,
the court should be understood as simply saying that such a more specific legal right
or rights may well exist in our corpus of law, considering the general policy principles
found in the Constitution and the existence of the Philippine Environment Code, and
that the trial court should have given petitioners an effective opportunity so to
demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a
cause of action be a specific, operable legal right, rather than a constitutional or
statutory policy, for at least two (2) reasons.One is that unless the legal right claimed
to have been violated or disregarded is given specification in operational terms,
defendants may well be unable to defend themselves intelligently and effectively; in
other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration -- where a specific violation of law or
applicable regulation is not alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:
Section 1. x x x
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the
Government. (Emphases supplied)
When substantive standards as general as the right to a balanced and healthy
ecology and the right to health are combined with remedial standards as broad
ranging as a grave abuse of discretion amounting to lack or excess of jurisdiction, the
result will be, it is respectfully submitted, to propel courts into the uncharted ocean of
social and economic policy making. At least in respect of the vast area of
environmental protection and management, our courts have no claim to special
technical competence and experience and professional qualification. Where no
specific, operable norms and standards are shown to exist, then the policy making
departments -- the legislative and executive departments -- must be given a real and
effective opportunity to fashion and promulgate those norms and standards, and to
implement them before the courts should intervene.
Economic Nationalism Should Be Read with Other Constitutional Mandates to
Attain Balanced Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down
general principles relating to the national economy and patrimony, should be read
and understood in relation to the other sections in said article, especially Secs. 1 and
13 thereof which read:
Section 1. The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the
underprivileged.
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country
shall be given optimum opportunity to develop. x x x
xxxxxxxxx
Sec. 13. The State shall pursue a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national
economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation
for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially
the underprivileged.
With these goals in context, the Constitution then ordains the ideals of economic
nationalism (1) by expressing preference in favor of qualified Filipinos in the grant of
rights, privileges and concessions covering the national economy and
patrimony[27] and in the use of Filipino labor, domestic materials and locally-produced
goods; (2) by mandating the State to adopt measures that help make them
competitive;[28] and (3) by requiring the State to develop a self-reliant and
independent national economy effectively controlled by Filipinos. [29] In similar
language, the Constitution takes into account the realities of the outside world as it
requires the pursuit of a trade policy that serves the general welfare and utilizes all
forms and arrangements of exchange on the basis of equality and reciprocity; [30] and
speaks of industries which are competitive in both domestic and foreign markets as
well as of the protection of Filipino enterprises against unfair foreign competition and
trade practices.
It is true that in the recent case of Manila Prince Hotel vs. Government Service
Insurance System, et al.,[31] this Court held that Sec. 10, second par., Art. XII of the
1987 Constitution is a mandatory, positive command which is complete in itself and
which needs no further guidelines or implementing laws or rules for its
enforcement. From its very words the provision does not require any legislation to put
it in operation. It is per se judicially enforceable. However, as the constitutional
provision itself states, it is enforceable only in regard to the grants of rights, privileges
and concessions covering national economy and patrimony and not to every aspect
of trade and commerce. It refers to exceptions rather than the rule. The issue here is
not whether this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather, the
issue is whether, as a rule, there are enough balancing provisions in the Constitution
to allow the Senate to ratify the Philippine concurrence in the WTO Agreement. And
we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods,
services, labor and enterprises, at the same time, it recognizes the need for business
exchange with the rest of the world on the bases of equality and reciprocity and limits
protection of Filipino enterprises only against foreign competition and trade practices
that are unfair.[32] In other words, the Constitution did not intend to pursue an
isolationist policy. It did not shut out foreign investments, goods and services in the
development of the Philippine economy. While the Constitution does not encourage
the unlimited entry of foreign goods, services and investments into the country, it
does not prohibit them either. In fact, it allows an exchange on the basis of equality
and reciprocity, frowning only on foreign competition that is unfair.
WTO Recognizes Need to Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some built-in
advantages to protect weak and developing economies, which comprise the vast
majority of its members. Unlike in the UN where major states have permanent seats
and veto powers in the Security Council, in the WTO, decisions are made on the
basis of sovereign equality, with each members vote equal in weight to that of any
other. There is no WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the
Ministerial Conference and the General Council shall be taken by the majority of the
votes cast, except in cases of interpretation of the Agreement or waiver of the
obligation of a member which would require three fourths vote. Amendments would
require two thirds vote in general. Amendments to MFN provisions and the
Amendments provision will require assent of all members. Any member may withdraw
from the Agreement upon the expiration of six months from the date of notice of
withdrawals.[33]
Hence, poor countries can protect their common interests more effectively through
the WTO than through one-on-one negotiations with developed countries. Within the
WTO, developing countries can form powerful blocs to push their economic agenda
more decisively than outside the Organization. This is not merely a matter of practical
alliances but a negotiating strategy rooted in law. Thus, the basic principles
underlying the WTO Agreement recognize the need of developing countries like the
Philippines to share in the growth in international trade commensurate with the needs
of their economic development. These basic principles are found in the preamble[34] of
the WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should
be conducted with a view to raising standards of living, ensuring full employment and
a large and steadily growing volume of real income and effective demand, and
expanding the production of and trade in goods and services, while allowing for the
optimal use of the worlds resources in accordance with the objective of sustainable
development, seeking both to protect and preserve the environment and to enhance
the means for doing so in a manner consistent with their respective needs and
concerns at different levels of economic development,
Recognizing further that there is need for positive efforts designed to ensure that
developing countries, and especially the least developed among them, secure
a share in the growth in international trade commensurate with the needs of their
economic development,
Being desirous of contributing to these objectives by entering into reciprocal and
mutually advantageous arrangements directed to the substantial reduction of tariffs
and other barriers to trade and to the elimination of discriminatory treatment in
international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral
trading system encompassing the General Agreement on Tariffs and Trade, the
results of past trade liberalization efforts, and all of the results of the Uruguay Round
of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the objectives underlying
this multilateral trading system, x x x. (underscoring supplied.)
Specific WTO Provisos Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent with the
foregoing basic principles, the WTO Agreement grants developing countries a more
lenient treatment, giving their domestic industries some protection from the rush of
foreign competition. Thus, with respect to tariffs in general, preferential treatment is
given to developing countries in terms of the amount of tariff reduction and the period
within which the reduction is to be spread out. Specifically, GATT requires an average
tariff reduction rate of 36% for developed countries to be effected within a period of
six (6) years while developing countries -- including the Philippines -- are required to
effect an average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce
domestic support to agricultural products by 20% over six (6) years, as compared
to only 13% for developing countries to be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires developed
countries to reduce their budgetary outlays for export subsidy by 36% and export
volumes receiving export subsidy by 21% within a period of six (6) years. For
developing countries, however, the reduction rate is only two-thirds of that prescribed
for developed countries and a longer period of ten (10) years within which to effect
such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition
and trade practices including anti-dumping measures, countervailing measures and
safeguards against import surges. Where local businesses are jeopardized by unfair
foreign competition, the Philippines can avail of these measures. There is hardly
therefore any basis for the statement that under the WTO, local industries and
enterprises will all be wiped out and that Filipinos will be deprived of control of the
economy. Quite the contrary, the weaker situations of developing nations like the
Philippines have been taken into account; thus, there would be no basis to say that in
joining the WTO, the respondents have gravely abused their discretion.True, they
have made a bold decision to steer the ship of state into the yet uncharted sea of
economic liberalization. But such decision cannot be set aside on the ground of grave
abuse of discretion, simply because we disagree with it or simply because we believe
only in other economic policies. As earlier stated, the Court in taking jurisdiction of
this case will not pass upon the advantages and disadvantages of trade liberalization
as an economic policy. It will only perform its constitutional duty of determining
whether the Senate committed grave abuse of discretion.
Constitution Does Not Rule Out Foreign Competition
Furthermore, the constitutional policy of a self-reliant and independent national
economy[35] does not necessarily rule out the entry of foreign investments, goods and
services. It contemplates neither economic seclusion nor mendicancy in the
international community. As explained by Constitutional Commissioner Bernardo
Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly
aware of overdependence on external assistance for even its most basic needs. It
does not mean autarky or economic seclusion; rather, it means avoiding mendicancy
in the international community. Independence refers to the freedom from undue
foreign control of the national economy, especially in such strategic industries as in
the development of natural resources and public utilities. [36]
The WTO reliance on most favored nation, national treatment, and trade without
discrimination cannot be struck down as unconstitutional as in fact they are rules of
equality and reciprocity that apply to all WTO members. Aside from envisioning a
trade policy based on equality and reciprocity,[37] the fundamental law encourages
industries that are competitive in both domestic and foreign markets, thereby
demonstrating a clear policy against a sheltered domestic trade environment, but one
in favor of the gradual development of robust industries that can compete with the
best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have
shown capability and tenacity to compete internationally. And given a free trade
environment, Filipino entrepreneurs and managers in Hongkong have demonstrated
the Filipino capacity to grow and to prosper against the best offered under a policy
of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any business
or enterprise, nor does it contain any specific pronouncement that Filipino companies
should be pampered with a total
proscription of foreign competition. On the other hand, respondents claim that
WTO/GATT aims to make available to the Filipino consumer the best goods and
services obtainable anywhere in the world at the most reasonable
prices. Consequently, the question boils down to whether WTO/GATT will favor the
general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to
reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare because it will --
as promised by its promoters -- expand the countrys exports and generate more
employment?
Will it bring more prosperity, employment, purchasing power and quality products at
the most reasonable rates to the Filipino public?
The responses to these questions involve judgment calls by our policy makers, for
which they are answerable to our people during appropriate electoral exercises. Such
questions and the answers thereto are not subject to judicial pronouncements based
on grave abuse of discretion.
Constitution Designed to Meet Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the Constitution was
drafted and ratified in 1987. That does not mean however that the Charter is
necessarily flawed in the sense that its framers might not have anticipated the advent
of a borderless world of business. By the same token, the United Nations was not yet
in existence when the 1935 Constitution became effective. Did that necessarily mean
that the then Constitution might not have contemplated a diminution of the
absoluteness of sovereignty when the Philippines signed the UN Charter, thereby
effectively surrendering part of its control over its foreign relations to the decisions of
various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to meet not only
the vagaries of contemporary events. They should be interpreted to cover even future
and unknown circumstances. It is to the credit of its drafters that a Constitution can
withstand the assaults of bigots and infidels but at the same time bend with the
refreshing winds of change necessitated by unfolding events. As one eminent political
law writer and respected jurist[38] explains:
The Constitution must be quintessential rather than superficial, the root and not the
blossom, the base and framework only of the edifice that is yet to rise. It is but the
core of the dream that must take shape, not in a twinkling by mandate of our
delegates, but slowly in the crucible of Filipino minds and hearts, where it will in time
develop its sinews and gradually gather its strength and finally achieve its
substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown
from the brow of the Constitutional Convention, nor can it conjure by mere fiat an
instant Utopia. It must grow with the society it seeks to re-structure and march apace
with the progress of the race, drawing from the vicissitudes of history the dynamism
and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law
attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that (e)ach Member shall ensure the conformity of its
laws, regulations and administrative procedures with its obligations as provided in the
annexed Agreements.[39] Petitioners maintain that this undertaking unduly limits,
restricts and impairs Philippine sovereignty, specifically the legislative power which
under Sec. 2, Article VI of the 1987 Philippine Constitution is vested in the Congress
of the Philippines. It is an assault on the sovereign powers of the Philippines because
this means that Congress could not pass legislation that will be good for our national
interest and general welfare if such legislation will not conform with the WTO
Agreement, which not only relates to the trade in goods x x x but also to the flow of
investments and money x x x as well as to a whole slew of agreements on socio-
cultural matters x x x.[40]
More specifically, petitioners claim that said WTO proviso derogates from the power
to tax, which is lodged in the Congress.[41] And while the Constitution allows Congress
to authorize the President to fix tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts, such authority is subject to specified
limits and x x x such limitations and restrictions as Congress may provide, [42] as in
fact it did under Sec. 401 of the Tariff and Customs Code.
Sovereignty Limited by International Law and Treaties
This Court notes and appreciates the ferocity and passion by which petitioners
stressed their arguments on this issue. However, while sovereignty has traditionally
been deemed absolute and all-encompassing on the domestic level, it is however
subject to restrictions and limitations voluntarily agreed to by the Philippines,
expressly or impliedly, as a member of the family of nations. Unquestionably, the
Constitution did not envision a hermit-type isolation of the country from the rest of the
world. In its Declaration of Principles and State Policies, the Constitution adopts the
generally accepted principles of international law as part of the law of the land, and
adheres to the policy of peace, equality, justice, freedom, cooperation and amity, with
all nations."[43] By the doctrine of incorporation, the country is bound by generally
accepted principles of international law, which are considered to be automatically part
of our own laws.[44] One of the oldest and most fundamental rules in international law
is pacta sunt servanda -- international agreements must be performed in good faith. A
treaty engagement is not a mere moral obligation but creates a legally binding
obligation on the parties x x x. A state which has contracted valid international
obligations is bound to make in its legislations such modifications as may be
necessary to ensure the fulfillment of the obligations undertaken.[45]
By their inherent nature, treaties really limit or restrict the absoluteness of
sovereignty. By their voluntary act, nations may surrender some aspects of their state
power in exchange for greater benefits granted by or derived from a convention or
pact. After all, states, like individuals, live with coequals, and in pursuit of mutually
covenanted objectives and benefits, they also commonly agree to limit the exercise of
their otherwise absolute rights. Thus, treaties have been used to record agreements
between States concerning such widely diverse matters as, for example, the lease of
naval bases, the sale or cession of territory, the termination of war, the regulation of
conduct of hostilities, the formation of alliances, the regulation of commercial
relations, the settling of claims, the laying down of rules governing conduct in peace
and the establishment of international organizations.[46] The sovereignty of a state
therefore cannot in fact and in reality be considered absolute. Certain restrictions
enter into the picture: (1) limitations imposed by the very nature of membership in the
family of nations and (2) limitations imposed by treaty stipulations. As aptly put by
John F. Kennedy, Today, no nation can build its destiny alone. The age of self-
sufficient nationalism is over. The age of interdependence is here.[47]
UN Charter and Other Treaties Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51 charter
members, it consented to restrict its sovereign rights under the concept of sovereignty
as auto-limitation.47-A Under Article 2 of the UN Charter, (a)ll members shall give the
United Nations every assistance in any action it takes in accordance with the present
Charter, and shall refrain from giving assistance to any state against which the United
Nations is taking preventive or enforcement action. Such assistance includes
payment of its corresponding share not merely in administrative expenses but also in
expenditures for the peace-keeping operations of the organization. In its advisory
opinion of July 20, 1961, the International Court of Justice held that money used by
the United Nations Emergency Force in the Middle East and in the Congo were
expenses of the United Nations under Article 17, paragraph 2, of the UN
Charter. Hence, all its members must bear their corresponding share in such
expenses. In this sense, the Philippine Congress is restricted in its power to
appropriate. It is compelled to appropriate funds whether it agrees with such peace-
keeping expenses or not. So too, under Article 105 of the said Charter, the UN and its
representatives enjoy diplomatic privileges and immunities, thereby limiting again the
exercise of sovereignty of members within their own territory. Another example:
although sovereign equality and domestic jurisdiction of all members are set forth as
underlying principles in the UN Charter, such provisos are however subject to
enforcement measures decided by the Security Council for the maintenance of
international peace and security under Chapter VII of the Charter. A final example:
under Article 103, (i)n the event of a conflict between the obligations of the Members
of the United Nations under the present Charter and their obligations under any other
international agreement, their obligation under the present charter shall prevail, thus
unquestionably denying the Philippines -- as a member -- the sovereign power to
make a choice as to which of conflicting obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international
pacts -- both bilateral and multilateral -- that involve limitations on Philippine
sovereignty. These are enumerated by the Solicitor General in his Compliance dated
October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes on income, where the
Philippines agreed, among others, to exempt from tax, income received in the
Philippines by, among others, the Federal Reserve Bank of the United States, the
Export/Import Bank of the United States, the Overseas Private Investment
Corporation of the United States. Likewise, in said convention, wages, salaries and
similar remunerations paid by the United States to its citizens for labor and personal
services performed by them as employees or officials of the United States are exempt
from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of
double taxation with respect to taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double
taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to
exempt from all customs duties, inspection fees and other duties or taxes aircrafts of
South Korea and the regular equipment, spare parts and supplies arriving with said
aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt
from customs duties, excise taxes, inspection fees and other similar duties, taxes or
charges fuel, lubricating oils, spare parts, regular equipment, stores on board
Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted
Belgian air carriers the same privileges as those granted to Japanese and Korean air
carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the
Philippines exempted Israeli nationals from the requirement of obtaining transit or
visitor visas for a sojourn in the Philippines not exceeding 59 days.
(I) Bilateral agreement with France exempting French nationals from the requirement
of obtaining transit and visitor visa for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the Philippines agreed that
premises of Special Missions in the Philippines are inviolable and its agents can not
enter said premises without consent of the Head of Mission concerned. Special
Missions are also exempted from customs duties, taxes and related charges.
(k) Multilateral Convention on the Law of Treaties. In this convention, the Philippines
agreed to be governed by the Vienna Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of
the International Court of Justice. The International Court of Justice has jurisdiction in
all legal disputes concerning the interpretation of a treaty, any question of
international law, the existence of any fact which, if established, would constitute a
breach of international obligation.
In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of
its sovereign powers of taxation, eminent domain and police power. The underlying
consideration in this partial surrender of sovereignty is the reciprocal commitment of
the other contracting states in granting the same privilege and immunities to the
Philippines, its officials and its citizens. The same reciprocity characterizes the
Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the
environment, the law of the sea, or trade, constrain domestic political sovereignty
through the assumption of external obligations. But unless anarchy in international
relations is preferred as an alternative, in most cases we accept that the benefits of
the reciprocal obligations involved outweigh the costs associated with any loss of
political sovereignty. (T)rade treaties that structure relations by reference to durable,
well-defined substantive norms and objective dispute resolution procedures reduce
the risks of larger countries exploiting raw economic power to bully smaller countries,
by subjecting power relations to some form of legal ordering. In addition, smaller
countries typically stand to gain disproportionately from trade liberalization. This is
due to the simple fact that liberalization will provide access to a larger set of potential
new trading relationship than in case of the larger country gaining enhanced success
to the smaller countrys market.[48]
The point is that, as shown by the foregoing treaties, a portion of sovereignty may be
waived without violating the Constitution, based on the rationale that the Philippines
adopts the generally accepted principles of international law as part of the law of the
land and adheres to the policy of x x x cooperation and amity with all nations.
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic
Principles of the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS)[49]intrudes on the power of the Supreme Court to promulgate rules
concerning pleading, practice and procedures.[50]
To understand the scope and meaning of Article 34, TRIPS, [51] it will be fruitful to
restate its full text as follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of the rights of
the owner referred to in paragraph 1(b) of Article 28, if the subject matter of a patent
is a process for obtaining a product, the judicial authorities shall have the authority to
order the defendant to prove that the process to obtain an identical product is different
from the patented process. Therefore, Members shall provide, in at least one of the
following circumstances, that any identical product when produced without the
consent of the patent owner shall, in the absence of proof to the contrary, be deemed
to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the
process and the owner of the patent has been unable through reasonable efforts to
determine the process actually used.
2. Any Member shall be free to provide that the burden of proof indicated in
paragraph 1 shall be on the alleged infringer only if the condition referred to in
subparagraph (a) is fulfilled or only if the condition referred to in subparagraph (b) is
fulfilled.
3. In the adduction of proof to the contrary, the legitimate interests of defendants in
protecting their manufacturing and business secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of disputable (note the
words in the absence of proof to the contrary) presumption that a product shown to be
identical to one produced with the use of a patented process shall be deemed to have
been obtained by the (illegal) use of the said patented process, (1) where such
product obtained by the patented product is new, or (2) where there is substantial
likelihood that the identical product was made with the use of the said patented
process but the owner of the patent could not determine the exact process used in
obtaining such identical product. Hence, the burden of proof contemplated by Article
34 should actually be understood as the duty of the alleged patent infringer to
overthrow such presumption. Such burden, properly understood, actually refers to the
burden of evidence (burden of going forward) placed on the producer of the identical
(or fake) product to show that his product was produced without the use of the
patented process.
The foregoing notwithstanding, the patent owner still has the burden of proof since,
regardless of the presumption provided under paragraph 1 of Article 34, such owner
still has to introduce evidence of the existence of the alleged identical product, the
fact that it is identical to the genuine one produced by the patented process and the
fact of newness of the genuine product or the fact of substantial likelihood that the
identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as
the present law on the subject, Republic Act No. 165, as amended, otherwise known
as the Patent Law, provides a similar presumption in cases of infringement of
patented design or utility model, thus:
SEC. 60. Infringement. - Infringement of a design patent or of a patent for utility
model shall consist in unauthorized copying of the patented design or utility model for
the purpose of trade or industry in the article or product and in the making, using or
selling of the article or product copying the patented design or utility model. Identity or
substantial identity with the patented design or utility model shall constitute evidence
of copying. (underscoring supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a disputable
presumption applies only if (1) the product obtained by the patented process is NEW
or (2) there is a substantial likelihood that the identical product was made by the
process and the process owner has not been able through reasonable effort to
determine the process used. Where either of these two provisos does not obtain,
members shall be free to determine the appropriate method of implementing the
provisions of TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection with our disposition of the third
issue -- derogation of legislative power - will apply to this fourth issue also. Suffice it
to say that the reciprocity clause more than justifies such intrusion, if any actually
exists. Besides, Article 34 does not contain an unreasonable burden, consistent as it
is with due process and the concept of adversarial dispute settlement inherent in our
judicial system.
So too, since the Philippine is a signatory to most international conventions on
patents, trademarks and copyrights, the adjustment in legislation and rules of
procedure will not be substantial.[52]
Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other
Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and its
annexes -- but not in the other documents referred to in the Final Act, namely the
Ministerial Declaration and Decisions and the Understanding on Commitments in
Financial Services -- is defective and insufficient and thus constitutes abuse of
discretion. They submit that such concurrence in the WTO Agreement alone is flawed
because it is in effect a rejection of the Final Act, which in turn was the document
signed by Secretary Navarro, in representation of the Republic upon authority of the
President. They contend that the second letter of the President to the Senate [53] which
enumerated what constitutes the Final Act should have been the subject of
concurrence of the Senate.
A final act, sometimes called protocol de clture, is an instrument which records the
winding up of the proceedings of a diplomatic conference and usually includes a
reproduction of the texts of treaties, conventions, recommendations and other acts
agreed upon and signed by the plenipotentiaries attending the conference.[54] It is not
the treaty itself. It is rather a summary of the proceedings of a protracted conference
which may have taken place over several years. The text of the Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade Negotiations is contained in
just one page[55] in Vol. I of the 36-volume Uruguay Round of Multilateral Trade
Negotiations. By signing said Final Act, Secretary Navarro as representative of the
Republic of the Philippines undertook:
"(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions."
The assailed Senate Resolution No. 97 expressed concurrence in exactly what the
Final Act required from its signatories, namely, concurrence of the Senate in the WTO
Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for
ratification. They were approved by the ministers by virtue of Article XXV: 1 of GATT
which provides that representatives of the members can meet to give effect to those
provisions of this Agreement which invoke joint action, and generally with a view to
facilitating the operation and furthering the objectives of this Agreement. [56]
The Understanding on Commitments in Financial Services also approved in
Marrakesh does not apply to the Philippines. It applies only to those 27 Members
which have indicated in their respective schedules of commitments on standstill,
elimination of monopoly, expansion of operation of existing financial service suppliers,
temporary entry of personnel, free transfer and processing of information, and
national treatment with respect to access to payment, clearing systems and
refinancing available in the normal course of business. [57]
On the other hand, the WTO Agreement itself expresses what multilateral
agreements are deemed included as its integral parts, [58] as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional framework for the conduct of trade
relations among its Members in matters to the agreements and associated legal
instruments included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3
(hereinafter referred to as Multilateral Agreements) are integral parts of this
Agreement, binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4 (hereinafter
referred to as Plurilateral Trade Agreements) are also part of this Agreement for those
Members that have accepted them, and are binding on those Members. The
Plurilateral Trade Agreements do not create either obligation or rights for Members
that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A
(hereinafter referred to as GATT 1994) is legally distinct from the General Agreement
on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act adopted at the
conclusion of the Second Session of the Preparatory Committee of the United
Nations Conference on Trade and Employment, as subsequently rectified, amended
or modified (hereinafter referred to as GATT 1947).
It should be added that the Senate was well-aware of what it was concurring in as
shown by the members deliberation on August 25, 1994. After reading the letter of
President Ramos dated August 11, 1994,[59] the senators of the Republic minutely
dissected what the Senate was concurring in, as follows: [60]
THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in
the first day hearing of this Committee yesterday. Was the observation made by
Senator Taada that what was submitted to the Senate was not the agreement on
establishing the World Trade Organization by the final act of the Uruguay Round
which is not the same as the agreement establishing the World Trade
Organization?And on that basis, Senator Tolentino raised a point of order which,
however, he agreed to withdraw upon understanding that his suggestion for an
alternative solution at that time was acceptable. That suggestion was to treat the
proceedings of the Committee as being in the nature of briefings for Senators until the
question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new... is he making
a new submission which improves on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no
misunderstanding, it was his intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on Senator Tolentino since
they were the ones that raised this question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly appear that what is
being submitted to the Senate for ratification is not the Final Act of the Uruguay
Round, but rather the Agreement on the World Trade Organization as well as the
Ministerial Declarations and Decisions, and the Understanding and Commitments in
Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator
Tolentino? And after him Senator Neptali Gonzales and Senator Lina.
SEN TOLENTINO, Mr. Chairman, I have not seen the new submission actually
transmitted to us but I saw the draft of his earlier, and I think it now complies with the
provisions of the Constitution, and with the Final Act itself. The Constitution does not
require us to ratify the Final Act. It requires us to ratify the Agreement which is now
being submitted. The Final Act itself specifies what is going to be submitted to with
the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as
appropriate the WTO Agreement for the consideration of the respective competent
authorities with a view to seeking approval of the Agreement in accordance with their
procedures.
In other words, it is not the Final Act that was agreed to be submitted to the
governments for ratification or acceptance as whatever their constitutional procedures
may provide but it is the World Trade Organization Agreement. And if that is the one
that is being submitted now, I think it satisfies both the Constitution and the Final Act
itself.
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of
record. And they had been adequately reflected in the journal of yesterdays session
and I dont see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make
any comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator
Gonzales out of the abundance of question. Then the new submission is, I believe,
stating the obvious and therefore I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO Agreement,
petitioners are invoking this Courts constitutionally imposed duty to determine
whether or not there has been grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of the Senate in giving its concurrence therein via Senate
Resolution No. 97. Procedurally, a writ of certiorari grounded on grave abuse of
discretion may be issued by the Court under Rule 65 of the Rules of Court when it is
amply shown that petitioners have no other plain, speedy and adequate remedy in the
ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction.[61] Mere abuse of discretion is not
enough. It must be grave abuse of discretion as when the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and must be
so patent and so gross as to amount to an evasion of a positive duty or to a virtual
refusal to perform the duty enjoined or to act at all in contemplation of law. [62] Failure
on the part of the petitioner to show grave abuse of discretion will result in the
dismissal of the petition.[63]
In rendering this Decision, this Court never forgets that the Senate, whose act is
under review, is one of two sovereign houses of Congress and is thus entitled to great
respect in its actions. It is itself a constitutional body independent and coordinate, and
thus its actions are presumed regular and done in good faith. Unless convincing proof
and persuasive arguments are presented to overthrow such presumptions, this Court
will resolve every doubt in its favor. Using the foregoing well-accepted definition of
grave abuse of discretion and the presumption of regularity in the Senates processes,
this Court cannot find any cogent reason to impute grave abuse of discretion to the
Senates exercise of its power of concurrence in the WTO Agreement granted it by
Sec. 21 of Article VII of the Constitution.[64]
It is true, as alleged by petitioners, that broad constitutional principles require the
State to develop an independent national economy effectively controlled by Filipinos;
and to protect and/or prefer Filipino labor, products, domestic materials and locally
produced goods. But it is equally true that such principles -- while serving as judicial
and legislative guides -- are not in themselves sources of causes of action. Moreover,
there are other equally fundamental constitutional principles relied upon by the
Senate which mandate the pursuit of a trade policy that serves the general welfare
and utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity and the promotion of industries which are competitive in both domestic and
foreign markets, thereby justifying its acceptance of said treaty. So too, the alleged
impairment of sovereignty in the exercise of legislative and judicial powers is
balanced by the adoption of the generally accepted principles of international law as
part of the law of the land and the adherence of the Constitution to the policy of
cooperation and amity with all nations.
economically, politically and culturally in the next century. He refers to the free market
espoused by WTO as the catalyst in this coming Asian ascendancy. There are at
present about 31 countries including China, Russia and Saudi Arabia negotiating for
membership in the WTO. Notwithstanding objections against possible limitations on
national sovereignty, the WTO remains as the only viable structure for multilateral
trading and the veritable forum for the development of international trade law. The
alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly
enriched with original membership, keenly aware of the advantages and
disadvantages of globalization with its on-line experience, and endowed with a vision
of the future, the Philippines now straddles the crossroads of an international strategy
for economic prosperity and stability in the new millennium. Let the people, through
their duly authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan,
Mendoza, Francisco, Hermosisima, Jr., and Torres, Jr., JJ., concur.
Padilla, and Vitug, JJ., in the result.

That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its
consent to the WTO Agreement thereby making it a part of the law of the land is a
legitimate exercise of its sovereign duty and power. We find no patent and gross
arbitrariness or despotism by reason of passion or personal hostility in such
exercise. It is not impossible to surmise that this Court, or at least some of its
members, may even agree with petitioners that it is more advantageous to the
national interest to strike down Senate Resolution No. 97. But that is not a legal
reason to attribute grave abuse of discretion to the Senate and to nullify its
decision. To do so would constitute grave abuse in the exercise of our own judicial
power and duty.Ineludably, what the Senate did was a valid exercise of its
authority. As to whether such exercise was wise, beneficial or viable is outside the
realm of judicial inquiry and review. That is a matter between the elected policy
makers and the people. As to whether the nation should join the worldwide march
toward trade liberalization and economic globalization is a matter that our people
should determine in electing their policy makers. After all, the WTO Agreement allows
withdrawal of membership, should this be the political desire of a member.

The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an
Asian Renaissance[65] where the East will become the dominant region of the world
 At issue in this case is the validity of a resolution, dated March 24, 1993, of the
Philippine Coconut Authority in which it declares that it will no longer require those
wishing to engage in coconut processing to apply to it for a license or permit as a
condition for engaging in such business.

Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as

APCD) brought this suit for certiorari and mandamus against respondent Philippine
Coconut Authority (PCA) to invalidate the latter's Board Resolution No. 018-93 and
the certificates of registration issued under it on the ground that the resolution in
question is beyond the power of the PCA to adopt, and to compel said administrative
agency to comply instead with the mandatory provisions of statutes regulating the
desiccated coconut industry, in particular, and the coconut industry, in general.

As disclosed by the parties' pleadings, the facts are as follows:

On November 5, 1992, seven desiccated coconut processing companies belonging to

the APCD brought suit in the Regional Trial Court, National Capital Judicial Region in
Makati, Metro Manila, to enjoin the PCA from issuing permits to certain applicants for
the establishment of new desiccated coconut processing plants. Petitioner alleged
that the issuance of licenses to the applicants would violate PCA's Administrative
Order No. 02, series of 1991, as the applicants were seeking permits to operate in
areas considered "congested" under the administrative order.1

On November 6, 1992, the trial court issued a temporary restraining order and, on
November 25, 1992, a writ of preliminary injunction, enjoining the PCA from
processing and issuing licenses to Primex Products, Inc., Coco Manila, Superstar
(Candelaria) and Superstar (Davao) upon the posting of a bond in the amount of
P100,000.00.2
Republic of the Philippines
Subsequently and while the case was pending in the Regional Trial Court, the
SUPREME COURT
Governing Board of the PCA issued on March 24, 1993 Resolution No. 018-93,
Manila
providing for the withdrawal of the Philippine Coconut Authority from all regulation of
EN BANC the coconut product processing industry. While it continues the registration of coconut
product processors, the registration would be limited to the "monitoring" of their
volumes of production and administration of quality standards. The full text of the
resolution reads:
G.R. No. 110526 February 10, 1998
RESOLUTION NO. 018-93
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner, POLICY DECLARATION DEREGULATING
vs. THE ESTABLISHMENT OF NEW COCONUT
PHILIPPINE COCONUT AUTHORITY, respondent. PROCESSING PLANTS

WHEREAS, it is the policy of the State to promote free enterprise unhampered by

protective regulations and unnecessary bureaucratic red tapes;
MENDOZA, J.:
WHEREAS, the deregulation of certain sectors of the coconut industry, such as
marketing of coconut oils pursuant to Presidential Decree No. 1960, the lifting of
export and commodity clearances under Executive Order No. 1016, and relaxation of
regulated capacity for the desiccated coconut sector pursuant to Presidential
Memorandum of February 11, 1988, has become a centerpiece of the present
dispensation;
WHEREAS, the issuance of permits or licenses prior to business operation is a form
of regulation which is not provided in the charter of nor included among the powers of
the PCA;
WHEREAS, the Governing Board of PCA has determined to follow and further
support the deregulation policy and effort of the government to promote free
enterprise;
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that,
henceforth, PCA shall no longer require any coconut oil mill, coconut oil refinery,
coconut desiccator, coconut product processor/factory, coconut fiber plant or any
similar coconut processing plant to apply with PCA and the latter shall no longer issue
any form of license or permit as condition prior to establishment or operation of such
mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the
aforementioned coconut product processors for the purpose of monitoring their
volumes of production, administration of quality standards with the corresponding
service fees/charges.
ADOPTED this 24th day of March 1993, at Quezon City.3
The PCA then proceeded to issue "certificates of registration" to those wishing to
operate desiccated coconut processing plants, prompting petitioner to appeal to the
Office of the President of the Philippines on April 26, 1993 not to approve the
resolution in question. Despite follow-up letters sent on May 25 and June 2, 1993,
petitioner received no reply from the Office of the President. The "certificates of
registration" issued in the meantime by the PCA has enabled a number of new
coconut mills to operate. Hence this petition.
Petitioner alleges:
I indiscriminately to new coconut millers, we hold that petitioner was justified in
RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR
BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY AN
ADMINISTRATIVE BODY.
II
ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS
WITHOUT ANY BASIS, ARBITRARY, UNREASONABLE AND THEREFORE IN
VIOLATION OF SUBSTANTIVE DUE PROCESS OF LAW.
III
IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED
THE PROCEDURAL DUE PROCESS REQUIREMENT OF CONSULTATION
PROVIDED IN PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO. 826
AND PCA ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991.
On the other hand, in addition to answering petitioner's arguments, respondent PCA
alleges that this petition should be denied on the ground that petitioner has a pending
appeal before the Office of the President. Respondent accuses petitioner of forum-
shopping in filing this petition and of failing to exhaust available administrative
remedies before coming to this Court. Respondent anchors its argument on the
general rule that one who brings an action under Rule 65 must show that one has no
appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.
I.
The rule of requiring exhaustion of administrative remedies before a party may seek
judicial review, so strenuously urged by the Solicitor General on behalf of respondent,
has obviously no application here. The resolution in question was issued by the PCA
in the exercise of its rule-making or legislative power. However, only judicial review of
decisions of administrative agencies made in the exercise of their quasi-
judicial function is subject to the exhaustion doctrine. The exhaustion doctrine stands
as a bar to an action which is not yet complete 4 and it is clear, in the case at bar,
that after its promulgation the resolution of the PCA abandoning regulation of
the desiccated coconut industry became effective. To be sure, the PCA is under
the direct supervision of the President of the Philippines but there is nothing in
P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining the powers
and functions of the PCA which requires rules and regulations issued by it to
be approved by the President before they become effective.
In any event, although the APCD has appealed the resolution in question to the
Office of the President, considering the fact that two months after they had sent
their first letter on April 26, 1993 they still had to hear from the President's
office, meanwhile respondent PCA was issuing certificates of registration
filing this case on June 25, 1993.5 Indeed, after writing the Office of the
President on April 26, 19936 petitioner sent inquiries to that office not once, but
twice, on May 26, 19937 and on June 2, 1993,8 but petitioner did not receive any
reply.
II.
We now turn to the merit of the present petition. The Philippine Coconut
Authority was originally created by P.D. 232 on June 30, 1973, to take over the
powers and functions of the Coconut Coordinating Council, the Philippine
Coconut Administration and the Philippine Coconut Research Institute. On
June 11, 1978, by P.D. No. 1468, it was made "an independent public
corporation . . . directly reporting to, and supervised by, the President of the
Philippines,"9 and charged with carrying out the State's policy "to promote the
rapid integrated development and growth of the coconut and other palm oil
industry in all its aspects and to ensure that the coconut farmers become direct
participants in, and beneficiaries of, such development and growth."10 through
a regulatory scheme set up by law.11
Through this scheme, the government, on August 28, 1982, temporarily
prohibited the opening of new coconut processing plants and, four months
later, phased out some of the existing ones in view of overproduction in the
coconut industry which resulted in cut-throat competition, underselling and
smuggling of poor quality products and ultimately in the decline of the export
performance of coconut-based commodities. The establishment of new plants
could be authorized only upon determination by the PCA of the existence of
certain economic conditions and the approval of the President of the
Philippines. Thus, Executive Order No. 826, dated August 28, 1982, provided:
Sec. 1. Prohibition. Except as herein provided, no government agency or
instrumentality shall hereafter authorize, approve or grant any permit or license
for the establishment or operation of new desiccated coconut processing
plants, including the importation of machinery or equipment for the purpose. In
the event of a need to establish a new plant, or expand the capacity, relocate or
upgrade the efficiencies of any existing desiccated plant, the Philippine
Coconut Authority may, upon proper determination of such need and
evaluation of the condition relating to:
a. the existing market demand;
b. the production capacity prevailing in the country or locality;
c. the level and flow of raw materials; and
d. other circumstances which may affect the growth or viability of the industry
concerned,
authorize or grant the application for, the establishment or expansion of
capacity, relocation or upgrading of efficiencies of such desiccated coconut
processing plant, subject to the approval of the President.
On December 6, 1982, a phase-out of some of the existing plants was ordered
by the government after finding that "a mere freeze in the present capacity of
existing plants will not afford a viable solution to the problem considering that
the total available limited market is not adequate to support all the existing
processing plants, making it imperative to reduce the number of existing
processing plants."12 Accordingly, it was ordered:13
Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action
as may be necessary to reduce the number of existing desiccated coconut
processing plants to a level which will insure the survival of the remaining
plants. The Authority is hereby directed to determine which of the existing
processing plants should be phased out and to enter into appropriate contracts
with such plants for the above purpose.
It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87,
authorizing the establishment and operation of additional DCN plants, in view
of the increased demand for desiccated coconut products in the world's
markets, particularly in Germany, the Netherlands and Australia. Even then, the
opening of new plants was made subject to "such implementing guidelines to
be set forth by the Authority" and "subject to the final approval of the
President."
The guidelines promulgated by the PCA, as embodied in Administrative Order
No. 002, series of 1991, inter alia authorized the opening of new plants in "non-
congested areas only as declared by the PCA" and subject to compliance by
applicants with "all procedures and requirements for registration under
Administrative Order No. 003, series of 1981 and this Order." In addition, as the
opening of new plants was premised on the increased global demand for
desiccated coconut products, the new entrants were required to submit sworn
statements of the names and addresses of prospective foreign buyers.
This form of "deregulation" was approved by President Aquino in her
memorandum, dated February 11, 1988, to the PCA. Affirming the regulatory
scheme, the President stated in her memorandum:
It appears that pursuant to Executive Order No. 826 providing measures for the
protection of the Desiccated Coconut Industry, the Philippine Coconut
Authority evaluated the conditions relating to: (a) the existing market demands;
(b) the production capacity prevailing in the country or locality; (c) the level and
flow of raw materials; and (d) other circumstances which may affect the growth
or viability of the industry concerned and that the result of such evaluation
favored the expansion of production and market of desiccated coconut
products.
In view hereof and the favorable recommendation of the Secretary of
Agriculture, the deregulation of the Desiccated Coconut Industry as
recommended in Resolution No. 058-87 adopted by the PCA Governing Board
on October 28, 1987 (sic) is hereby approved.14
These measures the restriction in 1982 on entry into the field, the reduction
the same year of the number of the existing coconut mills and then the lifting of
the restrictions in 1987 were adopted within the framework of regulation as
established by law "to promote the rapid integrated development and growth of
the coconut and other palm oil industry in all its aspects and to ensure that the
coconut farmers become direct participants in, and beneficiaries of, such
development and growth." 15 Contrary to the assertion in the dissent, the power
given to the Philippine Coconut Authority and before it to the Philippine
Coconut Administration "to formulate and adopt a general program of
development for the coconut and other palm oils industry" 16 is not a roving
commission to adopt any program deemed necessary to promote the
development of the coconut and other palm oils industry, but one to be
exercised in the context of this regulatory structure.
In plain disregard of this legislative purpose, the PCA adopted on March 24,
1993 the questioned resolution which allows not only the indiscriminate
opening of new coconut processing plants but the virtual dismantling of the
regulatory infrastructure whereby, forsaking controls theretofore placed in its
keeping, the PCA limits its function to the innocuous one of "monitoring"
compliance by coconut millers with quality standards and volumes of
production. In effect, the PCA would simply be compiling statistical data on
these matters, but in case of violations of standards there would be nothing
much it would do. The field would be left without an umpire who would retire to
the bleachers to become a mere spectator. As the PCA provided in its
Resolution No. 018-93:
NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that,
henceforth, PCA shall no longer require any coconut oil mill, coconut oil
refinery, coconut desiccator, coconut product processor/factory, coconut fiber
plant or any similar coconut processing plant to apply with PCA and the latter
shall no longer issue any form of license or permit as condition prior to
establishment or operation of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering
the aforementioned coconut product processors for the purpose of monitoring
their volumes of production, administration of quality standards with the
corresponding service fees/charges.
The issue is not whether the PCA has the power to adopt this resolution to
carry out its mandate under the law "to promote the accelerated growth and
development of the coconut and other palm oil industry." 17 The issue rather is
whether it can renounce the power to regulate implicit in the law creating it for
that is what the resolution in question actually is.
Under Art. II, 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the
PCA is "To formulate and adopt a general program of development for the
coconut and other palm oil industry in all its aspects." By limiting the purpose
of registration to merely "monitoring volumes of production [and]
administration of quality standards" of coconut processing plants, the PCA in
effect abdicates its role and leaves it almost completely to market forces how
the coconut industry will develop.
Art. II, 3 of P.D. No. 1468 further requires the PCA:
(h) To regulate the marketing and the exportation of copra and its by-products
by establishing standards for domestic trade and export and, thereafter, to
conduct an inspection of all copra and its by-products proposed for export to
determine if they conform to the standards established;
Instead of determining the qualifications of market players and preventing the
entry into the field of those who are unfit, the PCA now relies entirely on
competition with all its wastefulness and inefficiency to do the weeding
out, in its naive belief in survival of the fittest. The result can very well be a
repeat of 1982 when free enterprise degenerated into a "free-for-all," resulting
in cut-throat competition, underselling, the production of inferior products and
the like, which badly affected the foreign trade performance of the coconut
industry.
Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk
other statutory provisions, particularly those of P.D. No. 1644, to wit:
Sec. 1. The Philippine Coconut Authority shall have full power and authority to
regulate the marketing and export of copra, coconut oil and their by-products,
in furtherance of the steps being taken to rationalize the coconut oil milling
industry.
Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine
Coconut Authority may initiate and implement such measures as may be
necessary to attain the rationalization of the coconut oil milling industry,
including, but not limited to, the following measures:
(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil
and their by-products;
(b) Prescription of quality standards;
(c) Establishment of maximum quantities for particular periods and particular
markets;
(d) Inspection and survey of export shipments through an independent
international superintendent or surveyor.
In the exercise of its powers hereunder, the Philippine Coconut Authority shall
consult with, and be guided by, the recommendation of the coconut farmers,
through corporations owned or controlled by them through the Coconut
Industry Investment Fund and the private corporation authorized to be
organized under Letter of Instructions No. 926.
and the Revised Coconut Code (P.D. No. 1468), Art. II, 3, to wit:
(m) Except in respect of entities owned or controlled by the Government or by
the coconut farmers under Sections 9 and 10, Article III hereof, the Authority
shall have full power and authority to regulate the production, distribution and
utilization of all subsidized coconut-based products, and to require the
submission of such reports or documents as may be deemed necessary by the
Authority to ascertain whether the levy payments and/or subsidy claims are
due and correct and whether the subsidized products are distributed among,
and utilized by, the consumers authorized by the Authority.
The dissent seems to be saying that in the same way that restrictions on entry
into the field were imposed in 1982 and then relaxed in 1987, they can be totally
lifted now without prejudice to reimposing them in the future should it become
necessary to do so. There is really no renunciation of the power to regulate, it
is claimed. Trimming down of PCA's function to registration is not an
abdication of the power to regulate but is regulation itself. But how can this be
done when, under Resolution No. 018-93, the PCA no longer requires a license
as condition for the establishment or operation of a plant? If a number of
processing firms go to areas which are already congested, the PCA cannot
stop them from doing so. If there is overproduction, the PCA cannot order a cut
back in their production. This is because the licensing system is the
mechanism for regulation. Without it the PCA will not be able to regulate
coconut plants or mills.
In the first "whereas" clause of the questioned resolution as set out above, the
PCA invokes a policy of free enterprise that is "unhampered by protective
regulations and unnecessary bureaucratic red tape" as justification for
abolishing the licensing system. There can be no quarrel with the elimination of
"unnecessary red tape." That is within the power of the PCA to do and indeed it
should eliminate red tape. Its success in doing so will be applauded. But free
enterprise does not call for removal of "protective regulations."
Our Constitutions, beginning with the 1935 document, have repudiated laissez-
faire as an economic principle.18 Although the present Constitution enshrines
free enterprise as a policy,19 it nonetheless reserves to the government the
power to intervene whenever necessary to promote the general welfare. This is
clear from the following provisions of Art. XII of the Constitution which, so far
as pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the right to own,
establish, and operate economic enterprises, subject to the duty of the State to
promote distributive justice and to intervene when the common good so
demands.
Sec. 19. The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition
shall be allowed. (Emphasis added).
At all events, any change in policy must be made by the legislative department
of the government. The regulatory system has been set up by law. It is beyond
the power of an administrative agency to dismantle it. Indeed, petitioner
charges the PCA of seeking to render moot a case filed by some of its members
questioning the grant of licenses to certain parties by adopting the resolution
in question. It is alleged that members of petitioner complained to the court that
the PCA had authorized the establishment and operation of new plants in areas
which were already crowded, in violation of its Administrative Order No. 002,
series of 1991. In response, the Regional Trial Court issued a writ of preliminary
injunction, enjoining the PCA from issuing licenses to the private respondent in
that case.
These allegations of petitioner have not been denied here. It would thus seem
that instead of defending its decision to allow new entrants into the field
against petitioner's claim that the PCA decision violated the guidelines in
Administrative Order No. 002, series of 1991, the PCA adopted the resolution in
question to render the case moot. In so doing, the PCA abdicated its function of
regulation and left the field to untrammeled competition that is likely to
resurrect the evils of cut-throat competition, underselling and overproduction
which in 1982 required the temporary closing of the field to new players in
order to save the industry.
The PCA cannot rely on the memorandum of then President Aquino for
authority to adopt the resolution in question. As already stated, what President
Aquino approved in 1988 was the establishment and operation of new DCN
plants subject to the guidelines to be drawn by the PCA.20 In the first place, she
could not have intended to amend the several laws already mentioned, which
set up the regulatory system, by a mere memoranda to the PCA. In the second
place, even if that had been her intention, her act would be without effect
considering that, when she issued the memorandum in question on February
11, 1988, she was no longer vested with legislative authority.21
WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all
certificates of registration issued under it are hereby declared NULL and VOID
for having been issued in excess of the power of the Philippine Coconut
Authority to adopt or issue.
SO ORDERED. This resolves the Petition for Review on Certiorari seeking to set aside the
Decision1 of the Regional Trial Court of Quezon City, Branch 90 (RTC) dated
Narvasa, C.J., Regalado, Davide, Jr., Puno, Kapunan, Francisco, Panganiban November 5, 2002.
and Martinez, JJ., concur.
The case commenced upon petitioners filing of a Petition For Declaratory Relief With
Prayer For Issuance Of A Writ Of Preliminary Injunction And/Or Temporary
Restraining Order with the RTC on January 4, 2002. Petitioner, a non-stock
corporation duly organized and existing under the laws of the Philippines, is an
association of pesticide handlers duly licensed by respondent Fertilizer and Pesticide
Authority (FPA). It questioned the validity of Section 3.12 of the 1987 Pesticide
Regulatory Policies and Implementing Guidelines, which provides thus:

3.12 Protection of Proprietary Data

Data submitted to support the first full or conditional registration of a pesticide

active ingredient in the Philippines will be granted proprietary protection for a
period of seven years from the date of such registration. During this period
subsequent registrants may rely on these data only with third party
authorization or otherwise must submit their own data. After this period, all data
may be freely cited in support of registration by any applicant, provided convincing
proof is submitted that the product being registered is identical or substantially similar
to any current registered pesticide, or differs only in ways that would not significantly
increase the risk of unreasonable adverse effects.

Pesticides granted provisional registration under P.D. 1144 will be considered first
registered in 1977, the date of the Decree.

Pesticide products in which data is still under protection shall be referred to as

Republic of the Philippines
proprietary pesticides, and all others as commodity pesticides. (Emphasis supplied)
SUPREME COURT
Manila Petitioner argued that the specific provision on the protection of the proprietary data in
FPAs Pesticide Regulatory Policies and Implementing Guidelines is unlawful for
THIRD DIVISION
going counter to the objectives of Presidential Decree No. 1144 (P.D. No. 1144); for
exceeding the limits of delegated authority; and for encroaching on the exclusive
G.R. NO. 156041 February 21, 2007
jurisdiction of the Intellectual Property Office.
PEST MANAGEMENT ASSOCIATION OF THE PHILIPPINES (PMAP), represented
by its President, MANUEL J. CHAVEZ, Petitioner, On November 5, 2002, the RTC dismissed the petition for declaratory relief for lack of
merit. The RTC held that "the FPA did not exceed the limits of its delegated authority
vs.
in issuing the aforecited Section 3.12 of the Guidelines granting protection to
FERTILIZER AND PESTICIDE AUTHORITY (FPA), SECRETARY OF THE
proprietary data x x x because the issuance of the aforecited Section was a valid
DEPARTMENT OF AGRICULTURE, FPA OFFICER- IN-CHARGE CESAR M.
exercise of its power to regulate, control and develop the pesticide industry under
DRILON, AND FPA DEPUTY DIRECTOR DARIO C. SALUBARSE,Respondents.
P.D. 1144"2 and the assailed provision does "not encroach on one of the functions of
DECISION the Intellectual Properly Office (IPO)."3

AUSTRIA-MARTINEZ, J.: Dissatisfied with the RTC Decision, petitioner resorted to filing this petition for review
on certiorari where the following issues are raised:
I of proprietary data involves an investment of many years and large sums of money,
WHETHER OR NOT RESPONDENT FPA HAS ACTED BEYOND THE SCOPE OF
ITS DELEGATED POWER WHEN IT GRANTED A SEVEN-YEAR PROPRIETARY
PROTECTION TO DATA SUBMITTED TO SUPPORT THE FIRST FULL OR
CONDITIONAL REGISTRATION OF A PESTICIDE INGREDIENT IN THE
PHILIPPINES;
II
WHETHER OR NOT RESPONDENT FPA IS ENCROACHING ON THE EXCLUSIVE
JURISDICTION OF THE INTELLECTUAL PROPERTY OFFICE (IPO) WHEN IT
INCLUDED IN ITS PESTICIDE REGULATORY POLICIES AND IMPLEMENTING
GUIDELINES THE SUBJECT SEVEN-YEAR PROPRIETARY DATA PROTECTION;
III
WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION IS AN UNLAWFUL
RESTRAINT OF FREE TRADE;
IV
WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION RUNS COUNTER
TO THE OBJECTIVES OF P.D. NO. 1144;
V government authority equipped with the required expertise to regulate, control and
WHETHER OR NOT THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH
90, COMMITTED A REVERSIBLE ERROR WHEN IT UPHELD THE VALIDITY OF
SECTION 3.12 OF THE PESTICIDE REGULATORY POLICIES AND
IMPLEMENTING GUIDELINES ISSUED BY RESPONDENT FPA.
Respondents, on the other hand, maintain that the provision on the protection of
proprietary data in the FPA's Pesticide Regulatory Policies and Implementing
Guidelines is valid and legal as it does not violate the objectives of P.D. No. 1144; the
proprietary data are a substantial asset which must be protected; the protection for a
limited number of years does not constitute unlawful restraint of free trade; and such
provision does not encroach upon the jurisdiction of the Intellectual Property Office.
Respondents expound that since under P.D. No. 1144, the FPA is mandated to
regulate, control and develop the pesticide industry, it was necessary to provide for
such protection of proprietary data, otherwise, pesticide handlers will proliferate to the
the detriment of the industry and the public since the inherent toxicity of pesticides are
hazardous and are potential environmental contaminants.
They also pointed out that the protection under the assailed Pesticide Regulatory
Policies and Implementing Guidelines is warranted, considering that the development
thus, the data generated by an applicant in support of his application for registration
are owned and proprietary to him. Moreover, since the protection accorded to the
proprietary data is limited in time, then such protection is reasonable and does not
constitute unlawful restraint of trade.
Lastly, respondents emphasize that the provision on protection of proprietary data
does not usurp the functions of the Intellectual Property Office (IPO) since a patent
and data protection are two different matters. A patent prohibits all unlicensed
making, using and selling of a particular product, while data protection accorded by
the FPA merely prevents copying or unauthorized use of an applicant's data, but any
other party may independently generate and use his own data. It is further argued
that under Republic Act No. 8293 (R.A. No. 8293), the grant of power to the IPO to
administer and implement State policies on intellectual property is not exclusionary as
the IPO is even allowed to coordinate with other government agencies to formulate
and implement plans and policies to strengthen the protection of intellectual property
rights.
The petition is devoid of merit.
The law being implemented by the assailed Pesticide Regulatory Policies and
Implementing Guidelines is P.D. No. 1144, entitled Creating the Fertilizer and
Pesticide Authority and Abolishing the Fertilizer Industry Authority. As stated in the
Preamble of said decree, "there is an urgent need to create a technically-oriented
develop both the fertilizer and the pesticide industries." (Underscoring supplied) The
decree further provided as follows:
Section 6. Powers and Functions. The FPA shall have jurisdiction, over all existing
handlers of pesticides, fertilizers and other agricultural chemical inputs. The FPA shall
have the following powers and functions:
I. Common to Fertilizers, Pesticides and other Agricultural Chemicals
xxx
4. To promulgate rules and regulations for the registration and licensing of handlers of
these products, collect fees pertaining thereto, as well as the renewal, suspension,
revocation, or cancellation of such registration or licenses and such other rules and
regulations as may be necessary to implement this Decree;
xxx
Section 7. Power to Issue Rules and Regulations to Implement Decree. The FPA is
hereby authorized to issue or promulgate rules and regulations to implement, and
carry out the purposes and provisions of this Decree.
Did the FPA go beyond its delegated power and undermine the objectives of P.D. No.
1144 by issuing regulations that provide for protection of proprietary data? The
answer is in the negative.
Under P.D. No. 1144, the FPA is given the broad power to issue rules and regulations
to implement and carry out the purposes and provisions of said decree, i.e., to
regulate, control and develop the pesticide industry. In furtherance of such ends, the
FPA sees the protection of proprietary data as one way of fulfilling its mandate.
In Republic v. Sandiganbayan,4 the Court emphasized that:
x x x [t]he interpretation of an administrative government agency, which is
tasked to implement a statute is generally accorded great respect and
ordinarily controls the construction of the courts. The reason behind this rule was
explained in Nestle Philippines, Inc. vs. Court of Appeals in this wise:
The rationale for this rule relates not only to the emergence of the multifarious needs
of a modern or modernizing society and the establishment of diverse administrative
agencies for addressing and satisfying those needs; it also relates to the
accumulation of experience and growth of specialized capabilities by the
administrative agency charged with implementing a particular statute. In Asturias
Sugar Central, Inc. vs. Commissioner of Customs, the Court stressed that executive
officials are presumed to have familiarized themselves with all the
considerations pertinent to the meaning and purpose of the law, and to have
formed an independent, conscientious and competent expert opinion thereon.
The courts give much weight to the government agency officials charged with
the implementation of the law, their competence, expertness, experience and
informed judgment, and the fact that they frequently are the drafters of the law
they interpret."
x x x.5 [Emphasis supplied]
Verily, in this case, the Court acknowledges the experience and expertise of FPA
officials who are best qualified to formulate ways and means of ensuring the quality
and quantity of pesticides and handlers thereof that should enter the Philippine
market, such as giving limited protection to proprietary data submitted by applicants
for registration. The Court ascribes great value and will not disturb the FPA's
determination that one way of attaining the purposes of its charter is by granting such
protection, specially where there is nothing on record which shows that said
administrative agency went beyond its delegated powers.
Moreover, petitioner has not succeeded in convincing the Court that the provision in
question has legal infirmities.1awphi1.net
There is no encroachment upon the powers of the IPO granted under R.A. No. 8293,
otherwise known as the Intellectual Property Code of the Philippines. Section 5
thereof enumerates the functions of the IPO. Nowhere in said provision does it state
nor can it be inferred that the law intended the IPO to have the exclusive authority to
protect or promote intellectual property rights in the Philippines. On the contrary,
paragraph (g) of said Section even provides that the IPO shall "[c]oordinate with other
government agencies and the private sector efforts to formulate and implement plans
and policies to strengthen the protection of intellectual property rights in the country."
Clearly, R.A. No. 8293 recognizes that efforts to fully protect intellectual property
rights cannot be undertaken by the IPO alone. Other agencies dealing with
intellectual property rights are, therefore, not precluded from issuing policies,
guidelines and regulations to give protection to such rights.
There is also no evidence whatsoever to support petitioner's allegation that the grant
of protection to proprietary data would result in restraining free trade. Petitioner did
not adduce any reliable data to prove its bare allegation that the protection of
proprietary data would unduly restrict trade on pesticides. Furthermore, as held
in Association of Philippine Coconut Desiccators v. Philippine Coconut
Authority,6 despite the fact that "our present Constitution enshrines free enterprise as
a policy, it nonetheless reserves to the government the power to intervene whenever
necessary to promote the general welfare." There can be no question that the
unregulated use or proliferation of pesticides would be hazardous to our environment.
Thus, in the aforecited case, the Court declared that "free enterprise does not call for
removal of protective regulations."7 More recently, in Coconut Oil Refiners
Association, Inc. v. Torres,8 the Court held that "[t]he mere fact that incentives and
privileges are granted to certain enterprises to the exclusion of others does not render
the issuance unconstitutional for espousing unfair competition." It must be clearly
explained and proven by competent evidence just exactly how such protective
regulation would result in the restraint of trade.
In sum, the assailed provision in the 1987 Pesticide Regulatory Policies and
Implementing Guidelines granting protection to proprietary data is well within the
authority of the FPA to issue so as to carry out its purpose of controlling, regulating
and developing the pesticide industry.
WHEREFORE, the petition is DENIED. The Decision of the Regional Trial Court of
Quezon City, Branch 90, in SP. Civil Case No. Q-01-42790 is AFFIRMED.
SO ORDERED.
 - versus - BRION,*

PERALTA,

BERSAMIN,

DEL CASTILLO,

ABAD,

VILLARAMA, JR.,

PEREZ,

MENDOZA,* and

SERENO,** JJ.

HON. RONALDO ZAMORA, JR. (Executive Secretary), HON. MAR ROXAS

(Secretary of Trade and Industry), HON. FELIPE MEDALLA (Secretary of
National Economic and Development Authority), GOV. RAFAEL
BUENAVENTURA (Bangko Sentral ng Pilipinas) and HON. LILIA BAUTISTA
(Chairman, Securities and Exchange Commission),

Respondents. Promulgated:
EN BANC

September 21, 2010

REPRESENTATIVES GERARDO S. G.R. No. 143855 x --------------------------------------------------------------------------------------- x
ESPINA, ORLANDO FUA, JR., PROSPERO AMATONG, ROBERT ACE S. DECISION
BARBERS, RAUL M. GONZALES, PROSPERO PICHAY, JUAN MIGUEL ZUBIRI
and FRANKLIN BAUTISTA,

Petitioners, Present: ABAD, J.:

CORONA, C.J.,

CARPIO,

CARPIO MORALES, This case calls upon the Court to exercise its power of judicial review and determine
the constitutionality of the Retail Trade Liberalization Act of 2000, which has been
VELASCO, JR.,* assailed as in breach of the constitutional mandate for the development of a self-
reliant and independent national economy effectively controlled by Filipinos.
NACHURA,*

LEONARDO-DE CASTRO,*
The Facts and the Case
On March 7, 2000 President Joseph E. Estrada signed into law Republic Act (R.A.)
8762, also known as the Retail Trade Liberalization Act of 2000. It expressly repealed
R.A. 1180, which absolutely prohibited foreign nationals from engaging in the retail
trade business. R.A. 8762 now allows them to do so under four categories:
On October 11, 2000 petitioners Magtanggol T. Gunigundo I, Michael T.
Defensor, Gerardo S. Espina, Benjamin S. Lim, Orlando Fua, Jr., Prospero Amatong,
Sergio Apostol,Robert Ace S. Barbers, Enrique Garcia, Jr., Raul M. Gonzales, Jaime
Jacob, Apolinario Lozada, Jr., Leonardo Montemayor, Ma. Elena Palma-Gil, Prospero
Pichay, Juan Miguel Zubiri and Franklin Bautista, all members of the House of
Representatives, filed the present petition, assailing the constitutionality of R.A. 8762
on the following grounds:

Category A Less than Exclusively for Filipino

US$2,500,000.00
Category B US$2,500,000.00 up but
less than US$7,500,000.00
citizens and corporations
wholly owned by Filipino
citizens.
For the first two years of
R.A. 8762s effectivity,
foreign ownership is
allowed up to 60%. After
the two-year period, 100%
foreign equity shall be
allowed.
First, the law runs afoul of Sections 9, 19, and 20 of Article II of the Constitution which
enjoins the State to place the national economy under the control of Filipinos to
achieve equal distribution of opportunities, promote industrialization and full
employment, and protect Filipino enterprise against unfair competition and trade
policies.
Second, the implementation of R.A. 8762 would lead to alien control of the retail
trade, which taken together with alien dominance of other areas of business, would
result in the loss of effective Filipino control of the economy.

Category C US$7,500,000.00 or more May be wholly owned by

Category D US$250,000.00 per store
of foreign enterprises
specializing in high-end or
luxury products
foreigners. Foreign
Third, foreign retailers like Walmart and K-Mart would crush Filipino retailers and sari-
investments for
sari store vendors, destroy self-employment, and bring about more unemployment.
establishing a store in
Categories B and C shall
not be less than the
equivalent in Philippine Fourth, the World Bank-International Monetary Fund had improperly imposed the
Pesos of US$830,000.00. passage of R.A. 8762 on the government as a condition for the release of certain
loans.
May be wholly owned by
foreigners.
Fifth, there is a clear and present danger that the law would promote monopolies or
combinations in restraint of trade.

Respondents Executive Secretary Ronaldo Zamora, Jr., Trade and Industry Secretary
R.A. 8762 also allows natural-born Filipino citizens, who had lost their citizenship and Mar Roxas, National Economic and Development Authority (NEDA) Secretary Felipe
now reside in the Philippines, to engage in the retail trade business with the same Medalla, Bangko Sentral ng Pilipinas Gov. Rafael Buenaventura, and Securities and
rights as Filipino citizens. Exchange Commission Chairman Lilia Bautista countered that:
First, petitioners have no legal standing to file the petition. They cannot invoke the
fact that they are taxpayers since R.A. 8762 does not involve the disbursement of
public funds. Nor can they invoke the fact that they are members of Congress since
they made no claim that the law infringes on their right as legislators.
Second, the petition does not involve any justiciable controversy. Petitioners of
course claim that, as members of Congress, they represent the small retail vendors in
their respective districts but the petition does not allege that the subject law violates
the rights of those vendors.
Third, petitioners have failed to overcome the presumption of constitutionality of R.A.
8762. Indeed, they could not specify how the new law violates the constitutional
provisions they cite. Sections 9, 19, and 20 of Article II of the Constitution are not self-
executing provisions that are judicially demandable.
Fourth, the Constitution mandates the regulation but not the prohibition of foreign
investments. It directs Congress to reserve to Filipino citizens certain areas of
investments upon the recommendation of the NEDA and when the national interest
so dictates. But the Constitution leaves to the discretion of the Congress whether or
not to make such reservation. It does not prohibit Congress from enacting laws
allowing the entry of foreigners into certain industries not reserved by the Constitution
to Filipino citizens.
The Issues Presented
Simplified, the case presents two issues:
1. Whether or not petitioner lawmakers have the legal standing to challenge the
constitutionality of R.A. 8762; and
2. Whether or not R.A. 8762 is unconstitutional.
The Courts Ruling
One. The long settled rule is that he who challenges the validity of a law must have a
standing to do so.[1] Legal standing or locus standi refers to the right of a party to
come to a court of justice and make such a challenge. More particularly, standing
refers to his personal and substantial interest in that he has suffered or will suffer
direct injury as a result of the passage of that law.[2] To put it another way, he must
show that he has been or is about to be denied some right or privilege to which he is
lawfully entitled or that he is about to be subjected to some burdens or penalties by
reason of the law he complains of.[3]
Here, there is no clear showing that the implementation of the Retail Trade
Liberalization Act prejudices petitioners or inflicts damages on them, either as
taxpayers[4] or as legislators.[5] Still the Court will resolve the question they raise since
the rule on standing can be relaxed for nontraditional plaintiffs like ordinary citizens,
taxpayers, and legislators when as in this case the public interest so requires or the
matter is of transcendental importance, of overarching significance to society, or of
paramount public interest.[6]
Two. Petitioners mainly argue that R.A. 8762 violates the mandate of the 1987
Constitution for the State to develop a self-reliant and independent national economy
effectively controlled by Filipinos. They invoke the provisions of the Declaration of
Principles and State Policies under Article II of the 1987 Constitution, which read as
follows:
Section 9. The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the people from
poverty through policies that provide adequate social services, promote full
employment, a rising standard of living, and an improved quality of life for all.
xxxx
Section 19. The State shall develop a self-reliant and independent national
economy effectively controlled by Filipinos.
Section 20. The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed investments.
Petitioners also invoke the provisions of the National Economy and Patrimony under
Article XII of the 1987 Constitution, which reads:
Section 10. The Congress shall, upon recommendation of the economic and
planning agency, when the national interest dictates, reserve to citizens of the
Philippines or to corporations or associations at least sixty per centum of
whose capital is owned by such citizens, or such higher percentage as
Congress may prescribe, certain areas of investments. The Congress shall
enact measures that will encourage the formation and operation of enterprises
whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within
its national jurisdiction and in accordance with its national goals and priorities.
xxxx
Section 12. The State shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and adopt measures that help
make them competitive.
Section 13. The State shall pursue a trade policy that serves the general welfare
and utilizes all forms and arrangements of exchange on the basis of equality
and reciprocity.
But, as the Court explained in Taada v. Angara,[7] the provisions of Article II of the
1987 Constitution, the declarations of principles and state policies, are not self-
executing.Legislative failure to pursue such policies cannot give rise to a cause of
action in the courts.
The Court further explained in Taada that Article XII of the 1987 Constitution lays
down the ideals of economic nationalism: (1) by expressing preference in favor of
qualified Filipinos in the grant of rights, privileges and concessions covering the
national economy and patrimony and in the use of Filipino labor, domestic materials
and locally-produced goods; (2) by mandating the State to adopt measures that help
make them competitive; and (3) by requiring the State to develop a self-reliant and
independent national economy effectively controlled by Filipinos. [8]
In other words, while Section 19, Article II of the 1987 Constitution requires the
development of a self-reliant and independent national economy effectively controlled
by Filipino entrepreneurs, it does not impose a policy of Filipino monopoly of the
economic environment. The objective is simply to prohibit foreign powers or interests
from maneuvering our economic policies and ensure that Filipinos are given
preference in all areas of development.
Indeed, the 1987 Constitution takes into account the realities of the outside world as it
requires the pursuit of a trade policy that serves the general welfare and utilizes all
forms and arrangements of exchange on the basis of equality and reciprocity; and
speaks of industries which are competitive in both domestic and foreign markets as
well as of the protection of Filipino enterprises against unfair foreign competition and
trade practices. Thus, while the Constitution mandates a bias in favor of Filipino
goods, services, labor and enterprises, it also recognizes the need for business
exchange with the rest of the world on the bases of equality and reciprocity and limits
protection of Filipino enterprises only against foreign competition and trade practices
that are unfair.[9]
In other words, the 1987 Constitution does not rule out the entry of foreign
investments, goods, and services. While it does not encourage their unlimited entry
into the country, it does not prohibit them either. In fact, it allows an exchange on the
basis of equality and reciprocity, frowning only on foreign competition that is
unfair.[10] The key, as in all economies in the world, is to strike a balance between
protecting local businesses and allowing the entry of foreign investments and
services.
More importantly, Section 10, Article XII of the 1987 Constitution gives Congress the
discretion to reserve to Filipinos certain areas of investments upon the
recommendation of the NEDA and when the national interest requires. Thus,
Congress can determine what policy to pass and when to pass it depending on the
economic exigencies. It can enact laws allowing the entry of foreigners into certain
industries not reserved by the Constitution to Filipino citizens. In this case, Congress
has decided to open certain areas of the retail trade business to foreign investments
instead of reserving them exclusively to Filipino citizens. The NEDA has not opposed
such policy.
First, aliens can only engage in retail trade business subject to the categories above-
enumerated; Second, only nationals from, or juridical entities formed or incorporated
in countries which allow the entry of Filipino retailers shall be allowed to engage in
retail trade business; and Third, qualified foreign retailers shall not be allowed to
engage in certain retailing activities outside their accredited stores through the use of
mobile or rolling stores or carts, the use of sales representatives, door-to-door selling,
restaurants and sari-sari stores and such other similar retailing activities.
In sum, petitioners have not shown how the retail trade liberalization has prejudiced
and can prejudice the local small and medium enterprises since its implementation
about a decade ago.

WHEREFORE, the Court DISMISSES the petition for lack of merit. No costs.
The control and regulation of trade in the interest of the public welfare is of course an
exercise of the police power of the State. A persons right to property, whether he is a
Filipino citizen or foreign national, cannot be taken from him without due process of
law. In 1954, Congress enacted the Retail Trade Nationalization Act or R.A. 1180 that SO ORDERED.
restricts the retail business to Filipino citizens. In denying the petition assailing the
validity of such Act for violation of the foreigners right to substantive due process of
law, the Supreme Court held that the law constituted a valid exercise of police
power.[11] The State had an interest in preventing alien control of the retail trade and
R.A. 1180 was reasonably related to that purpose. That law is not arbitrary.

Here, to the extent that R.A. 8762, the Retail Trade Liberalization Act, lessens the
restraint on the foreigners right to property or to engage in an ordinarily lawful
business, it cannot be said that the law amounts to a denial of the Filipinos right to
property and to due process of law. Filipinos continue to have the right to engage in
the kinds of retail business to which the law in question has permitted the entry of
foreign investors.

Certainly, it is not within the province of the Court to inquire into the wisdom of R.A.
8762 save when it blatantly violates the Constitution. But as the Court has said, there
is no showing that the law has contravened any constitutional mandate. The Court is
not convinced that the implementation of R.A. 8762 would eventually lead to alien
control of the retail trade business. Petitioners have not mustered any concrete and
strong argument to support its thesis. The law itself has provided strict safeguards on
foreign participation in that business. Thus

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO
D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M.
ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I.
LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA,
ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA,
EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES,
BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS
JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS'
COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE
OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO,
CONRADO AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK
OF THE PHILIPPINES, respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged
Hercules for his life on his way to Mycenae after performing his eleventh labor. The
two wrestled mightily and Hercules flung his adversary to the ground thinking him
dead, but Antaeus rose even stronger to resume their struggle. This happened
several times to Hercules' increasing amazement. Finally, as they continued
grappling, it dawned on Hercules that Antaeus was the son of Gaea and could never
die as long as any part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and
crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch
even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the
elemental forces of life and death, of men and women who, like Antaeus need the
sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the
distribution of this precious resource among our people. But it is more than a slogan.
Through the brooding centuries, it has become a battle-cry dramatizing the
increasingly urgent demand of the dispossessed among us for a plot of earth as their
place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice
to "insure the well-being and economic security of all the people," 1 especially the less
privileged. In 1973, the new Constitution affirmed this goal adding specifically that
"the State shall regulate the acquisition, ownership, use, enjoyment and disposition of
private property and equitably diffuse property ownership and profits." 2 Significantly,
there was also the specific injunction to "formulate and implement an agrarian reform
program aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it
also adopted one whole and separate Article XIII on Social Justice and Human
Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the
common people. These include a call in the following words for the adoption by the
State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded on
the right of farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive a just
share of the fruits thereof. To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform
Code, had already been enacted by the Congress of the Philippines on August 8,
1963, in line with the above-stated principles. This was substantially superseded
almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972,
along with martial law, to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for
landowners.
The people power revolution of 1986 did not change and indeed even energized the
thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino
issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D.
No. 27 and providing for the valuation of still unvalued lands covered by the decree as
well as the manner of their payment. This was followed on July 22, 1987 by
Presidential Proclamation No. 131, instituting a comprehensive agrarian reform
program (CARP), and E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines
took over legislative power from the President and started its own deliberations,
including extensive public hearings, on the improvement of the interests of farmers.
The result, after almost a year of spirited debate, was the enactment of R.A. No.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which
President Aquino signed on June 10, 1988. This law, while considerably changing the
earlier mentioned enactments, nevertheless gives them suppletory effect insofar as
they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common
legal questions, including serious challenges to the constitutionality of the several
measures mentioned above. They will be the subject of one common discussion and
resolution, The different antecedents of each case will require separate treatment,
however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228
and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and
owned by petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by
four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were
declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D.
No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds
inter alia of separation of powers, due process, equal protection and the constitutional
limitation that no private property shall be taken for public use without just
compensation.
They contend that President Aquino usurped legislative power when she promulgated
E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4,
of the Constitution, for failure to provide for retention limits for small landowners.
Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a
valid appropriation.
In connection with the determination of just compensation, the petitioners argue that
the same may be made only by a court of justice and not by the President of the
Philippines. They invoke the recent cases of EPZA v. Dulay 5 andManotok v. National
Food Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights
is payable in money or in cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also
deprives the petitioners of their property rights as protected by due process. The
equal protection clause is also violated because the order places the burden of
solving the agrarian problems on the owners only of agricultural lands. No similar
obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to
be the owners of the lands occupied by them, E.O. No. 228 ignored judicial
prerogatives and so violated due process. Worse, the measure would not solve the
agrarian problem because even the small farmers are deprived of their lands and the
retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been
upheld in the earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and
Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land
Reform Council. 9 The determination of just compensation by the executive
authorities conformably to the formula prescribed under the questioned order is at
best initial or preliminary only. It does not foreclose judicial intervention whenever
sought or warranted. At any rate, the challenge to the order is premature because no
valuation of their property has as yet been made by the Department of Agrarian
Reform. The petitioners are also not proper parties because the lands owned by them
do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not
provide for retention limits on tenanted lands and that in any event their petition is a
class suit brought in behalf of landowners with landholdings below 24 hectares. They
maintain that the determination of just compensation by the administrative authorities
is a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was
decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27,
E.O. Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by
R.A. No. 6657. Nevertheless, this statute should itself also be declared
unconstitutional because it suffers from substantially the same infirmities as the
earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente
Cruz, owner of a 1. 83- hectare land, who complained that the DAR was insisting on
the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise
agreement he had reached with his tenant on the payment of rentals. In a subsequent
motion dated April 10, 1989, he adopted the allegations in the basic amended petition
that the above- mentioned enactments have been impliedly repealed by R.A. No.
6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District,
Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an
organization composed of 1,400 planter-members. This petition seeks to prohibit the
implementation of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform
Program as decreed by the Constitution belongs to Congress and not the President.
Although they agree that the President could exercise legislative power until the
Congress was convened, she could do so only to enact emergency measures during
the transition period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to
be annulled for violating the constitutional provisions on just compensation, due
process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the
Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
(P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian
Reform Program from 1987 to 1992 which shall be sourced from the receipts of the
sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten
wealth received through the Presidential Commission on Good Government and such
other sources as government may deem appropriate. The amounts collected and
accruing to this special fund shall be considered automatically appropriated for the
purpose authorized in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated expropriation has yet
to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such
payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6,
thereof provides that the Land Bank of the Philippines "shall compensate the
landowner in an amount to be established by the government, which shall be based
on the owner's declaration of current fair market value as provided in Section 4
hereof, but subject to certain controls to be defined and promulgated by the
Presidential Agrarian Reform Council." This compensation may not be paid fully in
money but in any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be mutually
agreed upon by the beneficiary and the landowner or as may be prescribed or
approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was
made to make a careful study of the sugar planters' situation. There is no tenancy
problem in the sugar areas that can justify the application of the CARP to them. To
the extent that the sugar planters have been lumped in the same legislation with other
farmers, although they are a separate group with problems exclusively their own, their
right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of
Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual
sugar planters all over the country. On September 10, 1987, another motion for
intervention was filed, this time by Manuel Barcelona, et al., representing coconut and
riceland owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform
Program and that, in any event, the appropriation is invalid because of uncertainty in
the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O.
No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the
minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National
Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by
clear and convincing evidence the necessity for the exercise of the powers of eminent
domain, and the violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the
expropriation of the said land for an amount equal to the government assessor's
valuation of the land for tax purposes. On the other hand, if the landowner declares
his own valuation he is unjustly required to immediately pay the corresponding taxes
on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the
necessity for the expropriation as explained in the "whereas" clauses of the
Proclamation and submits that, contrary to the petitioner's contention, a pilot project to
determine the feasibility of CARP and a general survey on the people's opinion
thereon are not indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed
to show that they belong to a different class and should be differently treated. The
Comment also suggests the possibility of Congress first distributing public agricultural
lands and scheduling the expropriation of private agricultural lands later. From this
viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the
payment of public money without the corresponding appropriation. There is no rule
that only money already in existence can be the subject of an appropriation law.
Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although
denominated as an initial amount, is actually the maximum sum appropriated. The
word "initial" simply means that additional amounts may be appropriated later when
necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own
behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments
already raised, Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;
(3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did not
originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in
violation of due process and the requirement for just compensation, placed his
landholding under the coverage of Operation Land Transfer. Certificates of Land
Transfer were subsequently issued to the private respondents, who then refused
payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small
landholding under Operation Land transfer and asked for the recall and cancellation
of the Certificates of Land Transfer in the name of the private respondents. He claims
that on December 24, 1986, his petition was denied without hearing. On February 17,
1987, he filed a motion for reconsideration, which had not been acted upon when
E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and
academic because they directly effected the transfer of his land to the private
respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no
private property shall be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the
1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before
Congress convened is anomalous and arbitrary, besides violating the doctrine of
separation of powers. The legislative power granted to the President under the
Transitory Provisions refers only to emergency measures that may be promulgated in
the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due
process of law and to the retention of his small parcels of riceholding as guaranteed
under Article XIII, Section 4 of the Constitution. He likewise argues that, besides
denying him just compensation for his land, the provisions of E.O. No. 228 declaring
that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972
shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the
inclusion of even small landowners in the program along with other landowners with
lands consisting of seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because
the motion for reconsideration filed with the Minister of Agrarian Reform is still
unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues
that they were enacted pursuant to Section 6, Article XVIII of the Transitory
Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first
Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was
promulgated on October 21. 1972, the tenant-farmer of agricultural land was deemed
the owner of the land he was tilling. The leasehold rentals paid after that date should
therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed
was resolved on December 14, 1987. An appeal to the Office of the President would
be useless with the promulgation of E.O. Nos. 228 and 229, which in effect
sanctioned the validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to
owners of rice and corn lands not exceeding seven hectares as long as they are
cultivating or intend to cultivate the same. Their respective lands do not exceed the
statutory limit but are occupied by tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be
ejected or removed from his farmholding until such time as the respective rights of the
tenant- farmers and the landowner shall have been determined in accordance with
the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their
right of retention because the Department of Agrarian Reform has so far not issued
the implementing rules required under the above-quoted decree. They therefore ask
the Court for a writ of mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended
by LOI 474 removing any right of retention from persons who own other agricultural
lands of more than 7 hectares in aggregate area or lands used for residential,
commercial, industrial or other purposes from which they derive adequate income for
their family. And even assuming that the petitioners do not fall under its terms, the
regulations implementing P.D. No. 27 have already been issued, to wit, the
Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small
Landowners, with an accompanying Retention Guide Table), Memorandum Circular
No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474),
Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines
on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR
Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for
Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to
file the corresponding applications for retention under these measures, the petitioners
are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated
this case notwithstanding the pendency of their appeal to the President of the
Philippines. Moreover, the issuance of the implementing rules, assuming this has not
yet been done, involves the exercise of discretion which cannot be controlled through
the writ of mandamus. This is especially true if this function is entrusted, as in this
case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable
to them because they do not own more than seven hectares of agricultural land.
Moreover, assuming arguendo that the rules were intended to cover them also, the
said measures are nevertheless not in force because they have not been published
as required by law and the ruling of this Court in Tanada v. Tuvera.10 As for LOI 474,
the same is ineffective for the additional reason that a mere letter of instruction could
not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the
three departments of the government, the judiciary is nonetheless vested with the
power to annul the acts of either the legislative or the executive or of both when not
conformable to the fundamental law. This is the reason for what some quarters call
the doctrine of judicial supremacy. Even so, this power is not lightly assumed or
readily exercised. The doctrine of separation of powers imposes upon the courts a
proper restraint, born of the nature of their functions and of their respect for the other
departments, in striking down the acts of the legislative and the executive as
unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to
sustain. The theory is that before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both, to insure that the
Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of
the Supreme Court who took part in the deliberations and voted on the issue during
their session en banc.11 And as established by judge made doctrine, the Court will
assume jurisdiction over a constitutional question only if it is shown that the essential
requisites of a judicial inquiry into such a question are first satisfied. Thus, there must
be an actual case or controversy involving a conflict of legal rights susceptible of
judicial determination, the constitutional question must have been opportunely raised
by the proper party, and the resolution of the question is unavoidably necessary to the
decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases
before us, we hold that the same is satisfied by the petitioners and intervenors
because each of them has sustained or is in danger of sustaining an immediate injury
as a result of the acts or measures complained of. 13 And even if, strictly speaking,
they are not covered by the definition, it is still within the wide discretion of the Court
to waive the requirement and so remove the impediment to its addressing and
resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed
to question the constitutionality of several executive orders issued by President
Quirino although they were invoking only an indirect and general interest shared in
common with the public. The Court dismissed the objection that they were not proper
parties and ruled that "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in many other
cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when
confronted with constitutional issues like the ones now before it, 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 as God and its conscience
give it the light to probe its meaning and discover its purpose. Personal motives and
political considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not
hesitate to "make the hammer fall, and heavily," to use Justice Laurel's pithy
language, where the acts of these departments, or of any public official, betray the
people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it does not assert
any superiority over the other departments; it does not in reality nullify or invalidate an
act of the Legislature, but only asserts the solemn and sacred obligation assigned to it
by the Constitution to determine conflicting claims of authority under the Constitution
and to establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is involved in what
is termed "judicial supremacy" which properly is the power of judicial review under the
Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the
more serious challenges to the constitutionality of the several measures involved in
these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers
under martial law has already been sustained in Gonzales v. Estrella and we find no
reason to modify or reverse it on that issue. As for the power of President Aquino to
promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized
under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the
Congress of the Philippines was formally convened and took over legislative power
from her. They are not "midnight" enactments intended to pre-empt the legislature
because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e.,
Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it
correct to say that these measures ceased to be valid when she lost her legislative
power for, like any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the legislature that
enacted it. By the same token, President Aquino's loss of legislative power did not
have the effect of invalidating all the measures enacted by her when and as long as
she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that
they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its
provisions. 17 Indeed, some portions of the said measures, like the creation of the P50
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229,
have been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution.
Clearly, however, Proc. No. 131 is not an appropriation measure even if it does
provide for the creation of said fund, for that is not its principal purpose. An
appropriation law is one the primary and specific purpose of which is to authorize the
release of public funds from the treasury. 19 The creation of the fund is only incidental
to the main objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24
and Section 25(4) of Article VI, are not applicable. With particular reference to Section
24, this obviously could not have been complied with for the simple reason that the
House of Representatives, which now has the exclusive power to initiate
appropriation measures, had not yet been convened when the proclamation was
issued. The legislative power was then solely vested in the President of the
Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should
be invalidated because they do not provide for retention limits as required by Article
XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for
such limits now in Section 6 of the law, which in fact is one of its most controversial
provisions. This section declares:
Retention Limits. Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which
shall vary according to factors governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1) that
he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of
this Act shall retain the same areas as long as they continue to cultivate said
homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall
have only one subject, to be expressed in its title, deserves only short attention. It is
settled that the title of the bill does not have to be a catalogue of its contents and will
suffice if the matters embodied in the text are relevant to each other and may be
inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential
issuance, by whatever name it was called, had the force and effect of law because it
came from President Marcos. Such are the ways of despots. Hence, it is futile to
argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed
P.D. No. 27 because the former was only a letter of instruction. The important thing is
that it was issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had
to comply with the requirement for publication as this Court held in Tanada v.
Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2
of the Civil Code, they could not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474 was published, though, in
the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ
of mandamus cannot issue to compel the performance of a discretionary act,
especially by a specific department of the government. That is true as a general
proposition but is subject to one important qualification. Correctly and categorically
stated, the rule is that mandamus will lie to compel the discharge of the discretionary
duty itself but not to control the discretion to be exercised. In other words, mandamus
can issue to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed
by law, the courts will intervene by the extraordinary legal remedy of mandamus to
compel action. If the duty is purely ministerial, the courts will require specific action. If
the duty is purely discretionary, the courts by mandamus will require action only. For
example, if an inferior court, public official, or board should, for an unreasonable
length of time, fail to decide a particular question to the great detriment of all parties
concerned, or a court should refuse to take jurisdiction of a cause when the law
clearly gave it jurisdiction mandamus will issue, in the first case to require a decision,
and in the second to require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a
plain, speedy and adequate remedy available from the administrative authorities,
resort to the courts may still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent
domain that logically preclude the application of both powers at the same time on the
same subject. In the case of City of Baguio v. NAWASA, 24for example, where a law
required the transfer of all municipal waterworks systems to the NAWASA in
exchange for its assets of equivalent value, the Court held that the power being
exercised was eminent domain because the property involved was wholesome and
intended for a public use. Property condemned under the police power is noxious or
intended for a noxious purpose, such as a building on the verge of collapse, which
should be demolished for the public safety, or obscene materials, which should be
destroyed in the interest of public morals. The confiscation of such property is not
compensable, unlike the taking of property under the power of expropriation, which
requires the payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits
of the police power in a famous aphorism: "The general rule at least is that while
property may be regulated to a certain extent, if regulation goes too far it will be
recognized as a taking." The regulation that went "too far" was a law prohibiting
mining which might cause the subsidence of structures for human habitation
constructed on the land surface. This was resisted by a coal company which had
earlier granted a deed to the land over its mine but reserved all mining rights
thereunder, with the grantee assuming all risks and waiving any damage claim. The
Court held the law could not be sustained without compensating the grantor. Justice
Brandeis filed a lone dissent in which he argued that there was a valid exercise of the
police power. He said:
Every restriction upon the use of property imposed in the exercise of the police power
deprives the owner of some right theretofore enjoyed, and is, in that sense, an
abridgment by the State of rights in property without making compensation. But
restriction imposed to protect the public health, safety or morals from dangers
threatened is not a taking. The restriction here in question is merely the prohibition of
a noxious use. The property so restricted remains in the possession of its owner. The
state does not appropriate it or make any use of it. The state merely prevents the
owner from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may because of further
changes in local or social conditions the restriction will have to be removed and the
owner will again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police
power and the power of eminent domain, with the latter being used as an implement
of the former like the power of taxation. The employment of the taxing power to
achieve a police purpose has long been accepted. 26 As for the power of
expropriation, Prof. John J. Costonis of the University of Illinois College of Law
(referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which
sustained a zoning law under the police power) makes the following significant
remarks:
Euclid, moreover, was decided in an era when judges located the Police and eminent
domain powers on different planets. Generally speaking, they viewed eminent domain
as encompassing public acquisition of private property for improvements that would
be available for public use," literally construed. To the police power, on the other
hand, they assigned the less intrusive task of preventing harmful externalities a point
reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its
support of zoning. So long as suppression of a privately authored harm bore a
plausible relation to some legitimate "public purpose," the pertinent measure need
have afforded no compensation whatever. With the progressive growth of
government's involvement in land use, the distance between the two powers has
contracted considerably. Today government often employs eminent domain
interchangeably with or as a useful complement to the police power-- a trend
expressly approved in the Supreme Court's 1954 decision in Berman v. Parker, which
broadened the reach of eminent domain's "public use" test to match that of the police
power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of
blighted areas in the District of Columbia as a proper exercise of the police power. On
the role of eminent domain in the attainment of this purpose, Justice Douglas
declared:
If those who govern the District of Columbia decide that the Nation's Capital should
be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in
the way.
Once the object is within the authority of Congress, the right to realize it through the
exercise of eminent domain is clear.
28
For the power of eminent domain is merely the means to the end.
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in
1978, the U.S Supreme Court sustained the respondent's Landmarks Preservation
Law under which the owners of the Grand Central Terminal had not been allowed to
construct a multi-story office building over the Terminal, which had been designated a
historic landmark. Preservation of the landmark was held to be a valid objective of the
police power. The problem, however, was that the owners of the Terminal would be
deprived of the right to use the airspace above it although other landowners in the
area could do so over their respective properties. While insisting that there was here
no taking, the Court nonetheless recognized certain compensatory rights accruing to
Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by
the regulation. This "fair compensation," as he called it, was explained by Prof.
Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central
was authorized to transfer to neighboring properties the authorized but unused rights
accruing to the site prior to the Terminal's designation as a landmark the rights
which would have been exhausted by the 59-story building that the city refused to
countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the
Terminal site by constructing or selling to others the right to construct larger, hence
more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of
compensable taking is concerned. To the extent that the measures under challenge
merely prescribe retention limits for landowners, there is an exercise of the police
power for the regulation of private property in accordance with the Constitution. But
where, to carry out such regulation, it becomes necessary to deprive such owners of
whatever lands they may own in excess of the maximum area allowed, there is
definitely a taking under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere limitation of the
use of the land. What is required is the surrender of the title to and the physical
possession of the said excess and all beneficial rights accruing to the owner in favor
of the farmer-beneficiary. This is definitely an exercise not of the police power but of
the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the
several measures before us are challenged as violative of the due process and equal
protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no
retention limits are prescribed has already been discussed and dismissed. It is noted
that although they excited many bitter exchanges during the deliberation of the CARP
Law in Congress, the retention limits finally agreed upon are, curiously enough, not
being questioned in these petitions. We therefore do not discuss them here. The
Court will come to the other claimed violations of due process in connection with our
examination of the adequacy of just compensation as required under the power of
expropriation.
The argument of the small farmers that they have been denied equal protection
because of the absence of retention limits has also become academic under Section
6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits.
There is also the complaint that they should not be made to share the burden of
agrarian reform, an objection also made by the sugar planters on the ground that they
belong to a particular class with particular interests of their own. However, no
evidence has been submitted to the Court that the requisites of a valid classification
have been violated.
Classification has been defined as the grouping of persons or things similar to each
other in certain particulars and different from each other in these same
particulars. 31 To be valid, it must conform to the following requirements: (1) it must be
based on substantial distinctions; (2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and (4) it must apply equally to all
the members of the class. 32 The Court finds that all these requisites have been met
by the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be
treated alike both as to the rights conferred and the liabilities imposed. 33 The
petitioners have not shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but also owners of other
properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that
is clearly visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of
justice except only where its discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police
power only if there is a concurrence of the lawful subject and the lawful method. Put
otherwise, the interests of the public generally as distinguished from those of a
particular class require the interference of the State and, no less important, the
means employed are reasonably necessary for the attainment of the purpose sought
to be achieved and not unduly oppressive upon individuals. 34 As the subject and
purpose of agrarian reform have been laid down by the Constitution itself, we may
say that the first requirement has been satisfied. What remains to be examined is the
validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that
there be a valid objective; it is also necessary that the means employed to pursue it
be in keeping with the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral conviction or the
most urgent public need, subject only to a few notable exceptions, will excuse the
bypassing of an individual's rights. It is no exaggeration to say that a, person invoking
a right guaranteed under Article III of the Constitution is a majority of one even as
against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of
Article III of the Constitution. With regard to his property, the owner enjoys the added
protection of Section 9, which reaffirms the familiar rule that private property shall not
be taken for public use without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire
private lands intended for public use upon payment of just compensation to the
owner. Obviously, there is no need to expropriate where the owner is willing to sell
under terms also acceptable to the purchaser, in which case an ordinary deed of sale
may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or
cannot accept the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of the State
over the interests of the property owner. Private rights must then yield to the
irresistible demands of the public interest on the time-honored justification, as in the
case of the police power, that the welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means
absolute (as indeed no power is absolute). The limitation is found in the constitutional
injunction that "private property shall not be taken for public use without just
compensation" and in the abundant jurisprudence that has evolved from the
interpretation of this principle. Basically, the requirements for a proper exercise of the
power are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that
the State should first distribute public agricultural lands in the pursuit of agrarian
reform instead of immediately disturbing property rights by forcibly acquiring private
agricultural lands. Parenthetically, it is not correct to say that only public agricultural
lands may be covered by the CARP as the Constitution calls for "the just distribution
of all agricultural lands." In any event, the decision to redistribute private agricultural
lands in the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not justified in
reviewing that discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political
departments when they decide what is known as the political question. As explained
by Chief Justice Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a
question of policy. It refers to "those questions which, under the Constitution, are to
be decided by the people in their sovereign capacity; or in regard to which full
discretionary authority has been delegated to the legislative or executive branch of
the government." It is concerned with issues dependent upon the wisdom, not legality,
of a particular measure.
It is true that the concept of the political question has been constricted with the
enlargement of judicial power, which now includes the authority of the courts "to
determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government." 37 Even so, this should not be construed as a license for us to reverse
the other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the
CARP the redistribution of private landholdings (even as the distribution of public
agricultural lands is first provided for, while also continuing apace under the Public
Land Act and other cognate laws). The Court sees no justification to interpose its
authority, which we may assert only if we believe that the political decision is not
unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the entire St.
Mary's river between the American bank and the international line, as well as all of the
upland north of the present ship canal, throughout its entire length, was "necessary
for the purpose of navigation of said waters, and the waters connected therewith,"
that determination is conclusive in condemnation proceedings instituted by the United
States under that Act, and there is no room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already been settled for us by
the Constitution itself No less than the 1987 Charter calls for agrarian reform, which is
the reason why private agricultural lands are to be taken from their owners, subject to
the prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc.
No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that
the State adopt the necessary measures "to encourage and undertake the just
distribution of all agricultural lands to enable farmers who are landless to own directly
or collectively the lands they till." That public use, as pronounced by the fundamental
law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and
more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator. 39 It has been repeatedly stressed by this Court that the
measure is not the taker's gain but the owner's loss. 40 The word "just" is used to
intensify the meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full,
ample. 41
It bears repeating that the measures challenged in these petitions contemplate more
than a mere regulation of the use of private lands under the police power. We deal
here with an actual taking of private agricultural lands that has dispossessed the
owners of their property and deprived them of all its beneficial use and enjoyment, to
entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking
when the following conditions concur: (1) the expropriator must enter a private
property; (2) the entry must be for more than a momentary period; (3) the entry must
be under warrant or color of legal authority; (4) the property must be devoted to public
use or otherwise informally appropriated or injuriously affected; and (5) the utilization
of the property for public use must be in such a way as to oust the owner and deprive
him of beneficial enjoyment of the property. All these requisites are envisioned in the
measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit
upon its taking possession of the condemned property, as "the compensation is a
public charge, the good faith of the public is pledged for its payment, and all the
resources of taxation may be employed in raising the amount." 43 Nevertheless,
Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of rejection
or no response from the landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in LBP bonds in accordance
with this Act, the DAR shall take immediate possession of the land and shall request
the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name
of the Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is
claimed is entrusted to the administrative authorities in violation of judicial
prerogatives. Specific reference is made to Section 16(d), which provides that in case
of the rejection or disregard by the owner of the offer of the government to buy his
land-
... the DAR shall conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land, within fifteen (15)
days from the receipt of the notice. After the expiration of the above period, the matter
is deemed submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the
courts of justice and may not be usurped by any other branch or official of the
government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated
by President Marcos providing that the just compensation for property under
expropriation should be either the assessment of the property by the government or
the sworn valuation thereof by the owner, whichever was lower. In declaring these
decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees
constitutes impermissible encroachment on judicial prerogatives. It tends to render
this Court inutile in a matter which under this Constitution is reserved to it for final
determination.
Thus, although in an expropriation proceeding the court technically would still have
the power to determine the just compensation for the property, following the
applicable decrees, its task would be relegated to simply stating the lower value of the
property as declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint commissioners under Rule
67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the
taking of private property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict application of the
decrees during the proceedings would be nothing short of a mere formality or charade
as the court has only to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two. The court cannot
exercise its discretion or independence in determining what is just or fair. Even a
grade school pupil could substitute for the judge insofar as the determination of
constitutional just compensation is concerned.
xxx
In the present petition, we are once again confronted with the same question of
whether the courts under P.D. No. 1533, which contains the same provision on just
compensation as its predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to the basic
concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or
clerk to absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro
and con have been presented, and after all factors and considerations essential to a
fair and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from
the arbitrariness that rendered the challenged decrees constitutionally objectionable.
Although the proceedings are described as summary, the landowner and other
interested parties are nevertheless allowed an opportunity to submit evidence on the
real value of the property. But more importantly, the determination of the just
compensation by the DAR is not by any means final and conclusive upon the
landowner or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with
finality the said determination in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not
as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the DAR
and the LBP, in accordance with the criteria provided for in Sections 16 and 17, and
other pertinent provisions hereof, or as may be finally determined by the court, as the
just compensation for the land.
The compensation shall be paid in one of the following modes, at the option of the
landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned
Twenty-five percent (25%) cash, the balance to be paid in government financial
instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares Thirty
percent (30%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(c) For lands twenty-four (24) hectares and below Thirty-five percent (35%) cash,
the balance to be paid in government financial instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP preferred
shares, physical assets or other qualified investments in accordance with guidelines
set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of
the face value of the bonds shall mature every year from the date of issuance until the
tenth (10th) year: Provided, That should the landowner choose to forego the cash
portion, whether in full or in part, he shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner,
his successors-in- interest or his assigns, up to the amount of their face value, for any
of the following:
(i) Acquisition of land or other real properties of the government, including assets
under the Asset Privatization Program and other assets foreclosed by government
financial institutions in the same province or region where the lands for which the
bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled corporations or
shares of stock owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;
(iv) Security for loans with any government financial institution, provided the proceeds
of the loans shall be invested in an economic enterprise, preferably in a small and
medium- scale industry, in the same province or region as the land for which the
bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the use of
these bonds for these purposes will be limited to a certain percentage of the
outstanding balance of the financial instruments; Provided, further, That the PARC
shall determine the percentages mentioned above;
(vi) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to
accept just compensation therefor in less than money, which is the only medium of
payment allowed. In support of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property
expropriated is entitled to a just compensation, which should be neither more nor
less, whenever it is possible to make the assessment, than the money equivalent of
said property. Just compensation has always been understood to be the just and
complete equivalent of the loss which the owner of the thing expropriated has to
suffer by reason of the expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value of the
property at the time of its taking. Anything beyond that is more, and anything short of
that is less, than just compensation. It means a fair and full equivalent for the loss
sustained, which is the measure of the indemnity, not whatever gain would accrue to
the expropriating entity. The market value of the land taken is the just compensation
to which the owner of condemned property is entitled, the market value being that
sum of money which a person desirous, but not compelled to buy, and an owner,
willing, but not compelled to sell, would agree on as a price to be given and received
for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been
derived, the weight of authority is also to the effect that just compensation for property
expropriated is payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The condemnor
cannot compel the owner to accept anything but money, nor can the owner compel or
require the condemnor to pay him on any other basis than the value of the property in
money at the time and in the manner prescribed by the Constitution and the statutes.
When the power of eminent domain is resorted to, there must be a standard medium
of payment, binding upon both parties, and the law has fixed that standard as money
in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be
regarded as a reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in
money, which must be paid at least within a reasonable time after the taking, and it is
not within the power of the Legislature to substitute for such payment future
obligations, bonds, or other valuable advantage. 49(Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of
just compensation is money and no other. And so, conformably, has just
compensation been paid in the past solely in that medium. However, we do not deal
here with the traditional excercise of the power of eminent domain. This is not an
ordinary expropriation where only a specific property of relatively limited area is
sought to be taken by the State from its owner for a specific and perhaps local
purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and
of whatever kind as long as they are in excess of the maximum retention limits
allowed their owners. This kind of expropriation is intended for the benefit not only of
a particular community or of a small segment of the population but of the entire
Filipino nation, from all levels of our society, from the impoverished farmer to the land-
glutted owner. Its purpose does not cover only the whole territory of this country but
goes beyond in time to the foreseeable future, which it hopes to secure and edify with
the vision and the sacrifice of the present generation of Filipinos. Generations yet to
come are as involved in this program as we are today, although hopefully only as
beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less
than the Constitution itself that has ordained this revolution in the farms, calling for "a
just distribution" among the farmers of lands that have heretofore been the prison of
their dreams but can now become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us,
we estimate that hundreds of billions of pesos will be needed, far more indeed than
the amount of P50 billion initially appropriated, which is already staggering as it is by
our present standards. Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when
they called for agrarian reform as a top priority project of the government. It is a part
of this assumption that when they envisioned the expropriation that would be needed,
they also intended that the just compensation would have to be paid not in the
orthodox way but a less conventional if more practical method. There can be no doubt
that they were aware of the financial limitations of the government and had no
illusions that there would be enough money to pay in cash and in full for the lands
they wanted to be distributed among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now provided for by the CARP
Law, particularly the payment of the balance (if the owner cannot be paid fully with
money), or indeed of the entire amount of the just compensation, with other things of
value. We may also suppose that what they had in mind was a similar scheme of
payment as that prescribed in P.D. No. 27, which was the law in force at the time they
deliberated on the new Charter and with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any
categorical agreement among the members regarding the meaning to be given the
concept of just compensation as applied to the comprehensive agrarian reform
program being contemplated. There was the suggestion to "fine tune" the requirement
to suit the demands of the project even as it was also felt that they should "leave it to
Congress" to determine how payment should be made to the landowner and
reimbursement required from the farmer-beneficiaries. Such innovations as
"progressive compensation" and "State-subsidized compensation" were also
proposed. In the end, however, no special definition of the just compensation for the
lands to be expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the
assumptions we are making of the general sentiments and intention of the members
on the content and manner of the payment to be made to the landowner in the light of
the magnitude of the expenditure and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of
the just compensation provided for in the afore- quoted Section 18 of the CARP Law
is not violative of the Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and demands of society or oblivious to
the need for its enhancement. The Court is as acutely anxious as the rest of our
people to see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades. We are
aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in the restless countryside. That is
not in our view the intention of the Constitution, and that is not what we shall decree
today.
Accepting the theory that payment of the just compensation is not always required to
be made fully in money, we find further that the proportion of cash payment to the
other things of value constituting the total payment, as determined on the basis of the
areas of the lands expropriated, is not unduly oppressive upon the landowner. It is
noted that the smaller the land, the bigger the payment in money, primarily because
the small landowner will be needing it more than the big landowners, who can afford a
bigger balance in bonds and other things of value. No less importantly, the
government financial instruments making up the balance of the payment are
"negotiable at any time." The other modes, which are likewise available to the
landowner at his option, are also not unreasonable because payment is made in
shares of stock, LBP bonds, other properties or assets, tax credits, and other things
of value equivalent to the amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big
and small, not a little inconvenience. As already remarked, this cannot be avoided.
Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we
know they are of the need for their forebearance and even sacrifice, will not begrudge
us their indispensable share in the attainment of the ideal of agrarian reform.
Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229
does not seem to be viable any more as it appears that Section 4 of the said Order
has been superseded by Section 14 of the CARP Law. This repeats the requisites of
registration as embodied in the earlier measure but does not provide, as the latter did,
that in case of failure or refusal to register the land, the valuation thereof shall be that
given by the provincial or city assessor for tax purposes. On the contrary, the CARP
Law says that the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property
even before actual payment to him in full of just compensation, in contravention of a
well- accepted principle of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from
the owner to the expropriator only upon full payment of the just compensation.
Jurisprudence on this settled principle is consistent both here and in other democratic
jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the
condemnor until the judgment fixing just compensation is entered and paid, but the
condemnor's title relates back to the date on which the petition under the Eminent
Domain Act, or the commissioner's report under the Local Improvement Act, is
filed. 51
... although the right to appropriate and use land taken for a canal is complete at the
time of entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
53
In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that
title to property does not pass to the condemnor until just compensation had actually
been made. In fact, the decisions appear to be uniformly to this effect. As early as
1838, in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the
condemned property was a condition precedent to the investment of the title to the
property in the State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction upon the
statutes was that the fee did not vest in the State until the payment of the
compensation although the authority to enter upon and appropriate the land was
complete prior to the payment. Kennedy further said that "both on principle and
authority the rule is ... that the right to enter on and use the property is complete, as
soon as the property is actually appropriated under the authority of law for a public
use, but that the title does not pass from the owner without his consent, until just
compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation adopted in
this jurisdiction is such as to afford absolute reassurance that no piece of land can be
finally and irrevocably taken from an unwilling owner until compensation is paid ...
. (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as
October 21, 1972 and declared that he shall "be deemed the owner" of a portion of
land consisting of a family-sized farm except that "no title to the land owned by him
was to be actually issued to him unless and until he had become a full-fledged
member of a duly recognized farmers' cooperative." It was understood, however, that
full payment of the just compensation also had to be made first, conformably to the
constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972
of the land they acquired by virtue of Presidential Decree No. 27. (Emphasis
supplied.)
it was obviously referring to lands already validly acquired under the said decree,
after proof of full-fledged membership in the farmers' cooperatives and full payment of
just compensation. Hence, it was also perfectly proper for the Order to also provide in
its Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary
after October 21, 1972 (pending transfer of ownership after full payment of just
compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of
the land to the government on receipt by the landowner of the corresponding payment
or the deposit by the DAR of the compensation in cash or LBP bonds with an
accessible bank. Until then, title also remains with the landowner. 57 No outright
change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under
P.D. No. 27, as recognized under E.O. No. 228, are retained by him even now under
R.A. No. 6657. This should counter-balance the express provision in Section 6 of the
said law that "the landowners whose lands have been covered by Presidential Decree WHEREFORE, the Court holds as follows:
No. 27 shall be allowed to keep the area originally retained by them thereunder,
further, That original homestead grantees or direct compulsory heirs who still own the 1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
original homestead at the time of the approval of this Act shall retain the same areas SUSTAINED against all the constitutional objections raised in the herein petitions.
as long as they continue to cultivate said homestead."
2. Title to all expropriated properties shall be transferred to the State only upon full
In connection with these retained rights, it does not appear in G.R. No. 78742 that the payment of compensation to their respective owners.
appeal filed by the petitioners with the Office of the President has already been
resolved. Although we have said that the doctrine of exhaustion of administrative 3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained
remedies need not preclude immediate resort to judicial action, there are factual and recognized.
issues that have yet to be examined on the administrative level, especially the claim
4. Landowners who were unable to exercise their rights of retention under P.D. No.
that the petitioners are not covered by LOI 474 because they do not own other
27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions
agricultural lands than the subjects of their petition.
therein prescribed.
Obviously, the Court cannot resolve these issues. In any event, assuming that the
5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without
petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the
pronouncement as to costs.
Court holds that they are entitled to the new retention rights provided for by R.A. No.
6657, which in fact are on the whole more liberal than those granted by the decree. SO ORDERED.
V Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado,
The CARP Law and the other enactments also involved in these cases have been the
JJ., concur.
subject of bitter attack from those who point to the shortcomings of these measures
and ask that they be scrapped entirely. To be sure, these enactments are less than
perfect; indeed, they should be continuously re-examined and rehoned, that they may
be sharper instruments for the better protection of the farmer's rights. But we have to
start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground
but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable.
The CARP Law is not a tried and tested project. On the contrary, to use Justice
Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as
we venture forward, and, if necessary, by our own mistakes. We cannot expect
perfection although we should strive for it by all means. Meantime, we struggle as
best we can in freeing the farmer from the iron shackles that have unconscionably,
and for so long, fettered his soul to the soil.

By the decision we reach today, all major legal obstacles to the comprehensive
agrarian reform program are removed, to clear the way for the true freedom of the
farmer. We may now glimpse the day he will be released not only from want but also
from the exploitation and disdain of the past and from his own feelings of inadequacy
and helplessness. At last his servitude will be ended forever. At last the farm on which
he toils will be his farm. It will be his portion of the Mother Earth that will give him not
only the staff of life but also the joy of living. And where once it bred for him only deep
despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now
at last can he banish from his small plot of earth his insecurities and dark resentments
and "rebuild in it the music and the dream."

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 175368 April 11, 2013
LEAGUE OF PROVINCES OF THE PHILIPPINES, Petitioner,
vs.
DEPARTMENT OF ENVIRONMENT and NATURAL RESOURCES and HON.
ANGELO T. REYES, in his capacity as Secretary of DENR, Respondents.
DECISION
PERALTA, J.:
This is a petition for certiorari, prohibition and mandamus,1 praying that this Court
order the following: ( 1) declare as unconstitutional Section 17(b)(3)(iii) of Republic
Act (R.A.) No. 7160, otherwise known as The Local Government Code of 1991 and
Section 24 of Republic Act (R.A.) No. 7076, otherwise known as the People's Small-
Scale Mining Act of 1991; (2) prohibit and bar respondents from exercising control
over provinces; and (3) declare as illegal the respondent Secretary of the Department
of Energy and Natural Resources' (DENR) nullification, voiding and cancellation of the
Small-Scale Mining permits issued by the Provincial Governor of Bulacan.
The Facts are as follows:
On March 28, 1996, Golden Falcon Mineral Exploration Corporation (Golden Falcon)
filed with the DENR Mines and Geosciences Bureau Regional Office No. III (MGB R-
III) an Application for Financial and Technical Assistance Agreement (FTAA) covering
an area of 61,136 hectares situated in the Municipalities of San Miguel, San
Ildefonso, Norzagaray and San Jose del Monte, Bulacan. 2
On April 29, 1998, the MGB R-III issued an Order denying Golden Falcon's
Application for Financial and Technical Assistance Agreement for failure to secure
area clearances from the Forest Management Sector and Lands Management Sector
of the DENR Regional Office No. III.3
On November 11, 1998, Golden Falcon filed an appeal with the DENR Mines and
Geosciences Bureau Central Office (MGB-Central Office), and sought reconsideration
of the Order dated April 29, 1998.4
On February 10, 2004, while Golden Falcon's appeal was pending, Eduardo D.
Mercado, Benedicto S. Cruz, Gerardo R. Cruz and Liberato Sembrano filed with the
Provincial Environment and Natural Resources Office (PENRO) of Bulacan their
respective Applications for Quarry Permit (AQP), which covered the same area
subject of Golden Falcon's Application for Financial and Technical Assistance
Agreement.5
On July 16, 2004, the MGB-Central Office issued an Order denying Golden Falcon's
appeal and affirming the MGB R-III's Order dated April 29, 1998.
On September 13, 2004, Atlantic Mines and Trading Corporation (AMTC) filed with
the PENRO of Bulacan an Application for Exploration Permit (AEP) covering 5,281
hectares of the area covered by Golden Falcon's Application for Financial and
Technical Assistance Agreement.6
On October 19, 2004, DENR-MGB Director Horacio C. Ramos, in response to MGB
R-III Director Arnulfo V. Cabantog's memorandum query dated September 8, 2004,
categorically stated that the MGB-Central Office's Order dated July 16, 2004 became
final on August 11, 2004, fifteen (15) days after Golden Falcon received the said
Order, per the Certification dated October 8, 2004 issued by the Postmaster II of the
Philippine Postal Corporation of Cainta, Rizal.7
Through letters dated May 5 and May 10, 2005, AMTC notified the PENRO of
Bulacan and the MGB R-III Director, respectively, that the subject Applications for
Quarry Permit fell within its (AMTC's) existing valid and prior Application for
Exploration Permit, and the the former area of Golden Falcon was open to mining
location only on August 11, 2004 per the Memorandum dated October 19, 2004 of the
MGB Director, Central Office.8
On June 24, 2005, Ricardo Medina, Jr., PENRO of Bulacan, indorsed AMTC's letter
to the Provincial Legal Officer, Atty. Eugenio F. Resurreccion, for his legal opinion on
which date of denial of Golden Falcon's application/appeal April 29, 1998 or July 16,
2004 is to be considered in the deliberation of the Provincial Mining Regulatory
Board (PMRB) for the purpose of determining when the land subject of the
Applications for Quarry Permit could be considered open for application.
On June 28, 2005, Provincial Legal Officer Eugenio Resurreccion issued a legal
opinion stating that the Order dated July 16, 2004 of the MGB-Central Office was a
mere reaffirmation of the Order dated April 29, 1998 of the MGB R-III; hence, the
Order dated April 29, 1998 should be the reckoning period of the denial of the
application of Golden Falcon.
On July 22, 2005, AMTC filed with the PMRB of Bulacan a formal protest against the
aforesaid Applications for Quarry Permit on the ground that the subject area was
already covered by its Application for Exploration Permit. 9
On August 8, 2005, MGB R-III Director Cabantog, who was the concurrent Chairman
of the PMRB, endorsed to the Provincial Governor of Bulacan, Governor Josefina M.
dela Cruz, the aforesaid Applications for Quarry Permit that had apparently been
converted to Applications for Small-Scale Mining Permit of Eduardo D. Mercado,
Benedicto S. Cruz, Gerardo R. Cruz and Lucila S. Valdez (formerly Liberato
Sembrano).10
On August 9, 2005, the PENRO of Bulacan issued four memoranda recommending to
Governor Dela Cruz the approval of the aforesaid Applications for Small-Scale Mining
Permit.11
On August 10, 2005, Governor Dela Cruz issued the corresponding Small-Scale
Mining Permits in favor of Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R. Cruz
and Lucila S. Valdez.12
Subsequently, AMTC appealed to respondent DENR Secretary the grant of the
aforesaid Small-Scale Mining Permits, arguing that: (1) The PMRB of Bulacan erred
in giving due course to the Applications for Small-Scale Mining Permit without first
resolving its formal protest; (2) The areas covered by the Small-Scale Mining Permits
fall within the area covered by AMTC's valid prior Application for Exploration Permit;
(3) The Applications for Quarry Permit were illegally converted to Applications for
Small-Scale Mining Permit; (4) DENR-MGB Director Horacio C. Ramos' ruling that the
subject areas became open for mining location only on August 11, 2004 was
controlling; (5) The Small-Scale Mining Permits were null and void because they
covered areas that were never declared People's Small-Scale Mining Program sites
as mandated by Section 4 of the People's Small-Scale Mining Act of 1991; and (6)
Iron ore is not considered as one of the quarry resources, as defined by Section 43 of
the Philippine Mining Act of 1995, which could be subjects of an Application for
Quarry Permit.13
On August 8, 2006, respondent DENR Secretary rendered a Decision14 in favor of
AMTC. The DENR Secretary agreed with MGB Director Horacio C. Ramos that the
area was open to mining location only on August 11, 2004, fifteen (15) days after the
receipt by Golden Falcon on July 27, 2004 of a copy of the MGB-Central Office's
Order dated July 16, 2004, which Order denied Golden Falcon's appeal. According to
the DENR Secretary, the filing by Golden Falcon of the letter-appeal suspended the
finality of the Order of denial issued on April 29, 1998 by the Regional Director until
the resolution of the appeal on July 16, 2004 by the MGB-Central Office. He stated
that the Applications for Quarry Permit were filed on February 10, 2004 when the area
was still closed to mining location; hence, the Small-Scale Mining Permits granted by
the PMRB and the Governor were null and void. On the other hand, the DENR
Secretary declared that AMTC filed its Application for Exploration Permit when the
area was already open to other mining applicants; thus, AMTCs Application for
Exploration Permit was valid. Moreover, the DENR Secretary held that the questioned
Small-Scale Mining Permits were issued in violation of Section 4 of R.A. No. 7076
and beyond the authority of the Provincial Governor pursuant to Section 43 of R.A.
No. 7942, because the area was never proclaimed to be under the People's Small-
Scale Mining Program. Further, the DENR Secretary stated that iron ore mineral is
not considered among the quarry resources.
The dispositive portion of the DENR Secretarys Decision reads:
WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines
and Trading Corp. is declared valid and may now be given due course. The Small-
Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of Eduardo
D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of Lucila S.
Valdez are declared NULL AND VOID. Consequently, the said permits are hereby
CANCELLED.15
Hence, petitioner League of Provinces filed this petition.
Petitioner is a duly organized league of local governments incorporated under R.A.
No. 7160. Petitioner declares that it is composed of 81 provincial governments,
including the Province of Bulacan. It states that this is not an action of one province
alone, but the collective action of all provinces through the League, as a favorable
ruling will not only benefit one province, but all provinces and all local governments.
Petitioner raises these issues:
I
WHETHER OR NOT SECTION 17(B)(3)(III) OF THE, 1991 LOCAL GOVERNMENT
CODE AND SECTION 24 OF THE PEOPLE'S SMALL-SCALE MINING ACT OF 1991
ARE UNCONSTITUTIONAL FOR PROVIDING FOR EXECUTIVE CONTROL AND
INFRINGING UPON THE LOCAL AUTONOMY OF PROVINCES.
II
WHETHER OR NOT THE ACT OF RESPONDENT [DENR] IN NULLIFYING,
VOIDING AND CANCELLING THE SMALL-SCALE MINING PERMITS AMOUNTS
TO EXECUTIVE CONTROL, NOT MERELY SUPERVISION AND USURPS THE
DEVOLVED POWERS OF ALL PROVINCES.16
To start, the Court finds that petitioner has legal standing to file this petition because it
is tasked under Section 504 of the Local Government Code of 1991 to promote local
autonomy at the provincial level;17 adopt measures for the promotion of the welfare of
all provinces and its officials and employees;18 and exercise such other powers and
perform such other duties and functions as the league may prescribe for the welfare
of the provinces.19
Before this Court determines the validity of an act of a co-equal and coordinate
branch of the Government, it bears emphasis that ingrained in our jurisprudence is
the time-honored principle that a statute is presumed to be valid.20This presumption is
rooted in the doctrine of separation of powers which enjoins upon the three
coordinate departments of the Government a becoming courtesy for each other's
acts.21 This Court, however, may declare a law, or portions thereof, unconstitutional
where a petitioner has shown a clear and unequivocal breach of the
Constitution,22 leaving no doubt or hesitation in the mind of the Court.23
In this case, petitioner admits that respondent DENR Secretary had the authority to
nullify the Small-Scale Mining Permits issued by the Provincial Governor of Bulacan,
as the DENR Secretary has control over the PMRB, and the implementation of the
Small-Scale Mining Program is subject to control by respondent DENR.
Control of the DENR/DENR Secretary over small-scale mining in the provinces is
granted by three statutes: (1) R.A. No. 7061 or The Local Government Code of 1991;
(2) R.A. No. 7076 or the People's Small Scale Mining Act of 1991; and (3) R.A. No.
7942, otherwise known as the Philippine Mining Act of 1995. 24 The pertinent
provisions of law sought to be declared as unconstitutional by petitioner are as
follows:
R.A. No. 7061 (The Local Government Code of 1991)
SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to
be self-reliant and shall continue exercising the powers and discharging the duties
and functions currently vested upon them. They shall also discharge the functions
and responsibilities of national agencies and offices devolved to them pursuant to this
Code. Local government units shall likewise exercise such other powers and
discharge such other functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services and facilities
enumerated herein.
(b) Such basic services and facilities include, but are not limited to, the following:
xxxx
(3) For a Province:c
xxxx
(iii) Pursuant to national policies and subject to supervision, control and review of the
DENR, enforcement of forestry laws limited to community-based forestry projects,
pollution control law, small-scale mining law, and other laws on the protection of the
environment; and mini-hydro electric projects for local purposes; x x x25
R.A. No. 7076 (People's Small-Scale Mining Act of 1991)
Sec. 24. Provincial/City Mining Regulatory Board. - There is hereby created under the
direct supervision and control of the Secretary a provincial/city mining regulatory
board, herein called the Board, which shall be the implementing agency of the
Department, and shall exercise the following powers and functions, subject to review
by the Secretary:
(a) Declare and segregate existing gold-rush areas for small-scale mining;
(b) Reserve future gold and other mining areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and regulations related to small-scale mining;
(e) Settle disputes, conflicts or litigations over conflicting claims within a peoples
small-scale mining area, an area that is declared a small-mining; and
(f) Perform such other functions as may be necessary to achieve the goals and
objectives of this Act.26
Petitioner contends that the aforecited laws and DENR Administrative Order No. 9640
(the Implementing Rules and Regulations of the Philippine Mining Act of 1995) did not
explicitly confer upon respondents DENR and the DENR Secretary the power to
reverse, abrogate, nullify, void, or cancel the permits issued by the Provincial
Governor or small-scale mining contracts entered into by the PMRB. The statutes are
also silent as to the power of respondent DENR Secretary to substitute his own
judgment over that of the Provincial Governor and the PMRB.
Moreover, petitioner contends that Section 17 (b)(3)(iii) of the Local Government
Code of 1991 and Section 24 of R.A. No. 7076, which confer upon respondents
DENR and the DENR Secretary the power of control are unconstitutional, as the
Constitution states that the President (and Executive Departments and her alter-egos)
has the power of supervision only, not control, over acts of the local government
units, and grants the local government units autonomy, thus:
The 1987 Constitution:
Article X, Section 4. The President of the Philippines shall exercise general
supervision over local governments. Provinces with respect to component cities and
municipalities, and cities and municipalities with respect to component barangays,
shall ensure that the acts of their component units are within the scope of their
prescribed powers and functions.27
Petitioner contends that the policy in the above-cited constitutional provision is
mirrored in the Local Government Code, which states:
SEC. 25. National Supervision over Local Government Units. - (a) Consistent with the
basic policy on local autonomy, the President shall exercise general supervision over
local government units to ensure that their acts are within the scope of their
prescribed powers and functions.
The President shall exercise supervisory authority directly over provinces, highly
urbanized cities, and independent component cities; through the province with
respect to component cities and municipalities; and through the city and municipality
with respect to barangays.28
Petitioner contends that the foregoing provisions of the Constitution and the Local
Government Code of 1991 show that the relationship between the President and the
Provinces or respondent DENR, as the alter ego of the President, and the Province of
Bulacan is one of executive supervision, not one of executive control. The term
"control" has been defined as the power of an officer to alter or modify or set aside
what a subordinate officer had done in the performance of his/her duties and to
substitute the judgment of the former for the latter, while the term "supervision" is the
power of a superior officer to see to it that lower officers perform their function in
accordance with law.29
Petitioner argues that respondent DENR Secretary went beyond mere executive
supervision and exercised control when he nullified the small-scale mining permits
granted by the Provincial Governor of Bulacan, as the former substituted the
judgment of the latter.
Petitioner asserts that what is involved here is a devolved power.
Under the Local Government Code of 1991, the power to regulate small-scale mining
has been devolved to all provinces. In the exercise of devolved powers, departmental
approval is not necessary.30
Petitioner contends that if the provisions in Section 24 of R.A. No. 7076 and Section
17 (b)(3)(iii) of the Local Government Code of 1991 granting the power of control to
the DENR/DENR Secretary are not nullified, nothing would stop the DENR Secretary
from nullifying, voiding and canceling the small-scale mining permits that have been
issued by a Provincial Governor.
Petitioner submits that the statutory grant of power of control to respondents is
unconstitutional, as the Constitution only allows supervision over local governments
and proscribes control by the executive departments.
In its Comment, respondents, represented by the Office of the Solicitor General,
stated that contrary to the assertion of petitioner, the power to implement the small-
scale mining law is expressly limited in Section 17 (b)(3)(iii) of the Local Government
Code, which provides that it must be carried out "pursuant to national policies and
subject to supervision, control and review of the DENR." Moreover, the fact that the
power to implement the small-scale mining law has not been fully devolved to
provinces is further amplified by Section 4 of the People's Small-Scale Mining Act of
1991, which provides, among others, that the People's Small-Scale Mining Program
shall be implemented by the DENR Secretary.
The petition lacks merit.
Paragraph 1 of Section 2, Article XII (National Economy and Patrimony) of the
Constitution31 provides that "the exploration, development and utilization of natural
resources shall be under the full control and supervision of the State."
Moreover, paragraph 3 of Section 2, Article XII of the Constitution provides that "the
Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens x x x."
Pursuant to Section 2, Article XII of the Constitution, R.A. No. 7076 or the People's
Small-Scale Mining Act of 1991, was enacted, establishing under Section 4 thereof a
People's Small-Scale Mining Program to be implemented by the DENR Secretary in
coordination with other concerned government agencies.
The People's Small-Scale Mining Act of 1991 defines "small-scale mining" as
"refer[ring] to mining activities, which rely heavily on manual labor using simple
implement and methods and do not use explosives or heavy mining equipment."32
It should be pointed out that the Administrative Code of 198733 provides that the
DENR is, subject to law and higher authority, in charge of carrying out the State's
constitutional mandate, under Section 2, Article XII of the Constitution, to control and
supervise the exploration, development, utilization and conservation of the country's
natural resources. Hence, the enforcement of small-scale mining law in the provinces
is made subject to the supervision, control and review of the DENR under the Local
Government Code of 1991, while the Peoples Small-Scale Mining Act of 1991
provides that the Peoples Small-Scale Mining Program is to be implemented by the
DENR Secretary in coordination with other concerned local government agencies.
Indeed, Section 4, Article X (Local Government) of the Constitution states that "[t]he
President of the Philippines shall exercise general supervision over local
governments," and Section 25 of the Local Government Code reiterates the same.
General supervision by the President means no more than seeing to it that laws are
faithfully executed or that subordinate officers act within the law. 34
The Court has clarified that the constitutional guarantee of local autonomy in the
Constitution Art. X, Sec. 2 refers to the administrative autonomy of local government
units or, cast in more technical language, the decentralization of government
authority.35 It does not make local governments sovereign within the
State.36 Administrative autonomy may involve devolution of powers, but subject to
limitations like following national policies or standards, 37 and those provided by the
Local Government Code, as the structuring of local governments and the allocation of
powers, responsibilities, and resources among the different local government units
and local officials have been placed by the Constitution in the hands of
Congress38 under Section 3, Article X of the Constitution.
Section 3, Article X of the Constitution mandated Congress to "enact a local
government code which shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization with effective
mechanisms of recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide for the
qualifications, election, appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters relating to the organization
and operation of the local units."
In connection with the enforcement of the small-scale mining law in the province,
Section 17 of the Local Government Code provides:
SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to
be self-reliant and shall continue exercising the powers and discharging the duties
and functions currently vested upon them. They shall also discharge the functions
and responsibilities of national agencies and offices devolved to them pursuant to this
Code. Local government units shall likewise exercise such other powers and
discharge such other functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services and facilities
enumerated herein.
(b) Such basic services and facilities include, but are not limited to, the following:
xxxx
(3) For a Province:c
xxxx
(iii) Pursuant to national policies and subject to supervision, control and review of the
DENR, enforcement of forestry laws limited to community-based forestry projects,
pollution control law, small-scale mining law, and other laws on the protection of the
environment; and mini-hydro electric projects for local purposes;39
Clearly, the Local Government Code did not fully devolve the enforcement of the
small-scale mining law to the provincial government, as its enforcement is subject to
the supervision, control and review of the DENR, which is in charge, subject to law
and higher authority, of carrying out the State's constitutional mandate to control and
supervise the exploration, development, utilization of the country's natural
resources.40
Section 17 (b)(3)(iii) of the Local Government Code of 1991 is in harmony with R.A.
No. 7076 or the People's Small-Scale Mining Act of 1991,41 which established a
People's Small-Scale Mining Program to be implemented by the Secretary of the
DENR, thus:
Sec. 2. Declaration of Policy. It is hereby declared of the State to promote, develop,
protect and rationalize viable small-scale mining activities in order to generate more
employment opportunities and provide an equitable sharing of the nation's wealth and
natural resources, giving due regard to existing rights as herein provided.
xxxx
Sec. 4. People's Small-Scale Mining Program. - For the purpose of carrying out the
declared policy provided in Section 2 hereof, there is hereby established a People's
Small-Scale Mining Program to be implemented by the Secretary of the Department
of Environment and Natural Resources, hereinafter called the Department, in
coordination with other concerned government agencies, designed to achieve an
orderly, systematic and rational scheme for the small-scale development and
utilization of mineral resources in certain mineral areas in order to address the social,
economic, technical, and environmental problems connected with small-scale mining
activities.
xxxx
Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created under
the direct supervision and control of the Secretary a provincial/city mining regulatory
board, herein called the Board, which shall be the implementing agency of the
Department, and shall exercise the following powers and functions, subject to review
by the Secretary:
(a) Declare and segregate existing gold-rush areas for small-scale mining;
(b) Reserve future gold and other mining areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and regulations related to small-scale mining;
(e) Settle disputes, conflicts or litigations over conflicting claims within a peoples
small-scale mining area, an area that is declared a small-mining; and
(f) Perform such other functions as may be necessary to achieve the goals and
objectives of this Act.42
DENR Administrative Order No. 34, series of 1992, containing the Rules and
Regulations to implement R.A. No. 7076, provides:
SEC. 21. Administrative Supervision over the People's Small-Scale Mining Program.
The following DENR officials shall exercise the following supervisory functions in
the implementation of the Program:
21.1 DENR Secretrary direct supervision and control over the program and
activities of the small-scale miners within the people's small-scale mining area;
21.2 Director the Director shall:
a. Recommend the depth or length of the tunnel or adit taking into account the: (1)
size of membership and capitalization of the cooperative; (2) size of mineralized
areas; (3) quantity of mineral deposits; (4) safety of miners; and (5) environmental
impact and other considerations;
b. Determine the right of small-scale miners to existing facilities in consultation with
the operator, claimowner, landowner or lessor of an affected area upon declaration of
a small-scale mining area;
c. Recommend to the Secretary the withdrawal of the status of the people's small-
scale mining area when it can no longer be feasibly operated on a small-scale basis;
and
d. See to it that the small-scale mining contractors abide by small-scale mines safety
rules and regulations.
xxxx
SEC. 22. Provincial/City Mining Regulatory Board. The Provincial/City Mining
Regulatory Board created under R.A. 7076 shall exercise the following powers and
functions, subject to review by the Secretary:
22.1 Declares and segregates existing gold rush area for small-scale mining;
22.2 Reserves for the future, mineralized areas/mineral lands for people's small-scale
mining;
22.3 Awards contracts to small-scale miners cooperative;
22.4 Formulates and implements rules and regulations related to R.A. 7076;
22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90)
days upon filing of protests or complaints; Provided, That any aggrieved party may
appeal within five (5) days from the Board's decision to the Secretary for final
resolution otherwise the same is considered final and executory; and
22.6 Performs such other functions as may be necessary to achieve the goals and
objectives of R.A. 7076.
SEC. 6. Declaration of People's Small-Scale Mining Areas. The Board created
under R.A. 7076 shall have the authority to declare and set aside People's Small-
Scale Mining Areas in sites onshore suitable for small-scale mining operations subject
to review by the DENR Secretary thru the Director.43
DENR Administrative Order No. 23, otherwise known as the Implementing Rules and
Regulations of R.A. No. 7942, otherwise known as the Philippine Mining Act of 1995,
adopted on August 15, 1995, provides under Section 123 44thereof that small-scale
mining applications should be filed with the PMRB45 and the corresponding permits
shall be issued by the Provincial Governor, except small-scale mining applications
within the mineral reservations.
Thereafter, DENR Administrative Order No. 96-40, otherwise known as the Revised
Implementing Rules and Regulations of R.A. No. 7942, otherwise known as the
Philippine Mining Act of 1995, adopted on December 19, 1996, provides that
applications for Small-Scale Mining Permits shall be filed with the Provincial
Governor/City Mayor through the concerned Provincial/City Mining Regulatory Board
for areas outside the Mineral Reservations and with the Director though the Bureau
for areas within the Mineral Reservations.46 Moreover, it provides that Local
Government Units shall, in coordination with the Bureau/ Regional Offices and subject
to valid and existing mining rights, "approve applications for small-scale mining, sand
and gravel, quarry x x x and gravel permits not exceeding five (5) hectares." 47
Petitioner contends that the Local Government Code of 1991, R.A. No. 7076, DENR
Administrative Orders Nos. 95-23 and 96-40 granted the DENR Secretary the broad
statutory power of control, but did not confer upon the respondents DENR and DENR
Secretary the power to reverse, abrogate, nullify, void, cancel the permits issued by
the Provincial Governor or small-scale mining contracts entered into by the Board.
The contention does not persuade.
The settlement of disputes over conflicting claims in small-scale mining is provided for
in Section 24 of R.A. No. 7076, thus:
Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created under
the direct supervision and control of the Secretary a provincial/city mining regulatory
board, herein called the Board, which shall be the implementing agency of the
Department, and shall exercise the following powers and functions, subject to review
by the Secretary:
xxxx
(e) Settle disputes, conflicts or litigations over conflicting claims within a people's
small-scale mining area, an area that is declared a small mining area; x x x
Section 24, paragraph (e) of R.A. No. 7076 cited above is reflected in Section 22,
paragraph 22.5 of the Implementing Rules and Regulations of R.A. No. 7076, to wit:
SEC. 22. Provincial/City Mining Regulatory Board. The Provincial/City Mining
Regulatory Board created under R.A. No. 7076 shall exercise the following powers
and functions, subject to review by the Secretary:
xxxx
22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90)
days upon filing of protests or complaints; Provided, That any aggrieved party may
appeal within five (5) days from the Board's decision to the Secretary for final
resolution otherwise the same is considered final and executory; x x x
In this case, in accordance with Section 22, paragraph 22.5 of the Implementing
Rules and Regulations of R.A. No. 7076, the AMTC filed on July 22, 2005 with the
PMRB of Bulacan a formal protest against the Applications for Quarry Permits of
Eduardo Mercado, Benedicto Cruz, Liberato Sembrano (replaced by Lucila Valdez)
and Gerardo Cruz on the ground that the subject area was already covered by its
Application for Exploration Permit.48 However, on August 8, 2005, the PMRB issued
Resolution Nos. 05-8, 05-9, 05-10 and 05-11, resolving to submit to the Provincial
Governor of Bulacan the Applications for Small-Scale Mining Permits of Eduardo
Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz for the granting/issuance
of the said permits.49 On August 10, 2005, the Provincial Governor of Bulacan issued
the Small-Scale Mining Permits to Eduardo Mercado, Benedicto Cruz, Lucila Valdez
and Gerardo Cruz based on the legal opinion of the Provincial Legal Officer and the
Resolutions of the PMRB of Bulacan.
Hence, AMTC filed an appeal with respondent DENR Secretary, appealing from
Letter-Resolution No. 05-1317 and Resolution Nos. 05-08, 05-09, 05-10 and 05-11,
all dated August 8, 2005, of the PMRB of Bulacan, which resolutions gave due course
and granted, on August 10, 2005, Small-Scale Mining Permits to Eduardo D.
Mercado, Benedicto S. Cruz, Lucila Valdez and Gerardo Cruz involving parcels of
mineral land situated at Camachin, Doa Remedios Trinidad, Bulacan.
The PMRB of Bulacan filed its Answer, stating that it is an administrative body,
created under R.A. No. 7076, which cannot be equated with the court wherein a full-
blown hearing could be conducted, but it is enough that the parties were given the
opportunity to present evidence. It asserted that the questioned resolutions it issued
were in accordance with the mining laws and that the Small-Scale Mining Permits
granted were registered ahead of AMTC's Application for Exploration Permit. Further,
the Board stated that the Governor of Bulacan had the power to approve the Small-
Scale Mining Permits under R.A. No. 7160.
The DENR Secretary found the appeal meritorious, and resolved these pivotal issues:
(1) when is the subject mining area open for mining location by other applicants; and
(2) who among the applicants have valid applications.1wphi1 The pertinent portion
of the decision of the DENR Secretary reads:
We agree with the ruling of the MGB Director that the area is open only to mining
location on August 11, 2004, fifteen (15) days after the receipt by Golden Falcon on
July 27, 2004 of a copy of the subject Order of July 16, 2004.1wphi1The filing by
Golden Falcon of the letter-appeal suspended the finality of the Order of Denial
issued on April 29, 1998 by the Regional Director until the Resolution thereof on July
16, 2004.
Although the subject AQPs/SSMPs were processed in accordance with the
procedures of the PMRB, however, the AQPs were filed on February 10, 2004 when
the area is still closed to mining location. Consequently, the SSMPs granted by the
PMRB and the Governor are null and void making thereby AEP No. III-02-04 of the
AMTC valid, it having been filed when the area is already open to other mining
applicants.
Records also show that the AQPs were converted into SSMPs. These are two (2)
different applications. The questioned SSMPs were issued in violation of Section 4 of
RA 7076 and beyond the authority of the Provincial Governor pursuant to Section 43
of RA 7942 because the area was never proclaimed as "People's Small-Scale Mining
Program." Moreover, iron ore mineral is not considered among the quarry resources.
xxxx
WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines
and Trading Corp. is declared valid and may now be given due course. The Small-
Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of Eduardo
D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of Lucila S.
Valdez are declared NULL AND VOID. Consequently, the said permits are hereby
CANCELLED.50
The Court finds that the decision of the DENR Secretary was rendered in accordance
with the power of review granted to the DENR Secretary in the resolution of disputes,
which is provided for in Section 24 of R.A. No. 707651 and Section 22 of its
Implementing Rules and Regulations.52 It is noted that although AMTC filed a protest
with the PMRB regarding its superior and prior Application for Exploration Permit over
the Applications for Quarry Permit, which were converted to Small-Scale Mining
Permits, the PMRB did not resolve the same, but issued Resolution Nos. 05-08 to 05-
11 on August 8, 2005, resolving to submit to the Provincial Governor of Bulacan the
Applications for Small-Scale Mining Permits of Eduardo Mercado, Benedicto Cruz,
Lucila Valdez and Gerardo Cruz for the granting of the said permits. After the
Provincial Governor of Bulacan issued the Small-Scale Mining Permits on August 10,
2005, AMTC appealed the Resolutions of the PMRB giving due course to the granting
of the Small-Scale Mining Permits by the Provincial Governor.
Hence, the decision of the DENR Secretary, declaring that the Application for
Exploration Permit of AMTC was valid and may be given due course, and canceling
the Small-Scale Mining Permits issued by the Provincial Governor, emanated from
the power of review granted to the DENR Secretary under R.A. No. 7076 and its
Implementing Rules and Regulations. The DENR Secretary's power to review and,
therefore, decide, in this case, the issue on the validity of the issuance of the Small-
Scale Mining Permits by the Provincial Governor as recommended by the PMRB, is a
quasi-judicial function, which involves the determination of what the law is, and what
the legal rights of the contending parties are, with respect to the matter in controversy
and, on the basis thereof and the facts obtaining, the adjudication of their respective
rights.53 The DENR Secretary exercises quasi-judicial function under R.A. No. 7076
and its Implementing Rules and Regulations to the extent necessary in settling
disputes, conflicts or litigations over conflicting claims. This quasi-judicial function of
the DENR Secretary can neither be equated with "substitution of judgment" of the
Provincial Governor in issuing Small-Scale Mining Permits nor "control" over the said
act of the Provincial Governor as it is a determination of the rights of AMTC over
conflicting claims based on the law.

In determining whether Section 17 (b)(3)(iii) of the Local Government Code of 1991

and Section 24 of R.A. No. 7076 are unconstitutional, the Court has been guided by
Beltran v. The Secretary of Health, 54 which held:

The fundamental criterion is that all reasonable doubts should be resolved in favor of
the constitutionality of a statute. Every law has in its favor the presumption of
constitutionality. For a law to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution. The ground for nullity must be clear and
beyond reasonable doubt. Those who petition this Court to declare a law, or parts
thereof, unconstitutional must clearly establish the basis therefor. Otherwise, the
petition must fail. 55

In this case, the Court finds that the grounds raised by petitioner to challenge the
constitutionality of Section 17 (b )(3)(iii) of the Local Government Code of 1991 and
Section 24 'of R.A. No.7076 failed to overcome the constitutionality of the said
provisions of law.

WHEREFORE, the petition is DISMISSED for lack of merit.

No costs.

SO ORDERED.
 C. It violates the equal protection clause of the constitution in that it legalizes
PAGCOR conducted gambling, while most other forms of gambling are outlawed,
together with prostitution, drug trafficking and other vices;

Republic of the Philippines D. It violates the avowed trend of the Cory government away from monopolistic and
SUPREME COURT crony economy, and toward free enterprise and privatization. (p. 2, Amended Petition;
Manila p. 7, Rollo)

EN BANC In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to
the declared national policy of the "new restored democracy" and the people's will as
expressed in the 1987 Constitution. The decree is said to have a "gambling objective"
and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII
G.R. No. 91649 May 14, 1991
and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN Petition; p. 21, Rollo).
AND LORENZO SANCHEZ,petitioners,
The procedural issue is whether petitioners, as taxpayers and practicing lawyers
vs.
(petitioner Basco being also the Chairman of the Committee on Laws of the City
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION
Council of Manila), can question and seek the annulment of PD 1869 on the alleged
(PAGCOR), respondent.
grounds mentioned above.
H.B. Basco & Associates for petitioners.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by
Valmonte Law Offices collaborating counsel for petitioners.
virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D.
Aguirre, Laborte and Capule for respondent PAGCOR.
1067-B also dated January 1, 1977 "to establish, operate and maintain gambling
casinos on land or water within the territorial jurisdiction of the Philippines." Its
operation was originally conducted in the well known floating casino "Philippine
Tourist." The operation was considered a success for it proved to be a potential
PARAS, J.: source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399
was passed on June 2, 1978 for PAGCOR to fully attain this objective.
A TV ad proudly announces:
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable
"The new PAGCOR responding through responsible gaming." the Government to regulate and centralize all games of chance authorized by existing
franchise or permitted by law, under the following declared policy
But the petitioners think otherwise, that is why, they filed the instant petition seeking
to annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to
PD 1869, because it is allegedly contrary to morals, public policy and order, and centralize and integrate all games of chance not heretofore authorized by existing
because franchises or permitted by law in order to attain the following objectives:

A. It constitutes a waiver of a right prejudicial to a third person with a right recognized (a) To centralize and integrate the right and authority to operate and conduct games
by law. It waived the Manila City government's right to impose taxes and license fees, of chance into one corporate entity to be controlled, administered and supervised by
which is recognized by law; the Government.

B. For the same reason stated in the immediately preceding paragraph, the law has
intruded into the local government's right to impose local taxes and license fees. This,
in contravention of the constitutionally enshrined principle of local autonomy;
(b) To establish and operate clubs and casinos, for amusement and recreation,
including sports gaming pools, (basketball, football, lotteries, etc.) and such other
forms of amusement and recreation including games of chance, which may be
allowed by law within the territorial jurisdiction of the Philippines and which will: (1)
generate sources of additional revenue to fund infrastructure and socio-civic projects,
such as flood control programs, beautification, sewerage and sewage projects,
Tulungan ng Bayan Centers, Nutritional Programs, Population Control and such other
essential public services; (2) create recreation and integrated facilities which will
expand and improve the country's existing tourist attractions; and (3) minimize, if not
totally eradicate, all the evils, malpractices and corruptions that are normally prevalent
on the conduct and operation of gambling clubs and casinos without direct
government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the
Philippines. Under its Charter's repealing clause, all laws, decrees, executive orders,
rules and regulations, inconsistent therewith, are accordingly repealed, amended or
modified.
It is reported that PAGCOR is the third largest source of government revenue, next to
the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR
earned P3.43 Billion, and directly remitted to the National Government a total of P2.5
Billion in form of franchise tax, government's income share, the President's Social
Fund and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and
charitable projects on its own or in cooperation with various governmental agencies,
and other private associations and organizations. In its 3 1/2 years of operation under
the present administration, PAGCOR remitted to the government a total of P6.2
Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its
nine (9) casinos nationwide, directly supporting the livelihood of Four Thousand Four
Hundred Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the
same is "null and void" for being "contrary to morals, public policy and public order,"
monopolistic and tends toward "crony economy", and is violative of the equal
protection clause and local autonomy as well as for running counter to the state
policies enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family)
and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the
most deliberate consideration by the Court, involving as it does the exercise of what
has been described as "the highest and most delicate function which belongs to the
judicial department of the government." (State v. Manuel, 20 N.C. 144; Lozano v.
Martinez, 146 SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and
coordinate branch of the government We need not be reminded of the time-honored
principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid.
Every presumption must be indulged in favor of its constitutionality. This is not to say
that We approach Our task with diffidence or timidity. Where it is clear that the
legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily,
as fall it must, on the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr.
Justice Zaldivar underscored the
. . . thoroughly established principle which must be followed in all cases where
questions of constitutionality as obtain in the instant cases are involved. All
presumptions are indulged in favor of constitutionality; one who attacks a statute
alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that a
law may work hardship does not render it unconstitutional; that if any reasonable
basis may be conceived which supports the statute, it will be upheld and the
challenger must negate all possible basis; that the courts are not concerned with the
wisdom, justice, policy or expediency of a statute and that a liberal interpretation of
the constitution in favor of the constitutionality of legislation should be adopted.
(Danner v. Hass, 194 N.W. 2nd534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta
v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes,
125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v.
Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the
legal personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping
with the Court's 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
this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan,
163 SCRA 371)
With particular regard to the requirement of proper party as applied in the cases
before us, We hold that the same is satisfied by the petitioners and intervenors
because each of them has sustained or is in danger of sustaining an immediate injury
as a result of the acts or measures complained of. And even if, strictly speaking they
are not covered by the definition, it is still within the wide discretion of the Court to
waive the requirement and so remove the impediment to its addressing and resolving
the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed
to question the constitutionality of several executive orders issued by President
Quirino although they were involving only an indirect and general interest shared in
common with the public. The Court dismissed the objection that they were not proper
parties and ruled that "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must
technicalities of procedure." We have since then applied the exception in many other
cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian
Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues
raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the
prohibition of gambling does not mean that the Government cannot regulate it in the
exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487)
As defined, it consists of (1) an imposition or restraint upon liberty or property, (2) in
order to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuming the greatest benefits. (Edu
v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its
origin to the charter. Along with the taxing power and eminent domain, it is inborn in
the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, refers to it succinctly as the plenary power of
the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The
police power of the State is a power co-extensive with self-protection and is most
aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board of
Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and illimitable of
powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables
the state to meet the agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and
centralize thru an appropriate institution all games of chance authorized by existing
franchise or permitted by law" (1st whereas clause, PD 1869). As was subsequently
proved, regulating and centralizing gambling operations in one corporate entity the
PAGCOR, was beneficial not just to the Government but to society in general. It is a
reliable source of much needed revenue for the cash strapped Government. It
provided funds for social impact projects and subjected gambling to "close scrutiny,
regulation, supervision and control of the Government" (4th Whereas Clause, PD
1869). With the creation of PAGCOR and the direct intervention of the Government,
the evil practices and corruptions that go with gambling will be minimized if not totally
eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of
Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is
violative of the principle of local autonomy. They must be referring to Section 13 par.
(2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any
"tax of any kind or form, income or otherwise, as well as fees, charges or levies of
whatever nature, whether National or Local."
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form,
income or otherwise as well as fees, charges or levies of whatever nature, whether
National or Local, shall be assessed and collected under this franchise from the
Corporation; nor shall any form or tax or charge attach in any way to the earnings of
the Corporation, except a franchise tax of five (5%) percent of the gross revenues or
earnings derived by the Corporation from its operations under this franchise. Such tax
shall be due and payable quarterly to the National Government and shall be in lieu of
all kinds of taxes, levies, fees or assessments of any kind, nature or description,
levied, established or collected by any municipal, provincial or national government
authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to
impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105
Phil. 337; Santos v. Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or
statute must plainly show an intent to confer that power or the municipality cannot
assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must
always yield to a legislative act which is superior having been passed upon by the
state itself which has the "inherent power to tax" (Bernas, the Revised [1973]
Philippine Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be
stressed that "municipal corporations are mere creatures of Congress" (Unson v.
Lacson, G.R. No. 7909, January 18, 1957) which has the power to "create and
abolish municipal corporations" due to its "general legislative powers" (Asuncion v.
Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has
the power of control over Local governments (Hebron v. Reyes, G.R. No. 9124, July
2, 1950). And if Congress can grant the City of Manila the power to tax certain
matters, it can also provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru
the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was
vested exclusively on the National Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered
cities and other local governments to issue license, permit or other form of franchise
to operate, maintain and establish horse and dog race tracks, jai-alai and other forms
of gambling is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse
and dog race tracks, jai-alai and other forms of gambling shall be issued by the
national government upon proper application and verification of the qualification of the
applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits"
for the operation of gambling. Necessarily, the power to demand or collect license
fees which is a consequence of the issuance of "licenses or permits" is no longer
vested in the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the National
Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also
exercises regulatory powers thus:
Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the
affiliated entities, and shall exercise all the powers, authority and the responsibilities
vested in the Securities and Exchange Commission over such affiliating entities
mentioned under the preceding section, including, but not limited to amendments of
Articles of Incorporation and By-Laws, changes in corporate term, structure,
capitalization and other matters concerning the operation of the affiliated entities, the
provisions of the Corporation Code of the Philippines to the contrary notwithstanding,
except only with respect to original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role
is governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and
actually is exempt from local taxes. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
The states have no power by taxation or otherwise, to retard, impede, burden or in
any manner control the operation of constitutional laws enacted by Congress to carry
into execution the powers vested in the federal government. (MC Culloch v. Marland,
4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire
absence of power on the part of the States to touch, in that way (taxation) at least, the
instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be
agreed that no state or political subdivision can regulate a federal instrumentality in
such a way as to prevent it from consummating its federal responsibilities, or even to
seriously burden it in the accomplishment of them. (Antieau, Modern Constitutional
Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activities or enterprise using
the power to tax as "a tool for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc
Culloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation
of the very entity which has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution
(on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such guidelines and
limitation as the congress may provide, consistent with the basic policy on local
autonomy. Such taxes, fees and charges shall accrue exclusively to the local
government. (emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to
"limitations" which Congress may provide by law. Since PD 1869 remains an
"operative" law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987
Constitution), its "exemption clause" remains as an exception to the exercise of the
power of local governments to impose taxes and fees. It cannot therefore be violative
but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436,
as cited in Bernas, The Constitution of the Republic of the Philippines, Vol. II, First
Ed., 1988, p. 374). It does not make local governments sovereign within the state or
an "imperium in imperio."
Local Government has been described as a political subdivision of a nation or state
which is constituted by law and has substantial control of local affairs. In a unitary
system of government, such as the government under the Philippine Constitution,
local governments can only be an intra sovereign subdivision of one sovereign nation,
it cannot be an imperium in imperio. Local government in such a system can only
mean a measure of decentralization of the function of government. (emphasis
supplied)
As to what state powers should be "decentralized" and what may be delegated to
local government units remains a matter of policy, which concerns wisdom. It is
therefore a political question. (Citizens Alliance for Consumer Protection v. Energy
Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with
gambling is a State concern and hence, it is the sole prerogative of the State to retain
it or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or express
charter power is generally necessary to empower the local corporation to deal with
the subject. . . . In the absence of express grant of power to enact, ordinance
provisions on this subject which are inconsistent with the state laws are void. (Ligan v.
Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757
following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as
cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the
Constitution, because "it legalized PAGCOR conducted gambling, while most
gambling are outlawed together with prostitution, drug trafficking and other vices" (p.
82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture
ignores the well-accepted meaning of the clause "equal protection of the laws." The
clause does not preclude classification of individuals who may be accorded different
treatment under the law as long as the classification is not unreasonable or arbitrary
(Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force
on all persons or things to be conformable to Article III, Section 1 of the Constitution
(DECS v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing
classes of individuals or objects upon which different rules shall operate (Laurel v.
Misa, 43 O.G. 2847). The Constitution does not require situations which are different
in fact or opinion to be treated in law as though they were the same (Gomez v.
Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the
equal protection is not clearly explained in the petition. The mere fact that some
gambling activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by
RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are
legalized under certain conditions, while others are prohibited, does not render the
applicable laws, P.D. 1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied. (Gomez v.
Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that all
occupations called by the same name must be treated the same way; the state may
do what it can to prevent which is deemed as evil and stop short of those cases in
which harm to the few concerned is not less than the harm to the public that would
insure if the rule laid down were made mathematically exact. (Dominican Hotel v.
Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory
Government away from monopolies and crony economy and toward free enterprise
and privatization" suffice it to state that this is not a ground for this Court to nullify P.D.
1869. If, indeed, PD 1869 runs counter to the government's policies then it is for the
Executive Department to recommend to Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare what the law is
and not what the law should be.1wphi1 Under our system of government, policy
issues are within the domain of the political branches of government and of the
people themselves as the repository of all state power. (Valmonte v. Belmonte, Jr.,
170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so
requires. No combinations in restraint of trade or unfair competition shall be allowed.
(Art. XII, National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily
prohibited by the Constitution. The state must still decide whether public interest
demands that monopolies be regulated or prohibited. Again, this is a matter of policy
for the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12
(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII
and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to
state also that these are merely statements of principles and, policies. As such, they
are basically not self-executing, meaning a law should be passed by Congress to
clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and the legislature. If the executive and the legislature
failed to heed the directives of the articles the available remedy was not judicial or
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v.
Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82
SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified,
it must be shown that there is a clear and unequivocal breach of the Constitution, not
merely a doubtful and equivocal one. In other words, the grounds for nullity must be
clear and beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition
this Court to declare a law, or parts thereof, unconstitutional must clearly establish the
basis for such a declaration. Otherwise, their petition must fail. Based on the grounds
raised by petitioners to challenge the constitutionality of P.D. 1869, the Court finds
that petitioners have failed to overcome the presumption. The dismissal of this
petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise
legislation considering the issues of "morality, monopoly, trend to free enterprise,
privatization as well as the state principles on social justice, role of youth and
educational values" being raised, is up for Congress to determine.

As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521

Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any
case, in its favor the presumption of validity and constitutionality which petitioners
Valmonte and the KMU have not overturned. Petitioners have not undertaken to
identify the provisions in the Constitution which they claim to have been violated by
that statute. This Court, however, is not compelled to speculate and to imagine how
the assailed legislation may possibly offend some provision of the Constitution. The
Court notes, further, in this respect that petitioners have in the main put in question
the wisdom, justice and expediency of the establishment of the OPSF, issues which
are not properly addressed to this Court and which this Court may not constitutionally
pass upon. Those issues should be addressed rather to the political departments of
government: the President and the Congress.

Parenthetically, We wish to state that gambling is generally immoral, and this is

precisely so when the gambling resorted to is excessive. This excessiveness
necessarily depends not only on the financial resources of the gambler and his family
but also on his mental, social, and spiritual outlook on life. However, the mere fact
that some persons may have lost their material fortunes, mental control, physical
health, or even their lives does not necessarily mean that the same are directly
attributable to gambling. Gambling may have been the antecedent, but certainly not
necessarily the cause. For the same consequences could have been preceded by an
overdose of food, drink, exercise, work, and even sex.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento,
Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 80391 February 28, 1989
SULTAN ALIMBUSAR P. LIMBONA, petitioner,
vs.
CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING,
ACMAD TOMAWIS, GERRY TOMAWIS, JESUS ORTIZ, ANTONIO DELA FUENTE,
DIEGO PALOMARES, JR., RAUL DAGALANGIT, and BIMBO
SINSUAT, respondents.
Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.
Makabangkit B. Lanto for respondents.
SARMIENTO, J.:
The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The
antecedent facts are as follows:
1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a
member of the Sangguniang Pampook, Regional Autonomous Government, Region
XII, representing Lanao del Sur.
2. On March 12, 1987 petitioner was elected Speaker of the Regional Legislative
Assembly or Batasang Pampook of Central Mindanao (Assembly for brevity).
3. Said Assembly is composed of eighteen (18) members. Two of said members,
respondents Acmad Tomawis and Pakil Dagalangit, filed on March 23, 1987 with the
Commission on Elections their respective certificates of candidacy in the May 11,
1987 congressional elections for the district of Lanao del Sur but they later withdrew
from the aforesaid election and thereafter resumed again their positions as members
of the Assembly.
4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the
Committee on Muslim Affairs of the House of Representatives, invited Mr. Xavier
Razul, Pampook Speaker of Region XI, Zamboanga City and the petitioner in his
capacity as Speaker of the Assembly, Region XII, in a letter which reads:
The Committee on Muslim Affairs well undertake consultations and dialogues with
local government officials, civic, religious organizations and traditional leaders on the
recent and present political developments and other issues affecting Regions IX and
XII.
The result of the conference, consultations and dialogues would hopefully chart the
autonomous governments of the two regions as envisioned and may prod the
President to constitute immediately the Regional Consultative Commission as
mandated by the Commission.
You are requested to invite some members of the Pampook Assembly of your
respective assembly on November 1 to 15, 1987, with venue at the Congress of the
Philippines. Your presence, unstinted support and cooperation is (sic) indispensable.
5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary
Johnny Alimbuyao of the Assembly to wire all Assemblymen that there shall be no
session in November as "our presence in the house committee hearing of Congress
take (sic) precedence over any pending business in batasang pampook ... ."
6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary
Alimbuyao sent to the members of the Assembly the following telegram:
TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM
RECEIVED FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY
MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM AFFAIRS
REQUESTED ME TO ASSIST SAID COMMITTEE IN THE DISCUSSION OF THE
PROPOSED AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE ALL
ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN NOVEMBER AS OUR
PRESENCE IN THE HOUSE COMMITTEE HEARING OF CONGRESS TAKE
PRECEDENCE OVER ANY PENDING BUSINESS IN BATASANG PAMPOOK OF
MATALAM FOLLOWS UNQUOTE REGARDS.
7. On November 2, 1987, the Assembly held session in defiance of petitioner's
advice, with the following assemblymen present:
1. Sali, Salic
2. Conding, Pilipinas (sic)
3. Dagalangit, Rakil
4. Dela Fuente, Antonio
5. Mangelen, Conte
6. Ortiz, Jesus the names of the new comers in order for them to cast their votes on the previous
motion to declare the position of the Speaker vacant. But before doing so, I move also
7. Palomares, Diego that the designation of the Speaker Pro Tempore as the Presiding Officer and Mr.
Johnny Evangelists as Acting Secretary in the session last November 2, 1987 be
8. Sinsuat, Bimbo reconfirmed in today's session.

9. Tomawis, Acmad HON. SALIC ALI: I second the motions.

10. Tomawis, Jerry
After declaring the presence of a quorum, the Speaker Pro-Tempore was authorized
to preside in the session. On Motion to declare the seat of the Speaker vacant, all
Assemblymen in attendance voted in the affirmative, hence, the chair declared said
seat of the Speaker vacant. 8. On November 5, 1987, the session of the Assembly
resumed with the following Assemblymen present:
PRESIDING OFFICER: Any comment or objections on the two motions presented?
Me chair hears none and the said motions are approved. ...
Twelve (12) members voted in favor of the motion to declare the seat of the Speaker
vacant; one abstained and none voted against. 1
Accordingly, the petitioner prays for judgment as follows:

1. Mangelen Conte-Presiding Officer WHEREFORE, petitioner respectfully prays that-

2. Ali Salic (a) This Petition be given due course;

3. Ali Salindatu (b) Pending hearing, a restraining order or writ of preliminary injunction be issued
enjoining respondents from proceeding with their session to be held on November 5,
4. Aratuc, Malik 1987, and on any day thereafter;

5. Cajelo, Rene (c) After hearing, judgment be rendered declaring the proceedings held by
respondents of their session on November 2, 1987 as null and void;
6. Conding, Pilipinas (sic)
(d) Holding the election of petitioner as Speaker of said Legislative Assembly or
7. Dagalangit, Rakil
Batasan Pampook, Region XII held on March 12, 1987 valid and subsisting, and
8. Dela Fuente, Antonio
(e) Making the injunction permanent.
9. Ortiz, Jesus 2
Petitioner likewise prays for such other relief as may be just and equitable.
10 Palomares, Diego
Pending further proceedings, this Court, on January 19, 1988, received a resolution
11. Quijano, Jesus filed by the Sangguniang Pampook, "EXPECTING ALIMBUSAR P. LIMBONA FROM
MEMBERSHIP OF THE SANGGUNIANG PAMPOOK AUTONOMOUS REGION
12. Sinsuat, Bimbo XII," 3 on the grounds, among other things, that the petitioner "had caused to be
prepared and signed by him paying [sic] the salaries and emoluments of Odin Abdula,
13. Tomawis, Acmad who was considered resigned after filing his Certificate of Candidacy for
Congressmen for the First District of Maguindanao in the last May 11, elections. . .
14. Tomawis, Jerry and nothing in the record of the Assembly will show that any request for reinstatement
by Abdula was ever made . . ." 4 and that "such action of Mr. Lim bona in paying
An excerpt from the debates and proceeding of said session reads: Abdula his salaries and emoluments without authority from the Assembly . . .
constituted a usurpation of the power of the Assembly," 5 that the petitioner "had
HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the
recently caused withdrawal of so much amount of cash from the Assembly resulting
presence of our colleagues who have come to attend the session today, I move to call
to the non-payment of the salaries and emoluments of some Assembly [sic]," 6 and
that he had "filed a case before the Supreme Court against some members of the
Assembly on question which should have been resolved within the confines of the
Assembly," 7 for which the respondents now submit that the petition had become
"moot and academic". 8
The first question, evidently, is whether or not the expulsion of the petitioner (pending
litigation) has made the case moot and academic.
We do not agree that the case has been rendered moot and academic by reason
simply of the expulsion resolution so issued. For, if the petitioner's expulsion was
done purposely to make this petition moot and academic, and to preempt the Court, it
will not make it academic.
On the ground of the immutable principle of due process alone, we hold that the
expulsion in question is of no force and effect. In the first place, there is no showing
that the Sanggunian had conducted an investigation, and whether or not the petitioner
had been heard in his defense, assuming that there was an investigation, or
otherwise given the opportunity to do so. On the other hand, what appears in the
records is an admission by the Assembly (at least, the respondents) that "since
November, 1987 up to this writing, the petitioner has not set foot at the Sangguniang
Pampook." 9 "To be sure, the private respondents aver that "[t]he Assemblymen, in a
conciliatory gesture, wanted him to come to Cotabato City," 10 but that was "so that
their differences could be threshed out and settled." 11Certainly, that avowed wanting
or desire to thresh out and settle, no matter how conciliatory it may be cannot be a
substitute for the notice and hearing contemplated by law.
While we have held that due process, as the term is known in administrative law,
does not absolutely require notice and that a party need only be given the opportunity
to be heard, 12 it does not appear herein that the petitioner had, to begin with, been
made aware that he had in fact stood charged of graft and corruption before his
collegues. It cannot be said therefore that he was accorded any opportunity to rebut
their accusations. As it stands, then, the charges now levelled amount to mere
accusations that cannot warrant expulsion.
In the second place, (the resolution) appears strongly to be a bare act of vendetta by
the other Assemblymen against the petitioner arising from what the former perceive to
be abduracy on the part of the latter. Indeed, it (the resolution) speaks of "a case
[having been filed] [by the petitioner] before the Supreme Court . . . on question which
should have been resolved within the confines of the Assemblyman act which some
members claimed unnecessarily and unduly assails their integrity and character as
representative of the people" 13 an act that cannot possibly justify expulsion. Access
to judicial remedies is guaranteed by the Constitution, 14 and, unless the recourse
amounts to malicious prosecution, no one may be punished for seeking redress in the
courts.
We therefore order reinstatement, with the caution that should the past acts of the
petitioner indeed warrant his removal, the Assembly is enjoined, should it still be so
minded, to commence proper proceedings therefor in line with the most elementary
requirements of due process. And while it is within the discretion of the members of
the Sanggunian to punish their erring colleagues, their acts are nonetheless subject
to the moderating band of this Court in the event that such discretion is exercised with
grave abuse.
It is, to be sure, said that precisely because the Sangguniang Pampook(s) are
"autonomous," the courts may not rightfully intervene in their affairs, much less strike
down their acts. We come, therefore, to the second issue: Are the so-called
autonomous governments of Mindanao, as they are now constituted, subject to the
jurisdiction of the national courts? In other words, what is the extent of self-
government given to the two autonomous governments of Region IX and XII?
The autonomous governments of Mindanao were organized in Regions IX and XII by
Presidential Decree No. 1618 15 promulgated on July 25, 1979. Among other things,
the Decree established "internal autonomy" 16 in the two regions "[w]ithin the
framework of the national sovereignty and territorial integrity of the Republic of the
Philippines and its Constitution," 17 with legislative and executive machinery to
exercise the powers and responsibilities 18specified therein.
It requires the autonomous regional governments to "undertake all internal
administrative matters for the respective regions," 19 except to "act on matters which
are within the jurisdiction and competence of the National Government," 20 "which
include, but are not limited to, the following:
(1) National defense and security;
(2) Foreign relations;
(3) Foreign trade;
(4) Currency, monetary affairs, foreign exchange, banking and quasi-banking, and
external borrowing,
(5) Disposition, exploration, development, exploitation or utilization of all natural
resources;
(6) Air and sea transport
(7) Postal matters and telecommunications;
(8) Customs and quarantine;
(9) Immigration and deportation;
(10) Citizenship and naturalization;
(11) National economic, social and educational planning; and
(12) General auditing. 21
In relation to the central government, it provides that "[t]he President shall have the
power of general supervision and control over the Autonomous Regions ..." 22
Now, autonomy is either decentralization of administration or decentralization of
power. There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden the base
of government power and in the process to make local governments "more
responsive and accountable," 23 "and ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national
development and social progress." 24 At the same time, it relieves the central
government of the burden of managing local affairs and enables it to concentrate on
national concerns. The President exercises "general supervision" 25 over them, but
only to "ensure that local affairs are administered according to law." 26 He has no
control over their acts in the sense that he can substitute their judgments with his
own. 27
Decentralization of power, on the other hand, involves an abdication of political power
in the favor of local governments units declare to be autonomous . In that case, the
autonomous government is free to chart its own destiny and shape its future with
minimum intervention from central authorities. According to a constitutional author,
decentralization of power amounts to "self-immolation," since in that event, the
autonomous government becomes accountable not to the central authorities but to its
constituency. 28
But the question of whether or not the grant of autonomy Muslim Mindanao under the
1987 Constitution involves, truly, an effort to decentralize power rather than mere
administration is a question foreign to this petition, since what is involved herein is a
local government unit constituted prior to the ratification of the present Constitution.
Hence, the Court will not resolve that controversy now, in this case, since no
controversy in fact exists. We will resolve it at the proper time and in the proper case.
Under the 1987 Constitution, local government units enjoy autonomy in these two
senses, thus:
Section 1. The territorial and political subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and barangays. Here shall be autonomous
regions in Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30
xxx xxx xxx
See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas
sharing common and distinctive historical and cultural heritage, economic and social
structures, and other relevant characteristics within the framework of this Constitution
and the national sovereignty as well as territorial integrity of the Republic of the
Philippines. 31
An autonomous government that enjoys autonomy of the latter category [CONST.
(1987), art. X, sec. 15.] is subject alone to the decree of the organic act creating it and
accepted principles on the effects and limits of "autonomy." On the other hand, an
autonomous government of the former class is, as we noted, under the supervision of
the national government acting through the President (and the Department of Local
Government). 32 If the Sangguniang Pampook (of Region XII), then, is autonomous in
the latter sense, its acts are, debatably beyond the domain of this Court in perhaps
the same way that the internal acts, say, of the Congress of the Philippines are
beyond our jurisdiction. But if it is autonomous in the former category only, it comes
unarguably under our jurisdiction. An examination of the very Presidential Decree
creating the autonomous governments of Mindanao persuades us that they were
never meant to exercise autonomy in the second sense, that is, in which the central
government commits an act of self-immolation. Presidential Decree No. 1618, in the
first place, mandates that "[t]he President shall have the power of general supervision
and control over Autonomous Regions."33 In the second place, the Sangguniang
Pampook, their legislative arm, is made to discharge chiefly administrative services,
thus:
SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall
exercise local legislative powers over regional affairs within the framework of national
development plans, policies and goals, in the following areas:
(1) Organization of regional administrative system;
(2) Economic, social and cultural development of the Autonomous Region;
(3) Agricultural, commercial and industrial programs for the Autonomous Region;
(4) Infrastructure development for the Autonomous Region;
(5) Urban and rural planning for the Autonomous Region;
(6) Taxation and other revenue-raising measures as provided for in this Decree;
(7) Maintenance, operation and administration of schools established by the
Autonomous Region;
(8) Establishment, operation and maintenance of health, welfare and other social
services, programs and facilities;
(9) Preservation and development of customs, traditions, languages and culture that instead, they opened the sessions themselves behind his back in an apparent act
indigenous to the Autonomous Region; and of mutiny. Under the circumstances, we find equity on his side. For this reason, we
uphold the "recess" called on the ground of good faith.
(10) Such other matters as may be authorized by law,including the enactment of such
measures as may be necessary for the promotion of the general welfare of the people It does not appear to us, moreover, that the petitioner had resorted to the aforesaid
in the Autonomous Region. "recess" in order to forestall the Assembly from bringing about his ouster. This is not
apparent from the pleadings before us. We are convinced that the invitation was what
The President shall exercise such powers as may be necessary to assure that precipitated it.
enactment and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap
ng Pook are in compliance with this Decree, national legislation, policies, plans and In holding that the "recess" in question is valid, we are not to be taken as establishing
programs. a precedent, since, as we said, a recess can not be validly declared without a session
having been first opened. In upholding the petitioner herein, we are not giving him
34
The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa. a carte blanche to order recesses in the future in violation of the Rules, or otherwise
to prevent the lawful meetings thereof.
Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the
expulsion in question, with more reason can we review the petitioner's removal as Neither are we, by this disposition, discouraging the Sanggunian from reorganizing
Speaker. itself pursuant to its lawful prerogatives. Certainly, it can do so at the proper time. In
the event that be petitioner should initiate obstructive moves, the Court is certain that
Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: it is armed with enough coercive remedies to thwart them. 39
(1) the Sanggunian, in convening on November 2 and 5, 1987 (for the sole purpose of
declaring the office of the Speaker vacant), did so in violation of the Rules of the In view hereof, we find no need in dwelling on the issue of quorum.
Sangguniang Pampook since the Assembly was then on recess; and (2) assuming
that it was valid, his ouster was ineffective nevertheless for lack of quorum. WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang
Pampook, Region XII, is ENJOINED to (1) REINSTATE the petitioner as Member,
Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were Sangguniang Pampook, Region XII; and (2) REINSTATE him as Speaker thereof. No
invalid. It is true that under Section 31 of the Region XII Sanggunian Rules, costs.
"[s]essions shall not be suspended or adjourned except by direction of the
Sangguniang Pampook," 35 but it provides likewise that "the Speaker may, on [sic] his SO ORDERED.
discretion, declare a recess of "short intervals." 36 Of course, there is disagreement
between the protagonists as to whether or not the recess called by the petitioner Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
effective November 1 through 15, 1987 is the "recess of short intervals" referred to; Gancayco, Bidin, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.
the petitioner says that it is while the respondents insist that, to all intents and
purposes, it was an adjournment and that "recess" as used by their Rules only refers Padilla, J., took no part.
to "a recess when arguments get heated up so that protagonists in a debate can talk
things out informally and obviate dissenssion [sic] and disunity. 37 The Court agrees
with the respondents on this regard, since clearly, the Rules speak of "short
intervals." Secondly, the Court likewise agrees that the Speaker could not have validly
called a recess since the Assembly had yet to convene on November 1, the date
session opens under the same Rules. 38 Hence, there can be no recess to speak of
that could possibly interrupt any session. But while this opinion is in accord with the
respondents' own, we still invalidate the twin sessions in question, since at the time
the petitioner called the "recess," it was not a settled matter whether or not he could.
do so. In the second place, the invitation tendered by the Committee on Muslim
Affairs of the House of Representatives provided a plausible reason for the
intermission sought. Thirdly, assuming that a valid recess could not be called, it does
not appear that the respondents called his attention to this mistake. What appears is

SECOND DIVISION
[G.R. No. 129093. August 30, 2001]
HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and
HON. CALIXTO CATAQUIZ, petitioners, vs. HON. FRANCISCO DIZON PAO and
TONY CALVENTO, respondents.
DECISION
QUISUMBING, J.:
For our resolution is a petition for review on certiorari seeking the reversal of the
decision[1] dated February 10, 1997 of the Regional Trial Court of San Pedro, Laguna,
Branch 93, enjoining petitioners from implementing or enforcing Kapasiyahan Bilang
508, Taon 1995, of the Sangguniang Panlalawigan of Laguna and its subsequent
Order[2] dated April 21, 1997 denying petitioners motion for reconsideration.
On December 29, 1995, respondent Tony Calvento was appointed agent by the
Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the
operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for
a mayors permit to open the lotto outlet. This was denied by Mayor Cataquiz in a
letter dated February 19, 1996. The ground for said denial was an ordinance passed
by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T.
1995 which was issued on September 18, 1995. The ordinance reads:
ISANG KAPASIYAHAN TINUTUTULAN ANG MGA ILLEGAL GAMBLING LALO NA
ANG LOTTO SA LALAWIGAN NG LAGUNA
SAPAGKAT, ang sugal dito sa lalawigan ng Laguna ay talamak na;
SAPAGKAT, ang sugal ay nagdudulot ng masasamang impluwensiya lalot higit sa
mga kabataan;
KUNG KAYAT DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at Kgg.
Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano at buong
pagkakaisang sinangayunan ng lahat ng dumalo sa pulong;
IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano mang uri
ng sugal dito sa lalawigan ng Laguna lalot higit ang Lotto;
IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang pinuno ng
Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-ibayuhin ang
pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng Laguna lalo na
ang Jueteng.[3]
As a result of this resolution of denial, respondent Calvento filed a complaint for
declaratory relief with prayer for preliminary injunction and temporary restraining
order. In the said complaint, respondent Calvento asked the Regional Trial Court of
San Pedro Laguna, Branch 93, for the following reliefs: (1) a preliminary injunction or
temporary restraining order, ordering the defendants to refrain from implementing or
enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon. Municipal Mayor
Calixto R. Cataquiz to issue a business permit for the operation of a lotto outlet; and
(3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.
On February 10, 1997, the respondent judge, Francisco Dizon Pao, promulgated his
decision enjoining the petitioners from implementing or enforcing resolution
or Kapasiyahan Blg. 508, T. 1995. The dispositive portion of said decision reads:
WHEREFORE, premises considered, defendants, their agents and representatives
are hereby enjoined from implementing or enforcing resolution or kapasiyahan blg.
508, T. 1995 of the Sangguniang Panlalawigan ng Laguna prohibiting the operation of
the lotto in the province of Laguna.
SO ORDERED.[4]
Petitioners filed a motion for reconsideration which was subsequently denied in an
Order dated April 21, 1997, which reads:
Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and the
Sangguniang Panlalawigan of Laguna, thru counsel, with the opposition filed by
plaintiffs counsel and the comment thereto filed by counsel for the defendants which
were duly noted, the Court hereby denies the motion for lack of merit.
SO ORDERED.[5]
On May 23, 1997, petitioners filed this petition alleging that the following errors were
committed by the respondent trial court:
I
THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM
IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE SANGGUNIANG
PANLALAWIGAN OF LAGUNA PROHIBITING THE OPERATION OF THE LOTTO
IN THE PROVINCE OF LAGUNA.
II
THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY THE
PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR PROGRAM
MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR OFFICES, PRIOR
CONSULTATION AND APPROVAL BY THE LOCAL GOVERNMENT UNITS
CONCERNED AND OTHER CONCERNED SECTORS IS REQUIRED.
Petitioners contend that the assailed resolution is a valid policy declaration of the
Provincial Government of Laguna of its vehement objection to the operation of lotto
and all forms of gambling. It is likewise a valid exercise of the provincial governments
police power under the General Welfare Clause of Republic Act 7160, otherwise
known as the Local Government Code of 1991.[6] They also maintain that
respondents lotto operation is illegal because no prior consultations and approval by
the local government were sought before it was implemented contrary to the express
provisions of Sections 2 (c) and 27 of R.A. 7160.[7]
For his part, respondent Calvento argues that the questioned resolution is, in effect, a
curtailment of the power of the state since in this case the national legislature itself
had already declared lotto as legal and permitted its operations around the
country.[8] As for the allegation that no prior consultations and approval were sought
from the sangguniang panlalawigan of Laguna, respondent Calvento contends this is
not mandatory since such a requirement is merely stated as a declaration of policy
and not a self-executing provision of the Local Government Code of 1991.[9] He also
states that his operation of the lotto system is legal because of the authority given to
him by the PCSO, which in turn had been granted a franchise to operate the lotto by
Congress.[10]
The Office of the Solicitor General (OSG), for the State, contends that the Provincial
Government of Laguna has no power to prohibit a form of gambling which has been
authorized by the national government.[11] He argues that this is based on the
principle that ordinances should not contravene statutes as municipal governments
are merely agents of the national government. The local councils exercise only
delegated legislative powers which have been conferred on them by Congress. This
being the case, these councils, as delegates, cannot be superior to the principal or
exercise powers higher than those of the latter. The OSG also adds that the question
of whether gambling should be permitted is for Congress to determine, taking into
account national and local interests. Since Congress has allowed the PCSO to
operate lotteries which PCSO seeks to conduct in Laguna, pursuant to its legislative
grant of authority, the provinces Sangguniang Panlalawigan cannot nullify the
exercise of said authority by preventing something already allowed by Congress.
The issues to be resolved now are the following: (1) whether Kapasiyahan Blg. 508,
T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a mayors
permit based thereon are valid; and (2) whether prior consultations and approval by
the concerned Sanggunian are needed before a lotto system can be operated in a
given local government unit.
The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a
mayors permit for the operation of a lotto outlet in favor of private
respondent. According to the mayor, he based his decision on an existing ordinance
prohibiting the operation of lotto in the province of Laguna. The ordinance, however,
merely states the objection of the council to the said game. It is but a mere policy
statement on the part of the local council, which is not self-executing. Nor could it
serve as a valid ground to prohibit the operation of the lotto system in the province of
Laguna. Even petitioners admit as much when they stated in their petition that:
5.7. The terms of the Resolution and the validity thereof are express and clear. The
Resolution is a policy declaration of the Provincial Government of Laguna of its
vehement opposition and/or objection to the operation of and/or all forms of gambling
including the Lotto operation in the Province of Laguna.[12]
As a policy statement expressing the local governments objection to the lotto, such
resolution is valid. This is part of the local governments autonomy to air its views
which may be contrary to that of the national governments. However, this freedom to
exercise contrary views does not mean that local governments may actually enact
ordinances that go against laws duly enacted by Congress. Given this premise, the
assailed resolution in this case could not and should not be interpreted as a measure
or ordinance prohibiting the operation of lotto.
The game of lotto is a game of chance duly authorized by the national government
through an Act of Congress. Republic Act 1169, as amended by Batas Pambansa
Blg. 42, is the law which grants a franchise to the PCSO and allows it to operate the
lotteries. The pertinent provision reads:
Section 1. The Philippine Charity Sweepstakes Office.- The Philippine Charity
Sweepstakes Office, hereinafter designated the Office, shall be the principal
government agency for raising and providing for funds for health programs, medical
assistance and services and charities of national character, and as such shall have
the general powers conferred in section thirteen of Act Numbered One thousand four
hundred fifty-nine, as amended, and shall have the authority:
A. To hold and conduct charity sweepstakes races, lotteries, and other similar
activities, in such frequency and manner, as shall be determined, and subject to such
rules and regulations as shall be promulgated by the Board of Directors.
This statute remains valid today. While lotto is clearly a game of chance, the national
government deems it wise and proper to permit it. Hence, the Sangguniang
Panlalawigan of Laguna, a local government unit, cannot issue a resolution or an
ordinance that would seek to prohibit permits. Stated otherwise, what the national
legislature expressly allows by law, such as lotto, a provincial board may not disallow
by ordinance or resolution.
In our system of government, the power of local government units to legislate and
enact ordinances and resolutions is merely a delegated power coming from
Congress. As held in Tatel vs. Virac,[13]ordinances should not contravene an existing
statute enacted by Congress. The reasons for this is obvious, as elucidated
in Magtajas v. Pryce Properties Corp.[14]
Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred upon them by Congress as the
national lawmaking body. The delegate cannot be superior to the principal or exercise
powers higher than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have derived their
power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot
exist. As it creates, so it may destroy. As it may destroy, it may abridge and
control. Unless there is some constitutional limitation on the right, the legislature
might, by a single act, and if we can suppose it capable of so great a folly and so
great a wrong, sweep from existence all of the municipal corporations in the state,
and the corporation could not prevent it. We know of no limitation on the right so far
as the corporation themselves are concerned. They are, so to phrase it, the mere
tenants at will of the legislature (citing Clinton vs. Ceder Rapids, etc. Railroad Co., 24
Iowa 455).
Nothing in the present constitutional provision enhancing local autonomy dictates a
different conclusion.
The basic relationship between the national legislature and the local government units
has not been enfeebled by the new provisions in the Constitution strengthening the
policy of local autonomy. Without meaning to detract from that policy, we here confirm
that Congress retains control of the local government units although in significantly
reduced degree now than under our previous Constitutions. The power to create still
includes the power to destroy. The power to grant still includes the power to withhold
or recall. True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax (citing Art. X, Sec. 5,
Constitution), which cannot now be withdrawn by mere statute. By and large,
however, the national legislature is still the principal of the local government units,
which cannot defy its will or modify or violate it.[15]
Ours is still a unitary form of government, not a federal state. Being so, any form of
autonomy granted to local governments will necessarily be limited and confined within
the extent allowed by the central authority. Besides, the principle of local autonomy
under the 1987 Constitution simply means decentralization. It does not make local
governments sovereign within the state or an imperium in imperio.[16]
To conclude our resolution of the first issue, respondent mayor of San Pedro, cannot
avail of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of Laguna as
justification to prohibit lotto in his municipality. For said resolution is nothing but an
expression of the local legislative unit concerned. The Boards enactment, like spring
water, could not rise above its source of power, the national legislature.
As for the second issue, we hold that petitioners erred in declaring that Sections 2 (c)
and 27 of Republic Act 7160, otherwise known as the Local Government Code of
1991, apply mandatorily in the setting up of lotto outlets around the country. These
provisions state:
Section 2. Declaration of Policy. x x x
(c) It is likewise the policy of the State to require all national agencies and offices to
conduct periodic consultations with appropriate local government units, non-
governmental and peoples organizations, and other concerned sectors of the
community before any project or program is implemented in their respective
jurisdictions.
Section 27. Prior Consultations Required. No project or program shall be
implemented by government authorities unless the consultations mentioned in
Section 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian
concerned is obtained; Provided, that occupants in areas where such projects are to
be implemented shall not be evicted unless appropriate relocation sites have been
provided, in accordance with the provisions of the Constitution.
From a careful reading of said provisions, we find that these apply only to national
programs and/or projects which are to be implemented in a particular local
community. Lotto is neither a program nor a project of the national government, but of
a charitable institution, the PCSO. Though sanctioned by the national government, it
is far fetched to say that lotto falls within the contemplation of Sections 2 (c) and 27 of
the Local Government Code.
Section 27 of the Code should be read in conjunction with Section 26
thereof.[17] Section 26 reads:
Section 26. Duty of National Government Agencies in the Maintenance of Ecological
Balance. It shall be the duty of every national agency or government-owned or
controlled corporation authorizing or involved in the planning and implementation of
any project or program that may cause pollution, climatic change, depletion of non-
renewable resources, loss of crop land, range-land, or forest cover, and extinction of
animal or plant species, to consult with the local government units, nongovernmental
organizations, and other sectors concerned and explain the goals and objectives of
the project or program, its impact upon the people and the community in terms of
environmental or ecological balance, and the measures that will be undertaken to
prevent or minimize the adverse effects thereof.
Thus, the projects and programs mentioned in Section 27 should be interpreted to
mean projects and programs whose effects are among those enumerated in Section
26 and 27, to wit, those that: (1) may cause pollution; (2) may bring about climatic
change; (3) may cause the depletion of non-renewable resources; (4) may result in
loss of crop land, range-land, or forest cover; (5) may eradicate certain animal or
plant species from the face of the planet; and (6) other projects or programs that may
call for the eviction of a particular group of people residing in the locality where these
will be implemented. Obviously, none of these effects will be produced by the
introduction of lotto in the province of Laguna.

Moreover, the argument regarding lack of consultation raised by petitioners is clearly

an afterthought on their part. There is no indication in the letter of Mayor Cataquiz that
this was one of the reasons for his refusal to issue a permit. That refusal was
predicated solely but erroneously on the provisions of Kapasiyahan Blg. 508, Taon
1995, of the Sangguniang Panlalawigan of Laguna.

In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz from
enforcing or implementing the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang
Panlalawigan of Laguna. That resolution expresses merely a policy statement of the
Laguna provincial board. It possesses no binding legal force nor requires any act of
implementation. It provides no sufficient legal basis for respondent mayors refusal to
issue the permit sought by private respondent in connection with a legitimate
business activity authorized by a law passed by Congress.

WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional
Trial Court of San Pedro, Laguna enjoining the petitioners from implementing or
enforcing Resolution or Kapasiyahan Blg. 508, T. 1995, of the Provincial Board of
Laguna is hereby AFFIRMED. No costs.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.


EN BANC
[G.R. No. 125350. December 3, 2002]
HON. RTC JUDGES MERCEDES G. DADOLE (Executive Judge, Branch 28),
ULRIC R. CAETE (Presiding Judge, Branch 25), AGUSTINE R. VESTIL
(Presiding Judge, Branch 56), HON. MTC JUDGES TEMISTOCLES M. BOHOLST
(Presiding Judge, Branch 1), VICENTE C. FANILAG (Judge Designate, Branch
2), and WILFREDO A. DAGATAN (Presiding Judge, Branch 3), all of Mandaue
City, petitioners, vs. COMMISSION ON AUDIT, respondent.
DECISION
CORONA, J.:
Before us is a petition for certiorari under Rule 64 to annul the decision[1] and
resolution[2], dated September 21, 1995 and May 28, 1996, respectively, of the
respondent Commission on Audit (COA) affirming the notices of the Mandaue City
Auditor which diminished the monthly additional allowances received by the petitioner
judges of the Regional Trial Court (RTC) and Municipal Trial Court (MTC) stationed in
Mandaue City.
The undisputed facts are as follows:
In 1986, the RTC and MTC judges of Mandaue City started receiving monthly
allowances of P1,260 each through the yearly appropriation ordinance enacted by the
Sangguniang Panlungsod of the said city. In 1991, Mandaue City increased the
amount to P1,500 for each judge.
On March 15, 1994, the Department of Budget and Management (DBM) issued the
disputed Local Budget Circular No. 55 (LBC 55) which provided that:
xxx xxx xxx
2.3.2. In the light of the authority granted to the local government units under the
Local Government Code to provide for additional allowances and other benefits to
national government officials and employees assigned in their locality, such additional
allowances in the form of honorarium at rates not exceeding P1,000.00 in provinces
and cities and P700.00 in municipalities may be granted subject to the following
conditions:
a) That the grant is not mandatory on the part of the LGUs;
b) That all contractual and statutory obligations of the LGU including the
implementation of R.A. 6758 shall have been fully provided in the budget;
c) That the budgetary requirements/limitations under Section 324 and 325 of R.A.
7160 should be satisfied and/or complied with; and
d) That the LGU has fully implemented the devolution of functions/personnel in
accordance with R.A. 7160.[3] (italics supplied)
xxx xxx xxx
The said circular likewise provided for its immediate effectivity without need of
publication:
5.0 EFFECTIVITY
This Circular shall take effect immediately.
Acting on the DBM directive, the Mandaue City Auditor issued notices of disallowance
to herein petitioners, namely, Honorable RTC Judges Mercedes G. Dadole, Ulric R.
Caete, Agustin R. Vestil, Honorable MTC Judges Temistocles M. Boholst, Vicente C.
Fanilag and Wilfredo A. Dagatan, in excess of the amount authorized by LBC 55.
Beginning October, 1994, the additional monthly allowances of the petitioner judges
were reduced to P1,000 each. They were also asked to reimburse the amount they
received in excess of P1,000 from April to September, 1994.
The petitioner judges filed with the Office of the City Auditor a protest against the
notices of disallowance. But the City Auditor treated the protest as a motion for
reconsideration and indorsed the same to the COA Regional Office No. 7. In turn, the
COA Regional Office referred the motion to the head office with a recommendation
that the same be denied.
On September 21, 1995, respondent COA rendered a decision denying petitioners
motion for reconsideration. The COA held that:
The issue to be resolved in the instant appeal is whether or not the City Ordinance of
Mandaue which provides a higher rate of allowances to the appellant judges may
prevail over that fixed by the DBM under Local Budget Circular No. 55 dated March
15, 1994.
xxx xxx xxx
Applying the foregoing doctrine, appropriation ordinance of local government units is
subject to the organizational, budgetary and compensation policies of budgetary
authorities (COA 5th Ind., dated March 17, 1994 re: Province of Antique; COA letter
dated May 17, 1994 re: Request of Hon. Renato Leviste, Cong. 1 st Dist. Oriental
Mindoro). In this regard, attention is invited to Administrative Order No. 42 issued on
March 3, 1993 by the President of the Philippines clarifying the role of DBM in the
compensation and classification of local government positions under RA No. 7160
vis-avis the provisions of RA No. 6758 in view of the abolition of the JCLGPA. Section
1 of said Administrative Order provides that:
Section 1. The Department of Budget and Management as the lead administrator of
RA No. 6758 shall, through its Compensation and Position Classification Bureau,
continue to have the following responsibilities in connection with the implementation
of the Local Government Code of 1991:
a) Provide guidelines on the classification of local government positions and on the
specific rates of pay therefore;
b) Provide criteria and guidelines for the grant of all allowances and additional forms
of compensation to local government employees; xxx. (underscoring supplied)
To operationalize the aforecited presidential directive, DBM issued LBC No. 55, dated
March 15, 1994, whose effectivity clause provides that:
xxx xxx xxx
5.0 EFFECTIVITY
This Circular shall take effect immediately.
It is a well-settled rule that implementing rules and regulations promulgated by
administrative or executive officer in accordance with, and as authorized by law, has
the force and effect of law or partake the nature of a statute (Victorias Milling Co.,
Inc., vs. Social Security Commission, 114 Phil. 555, cited in Agpalos Statutory
Construction, 2nd Ed. P. 16; Justice Cruzs Phil. Political Law, 1984 Ed., p. 103;
Espanol vs. Phil Veterans Administration, 137 SCRA 314; Antique Sawmills Inc. vs.
Tayco, 17 SCRA 316).
xxx xxx xxx
There being no statutory basis to grant additional allowance to judges in excess of
P1,000.00 chargeable against the local government units where they are stationed,
this Commission finds no substantial grounds or cogent reason to disturb the decision
of the City Auditor, Mandaue City, disallowing in audit the allowances in question.
Accordingly, the above-captioned appeal of the MTC and RTC Judges of Mandaue
City, insofar as the same is not covered by Circular Letter No. 91-7, is hereby
dismissed for lack of merit.
xxx xxx xxx[4]
On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, for and in behalf of
the petitioner judges, filed a motion for reconsideration of the decision of the COA. In
a resolution dated May 28, 1996, the COA denied the motion.
Hence, this petition for certiorari by the petitioner judges, submitting the following
questions for resolution:
I
HAS THE CITY OF MANDAUE STATUTORY AND CONSTITUTIONAL BASIS TO
PROVIDE ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO JUDGES
STATIONED IN AND ASSIGNED TO THE CITY?
II
CAN AN ADMINISTRATIVE CIRCULAR OR GUIDELINE SUCH AS LOCAL
BUDGET CIRCULAR NO. 55 RENDER INOPERATIVE THE POWER OF THE
LEGISLATIVE BODY OF A CITY BY SETTING A LIMIT TO THE EXTENT OF THE
EXERCISE OF SUCH POWER?
III
HAS THE COMMISSION ON AUDIT CORRECTLY INTERPRETED LOCAL
BUDGET CIRCULAR NO. 55 TO INCLUDE MEMBERS OF THE JUDICIARY IN
FIXING THE CEILING OF ADDITIONAL ALLOWANCES AND BENEFITS TO BE
PROVIDED TO JUDGES STATIONED IN AND ASSIGNED TO MANDAUE CITY BY
THE CITY GOVERNMENT AT P1,000.00 PER MONTH NOTWITHSTANDING THAT
THEY HAVE BEEN RECEIVING ALLOWANCES OF P1,500.00 MONTHLY FOR
THE PAST FIVE YEARS?
IV
IS LOCAL BUDGET CIRCULAR NO. 55 DATED MARCH 15, 1994 ISSUED BY THE
DEPARTMENT OF BUDGET AND MANAGEMENT VALID AND ENFORCEABLE
CONSIDERING THAT IT WAS NOT DULY PUBLISHED IN ACCODANCE WITH
LAW?[5]
Petitioner judges argue that LBC 55 is void for infringing on the local autonomy of
Mandaue City by dictating a uniform amount that a local government unit can
disburse as additional allowances to judges stationed therein. They maintain that said
circular is not supported by any law and therefore goes beyond the supervisory
powers of the President. They further allege that said circular is void for lack of
publication.
On the other hand, the yearly appropriation ordinance providing for additional
allowances to judges is allowed by Section 458, par. (a)(1)[xi], of RA 7160, otherwise
known as the Local Government Code of 1991, which provides that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The sangguniang
panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its inhabitants
pursuant to Section 16 of this Code and in the proper exercise of the corporate
powers of the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective
city government, and in this connection, shall:
xxx xxx xxx
(xi) When the finances of the city government allow, provide for additional allowances
and other benefits to judges, prosecutors, public elementary and high school
teachers, and other national government officials stationed in or assigned to the
city; (italics supplied)
Instead of filing a comment on behalf of respondent COA, the Solicitor General filed a
manifestation supporting the position of the petitioner judges. The Solicitor General
argues that (1) DBM only enjoys the power to review and determine whether the
disbursements of funds were made in accordance with the ordinance passed by a
local government unit while (2) the COA has no more than auditorial visitation powers
over local government units pursuant to Section 348 of RA 7160 which provides for
the power to inspect at any time the financial accounts of local government units.
Moreover, the Solicitor General opines that the DBM and the respondent are only
authorized under RA 7160 to promulgate a Budget Operations Manual for local
government units, to improve and systematize methods, techniques and procedures
employed in budget preparation, authorization, execution and accountability pursuant
to Section 354 of RA 7160. The Solicitor General points out that LBC 55 was not
exercised under any of the aforementioned provisions.
Respondent COA, on the other hand, insists that the constitutional and statutory
authority of a city government to provide allowances to judges stationed therein is not
absolute. Congress may set limitations on the exercise of autonomy. It is for the
President, through the DBM, to check whether these legislative limitations are being
followed by the local government units.
One such law imposing a limitation on a local government units autonomy is Section
458, par. (a) (1) [xi], of RA 7160, which authorizes the disbursement of additional
allowances and other benefits to judges subject to the condition that the finances of
the city government should allow the same. Thus, DBM is merely enforcing the
condition of the law when it sets a uniform maximum amount for the additional
allowances that a city government can release to judges stationed therein.
Assuming arguendo that LBC 55 is void, respondent COA maintains that the
provisions of the yearly approved ordinance granting additional allowances to judges
are still prohibited by the appropriation laws passed by Congress every year. COA
argues that Mandaue City gets the funds for the said additional allowances of judges
from the Internal Revenue Allotment (IRA). But the General Appropriations Acts of
1994 and 1995 do not mention the disbursement of additional allowances to judges
as one of the allowable uses of the IRA. Hence, the provisions of said ordinance
granting additional allowances, taken from the IRA, to herein petitioner judges are
void for being contrary to law.
To resolve the instant petition, there are two issues that we must address: (1) whether
LBC 55 of the DBM is void for going beyond the supervisory powers of the President
and for not having been published and (2) whether the yearly appropriation ordinance
enacted by the City of Mandaue that provides for additional allowances to judges
contravenes the annual appropriation laws enacted by Congress.
We rule in favor of the petitioner judges.
On the first issue, we declare LBC 55 to be null and void.
We recognize that, although our Constitution[6] guarantees autonomy to local
government units, the exercise of local autonomy remains subject to the power of
control by Congress and the power of supervision by the President. Section 4 of
Article X of the 1987 Philippine Constitution provides that:
Sec. 4. The President of the Philippines shall exercise general supervision over local
governments. x x x
In Pimentel vs. Aguirre[7], we defined the supervisory power of the President and
distinguished it from the power of control exercised by Congress. Thus:
This provision (Section 4 of Article X of the 1987 Philippine Constitution) has been
interpreted to exclude the power of control. In Mondano v. Silvosa,[i][5] the Court
contrasted the President's power of supervision over local government officials with
that of his power of control over executive officials of the national government. It was
emphasized that the two terms -- supervision and control -- differed in meaning and
extent. The Court distinguished them as follows:
"x x x In administrative law, supervision means overseeing or the power or authority
of an officer to see that subordinate officers perform their duties. If the latter fail or
neglect to fulfill them, the former may take such action or step as prescribed by law to
make them perform their duties. Control, on the other hand, means the power of an
officer to alter or modify or nullify or set aside what a subordinate officer ha[s] done in
the performance of his duties and to substitute the judgment of the former for that of
the latter."[ii][6]
In Taule v. Santos,[iii][7] we further stated that the Chief Executive wielded no more
authority than that of checking whether local governments or their officials were
performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of their
authority. "Supervisory power, when contrasted with control, is the power of mere
oversight over an inferior body; it does not include any restraining authority over such
body,"[iv][8] we said.
In a more recent case, Drilon v. Lim,[v][9] the difference between control and
supervision was further delineated. Officers in control lay down the rules in the
performance or accomplishment of an act. If these rules are not followed, they may, in
their discretion, order the act undone or redone by their subordinates or even decide
to do it themselves. On the other hand, supervision does not cover such
authority.Supervising officials merely see to it that the rules are followed, but they
themselves do not lay down such rules, nor do they have the discretion to modify or
replace them. If the rules are not observed, they may order the work done or redone,
but only to conform to such rules. They may not prescribe their own manner of
execution of the act. They have no discretion on this matter except to see to it that the
rules are followed.
Under our present system of government, executive power is vested in the
President.[vi][10] The members of the Cabinet and other executive officials are merely
alter egos. As such, they are subject to the power of control of the President, at
whose will and behest they can be removed from office; or their actions and decisions
changed, suspended or reversed.[vii][11] In contrast, the heads of political subdivisions
are elected by the people. Their sovereign powers emanate from the electorate, to
whom they are directly accountable. By constitutional fiat, they are subject to the
Presidents supervision only, not control, so long as their acts are exercised within the
sphere of their legitimate powers. By the same token, the President may not withhold
or alter any authority or power given them by the Constitution and the law.
Clearly then, the President can only interfere in the affairs and activities of a local
government unit if he or she finds that the latter has acted contrary to law. This is the
scope of the Presidents supervisory powers over local government units. Hence, the
President or any of his or her alter egos cannot interfere in local affairs as long as the
concerned local government unit acts within the parameters of the law and the
Constitution. Any directive therefore by the President or any of his or her alter
egos seeking to alter the wisdom of a law-conforming judgment on local affairs of a
local government unit is a patent nullity because it violates the principle of local
autonomy and separation of powers of the executive and legislative departments in
governing municipal corporations.
Does LBC 55 go beyond the law it seeks to implement? Yes.
LBC 55 provides that the additional monthly allowances to be given by a local
government unit should not exceed P1,000 in provinces and cities and P700 in
municipalities. Section 458, par. (a)(1)(xi), of RA 7160, the law that supposedly
serves as the legal basis of LBC 55, allows the grant of additional allowances to
judges when the finances of the city government allow. The said provision does not
authorize setting a definite maximum limit to the additional allowances granted to
judges. Thus, we need not belabor the point that the finances of a city government
may allow the grant of additional allowances higher than P1,000 if the revenues of the
said city government exceed its annual expenditures. Thus, to illustrate, a city
government with locally generated annual revenues of P40 million and expenditures
of P35 million can afford to grant additional allowances of more than P1,000 each to,
say, ten judges inasmuch as the finances of the city can afford it.
Setting a uniform amount for the grant of additional allowances is an inappropriate
way of enforcing the criterion found in Section 458, par. (a)(1)(xi), of RA 7160. The
DBM over-stepped its power of supervision over local government units by imposing
a prohibition that did not correspond with the law it sought to implement. In other
words, the prohibitory nature of the circular had no legal basis.
Furthermore, LBC 55 is void on account of its lack of publication, in violation of our
ruling in Taada vs. Tuvera[8] where we held that:
xxx. Administrative rules and regulations must also be published if their purpose is to
enforce or implement existing law pursuant to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of an administrative agency and the public, need not be published.
Neither is publication required of the so-called letters of instruction issued by
administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.
Respondent COA claims that publication is not required for LBC 55 inasmuch as it is
merely an interpretative regulation applicable to the personnel of an LGU. We
disagree. In De Jesus vs. Commission on Audit[9] where we dealt with the same
issue, this Court declared void, for lack of publication, a DBM circular that disallowed
payment of allowances and other additional compensation to government officials and
employees. In refuting respondent COAs argument that said circular was merely an
internal regulation, we ruled that:
On the need for publication of subject DBM-CCC No. 10, we rule in the affirmative.
Following the doctrine enunciated in Taada v. Tuvera, publication in the Official
Gazette or in a newspaper of general circulation in the Philippines is required
since DBM-CCC No. 10 is in the nature of an administrative circular the purpose
of which is to enforce or implement an existing law. Stated differently, to be
effective and enforceable, DBM-CCC No. 10 must go through the requisite publication
in the Official Gazette or in a newspaper of general circulation in the Philippines.
In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which
completely disallows payment of allowances and other additional compensation to
government officials and employees, starting November 1, 1989, is not a mere
interpretative or internal regulation. It is something more than that. And why not, when
it tends to deprive government workers of their allowance and additional
compensation sorely needed to keep body and soul together. At the very least,
before the said circular under attack may be permitted to substantially reduce
their income, the government officials and employees concerned should be
apprised and alerted by the publication of subject circular in the Official
Gazette or in a newspaper of general circulation in the Philippines to the end
that they be given amplest opportunity to voice out whatever opposition they
may have, and to ventilate their stance on the matter. This approach is more in
keeping with democratic precepts and rudiments of fairness and
transparency. (emphasis supplied)
In Philippine International Trading Corporation vs. Commission on Audit [10], we again
declared the same circular as void, for lack of publication, despite the fact that it was
re-issued and then submitted for publication. Emphasizing the importance of
publication to the effectivity of a regulation, we therein held that:
It has come to our knowledge that DBM-CCC No. 10 has been re-issued in its entirety
and submitted for publication in the Official Gazette per letter to the National Printing
Office dated March 9, 1999. Would the subsequent publication thereof cure the defect
and retroact to the time that the above-mentioned items were disallowed in audit?
The answer is in the negative, precisely for the reason that publication is required as
a condition precedent to the effectivity of a law to inform the public of the contents of
the law or rules and regulations before their rights and interests are affected by the
same. From the time the COA disallowed the expenses in audit up to the filing of
herein petition the subject circular remained in legal limbo due to its non-publication.
As was stated in Taada v. Tuvera, prior publication of laws before they become
effective cannot be dispensed with, for the reason that it would deny the public
knowledge of the laws that are supposed to govern it. [11]
We now resolve the second issue of whether the yearly appropriation ordinance
enacted by Mandaue City providing for fixed allowances for judges contravenes any
law and should therefore be struck down as null and void.
According to respondent COA, even if LBC 55 were void, the ordinances enacted by
Mandaue City granting additional allowances to the petitioner judges would still (be)
bereft of legal basis for want of a lawful source of funds considering that the
IRA cannot be used for such purposes. Respondent COA showed that Mandaue
Citys funds consisted of locally generated revenues and the IRA. From 1989 to 1995,
Mandaue Citys yearly expenditures exceeded its locally generated revenues, thus
resulting in a deficit. During all those years, it was the IRA that enabled Mandaue City
to incur a surplus. Respondent avers that Mandaue City used its IRA to pay for said
additional allowances and this violated paragraph 2 of the Special Provisions, page
1060, of RA 7845 (The General Appropriations Act of 1995)[12] and paragraph 3 of the
Special Provision, page 1225, of RA 7663 (The General Appropriations Act of
1994)[13] which specifically identified the objects of expenditure of the IRA. Nowhere in
said provisions of the two budgetary laws does it say that the IRA can be used for
additional allowances of judges. Respondent COA thus argues that the provisions in
the ordinance providing for such disbursement are against the law, considering that
the grant of the subject allowances is not within the specified use allowed by the
aforesaid yearly appropriations acts.
We disagree.
Respondent COA failed to prove that Mandaue City used the IRA to spend for the
additional allowances of the judges. There was no evidence submitted by COA
showing the breakdown of the expenses of the city government and the funds used
for said expenses. All the COA presented were the amounts expended, the locally
generated revenues, the deficit, the surplus and the IRA received each year. Aside
from these items, no data or figures were presented to show that Mandaue City
deducted the subject allowances from the IRA. In other words, just because Mandaue
Citys locally generated revenues were not enough to cover its expenditures, this did
not mean that the additional allowances of petitioner judges were taken from the IRA
and not from the citys own revenues.
Moreover, the DBM neither conducted a formal review nor ordered a disapproval of
Mandaue Citys appropriation ordinances, in accordance with the procedure outlined
by Sections 326 and 327 of RA 7160 which provide that:
Section 326. Review of Appropriation Ordinances of Provinces, Highly Urbanized
Cities, Independent Component Cities, and Municipalities within the Metropolitan
Manila Area. The Department of Budget and Management shall review ordinances
authorizing the annual or supplemental appropriations of provinces, highly-urbanized
cities, independent component cities, and municipalities within the Metropolitan
Manila Area in accordance with the immediately succeeding Section.
Section 327. Review of Appropriation Ordinances of Component Cities and
Municipalities.- The sangguninang panlalawigan shall review the ordinance
authorizing annual or supplemental appropriations of component cities and
municipalities in the same manner and within the same period prescribed for the
review of other ordinances.
If within ninety (90) days from receipt of copies of such ordinance, the
sangguniang panlalawigan takes no action thereon, the same shall be deemed
to have been reviewed in accordance with law and shall continue to be in full
force and effect. (emphasis supplied)
Within 90 days from receipt of the copies of the appropriation ordinance, the DBM
should have taken positive action. Otherwise, such ordinance was deemed to have
been properly reviewed and deemed to have taken effect. Inasmuch as, in the instant
case, the DBM did not follow the appropriate procedure for reviewing the subject
ordinance of Mandaue City and allowed the 90-day period to lapse, it can no longer
question the legality of the provisions in the said ordinance granting additional
allowances to judges stationed in the said city.
WHEREFORE, the petition is hereby GRANTED, and the assailed decision and
resolution, dated September 21, 1995 and May 28, 1996, respectively, of the
Commission on Audit are hereby set aside.

No costs.

SO ORDERED.
EN BANC
G.R. No. 161872 April 13, 2004
REV. ELLY CHAVEZ PAMATONG, ESQUIRE, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
TINGA, J.:
Petitioner Rev. Elly Velez Pamatong filed his Certificate of Candidacy for President on
December 17, 2003. Respondent Commission on Elections (COMELEC) refused to
give due course to petitioners Certificate of Candidacy in its Resolution No.
6558 dated January 17, 2004. The decision, however, was not unanimous since
Commissioners Luzviminda G. Tancangco and Mehol K. Sadain voted to include
petitioner as they believed he had parties or movements to back up his candidacy.
On January 15, 2004, petitioner moved for reconsideration of Resolution No.
6558. Petitioners Motion for Reconsideration was docketed as SPP (MP) No. 04-001.
The COMELEC, acting on petitioners Motion for Reconsideration and on similar
motions filed by other aspirants for national elective positions, denied the same under
the aegis of Omnibus Resolution No. 6604 dated February 11, 2004. The COMELEC
declared petitioner and thirty-five (35) others nuisance candidates who could not
wage a nationwide campaign and/or are not nominated by a political party or are not
supported by a registered political party with a national constituency. Commissioner
Sadain maintained his vote for petitioner. By then, Commissioner Tancangco had
retired.
In this Petition For Writ of Certiorari, petitioner seeks to reverse the resolutions which
were allegedly rendered in violation of his right to "equal access to opportunities for
public service" under Section 26, Article II of the 1987
Constitution,1 by limiting the number of qualified candidates only to those who can
afford to wage a nationwide campaign and/or are nominated by political parties. In so
doing, petitioner argues that the COMELEC indirectly amended the constitutional
provisions on the electoral process and limited the power of the sovereign people to
choose their leaders. The COMELEC supposedly erred in disqualifying him since he
is the most qualified among all the presidential candidates, i.e., he possesses all the
constitutional and legal qualifications for the office of the president, he is capable of
waging a national campaign since he has numerous national organizations under his
leadership, he also has the capacity to wage an international campaign since he has
practiced law in other countries, and he has a platform of government. Petitioner
likewise attacks the validity of the form for the Certificate of Candidacy prepared by
the COMELEC. Petitioner claims that the form does not provide clear and reasonable
guidelines for determining the qualifications of candidates since it does not ask for the
candidates bio-data and his program of government.
First, the constitutional and legal dimensions involved.
Implicit in the petitioners invocation of the constitutional provision ensuring "equal
access to opportunities for public office" is the claim that there is a constitutional right
to run for or hold public office and, particularly in his case, to seek the presidency.
There is none. What is recognized is merely a privilege subject to limitations imposed
by law. Section 26, Article II of the Constitution neither bestows such a right nor
elevates the privilege to the level of an enforceable right. There is nothing in the plain
language of the provision which suggests such a thrust or justifies an interpretation of
the sort.
The "equal access" provision is a subsumed part of Article II of the Constitution,
entitled "Declaration of Principles and State Policies." The provisions under the Article
are generally considered not self-executing,2 and there is no plausible reason for
according a different treatment to the "equal access" provision. Like the rest of the
policies enumerated in Article II, the provision does not contain any judicially
enforceable constitutional right but merely specifies a guideline for legislative or
executive action.3 The disregard of the provision does not give rise to any cause of
action before the courts.4
An inquiry into the intent of the framers5 produces the same determination that the
provision is not self-executory. The original wording of the present Section 26, Article
II had read, "The State shall broaden opportunities to public office and prohibit public
dynasties."6 Commissioner (now Chief Justice) Hilario Davide, Jr. successfully
brought forth an amendment that changed the word "broaden" to the phrase "ensure
equal access," and the substitution of the word "office" to "service." He explained his
proposal in this wise:
I changed the word "broaden" to "ENSURE EQUAL ACCESS TO" because what is
important would be equal access to the opportunity. If you broaden, it would
necessarily mean that the government would be mandated to create as many
offices as are possible to accommodate as many people as are also possible.
That is the meaning of broadening opportunities to public service. So, in order that
we should not mandate the State to make the government the number one
employer and to limit offices only to what may be necessary and expedient yet
offering equal opportunities to access to it, I change the word
"broaden."7 (emphasis supplied)
Obviously, the provision is not intended to compel the State to enact positive
measures that would accommodate as many people as possible into public office.
The approval of the "Davide amendment" indicates the design of the framers to cast
the provision as simply enunciatory of a desired policy objective and not reflective of
the imposition of a clear State burden.
Moreover, the provision as written leaves much to be desired if it is to be regarded as
the source of positive rights. It is difficult to interpret the clause as operative in the
absence of legislation since its effective means and reach are not properly defined.
Broadly written, the myriad of claims that can be subsumed under this rubric appear
to be entirely open-ended.8 Words and phrases such as "equal access,"
"opportunities," and "public service" are susceptible to countless interpretations owing
to their inherent impreciseness. Certainly, it was not the intention of the framers to
inflict on the people an operative but amorphous foundation from which innately
unenforceable rights may be sourced.
As earlier noted, the privilege of equal access to opportunities to public office may be
subjected to limitations. Some valid limitations specifically on the privilege to seek
elective office are found in the provisions9 of the Omnibus Election Code on
"Nuisance Candidates" and COMELEC Resolution No. 645210 dated December 10,
2002 outlining the instances wherein the COMELEC may motu proprio refuse to give
due course to or cancel a Certificate of Candidacy.
As long as the limitations apply to everybody equally without discrimination, however,
the equal access clause is not violated. Equality is not sacrificed as long as the
burdens engendered by the limitations are meant to be borne by any one who is
minded to file a certificate of candidacy. In the case at bar, there is no showing that
any person is exempt from the limitations or the burdens which they create.
Significantly, petitioner does not challenge the constitutionality or validity of Section
69 of the Omnibus Election Code and COMELEC Resolution No. 6452 dated 10
December 2003. Thus, their presumed validity stands and has to be accorded due
weight.
Clearly, therefore, petitioners reliance on the equal access clause in Section 26,
Article II of the Constitution is misplaced.
The rationale behind the prohibition against nuisance candidates and the
disqualification of candidates who have not evinced a bona fide intention to run for
office is easy to divine. The State has a compelling interest to ensure that its electoral
exercises are rational, objective, and orderly. Towards this end, the State takes into
account the practical considerations in conducting elections. Inevitably, the greater
the number of candidates, the greater the opportunities for logistical confusion, not to
mention the increased allocation of time and resources in preparation for the election.
These practical difficulties should, of course, never exempt the State from the conduct
of a mandated electoral exercise. At the same time, remedial actions should be
available to alleviate these logistical hardships, whenever necessary and proper.
Ultimately, a disorderly election is not merely a textbook example of inefficiency, but a
rot that erodes faith in our democratic institutions. As the United States Supreme
Court held:
[T]here is surely an important state interest in requiring some preliminary showing of a
significant modicum of support before printing the name of a political organization and
its candidates on the ballot the interest, if no other, in avoiding confusion, deception
and even frustration of the democratic [process].11
The COMELEC itself recognized these practical considerations when it
promulgated Resolution No. 6558 on 17 January 2004, adopting the study
Memorandum of its Law Department dated 11 January 2004. As observed in the
COMELECs Comment:
There is a need to limit the number of candidates especially in the case of candidates
for national positions because the election process becomes a mockery even if those
who cannot clearly wage a national campaign are allowed to run. Their names would
have to be printed in the Certified List of Candidates, Voters Information Sheet and
the Official Ballots. These would entail additional costs to the government. For the
official ballots in automated counting and canvassing of votes, an additional page
would amount to more or less FOUR HUNDRED FIFTY MILLION PESOS
(450,000,000.00).
xxx[I]t serves no practical purpose to allow those candidates to continue if they
cannot wage a decent campaign enough to project the prospect of winning, no matter
how slim.12
The preparation of ballots is but one aspect that would be affected by allowance of
"nuisance candidates" to run in the elections. Our election laws provide various
entitlements for candidates for public office, such as watchers in every polling
place,13 watchers in the board of canvassers,14 or even the receipt of electoral
contributions.15Moreover, there are election rules and regulations the formulations of
which are dependent on the number of candidates in a given election.
Given these considerations, the ignominious nature of a nuisance candidacy
becomes even more galling. The organization of an election with bona
fide candidates standing is onerous enough. To add into the mix candidates with no
serious intentions or capabilities to run a viable campaign would actually impair the
electoral process. This is not to mention the candidacies which are palpably ridiculous
so as to constitute a one-note joke. The poll body would be bogged by irrelevant
minutiae covering every step of the electoral process, most probably posed at the
instance of these nuisance candidates. It would be a senseless sacrifice on the part
of the State.
Owing to the superior interest in ensuring a credible and orderly election, the State
could exclude nuisance candidates and need not indulge in, as the song goes, "their
trips to the moon on gossamer wings."
The Omnibus Election Code and COMELEC Resolution No. 6452 are cognizant of
the compelling State interest to ensure orderly and credible elections by excising
impediments thereto, such as nuisance candidacies that distract and detract from the The COMELEC is directed to hold and complete the reception of evidence and report
larger purpose. The COMELEC is mandated by the Constitution with the its findings to this Court with deliberate dispatch.
administration of elections16 and endowed with considerable latitude in adopting
means and methods that will ensure the promotion of free, orderly and honest SO ORDERED.
elections.17 Moreover, the Constitution guarantees that only bona fide candidates for
public office shall be free from any form of harassment and discrimination. 18 The
determination of bona fidecandidates is governed by the statutes, and the concept, to
our mind is, satisfactorily defined in the Omnibus Election Code.

Now, the needed factual premises.

However valid the law and the COMELEC issuance involved are, their proper
application in the case of the petitioner cannot be tested and reviewed by this Court
on the basis of what is now before it. The assailed resolutions of the COMELEC do
not direct the Court to the evidence which it considered in determining that petitioner
was a nuisance candidate. This precludes the Court from reviewing at this instance
whether the COMELEC committed grave abuse of discretion in disqualifying
petitioner, since such a review would necessarily take into account the matters which
the COMELEC considered in arriving at its decisions.

Petitioner has submitted to this Court mere photocopies of various documents

purportedly evincing his credentials as an eligible candidate for the presidency. Yet
this Court, not being a trier of facts, can not properly pass upon the reproductions as
evidence at this level. Neither the COMELEC nor the Solicitor General appended any
document to their respective Comments.

The question of whether a candidate is a nuisance candidate or not is both legal and
factual. The basis of the factual determination is not before this Court. Thus, the
remand of this case for the reception of further evidence is in order.

A word of caution is in order. What is at stake is petitioners aspiration and offer to

serve in the government. It deserves not a cursory treatment but a hearing which
conforms to the requirements of due process.

As to petitioners attacks on the validity of the form for the certificate of candidacy,
suffice it to say that the form strictly complies with Section 74 of the Omnibus Election
Code. This provision specifically enumerates what a certificate of candidacy should
contain, with the required information tending to show that the candidate possesses
the minimum qualifications for the position aspired for as established by the
Constitution and other election laws.

IN VIEW OF THE FOREGOING, COMELEC Case No. SPP (MP) No. 04-001 is
hereby remanded to the COMELEC for the reception of further evidence, to
determine the question on whether petitioner Elly Velez Lao Pamatong is a nuisance
candidate as contemplated in Section 69 of the Omnibus Election Code.
Republic of the Philippines bonding company of good reputation, acceptable to the Commission, in the sums of
SUPREME COURT P60,000.00 and P40,000.00, for President and Vice-President, respectively, and
Manila P32,000.00 for Senator and Member of the House of Representatives;

EN BANC 3. That, in consequence of said Republic Act No. 4421 and the aforementioned action
of the Commission on Elections, every candidate has to pay the premium charged by
G.R. No. L-24761 September 7, 1965 bonding companies, and, to offer thereto, either his own properties, worth, at least,
the amount of the surety bond, or properties of the same worth, belonging to other
LEON G. MAQUERA, petitioner, persons willing to accommodate him, by way of counter-bond in favor of said bonding
vs. companies;
JUAN BORRA, CESAR MIRAFLOR, and GREGORIO SANTAYANA, in their
respective capacities as Chairman and Members of the Commission on 4. That the effect of said Republic Act No. 4421 is, therefore, to prevent or disqualify
Elections, and the COMMISSION ON ELECTIONS, respondents. from running for President, Vice-President, Senator or Member of the House of
Representatives those persons who, although having the qualifications prescribed by
--------------------------- the Constitution therefore, cannot file the surety bond aforementioned, owing to
failure to pay the premium charged by the bonding company and/or lack of the
G.R. No. L-24828 September 7, 1965
property necessary for said counter-bond;
FELIPE N. AUREA and MELECIO MALABANAN, petitioners,
5. That said Republic Act No. 4421 has, likewise, the effect of disqualifying for
vs.
provincial, city or municipal elective offices, persons who, although possessing the
COMMISSION ON ELECTIONS, respondent.
qualifications prescribed by law therefor, cannot pay said premium and/or do not have
Leon G. Maquera in his own behalf as petitioner. the property essential for the aforementioned counter-bond;
Ramon Barrios for respondents.
6. That said Republic Act No. 4421 has, accordingly, the effect of imposing property
RESOLUTION qualifications in order that a person could run for a public office and that the people
could validly vote for him;

PER CURIAM:
Upon consideration of case G.R. No. L-24761, "Leon G. Maquera vs. Juan Borra, et
al.," and case G.R. No. L-24828, "Felipe N. Aurea and Melecio Malabanan vs.
Commission on Elections," and it appearing:
1. That Republic Act No. 4421 requires "all candidates for national, provincial, city and
municipal offices" to post a surety bond equivalent to the one-year salary or
emoluments of the position to which he is a candidate, which bond shall be forfeited
in favor of the national, provincial, city or municipal government concerned if the
candidate, except when declared winner, fails to obtain at least 10% of the votes cast
for the office to which he has filed his certificate of candidacy, there being not more
than four (4) candidates for the same office;"
2. That, in compliance with said Republic Act No. 4421, the Commission on Elections
had, on July 20, 1965, decided to require all candidates for President, Vice-President,
Senator and Member of the House of Representatives to file a surety bond, by a
7. That said property qualifications are inconsistent with the nature and essence of
the Republican system ordained in our Constitution and the principle of social justice
underlying the same, for said political system is premised upon the tenet that
sovereignty resides in the people and all government authority emanates from them,
and this, in turn, implies necessarily that the right to vote and to be voted for shall not
be dependent upon the wealth of the individual concerned, whereas social justice
presupposes equal opportunity for all, rich and poor alike, and that, accordingly, no
person shall, by reason of poverty, be denied the chance to be elected to public
office; and
8. That the bond required in Republic Act No. 4421 and the confiscation of said bond
are not predicated upon the necessity of defraying certain expenses or of
compensating services given in connection with elections, and is, therefore, arbitrary
and oppressive.
The Court RESOLVED, without prejudice to rendering an extended decision, to
declare that said Republic Act No. 4421 is unconstitutional and hence null and void,
and, hence, to enjoin respondents herein, as well as their representatives and agents,
from enforcing and/or implementing said constitutional enactment.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-72119 May 29, 1987
VALENTIN L. LEGASPI, petitioner,
vs.
CIVIL SERVICE COMMISSION, respondent.
CORTES, J.:
The fundamental right of the people to information on matters of public concern is
invoked in this special civil action for mandamus instituted by petitioner Valentin L.
Legaspi against the Civil Service Commission. The respondent had earlier denied
Legaspi's request for information on the civil service eligibilities of certain persons
employed as sanitarians in the Health Department of Cebu City. These government
employees, Julian Sibonghanoy and Mariano Agas, had allegedly represented
themselves as civil service eligibles who passed the civil service examinations for
sanitarians.
Claiming that his right to be informed of the eligibilities of Julian Sibonghanoy and
Mariano Agas, is guaranteed by the Constitution, and that he has no other plain,
speedy and adequate remedy to acquire the information, petitioner prays for the
issuance of the extraordinary writ of mandamus to compel the respondent
Commission to disclose said information.
This is not the first tune that the writ of mandamus is sought to enforce the
fundamental right to information. The same remedy was resorted to in the case
of Tanada et. al. vs. Tuvera et. al., (G.R. No. L-63915, April 24,1985,136 SCRA 27)
wherein the people's right to be informed under the 1973 Constitution (Article IV,
Section 6) was invoked in order to compel the publication in the Official Gazette of
various presidential decrees, letters of instructions and other presidential issuances.
Prior to the recognition of the right in said Constitution the statutory right to
information provided for in the Land Registration Act (Section 56, Act 496, as
amended) was claimed by a newspaper editor in another mandamus proceeding, this
time to demand access to the records of the Register of Deeds for the purpose of
gathering data on real estate transactions involving aliens (Subido vs. Ozaeta, 80
Phil. 383 [1948]).
The constitutional right to information on matters of public concern first gained
recognition in the Bill of Rights, Article IV, of the 1973 Constitution, which states:
Sec. 6. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be afforded the citizen subject to such
limitations as may be provided by law.
The foregoing provision has been retained and the right therein provided amplified in
Article III, Sec. 7 of the 1987 Constitution with the addition of the phrase, "as well as
to government research data used as basis for policy development." The new
provision reads:
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis. for policy development, shall be afforded the citizen, subject to such stations
as may be provided by law.
These constitutional provisions are self-executing. They supply the rules by means of
which the right to information may be enjoyed (Cooley, A Treatise on the
Constitutional Limitations 167 [1927]) by guaranteeing the right and mandating the
duty to afford access to sources of information. Hence, the fundamental right therein
recognized may be asserted by the people upon the ratification of the constitution
without need for any ancillary act of the Legislature. (Id. at, p. 165) What may be
provided for by the Legislature are reasonable conditions and limitations upon the
access to be afforded which must, of necessity, be consistent with the declared State
policy of full public disclosure of all transactions involving public interest (Constitution,
Art. 11, Sec. 28). However, it cannot be overemphasized that whatever limitation may
be prescribed by the Legislature, the right and the duty under Art. III Sec. 7 have
become operative and enforceable by virtue of the adoption of the New Charter.
Therefore, the right may be properly invoked in a mandamus proceeding such as this
one.
The Solicitor General interposes procedural objections to Our giving due course to
this Petition. He challenges the petitioner's standing to sue upon the ground that the
latter does not possess any clear legal right to be informed of the civil service
eligibilities of the government employees concerned. He calls attention to the alleged
failure of the petitioner to show his actual interest in securing this particular
information. He further argues that there is no ministerial duty on the part of the
Commission to furnish the petitioner with the information he seeks.
1. To be given due course, a Petition for mandamus must have been instituted by a
party aggrieved by the alleged inaction of any tribunal, corporation, board or person
which unlawfully excludes said party from the enjoyment of a legal right. (Ant;-
Chinese League of the Philippines vs. Felix, 77 Phil. 1012 [1947]). The petitioner in
every case must therefore be an "aggrieved party" in the sense that he possesses a
clear legal right to be enforced and a direct interest in the duty or act to be performed.
In the case before Us, the respondent takes issue on the personality of the petitioner
to bring this suit. It is asserted that, the instant Petition is bereft of any allegation of
Legaspi's actual interest in the civil service eligibilities of Julian Sibonghanoy and
Mariano Agas, At most there is a vague reference to an unnamed client in whose
behalf he had allegedly acted when he made inquiries on the subject (Petition, Rollo,
p. 3).
But what is clear upon the face of the Petition is that the petitioner has firmly
anchored his case upon the right of the people to information on matters of public
concern, which, by its very nature, is a public right. It has been held that:
* * * when the question is one of public right and the object of the mandamus is to
procure the enforcement of a public duty, the people are regarded as the real party in
interest and the relator at whose instigation the proceedings are instituted need not
show that he has any legal or special interest in the result, it being sufficient to show
that he is a citizen and as such interested in the execution of the laws * * * (Tanada
et. al. vs. Tuvera, et. al., G.R. No. L- 63915, April 24, 1985, 136 SCRA 27, 36).
From the foregoing, it becomes apparent that when a mandamus proceeding involves
the assertion of a public right, the requirement of personal interest is satisfied by the
mere fact that the petitioner is a citizen, and therefore, part of the general "public"
which possesses the right.
The Court had opportunity to define the word "public" in the Subido case, supra, when
it held that even those who have no direct or tangible interest in any real estate
transaction are part of the "public" to whom "(a)ll records relating to registered lands
in the Office of the Register of Deeds shall be open * * *" (Sec. 56, Act No. 496, as
amended). In the words of the Court:
* * * "Public" is a comprehensive, all-inclusive term. Properly construed, it embraces
every person. To say that only those who have a present and existing interest of a
pecuniary character in the particular information sought are given the right of
inspection is to make an unwarranted distinction. *** (Subido vs. Ozaeta, supra at p.
387).
The petitioner, being a citizen who, as such is clothed with personality to seek redress
for the alleged obstruction of the exercise of the public right. We find no cogent
reason to deny his standing to bring the present suit.
2. For every right of the people recognized as fundamental, there lies a corresponding
duty on the part of those who govern, to respect and protect that right. That is the
very essence of the Bill of Rights in a constitutional regime. Only governments
operating under fundamental rules defining the limits of their power so as to shield
individual rights against its arbitrary exercise can properly claim to be constitutional
(Cooley, supra, at p. 5). Without a government's acceptance of the limitations
imposed upon it by the Constitution in order to uphold individual liberties, without an
acknowledgment on its part of those duties exacted by the rights pertaining to the
citizens, the Bill of Rights becomes a sophistry, and liberty, the ultimate illusion.
In recognizing the people's right to be informed, both the 1973 Constitution and the
New Charter expressly mandate the duty of the State and its agents to afford access
to official records, documents, papers and in addition, government research data
used as basis for policy development, subject to such limitations as may be provided
by law. The guarantee has been further enhanced in the New Constitution with the
adoption of a policy of full public disclosure, this time "subject to reasonable
conditions prescribed by law," in Article 11, Section 28 thereof, to wit:
Subject to reasonable conditions prescribed by law, the State adopts and implements
a policy of full public disclosure of all its transactions involving public interest. (Art. 11,
Sec. 28).
In the Tanada case, supra, the constitutional guarantee was bolstered by what this
Court declared as an imperative duty of the government officials concerned to publish
all important legislative acts and resolutions of a public nature as well as all executive
orders and proclamations of general applicability. We granted mandamus in said
case, and in the process, We found occasion to expound briefly on the nature of said
duty:
* * * That duty must be enforced if the Constitutional right of the people to be informed
on matters of public concern is to be given substance and reality. The law itself
makes a list of what should be published in the Official Gazette. Such listing, to our
mind, leaves respondents with no discretion whatsoever as to what must be in
included or excluded from such publication. (Tanada v. Tuvera, supra, at 39).
(Emphasis supplied).
The absence of discretion on the part of government agencia es in allowing the
examination of public records, specifically, the records in the Office of the Register of
Deeds, is emphasized in Subido vs. Ozaeta, supra:
Except, perhaps when it is clear that the purpose of the examination is unlawful, or
sheer, idle curiosity, we do not believe it is the duty under the law of registration
officers to concern themselves with the motives, reasons, and objects of the person
seeking access to the records. It is not their prerogative to see that the information
which the records contain is not flaunted before public gaze, or that scandal is not
made of it. If it be wrong to publish the contents of the records, it is the legislature and
not the officials having custody thereof which is called upon to devise a remedy. ***
(Subido v. Ozaeta, supra at 388). (Emphasis supplied).
It is clear from the foregoing pronouncements of this Court that government agencies
are without discretion in refusing disclosure of, or access to, information of public
concern. This is not to lose sight of the reasonable regulations which may be imposed
by said agencies in custody of public records on the manner in which the right to
information may be exercised by the public. In the Subido case, We recognized the
authority of the Register of Deeds to regulate the manner in which persons desiring to
do so, may inspect, examine or copy records relating to registered lands. However,
the regulations which the Register of Deeds may promulgate are confined to:
* * * prescribing the manner and hours of examination to the end that damage to or
loss of, the records may be avoided, that undue interference with the duties of the
custodian of the books and documents and other employees may be prevented, that
the right of other persons entitled to make inspection may be insured * * * (Subido vs.
Ozaeta, 80 Phil. 383, 387)
Applying the Subido ruling by analogy, We recognized a similar authority in a
municipal judge, to regulate the manner of inspection by the public of criminal docket
records in the case of Baldoza vs. Dimaano (Adm. Matter No. 1120-MJ, May 5, 1976,
71 SCRA 14). Said administrative case was filed against the respondent judge for his
alleged refusal to allow examination of the criminal docket records in his sala. Upon a
finding by the Investigating Judge that the respondent had allowed the complainant to
open and view the subject records, We absolved the respondent. In effect, We have
also held that the rules and conditions imposed by him upon the manner of examining
the public records were reasonable.
In both the Subido and the Baldoza cases, We were emphatic in Our statement that
the authority to regulate the manner of examining public records does not carry with it
the power to prohibit. A distinction has to be made between the discretion to refuse
outright the disclosure of or access to a particular information and the authority to
regulate the manner in which the access is to be afforded. The first is a limitation
upon the availability of access to the information sought, which only the Legislature
may impose (Art. III, Sec. 6, 1987 Constitution). The second pertains to the
government agency charged with the custody of public records. Its authority to
regulate access is to be exercised solely to the end that damage to, or loss of, public
records may be avoided, undue interference with the duties of said agencies may be
prevented, and more importantly, that the exercise of the same constitutional right by
other persons shall be assured (Subido vs. Ozaetal supra).
Thus, while the manner of examining public records may be subject to reasonable
regulation by the government agency in custody thereof, the duty to disclose the
information of public concern, and to afford access to public records cannot be
discretionary on the part of said agencies. Certainly, its performance cannot be made
contingent upon the discretion of such agencies. Otherwise, the enjoyment of the
constitutional right may be rendered nugatory by any whimsical exercise of agency
discretion. The constitutional duty, not being discretionary, its performance may be
compelled by a writ of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the public
right to be enforced and the concomitant duty of the State are unequivocably set forth
in the Constitution. The decisive question on the propriety of the issuance of the writ
of mandamus in this case is, whether the information sought by the petitioner is within
the ambit of the constitutional guarantee.
3. The incorporation in the Constitution of a guarantee of access to information of
public concern is a recognition of the essentiality of the free flow of ideas and
information in a democracy (Baldoza v. Dimaano, Adm. Matter No. 1120-MJ, May 5,
1976, 17 SCRA 14). In the same way that free discussion enables members of
society to cope with the exigencies of their time (Thornhill vs. Alabama, 310 U.S.
88,102 [1939]), access to information of general interest aids the people in
democratic decision-making (87 Harvard Law Review 1505 [1974]) by giving them a
better perspective of the vital issues confronting the nation.
But the constitutional guarantee to information on matters of public concern is not
absolute. It does not open every door to any and all information. Under the
Constitution, access to official records, papers, etc., are "subject to limitations as may
be provided by law" (Art. III, Sec. 7, second sentence). The law may therefore exempt
certain types of information from public scrutiny, such as those affecting national
security (Journal No. 90, September 23, 1986, p. 10; and Journal No. 91, September
24, 1986, p. 32, 1986 Constitutional Commission). It follows that, in every case, the
availability of access to a particular public record must be circumscribed by the nature
of the information sought, i.e., (a) being of public concern or one that involves public
interest, and, (b) not being exempted by law from the operation of the constitutional
guarantee. The threshold question is, therefore, whether or not the information sought
is of public interest or public concern.
a. This question is first addressed to the government agency having custody of the
desired information. However, as already discussed, this does not give the agency
concerned any discretion to grant or deny access. In case of denial of access, the
government agency has the burden of showing that the information requested is not
of public concern, or, if it is of public concern, that the same has been exempted by
law from the operation of the guarantee. To hold otherwise will serve to dilute the
constitutional right. As aptly observed, ". . . the government is in an advantageous
position to marshall and interpret arguments against release . . ." (87 Harvard Law
Review 1511 [1974]). To safeguard the constitutional right, every denial of access by
the government agency concerned is subject to review by the courts, and in the
proper case, access may be compelled by a writ of Mandamus.
In determining whether or not a particular information is of public concern there is no
rigid test which can be applied. "Public concern" like "public interest" is a term that
eludes exact definition. Both terms embrace a broad spectrum of subjects which the
public may want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citizen. In the final
analysis, it is for the courts to determine in a case by case basis whether the matter at
issue is of interest or importance, as it relates to or affects the public.
The public concern invoked in the case of Tanada v. Tuvera, supra, was the need for
adequate notice to the public of the various laws which are to regulate the actions and
conduct of citizens. In Subido vs. Ozaeta, supra, the public concern deemed covered
by the statutory right was the knowledge of those real estate transactions which some
believed to have been registered in violation of the Constitution.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz,
Paras, Gancayco, Padilla, Bidin and Sarmiento, JJ., concur.
Feliciano, J., is on leave.

The information sought by the petitioner in this case is the truth of the claim of certain
government employees that they are civil service eligibles for the positions to which
they were appointed. The Constitution expressly declares as a State policy that:

Appointments in the civil service shall be made only according to merit and fitness to
be determined, as far as practicable, and except as to positions which are policy
determining, primarily confidential or highly technical, by competitive examination.
(Art. IX, B, Sec. 2.[2]).

Public office being a public trust, [Const. Art. XI, Sec. 1] it is the legitimate concern of
citizens to ensure that government positions requiring civil service eligibility are
occupied only by persons who are eligibles. Public officers are at all times
accountable to the people even as to their eligibilities for their respective positions.

b. But then, it is not enough that the information sought is of public interest. For
mandamus to lie in a given case, the information must not be among the species
exempted by law from the operation of the constitutional guarantee.

In the instant, case while refusing to confirm or deny the claims of eligibility, the
respondent has failed to cite any provision in the Civil Service Law which would limit
the petitioner's right to know who are, and who are not, civil service eligibles. We take
judicial notice of the fact that the names of those who pass the civil service
examinations, as in bar examinations and licensure examinations for various
professions, are released to the public. Hence, there is nothing secret about one's
civil service eligibility, if actually possessed. Petitioner's request is, therefore, neither
unusual nor unreasonable. And when, as in this case, the government employees
concerned claim to be civil service eligibles, the public, through any citizen, has a
right to verify their professed eligibilities from the Civil Service Commission.

The civil service eligibility of a sanitarian being of public concern, and in the absence
of express limitations under the law upon access to the register of civil service
eligibles for said position, the duty of the respondent Commission to confirm or deny
the civil service eligibility of any person occupying the position becomes imperative.
Mandamus, therefore lies.

WHEREFORE, the Civil Service Commission is ordered to open its register of

eligibles for the position of sanitarian, and to confirm or deny, the civil service
eligibility of Julian Sibonghanoy and Mariano Agas, for said position in the Health
Department of Cebu City, as requested by the petitioner Valentin L. Legaspi.
Republic of the Philippines Sir:
SUPREME COURT
Manila As a lawyer, member of the media and plain citizen of our Republic, I am requesting
that I be furnished with the list of names of the opposition members of (the) Batasang
EN BANC Pambansa who were able to secure a clean loan of P2 million each on guarranty (sic)
of Mrs. Imelda Marcos. We understand that OIC Mel Lopez of Manila was one of
G.R. No. 74930 February 13, 1989 those aforesaid MPs. Likewise, may we be furnished with the certified true copies of
the documents evidencing their loan. Expenses in connection herewith shall be borne
RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO, by us.
ROLANDO BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO
BAGATSING, JUN "NINOY" ALBA, PERCY LAPID, ROMMEL CORRO and If we could not secure the above documents could we have access to them?
ROLANDO FADUL, petitioners,
vs. We are premising the above request on the following provision of the Freedom
FELICIANO BELMONTE, JR., respondent. Constitution of the present regime.

Ricardo C. Valmonte for and in his own behalf and his co-petitioners. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
The Solicitor General for respondent. official acts, transactions or decisions, shall be afforded the citizen subject to such
limitation as may be provided by law. (Art. IV, Sec. 6).

We trust that within five (5) days from receipt hereof we will receive your favorable
CORTES, J.: response on the matter.

Petitioners in this special civil action for mandamus with preliminary injunction invoke Very truly yours,
their right to information and pray that respondent be directed:
(Sgd.) RICARDO C. VALMONTE

[Rollo, p. 7.]
(a) to furnish petitioners the list of the names of the Batasang Pambansa members
belonging to the UNIDO and PDP-Laban who were able to secure clean loans To the aforesaid letter, the Deputy General Counsel of the GSIS replied:
immediately before the February 7 election thru the intercession/marginal note of the
then First Lady Imelda Marcos; and/or June 17, 1986

(b) to furnish petitioners with certified true copies of the documents evidencing their Atty. Ricardo C. Valmonte
respective loans; and/or 108 E. Benin Street
Caloocan City
(c) to allow petitioners access to the public records for the subject information.
(Petition, pp. 4-5; paragraphing supplied.] Dear Compaero:

The controversy arose when petitioner Valmonte wrote respondent Belmonte the Possibly because he must have thought that it contained serious legal implications,
following letter: President & General Manager Feliciano Belmonte, Jr. referred to me for study and
reply your letter to him of June 4, 1986 requesting a list of the opposition members of
June 4, 1986 Batasang Pambansa who were able to secure a clean loan of P2 million each on
guaranty of Mrs. Imelda Marcos.
Hon. Feliciano Belmonte
GSIS General Manager My opinion in this regard is that a confidential relationship exists between the GSIS
Arroceros, Manila and all those who borrow from it, whoever they may be; that the GSIS has a duty to
its customers to preserve this confidentiality; and that it would not be proper for the
GSIS to breach this confidentiality unless so ordered by the courts.
As a violation of this confidentiality may mar the image of the GSIS as a reputable
financial institution, I regret very much that at this time we cannot respond positively
to your request.
Very truly yours,
(Sgd.) MEYNARDO A. TIRO
Deputy General Counsel
[Rollo, p. 40.]
On June 20, 1986, apparently not having yet received the reply of the Government
Service and Insurance System (GSIS) Deputy General Counsel, petitioner Valmonte
wrote respondent another letter, saying that for failure to receive a reply, "(W)e are
now considering ourselves free to do whatever action necessary within the premises
to pursue our desired objective in pursuance of public interest." [Rollo, p. 8.]
On June 26, 1986, Valmonte, joined by the other petitioners, filed the instant suit.
On July 19, 1986, the Daily Express carried a news item reporting that 137 former
members of the defunct interim and regular Batasang Pambansa, including ten (10)
opposition members, were granted housing loans by the GSIS [Rollo, p. 41.]
Separate comments were filed by respondent Belmonte and the Solicitor General.
After petitioners filed a consolidated reply, the petition was given due course and the
parties were required to file their memoranda. The parties having complied, the case
was deemed submitted for decision.
In his comment respondent raises procedural objections to the issuance of a writ of
mandamus, among which is that petitioners have failed to exhaust administrative
remedies.
Respondent claims that actions of the GSIS General Manager are reviewable by the
Board of Trustees of the GSIS. Petitioners, however, did not seek relief from the
GSIS Board of Trustees. It is therefore asserted that since administrative remedies
were not exhausted, then petitioners have no cause of action.
To this objection, petitioners claim that they have raised a purely legal
issue, viz., whether or not they are entitled to the documents sought, by virtue of their
constitutional right to information. Hence, it is argued that this case falls under one of
the exceptions to the principle of exhaustion of administrative remedies.
Among the settled principles in administrative law is that before a party can be
allowed to resort to the courts, he is expected to have exhausted all means of
administrative redress available under the law. The courts for reasons of law, comity
and convenience will not entertain a case unless the available administrative
remedies have been resorted to and the appropriate authorities have been given
opportunity to act and correct the errors committed in the administrative forum.
However, the principle of exhaustion of administrative remedies is subject to settled
exceptions, among which is when only a question of law is involved [Pascual v.
Provincial Board, 106 Phil. 466 (1959); Aguilar v. Valencia, et al., G.R. No. L-30396,
July 30, 1971, 40 SCRA 210; Malabanan v. Ramento, G.R. No. L-2270, May 21,
1984, 129 SCRA 359.] The issue raised by petitioners, which requires the
interpretation of the scope of the constitutional right to information, is one which can
be passed upon by the regular courts more competently than the GSIS or its Board of
Trustees, involving as it does a purely legal question. Thus, the exception of this case
from the application of the general rule on exhaustion of administrative remedies is
warranted. Having disposed of this procedural issue, We now address ourselves to
the issue of whether or not mandamus hes to compel respondent to perform the acts
sought by petitioners to be done, in pursuance of their right to information.
We shall deal first with the second and third alternative acts sought to be done, both
of which involve the issue of whether or not petitioners are entitled to access to the
documents evidencing loans granted by the GSIS.
This is not the first time that the Court is confronted with a controversy directly
involving the constitutional right to information. In Taada v. Tuvera, G.R. No. 63915,
April 24,1985, 136 SCRA 27 and in the recent case of Legaspi v. Civil Service
Commission, G.R. No. 72119, May 29, 1987,150 SCRA 530, the Court upheld the
people's constitutional right to be informed of matters of public interest and ordered
the government agencies concerned to act as prayed for by the petitioners.
The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 which states:
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.
The right of access to information was also recognized in the 1973 Constitution, Art.
IV Sec. 6 of which provided:
The right of the people to information on 'matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be afforded the citizen subject to such
limitations as may be provided by law.
An informed citizenry with access to the diverse currents in political, moral and artistic
thought and data relative to them, and the free exchange of ideas and discussion of
issues thereon, is vital to the democratic government envisioned under our
Constitution. The cornerstone of this republican system of government is delegation
of power by the people to the State. In this system, governmental agencies and
institutions operate within the limits of the authority conferred by the people. Denied
access to information on the inner workings of government, the citizenry can become
prey to the whims and caprices of those to whom the power had been delegated. The
postulate of public office as a public trust, institutionalized in the Constitution (in Art.
XI, Sec. 1) to protect the people from abuse of governmental power, would certainly
be were empty words if access to such information of public concern is denied,
except under limitations prescribed by implementing legislation adopted pursuant to
the Constitution.
Petitioners are practitioners in media. As such, they have both the right to gather and
the obligation to check the accuracy of information the disseminate. For them, the
freedom of the press and of speech is not only critical, but vital to the exercise of their
professions. The right of access to information ensures that these freedoms are not
rendered nugatory by the government's monopolizing pertinent information. For an
essential element of these freedoms is to keep open a continuing dialogue or process
of communication between the government and the people. It is in the interest of the
State that the channels for free political discussion be maintained to the end that the
government may perceive and be responsive to the people's will. Yet, this open
dialogue can be effective only to the extent that the citizenry is informed and thus able
to formulate its will intelligently. Only when the participants in the discussion are
aware of the issues and have access to information relating thereto can such bear
fruit.
The right to information is an essential premise of a meaningful right to speech and
expression. But this is not to say that the right to information is merely an adjunct of
and therefore restricted in application by the exercise of the freedoms of speech and
of the press. Far from it. The right to information goes hand-in-hand with the
constitutional policies of full public disclosure * and honesty in the public service. ** It
is meant to enhance the widening role of the citizenry in governmental decision-
making as well as in checking abuse in government.
Yet, like all the constitutional guarantees, the right to information is not absolute. As
stated in Legaspi, the people's right to information is limited to "matters of public
concern," and is further "subject to such limitations as may be provided by law."
Similarly, the State's policy of full disclosure is limited to "transactions involving public
interest," and is "subject to reasonable conditions prescribed by law."
Hence, before mandamus may issue, it must be clear that the information sought is of
"public interest" or "public concern," and is not exempted by law from the operation of
the constitutional guarantee [Legazpi v. Civil Service Commission, supra, at p. 542.]
The Court has always grappled with the meanings of the terms "public interest" and
"public concern". As observed in Legazpi:
In determining whether or not a particular information is of public concern there is no
rigid test which can be applied. "Public concern" like "public interest" is a term that
eludes exact definition. Both terms embrace a broad spectrum of subjects which the
public may want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citezen. In the final
analysis, it is for the courts to determine on a case by case basis whether the matter
at issue is of interest or importance, as it relates to or affects the public. [Ibid. at p.
541]
In the Taada case the public concern deemed covered by the constitutional right to
information was the need for adequate notice to the public of the various laws which
are to regulate the actions and conduct of citezens. In Legaspi, it was the "legitimate
concern of citezensof ensure that government positions requiring civil service
eligibility are occupied only by persons who are eligibles" [Supra at p. 539.]
The information sought by petitioners in this case is the truth of reports that certain
Members of the Batasang Pambansa belonging to the opposition were able to secure
"clean" loans from the GSIS immediately before the February 7, 1986 election
through the intercession of th eformer First Lady, Mrs. Imelda Marcos.
The GSIS is a trustee of contributions from the government and its employees and
the administrator of various insurance programs for the benefit of the latter.
Undeniably, its funds assume a public character. More particularly, Secs. 5(b) and 46
of P.D. 1146, as amended (the Revised Government Service Insurance Act of 1977),
provide for annual appropriations to pay the contributions, premiums, interest and
other amounts payable to GSIS by the government, as employer, as well as the
obligations which the Republic of the Philippines assumes or guarantees to pay.
Considering the nature of its funds, the GSIS is expected to manage its resources
with utmost prudence and in strict compliance with the pertinent laws or rules and
regulations. Thus, one of the reasons that prompted the revision of the old GSIS law
(C.A. No. 186, as amended) was the necessity "to preserve at all times the actuarial
solvency of the funds administered by the System" [Second Whereas Clause, P.D.
No. 1146.] Consequently, as respondent himself admits, the GSIS "is not supposed to
grant 'clean loans.'" [Comment, p. 8.] It is therefore the legitimate concern of the
public to ensure that these funds are managed properly with the end in view of
maximizing the benefits that accrue to the insured government employees. Moreover,
the supposed borrowers were Members of the defunct Batasang Pambansa who
themselves appropriated funds for the GSIS and were therefore expected to be the
first to see to it that the GSIS performed its tasks with the greatest degree of fidelity
and that an its transactions were above board.
In sum, the public nature of the loanable funds of the GSIS and the public office held
by the alleged borrowers make the information sought clearly a matter of public
interest and concern.
A second requisite must be met before the right to information may be enforced
through mandamus proceedings, viz., that the information sought must not be among
those excluded by law.
Respondent maintains that a confidential relationship exists between the GSIS and its
borrowers. It is argued that a policy of confidentiality restricts the indiscriminate
dissemination of information.
Yet, respondent has failed to cite any law granting the GSIS the privilege of
confidentiality as regards the documents subject of this petition. His position is
apparently based merely on considerations of policy. The judiciary does not settle
policy issues. The Court can only declare what the law is, and not what the law
should be. Under our system of government, policy issues are within the domain of
the political branches of the government, and of the people themselves as the
repository of all State power.
Respondent however contends that in view of the right to privacy which is equally
protected by the Constitution and by existing laws, the documents evidencing loan
transactions of the GSIS must be deemed outside the ambit of the right to
information.
There can be no doubt that right to privacy is constitutionally protected. In the
landmark case of Morfe v. Mutuc [130 Phil. 415 (1968), 22 SCRA 424], this Court,
speaking through then Mr. Justice Fernando, stated:
... The right to privacy as such is accorded recognition independently of its
identification with liberty; in itself, it is fully deserving of constitutional protection. The
language of Prof. Emerson is particularly apt: "The concept of limited government has
always included the idea that governmental powers stop short of certain intrusions
into the personal life of the citizen. This is indeed one of the basic distinctions
between absolute and limited government. UItimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of the absolute. state, In contrast, a
system of limited government safeguards a private sector, which belongs to the
individual, firmly distinguishing it from the public sector, which the state can control.
Protection of this private sector protection, in other words, of the dignity and
integrity of the individual has become increasingly important as modem society has
developed. All the forces of technological age industrialization, urbanization, and
organization operate to narrow the area of privacy and facilitate intrusion into it. In
modern terms, the capacity to maintain and support this enclave of private life marks
the difference between a democratic and a totalitarian society." [at pp. 444-445.]
When the information requested from the government intrudes into the privacy of a
citizen, a potential conflict between the rights to information and to privacy may arise.
However, the competing interests of these rights need not be resolved in this case.
Apparent from the above-quoted statement of the Court in Morfe is that the right to
privacy belongs to the individual in his private capacity, and not to public and
governmental agencies like the GSIS. Moreover, the right cannot be invoked by
juridical entities like the GSIS. As held in the case of Vassar College v. Loose Wills
Biscuit Co. [197 F. 982 (1912)], a corporation has no right of privacy in its name since
the entire basis of the right to privacy is an injury to the feelings and sensibilities of
the party and a corporation would have no such ground for relief.
Neither can the GSIS through its General Manager, the respondent, invoke the right
to privacy of its borrowers. The right is purely personal in nature [Cf. Atkinson v. John
Doherty & Co., 121 Mich 372, 80 N.W. 285, 46 L.RA. 219 (1899); Schuyler v. Curtis,
147 N.Y. 434, 42 N.E. 22, 31 L.R.A. 286 (1895)), and hence may be invoked only by
the person whose privacy is claimed to be violated.
It may be observed, however, that in the instant case, the concerned borrowers
themselves may not succeed if they choose to invoke their right to privacy,
considering the public offices they were holding at the time the loans were alleged to
have been granted. It cannot be denied that because of the interest they generate
and their newsworthiness, public figures, most especially those holding responsible
positions in government, enjoy a more limited right to privacy as compared to ordinary
individuals, their actions being subject to closer public scrutiny [Cf.Ayer Productions
Pty. Ltd. v. Capulong, G.R. Nos. 82380 and 82398, April 29, 1988; See also Cohen v.
Marx, 211 P. 2d 321 (1949).]
Respondent next asserts that the documents evidencing the loan transactions of the
GSIS are private in nature and hence, are not covered by the Constitutional right to
information on matters of public concern which guarantees "(a)ccess
to official records, and to documents, and papers pertaining to official acts,
transactions, or decisions" only.
It is argued that the records of the GSIS, a government corporation performing
proprietary functions, are outside the coverage of the people's right of access
to official records.
It is further contended that since the loan function of the GSIS is merely incidental to
its insurance function, then its loan transactions are not covered by the constitutional
policy of full public disclosure and the right to information which is applicable only to
"official" transactions.
First of all, the "constituent ministrant" dichotomy characterizing government
function has long been repudiated. In ACCFA v. Confederation of Unions and
Government Corporations and Offices (G.R. Nos. L-21484 and L-23605, November
29, 1969, 30 SCRA 6441, the Court said that the government, whether carrying out its
sovereign attributes or running some business, discharges the same function of
service to the people.
Consequently, that the GSIS, in granting the loans, was exercising a proprietary
function would not justify the exclusion of the transactions from the coverage and
scope of the right to information.
Moreover, the intent of the members of the Constitutional Commission of 1986, to
include government-owned and controlled corporations and transactions entered into
by them within the coverage of the State policy of fun public disclosure is manifest
from the records of the proceedings:
xxx xxx xxx
THE PRESIDING OFFICER (Mr. Colayco).
Commissioner Suarez is recognized.
MR. SUAREZ. Thank you. May I ask the Gentleman a few question?
MR. OPLE. Very gladly.
MR. SUAREZ. Thank you.
When we declare a "policy of full public disclosure of all its transactions" referring
to the transactions of the State and when we say the "State" which I suppose
would include all of the various agencies, departments, ministries and
instrumentalities of the government....
MR. OPLE. Yes, and individual public officers, Mr. Presiding Officer.
MR. SUAREZ. Including government-owned and controlled corporations.
MR. OPLE. That is correct, Mr. Presiding Officer.
MR. SUAREZ. And when we say "transactions" which should be distinguished from
contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps
leading to the consummation of the contract, or does he refer to the contract itself?
MR. OPLE. The "transactions" used here I suppose is generic and, therefore, it can
cover both steps leading to a contract, and already a consummated contract, Mr.
Presiding Officer.
MR. SUAREZ. This contemplates inclusion of negotiations leading to the
consummation of the transaction.
MR. OPLE. Yes, subject only to reasonable safeguards on the national interest.
MR. SUAREZ. Thank you. [V Record of the Constitutional Commission 24-25.]
(Emphasis supplied.)
Considering the intent of the framers of the Constitution which, though not binding
upon the Court, are nevertheless persuasive, and considering further that
government-owned and controlled corporations, whether performing proprietary or
governmental functions are accountable to the people, the Court is convinced that
transactions entered into by the GSIS, a government-controlled corporation created
by special legislation are within the ambit of the people's right to be informed pursuant
to the constitutional policy of transparency in government dealings.
In fine, petitioners are entitled to access to the documents evidencing loans granted
by the GSIS, subject to reasonable regulations that the latter may promulgate relating
to the manner and hours of examination, to the end that damage to or loss of the
records may be avoided, that undue interference with the duties of the custodian of
the records may be prevented and that the right of other persons entitled to inspect
the records may be insured [Legaspi v. Civil Service Commission, supra at p. 538,
quoting Subido v. Ozaeta, 80 Phil. 383, 387.] The petition, as to the second and third
alternative acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners,
i.e., "to furnish petitioners the list of the names of the Batasang Pambansa members
belonging to the UNIDO and PDP-Laban who were able to secure clean loans
immediately before the February 7 election thru the intercession/marginal note of the
then First Lady Imelda Marcos."
Although citizens are afforded the right to information and, pursuant thereto, are
entitled to "access to official records," the Constitution does not accord them a right to
compel custodians of official records to prepare lists, abstracts, summaries and the
like in their desire to acquire information on matters of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that the
applicant has a well-defined, clear and certain legal right to the thing demanded and
that it is the imperative duty of defendant to perform the act required. The
corresponding duty of the respondent to perform the required act must be clear and
specific [Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126 SCRA 203;
Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.] The request
of the petitioners fails to meet this standard, there being no duty on the part of
respondent to prepare the list requested.
WHEREFORE, the instant petition is hereby granted and respondent General
Manager of the Government Service Insurance System is ORDERED to allow
petitioners access to documents and records evidencing loans granted to Members of
the former Batasang Pambansa, as petitioners may specify, subject to reasonable
regulations as to the time and manner of inspection, not incompatible with this
decision, as the GSIS may deem necessary.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 92024 November 9, 1990
CONGRESSMAN ENRIQUE T. GARCIA (Second District of Bataan), petitioner,
vs.
THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND
INDUSTRY, LUZON PETROCHEMICAL CORPORATION, and PILIPINAS SHELL
CORPORATION, respondents.
Abraham C. La Vina for petitioner.
Sycip, Salazar, Hernandez & Gatmaitan for Luzon Petrochemical Corporation.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for Pilipinas Shell
Petroleum Corporation.
GUTIERREZ, JR., J.:
This is a petition to annul and set aside the decision of the Board of Investments
(BOI)/Department of Trade and Industry (DTI) approving the transfer of the site of the
proposed petrochemical plant from Bataan to Batangas and the shift of feedstock for
that plant from naphtha only to naphtha and/or liquefied petroleum gas (LPG).
This petition is a sequel to the petition in G.R. No. 88637 entitled "Congressman
Enrique T. Garcia v. the Board of Investments", September 7, 1989, where this Court
issued a decision, ordering the BOI as follows:
WHEREFORE, the petition for certiorari is granted. The Board of Investments is
ordered: (1) to publish the amended application for registration of the Bataan
Petrochemical Corporation, (2) to allow the petitioner to have access to its records on
the original and amended applications for registration, as a petrochemical
manufacturer, of the respondent Bataan Petrochemical Corporation, excluding,
however, privileged papers containing its trade secrets and other business and
financial information, and (3) to set for hearing the petitioner's opposition to the
amended application in order that he may present at such hearing all the evidence in
his possession in support of his opposition to the transfer of the site of the BPC
petrochemical plant to Batangas province. The hearing shall not exceed a period of
ten (10) days from the date fixed by the BOI, notice of which should be served by
personal service to the petitioner through counsel, at least three (3) days in advance.
The hearings may be held from day to day for a period of ten (10) days without
postponements. The petition for a writ of prohibition or preliminary injunction is
denied. No costs. (Rollo, pages 450-451)
However, acting on the petitioner's motion for partial reconsideration asking that we
rule on the import of P.D. Nos. 949 and 1803 and on the foreign investor's claim of
right of final choice of plant site, in the light of the provisions of the Constitution and
the Omnibus Investments Code of 1987, this Court on October 24, 1989, made the
observation that P.D. Nos. 949 and 1803 "do not provide that the Limay site should
be the only petrochemical zone in the country, nor prohibit the establishment of a
petrochemical plant elsewhere in the country, that the establishment of a
petrochemical plant in Batangas does not violate P.D. No. 949 and P.D. No. 1803.
Our resolution skirted the issue of whether the investor given the initial inducements
and other circumstances surrounding its first choice of plant site may change it simply
because it has the final choice on the matter. The Court merely ruled that the
petitioner appears to have lost interest in the case by his failure to appear at the
hearing that was set by the BOI after receipt of the decision, so he may be deemed to
have waived the fruit of the judgment. On this ground, the motion for partial
reconsideration was denied.
A motion for reconsideration of said resolution was filed by the petitioner asking that
we resolve the basic issue of whether or not the foreign investor has the right of final
choice of plant site; that the non-attendance of the petitioner at the hearing was
because the decision was not yet final and executory; and that the petitioner had not
therefor waived the right to a hearing before the BOI.
In the Court's resolution dated January 17, 1990, we stated:
Does the investor have a "right of final choice" of plant site? Neither under the 1987
Constitution nor in the Omnibus Investments Code is there such a 'right
of final choice.' In the first place, the investor's choice is subject to processing and
approval or disapproval by the BOI (Art. 7, Chapter II, Omnibus Investments Code).
By submitting its application and amended application to the BOI for approval, the
investor recognizes the sovereign prerogative of our Government, through the BOI, to
approve or disapprove the same after determining whether its proposed project will
be feasible, desirable and beneficial to our country. By asking that his opposition to
the LPC's amended application be heard by the BOI, the petitioner likewise
acknowledges that the BOI, not the investor, has the last word or the "final choice" on
the matter.
Secondly, as this case has shown, even a choice that had been approved by the BOI
may not be 'final', for supervening circumstances and changes in the conditions of a
place may dictate a corresponding change in the choice of plant site in order that the
project will not fail. After all, our country will benefit only when a project succeeds, not
when it fails. (Rollo, pp. 538-539)
Nevertheless, the motion for reconsideration of the petitioner was denied.
A minority composed of Justices Melencio-Herrera, Gancayco, Sarmiento and
this ponente voted to grant the motion for reconsideration stating that the hearing set
by the BOI was premature as the decision of the Court was not yet final and
executory; that as contended by the petitioner the Court must first rule on whether or
not the investor has the right of final choice of plant site for if the ruling is in the
affirmative, the hearing would be a useless exercise; that in the October 19, 1989
resolution, the Court while upholding validity of the transfer of the plant site did not
rule on the issue of who has the final choice; that they agree with the observation of
the majority that "the investor has no final choice either under the 1987 Constitution or
in the Omnibus Investments Code and that it is the BOI who decides for the
government" and that the plea of the petitioner should be granted to give him the
chance to show the justness of his claim and to enable the BOI to give a second hard
look at the matter.
Thus, the herein petition which relies on the ruling of the Court in the resolution of
January 17, 1990 in G.R. No. 88637 that the investor has no right of final choice
under the 1987 Constitution and the Omnibus Investments Code.
Under P.D. No. 1803 dated January 16, 1981, 576 hectares of the public domain
located in Lamao, Limay, Bataan were reserved for the Petrochemical Industrial Zone
under the administration, management, and ownership of the Philippine National Oil
Company (PNOC).
The Bataan Refining Corporation (BRC) is a wholly government owned corporation,
located at Bataan. It produces 60% of the national output of naphtha.
Taiwanese investors in a petrochemical project formed the Bataan Petrochemical
Corporation (BPC) and applied with BOI for registration as a new domestic producer
of petrochemicals. Its application specified Bataan as the plant site. One of the terms
and conditions for registration of the project was the use of "naphtha cracker" and
"naphtha" as feedstock or fuel for its petrochemical plant. The petrochemical plant
was to be a joint venture with PNOC. BPC was issued a certificate of registration on
February 24, 1988 by BOI.
BPC was given pioneer status and accorded fiscal and other incentives by BOI, like:
(1) exemption from taxes on raw materials, (2) repatriation of the entire proceeds of
liquidation investments in currency originally made and at the exchange rate obtaining
at the time of repatriation; and (3) remittance of earnings on investments. As
additional incentive, the House of Representatives approved a bill introduced by the
petitioner eliminating the 48% ad valoremtax on naphtha if and when it is used as raw
materials in the petrochemical plant. (G.R. No. 88637, September 7, 1989, pp. 2-3.
Rollo, pp. 441-442)
However, in February, 1989, A.T. Chong, chairman of USI Far East Corporation, the
major investor in BPC, personally delivered to Trade Secretary Jose Concepcion a
letter dated January 25, 1989 advising him of BPC's desire to amend the original
registration certification of its project by changing the job site from Limay, Bataan, to
Batangas. The reason adduced for the transfer was the insurgency and unstable
labor situation, and the presence in Batangas of a huge liquefied petroleum gas
(LPG) depot owned by the Philippine Shell Corporation.
The petitioner vigorously opposed the proposal and no less than President Aquino
expressed her preference that the plant be established in Bataan in a conference with
the Taiwanese investors, the Secretary of National Defense and The Chief of Staff of
the Armed Forces.
Despite speeches in the Senate and House opposing the Transfer of the project to
Batangas, BPC filed on April 11, 1989 its request for approval of the amendments. Its
application is as follows: "(l) increasing the investment amount from US $220 million
to US $320 million; (2) increasing the production capacity of its naphtha cracker,
polythylene plant and polypropylene plant; (3) changing the feedstock from naphtha
only to "naphtha and/or liquefied petroleum gas;" and (4) transferring the job site from
Limay, Bataan, to Batangas. (Annex B to Petition; Rollo, p. 25)
Notwithstanding opposition from any quarters and the request of the petitioner
addressed to Secretary Concepcion to be furnished a copy of the proposed
amendment with its attachments which was denied by the BOI on May 25, 1989, BOI
approved the revision of the registration of BPC's petrochemical project. (Petition,
Annex F; Rollo, p. 32; See pp. 4 to 6, Decision in G.R. No. 88637; supra.)
BOI Vice-Chairman Tomas I. Alcantara testifying before the Committee on Ways and
Means of the Senate asserted that:
The BOI has taken a public position preferring Bataan over Batangas as the site of
the petrochemical complex, as this would provide a better distribution of industries
around the Metro Manila area. ... In advocating the choice of Bataan as the project
site for the petrochemical complex, the BOI, however, made it clear, and I would like
to repeat this that the BOI made it clear in its view that the BOI or the government for
that matter could only recomend as to where the project should be located. The BOI
recognizes and respect the principle that the final chouce is still with the proponent
who would in the final analysis provide the funding or risk capital for the
project. (Petition, P. 13; Annex D to the petition)
This position has not been denied by BOI in its pleadings in G.R. No. 88637 and in
the present petition.
Section 1, Article VIII of the 1987 Constitution provides:
SECTION 1. The judicial power shall be vested in one Supreme Court and in such
lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government.
There is before us an actual controversy whether the petrochemical plant should
remain in Bataan or should be transferred to Batangas, and whether its feedstock
originally of naphtha only should be changed to naphtha and/or liquefied petroleum
gas as the approved amended application of the BPC, now Luzon Petrochemical
Corporation (LPC), shows. And in the light of the categorical admission of the BOI
that it is the investor who has the final choice of the site and the decision on the
feedstock, whether or not it constitutes a grave abuse of discretion for the BOI to yield
to the wishes of the investor, national interest notwithstanding.
We rule that the Court has a constitutional duty to step into this controversy and
determine the paramount issue. We grant the petition.
First, Bataan was the original choice as the plant site of the BOI to which the BPC
agreed. That is why it organized itself into a corporation bearing the name Bataan.
There is available 576 hectares of public land precisely reserved as the petrochemical
zone in Limay, Bataan under P.D. No. 1803. There is no need to buy expensive real
estate for the site unlike in the proposed transfer to Batangas. The site is the result of
careful study long before any covetous interests intruded into the choice. The site is
ideal. It is not unduly constricted and allows for expansion. The respondents have not
shown nor reiterated that the alleged peace and order situation in Bataan or unstable
labor situation warrant a transfer of the plant site to Batangas. Certainly, these were
taken into account when the firm named itself Bataan Petrochemical Corporation.
Moreover, the evidence proves the contrary.
Second, the BRC, a government owned Filipino corporation, located in Bataan
produces 60% of the national output of naphtha which can be used as feedstock for
the plant in Bataan. It can provide the feedstock requirement of the plant. On the
other hand, the country is short of LPG and there is need to import the same for use
of the plant in Batangas. The local production thereof by Shell can hardly supply the
needs of the consumers for cooking purposes. Scarce dollars will be diverted,
unnecessarily, from vitally essential projects in order to feed the furnaces of the
transferred petrochemical plant.
Third, naphtha as feedstock has been exempted by law from the ad valorem tax by
the approval of Republic Act No. 6767 by President Aquino but excluding LPG from
exemption from ad valorem tax. The law was enacted specifically for the
petrochemical industry. The policy determination by both Congress and the President
is clear. Neither BOI nor a foreign investor should disregard or contravene expressed
policy by shifting the feedstock from naphtha to LPG.
Fourth, under Section 10, Article XII of the 1987 Constitution, it is the duty of the State
to "regulate and exercise authority over foreign investments within its national
jurisdiction and in accordance with its national goals and priorities." The development
of a self-reliant and independent national economy effectively controlled by Filipinos
is mandated in Section 19, Article II of the Constitution.
In Article 2 of the Omnibus Investments Code of 1987 "the sound development of the
national economy in consonance with the principles and objectives of economic
nationalism" is the set goal of government.
Fifth, with the admitted fact that the investor is raising the greater portion of the capital
for the project from local sources by way of loan which led to the so-called "petroscam
scandal", the capital requirements would be greatly minimized if LPC does not have
to buy the land for the project and its feedstock shall be limited to naphtha which is
certainly more economical, more readily available than LPG, and does not have to be
imported.
Sixth, if the plant site is maintained in Bataan, the PNOC shall be a partner in the
venture to the great benefit and advantage of the government which shall have a
participation in the management of the project instead of a firm which is a huge
multinational corporation.
In the light of all the clear advantages manifest in the plant's remaining in Bataan,
practically nothing is shown to justify the transfer to Batangas except a near-absolute
discretion given by BOI to investors not only to freely choose the site but to transfer it
from their own first choice for reasons which remain murky to say the least.
And this brings us to a prime consideration which the Court cannot rightly ignore.
Section 1, Article XII of the Constitution provides that:
xxx xxx xxx
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
xxx xxx xxx
Every provision of the Constitution on the national economy and patrimony is infused
with the spirit of national interest. The non-alienation of natural resources, the State's
full control over the development and utilization of our scarce resources, agreements
with foreigners being based on real contributions to the economic growth and general
welfare of the country and the regulation of foreign investments in accordance with
national goals and priorities are too explicit not to be noticed and understood.
A petrochemical industry is not an ordinary investment opportunity. It should not be
treated like a garment or embroidery firm, a shoe-making venture, or even an
assembler of cars or manufacturer of computer chips, where the BOI reasoning may
be accorded fuller faith and credit. The petrochemical industry is essential to the
national interest. In other ASEAN countries like Indonesia and Malaysia, the
government superintends the industry by controlling the upstream or cracker facility.
In this particular BPC venture, not only has the Government given unprecedented
favors, among them:
foreign dictation. In this case, it is not even a foreign government but an ordinary
investor whom the BOI allows to dictate what we shall do with our heritage.
WHEREFORE, the petition is hereby granted. The decision of the respondent Board
of Investments approving the amendment of the certificate of registration of the Luzon
Petrochemical Corporation on May 23, 1989 under its Resolution No. 193, Series of
1989, (Annex F to the Petition) is SET ASIDE as NULL and VOID. The original
certificate of registration of BPC' (now LPC) of February 24, 1988 with Bataan as the
plant site and naphtha as the feedstock is, therefore, ordered maintained.
SO ORDERED.
Cruz, Gancayco, Padilla, Bidin, Sarmiento and Medialdea, JJ., concur.

(1) For an initial authorized capital of only P20 million, the Central Bank gave an Fernan, C.J., Paras, JJ., took no part.
eligible relending credit or relending facility worth US $50 million and a debt to swap
arrangement for US $30 million or a total accommodation of US $80 million which at Feliciano, J., is on leave.
current exchange rates is around P2080 million.

(2) A major part of the company's capitalization shall not come from foreign sources
but from loans, initially a Pl Billion syndicated loan, to be given by both government
banks and a consortium of Philippine private banks or in common parlance, a case of
'guiniguisa sa sariling manteca.'

(3) Tax exemptions and privileges were given as part of its 'preferred pioneer status.'

(4) Loan applications of other Philippine firms will be crowded out of the Asian
Development Bank portfolio because of the petrochemical firm's massive loan
request. (Taken from the proceedings before the Senate Blue Ribbon Committee).

but through its regulatory agency, the BOI, it surrenders even the power to make a
company abide by its initial choice, a choice free from any suspicion of unscrupulous
machinations and a choice which is undoubtedly in the best interests of the Filipino
people.

The Court, therefore, holds and finds that the BOI committed a grave abuse of
discretion in approving the transfer of the petrochemical plant from Bataan to
Batangas and authorizing the change of feedstock from naphtha only to naphtha
and/or LPG for the main reason that the final say is in the investor all other
circumstances to the contrary notwithstanding. No cogent advantage to the
government has been shown by this transfer. This is a repudiation of the independent
policy of the government expressed in numerous laws and the Constitution to run its
own affairs the way it deems best for the national interest.

One can but remember the words of a great Filipino leader who in part said he would
not mind having a government run like hell by Filipinos than one subservient to
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. 92541 November 13, 1991
MA. CARMEN G. AQUINO-SARMIENTO, petitioner,
vs.
MANUEL L. MORATO (in his capacity as Chairman of the MTRCB) and the
MOVIE & TELEVISION REVIEW AND CLASSIFICATION BOARD, respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner.
Francisco Ma. Chanco for respondents.
BIDIN, J.:
At issue in this petition is the citizen's right of access to official records as guaranteed
by the constitution.
In February 1989, petitioner, herself a member of respondent Movie and Television
Review and Classification Board (MTRCB), wrote its records officer requesting that
she be allowed to examine the board's records pertaining to the voting slips
accomplished by the individual board members after a review of the movies and
television productions. It is on the basis of said slips that films are either banned, cut
or classified accordingly.
Acting on the said request, the records officer informed petitioner that she has to
secure prior clearance from respondent Manuel Morato, as chairman of MTRCB, to
gain access to the records sought to be examined.
Petitioner's request was eventually denied by respondent Morato on the ground that
whenever the members of the board sit in judgment over a film, their decisions as
reflected in the individual voting slips partake the nature of conscience votes and as
such, are purely and completely private and personal. It is the submission of
respondents that the individual voting slips is the exclusive property of the member
concerned and anybody who wants access thereto must first secure his (the
member's) consent, otherwise, a request therefor may be legally denied.
Petitioner argues, on the other hand, that the records she wishes to examine are
public in character and other than providing for reasonable conditions regulating the
manner and hours of examination, respondents Morato and the classification board
have no authority to deny any citizen seeking examination of the board's records.
On February 27, 1989, respondent Morato called an executive meeting of the MTRCB
to discuss, among others, the issue raised by petitioner. In said meeting, seventeen
(17) members of the board voted to declare their individual voting records as
classified documents which rendered the same inaccessible to the public without
clearance from the chairman. Thereafter, respondent Morato denied petitioner's
request to examine the voting slips. However, it was only much later, i.e., on July 27,
1989, that respondent Board issued Resolution No. 10-89 which declared as
confidential, private and personal, the decision of the reviewing committee and the
voting slips of the members.
Petitioner brought the matter to the attention of the Executive Secretary, which in turn,
referred the same to respondent Morato for appropriate comment.
Another incident which gave rise to this petition occurred in a board meeting held on
June 22, 1989. In that meeting, respondent Morato told the board that he has ordered
some deletions on the movie "Mahirap ang Magmahal" notwithstanding the fact that
said movie was earlier approved for screening by the Board with classification "R-18
without cuts". He explained that his power to unilaterally change the decision of the
Review Committee is authorized by virtue of MTRCB Resolution No. 88-1-25 (dated
June 22,1988) which allows the chairman of the board "to downgrade a film (already)
reviewed especially those which are controversial."
Petitioner informed the Board, however, that respondent Morato possesses no
authority to unilaterally reverse a decision of the review committee under PD 1986
(Creating the Movie and Television Review and Classification Board).
After the matter was referred by the Deputy Executive Secretary to the Justice
Secretary, the latter opined that PD 1896 does not vest respondent Morato any
authority to unilaterally reverse the decision of the review committee but declined to
comment on the constitutionality of Res. No. 10-89 on the ground that the resolution
thereof is a judicial prerogative (Rollo, pp. 38-42).
The Justice Secretary's opinion to the contrary notwithstanding, respondent Morato
opted to ignore it.
Hence, this petition anchored on the following:
A. MORATO AND THE MTRCB BY APPROVING AND ENFORCING RESOLUTION
NO. 10-89 ACTED WITH GRAVE ABUSE OF DISCRETION TANTAMOUNT TO
LACK OF JURISDICTION BECAUSE THE SAME VIOLATES ARTICLE III SECTION
7 OF THE 1987 CONSTITUTION.
B. MTRCB RESOLUTION NO. 88-1-25 HAS NO LEGAL BASIS AND CONSTITUTES
AN UNLAWFUL DELEGATION OF DISCRETIONARY POWERS.
C. MORATO AND THE MTRCB BY REFUSING TO ABIDE BY OPINION NO. 1
SERIES OF 1990 OF THE SECRETARY OF JUSTICE AND BY INSISTING ON THE
VALIDITY OF RESOLUTION NO. 88-1-25 ACTED CAPRICIOUSLY, ARBITRARILY,
IN BAD FAITH, IN EXCESS OF THEIR JURISDICTION, AND WITH GRAVE ABUSE
OF DISCRETION.
Petitioner therefore seeks the nullification of 1) MTRCB Resolution No. 88-1-25 which
allows the Chairman of the Board to unilaterally downgrade a film (already) reviewed
especially those which are controversial and 2) MTRCB RESOLUTION No. 10-89
(dated July 27, 1989) declaring as strictly confidential, private and personal a) the
decision of a reviewing committee which previously reviewed a certain film and b) the
individual voting slips of the members of the committee that reviewed the film.
Respondents argue at the outset that the instant petition should be dismissed outright
for having failed to comply with the doctrine of exhaustion of administrative remedies.
We disagree. The doctrine of exhaustion of administrate remedies simply provides
that before a party litigant is allowed resort to the courts, he is required to comply with
all administrative remedies available under the law (Rosales v. Court of Appeals, 165
SCRA 344 [1988]). The rationale behind this salutory principle is that for reasons of
practical considerations, comity and convenience, the courts of law will not entertain a
case until all the available administrative remedies provided by law have been
resorted to and the appropriate authorities have been given ample opportunity to act
and to correct the errors committed in the administrative level. If the error is rectified,
judicial intervention would then be unnecessary.
Nonetheless, the doctrine of exhaustion of administrative remedies is not absolute.
The applicability of the principle admits of certain exceptions, such as: 1) when no
administrative review is provided by law; 2) when the only question involved is one of
law (Valmonte v. Valmonte, 170 SCRA 256 [1989], citing Aguilar v. Valencia, 40
SCRA 210 [1971]; Malabanan v. Ramento, 129 SCRA 359 [1984]; Bagatsing v.
Ramirez, 74 SCRA 306; Del Mar v. Philippine Veterans Administration, 51 SCRA 340
[1973]; Pascual v. Provincial Board, 106 Phil. 466 [1959]; 3) where the party invoking
the doctrine is guilty of estoppel (Vda. de Tan v. Veterans' Backpay Commission
[1969]; 4) where the challenged administrative action is patently illegal, arbitrary and
oppressive (Azur v. Provincial Board, 27 SCRA 50 [1969]; National Development Co.
v. Collector of Customs of Manila, 9 SCRA 429 [1963]; 5) where there is
unreasonable delay or official inaction that would greatly prejudice the complainant
(Gravador v. Mamigo, 20 SCRA 742 [1967]; Azuelo v. Arnaldo, 108 Phil. 293 [1960];
6) where to exhaust administrative review is impractical and unreasonable (Cipriano
v. Marcelino, 43 SCRA 291); and 7) where the rule of qualified political agency
applies (Demaisip v. Court of Appeals, 106 Phil. 237 [1906]).
The issue raised in the instant petition is one of law, hence the doctrine of non-
exhaustion of administrative remedy relied upon by respondents is inapplicable and
cannot be given any effect. At any rate, records are replete with events pointing to the
fact that petitioner adhered to the administrative processes in the disposition of the
assailed resolutions of public respondents prior to filing the instant petition by, among
others, writing the Executive Secretary and bringing the matter to the attention of the
Office of the President (Rollo, pp. 145-147). Respondents' claim that petitioner failed
to exhaust administrative remedies must therefore fail.
Having disposed of the procedural objection raised by respondents, We now proceed
to resolve the issues raised by petitioner. In this regard, We find respondents' refusal
to allow petitioner to examine the records of respondent MTRCB, pertaining to the
decisions of the review committee as well as the individual voting slips of its
members, as violative of petitioner's constitutional right of access to public records.
More specifically, Sec. 7, Art. III of the Constitution provides that:
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law. (emphasis supplied)
As We held in Legaspi v. Civil Service Commission (150 SCRA 530 [1987]), this
constitutional provision is self-executory and supplies "the rules by means of which
the right to information may be enjoyed (Cooley, A Treatise on Constitutional
Limitations 167 [1927]) by guaranteeing the right and mandating the duty to afford
access to sources of information. Hence, the fundamental right therein recognized
may be asserted by the people upon the ratification of the constitution without need
for any ancillary act of the Legislature (Id. at 165). What may be provided for by the
Legislature are reasonable conditions and limitations upon the access to be afforded
which must, of necessity, be consistent with the declared State Policy of full public
disclosure of all transactions involving public interest (Constitution, Art. II, Sec. 28)."
(See also Taada v. Tuvera, 136 SCRA 27 [1985]; Valmonte v. Belmonte, Jr., 170
SCRA 256 [1989]).
Respondents contend, however, that what is rendered by the members of the board
in reviewing films and reflected in their individual voting slip is their individual vote of
conscience on the motion picture or television program and as such, makes the
individual voting slip purely private and personal; an exclusive property of the member
concerned.
The term private has been defined as "belonging to or concerning, an individual
person, company, or interest"; whereas, public means "pertaining to, or belonging to,
or affecting a nation, state, or community at large" (People v. Powell, 274 NW 372
[1937]). May the decisions of respondent Board and the individual members
concerned, arrived at in an official capacity, be considered private? Certainly not. As
may be gleaned from the decree (PD 1986) creating the respondent classification
board, there is no doubt that its very existence is public is character; it is an office
created to serve public interest. It being the case, respondents can lay no valid claim
to privacy. The right to privacy belongs to the individual acting in his private capacity
and not to a governmental agency or officers tasked with, and acting in, the discharge
of public duties (See Valmonte v. Belmonte, Jr., supra.) There can be no invasion of
privacy in the case at bar since what is sought to be divulged is a product of action
undertaken in the course of performing official functions. To declare otherwise would
be to clothe every public official with an impregnable mantle of protection against
public scrutiny for their official acts.
Further, the decisions of the Board and the individual voting slips accomplished by
the members concerned are acts made pursuant to their official functions, and as
such, are neither personal nor private in nature but rather public in character. They
are, therefore, public records access to which is guaranteed to the citizenry by no less
than the fundamental law of the land. Being a public right, the exercise thereof cannot
be made contingent on the discretion, nay, whim and caprice, of the agency charged
with the custody of the official records sought to be examined. The constitutional
recognition of the citizen's right of access to official records cannot be made
dependent upon the consent of the members of the board concerned, otherwise, the
said right would be rendered nugatory. As stated by this Court in Subido v.
Ozaeta (80 Phil. 383 [1948]):
Except, perhaps when it is clear that the purpose of the examinations is unlawful, or
sheer, idle curiosity, we do not believe it is the duty under the law of registration
officers to concern themselves with the motives, reasons, and objects of the person
seeking access to the records. It is not their prerogative to see that the information
which the records contain is not flaunted before public gaze, or that scandal is not
made of it. If it be wrong to publish the contents of the records, it is the legislature and
not the officials having custody thereof which is called upon to devise a
remedy. (emphasis supplied)
It is significant to point out that this Court in the 1948 case of Subido v. Ozaeta,
supra, upheld the right to information based on the statutory right then provided in
Sec. 56 of the Land Registration Act (Act 496, as amended). Consequently, We see
no cogent reason why said right, now constitutionalized, should be given less efficacy
and primacy than what the fundament law mandates.
The Court is not unaware of RA 6713 (Code of Conduct and Ethical Standards for
Public Officials and Employees) which provides, among others, certain exceptions as
regards the availability of official records or documents to the requesting public, e.g.,
closed door Cabinet sessions and deliberations of this Court. Suffice it to state,
however, that the exceptions therein enumerated find no application in the case at
bar. Petitioner request is not concerned with the deliberations of respondent Board
but with its documents or records made after a decision or order has been rendered.
Neither will the examination involve disclosure of trade secrets or matters pertaining
to national security which would otherwise limit the right of access to official records
(See Legaspi v. Civil Service Commission, supra).
We are likewise not impressed with the proposition advanced by respondents that
respondent Morato is empowered by PD 1986 to unilaterally downgrade or upgrade a
film reviewed especially those which are controversial. The pertinent provisions of
said decree provides:
Sec 4. Decision. The decision of the BOARD either approving or disapproving for
exhibition in the Philippines a motion picture, television program, still and other
pictorial advertisement submitted to it for examination and preview must be rendered
within a period of ten (10) days which shall be counted from the date of receipt by the
BOARD of an application for the purpose . . .
For each review session, the Chairman of the Board shall designate a sub-committee
composed of at least three BOARD members to undertake the work of review. Any
disapproval or deletion must be approved by a majority of the sub-committee
members so designated. After receipt of the written decision of the sub-committee, a
motion for reconsideration in writing may be made, upon which the Chairman of the
Board shall designate a sub-committee of five BOARD members to undertake a
second review session, whose decision on behalf of the Board shall be rendered
through a majority of the sub-committee members so designated and present at the
second review session. This second review session shall be presided over by the
Chairman, or the Vice-Chairman. The decision of the BOARD in the second review
session shall be rendered within five (5) days from the date of receipt of the motion
for reconsideration.
Every decision of the BOARD disapproving a motion picture, television program or
publicity material for exhibition in the Philippines must be in writing, and shall state the
reasons or grounds for such disapproval. No film or motion picture intended for
exhibition at the moviehouses or theaters or on television shall be disapproved by
reason of its topic, theme or subject matter, but upon the merits of each picture or
program considered in its entirety.
The second decision of the BOARD shall be final, with the exception of a decision
disapproving or prohibiting a motion picture or television program in its entirety which
shall be appealable to the President of the Philippines, who may himself decide the
appeal, or be assisted either by an ad hoe committee he may create or by the
Appeals Committee herein created.
An Appeals Committee in the Office of the President of the Philippines is hereby
created composed of a Chairman and four (4) members to be appointed by the
President of the Philippines, which shall submit its recommendation to the President.
The Office of the Presidential Assistant for Legal Affairs shall serve as the Secretariat
of the Appeals Committee.
The decision of the President of the Philippines on any appealed matter shall be final.
Implementing Rules and Regulations
Sec 11. Review by Sub-Committee of Three. a) A proper application having been
filed, the Chairman of the Board shall, as the exigencies of the service may permit,
designate a Sub-Committee of at least three Board Members who shall meet, with
notice to the applicant, within ten days from receipt of the completed application. The
Sub-Committee shall then preview the motion picture subject of the application.
b) Immediately after the preview, the applicant or his representative shall withdraw to
await the results of the deliberation of the Sub-Committee. After reaching a decision,
the Sub-Committee shall summon the applicant or his representative and inform him
of its decision giving him an opportunity either to request reconsideration or to offer
certain cuts or deletions in exchange for a better classification. The decision shall be
in writing, stating, in case of disapproval of the film or denial of the classification rating
desired or both, the reason or reasons for such disapproval or denial and the
classification considered by the Sub-Committee member dissenting from the majority
opinion may express his dissent in writing.
c) The decision including the dissenting opinion, if any, shall immediately be
submitted to the Chairman of the Board for transmission to the applicant.
Sec 12. Review by Sub-Committee of Five. Within five days from receipt of a copy
of the decision of the Sub-Committee referred to in the preceding section, the
applicant may file a motion for reconsideration in writing of that decision. On receipt of
the motion, the Chairman of the Board shall designate a Sub-Committee of Five
Board Members which shall consider the motion and, within five days of receipt of
such motion, conduct a second preview of the film. The review shall, to the extent
applicable, follow the same procedure provided in the preceding section.
Sec 13. Reclassification. An applicant desiring a change in the classification rating
given his film by either the Sub-Committee of Three? or Committee of Five mentioned
in the immediately preceeding two sections may re-edit such film and apply anew with
the Board for its review and reclassification.
Sec 14. Appeal. The decision of the Committee of Five Board Members in the
second review shall be final, with the exception of a decision disapproving or
prohibiting a motion picture in its entirety which shall be appealable to the President
of the Philippines who may himself decide the appeal or refer it to the Appeals
Committee in the Office of the President for adjudication.
On the other hand, the powers and functions of the MTRCB Chairman are found in
Section 5 of the same decree as follows:
Sec. 5. Executive Officer. The Chairman of the BOARD shall be the Chief
Executive Officer of the BOARD. He shall exercise the following functions, powers
and duties:
(a) Execute, implement and enforce the decisions, orders, awards, rules and
regulations issued by the BOARD;
(b) Direct and supervise the operations and the internal affairs of the BOARD;
(c) Establish the internal organization and administrative procedures of the BOARD,
and recommend to the BOARD the appointment of the necessary administrative and
subordinate personnel; and
(d) Exercise such other powers and functions and perform such duties as are not
specifically lodged in the BOARD.
It is at once apparent from a reading of the above provisions of PD 1986 that
respondent Morato, as Chairman of the MTRCB, is not vested with any authority to
reverse or overrule by himself alone a decision rendered by a committee which
conducted a review of motion pictures or television programs.
The power to classify motion pictures into categories such as "General Patronage" or
"For Adults Only" is vested with the respondent Board itself and not with the
Chairman thereof (Sec. 3 [e], PD 1986). As Chief Executive Officer, respondent
Morato's function as Chairman of the Board calls for the implementation and
execution, not modification or reversal, of the decisions or orders of the latter (Sec. 5
[a], Ibid.). The power of classification having been reposed by law exclusively with the
respondent Board, it has no choice but to exercise the same as mandated by law, i.e.,
as a collegial body, and not transfer it elsewhere or discharge said power through the
intervening mind of another. Delegata potestas non potest delegari a delegated
power cannot be delegated. And since the act of classification involves an exercise of
the Board's discretionary power with more reason the Board cannot, by way of the
assailed resolution, delegate said power for it is an established rule in administrative
law that discretionary authority cannot be a subject of delegation.
WHEREFORE, the instant petition is GRANTED. Resolution Nos. 10-89 and 88-1-25
issued by the respondent Board are hereby declared null and void.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Padilla, Medialdea, Regalado and Davide, Jr., JJ., concur.
Grio-Aquino and Romero, JJ., took no part.
EN BANC
[G.R. No. 133250. July 9, 2002]
FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and
AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.
DECISION
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary
injunction and a temporary restraining order. The petition seeks to compel the Public
Estates Authority (PEA for brevity) to disclose all facts on PEAs then on-going
renegotiations with Amari Coastal Bay and Development Corporation (AMARI for
brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA
from signing a new agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public
Highways, signed a contract with the Construction and Development Corporation of
the Philippines (CDCP for brevity) to reclaim certain foreshore and offshore areas of
Manila Bay. The contract also included the construction of Phases I and II of the
Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works in
consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree
No. 1084 creating PEA. PD No. 1084 tasked PEA to reclaim land, including foreshore
and submerged areas, and to develop, improve, acquire, x x x lease and sell any and
all kinds of lands.[1] On the same date, then President Marcos issued Presidential
Decree No. 1085 transferring to PEA the lands reclaimed in the foreshore and
offshore of the Manila Bay[2] under the Manila-Cavite Coastal Road and Reclamation
Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA
to amend its contract with CDCP, so that [A]ll future works in MCCRRP x x x shall be
funded and owned by PEA. Accordingly, PEA and CDCP executed a Memorandum of
Agreement dated December 29, 1981, which stated:
(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of
works on a unit price/lump sum basis for items of work to be agreed upon, subject to
price escalation, retention and other terms and conditions provided for in Presidential
Decree No. 1594. All the financing required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede
and transfer in favor of PEA, all of the rights, title, interest and participation of CDCP
in and to all the areas of land reclaimed by CDCP in the MCCRRP as of December
30, 1981 which have not yet been sold, transferred or otherwise disposed of by
CDCP as of said date, which areas consist of approximately Ninety-Nine Thousand
Four Hundred Seventy Three (99,473) square meters in the Financial Center Area
covered by land pledge No. 5 and approximately Three Million Three Hundred Eighty
Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed
areas at varying elevations above Mean Low Water Level located outside the
Financial Center Area and the First Neighborhood Unit.[3]
On January 19, 1988, then President Corazon C. Aquino issued Special Patent No.
3517, granting and transferring to PEA the parcels of land so reclaimed under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total
area of one million nine hundred fifteen thousand eight hundred ninety four
(1,915,894) square meters. Subsequently, on April 9, 1988, the Register of Deeds of
the Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311,
and 7312, in the name of PEA, covering the three reclaimed islands known as the
Freedom Islands located at the southern portion of the Manila-Cavite Coastal Road,
Paraaque City. The Freedom Islands have a total land area of One Million Five
Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square
meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA for brevity) with
AMARI, a private corporation, to develop the Freedom Islands. The JVA also required
the reclamation of an additional 250 hectares of submerged areas surrounding these
islands to complete the configuration in the Master Development Plan of the Southern
Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA through
negotiation without public bidding.[4] On April 28, 1995, the Board of Directors of PEA,
in its Resolution No. 1245, confirmed the JVA. [5] On June 8, 1995, then President
Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the
JVA.[6]
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege
speech in the Senate and denounced the JVA as the grandmother of all scams. As a
result, the Senate Committee on Government Corporations and Public Enterprises,
and the Committee on Accountability of Public Officers and Investigations, conducted
a joint investigation. The Senate Committees reported the results of their investigation
in Senate Committee Report No. 560 dated September 16, 1997. [7] Among the
conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to
AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself
is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential
Administrative Order No. 365 creating a Legal Task Force to conduct a study on the
legality of the JVA in view of Senate Committee Report No. 560. The members of the
Legal Task Force were the Secretary of Justice,[8] the Chief Presidential Legal
Counsel,[9] and the Government Corporate Counsel.[10] The Legal Task Force upheld
the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.[11]
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that
there were on-going renegotiations between PEA and AMARI under an order issued
by then President Fidel V. Ramos. According to these reports, PEA Director Nestor
Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed
the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition
with Application for the Issuance of a Temporary Restraining Order and Preliminary
Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The Court
dismissed the petition for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case before the proper court. [12]
On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer,
filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order. Petitioner contends the
government stands to lose billions of pesos in the sale by PEA of the reclaimed lands
to AMARI. Petitioner prays that PEA publicly disclose the terms of any renegotiation
of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987
Constitution on the right of the people to information on matters of public
concern. Petitioner assails the sale to AMARI of lands of the public domain as a
blatant violation of Section 3, Article XII of the 1987 Constitution prohibiting the sale of
alienable lands of the public domain to private corporations. Finally, petitioner asserts
that he seeks to enjoin the loss of billions of pesos in properties of the State that are
of public dominion.
After several motions for extension of time,[13] PEA and AMARI filed their Comments
on October 19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28,
1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of
the renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining
order; and (c) to set the case for hearing on oral argument. Petitioner filed a
Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the Court
denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and
required the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement
(Amended JVA, for brevity). On May 28, 1999, the Office of the President under the
administration of then President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner
now prays that on constitutional and statutory grounds the renegotiated contract be
declared null and void.[14]
The Issues
The issues raised by petitioner, PEA[15] and AMARI[16] are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE
MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE
THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE
OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Courts Ruling
First issue: whether the principal reliefs prayed for in the petition are moot and
academic because of subsequent events.
The petition prays that PEA publicly disclose the terms and conditions of the on-going
negotiations for a new agreement. The petition also prays that the Court enjoin PEA
from privately entering into, perfecting and/or executing any new agreement with
AMARI.
PEA and AMARI claim the petition is now moot and academic because AMARI
furnished petitioner on June 21, 1999 a copy of the signed Amended JVA containing
the terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfied
petitioners prayer for a public disclosure of the renegotiations. Likewise, petitioners
prayer to enjoin the signing of the Amended JVA is now moot because PEA and
AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the
Office of the President has approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by
simply fast-tracking the signing and approval of the Amended JVA before the Court
could act on the issue. Presidential approval does not resolve the constitutional issue
or remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by
the President cannot operate to moot the petition and divest the Court of its
jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to
enjoin the signing of the Amended JVA on constitutional grounds necessarily includes
preventing its implementation if in the meantime PEA and AMARI have signed one in
violation of the Constitution. Petitioners principal basis in assailing the renegotiation of
the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private corporations. If the
Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its
implementation, and if already implemented, to annul the effects of such
unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks
to transfer title and ownership to 367.5 hectares of reclaimed lands and
submerged areas of Manila Bay to a single private corporation. It now becomes
more compelling for the Court to resolve the issue to insure the government itself
does not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the
instant case, if the Amended JVA runs counter to the Constitution, the Court can still
prevent the transfer of title and ownership of alienable lands of the public domain in
the name of AMARI. Even in cases where supervening events had made the cases
moot, the Court did not hesitate to resolve the legal or constitutional issues raised to
formulate controlling principles to guide the bench, bar, and the public.[17]
Also, the instant petition is a case of first impression. All previous decisions of the
Court involving Section 3, Article XII of the 1987 Constitution, or its counterpart
provision in the 1973 Constitution,[18] covered agricultural lands sold to private
corporations which acquired the lands from private parties. The transferors of the
private corporations claimed or could claim the right to judicial confirmation of their
imperfect titles[19] under Title II of Commonwealth Act. 141 (CA No. 141 for
brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation,
reclaimed lands and submerged areas for non-agricultural purposes
by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141. Certain
undertakings by AMARI under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation of their titles
because the lands covered by the Amended JVA are newly reclaimed or still to be
reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive
and notorious occupation of agricultural lands of the public domain for at least thirty
years since June 12, 1945 or earlier. Besides, the deadline for filing applications for
judicial confirmation of imperfect title expired on December 31, 1987. [20]
Lastly, there is a need to resolve immediately the constitutional issue raised in this
petition because of the possible transfer at any time by PEA to AMARI of title and
ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is
obligated to transfer to AMARI the latters seventy percent proportionate share in the
reclaimed areas as the reclamation progresses. The Amended JVA even allows
AMARI to mortgage at any time the entire reclaimed area to raise financing for the
reclamation project.[21]
Second issue: whether the petition merits dismissal for failing to observe the
principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief
directly from the Court. The principle of hierarchy of courts applies generally to cases
involving factual questions. As it is not a trier of facts, the Court cannot entertain
cases involving factual issues. The instant case, however, raises constitutional issues
of transcendental importance to the public.[22] The Court can resolve this case without
determining any factual issue related to the case. Also, the instant case is a petition
for mandamus which falls under the originaljurisdiction of the Court under Section 5,
Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the
instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of
administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose
publicly certain information without first asking PEA the needed information. PEA
claims petitioners direct resort to the Court violates the principle of exhaustion of
administrative remedies. It also violates the rule that mandamus may issue only if
there is no other plain, speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera[23] where the Court granted
the petition for mandamus even if the petitioners there did not initially demand from
the Office of the President the publication of the presidential decrees. PEA points out
that in Taada, the Executive Department had an affirmative statutory duty under
Article 2 of the Civil Code[24] and Section 1 of Commonwealth Act No. 638[25] to
publish the presidential decrees. There was, therefore, no need for the petitioners
in Taada to make an initial demand from the Office of the President. In the instant
case, PEA claims it has no affirmative statutory duty to disclose publicly information
about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the
principle of exhaustion of administrative remedies to the instant case in view of the
failure of petitioner here to demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a
government corporation. Under Section 79 of the Government Auditing Code,[26]2 the
disposition of government lands to private parties requires public bidding. PEA was
under a positive legal duty to disclose to the public the terms and conditions
for the sale of its lands. The law obligated PEA to make this public disclosure even
without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of
a negotiated contract, not of a public bidding. Considering that PEA had an
affirmative statutory duty to make the public disclosure, and was even in breach of
this legal duty, petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely legal or
constitutional question.[27] The principal issue in the instant case is the capacity of
AMARI to acquire lands held by PEA in view of the constitutional ban prohibiting the
alienation of lands of the public domain to private corporations. We rule that the
principle of exhaustion of administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to
enforce his constitutional right to information without a showing that PEA refused to
perform an affirmative duty imposed on PEA by the Constitution. PEA also claims that
petitioner has not shown that he will suffer any concrete injury because of the signing
or implementation of the Amended JVA. Thus, there is no actual controversy requiring
the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayers suit because the petition seeks to
compel PEA to comply with its constitutional duties. There are two constitutional
issues involved here. First is the right of citizens to information on matters of public
concern. Second is the application of a constitutional provision intended to insure the
equitable distribution of alienable lands of the public domain among Filipino
citizens. The thrust of the first issue is to compel PEA to disclose publicly information
on the sale of government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second
issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the
public domain in violation of the Constitution, compelling PEA to comply with a
constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the
public. In Chavez v. PCGG,[28] the Court upheld the right of a citizen to bring a
taxpayers suit on matters of transcendental importance to the public, thus -
Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of transcendental importance to the public. He asserts that
ordinary taxpayers have a right to initiate and prosecute actions questioning the
validity of acts or orders of government agencies or instrumentalities, if the issues
raised are of paramount public interest, and if they immediately affect the social,
economic and moral well being of the people.
Moreover, the mere fact that he is a citizen satisfies the requirement of personal
interest, when the proceeding involves the assertion of a public right, such as in this
case. He invokes several decisions of this Court which have set aside the procedural
matter of locus standi, when the subject of the case involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue concerns a public right
and the object of mandamus is to obtain the enforcement of a public duty, the people
are regarded as the real parties in interest; and because it is sufficient that petitioner
is a citizen and as such is interested in the execution of the laws, he need not show
that he has any legal or special interest in the result of the action. In the aforesaid
case, the petitioners sought to enforce their right to be informed on matters of public
concern, a right then recognized in Section 6, Article IV of the 1973 Constitution, in
connection with the rule that laws in order to be valid and enforceable must be
published in the Official Gazette or otherwise effectively promulgated. In ruling for the
petitioners' legal standing, the Court declared that the right they sought to be enforced
is a public right recognized by no less than the fundamental law of the land.
Legaspi v. Civil Service Commission, while reiterating Taada, further declared that
when a mandamus proceeding involves the assertion of a public right, the
requirement of personal interest is satisfied by the mere fact that petitioner is a citizen
and, therefore, part of the general 'public' which possesses the right.
Further, in Albano v. Reyes, we said that while expenditure of public funds may not
have been involved under the questioned contract for the development, management
and operation of the Manila International Container Terminal, public interest [was]
definitely involved considering the important role [of the subject contract] . . . in the
economic development of the country and the magnitude of the financial
consideration involved. We concluded that, as a consequence, the disclosure
provision in the Constitution would constitute sufficient authority for upholding the
petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to information and
access to official records, documents and papers a right guaranteed under Section 7,
Article III of the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino
citizen. Because of the satisfaction of the two basic requisites laid down by decisional
law to sustain petitioner's legal standing, i.e. (1) the enforcement of a public right (2)
espoused by a Filipino citizen, we rule that the petition at bar should be allowed.
We rule that since the instant petition, brought by a citizen, involves the enforcement
of constitutional rights - to information and to the equitable diffusion of natural
resources - matters of transcendental public importance, the petitioner has the
requisite locus standi.
Fifth issue: whether the constitutional right to information includes official
information on on-going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the peoples right to information on
matters of public concern in this manner:
Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining
to official acts, transactions, or decisions, as well as to government research data
used as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law. (Emphasis supplied)
The State policy of full transparency in all transactions involving public interest
reinforces the peoples right to information on matters of public concern. This State
policy is expressed in Section 28, Article II of the Constitution, thus:
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving
public interest. (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-
making and in the operations of the government, as well as provide the people
sufficient information to exercise effectively other constitutional rights. These twin
provisions are essential to the exercise of freedom of expression. If the government
does not disclose its official acts, transactions and decisions to citizens, whatever
citizens say, even if expressed without any restraint, will be speculative and amount
to nothing. These twin provisions are also essential to hold public officials at all times
x x x accountable to the people,[29] for unless citizens have the proper information,
they cannot hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the formulation of
government policies and their effective implementation. An informed citizenry is
essential to the existence and proper functioning of any democracy. As explained by
the Court in Valmonte v. Belmonte, Jr.[30]
An essential element of these freedoms is to keep open a continuing dialogue or
process of communication between the government and the people. It is in the
interest of the State that the channels for free political discussion be maintained to the
end that the government may perceive and be responsive to the peoples will. Yet, this
open dialogue can be effective only to the extent that the citizenry is informed and
thus able to formulate its will intelligently. Only when the participants in the discussion
are aware of the issues and have access to information relating thereto can such bear
fruit.
PEA asserts, citing Chavez v. PCGG,[31] that in cases of on-going negotiations the
right to information is limited to definite propositions of the government. PEA
maintains the right does not include access to intra-agency or inter-agency
recommendations or communications during the stage when common assertions are
still in the process of being formulated or are in the exploratory stage.
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional
stage or before the closing of the transaction. To support its contention, AMARI cites
the following discussion in the 1986 Constitutional Commission:
Mr. Suarez. And when we say transactions which should be distinguished from
contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps
leading to the consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The transactions used here, I suppose is generic and therefore, it can
cover both steps leading to a contract and already a consummated contract,
Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the
consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you.[32] (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can
invoke the right. Requiring government officials to reveal their deliberations at the pre-
decisional stage will degrade the quality of decision-making in government
agencies. Government officials will hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of their discussions, putting
them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA
to disclose publicly, and information the constitutional right to information requires
PEA to release to the public. Before the consummation of the contract, PEA must, on
its own and without demand from anyone, disclose to the public matters relating to
the disposition of its property.These include the size, location, technical description
and nature of the property being disposed of, the terms and conditions of the
disposition, the parties qualified to bid, the minimum price and similar
information. PEA must prepare all these data and disclose them to the public at the
start of the disposition process, long before the consummation of the contract,
because the Government Auditing Code requires public bidding. If PEA fails to
make this disclosure, any citizen can demand from PEA this information at any time
during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being
undertaken by the bidding or review committee is not immediately accessible under
the right to information. While the evaluation or review is still on-going, there are no
official acts, transactions, or decisions on the bids or proposals. However, once the
committee makes its official recommendation, there arises a definite
proposition on the part of the government. From this moment, the publics right to
information attaches, and any citizen can access all the non-proprietary information
leading to such definite proposition. In Chavez v. PCGG,[33] the Court ruled as
follows:
Considering the intent of the framers of the Constitution, we believe that it is
incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed settlement
they have decided to take up with the ostensible owners and holders of ill-gotten
wealth. Such information, though, must pertain to definite propositions of the
government, not necessarily to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the process of
being formulated or are in the exploratory stage. There is need, of course, to observe
the same restrictions on disclosure of information in general, as discussed earlier
such as on matters involving national security, diplomatic or foreign relations,
intelligence and other classified information. (Emphasis supplied)
Contrary to AMARIs contention, the commissioners of the 1986 Constitutional
Commission understood that the right to information contemplates inclusion of
negotiations leading to the consummation of the transaction. Certainly, a
consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is
consummated, and if one is consummated, it may be too late for the public to expose
its defects.
Requiring a consummated contract will keep the public in the dark until the contract,
which may be grossly disadvantageous to the government or even illegal, becomes
a fait accompli.This negates the State policy of full transparency on matters of public
concern, a situation which the framers of the Constitution could not have
intended. Such a requirement will prevent the citizenry from participating in the public
discussion of any proposed contract, effectively truncating a basic right enshrined in
the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a
retreat by the State of its avowed policy of full disclosure of all its transactions
involving public interest.
The right covers three categories of information which are matters of public concern,
namely: (1) official records; (2) documents and papers pertaining to official acts,
transactions and decisions; and (3) government research data used in formulating
policies. The first category refers to any document that is part of the public records in
the custody of government agencies or officials. The second category refers to
documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies
or officials. The third category refers to research data, whether raw, collated or
processed, owned by the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes
evaluation reports, recommendations, legal and expert opinions, minutes of meetings,
terms of reference and other documents attached to such reports or minutes, all
relating to the JVA. However, the right to information does not compel PEA to prepare
lists, abstracts, summaries and the like relating to the renegotiation of the JVA.[34] The
right only affords access to records, documents and papers, which means the
opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also
subject to reasonable regulations to protect the integrity of the public records and to
minimize disruption to government operations, like rules specifying when and how to
conduct the inspection and copying.[35]
The right to information, however, does not extend to matters recognized as
privileged information under the separation of powers. [36] The right does not also
apply to information on military and diplomatic secrets, information affecting national
security, and information on investigations of crimes by law enforcement agencies
before the prosecution of the accused, which courts have long recognized as
confidential.[37] The right may also be subject to other limitations that Congress may
impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged
information rooted in the separation of powers. The information does not cover
Presidential conversations, correspondences, or discussions during closed-door
Cabinet meetings which, like internal deliberations of the Supreme Court and other
collegiate courts, or executive sessions of either house of Congress, [38] are
recognized as confidential. This kind of information cannot be pried open by a co-
equal branch of government. A frank exchange of exploratory ideas and
assessments, free from the glare of publicity and pressure by interested parties, is
essential to protect the independence of decision-making of those tasked to exercise
Presidential, Legislative and Judicial power.[39] This is not the situation in the instant
case.
We rule, therefore, that the constitutional right to information includes official
information on on-going negotiations before a final contract. The information,
however, must constitute definite propositions by the government and should not
cover recognized exceptions like privileged information, military and diplomatic
secrets and similar matters affecting national security and public order. [40] Congress
has also prescribed other limitations on the right to information in several
legislations.[41]
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI
of lands, reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in
the Regalian doctrine which holds that the State owns all lands and waters of the
public domain.Upon the Spanish conquest of the Philippines, ownership of all lands,
territories and possessions in the Philippines passed to the Spanish Crown. [42] The
King, as the sovereign ruler and representative of the people, acquired and owned all
lands and territories in the Philippines except those he disposed of by grant or sale to
private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting,
however, the State, in lieu of the King, as the owner of all lands and waters of the
public domain.The Regalian doctrine is the foundation of the time-honored principle of
land ownership that all lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain. [43] Article 339 of the Civil Code of
1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian
doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the
ownership and disposition of reclaimed lands in the Philippines. On May 18, 1907, the
Philippine Commission enacted Act No. 1654 which provided for the lease, but not
the sale, of reclaimed lands of the government to corporations and individuals.
Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874, the
Public Land Act, which authorized the lease, but not the sale, of reclaimed lands
of the government to corporations and individuals. On November 7, 1936, the
National Assembly passed Commonwealth Act No. 141, also known as the Public
Land Act, which authorized the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. CA No. 141 continues to this day as
the general law governing the classification and disposition of lands of the public
domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all
waters within the maritime zone of the Spanish territory belonged to the public domain
for public use.[44] The Spanish Law of Waters of 1866 allowed the reclamation of the
sea under Article 5, which provided as follows:
Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise provided
by the terms of the grant of authority.
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party
undertaking the reclamation, provided the government issued the necessary permit
and did not reserve ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar
character;
2. That belonging exclusively to the State which, without being of general public use,
is employed in some public service, or in the development of the national wealth,
such as walls, fortresses, and other works for the defense of the territory, and mines,
until granted to private individuals.
Property devoted to public use referred to property open for use by the public. In
contrast, property devoted to public service referred to property used for some
specific public service and open only to those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but
also to property not so used but employed to develop the national wealth. This
class of property constituted property of public dominion although employed for some
economic or commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of
public dominion into private property, to wit:
Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State.
This provision, however, was not self-executing. The legislature, or the executive
department pursuant to law, must declare the property no longer needed for public
use or territorial defense before the government could lease or alienate the property
to private parties.[45]
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated
the lease of reclaimed and foreshore lands. The salient provisions of this law were as
follows:
Section 1. The control and disposition of the foreshore as defined in existing law,
and the title to all Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise throughout the Philippine
Islands, shall be retained by the Government without prejudice to vested rights and
without prejudice to rights conceded to the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or public lands
made or reclaimed by the Government by dredging or filling or otherwise to be divided
into lots or blocks, with the necessary streets and alleyways located thereon, and
shall cause plats and plans of such surveys to be prepared and filed with the Bureau
of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give
notice to the public that such parts of the lands so made or reclaimed as are
not needed for public purposes will be leased for commercial and business
purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-
General may by executive order prescribe. (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands
reclaimed by the government. The Act also vested in the government control and
disposition of foreshore lands. Private parties could lease lands reclaimed by the
government only if these lands were no longer needed for public purpose. Act No.
1654 mandated public bidding in the lease of government reclaimed lands. Act No.
1654 made government reclaimed lands sui generis in that unlike other public lands
which the government could sell to private parties, these reclaimed lands were
available only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of
1866. Act No. 1654 did not prohibit private parties from reclaiming parts of the sea
under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by
private parties with government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public
Land Act.[46] The salient provisions of Act No. 2874, on reclaimed lands, were as
follows:
Sec. 6. The Governor-General, upon the recommendation of the Secretary of
Agriculture and Natural Resources, shall from time to time classify the lands of
the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable
public lands, the Governor-General, upon recommendation by the Secretary of
Agriculture and Natural Resources, shall from time to time declare what lands
are open to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral
land, shall be classified as suitable for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural purposes, and
shall be open to disposition or concession, shall be disposed of under the provisions
of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall
be disposed of to private parties by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the Secretary of Agriculture and
Natural Resources, shall declare that the same are not necessary for the public
service and are open to disposition under this chapter. The lands included in
class (d) may be disposed of by sale or lease under the provisions of this
Act. (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to classify lands of the
public domain into x x x alienable or disposable [47] lands. Section 7 of the Act
empowered the Governor-General to declare what lands are open to disposition or
concession. Section 8 of the Act limited alienable or disposable lands only to those
lands which have been officially delimited and classified.
Section 56 of Act No. 2874 stated that lands disposable under this title [48] shall be
classified as government reclaimed, foreshore and marshy lands, as well as other
lands. All these lands, however, must be suitable for residential, commercial,
industrial or other productive non-agricultural purposes. These provisions vested
upon the Governor-General the power to classify inalienable lands of the public
domain into disposable lands of the public domain. These provisions also empowered
the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well
as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public
domain classified as government reclaimed, foreshore and marshy lands shall be
disposed of to private parties by lease only and not otherwise. The Governor-
General, before allowing the lease of these lands to private parties, must formally
declare that the lands were not necessary for the public service. Act No. 2874
reiterated the State policy to lease and not to sell government reclaimed, foreshore
and marshy lands of the public domain, a policy first enunciated in 1907 in Act No.
1654. Government reclaimed, foreshore and marshy lands remained sui generis, as
the only alienable or disposable lands of the public domain that the government could
not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore
and marshy public lands for non-agricultural purposes retain their inherent potential
as areas for public service. This is the reason the government prohibited the sale, and
only allowed the lease, of these lands to private parties. The State always reserved
these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed,
foreshore and marshy lands into other non-agricultural lands under Section 56
(d). Lands falling under Section 56 (d) were the only lands for non-agricultural
purposes the government could sell to private parties. Thus, under Act No. 2874, the
government could not sell government reclaimed, foreshore and marshy lands to
private parties, unless the legislature passed a law allowing their sale.[49]
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant
to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by
private parties with government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino
people. The 1935 Constitution, in adopting the Regalian doctrine, declared in Section
1, Article XIII, that
Section 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy and
other natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines or
to corporations or associations at least sixty per centum of the capital of which is
owned by such citizens, subject to any existing right, grant, lease, or concession at
the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land,
shall not be alienated, and no license, concession, or lease for the exploitation,
development, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for another twenty-five years, except
as to water rights for irrigation, water supply, fisheries, or industrial uses other than
the development of water power, in which cases beneficial use may be the measure
and limit of the grant. (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public
agricultural lands, which were the only natural resources the State could
alienate. Thus, foreshore lands, considered part of the States natural resources,
became inalienable by constitutional fiat, available only for lease for 25 years,
renewable for another 25 years. The government could alienate foreshore lands only
after these lands were reclaimed and classified as alienable agricultural lands of the
public domain. Government reclaimed and marshy lands of the public domain, being
neither timber nor mineral lands, fell under the classification of public agricultural
lands.[50] However, government reclaimed and marshy lands, although subject to
classification as disposable public agricultural lands, could only be leased and not
sold to private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed
and marshy lands of the public domain was only a statutory prohibition and the
legislature could therefore remove such prohibition. The 1935 Constitution did not
prohibit individuals and corporations from acquiring government reclaimed and
marshy lands of the public domain that were classified as agricultural lands under
existing public land laws. Section 2, Article XIII of the 1935 Constitution provided as
follows:
Section 2. No private corporation or association may acquire, lease, or hold
public agricultural lands in excess of one thousand and twenty four hectares,
nor may any individual acquire such lands by purchase in excess of one
hundred and forty hectares, or by lease in excess of one thousand and twenty-four
hectares, or by homestead in excess of twenty-four hectares. Lands adapted to
grazing, not exceeding two thousand hectares, may be leased to an individual, private
corporation, or association. (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section
58 of Act No. 2874 to open for sale to private parties government reclaimed and
marshy lands of the public domain. On the contrary, the legislature continued the long
established State policy of retaining for the government title and ownership of
government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141,
also known as the Public Land Act, which compiled the then existing laws on lands of
the public domain. CA No. 141, as amended, remains to this day the existing
general law governing the classification and disposition of lands of the public domain
other than timber and mineral lands.[51]
Section 6 of CA No. 141 empowers the President to classify lands of the public
domain into alienable or disposable[52] lands of the public domain, which prior to such
classification are inalienable and outside the commerce of man. Section 7 of CA No.
141 authorizes the President to declare what lands are open to disposition or
concession. Section 8 of CA No. 141 states that the government can declare open for
disposition or concession only lands that are officially delimited and classified.
Sections 6, 7 and 8 of CA No. 141 read as follows:
Sec. 6. The President, upon the recommendation of the Secretary of Agriculture
and Commerce, shall from time to time classify the lands of the public domain
into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to
another,[53] for the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or
disposable public lands, the President, upon recommendation by the Secretary of
Agriculture and Commerce, shall from time to time declare what lands are open
to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited and classified and, when practicable,
surveyed, and which have not been reserved for public or quasi-public uses, nor
appropriated by the Government, nor in any manner become private property, nor
those on which a private right authorized and recognized by this Act or any other valid
law may be claimed, or which, having been reserved or appropriated, have ceased to
be so. x x x.
Thus, before the government could alienate or dispose of lands of the public domain,
the President must first officially classify these lands as alienable or disposable, and
then declare them open to disposition or concession. There must be no law reserving
these lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and
marshy lands of the public domain, are as follows:
Sec. 58. Any tract of land of the public domain which, being neither timber nor
mineral land, is intended to be used for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions of this
chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the
case may be, to any person, corporation, or association authorized to purchase or
lease public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine
shall be disposed of to private parties by lease only and not otherwise, as soon
as the President, upon recommendation by the Secretary of Agriculture, shall
declare that the same are not necessary for the public service and are open to
disposition under this chapter. The lands included in class (d) may be disposed of
by sale or lease under the provisions of this Act. (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution,
Section 58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore
and marshy disposable lands of the public domain. All these lands are intended for
residential, commercial, industrial or other non-agricultural purposes. As before,
Section 61 allowed only the lease of such lands to private parties. The government
could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or
those lands for non-agricultural purposes not classified as government reclaimed,
foreshore and marshy disposable lands of the public domain. Foreshore lands,
however, became inalienable under the 1935 Constitution which only allowed the
lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain
intended for residential, commercial, industrial or other productive purposes other
than agricultural shall be disposed of under the provisions of this chapter and
not otherwise. Under Section 10 of CA No. 141, the term disposition includes lease
of the land. Any disposition of government reclaimed, foreshore and marshy
disposable lands for non-agricultural purposes must comply with Chapter IX, Title III
of CA No. 141,[54] unless a subsequent law amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation
v. Court of Appeals,[55] Justice Reynato S. Puno summarized succinctly the law on
this matter, as follows:
Foreshore lands are lands of public dominion intended for public use. So too are
lands reclaimed by the government by dredging, filling, or other means. Act 1654
mandated that the control and disposition of the foreshore and lands under water
remained in the national government. Said law allowed only the leasing of reclaimed
land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and
lands reclaimed by the government were to be disposed of to private parties by lease
only and not otherwise. Before leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture and Natural Resources, had first to
determine that the land reclaimed was not necessary for the public service. This
requisite must have been met before the land could be disposed of. But even then,
the foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by lease. The
land remained property of the State. (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, Commonwealth Act No. 141
has remained in effect at present.
The State policy prohibiting the sale to private parties of government reclaimed,
foreshore and marshy alienable lands of the public domain, first implemented in 1907
was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. The
prohibition on the sale of foreshore lands, however, became a constitutional edict
under the 1935 Constitution. Foreshore lands became inalienable as natural
resources of the State, unless reclaimed by the government and classified as
agricultural lands of the public domain, in which case they would fall under the
classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy
disposable lands of the public domain continued to be only leased and not sold to
private parties.[56]These lands remained sui generis, as the only alienable or
disposable lands of the public domain the government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties
government reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. CA No. 141 does not authorize the
President to reclassify government reclaimed and marshy lands into other non-
agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the
only alienable or disposable lands for non-agricultural purposes that the government
could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority
before lands under Section 59 that the government previously transferred to
government units or entities could be sold to private parties. Section 60 of CA No. 141
declares that
Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of
the Secretary of Agriculture and Natural Resources, be reasonably necessary for the
purposes for which such sale or lease is requested, and shall not exceed one
hundred and forty-four hectares: Provided, however, That this limitation shall not
apply to grants, donations, or transfers made to a province, municipality or branch or
subdivision of the Government for the purposes deemed by said entities conducive to
the public interest; but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except
when authorized by Congress: x x x. (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the
legislative authority required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141
exempted government units and entities from the maximum area of public lands that
could be acquired from the State. These government units and entities should not just
turn around and sell these lands to private parties in violation of constitutional or
statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes to
government units and entities could be used to circumvent constitutional limitations
on ownership of alienable or disposable lands of the public domain. In the same
manner, such transfers could also be used to evade the statutory prohibition in CA
No. 141 on the sale of government reclaimed and marshy lands of the public domain
to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on
these lands.[57]
In case of sale or lease of disposable lands of the public domain falling under
Section 59 of CA No. 141, Sections 63 and 67 require a public bidding. Sections 63
and 67 of CA No. 141 provide as follows:
Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for
public purposes, the Director of Lands shall ask the Secretary of Agriculture and
Commerce (now the Secretary of Natural Resources) for authority to dispose of the
same. Upon receipt of such authority, the Director of Lands shall give notice by public
advertisement in the same manner as in the case of leases or sales of agricultural
public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall
be made to the highest bidder. x x x. (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or
sales of alienable or disposable lands of the public domain. [58]
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of
the Spanish Law of Waters of 1866. Private parties could still reclaim portions of the
sea with government permission. However, the reclaimed land could become
private land only if classified as alienable agricultural land of the public
domain open to disposition under CA No. 141. The 1935 Constitution prohibited the
alienation of all natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public
dominion found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of
1950 state that
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State.
Again, the government must formally declare that the property of public dominion is
no longer needed for public use or public service, before the same could be classified
as patrimonial property of the State.[59] In the case of government reclaimed and
marshy lands of the public domain, the declaration of their being disposable, as well
as the manner of their disposition, is governed by the applicable provisions of CA No.
141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public
dominion those properties of the State which, without being for public use, are
intended for public service or the development of the national wealth. Thus,
government reclaimed and marshy lands of the State, even if not employed for public
use or public service, if developed to enhance the national wealth, are classified as
property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the
Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that
Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, wildlife, and other natural
resources of the Philippines belong to the State. With the exception of agricultural,
industrial or commercial, residential, and resettlement lands of the public
domain, natural resources shall not be alienated, and no license, concession, or
lease for the exploration, development, exploitation, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years, renewable for
not more than twenty-five years, except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water power, in which
cases, beneficial use may be the measure and the limit of the grant. (Emphasis
supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the
exception of agricultural, industrial or commercial, residential, and resettlement lands
of the public domain. In contrast, the 1935 Constitution barred the alienation of all
natural resources except public agricultural lands. However, the term public
agricultural lands in the 1935 Constitution encompassed industrial, commercial,
residential and resettlement lands of the public domain. [60] If the land of public domain
were neither timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973 Constitutions,
therefore, prohibited the alienation of all natural resources except agricultural
lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to
individuals who were citizens of the Philippines. Private corporations, even if wholly
owned by Philippine citizens, were no longer allowed to acquire alienable lands of the
public domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973
Constitution declared that
Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of
land of the public domain which may be developed, held or acquired by, or leased to,
any qualified individual, corporation, or association, and the conditions therefor. No
private corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area nor may any
citizen hold such lands by lease in excess of five hundred hectares or acquire by
purchase, homestead or grant, in excess of twenty-four hectares. No private
corporation or association may hold by lease, concession, license or permit, timber or
forest lands and other timber or forest resources in excess of one hundred thousand
hectares. However, such area may be increased by the Batasang Pambansa upon
recommendation of the National Economic and Development Authority. (Emphasis
supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of
the public domain only through lease. Only individuals could now acquire alienable
lands of the public domain, and private corporations became absolutely barred
from acquiring any kind of alienable land of the public domain. The constitutional
ban extended to all kinds of alienable lands of the public domain, while the statutory
ban under CA No. 141 applied only to government reclaimed, foreshore and marshy
alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree
No. 1084 creating PEA, a wholly government owned and controlled corporation with a
special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following
purposes and powers:
Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging,
filling or other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and
sell any and all kinds of lands, buildings, estates and other forms of real property,
owned, managed, controlled and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the
efficient, economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream,
watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified. (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the
public domain. Foreshore areas are those covered and uncovered by the ebb and
flow of the tide.[61] Submerged areas are those permanently under water regardless of
the ebb and flow of the tide.[62] Foreshore and submerged areas indisputably belong
to the public domain[63] and are inalienable unless reclaimed, classified as alienable
lands open to disposition, and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable
lands of the public domain did not apply to PEA since it was then, and until today, a
fully owned government corporation. The constitutional ban applied then, as it still
applies now, only to private corporations and associations. PD No. 1084 expressly
empowers PEA to hold lands of the public domain even in excess of the area
permitted to private corporations by statute. Thus, PEA can hold title to private
lands, as well as title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the
public domain, there must be legislative authority empowering PEA to sell these
lands. This legislative authority is necessary in view of Section 60 of CA No.141,
which states
Sec. 60. x x x; but the land so granted, donated or transferred to a province,
municipality, or branch or subdivision of the Government shall not be alienated,
encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress; x x x. (Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed
foreshore and submerged alienable lands of the public domain. Nevertheless, any
legislative authority granted to PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on private corporations from
acquiring alienable lands of the public domain. Hence, such legislative authority could
only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted
the Regalian doctrine. The 1987 Constitution declares that all natural resources
are owned by the State, and except for alienable agricultural lands of the public
domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the
1987 Constitution state that
Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the State. With the exception
of agricultural lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be under the full
control and supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber,
mineral lands, and national parks. Agricultural lands of the public domain may be
further classified by law according to the uses which they may be devoted. Alienable
lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not more than five hundred
hectares, or acquire not more than twelve hectares thereof by purchase, homestead,
or grant.
Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law,
the size of lands of the public domain which may be acquired, developed, held, or
leased and the conditions therefor. (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning
private corporations from acquiring any kind of alienable land of the public
domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations
to hold alienable lands of the public domain only through lease. As in the 1935 and
1973 Constitutions, the general law governing the lease to private corporations of
reclaimed, foreshore and marshy alienable lands of the public domain is still CA No.
141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except
through lease, alienable lands of the public domain is not well understood. During the
deliberations of the 1986 Constitutional Commission, the commissioners probed the
rationale behind this ban, thus:
FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5
which says:
`No private corporation or association may hold alienable lands of the public domain
except by lease, not to exceed one thousand hectares in area.
If we recall, this provision did not exist under the 1935 Constitution, but this was
introduced in the 1973 Constitution. In effect, it prohibits private corporations from
acquiring alienable public lands. But it has not been very clear in jurisprudence
what the reason for this is. In some of the cases decided in 1982 and 1983, it was
indicated that the purpose of this is to prevent large landholdings. Is that the
intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were
instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-square
meter land where a chapel stood because the Supreme Court said it would be in
violation of this. (Emphasis supplied)
In Ayog v. Cusi,[64] the Court explained the rationale behind this constitutional ban in
this way:
Indeed, one purpose of the constitutional prohibition against purchases of public
agricultural lands by private corporations is to equitably diffuse land ownership or to
encourage owner-cultivatorship and the economic family-size farm and to prevent a
recurrence of cases like the instant case. Huge landholdings by corporations or
private persons had spawned social unrest.
However, if the constitutional intent is to prevent huge landholdings, the Constitution
could have simply limited the size of alienable lands of the public domain that
corporations could acquire. The Constitution could have followed the limitations on
individuals, who could acquire not more than 24 hectares of alienable lands of the
public domain under the 1973 Constitution, and not more than 12 hectares under the
1987 Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the
land in the name of a corporation would be more effective in preventing the break-up
of farmlands. If the farmland is registered in the name of a corporation, upon the
death of the owner, his heirs would inherit shares in the corporation instead of
subdivided parcels of the farmland. This would prevent the continuing break-up of
farmlands into smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on
individuals from acquiring more than the allowed area of alienable lands of the public
domain.Without the constitutional ban, individuals who already acquired the maximum
area of alienable lands of the public domain could easily set up corporations to
acquire more alienable public lands. An individual could own as many corporations as
his means would allow him. An individual could even hide his ownership of a
corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on
acquisition by individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer
ownership of only a limited area of alienable land of the public domain to a qualified
individual. This constitutional intent is safeguarded by the provision prohibiting
corporations from acquiring alienable lands of the public domain, since the vehicle to
circumvent the constitutional intent is removed. The available alienable public lands
are gradually decreasing in the face of an ever-growing population. The most
effective way to insure faithful adherence to this constitutional intent is to grant or sell
alienable lands of the public domain only to individuals. This, it would seem, is the
practical benefit arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas clause,
consists of three properties, namely:
1. [T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;
2. [A]nother area of 2,421,559 square meters contiguous to the three islands; and
3. [A]t AMARIs option as approved by PEA, an additional 350 hectares more or less
to regularize the configuration of the reclaimed area. [65]
PEA confirms that the Amended JVA involves the development of the Freedom
Islands and further reclamation of about 250 hectares x x x, plus an option granted to
AMARI to subsequently reclaim another 350 hectares x x x.[66]
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84
hectares of the 750-hectare reclamation project have been reclaimed, and the
rest of the 592.15 hectares are still submerged areas forming part of Manila
Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00
for PEAs actual cost in partially reclaiming the Freedom Islands. AMARI will also
complete, at its own expense, the reclamation of the Freedom Islands. AMARI will
further shoulder all the reclamation costs of all the other areas, totaling 592.15
hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70
percent and 30 percent, respectively, the total net usable area which is defined in the
Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARIs share in the net usable area, totaling 367.5 hectares, will be
issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides that
x x x, PEA shall have the duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARIs Land share based on the
Land Allocation Plan. PEA, when requested in writing by AMARI, shall then cause
the issuance and delivery of the proper certificates of title covering AMARIs
Land Share in the name of AMARI, x x x; provided, that if more than seventy
percent (70%) of the titled area at any given time pertains to AMARI, PEA shall
deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI, until
such time when a corresponding proportionate area of additional land pertaining to
PEA has been titled. (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum
of 367.5 hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI
joint venture PEAs statutory authority, rights and privileges to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that
PEA hereby contributes to the joint venture its rights and privileges to perform
Rawland Reclamation and Horizontal Development as well as own the Reclamation
Area, thereby granting the Joint Venture the full and exclusive right, authority and
privilege to undertake the Project in accordance with the Master Development Plan.
The Amended JVA is the product of a renegotiation of the original JVA dated April 25,
1995 and its supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own
under the Amended JVA 367.5 hectares of reclaimed foreshore and submerged
areas in Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution
which state that:
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the State. With the exception
of agricultural lands, all other natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural
lands. Private corporations or associations may not hold such alienable lands
of the public domain except by lease, x x x.(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of
Manila Bay are alienable or disposable lands of the public domain. In its
Memorandum,[67] PEA admits that
Under the Public Land Act (CA 141, as amended), reclaimed lands are classified
as alienable and disposable lands of the public domain:
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x. (Emphasis supplied)
Likewise, the Legal Task Force[68] constituted under Presidential Administrative Order
No. 365 admitted in its Report and Recommendation to then President Fidel V.
Ramos, [R]eclaimed lands are classified as alienable and disposable lands of
the public domain.[69] The Legal Task Force concluded that
D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the
rights of ownership and disposition over reclaimed lands have been transferred to
PEA, by virtue of which PEA, as owner, may validly convey the same to any qualified
person without violating the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land,
except by lease (Sec. 3, Art. XVII,[70] 1987 Constitution), does not apply to reclaimed
lands whose ownership has passed on to PEA by statutory grant.
Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged
areas of Manila Bay are part of the lands of the public domain, waters x x x and other
natural resources and consequently owned by the State. As such, foreshore and
submerged areas shall not be alienated, unless they are classified as agricultural
lands of the public domain. The mere reclamation of these areas by PEA does not
convert these inalienable natural resources of the State into alienable or disposable
lands of the public domain. There must be a law or presidential proclamation officially
classifying these reclaimed lands as alienable or disposable and open to disposition
or concession. Moreover, these reclaimed lands cannot be classified as alienable or
disposable if the law has reserved them for some public or quasi-public use.[71]
Section 8 of CA No. 141 provides that only those lands shall be declared open to
disposition or concession which have been officially delimited and
classified.[72] The President has the authority to classify inalienable lands of the
public domain into alienable or disposable lands of the public domain, pursuant to
Section 6 of CA No. 141. In Laurel vs. Garcia,[73] the Executive Department
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the
Philippine Government for use as the Chancery of the Philippine Embassy.Although
the Chancery had transferred to another location thirteen years earlier, the Court still
ruled that, under Article 422[74] of the Civil Code, a property of public dominion retains
such character until formally declared otherwise. The Court ruled that
The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of
the public domain, not available for private appropriation or ownership until
there is a formal declaration on the part of the government to withdraw it from
being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]. (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land
patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila
Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Patent
No. 3517 in the name of PEA for the 157.84 hectares comprising the partially
reclaimed Freedom Islands.Subsequently, on April 9, 1999 the Register of Deeds of
the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of
PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates
of title corresponding to land patents. To this day, these certificates of title are still in
the name of PEA.
PD No. 1085, coupled with President Aquinos actual issuance of a special patent
covering the Freedom Islands, is equivalent to an official proclamation classifying the
Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085
and President Aquinos issuance of a land patent also constitute a declaration that the
Freedom Islands are no longer needed for public service. The Freedom Islands are
thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already
reclaimed the Freedom Islands although subsequently there were partial erosions on
some areas. The government had also completed the necessary surveys on these
islands. Thus, the Freedom Islands were no longer part of Manila Bay but part of the
land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the public
domain into agricultural, forest or timber, mineral lands, and national parks. Being
neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public
domain. Under the 1987 Constitution, agricultural lands of the public domain are the
only natural resources that the State may alienate to qualified private parties. All other
natural resources, such as the seas or bays, are waters x x x owned by the State
forming part of the public domain, and are inalienable pursuant to Section 2, Article
XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a
private corporation, reclaimed the islands under a contract dated November 20, 1973
with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish
Law of Waters of 1866, argues that if the ownership of reclaimed lands may be given
to the party constructing the works, then it cannot be said that reclaimed lands are
lands of the public domain which the State may not alienate. [75] Article 5 of the
Spanish Law of Waters reads as follows:
Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise
provided by the terms of the grant of authority. (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim
from the sea only with proper permission from the State. Private parties could own the
reclaimed land only if not otherwise provided by the terms of the grant of authority.
This clearly meant that no one could reclaim from the sea without permission from the
State because the sea is property of public dominion. It also meant that the State
could grant or withhold ownership of the reclaimed land because any reclaimed land,
like the sea from which it emerged, belonged to the State. Thus, a private person
reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public dominion like
the sea it replaced.[76] Article 5 of the Spanish Law of Waters of 1866 adopted the
time-honored principle of land ownership that all lands that were not acquired from
the government, either by purchase or by grant, belong to the public domain. [77]
Article 5 of the Spanish Law of Waters must be read together with laws subsequently
enacted on the disposition of public lands. In particular, CA No. 141 requires that
lands of the public domain must first be classified as alienable or disposable before
the government can alienate them. These lands must not be reserved for public or
quasi-public purposes.[78]Moreover, the contract between CDCP and the government
was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This
contract could not have converted the Freedom Islands into private lands of a private
corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws
authorizing the reclamation of areas under water and revested solely in the National
Government the power to reclaim lands. Section 1 of PD No. 3-A declared that
The provisions of any law to the contrary notwithstanding, the reclamation of
areas under water, whether foreshore or inland, shall be limited to the National
Government or any person authorized by it under a proper contract. (Emphasis
supplied)
x x x.
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because
reclamation of areas under water could now be undertaken only by the National
Government or by a person contracted by the National Government. Private parties
may reclaim from the sea only under a contract with the National Government, and no
longer by grant or permission as provided in Section 5 of the Spanish Law of Waters
of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the
National Governments implementing arm to undertake all reclamation projects of the
government, which shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity. Under such contract, a private party
receives compensation for reclamation services rendered to PEA. Payment to the
contractor may be in cash, or in kind consisting of portions of the reclaimed land,
subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain. The reclaimed land can be used as payment in kind only if
the reclaimed land is first classified as alienable or disposable land open to
disposition, and then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional
592.15 hectares which are still submerged and forming part of Manila Bay. There is
no legislative or Presidential act classifying these submerged areas as
alienable or disposable lands of the public domain open to disposition. These
submerged areas are not covered by any patent or certificate of title. There can be no
dispute that these submerged areas form part of the public domain, and in their
present state are inalienable and outside the commerce of man. Until reclaimed
from the sea, these submerged areas are, under the Constitution, waters x x x owned
by the State, forming part of the public domain and consequently inalienable.Only
when actually reclaimed from the sea can these submerged areas be classified as
public agricultural lands, which under the Constitution are the only natural resources
that the State may alienate. Once reclaimed and transformed into public agricultural
lands, the government may then officially classify these lands as alienable or
disposable lands open to disposition.Thereafter, the government may declare these
lands no longer needed for public service. Only then can these reclaimed lands be
considered alienable or disposable lands of the public domain and within the
commerce of man.
The classification of PEAs reclaimed foreshore and submerged lands into alienable or
disposable lands open to disposition is necessary because PEA is tasked under its
charter to undertake public services that require the use of lands of the public
domain. Under Section 5 of PD No. 1084, the functions of PEA include the following:
[T]o own or operate railroads, tramways and other kinds of land transportation, x x x;
[T]o construct, maintain and operate such systems of sanitary sewers as may be
necessary; [T]o construct, maintain and operate such storm drains as may be
necessary. PEA is empowered to issue rules and regulations as may be necessary
for the proper use by private parties of any or all of the highways, roads, utilities,
buildings and/or any of its properties and to impose or collect fees or tolls for their
use. Thus, part of the reclaimed foreshore and submerged lands held by the PEA
would actually be needed for public use or service since many of the functions
imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be primarily
responsible for integrating, directing, and coordinating all reclamation projects for and
on behalf of the National Government. The same section also states that [A]ll
reclamation projects shall be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a proper contract executed by it
with any person or entity; x x x. Thus, under EO No. 525, in relation to PD No. 3-A
and PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No.
525 recognized PEA as the government entity to undertake the reclamation of lands
and ensure their maximum utilization in promoting public welfare and
interests.[79] Since large portions of these reclaimed lands would obviously be
needed for public service, there must be a formal declaration segregating reclaimed
lands no longer needed for public service from those still needed for public service.
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA shall belong to
or be owned by the PEA, could not automatically operate to classify inalienable lands
into alienable or disposable lands of the public domain. Otherwise, reclaimed
foreshore and submerged lands of the public domain would automatically become
alienable once reclaimed by PEA, whether or not classified as alienable or
disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO
No. 525, vests in the Department of Environment and Natural Resources (DENR for
brevity) the following powers and functions:
Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and disposable
public lands, mineral resources and, in the process of exercising such control,
impose appropriate taxes, fees, charges, rentals and any such form of levy and
collect such revenues for the exploration, development, utilization or gathering of
such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning
the development, exploration and utilization of the countrys marine, freshwater,
and brackish water and over all aquatic resources of the country and shall
continue to oversee, supervise and police our natural resources; cancel or
cause to cancel such privileges upon failure, non-compliance or violations of any
regulation, order, and for all other causes which are in furtherance of the conservation
of natural resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all
lands of the public domain and serve as the sole agency responsible for
classification, sub-classification, surveying and titling of lands in consultation with
appropriate agencies.[80] (Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State, DENR
exercises supervision and control over alienable and disposable public lands. DENR
also exercises exclusive jurisdiction on the management and disposition of all lands
of the public domain. Thus, DENR decides whether areas under water, like foreshore
or submerged areas of Manila Bay, should be reclaimed or not. This means that PEA
needs authorization from DENR before PEA can undertake reclamation projects in
Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the
public domain. Hence, DENR decides whether reclaimed lands of PEA should be
classified as alienable under Sections 6[81] and 7[82] of CA No. 141. Once DENR
decides that the reclaimed lands should be so classified, it then recommends to the
President the issuance of a proclamation classifying the lands as alienable or
disposable lands of the public domain open to disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in
compliance with the Revised Administrative Code and Sections 6 and 7 of CA No.
141.
In short, DENR is vested with the power to authorize the reclamation of areas under
water, while PEA is vested with the power to undertake the physical reclamation of
areas under water, whether directly or through private contractors. DENR is also
empowered to classify lands of the public domain into alienable or disposable lands
subject to the approval of the President. On the other hand, PEA is tasked to develop,
sell or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged
areas does not make the reclaimed lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the
National Government of lands of the public domain to PEA does not make the lands
alienable or disposable lands of the public domain, much less patrimonial lands of
PEA.
Absent two official acts a classification that these lands are alienable or disposable
and open to disposition and a declaration that these lands are not needed for public
service, lands reclaimed by PEA remain inalienable lands of the public domain. Only
such an official classification and formal declaration can convert reclaimed lands into
alienable or disposable lands of the public domain, open to disposition under the
Constitution, Title I and Title III[83] of CA No. 141 and other applicable laws.[84]
PEAs Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the
public domain, the reclaimed lands shall be disposed of in accordance with CA No.
141, the Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed
lands transferred to a branch or subdivision of the government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x.[85] (Emphasis by PEA)
In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised Administrative
Code of 1987, which states that
Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x.
Thus, the Court concluded that a law is needed to convey any real property belonging
to the Government. The Court declared that -
It is not for the President to convey real property of the government on his or her own
sole will. Any such conveyance must be authorized and approved by a law
enacted by the Congress. It requires executive and legislative
concurrence. (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority
allowing PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977,
provides that
The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to
the contract for the reclamation and construction of the Manila-Cavite Coastal Road
Project between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines dated November 20, 1973 and/or any
other contract or reclamation covering the same area is hereby transferred,
conveyed and assigned to the ownership and administration of the Public
Estates Authority established pursuant to PD No. 1084; Provided, however, That the
rights and interests of the Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the
obligations of the Republic of the Philippines (Department of Public Highways) arising
from, or incident to, the aforesaid contract between the Republic of the Philippines
and the Construction and Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates
Authority shall issue in favor of the Republic of the Philippines the corresponding
shares of stock in said entity with an issued value of said shares of stock (which) shall
be deemed fully paid and non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates
Authority shall execute such contracts or agreements, including appropriate
agreements with the Construction and Development Corporation of the Philippines,
as may be necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of Natural
Resources in favor of the Public Estates Authority without prejudice to the
subsequent transfer to the contractor or his assignees of such portion or
portions of the land reclaimed or to be reclaimed as provided for in the above-
mentioned contract. On the basis of such patents, the Land Registration
Commission shall issue the corresponding certificate of title. (Emphasis
supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides
that -
Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the
PEA which shall be responsible for its administration, development, utilization or
disposition in accordance with the provisions of Presidential Decree No. 1084. Any
and all income that the PEA may derive from the sale, lease or use of reclaimed lands
shall be used in accordance with the provisions of Presidential Decree No. 1084.
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell
its reclaimed lands. PD No. 1085 merely transferred ownership and administration of
lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands
reclaimed by PEA shall belong to or be owned by PEA. EO No. 525 expressly states
that PEA should dispose of its reclaimed lands in accordance with the provisions of
Presidential Decree No. 1084, the charter of PEA.
PEAs charter, however, expressly tasks PEA to develop, improve, acquire,
administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands x x
x owned, managed, controlled and/or operated by the government.[87] (Emphasis
supplied) There is, therefore, legislative authority granted to PEA to sell its
lands, whether patrimonial or alienable lands of the public domain. PEA may sell
to private parties its patrimonial properties in accordance with the PEA charter free
from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEAs
patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to
private individuals since, with the legislative authority, there is no longer any statutory
prohibition against such sales and the constitutional ban does not apply to
individuals. PEA, however, cannot sell any of its alienable or disposable lands of the
public domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable
land of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be
transferred by PEA to the contractor or his assignees (Emphasis supplied) would not
apply to private corporations but only to individuals because of the constitutional
ban. Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987
Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands
open to disposition, and further declared no longer needed for public service, PEA
would have to conduct a public bidding in selling or leasing these lands. PEA must
observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction,
in the absence of a law exempting PEA from holding a public auction.[88] Special
Patent No. 3517 expressly states that the patent is issued by authority of the
Constitution and PD No. 1084, supplemented by Commonwealth Act No. 141, as
amended. This is an acknowledgment that the provisions of CA No. 141 apply to the
disposition of reclaimed alienable lands of the public domain unless otherwise
provided by law. Executive Order No. 654,[89] which authorizes PEA to determine the
kind and manner of payment for the transfer of its assets and properties, does not
exempt PEA from the requirement of public auction. EO No. 654 merely authorizes
PEA to decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government
Auditing Code, the government is required to sell valuable government property
through public bidding. Section 79 of PD No. 1445 mandates that
Section 79. When government property has become unserviceable for any cause,
or is no longer needed, it shall, upon application of the officer accountable therefor,
be inspected by the head of the agency or his duly authorized representative in the
presence of the auditor concerned and, if found to be valueless or unsaleable, it may
be destroyed in their presence. If found to be valuable, it may be sold at public
auction to the highest bidder under the supervision of the proper committee on
award or similar body in the presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in any newspaper
of general circulation, or where the value of the property does not warrant the
expense of publication, by notices posted for a like period in at least three public
places in the locality where the property is to be sold. In the event that the public
auction fails, the property may be sold at a private sale at such price as may be
fixed by the same committee or body concerned and approved by the
Commission.
It is only when the public auction fails that a negotiated sale is allowed, in which case
the Commission on Audit must approve the selling price. [90] The Commission on Audit
implements Section 79 of the Government Auditing Code through Circular No. 89-
296[91] dated January 27, 1989. This circular emphasizes that government assets
must be disposed of only through public auction, and a negotiated sale can be
resorted to only in case of failure of public auction.
At the public auction sale, only Philippine citizens are qualified to bid for PEAs
reclaimed foreshore and submerged alienable lands of the public domain. Private
corporations are barred from bidding at the auction sale of any kind of alienable land
of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10,
1991. PEA imposed a condition that the winning bidder should reclaim another 250
hectares of submerged areas to regularize the shape of the Freedom Islands, under a
60-40 sharing of the additional reclaimed areas in favor of the winning bidder. [92] No
one, however, submitted a bid. On December 23, 1994, the Government Corporate
Counsel advised PEA it could sell the Freedom Islands through negotiation, without
need of another public bidding, because of the failure of the public bidding on
December 10, 1991.[93]
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands
and the additional 250 hectares still to be reclaimed, it also granted an option to
AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract,
enlarged the reclamation area to 750 hectares.[94] The failure of public bidding on
December 10, 1991, involving only 407.84 hectares,[95] is not a valid justification for a
negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides,
the failure of public bidding happened on December 10, 1991, more than three years
before the signing of the original JVA on April 25, 1995. The economic situation in the
country had greatly improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is
absolute and clear: Private corporations or associations may not hold such alienable
lands of the public domain except by lease, x x x. Even Republic Act No. 6957 (BOT
Law, for brevity), cited by PEA and AMARI as legislative authority to sell reclaimed
lands to private parties, recognizes the constitutional ban. Section 6 of RA No. 6957
states
Sec. 6. Repayment Scheme. - For the financing, construction, operation and
maintenance of any infrastructure projects undertaken through the build-operate-and-
transfer arrangement or any of its variations pursuant to the provisions of this Act, the
project proponent x x x may likewise be repaid in the form of a share in the revenue of
the project or other non-monetary payments, such as, but not limited to, the grant of a
portion or percentage of the reclaimed land, subject to the constitutional
requirements with respect to the ownership of the land: x x x. (Emphasis
supplied)
A private corporation, even one that undertakes the physical reclamation of a
government BOT project, cannot acquire reclaimed alienable lands of the public
domain in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI,
authorizes local governments in land reclamation projects to pay the contractor or
developer in kind consisting of a percentage of the reclaimed land, to wit:
Section 302. Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment plan
may consist of the grant of a portion or percentage of the reclaimed land or the
industrial estate constructed.
Although Section 302 of the Local Government Code does not contain a proviso
similar to that of the BOT Law, the constitutional restrictions on land ownership
automatically apply even though not expressly mentioned in the Local Government
Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or
developer, if a corporate entity, can only be paid with leaseholds on portions of the
reclaimed land. If the contractor or developer is an individual, portions of the
reclaimed land, not exceeding 12 hectares[96] of non-agricultural lands, may be
conveyed to him in ownership in view of the legislative authority allowing such
conveyance. This is the only way these provisions of the BOT Law and the Local
Government Code can avoid a direct collision with Section 3, Article XII of the 1987
Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the act of conveying the ownership of the reclaimed lands
to public respondent PEA transformed such lands of the public domain to private
lands. This theory is echoed by AMARI which maintains that the issuance of the
special patent leading to the eventual issuance of title takes the subject land away
from the land of public domain and converts the property into patrimonial or private
property. In short, PEA and AMARI contend that with the issuance of Special Patent
No. 3517 and the corresponding certificates of titles, the 157.84 hectares comprising
the Freedom Islands have become private lands of PEA. In support of their theory,
PEA and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held
Once the patent was granted and the corresponding certificate of title was issued, the
land ceased to be part of the public domain and became private property over which
the Director of Lands has neither control nor jurisdiction.
2. Lee Hong Hok v. David,[98] where the Court declared -
After the registration and issuance of the certificate and duplicate certificate of title
based on a public land patent, the land covered thereby automatically comes under
the operation of Republic Act 496 subject to all the safeguards provided therein.
3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court ruled -
While the Director of Lands has the power to review homestead patents, he may do
so only so long as the land remains part of the public domain and continues to be
under his exclusive control; but once the patent is registered and a certificate of title is
issued, the land ceases to be part of the public domain and becomes private property
over which the Director of Lands has neither control nor jurisdiction.
4. Manalo v. Intermediate Appellate Court,[100] where the Court held
When the lots in dispute were certified as disposable on May 19, 1971, and free
patents were issued covering the same in favor of the private respondents, the said
lots ceased to be part of the public domain and, therefore, the Director of Lands lost
jurisdiction over the same.
5.Republic v. Court of Appeals,[101] where the Court stated
Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally
effected a land grant to the Mindanao Medical Center, Bureau of Medical Services,
Department of Health, of the whole lot, validly sufficient for initial registration under
the Land Registration Act. Such land grant is constitutive of a fee simple title or
absolute title in favor of petitioner Mindanao Medical Center.Thus, Section 122 of the
Act, which governs the registration of grants or patents involving public lands,
provides that Whenever public lands in the Philippine Islands belonging to the
Government of the United States or to the Government of the Philippines are
alienated, granted or conveyed to persons or to public or private corporations, the
same shall be brought forthwith under the operation of this Act (Land Registration Act,
Act 496) and shall become registered lands.
The first four cases cited involve petitions to cancel the land patents and the
corresponding certificates of titles issued to private parties. These four cases
uniformly hold that the Director of Lands has no jurisdiction over private lands or that
upon issuance of the certificate of title the land automatically comes under the
Torrens System. The fifth case cited involves the registration under the Torrens
System of a 12.8-hectare public land granted by the National Government to
Mindanao Medical Center, a government unit under the Department of Health. The
National Government transferred the 12.8-hectare public land to serve as the site for
the hospital buildings and other facilities of Mindanao Medical Center, which
performed a public service. The Court affirmed the registration of the 12.8-hectare
public land in the name of Mindanao Medical Center under Section 122 of Act No.
496. This fifth case is an example of a public land being registered under Act No. 496
without the land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the
name of PEA, a wholly government owned corporation performing public as well as
proprietary functions. No patent or certificate of title has been issued to any private
party. No one is asking the Director of Lands to cancel PEAs patent or certificates of
title. In fact, the thrust of the instant petition is that PEAs certificates of title should
remain with PEA, and the land covered by these certificates, being alienable lands of
the public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant
private or public ownership of the land. Registration is not a mode of acquiring
ownership but is merely evidence of ownership previously conferred by any of the
recognized modes of acquiring ownership. Registration does not give the registrant a
better right than what the registrant had prior to the registration. [102] The registration of
lands of the public domain under the Torrens system, by itself, cannot convert public
lands into private lands.[103]
Jurisprudence holding that upon the grant of the patent or issuance of the certificate
of title the alienable land of the public domain automatically becomes private land
cannot apply to government units and entities like PEA. The transfer of the Freedom
Islands to PEA was made subject to the provisions of CA No. 141 as expressly stated
in Special Patent No. 3517 issued by then President Aquino, to wit:
NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the
Philippines and in conformity with the provisions of Presidential Decree No.
1084, supplemented by Commonwealth Act No. 141, as amended, there are
hereby granted and conveyed unto the Public Estates Authority the aforesaid tracts of
land containing a total area of one million nine hundred fifteen thousand eight
hundred ninety four (1,915,894) square meters; the technical description of which are
hereto attached and made an integral part hereof. (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not
covered by PD No. 1084. Section 60 of CA No. 141 prohibits, except when authorized
by Congress, the sale of alienable lands of the public domain that are transferred to
government units or entities. Section 60 of CA No. 141 constitutes, under Section 44
of PD No. 1529, a statutory lien affecting title of the registered land even if not
annotated on the certificate of title.[104] Alienable lands of the public domain held by
government entities under Section 60 of CA No. 141 remain public lands because
they cannot be alienated or encumbered unless Congress passes a law authorizing
their disposition. Congress, however, cannot authorize the sale to private
corporations of reclaimed alienable lands of the public domain because of the
constitutional ban. Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of
CA No. 141 does not automatically convert alienable lands of the public domain into
private or patrimonial lands. The alienable lands of the public domain must be
transferred to qualified private parties, or to government entities not tasked to dispose
of public lands, before these lands can become private or patrimonial
lands. Otherwise, the constitutional ban will become illusory if Congress can declare
lands of the public domain as private or patrimonial lands in the hands of a
government agency tasked to dispose of public lands. This will allow private
corporations to acquire directly from government agencies limitless areas of lands
which, prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National
Government to reclaim foreshore and submerged areas of the public domain. Thus,
EO No. 525 declares that
EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being
proposed to be undertaken in various parts of the country which need to be evaluated
for consistency with national programs;
Whereas, there is a need to give further institutional support to the Governments
declared policy to provide for a coordinated, economical and efficient reclamation of
lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be
limited to the National Government or any person authorized by it under proper
contract;
Whereas, a central authority is needed to act on behalf of the National
Government which shall ensure a coordinated and integrated approach in the
reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as
a government corporation to undertake reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing
authority to reorganize the national government including the transfer, abolition, or
merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution and pursuant to Presidential
Decree No. 1416, do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on
behalf of the National Government. All reclamation projects shall be approved by
the President upon recommendation of the PEA, and shall be undertaken by the PEA
or through a proper contract executed by it with any person or entity; Provided, that,
reclamation projects of any national government agency or entity authorized under its
charter shall be undertaken in consultation with the PEA upon approval of the
President.
xxx.
As the central implementing agency tasked to undertake reclamation projects
nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the
government agency charged with leasing or selling reclaimed lands of the public
domain. The reclaimed lands being leased or sold by PEA are not private lands, in
the same manner that DENR, when it disposes of other alienable lands, does not
dispose of private lands but alienable lands of the public domain. Only when qualified
private parties acquire these lands will the lands become private lands. In the hands
of the government agency tasked and authorized to dispose of alienable of
disposable lands of the public domain, these lands are still public, not private
lands.
Furthermore, PEAs charter expressly states that PEA shall hold lands of the public
domain as well as any and all kinds of lands. PEA can hold both lands of the public
domain and private lands. Thus, the mere fact that alienable lands of the public
domain like the Freedom Islands are transferred to PEA and issued land patents or
certificates of title in PEAs name does not automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA
as private lands will sanction a gross violation of the constitutional ban on private
corporations from acquiring any kind of alienable land of the public domain. PEA will
simply turn around, as PEA has now done under the Amended JVA, and transfer
several hundreds of hectares of these reclaimed and still to be reclaimed lands to a
single private corporation in only one transaction. This scheme will effectively nullify
the constitutional ban in Section 3, Article XII of the 1987 Constitution which was
intended to diffuse equitably the ownership of alienable lands of the public domain
among Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the
public domain since PEA can acquire x x x any and all kinds of lands. This will open
the floodgates to corporations and even individuals acquiring hundreds of hectares of
alienable lands of the public domain under the guise that in the hands of PEA these
lands are private lands. This will result in corporations amassing huge landholdings
never before seen in this country - creating the very evil that the constitutional ban
was designed to prevent. This will completely reverse the clear direction of
constitutional development in this country. The 1935 Constitution allowed private
corporations to acquire not more than 1,024 hectares of public lands. [105] The 1973
Constitution prohibited private corporations from acquiring any kind of public land,
and the 1987 Constitution has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No.
496 or PD No. 1529, automatically become private lands is contrary to existing
laws. Several laws authorize lands of the public domain to be registered under the
Torrens System or Act No. 496, now PD No. 1529, without losing their character as
public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529,
respectively, provide as follows:
Act No. 496
Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons
or the public or private corporations, the same shall be brought forthwith under the
operation of this Act and shall become registered lands.
PD No. 1529
Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith
under the operation of this Decree. (Emphasis supplied)
Based on its legislative history, the phrase conveyed to any person in Section 103 of
PD No. 1529 includes conveyances of public lands to public corporations.
Alienable lands of the public domain granted, donated, or transferred to a province,
municipality, or branch or subdivision of the Government, as provided in Section 60 of
CA No. 141, may be registered under the Torrens System pursuant to Section 103 of
PD No. 1529. Such registration, however, is expressly subject to the condition in
Section 60 of CA No. 141 that the land shall not be alienated, encumbered or
otherwise disposed of in a manner affecting its title, except when authorized by
Congress. This provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be alienated or
encumbered unless expressly authorized by Congress. The need for legislative
authority prevents the registered land of the public domain from becoming private
land that can be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public
domain may be registered under the Torrens System. Section 48, Chapter 12, Book I
of the Code states
Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the
name of any political subdivision or of any corporate agency or instrumentality,
by the executive head of the agency or instrumentality. (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a
public wharf may be titled in the name of a government corporation regulating port
operations in the country. Private property purchased by the National Government for
expansion of an airport may also be titled in the name of the government agency
tasked to administer the airport.Private property donated to a municipality for use as a
town plaza or public school site may likewise be titled in the name of the
municipality.[106] All these properties become properties of the public domain, and if
already registered under Act No. 496 or PD No. 1529, remain registered land. There
is no requirement or provision in any existing law for the de-registration of land from
the Torrens System.
Private lands taken by the Government for public use under its power of eminent
domain become unquestionably part of the public domain. Nevertheless, Section 85
of PD No. 1529 authorizes the Register of Deeds to issue in the name of the National
Government new certificates of title covering such expropriated lands. Section 85 of
PD No. 1529 states
Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest
therein, is expropriated or taken by eminent domain, the National Government,
province, city or municipality, or any other agency or instrumentality exercising such
right shall file for registration in the proper Registry a certified copy of the judgment
which shall state definitely by an adequate description, the particular property or
interest expropriated, the number of the certificate of title, and the nature of the public
use. A memorandum of the right or interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee simple is taken, a new certificate
shall be issued in favor of the National Government, province, city,
municipality, or any other agency or instrumentality exercising such right for the land
so taken. The legal expenses incident to the memorandum of registration or issuance
of a new certificate of title shall be for the account of the authority taking the land or
interest therein. (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively
private or patrimonial lands. Lands of the public domain may also be registered
pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the
Freedom Islands or of the lands to be reclaimed from submerged areas of Manila
Bay. In the words of AMARI, the Amended JVA is not a sale but a joint venture with a
stipulation for reimbursement of the original cost incurred by PEA for the earlier
reclamation and construction works performed by the CDCP under its 1973 contract
with the Republic. Whether the Amended JVA is a sale or a joint venture, the fact
remains that the Amended JVA requires PEA to cause the issuance and delivery of
the certificates of title conveying AMARIs Land Share in the name of AMARI.[107]
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which
provides that private corporations shall not hold such alienable lands of the public
domain except by lease. The transfer of title and ownership to AMARI clearly means
that AMARI will hold the reclaimed lands other than by lease. The transfer of title and
ownership is a disposition of the reclaimed lands, a transaction considered a sale or
alienation under CA No. 141,[108] the Government Auditing Code,[109] and Section 3,
Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and
submerged areas form part of the public domain and are inalienable. Lands reclaimed
from foreshore and submerged areas also form part of the public domain and are also
inalienable, unless converted pursuant to law into alienable or disposable lands of the
public domain. Historically, lands reclaimed by the government are sui generis, not
available for sale to private parties unlike other alienable public lands. Reclaimed
lands retain their inherent potential as areas for public use or public service. Alienable
lands of the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such equitable
distribution, the 1973 and 1987 Constitutions have barred private corporations from
acquiring any kind of alienable land of the public domain. Those who attempt to
dispose of inalienable natural resources of the State, or seek to circumvent the
constitutional ban on alienation of lands of the public domain to private corporations,
do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now
covered by certificates of title in the name of PEA, are alienable lands of the public
domain. PEA may lease these lands to private corporations but may not sell or
transfer ownership of these lands to private corporations. PEA may only sell these
lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open
to disposition and declared no longer needed for public service. The government can
make such classification and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as agricultural lands of the public
domain, which are the only natural resources the government can alienate. In their
present state, the 592.15 hectares of submerged areas are inalienable and outside
the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation,
ownership of 77.34 hectares[110] of the Freedom Islands, such transfer is void for
being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares[111] of still submerged areas of Manila Bay, such transfer is void for being
contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation
of natural resources other than agricultural lands of the public domain. PEA may
reclaim these submerged areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and further declare them no longer
needed for public service. Still, the transfer of such reclaimed alienable lands of the
public domain to AMARI will be void in view of Section 3, Article XII of the 1987
Constitution which prohibits private corporations from acquiring any kind of alienable
land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution. Under Article 1409[112] of the Civil Code, contracts whose object or
purpose is contrary to law, or whose object is outside the commerce of men, are
inexistent and void from the beginning. The Court must perform its duty to defend and
uphold the Constitution, and therefore declares the Amended JVA null and void ab
initio.
Seventh issue: whether the Court is the proper forum to raise the issue of
whether the Amended JVA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to
rule on this last issue. Besides, the Court is not a trier of facts, and this last issue
involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari
Coastal Bay Development Corporation are PERMANENTLY ENJOINED from
implementing the Amended Joint Venture Agreement which is hereby declared NULL
and VOID ab initio.
SO ORDERED.
FIRST DIVISION
[G.R. No. 120095. August 5, 1996]
JMM PROMOTION AND MANAGEMENT, INC., and KARY INTERNATIONAL,
INC., petitioner, vs. HON. COURT OF APPEALS, HON. MA. NIEVES
CONFESSOR, then Secretary of the Department of the Labor and
Employment, HON. JOSE BRILLANTES, in his capacity as acting
Secretary of the Department of Labor and Employment and
HON. FELICISIMO JOSON, in his capacity as Administrator of the
Philippine Overseas Employment Administration, respondents.
DECISION
KAPUNAN, J.:
The limits of government regulation under the State's Police Power are once
again at the vortex of the instant controversy. Assailed is the government's power to
control deployment of female entertainers to Japan by requiring an Artist Record
Book (ARB) as a precondition to the processing by the POEA of any contract for
overseas employment. By contending that the right to overseas employment, is a
property right within the meaning of the Constitution, petitioners vigorously aver that
deprivation thereof allegedly through the onerous requirement of an ARB violates the
due process clause and constitutes an invalid exercise of the police power.
The factual antecedents are undisputed.
Following the much-publicized death of Maricris Sioson in 1991, former
President Corazon C. Aquino ordered a total ban against the deployment of
performing artists to Japan and other foreign destinations. The ban was, however,
rescinded after leaders of the overseas employment industry promised to extend full
support for a program aimed at removing kinks in the system of deployment. In its
place, the government, through the Secretary of Labor and Employment,
subsequently issued Department Order No. 28, creating the Entertainment Industry
Advisory Council (EIAC), which was tasked with issuing guidelines on the training,
testing certification and deployment of performing artists abroad.
Pursuant to the EIAC's recommendations,[1] the Secretary of Labor, on January
6, 1994, issued Department Order No. 3 establishing various procedures and
requirements for screening performing artists under a new system of training, testing,
certification and deployment of the former. Performing artists successfully hurdling the
test, training and certification requirement were to be issued an Artist's Record Book
(ARB), a necessary prerequisite to processing of any contract of employment by the
POEA. Upon request of the industry, implementation of the process, originally
scheduled for April 1, 1994, was moved to October 1, 1994.
Thereafter, the Department of Labor, following the EIAC's recommendation,
issued a series of orders fine-tuning and implementing the new system. Prominent
among these orders were the following issuances:
1. Department Order No. 3-A, providing for additional guidelines on the training,
testing, certification and deployment of performing artists.
2. Department Order No. 3-B, pertaining to the Artist Record Book (ARB)
requirement, which could be processed only after the artist could show proof of
academic and skills training and has passed the required tests.
3. Department Order No. 3-E, providing the minimum salary a performing artist ought
to receive (not less than US$600.00 for those bound for Japan) and the authorized
deductions therefrom.
4. Department Order No. 3-F, providing for the guidelines on the issuance and use of
the ARB by returning performing artists who, unlike new artists, shall only undergo a
Special Orientation Program (shorter than the basic program) although they must
pass the academic test.
In Civil Case No. 95-72750, the Federation of Entertainment Talent Managers of
the Philippines (FETMOP), on January 27, 1995 filed a class suit assailing these
department orders, principally contending that said orders 1) violated the
constitutional right to travel; 2) abridged existing contracts for employment; and 3)
deprived individual artists of their licenses without due process of law. FETMOP,
likewise, averred that the issuance of the Artist Record Book (ARB) was
discriminatory and illegal and "in gross violation of the constitutional right... to life
liberty and property." Said Federation consequently prayed for the issuance of a writ
of preliminary injunction against the aforestated orders.
On February 2, 1992, JMM Promotion and Management, Inc. and Kary
International, Inc., herein petitioners, filed a Motion for Intervention in said civil case,
which was granted by the trial court in an Order dated 15 February, 1995.
However, on February 21, 1995, the trial court issued an Order denying
petitioners' prayer for a writ of preliminary injunction and dismissed the complaint.
On appeal from the trial court's Order, respondent court, in CA G.R. SP No.
36713 dismissed the same. Tracing the circumstances which led to the issuance of
the ARB requirement and the assailed Department Order, respondent court
concluded that the issuances constituted a valid exercise by the state of the police
power.
We agree.
The latin maxim salus populi est suprema lex embodies the character of the
entire spectrum of public laws aimed at promoting the general welfare of the people
under the State's police power. As an inherent attribute of sovereignty which virtually
"extends to all public needs,"[2] this "least limitable"[3] of governmental powers grants a
wide panoply of instruments through which the state, as parens patriae gives effect to
a host of its regulatory powers.
Describing the nature and scope of the police power, Justice Malcolm, in the
early case of Rubi v. Provincial Board of Mindoro[4] wrote:
"The police power of the State," one court has said...'is a power coextensive with self-
protection, and is not inaptly termed 'the law of overruling necessity.' It may be said to
be that inherent and plenary power in the state which enables it to prohibit all things
hurtful to the comfort, safety and welfare of society.' Carried onward by the current of
legislature, the judiciary rarely attempts to dam the onrushing power of legislative
discretion, provided the purposes of the law do not go beyond the great principles that
mean security for the public welfare or do not arbitrarily interfere with the right of the
individual."[5]
Thus, police power concerns government enactments which precisely interfere
with personal liberty or property in order to promote the general welfare or the
common good. As the assailed Department Order enjoys a presumed validity, it
follows that the burden rests upon petitioners to demonstrate that the said order,
particularly, its ARB requirement, does not enhance the public welfare or was
exercised arbitrarily or unreasonably.
A thorough review of the facts and circumstances leading to the issuance of the
assailed orders compels us to rule that the Artist Record Book requirement and the
questioned Department Order related to its issuance were issued by the Secretary of
Labor pursuant to a valid exercise of the police power.
In 1984, the Philippines emerged as the largest labor sending country in Asia
dwarfing the labor export of countries with mammoth populations such as India and
China. According to the National Statistics Office, this diaspora was augmented
annually by over 450,000 documented and clandestine or illegal (undocumented)
workers who left the country for various destinations abroad, lured by higher salaries,
better work opportunities and sometimes better living conditions.
Of the hundreds of thousands of workers who left the country for greener
pastures in the last few years, women composed slightly close to half of those
deployed, constituting 47% between 1987-1991, exceeding this proportion (58%) by
the end of 1991,[6] the year former President Aquino instituted the ban on deployment
of performing artists to Japan and other countries as a result of the gruesome death
of Filipino entertainer Maricris Sioson.
It was during the same period that this Court took judicial notice not only of the
trend, but also of the fact that most of our women, a large number employed as
domestic helpers and entertainers, worked under exploitative conditions "marked by
physical and personal abuse."[7] Even then, we noted that "[t]he sordid tales of
maltreatment suffered by migrant Filipina workers, even rape and various forms of
torture, confirmed by testimonies of returning workers" compelled "urgent government
action."[8]
Pursuant to the alarming number of reports that a significant number of Filipina
performing artists ended up as prostitutes abroad (many of whom were beaten,
drugged and forced into prostitution), and following the deaths of a number of these
women, the government began instituting measures aimed at deploying only those
individuals who met set standards which would qualify them as legitimate performing
artists. In spite of these measures, however, a number of our countrymen have
nonetheless fallen victim to unscrupulous recruiters, ending up as virtual slaves
controlled by foreign crime syndicates and forced into jobs other than those indicated
in their employment contracts. Worse, some of our women have been forced into
prostitution.
Thus, after a number of inadequate and failed accreditation schemes, the
Secretary of Labor issued on August 16, 1993, D.O. No. 28, establishing the
Entertainment Industry Advisory Council (EIAC), the policy advisory body of DOLE on
entertainment industry matters.[9] Acting on the recommendations of the said body,
the Secretary of Labor, on January 6, 1994, issued the assailed orders. These orders
embodied EIAC's Resolution No. 1, which called for guidelines on screening, testing
and accrediting performing overseas Filipino artists. Significantly, as the respondent
court noted, petitioners were duly represented in the EIAC,[10] which gave the
recommendations on which the ARB and other requirements were based.
 Clearly, the welfare of Filipino performing artists, particularly the women was
paramount in the issuance of Department Order No. 3. Short of a total and absolute
ban against the deployment of performing artists to "high risk" destinations, a
measure which would only drive recruitment further underground, the new scheme at
the very least rationalizes the method of screening performing artists by requiring
reasonable educational and artistic skills from them and limits deployment to only
those individuals adequately prepared for the unpredictable demands of employment
as artists abroad. It cannot be gainsaid that this scheme at least lessens the room for
exploitation by unscrupulous individuals and agencies.
Moreover, here or abroad, selection of performing artists is usually
accomplished by auditions, where those deemed unfit are usually weeded out
through a process which is inherently subjective and vulnerable to bias and
differences in taste. The ARB requirement goes one step further, however, attempting
to minimize the subjectivity of the process by defining the minimum skills required
from entertainers and performing artists. As the Solicitor General observed, this
should be easily met by experienced artists possessing merely basic skills. The tests
are aimed at segregating real artists or performers from those passing themselves off
as such, eager to accept any available job and therefore exposing themselves to
possible exploitation.
As to the other provisions of Department Order No. 3 questioned by petitioners,
we see nothing wrong with the requirement for document and booking confirmation
(D.O. 3-C), a minimum salary scale (D.O. 3-E), or the requirement for registration of
returning performers. The requirement for a venue certificate or other documents
evidencing the place and nature of work allows the government closer monitoring of
foreign employers and helps keep our entertainers away from prostitution fronts and
other worksites associated with unsavory, immoral, illegal or exploitative
practices. Parenthetically, none of these issuances appear to us, by any stretch of the
imagination, even remotely unreasonable or arbitrary. They address a felt need of
according greater protection for an oft-exploited segment of our OCW's. They
respond to the industry's demand for clearer and more practicable rules and
guidelines. Many of these provisions were fleshed out following recommendations by,
and after consultations with, the affected sectors and non-government
organizations. On the whole, they are aimed at enhancing the safety and security of
entertainers and artists bound for Japan and other destinations, without stifling the
industry's concerns for expansion and growth.
In any event, apart from the State's police power, the Constitution itself
mandates government to extend the fullest protection to our overseas workers. The
basic constitutional statement on labor, embodied in Section 18 of Article II of the
Constitution provides:
Sec. 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
More emphatically, the social justice provision on labor of the 1987 Constitution
in its first paragraph states:
The State shall afford full protection to labor, local and overseas, organized and
unorganized and promote full employment and equality of employment opportunities
for all.
Obviously, protection to labor does not indicate promotion of employment
alone. Under the welfare and social justice provisions of the Constitution, the
promotion of full employment, while desirable, cannot take a backseat to the
government's constitutional duty to provide mechanisms for the protection of our
workforce, local or overseas. As this Court explained in Philippine Association of
Service Exporters (PASEI) v. Drilon,[11] in reference to the recurring problems faced
by our overseas workers:
What concerns the Constitution more paramountly is that such an employment be
above all, decent, just, and humane. It is bad enough that the country has to send its
sons and daughters to strange lands because it cannot satisfy their employment
needs at home. Under these circumstances, the Government is duty-bound to insure
that our toiling expatriates have adequate protection, personally and economically,
while away from home.
We now go to petitioners' assertion that the police power cannot, nevertheless,
abridge the right of our performing workers to return to work abroad after having
earlier qualified under the old process, because, having previously been accredited,
their accreditation became a property right," protected by the due process clause. We
find this contention untenable.
A profession, trade or calling is a property right within the meaning of our
constitutional guarantees. One cannot be deprived of the right to work and the right to
make a living because these rights are property rights, the arbitrary and unwarranted
deprivation of which normally constitutes an actionable wrong. [12]
Nevertheless, no right is absolute, and the proper regulation of a profession,
calling, business or trade has always been upheld as a legitimate subject of a valid
exercise of the police power by the state particularly when their conduct affects either
the execution of legitimate governmental functions, the preservation of the State, the
public health and welfare and public morals. According to the maxim, sic utere tuo ut
alienum non laedas, it must of course be within the legitimate range of legislative
action to define the mode and manner in which every one may so use his own
property so as not to pose injury to himself or others.[13]
In any case, where the liberty curtailed affects at most the rights of property, the
permissible scope of regulatory measures is certainly much wider. [14] To pretend that
licensing or accreditation requirements violates the due process clause is to ignore
the settled practice, under the mantle of the police power, of regulating entry to the
practice of various trades or professions. Professionals leaving for abroad are
required to pass rigid written and practical exams before they are deemed fit to
practice their trade. Seamen are required to take tests determining their
seamanship. Locally, the Professional Regulation Commission has began to require
previously licensed doctors and other professionals to furnish documentary proof that
they had either re-trained or had undertaken continuing education courses as a
requirement for renewal of their licenses. It is not claimed that these requirements
pose an unwarranted deprivation of a property right under the due process clause. So
long as Professionals and other workers meet reasonable regulatory standards no
such deprivation exists.
Finally, it is a futile gesture on the part of petitioners to invoke the non-
impairment clause of the Constitution to support their argument that the government
cannot enact the assailed regulatory measures because they abridge the freedom to
contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that
"[t]he non-impairment clause of the Constitution... must yield to the loftier purposes
targeted by the government."[15] Equally important, into every contract is read
provisions of existing law, and always, a reservation of the police power for so long as
the agreement deals with a subject impressed with the public welfare.
A last point. Petitioners suggest that the singling out of entertainers and
performing artists under the assailed department orders constitutes class legislation
which violates the equal protection clause of the Constitution. We do not agree.
The equal protection clause is directed principally against undue favor and
individual or class privilege. It is not intended to prohibit legislation which is limited to
the object to which it is directed or by the territory in which it is to operate. It does not
require absolute equality, but merely that all persons be treated alike under like
conditions both as to privileges conferred and liabilities imposed.[16] We have held,
time and again, that the equal protection clause of the Constitution does not forbid
classification for so long as such classification is based on real and substantial
differences having a reasonable relation to the subject of the particular
legislation.[17] If classification is germane to the purpose of the law, concerns all
members of the class, and applies equally to present and future conditions, the
classification does not violate the equal protection guarantee.
In the case at bar, the challenged Department Order clearly applies to all
performing artists and entertainers destined for jobs abroad. These orders, we
stressed hereinbefore, further the Constitutional mandate requiring Government to
protect our workforce, particularly those who may be prone to abuse and exploitation
as they are beyond the physical reach of government regulatory agencies. The tragic
incidents must somehow stop, but short of absolutely curtailing the right of these
performers and entertainers to work abroad, the assailed measures enable our
government to assume a measure of control.
WHEREFORE, finding no reversible error in the decision sought to be reviewed,
petition is hereby DENIED.
SO ORDERED.
Padilla (Chairman), Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and
TOMAS D. ACHACOSO, as Administrator of the Philippine Overseas
Employment Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.
SARMIENTO, J.:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a
firm "engaged principally in the recruitment of Filipino workers, male and female, for
overseas placement," 1 challenges the Constitutional validity of Department Order No.
1, Series of 1988, of the Department of Labor and Employment, in the character of
"GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT
OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for
certiorari and prohibition. Specifically, the measure is assailed for "discrimination
against males or females;" 2 that it "does not apply to all Filipino workers but only to
domestic helpers and females with similar skills;" 3 and that it is violative of the right to
travel. It is held likewise to be an invalid exercise of the lawmaking power, police
power being legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation "in policy and decision-making
processes affecting their rights and benefits as may be provided by
law." 4 Department Order No. 1, it is contended, was passed in the absence of prior
consultations. It is claimed, finally, to be in violation of the Charter's non-impairment
clause, in addition to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of
Labor and Administrator of the Philippine Overseas Employment Administration, filed
a Comment informing the Court that on March 8, 1988, the respondent Labor
Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada,
Hongkong, United States, Italy, Norway, Austria, and Switzerland. * In submitting the
validity of the challenged "guidelines," the Solicitor General invokes the police power
of the Philippine State.
It is admitted that Department Order No. 1 is in the nature of a police power measure.
The only question is whether or not it is valid under the Constitution.
The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare." 5 As defined, it consists of (1) an
imposition of restraint upon liberty or property, (2) in order to foster the common good.
It is not capable of an exact definition but has been, purposely, veiled in general
terms to underscore its all-comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits." 6
It finds no specific Constitutional grant for the plain reason that it does not owe its
origin to the Charter. Along with the taxing power and eminent domain, it is inborn in
the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, 7 refers to it succinctly as the plenary power
of the State "to govern its citizens." 8
"The police power of the State ... is a power coextensive with self- protection, and it is
not inaptly termed the "law of overwhelming necessity." It may be said to be that
inherent and plenary power in the State which enables it to prohibit all things hurtful to
the comfort, safety, and welfare of society." 9
It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is
"rooted in the conception that men in organizing the state and imposing upon its
government limitations to safeguard constitutional rights did not intend thereby to
enable an individual citizen or a group of citizens to obstruct unreasonably the
enactment of such salutary measures calculated to ensure communal peace, safety,
good order, and welfare." 10 Significantly, the Bill of Rights itself does not purport to
be an absolute guaranty of individual rights and liberties "Even liberty itself, the
greatest of all rights, is not unrestricted license to act according to one's will." 11 It is
subject to the far more overriding demands and requirements of the greater number.
Notwithstanding its extensive sweep, police power is not without its own limitations.
For all its awesome consequences, it may not be exercised arbitrarily or
unreasonably. Otherwise, and in that event, it defeats the purpose for which it is
exercised, that is, to advance the public good. Thus, when the power is used to
further private interests at the expense of the citizenry, there is a clear misuse of the
power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. 13 In the absence of clear
and convincing evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should
be nullified. There is no question that Department Order No. 1 applies only to "female
contract workers," 14 but it does not thereby make an undue discrimination between
the sexes. It is well-settled that "equality before the law" under the Constitution 15does
not import a perfect Identity of rights among all men and women. It admits of
classifications, provided that (1) such classifications rest on substantial distinctions;
(2) they are germane to the purposes of the law; (3) they are not confined to existing
conditions; and (4) they apply equally to all members of the same class. 16
The Court is satisfied that the classification made-the preference for female workers
rests on substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that has
befallen our female labor force abroad, especially domestic servants, amid
exploitative working conditions marked by, in not a few cases, physical and personal
abuse. The sordid tales of maltreatment suffered by migrant Filipina workers, even
rape and various forms of torture, confirmed by testimonies of returning workers, are
compelling motives for urgent Government action. As precisely the caretaker of
Constitutional rights, the Court is called upon to protect victims of exploitation. In
fulfilling that duty, the Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first place, there is no
evidence that, except perhaps for isolated instances, our men abroad have been
afflicted with an Identical predicament. The petitioner has proffered no argument that
the Government should act similarly with respect to male workers. The Court, of
course, is not impressing some male chauvinistic notion that men are superior to
women. What the Court is saying is that it was largely a matter of evidence (that
women domestic workers are being ill-treated abroad in massive instances) and not
upon some fanciful or arbitrary yardstick that the Government acted in this case. It is
evidence capable indeed of unquestionable demonstration and evidence this Court
accepts. The Court cannot, however, say the same thing as far as men are
concerned. There is simply no evidence to justify such an inference. Suffice it to state,
then, that insofar as classifications are concerned, this Court is content that
distinctions are borne by the evidence. Discrimination in this case is justified.
As we have furthermore indicated, executive determinations are generally final on the
Court. Under a republican regime, it is the executive branch that enforces policy. For
their part, the courts decide, in the proper cases, whether that policy, or the manner
by which it is implemented, agrees with the Constitution or the laws, but it is not for
them to question its wisdom. As a co-equal body, the judiciary has great respect for
determinations of the Chief Executive or his subalterns, especially when the
legislature itself has specifically given them enough room on how the law should be
effectively enforced. In the case at bar, there is no gainsaying the fact, and the Court
will deal with this at greater length shortly, that Department Order No. 1 implements
the rule-making powers granted by the Labor Code. But what should be noted is the
fact that in spite of such a fiction of finality, the Court is on its own persuaded that
prevailing conditions indeed call for a deployment ban.
There is likewise no doubt that such a classification is germane to the purpose behind
the measure. Unquestionably, it is the avowed objective of Department Order No. 1 to
"enhance the protection for Filipino female overseas workers" 17 this Court has no
quarrel that in the midst of the terrible mistreatment Filipina workers have suffered
abroad, a ban on deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended to
apply indefinitely so long as those conditions exist. This is clear from the Order itself
("Pending review of the administrative and legal measures, in the Philippines and in
the host countries . . ."18), meaning to say that should the authorities arrive at a
means impressed with a greater degree of permanency, the ban shall be lifted. As a
stop-gap measure, it is possessed of a necessary malleability, depending on the
circumstances of each case. Accordingly, it provides:
9. LIFTING OF SUSPENSION. The Secretary of Labor and Employment (DOLE)
may, upon recommendation of the Philippine Overseas Employment Administration
(POEA), lift the suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and
protection of Filipino workers. 19
The Court finds, finally, the impugned guidelines to be applicable to all female
domestic overseas workers. That it does not apply to "all Filipina workers" 20 is not an
argument for unconstitutionality. Had the ban been given universal applicability, then
it would have been unreasonable and arbitrary. For obvious reasons, not all of them
are similarly circumstanced. What the Constitution prohibits is the singling out of a
select person or group of persons within an existing class, to the prejudice of such a
person or group or resulting in an unfair advantage to another person or group of
persons. To apply the ban, say exclusively to workers deployed by A, but not to those
recruited by B, would obviously clash with the equal protection clause of the Charter.
It would be a classic case of what Chase refers to as a law that "takes property from
A and gives it to B." 21 It would be an unlawful invasion of property rights and freedom
of contract and needless to state, an invalid act. 22 (Fernando says: "Where the
classification is based on such distinctions that make a real difference as infancy, sex,
and stage of civilization of minority groups, the better rule, it would seem, is to
recognize its validity only if the young, the women, and the cultural minorities are
singled out for favorable treatment. There would be an element of unreasonableness
if on the contrary their status that calls for the law ministering to their needs is made
the basis of discriminatory legislation against them. If such be the case, it would be
difficult to refute the assertion of denial of equal protection." 23 In the case at bar, the
assailed Order clearly accords protection to certain women workers, and not the
contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas
deployment. From scattered provisions of the Order, it is evident that such a total ban
has hot been contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers
of similar skills defined herein to the following [sic] are authorized under these
guidelines and are exempted from the suspension.
5.1 Hirings by immediate members of the family of Heads of State and Government;
5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and
5.3 Hirings by senior officials of the diplomatic corps and duly accredited international
organizations.
5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral enterprise, like all other freedoms, is not free from restrictions, more so in this
labor agreements or understanding. jurisdiction, where laissez faire has never been fully accepted as a controlling
xxx xxx xxx economic way of life.
7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS-- This Court understands the grave implications the questioned Order has on the
Vacationing domestic helpers and/or workers of similar skills shall be allowed to business of recruitment. The concern of the Government, however, is not necessarily
process with the POEA and leave for worksite only if they are returning to the same to maintain profits of business firms. In the ordinary sequence of events, it is profits
employer to finish an existing or partially served employment contract. Those workers that suffer as a result of Government regulation. The interest of the State is to provide
returning to worksite to serve a new employer shall be covered by the suspension a decent living to its citizens. The Government has convinced the Court in this case
and the provision of these guidelines. that this is its intent. We do not find the impugned Order to be tainted with a grave
xxx xxx xxx abuse of discretion to warrant the extraordinary relief prayed for.
9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may, WHEREFORE, the petition is DISMISSED. No costs.
upon recommendation of the Philippine Overseas Employment Administration SO ORDERED.
(POEA), lift the suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and
protection of Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel does not impair the
right. The right to travel is subject, among other things, to the requirements of "public
safety," "as may be provided by law." 25 Department Order No. 1 is a valid
implementation of the Labor Code, in particular, its basic policy to "afford protection to
labor," 26 pursuant to the respondent Department of Labor's rule-making authority
vested in it by the Labor Code. 27 The petitioner assumes that it is unreasonable
simply because of its impact on the right to travel, but as we have stated, the right
itself is not absolute. The disputed Order is a valid qualification thereto.
Neither is there merit in the contention that Department Order No. 1 constitutes an
invalid exercise of legislative power. It is true that police power is the domain of the
legislature, but it does not mean that such an authority may not be lawfully delegated.
As we have mentioned, the Labor Code itself vests the Department of Labor and
Employment with rulemaking powers in the enforcement whereof. 28
The petitioners's reliance on the Constitutional guaranty of worker participation "in
policy and decision-making processes affecting their rights and benefits" 29 is not well-
taken. The right granted by this provision, again, must submit to the demands and
necessities of the State's power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
opportunities for all. 30
"Protection to labor" does not signify the promotion of employment alone. What
concerns the Constitution more paramountly is that such an employment be above
all, decent, just, and humane. It is bad enough that the country has to send its sons
and daughters to strange lands because it cannot satisfy their employment needs at
home. Under these circumstances, the Government is duty-bound to insure that our
toiling expatriates have adequate protection, personally and economically, while away
from home. In this case, the Government has evidence, an evidence the petitioner
cannot seriously dispute, of the lack or inadequacy of such protection, and as part of
its duty, it has precisely ordered an indefinite ban on deployment.
The Court finds furthermore that the Government has not indiscriminately made use
of its authority. It is not contested that it has in fact removed the prohibition with
respect to certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield
to the loftier purposes targetted by the Government. 31 Freedom of contract and

THIRD DIVISION
[G.R. No. 122917. July 12, 1999]
MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P.
PASCUAL, RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ,
JOSELITO O. AGDON GEORGE P. LIGUTAN JR., CELSO M. YAZAR, ALEX G.
CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C.
DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F.
TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA
CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E.
SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY
V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R. CORTEZ,
MA. ISABEL B. CONCEPCION, DINDO VALERIO, ZENAIDA MATA, ARIEL DEL
PILAR, MARGARET CECILIA CANOZA, THELMA SEBASTIAN, MA. JEANETTE
CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY BALOLOA,
ELIZABETH VENTURA, GRACE S. PARDO & RICO TIMOSA, petitioners vs.
NATIONAL LABOR RELATIONS COMMISSION & FAR EAST BANK AND TRUST
COMPANY, respondents.
DECISION
PANGANIBAN, J.:
The Magna Carta for Disabled Persons mandates that qualified disabled persons be
granted the same terms and conditions of employment as qualified able-bodied
employees. Once they have attained the status of regular workers, they should be
accorded all the benefits granted by law, notwithstanding written or verbal contracts to
the contrary. This treatment is rooted not merely on charity or accommodation, but on
justice for all.
The Case
Challenged in the Petition for Certiorari[1] before us is the June 20, 1995 Decision[2] of
the National Labor Relations Commission (NLRC),[3] which affirmed the August, 22
1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiters Decision
disposed as follows:[4]
WHEREFORE, judgment is hereby rendered dismissing the above-mentioned
complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution[5] of the NLRC, which denied the
Motion for Reconsideration.
The Facts
The facts were summarized by the NLRC in this wise:[6]
Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
Employment Contract for Handicapped Workers. (pp. 68 & 69, Records) The full text
of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
organized and existing under and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla, Intramuros, Manila, represented herein
by its Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter referred
to as the BANK);
- and -
________________, ________________ years old, of legal age, _____________,
and residing at __________________ (hereinafter referred to as the (EMPLOYEE).
WITNESSETH: That
WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a
need to provide disabled and handicapped persons gainful employment and
opportunities to realize their potentials, uplift their socio-economic well being and
welfare and make them productive, self-reliant and useful citizens to enable them to
fully integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK which may be filled-up by
disabled and handicapped persons, particularly deaf-mutes, and the BANK ha[s]
been approached by some civic-minded citizens and authorized government
agencies [regarding] the possibility of hiring handicapped workers for these positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]
recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing premises and in
compliance with Article 80 of the Labor Code of the Philippines as amended, the
BANK and the EMPLOYEE have entered into this Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK, as Money Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:
i Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the aid of a counting
machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month, after which the
BANK shall determine whether or not he/she should be allowed to finish the
remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,
subject to adjustment in the sole judgment of the BANK, payable every 15 th and end
of the month.
5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from
Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may be required to
perform overtime work as circumstance may warrant, for which overtime work he/she
[shall] be paid an additional compensation of 125% of his daily rate if performed
during ordinary days and 130% if performed during Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13th month pay based on his basic daily wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK
Rules and Regulations and Policies, and to conduct himself/herself in a manner
expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed under a
special employment program of the BANK, for which reason the standard hiring
requirements of the BANK were not applied in his/her case. Consequently, the
EMPLOYEE acknowledges and accepts the fact that the terms and conditions of the
employment generally observed by the BANK with respect to the BANKs regular
employee are not applicable to the EMPLOYEE, and that therefore, the terms and
conditions of the EMPLOYEEs employment with the BANK shall be governed solely
and exclusively by this Contract and by the applicable rules and regulations that the
Department of Labor and Employment may issue in connection with the employment
of disabled and handicapped workers. More specifically, the EMPLOYEE hereby
acknowledges that the provisions of Book Six of the Labor Code of the Philippines as
amended, particularly on regulation of employment and separation pay are not
applicable to him/her.
9. The Employment Contract shall be for a period of six (6) months or from ____ to
____ unless earlier terminated by the BANK for any just or reasonable cause. Any
continuation or extension of this Contract shall be in writing and therefore this
Contract will automatically expire at the end of its terms unless renewed in writing by
the BANK.
IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this
____ day of _________________, ____________ at Intramuros, Manila, Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
(2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one
(21). Their employment[s] were renewed every six months such that by the time this
case arose, there were fifty-six (56) deaf-mutes who were employed by respondent
under the said employment agreement. The last one was Thelma Malindoy who was
employed in 1992 and whose contract expired on July 1993.
xxxxxxxxx
Disclaiming that complainants were regular employees, respondent Far East Bank
and Trust Company maintained that complainants who are a special class of workers
the hearing impaired employees were hired temporarily under [a] special employment
arrangement which was a result of overtures made by some civic and political
personalities to the respondent Bank; that complainant[s] were hired due to pakiusap
which must be considered in the light of the context of the respondent Banks
corporate philosophy as well as its career and working environment which is to
maintain and strengthen a corps of professionals trained and qualified officers and
regular employees who are baccalaureate degree holders from excellent schools
which is an unbending policy in the hiring of regular employees; that in addition to
this, training continues so that the regular employee grows in the corporate ladder;
that the idea of hiring handicapped workers was acceptable to them only on a special
arrangement basis; that it adopted the special program to help tide over a group of
handicapped workers such as deaf-mutes like the complainants who could do manual
work for the respondent Bank; that the task of counting and sorting of bills which was
being performed by tellers could be assigned to deaf-mutes; that the counting and
sorting of money are tellering works which were always logically and naturally part
and parcel of the tellers normal functions; that from the beginning there have been no
separate items in the respondent Bank plantilla for sorters or counters; that the tellers
themselves already did the sorting and counting chore as a regular feature and
integral part of their duties (p. 97, Records); that through the pakiusap of Arturo
Borjal, the tellers were relieved of this task of counting and sorting bills in favor of
deaf-mutes without creating new positions as there is no position either in the
respondent or in any other bank in the Philippines which deals with purely counting
and sorting of bills in banking operations.
Petitioners specified when each of them was hired and dismissed, viz: [7]
NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed
1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93
2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94
3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93
4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94
5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94
6. ALBERT HALLARE West 4 JAN 91 9 JAN 94
7. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 93
8. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 93
9. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 94
10. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 93
11. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 93
12. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 93
13. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 93
14. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 93
15. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 93
16. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93
17. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93
18. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93
19. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93
20. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93
21. ROBERT MARCELO West 31 JUL 93[8] 1 AUG 93
22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 93

23. JOSE E. SALES West 6 AUG 92 12 OCT 93
24. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93
25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 94
26. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93
27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93
28. BERNADETH D. AGERO West 19 DEC 90 27 DEC 93
29. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93
30. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 93
31. MA. ISABEL B. CONCEPCION West 6 SEPT 90 6 FEB 94
32. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93
33. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93
34. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93
35. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94
36. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93
37. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93
38. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93
39. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93
40. PINKY BALOLOA West 3 JUN 91 2 DEC 93
41. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [SIC]
42. GRACE S. PARDO West 4 APR 90 13 MAR 94
43. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein
petitioners. Hence, this recourse to this Court.[9]
The Ruling of the NLRC
In affirming the ruling of the labor arbiter that herein petitioners could not be deemed
regular employees under Article 280 of the Labor Code, as amended, Respondent
Commission ratiocinated as follows:
We agree that Art. 280 is not controlling herein. We give due credence to the
conclusion that complainants were hired as an accommodation to [the]
recommendation of civic oriented personalities whose employment[s] were covered
by xxx Employment Contract[s] with special provisions on duration of contract as
specified under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the terms
of the contract shall be the law between the parties.[10]
The NLRC also declared that the Magna Carta for Disabled Persons was not
applicable, considering the prevailing circumstances/milieu of the case.
Issues
In their Memorandum, petitioners cite the following grounds in support of their cause:
I. The Honorable Commission committed grave abuse of discretion in holding that the
petitioners - money sorters and counters working in a bank - were not regular
employees.
II. The Honorable Commission committed grave abuse of discretion in holding that
the employment contracts signed and renewed by the petitioners - which provide for a
period of six (6) months - were valid.
III. The Honorable Commission committed grave abuse of discretion in not applying
the provisions of the Magna Carta for the Disabled (Republic Act No. 7277), on
proscription against discrimination against disabled persons. [11]
In the main, the Court will resolve whether petitioners have become regular
employees.
This Courts Ruling
The petition is meritorious. However, only the employees, who worked for more than
six months and whose contracts were renewed are deemed regular. Hence, their
dismissal from employment was illegal.
Preliminary Matter: Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of the findings of
facts of the NLRC is not allowed in a petition for certiorari. Specifically, it maintains
that the Court cannot pass upon the findings of public respondents that petitioners
were not regular employees.
True, the Court, as a rule, does not review the factual findings of public respondents
in a certiorari proceeding. In resolving whether the petitioners have become regular
employees, we shall not change the facts found by the public respondent. Our task is
merely to determine whether the NLRC committed grave abuse of discretion in
applying the law to the established facts, as above-quoted from the assailed Decision.
Main Issue: Are Petitioners Regular Employees?
Petitioners maintain that they should be considered regular employees, because their
task as money sorters and counters was necessary and desirable to the business of
respondent bank. They further allege that their contracts served merely to preclude
the application of Article 280 and to bar them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as
special workers and should not in any way be considered as part of the regular
complement of the Bank.[12] Rather, they were special workers under Article 80 of the
Labor Code. Private respondent contends that it never solicited the services of
petitioners, whose employment was merely an accommodation in response to the
requests of government officials and civic-minded citizens. They were told from the
start, with the assistance of government representatives, that they could not become
regular employees because there were no plantilla positions for money sorters,
whose task used to be performed by tellers. Their contracts were renewed several
times, not because of need but merely for humanitarian reasons. Respondent submits
that as of the present, the special position that was created for the petitioners no
longer exist[s] in private respondent [bank], after the latter had decided not to renew
anymore their special employment contracts.
At the outset, let it be known that this Court appreciates the nobility of private
respondents effort to provide employment to physically impaired individuals and to
make them more productive members of society. However, we cannot allow it to
elude the legal consequences of that effort, simply because it now deems their
employment irrelevant. The facts, viewed in light of the Labor Code and the Magna
Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of
them, should be deemed regular employees. As such, they have acquired legal rights
that this Court is duty-bound to protect and uphold, not as a matter of compassion but
as a consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they shall be
trained for a period of one month, after which the employer shall determine whether
or not they should be allowed to finish the 6-month term of the contract. Furthermore,
the employer may terminate the contract at any time for a just and reasonable
cause. Unless renewed in writing by the employer, the contract shall automatically
expire at the end of the term.
According to private respondent, the employment contracts were prepared in
accordance with Article 80 of the Labor Code, which provides:
ART. 80. Employment agreement. Any employer who employs handicapped workers
shall enter into an employment agreement with them, which agreement shall include:
(a) The names and addresses of the handicapped workers to be employed;
(b) The rate to be paid the handicapped workers which shall be not less than seventy
five (75%) per cent of the applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of Labor
or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with the aforecited
provision. Succeeding events and the enactment of RA No. 7277 (the Magna Carta
for Disabled Persons),[13]however, justify the application of Article 280 of the Labor
Code.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from
1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and the
hiring of others lead to the conclusion that their tasks were beneficial and necessary
to the bank. More important, these facts show that they were qualified to perform the
responsibilities of their positions. In other words, their disability did not render them
unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms and conditions of employment as
a qualified able-bodied person. Section 5 of the Magna Carta provides:
Section 5. Equal Opportunity for Employment.No disabled person shall be denied
access to opportunities for suitable employment. A qualified disabled employee shall
be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords
them the rights of qualified able-bodied persons, they are thus covered by Article 280
of the Labor Code, which provides:
ART. 280. Regular and Casual Employment. -- The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered as regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC,[14] in
which this Court held:
The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection
can be determined by considering the nature of the work performed and its relation to
the scheme of the particular business or trade in its entirety. Also if the employee has
been performing the job for at least one year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for
its performance as sufficient evidence of the necessity if not indispensability of that
activity to the business. Hence, the employment is considered regular, but only with
respect to such activity, and while such activity exists.
Without a doubt, the task of counting and sorting bills is necessary and desirable to
the business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months. Thus, the following twenty-seven
petitioners should be deemed regular employees: Marites Bernardo, Elvira Go
Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare,
Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo,
Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V.
Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B.
Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S.
Pardo.
As held by the Court, Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the
simple expedient of extending to them probationary appointments, ad
infinitum.[15] The contract signed by petitioners is akin to a probationary employment,
during which the bank determined the employees fitness for the job. When the bank
renewed the contract after the lapse of the six-month probationary period, the
employees thereby became regular employees.[16] No employer is allowed to
determine indefinitely the fitness of its employees.
As regular employees, the twenty-seven petitioners are entitled to security of tenure;
that is, their services may be terminated only for a just or authorized cause. Because
respondent failed to show such cause,[17] these twenty-seven petitioners are deemed
illegally dismissed and therefore entitled to back wages and reinstatement without
loss of seniority rights and other privileges.[18] Considering the allegation of
respondent that the job of money sorting is no longer available because it has been
assigned back to the tellers to whom it originally belonged,[19] petitioners are hereby
awarded separation pay in lieu of reinstatement.[20]
Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
Applicability of the Brent Ruling
Respondent bank, citing Brent School v. Zamora[21] in which the Court upheld the
validity of an employment contract with a fixed term, argues that the parties entered
into the contract on equal footing. It adds that the petitioners had in fact an
advantage, because they were backed by then DSWD Secretary Mita Pardo de
Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that
the petitioners were disabled, and that the bank had to determine their fitness for the
position. Indeed, its validity is based on Article 80 of the Labor Code. But as noted
earlier, petitioners proved themselves to be qualified disabled persons who, under the
Magna Carta for Disabled Persons, are entitled to terms and conditions of
employment enjoyed by qualified able-bodied individuals; hence, Article 80 does not
apply because petitioners are qualified for their positions. The validation of the limit
imposed on their contracts, imposed by reason of their disability, was a glaring
instance of the very mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with
public interest.[22] Provisions of applicable statutes are deemed written into the
contract, and the parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with
each other.[23] Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled
Persons, which mandate that petitioners must be treated as qualified able-bodied
employees.
Respondents reason for terminating the employment of petitioners is after showing their fitness for the work assigned to them, they should be treated and
instructive. Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the granted the same rights like any other regular employees.
bank be turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m., In this light, we note the Office of the Solicitor Generals prayer joining the petitioners
respondent resorted to nighttime sorting and counting of money. Thus, it reasons that cause.[28]
this task could not be done by deaf mutes because of their physical limitations as it is WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20,
very risky for them to travel at night.[24] We find no basis for this argument. Travelling 1995 Decision and the August 4, 1995 Resolution of the NLRC
at night involves risks to handicapped and able-bodied persons alike. This excuse are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is
cannot justify the termination of their employment. hereby ORDERED to pay back wages and separation pay to each of the following
Other Grounds Cited by Respondent
twenty-seven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante,
Respondent argues that petitioners were merely accommodated employees. This fact Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M.
does not change the nature of their employment. As earlier noted, an employee is Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E.
regular because of the nature of work and the length of service, not because of the Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela,
mode or even the reason for hiring them. Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion,
Equally unavailing are private respondents arguments that it did not go out of its way Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil,
to recruit petitioners, and that its plantilla did not contain their positions. In L. T. Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC is
Datu v. NLRC,[25] the Court held that the determination of whether employment is hereby directed to compute the exact amount due each of said employees, pursuant
casual or regular does not depend on the will or word of the employer, and the to existing laws and regulations, within fifteen days from the finality of this
procedure of hiring x x x but on the nature of the activities performed by the Decision. No costs.
employee, and to some extent, the length of performance and its continued existence. SO ORDERED.
Private respondent argues that the petitioners were informed from the start that they Romero, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
could not become regular employees. In fact, the bank adds, they agreed with the
stipulation in the contract regarding this point. Still, we are not persuaded. The well-
settled rule is that the character of employment is determined not by stipulations in
the contract, but by the nature of the work performed. [26] Otherwise, no employee can
become regular by the simple expedient of incorporating this condition in the contract
of employment.
In this light, we iterate our ruling in Romares v. NLRC:[27]
Article 280 was emplaced in our statute books to prevent the circumvention of the
employees right to be secure in his tenure by indiscriminately and completely ruling
out all written and oral agreements inconsistent with the concept of regular
employment defined therein. Where an employee has been engaged to perform
activities which are usually necessary or desirable in the usual business of the
employer, such employee is deemed a regular employee and is entitled to security of
tenure notwithstanding the contrary provisions of his contract of employment.
xxxxxxxxx
At this juncture, the leading case of Brent School, Inc. v. Zamora proves
instructive. As reaffirmed in subsequent cases, this Court has upheld the legality of
fixed-term employment. It ruled that the decisive determinant in term employment
should not be the activities that the employee is called upon to perform but the day
certain agreed upon the parties for the commencement and termination of their
employment relationship. But this Court went on to say that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down or
disregarded as contrary to public policy and morals.
In rendering this Decision, the Court emphasizes not only the constitutional bias in
favor of the working class, but also the concern of the State for the plight of the
disabled. The noble objectives of Magna Carta for Disabled Persons are not based
merely on charity or accommodation, but on justice and the equal treatment
of qualified persons, disabled or not. In the present case, the handicap of petitioners
(deaf-mutes) is not a hindrance to their work. The eloquent proof of this statement is
the repeated renewal of their employment contracts. Why then should they be
dismissed, simply because they are physically impaired? The Court believes, that,
 INC., and PHILIPPINE PEASANT INSTITUTE, in representation of various
taxpayers and as non-governmental organizations, petitioners, vs. EDGARDO
ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON
ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES,
ERNESTO HERRERA, JOSE LINA, GLORIA MACAPAGAL-ARROYO, ORLANDO
MERCADO, BLAS OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON
REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their
respective capacities as members of the Philippine Senate who concurred in
the ratification by the President of the Philippines of the Agreement
Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his
capacity as Secretary of Budget and Management; CARIDAD VALDEHUESA, in
her capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as
Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity as
Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary
of Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs;
and TEOFISTO T. GUINGONA, in his capacity as Executive
Secretary, respondents.

DECISION

PANGANIBAN, J.:

The emergence on January 1, 1995 of the World Trade Organization, abetted by the
membership thereto of the vast majority of countries has revolutionized international
business and economic relations amongst states. It has irreversibly propelled the
world towards trade liberalization and economic globalization. Liberalization,
globalization, deregulation and privatization, the third-millennium buzz words, are
ushering in a new borderless world of business by sweeping away as mere historical
relics the heretofore traditional modes of promoting and protecting national
economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax
exemptions and currency controls. Finding market niches and becoming the best in
specific industries in a market-driven and export-oriented global scenario are
replacing age-old beggar-thy-neighbor policies that unilaterally protect weak and
inefficient domestic producers of goods and services. In the words of Peter Drucker,
EN BANC
the well-known management guru, Increased participation in the world economy has
become the key to domestic economic growth and prosperity.
[G.R. No. 118295. May 2, 1997]
Brief Historical Background
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the
Philippine Senate and as taxpayers; GREGORIO ANDOLANA and JOKER
To hasten worldwide recovery from the devastation wrought by the Second World
ARROYO as members of the House of Representatives and as taxpayers;
War, plans for the establishment of three multilateral institutions -- inspired by that
NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL
grand political body, the United Nations -- were discussed at Dumbarton Oaks and
LIBERTIES UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION,
Bretton Woods. The first was the World Bank (WB) which was to address the
CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG
rehabilitation and reconstruction of war-ravaged and later developing countries;
KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION
the second, the International Monetary Fund (IMF) which was to deal with currency
MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS,
problems; and the third, the International Trade Organization (ITO), which was to
foster order and predictability in world trade and to minimize unilateral protectionist
policies that invite challenge, even retaliation, from other states. However, for a
variety of reasons, including its non-ratification by the United States, the ITO, unlike
the IMF and WB, never took off. What remained was only GATT -- the General
Agreement on Tariffs and Trade. GATT was a collection of treaties governing access
to the economies of treaty adherents with no institutionalized body administering the
agreements or dependable system of dispute settlement.
After half a century and several dizzying rounds of negotiations, principally the
Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally gave
birth to that administering body -- the World Trade Organization -- with the signing of
the Final Act in Marrakesh, Morocco and the ratification of the WTO Agreement by its
members.[1]
Like many other developing countries, the Philippines joined WTO as a founding
member with the goal, as articulated by President Fidel V. Ramos in two letters to the
Senate (infra), of improving Philippine access to foreign markets, especially its major
trading partners, through the reduction of tariffs on its exports, particularly agricultural
and industrial products. The President also saw in the WTO the opening of new
opportunities for the services sector x x x, (the reduction of) costs and uncertainty
associated with exporting x x x, and (the attraction of) more investments into the
country. Although the Chief Executive did not expressly mention it in his letter, the
Philippines - - and this is of special interest to the legal profession - - will benefit from
the WTO system of dispute settlement by judicial adjudication through the
independent WTO settlement bodies called (1) Dispute Settlement Panels and (2)
Appellate Tribunal.Heretofore, trade disputes were settled mainly through
negotiations where solutions were arrived at frequently on the basis of relative
bargaining strengths, and where naturally, weak and underdeveloped countries were
at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines to place nationals and
products of member-countries on the same footing as Filipinos and local products and
(2) that the WTO intrudes, limits and/or impairs the constitutional powers of both
Congress and the Supreme Court, the instant petition before this Court assails the
WTO Agreement for violating the mandate of the 1987 Constitution to develop a self-
reliant and independent national economy effectively controlled by Filipinos x x x (to)
give preference to qualified Filipinos (and to) promote the preferential use of Filipino
labor, domestic materials and locally produced goods.
Simply stated, does the Philippine Constitution prohibit Philippine participation in
worldwide trade liberalization and economic globalization? Does it prescribe
Philippine integration into a global economy that is liberalized, deregulated and
privatized? These are the main questions raised in this petition for certiorari,
prohibition and mandamus under Rule 65 of the Rules of Court praying (1) for the
nullification, on constitutional grounds, of the concurrence of the Philippine Senate in
the ratification by the President of the Philippines of the Agreement Establishing the
World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of
its implementation and enforcement through the release and utilization of public
funds, the assignment of public officials and employees, as well as the use of
government properties and resources by respondent-heads of various executive
offices concerned therewith. This concurrence is embodied in Senate Resolution No.
97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of
the Department of Trade and Industry (Secretary Navarro, for brevity), representing
the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the
Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations
(Final Act, for brevity).
By signing the Final Act,[2] Secretary Navarro on behalf of the Republic of the
Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities, with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a letter dated
August 11, 1994 from the President of the Philippines,[3] stating among others that the
Uruguay Round Final Act is hereby submitted to the Senate for its concurrence
pursuant to Section 21, Article VII of the Constitution.
On August 13, 1994, the members of the Philippine Senate received another letter
from the President of the Philippines[4] likewise dated August 11, 1994, which stated
among others that the Uruguay Round Final Act, the Agreement Establishing the
World Trade Organization, the Ministerial Declarations and Decisions, and the
Understanding on Commitments in Financial Services are hereby submitted to the
Senate for its concurrence pursuant to Section 21, Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the necessity of the
immediate adoption of P.S. 1083, a resolution entitled Concurring in the Ratification of
the Agreement Establishing the World Trade Organization.[5]
On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which
Resolved, as it is hereby resolved, that the Senate concur, as it hereby concurs, in
the ratification by the President of the Philippines of the Agreement Establishing the
World Trade Organization.[6] The text of the WTO Agreement is written on pages
137 et seq. of Volume I of the 36-volume Uruguay Round of Multilateral Trade
Negotiations and includes various agreements and associated legal instruments
(identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively
referred to as Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994
Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines signed[7] the Instrument of
Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic
of the Philippines, after having seen and considered the aforementioned Agreement
Establishing the World Trade Organization and the agreements and associated legal
instruments included in Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof, signed at Marrakesh, Morocco on 15 April 1994, do
hereby ratify and confirm the same and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is
composed of the Agreement Proper and the associated legal instruments included in
Annexes one (1), two (2) and three (3) of that Agreement which are integral parts
thereof.
On the other hand, the Final Act signed by Secretary Navarro embodies not only the
WTO Agreement (and its integral annexes aforementioned) but also (1) the Ministerial
Declarations and Decisions and (2) the Understanding on Commitments in Financial
Services. In his Memorandum dated May 13, 1996,[8] the Solicitor General describes
these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five declarations and decisions
on a wide range of matters, such as measures in favor of least developed countries,
notification procedures, relationship of WTO with the International Monetary Fund
(IMF), and agreements on technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on, among other
things, standstill or limitations and qualifications of commitments to existing non-
conforming measures, market access, national treatment, and definitions of non-
resident supplier of financial services, commercial presence and new financial
service.
On December 29, 1994, the present petition was filed. After careful deliberation on
respondents comment and petitioners reply thereto, the Court resolved on December
12, 1995, to give due course to the petition, and the parties thereafter filed their
respective memoranda. The Court also requested the Honorable Lilia R. Bautista, the
Philippine Ambassador to the United Nations stationed in Geneva, Switzerland, to
submit a paper, hereafter referred to as Bautista Paper,[9] for brevity, (1) providing a
historical background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in
controversy and (2) the transcript of proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine
treaties signed prior to the Philippine adherence to the WTO Agreement, which
derogate from Philippine sovereignty and (2) copies of the multi-volume WTO
Agreement and other documents mentioned in the Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider the case
submitted for resolution. In a Compliance dated September 16, 1996, the Solicitor
General submitted a printed copy of the 36-volume Uruguay Round of Multilateral
Trade Negotiations, and in another Compliance dated October 24, 1996, he listed the
various bilateral or multilateral treaties or international instruments involving
derogation of Philippine sovereignty. Petitioners, on the other hand, submitted their
Compliance dated January 28, 1997, on January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as
follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who participated in the deliberations
and voting leading to the concurrence are estopped from impugning the validity of the
Agreement Establishing the World Trade Organization or of the validity of the
concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade
Organization contravene the provisions of Sec. 19, Article II, and Secs. 10 and 12,
Article XII, all of the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade Organization
unduly limit, restrict and impair Philippine sovereignty specifically the legislative power
which, under Sec. 2, Article VI, 1987 Philippine Constitution is vested in the Congress
of the Philippines;
E. Whether provisions of the Agreement Establishing the World Trade Organization
interfere with the exercise of judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of discretion
amounting to lack or excess of jurisdiction when they voted for concurrence in the
ratification of the constitutionally-infirm Agreement Establishing the World Trade
Organization.
G. Whether the respondent members of the Senate acted in grave abuse of discretion
amounting to lack or excess of jurisdiction when they concurred only in the ratification
of the Agreement Establishing the World Trade Organization, and not with the
Presidential submission which included the Final Act, Ministerial Declaration and
Decisions, and the Understanding on Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents synthesized the
several issues raised by petitioners into the following:[10]
1. Whether or not the provisions of the Agreement Establishing the World Trade
Organization and the Agreements and Associated Legal Instruments included in
Annexes one (1), two (2) and three (3) of that agreement cited by petitioners directly
contravene or undermine the letter, spirit and intent of Section 19, Article II and
Sections 10 and 12, Article XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair
the exercise of legislative power by Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial
power by this Honorable Court in promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate in the ratification by the President of
the Philippines of the Agreement establishing the World Trade Organization implied
rejection of the treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by petitioners,
the Solicitor General has effectively ignored three, namely: (1) whether the petition
presents a political question or is otherwise not justiciable; (2) whether petitioner-
members of the Senate (Wigberto E. Taada and Anna Dominique Coseteng) are
estopped from joining this suit; and (3) whether the respondent-members of the
Senate acted in grave abuse of discretion when they voted for concurrence in the
ratification of the WTO Agreement. The foregoing notwithstanding, this Court resolved
to deal with these three issues thus:
(1) The political question issue -- being very fundamental and vital, and being a
matter that probes into the very jurisdiction of this Court to hear and decide this case -
- was deliberated upon by the Court and will thus be ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is waivable and
the respondents have effectively waived it by not pursuing it in any of their pleadings;
in any event, this issue, even if ruled in respondents favor, will not cause the petitions
dismissal as there are petitioners other than the two senators, who are not vulnerable
to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent
senators will be taken up as an integral part of the disposition of the four issues raised
by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did not
question the locus standi of petitioners. Hence, they are also deemed to have waived
the benefit of such issue. They probably realized that grave constitutional issues,
expenditures of public funds and serious international commitments of the nation are
involved here, and that transcendental public interest requires that the substantive
issues be met head on and decided on the merits, rather than skirted or deflected by
procedural matters.[11]
To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE
CONTROVERSY? OTHERWISE STATED, DOES THE PETITION INVOLVE A
POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES
CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF
THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT,
RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY
CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE
EXERCISE OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES
ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND
ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT
INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS AND DECISIONS, AND
THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?
The First Issue: Does the Court Have Jurisdiction Over the Controversy?
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.[12] Once a controversy as to the application or interpretation of a 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. [13]
The jurisdiction of this Court to adjudicate the matters [14] raised in the petition is
clearly set out in the 1987 Constitution,[15] as follows:
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the government.
The foregoing text emphasizes the judicial departments duty and power to strike
down grave abuse of discretion on the part of any branch or instrumentality of
government including Congress. It is an innovation in our political law.[16] As explained
by former Chief Justice Roberto Concepcion,[17] the judiciary is the final arbiter on the
question of whether or not a branch of government or any of its officials has acted
without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an
abuse of discretion amounting to excess of jurisdiction. This is not only a judicial
power but a duty to pass judgment on matters of this nature.
As this Court has repeatedly and firmly emphasized in many cases, [18] it will not shirk,
digress from or abandon its sacred duty and authority to uphold the Constitution in
matters that involve grave abuse of discretion brought before it in appropriate cases,
committed by any officer, agency, instrumentality or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain,
speedy or adequate remedy in the ordinary course of law, we have no hesitation at all
in holding that this petition should be given due course and the vital questions raised
therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition
and mandamus are appropriate remedies to raise constitutional issues and to review
and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this,
we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will
not review the wisdom of the decision of the President and the Senate in enlisting the
country into the WTO, or pass upon the merits of trade liberalization as a policy
espoused by said international body. Neither will it rule on the propriety of the
governments economic policy of reducing/removing tariffs, taxes, subsidies,
quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its
constitutional duty to determine whether or not there had been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the Senate in
ratifying the WTO Agreement and its three annexes.
Second Issue: The WTO Agreement and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of the Constitution
mandating economic nationalism are violated by the so-called parity provisions and
national treatment clauses scattered in various parts not only of the WTO Agreement
and its annexes but also in the Ministerial Decisions and Declarations and in the
Understanding on Commitments in Financial Services.
Specifically, the flagship constitutional provisions referred to are Sec. 19, Article II,
and Secs. 10 and 12, Article XII, of the Constitution, which are worded as follows:
Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
xx xx xx xx
Sec. 19. The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos.
xx xx xx xx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xx xx xx xx
Sec. 10. x x x. The Congress shall enact measures that will encourage the formation
and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.
xx xx xx xx
Sec. 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.
Petitioners aver that these sacred constitutional principles are desecrated by the
following WTO provisions quoted in their memorandum: [19]
a) In the area of investment measures related to trade in goods (TRIMS, for
brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994. no Member
shall apply any TRIM that is inconsistent with the provisions of Article III or Article XI
of GATT 1994.
2. An Illustrative list of TRIMS that are inconsistent with the obligations of general
elimination of quantitative restrictions provided for in paragraph I of Article XI of GATT
1994 is contained in the Annex to this Agreement. (Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p.22121,
emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national treatment
provided for in paragraph 4 of Article III of GATT 1994 include those which are
mandatory or enforceable under domestic law or under administrative rulings,
or compliance with which is necessary to obtain an advantage, and which
require:
(a) the purchase or use by an enterprise of products of domestic origin or from any
domestic source, whether specified in terms of particular products, in terms of volume
or value of products, or in terms of proportion of volume or value of its local
production; or
(b) that an enterprises purchases or use of imported products be limited to an amount
related to the volume or value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of
quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 include
those which are mandatory or enforceable under domestic laws or under
administrative rulings, or compliance with which is necessary to obtain an advantage,
and which restrict:
(a) the importation by an enterprise of products used in or related to the local
production that it exports;
(b) the importation by an enterprise of products used in or related to its local
production by restricting its access to foreign exchange inflows attributable to the
enterprise; or
(c) the exportation or sale for export specified in terms of particular products, in terms
of volume or value of products, or in terms of a preparation of volume or value of its
local production. (Annex to the Agreement on Trade-Related Investment Measures,
Vol. 27, Uruguay Round Legal Documents, p.22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any
other contracting party shall be accorded treatment no less favorable than that
accorded to like products of national origin in respect of laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use. the provisions of this paragraph shall not prevent the application of
differential internal transportation charges which are based exclusively on the
economic operation of the means of transport and not on the nationality of the
product. (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and
Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to paragraph
1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round,
Legal Instruments p.177, emphasis supplied).
b) In the area of trade related aspects of intellectual property rights (TRIPS, for
brevity):
Each Member shall accord to the nationals of other Members treatment no less
favourable than that it accords to its own nationals with regard to the protection of
intellectual property... (par. 1, Article 3, Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p.25432
(emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and
qualifications set out therein, each Member shall accord to services and service
suppliers of any other Member, in respect of all measures affecting the supply of
services, treatment no less favourable than it accords to its own like services
and service suppliers.
2. A Member may meet the requirement of paragraph I by according to services and
service suppliers of any other Member, either formally identical treatment or formally
different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less
favourable if it modifies the conditions of completion in favour of services or service
suppliers of the Member compared to like services or service suppliers of any other
Member. (Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay
Round Legal Instruments, p.22610 emphasis supplied).
It is petitioners position that the foregoing national treatment and parity provisions of
the WTO Agreement place nationals and products of member countries on the same
footing as Filipinos and local products, in contravention of the Filipino First policy of
the Constitution. They allegedly render meaningless the phrase effectively controlled
by Filipinos. The constitutional conflict becomes more manifest when viewed in the
context of the clear duty imposed on the Philippines as a WTO member to ensure the
conformity of its laws, regulations and administrative procedures with its obligations
as provided in the annexed agreements.[20] Petitioners further argue that these
provisions contravene constitutional limitations on the role exports play in national
development and negate the preferential treatment accorded to Filipino labor,
domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor General counter (1) that such
Charter provisions are not self-executing and merely set out general policies; (2) that
these nationalistic portions of the Constitution invoked by petitioners should not be
read in isolation but should be related to other relevant provisions of Art. XII,
particularly Secs. 1 and 13 thereof; (3) that read properly, the cited WTO clauses do
not conflict with the Constitution; and (4) that the WTO Agreement contains sufficient
provisions to protect developing countries like the Philippines from the harshness of
sudden trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles Not Self-Executing
By its very title, Article II of the Constitution is a declaration of principles and state
policies. The counterpart of this article in the 1935 Constitution[21] is called the basic
political creed of the nation by Dean Vicente Sinco.[22] These principles in Article II are
not intended to be self-executing principles ready for enforcement through the
courts.[23] They are used by the judiciary as aids or as guides in the exercise of its
power of judicial review, and by the legislature in its enactment of laws. As held in the
leading case of Kilosbayan, Incorporated vs. Morato,[24] the principles and state
policies enumerated in Article II and some sections of Article XII are not self-
executing provisions, the disregard of which can give rise to a cause of action in the
courts.They do not embody judicially enforceable constitutional rights but guidelines
for legislation.
In the same light, we held in Basco vs. Pagcor[25] that broad constitutional principles
need legislative enactments to implement them, thus:
On petitioners allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12
(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII
and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to
state also that these are merely statements of principles and policies. As such, they
are basically not self-executing, meaning a law should be passed by Congress to
clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and to the legislature. If the executive and the legislature
failed to heed the directives of the article, the available remedy was not judicial but
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of broad
constitutional principles are sourced from basic considerations of due process and the
lack of judicial authority to wade into the uncharted ocean of social and economic
policy making. Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa
vs. Factoran, Jr.,[26] explained these reasons as follows:
My suggestion is simply that petitioners must, before the trial court, show a more
specific legal right -- a right cast in language of a significantly lower order of generality
than Article II (15) of the Constitution -- that is or may be violated by the actions, or
failures to act, imputed to the public respondent by petitioners so that the trial court
can validly render judgment granting all or part of the relief prayed for. To my mind,
the court should be understood as simply saying that such a more specific legal right
or rights may well exist in our corpus of law, considering the general policy principles
found in the Constitution and the existence of the Philippine Environment Code, and
that the trial court should have given petitioners an effective opportunity so to
demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a
cause of action be a specific, operable legal right, rather than a constitutional or
statutory policy, for at least two (2) reasons.One is that unless the legal right claimed
to have been violated or disregarded is given specification in operational terms,
defendants may well be unable to defend themselves intelligently and effectively; in
other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration -- where a specific violation of law or
applicable regulation is not alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:
Section 1. x x x
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the
Government. (Emphases supplied)
When substantive standards as general as the right to a balanced and healthy
ecology and the right to health are combined with remedial standards as broad
ranging as a grave abuse of discretion amounting to lack or excess of jurisdiction, the
result will be, it is respectfully submitted, to propel courts into the uncharted ocean of
social and economic policy making. At least in respect of the vast area of
environmental protection and management, our courts have no claim to special
technical competence and experience and professional qualification. Where no
specific, operable norms and standards are shown to exist, then the policy making
departments -- the legislative and executive departments -- must be given a real and
effective opportunity to fashion and promulgate those norms and standards, and to
implement them before the courts should intervene.
Economic Nationalism Should Be Read with Other Constitutional Mandates to
Attain Balanced Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down
general principles relating to the national economy and patrimony, should be read
and understood in relation to the other sections in said article, especially Secs. 1 and
13 thereof which read:
Section 1. The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the
underprivileged.
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country
shall be given optimum opportunity to develop. x x x
xxxxxxxxx
Sec. 13. The State shall pursue a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national
economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation
for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially
the underprivileged.
With these goals in context, the Constitution then ordains the ideals of economic
nationalism (1) by expressing preference in favor of qualified Filipinos in the grant of
rights, privileges and concessions covering the national economy and
patrimony[27] and in the use of Filipino labor, domestic materials and locally-produced
goods; (2) by mandating the State to adopt measures that help make them
competitive;[28] and (3) by requiring the State to develop a self-reliant and
independent national economy effectively controlled by Filipinos. [29] In similar
language, the Constitution takes into account the realities of the outside world as it
requires the pursuit of a trade policy that serves the general welfare and utilizes all
forms and arrangements of exchange on the basis of equality and reciprocity; [30] and
speaks of industries which are competitive in both domestic and foreign markets as
well as of the protection of Filipino enterprises against unfair foreign competition and
trade practices.
It is true that in the recent case of Manila Prince Hotel vs. Government Service
Insurance System, et al.,[31] this Court held that Sec. 10, second par., Art. XII of the
1987 Constitution is a mandatory, positive command which is complete in itself and
which needs no further guidelines or implementing laws or rules for its
enforcement. From its very words the provision does not require any legislation to put
it in operation. It is per se judicially enforceable. However, as the constitutional
provision itself states, it is enforceable only in regard to the grants of rights, privileges
and concessions covering national economy and patrimony and not to every aspect
of trade and commerce. It refers to exceptions rather than the rule. The issue here is
not whether this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather, the
issue is whether, as a rule, there are enough balancing provisions in the Constitution
to allow the Senate to ratify the Philippine concurrence in the WTO Agreement. And
we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods,
services, labor and enterprises, at the same time, it recognizes the need for business
exchange with the rest of the world on the bases of equality and reciprocity and limits
protection of Filipino enterprises only against foreign competition and trade practices
that are unfair.[32] In other words, the Constitution did not intend to pursue an
isolationist policy. It did not shut out foreign investments, goods and services in the
development of the Philippine economy. While the Constitution does not encourage
the unlimited entry of foreign goods, services and investments into the country, it
does not prohibit them either. In fact, it allows an exchange on the basis of equality
and reciprocity, frowning only on foreign competition that is unfair.
WTO Recognizes Need to Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some built-in
advantages to protect weak and developing economies, which comprise the vast
majority of its members. Unlike in the UN where major states have permanent seats
and veto powers in the Security Council, in the WTO, decisions are made on the
basis of sovereign equality, with each members vote equal in weight to that of any
other. There is no WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the
Ministerial Conference and the General Council shall be taken by the majority of the
votes cast, except in cases of interpretation of the Agreement or waiver of the
obligation of a member which would require three fourths vote. Amendments would
require two thirds vote in general. Amendments to MFN provisions and the
Amendments provision will require assent of all members. Any member may withdraw
from the Agreement upon the expiration of six months from the date of notice of
withdrawals.[33]
Hence, poor countries can protect their common interests more effectively through
the WTO than through one-on-one negotiations with developed countries. Within the
WTO, developing countries can form powerful blocs to push their economic agenda
more decisively than outside the Organization. This is not merely a matter of practical
alliances but a negotiating strategy rooted in law. Thus, the basic principles
underlying the WTO Agreement recognize the need of developing countries like the
Philippines to share in the growth in international trade commensurate with the needs
of their economic development. These basic principles are found in the preamble[34] of
the WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should
be conducted with a view to raising standards of living, ensuring full employment and
a large and steadily growing volume of real income and effective demand, and
expanding the production of and trade in goods and services, while allowing for the
optimal use of the worlds resources in accordance with the objective of sustainable
development, seeking both to protect and preserve the environment and to enhance
the means for doing so in a manner consistent with their respective needs and
concerns at different levels of economic development,
Recognizing further that there is need for positive efforts designed to ensure that
developing countries, and especially the least developed among them, secure
a share in the growth in international trade commensurate with the needs of their
economic development,
Being desirous of contributing to these objectives by entering into reciprocal and
mutually advantageous arrangements directed to the substantial reduction of tariffs
and other barriers to trade and to the elimination of discriminatory treatment in
international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral
trading system encompassing the General Agreement on Tariffs and Trade, the
results of past trade liberalization efforts, and all of the results of the Uruguay Round
of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the objectives underlying
this multilateral trading system, x x x. (underscoring supplied.)
Specific WTO Provisos Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent with the
foregoing basic principles, the WTO Agreement grants developing countries a more
lenient treatment, giving their domestic industries some protection from the rush of
foreign competition. Thus, with respect to tariffs in general, preferential treatment is
given to developing countries in terms of the amount of tariff reduction and the period
within which the reduction is to be spread out. Specifically, GATT requires an average
tariff reduction rate of 36% for developed countries to be effected within a period of
six (6) years while developing countries -- including the Philippines -- are required to
effect an average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce
domestic support to agricultural products by 20% over six (6) years, as compared
to only 13% for developing countries to be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires developed
countries to reduce their budgetary outlays for export subsidy by 36% and export
volumes receiving export subsidy by 21% within a period of six (6) years. For
developing countries, however, the reduction rate is only two-thirds of that prescribed
for developed countries and a longer period of ten (10) years within which to effect
such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition
and trade practices including anti-dumping measures, countervailing measures and
safeguards against import surges. Where local businesses are jeopardized by unfair
foreign competition, the Philippines can avail of these measures. There is hardly
therefore any basis for the statement that under the WTO, local industries and
enterprises will all be wiped out and that Filipinos will be deprived of control of the
economy. Quite the contrary, the weaker situations of developing nations like the
Philippines have been taken into account; thus, there would be no basis to say that in
joining the WTO, the respondents have gravely abused their discretion.True, they
have made a bold decision to steer the ship of state into the yet uncharted sea of
economic liberalization. But such decision cannot be set aside on the ground of grave
abuse of discretion, simply because we disagree with it or simply because we believe
only in other economic policies. As earlier stated, the Court in taking jurisdiction of
this case will not pass upon the advantages and disadvantages of trade liberalization
as an economic policy. It will only perform its constitutional duty of determining
whether the Senate committed grave abuse of discretion.
Constitution Does Not Rule Out Foreign Competition
Furthermore, the constitutional policy of a self-reliant and independent national
economy[35] does not necessarily rule out the entry of foreign investments, goods and
services. It contemplates neither economic seclusion nor mendicancy in the
international community. As explained by Constitutional Commissioner Bernardo
Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly
aware of overdependence on external assistance for even its most basic needs. It
does not mean autarky or economic seclusion; rather, it means avoiding mendicancy
in the international community. Independence refers to the freedom from undue
foreign control of the national economy, especially in such strategic industries as in
the development of natural resources and public utilities.[36]
The WTO reliance on most favored nation, national treatment, and trade without
discrimination cannot be struck down as unconstitutional as in fact they are rules of
equality and reciprocity that apply to all WTO members. Aside from envisioning a
trade policy based on equality and reciprocity,[37] the fundamental law encourages
industries that are competitive in both domestic and foreign markets, thereby
demonstrating a clear policy against a sheltered domestic trade environment, but one
in favor of the gradual development of robust industries that can compete with the
best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have
shown capability and tenacity to compete internationally. And given a free trade
environment, Filipino entrepreneurs and managers in Hongkong have demonstrated
the Filipino capacity to grow and to prosper against the best offered under a policy
of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any business
or enterprise, nor does it contain any specific pronouncement that Filipino companies
should be pampered with a total
proscription of foreign competition. On the other hand, respondents claim that
WTO/GATT aims to make available to the Filipino consumer the best goods and
services obtainable anywhere in the world at the most reasonable
prices. Consequently, the question boils down to whether WTO/GATT will favor the
general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to
reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare because it will --
as promised by its promoters -- expand the countrys exports and generate more
employment?
Will it bring more prosperity, employment, purchasing power and quality products at
the most reasonable rates to the Filipino public?
The responses to these questions involve judgment calls by our policy makers, for
which they are answerable to our people during appropriate electoral exercises. Such
questions and the answers thereto are not subject to judicial pronouncements based
on grave abuse of discretion.
Constitution Designed to Meet Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the Constitution was
drafted and ratified in 1987. That does not mean however that the Charter is
necessarily flawed in the sense that its framers might not have anticipated the advent
of a borderless world of business. By the same token, the United Nations was not yet
in existence when the 1935 Constitution became effective. Did that necessarily mean
that the then Constitution might not have contemplated a diminution of the
absoluteness of sovereignty when the Philippines signed the UN Charter, thereby
effectively surrendering part of its control over its foreign relations to the decisions of
various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to meet not only
the vagaries of contemporary events. They should be interpreted to cover even future
and unknown circumstances. It is to the credit of its drafters that a Constitution can
withstand the assaults of bigots and infidels but at the same time bend with the
refreshing winds of change necessitated by unfolding events. As one eminent political
law writer and respected jurist[38] explains:
The Constitution must be quintessential rather than superficial, the root and not the
blossom, the base and framework only of the edifice that is yet to rise. It is but the
core of the dream that must take shape, not in a twinkling by mandate of our
delegates, but slowly in the crucible of Filipino minds and hearts, where it will in time
develop its sinews and gradually gather its strength and finally achieve its
substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown
from the brow of the Constitutional Convention, nor can it conjure by mere fiat an
instant Utopia. It must grow with the society it seeks to re-structure and march apace
with the progress of the race, drawing from the vicissitudes of history the dynamism
and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law
attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that (e)ach Member shall ensure the conformity of its
laws, regulations and administrative procedures with its obligations as provided in the
annexed Agreements.[39] Petitioners maintain that this undertaking unduly limits,
restricts and impairs Philippine sovereignty, specifically the legislative power which
under Sec. 2, Article VI of the 1987 Philippine Constitution is vested in the Congress
of the Philippines. It is an assault on the sovereign powers of the Philippines because
this means that Congress could not pass legislation that will be good for our national
interest and general welfare if such legislation will not conform with the WTO
Agreement, which not only relates to the trade in goods x x x but also to the flow of
investments and money x x x as well as to a whole slew of agreements on socio-
cultural matters x x x.[40]
More specifically, petitioners claim that said WTO proviso derogates from the power
to tax, which is lodged in the Congress.[41] And while the Constitution allows Congress
to authorize the President to fix tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts, such authority is subject to specified
limits and x x x such limitations and restrictions as Congress may provide, [42] as in
fact it did under Sec. 401 of the Tariff and Customs Code.
Sovereignty Limited by International Law and Treaties
This Court notes and appreciates the ferocity and passion by which petitioners
stressed their arguments on this issue. However, while sovereignty has traditionally
been deemed absolute and all-encompassing on the domestic level, it is however
subject to restrictions and limitations voluntarily agreed to by the Philippines,
expressly or impliedly, as a member of the family of nations. Unquestionably, the
Constitution did not envision a hermit-type isolation of the country from the rest of the
world. In its Declaration of Principles and State Policies, the Constitution adopts the
generally accepted principles of international law as part of the law of the land, and
adheres to the policy of peace, equality, justice, freedom, cooperation and amity, with
all nations."[43] By the doctrine of incorporation, the country is bound by generally
accepted principles of international law, which are considered to be automatically part
of our own laws.[44] One of the oldest and most fundamental rules in international law
is pacta sunt servanda -- international agreements must be performed in good faith. A
treaty engagement is not a mere moral obligation but creates a legally binding
obligation on the parties x x x. A state which has contracted valid international
obligations is bound to make in its legislations such modifications as may be
necessary to ensure the fulfillment of the obligations undertaken. [45]
By their inherent nature, treaties really limit or restrict the absoluteness of
sovereignty. By their voluntary act, nations may surrender some aspects of their state
power in exchange for greater benefits granted by or derived from a convention or
pact. After all, states, like individuals, live with coequals, and in pursuit of mutually
covenanted objectives and benefits, they also commonly agree to limit the exercise of
their otherwise absolute rights. Thus, treaties have been used to record agreements
between States concerning such widely diverse matters as, for example, the lease of
naval bases, the sale or cession of territory, the termination of war, the regulation of
conduct of hostilities, the formation of alliances, the regulation of commercial
relations, the settling of claims, the laying down of rules governing conduct in peace
and the establishment of international organizations.[46] The sovereignty of a state
therefore cannot in fact and in reality be considered absolute. Certain restrictions
enter into the picture: (1) limitations imposed by the very nature of membership in the
family of nations and (2) limitations imposed by treaty stipulations. As aptly put by
John F. Kennedy, Today, no nation can build its destiny alone. The age of self-
sufficient nationalism is over. The age of interdependence is here.[47]
UN Charter and Other Treaties Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51 charter
members, it consented to restrict its sovereign rights under the concept of sovereignty
as auto-limitation.47-A Under Article 2 of the UN Charter, (a)ll members shall give the
United Nations every assistance in any action it takes in accordance with the present
Charter, and shall refrain from giving assistance to any state against which the United
Nations is taking preventive or enforcement action. Such assistance includes
payment of its corresponding share not merely in administrative expenses but also in
expenditures for the peace-keeping operations of the organization. In its advisory
opinion of July 20, 1961, the International Court of Justice held that money used by
the United Nations Emergency Force in the Middle East and in the Congo were
expenses of the United Nations under Article 17, paragraph 2, of the UN
Charter. Hence, all its members must bear their corresponding share in such
expenses. In this sense, the Philippine Congress is restricted in its power to
appropriate. It is compelled to appropriate funds whether it agrees with such peace-
keeping expenses or not. So too, under Article 105 of the said Charter, the UN and its
representatives enjoy diplomatic privileges and immunities, thereby limiting again the
exercise of sovereignty of members within their own territory. Another example:
although sovereign equality and domestic jurisdiction of all members are set forth as
underlying principles in the UN Charter, such provisos are however subject to
enforcement measures decided by the Security Council for the maintenance of
international peace and security under Chapter VII of the Charter. A final example:
under Article 103, (i)n the event of a conflict between the obligations of the Members
of the United Nations under the present Charter and their obligations under any other
international agreement, their obligation under the present charter shall prevail, thus
unquestionably denying the Philippines -- as a member -- the sovereign power to
make a choice as to which of conflicting obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international
pacts -- both bilateral and multilateral -- that involve limitations on Philippine
sovereignty. These are enumerated by the Solicitor General in his Compliance dated
October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes on income, where the
Philippines agreed, among others, to exempt from tax, income received in the
Philippines by, among others, the Federal Reserve Bank of the United States, the
Export/Import Bank of the United States, the Overseas Private Investment
Corporation of the United States. Likewise, in said convention, wages, salaries and
similar remunerations paid by the United States to its citizens for labor and personal
services performed by them as employees or officials of the United States are exempt
from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of
double taxation with respect to taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double
taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to
exempt from all customs duties, inspection fees and other duties or taxes aircrafts of
South Korea and the regular equipment, spare parts and supplies arriving with said
aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt
from customs duties, excise taxes, inspection fees and other similar duties, taxes or
charges fuel, lubricating oils, spare parts, regular equipment, stores on board
Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted
Belgian air carriers the same privileges as those granted to Japanese and Korean air
carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the
Philippines exempted Israeli nationals from the requirement of obtaining transit or
visitor visas for a sojourn in the Philippines not exceeding 59 days.
(I) Bilateral agreement with France exempting French nationals from the requirement
of obtaining transit and visitor visa for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the Philippines agreed that
premises of Special Missions in the Philippines are inviolable and its agents can not
enter said premises without consent of the Head of Mission concerned. Special
Missions are also exempted from customs duties, taxes and related charges.
(k) Multilateral Convention on the Law of Treaties. In this convention, the Philippines
agreed to be governed by the Vienna Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of
the International Court of Justice. The International Court of Justice has jurisdiction in
all legal disputes concerning the interpretation of a treaty, any question of
international law, the existence of any fact which, if established, would constitute a
breach of international obligation.
In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of
its sovereign powers of taxation, eminent domain and police power. The underlying
consideration in this partial surrender of sovereignty is the reciprocal commitment of
the other contracting states in granting the same privilege and immunities to the
Philippines, its officials and its citizens. The same reciprocity characterizes the
Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the
environment, the law of the sea, or trade, constrain domestic political sovereignty
through the assumption of external obligations. But unless anarchy in international
relations is preferred as an alternative, in most cases we accept that the benefits of
the reciprocal obligations involved outweigh the costs associated with any loss of
political sovereignty. (T)rade treaties that structure relations by reference to durable,
well-defined substantive norms and objective dispute resolution procedures reduce
the risks of larger countries exploiting raw economic power to bully smaller countries,
by subjecting power relations to some form of legal ordering. In addition, smaller
countries typically stand to gain disproportionately from trade liberalization. This is
due to the simple fact that liberalization will provide access to a larger set of potential
new trading relationship than in case of the larger country gaining enhanced success
to the smaller countrys market.[48]
The point is that, as shown by the foregoing treaties, a portion of sovereignty may be
waived without violating the Constitution, based on the rationale that the Philippines
adopts the generally accepted principles of international law as part of the law of the
land and adheres to the policy of x x x cooperation and amity with all nations.
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic
Principles of the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS)[49]intrudes on the power of the Supreme Court to promulgate rules
concerning pleading, practice and procedures.[50]
To understand the scope and meaning of Article 34, TRIPS, [51] it will be fruitful to
restate its full text as follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of the rights of
the owner referred to in paragraph 1(b) of Article 28, if the subject matter of a patent
is a process for obtaining a product, the judicial authorities shall have the authority to
order the defendant to prove that the process to obtain an identical product is different
from the patented process. Therefore, Members shall provide, in at least one of the
following circumstances, that any identical product when produced without the
consent of the patent owner shall, in the absence of proof to the contrary, be deemed
to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the
process and the owner of the patent has been unable through reasonable efforts to
determine the process actually used.
2. Any Member shall be free to provide that the burden of proof indicated in
paragraph 1 shall be on the alleged infringer only if the condition referred to in
subparagraph (a) is fulfilled or only if the condition referred to in subparagraph (b) is
fulfilled.
3. In the adduction of proof to the contrary, the legitimate interests of defendants in
protecting their manufacturing and business secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of disputable (note the
words in the absence of proof to the contrary) presumption that a product shown to be
identical to one produced with the use of a patented process shall be deemed to have
been obtained by the (illegal) use of the said patented process, (1) where such
product obtained by the patented product is new, or (2) where there is substantial
likelihood that the identical product was made with the use of the said patented
process but the owner of the patent could not determine the exact process used in
obtaining such identical product. Hence, the burden of proof contemplated by Article
34 should actually be understood as the duty of the alleged patent infringer to
overthrow such presumption. Such burden, properly understood, actually refers to the
burden of evidence (burden of going forward) placed on the producer of the identical
(or fake) product to show that his product was produced without the use of the
patented process.
The foregoing notwithstanding, the patent owner still has the burden of proof since,
regardless of the presumption provided under paragraph 1 of Article 34, such owner
still has to introduce evidence of the existence of the alleged identical product, the
fact that it is identical to the genuine one produced by the patented process and the
fact of newness of the genuine product or the fact of substantial likelihood that the
identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as
the present law on the subject, Republic Act No. 165, as amended, otherwise known
as the Patent Law, provides a similar presumption in cases of infringement of
patented design or utility model, thus:
SEC. 60. Infringement. - Infringement of a design patent or of a patent for utility
model shall consist in unauthorized copying of the patented design or utility model for
the purpose of trade or industry in the article or product and in the making, using or
selling of the article or product copying the patented design or utility model. Identity or
substantial identity with the patented design or utility model shall constitute evidence
of copying. (underscoring supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a disputable
presumption applies only if (1) the product obtained by the patented process is NEW
or (2) there is a substantial likelihood that the identical product was made by the
process and the process owner has not been able through reasonable effort to
determine the process used. Where either of these two provisos does not obtain,
members shall be free to determine the appropriate method of implementing the
provisions of TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection with our disposition of the third
issue -- derogation of legislative power - will apply to this fourth issue also. Suffice it
to say that the reciprocity clause more than justifies such intrusion, if any actually
exists. Besides, Article 34 does not contain an unreasonable burden, consistent as it
is with due process and the concept of adversarial dispute settlement inherent in our
judicial system.
So too, since the Philippine is a signatory to most international conventions on
patents, trademarks and copyrights, the adjustment in legislation and rules of
procedure will not be substantial.[52]
Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other
Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and its
annexes -- but not in the other documents referred to in the Final Act, namely the
Ministerial Declaration and Decisions and the Understanding on Commitments in
Financial Services -- is defective and insufficient and thus constitutes abuse of
discretion. They submit that such concurrence in the WTO Agreement alone is flawed
because it is in effect a rejection of the Final Act, which in turn was the document
signed by Secretary Navarro, in representation of the Republic upon authority of the
President. They contend that the second letter of the President to the Senate [53] which
enumerated what constitutes the Final Act should have been the subject of
concurrence of the Senate.
A final act, sometimes called protocol de clture, is an instrument which records the
winding up of the proceedings of a diplomatic conference and usually includes a
reproduction of the texts of treaties, conventions, recommendations and other acts
agreed upon and signed by the plenipotentiaries attending the conference.[54] It is not
the treaty itself. It is rather a summary of the proceedings of a protracted conference
which may have taken place over several years. The text of the Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade Negotiations is contained in
just one page[55] in Vol. I of the 36-volume Uruguay Round of Multilateral Trade
Negotiations. By signing said Final Act, Secretary Navarro as representative of the
Republic of the Philippines undertook:
"(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions."
The assailed Senate Resolution No. 97 expressed concurrence in exactly what the
Final Act required from its signatories, namely, concurrence of the Senate in the WTO
Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for
ratification. They were approved by the ministers by virtue of Article XXV: 1 of GATT
which provides that representatives of the members can meet to give effect to those
provisions of this Agreement which invoke joint action, and generally with a view to
facilitating the operation and furthering the objectives of this Agreement. [56]
The Understanding on Commitments in Financial Services also approved in
Marrakesh does not apply to the Philippines. It applies only to those 27 Members
which have indicated in their respective schedules of commitments on standstill,
elimination of monopoly, expansion of operation of existing financial service suppliers,
temporary entry of personnel, free transfer and processing of information, and
national treatment with respect to access to payment, clearing systems and
refinancing available in the normal course of business. [57]
On the other hand, the WTO Agreement itself expresses what multilateral
agreements are deemed included as its integral parts, [58] as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional framework for the conduct of trade
relations among its Members in matters to the agreements and associated legal
instruments included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3
(hereinafter referred to as Multilateral Agreements) are integral parts of this
Agreement, binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4 (hereinafter
referred to as Plurilateral Trade Agreements) are also part of this Agreement for those
Members that have accepted them, and are binding on those Members. The
Plurilateral Trade Agreements do not create either obligation or rights for Members
that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A
(hereinafter referred to as GATT 1994) is legally distinct from the General Agreement
on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act adopted at the
conclusion of the Second Session of the Preparatory Committee of the United
Nations Conference on Trade and Employment, as subsequently rectified, amended
or modified (hereinafter referred to as GATT 1947).
It should be added that the Senate was well-aware of what it was concurring in as
shown by the members deliberation on August 25, 1994. After reading the letter of
President Ramos dated August 11, 1994,[59] the senators of the Republic minutely
dissected what the Senate was concurring in, as follows: [60]
THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in
the first day hearing of this Committee yesterday. Was the observation made by
Senator Taada that what was submitted to the Senate was not the agreement on
establishing the World Trade Organization by the final act of the Uruguay Round
which is not the same as the agreement establishing the World Trade
Organization?And on that basis, Senator Tolentino raised a point of order which,
however, he agreed to withdraw upon understanding that his suggestion for an
alternative solution at that time was acceptable. That suggestion was to treat the
proceedings of the Committee as being in the nature of briefings for Senators until the
question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new... is he making
a new submission which improves on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no
misunderstanding, it was his intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on Senator Tolentino since
they were the ones that raised this question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly appear that what is
being submitted to the Senate for ratification is not the Final Act of the Uruguay
Round, but rather the Agreement on the World Trade Organization as well as the
Ministerial Declarations and Decisions, and the Understanding and Commitments in
Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator
Tolentino? And after him Senator Neptali Gonzales and Senator Lina.
SEN TOLENTINO, Mr. Chairman, I have not seen the new submission actually
transmitted to us but I saw the draft of his earlier, and I think it now complies with the
provisions of the Constitution, and with the Final Act itself. The Constitution does not
require us to ratify the Final Act. It requires us to ratify the Agreement which is now
being submitted. The Final Act itself specifies what is going to be submitted to with
the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as
appropriate the WTO Agreement for the consideration of the respective competent
authorities with a view to seeking approval of the Agreement in accordance with their
procedures.
In other words, it is not the Final Act that was agreed to be submitted to the
governments for ratification or acceptance as whatever their constitutional procedures
may provide but it is the World Trade Organization Agreement. And if that is the one
that is being submitted now, I think it satisfies both the Constitution and the Final Act
itself.
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of
record. And they had been adequately reflected in the journal of yesterdays session
and I dont see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make
any comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator
Gonzales out of the abundance of question. Then the new submission is, I believe,
stating the obvious and therefore I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO Agreement,
petitioners are invoking this Courts constitutionally imposed duty to determine
whether or not there has been grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of the Senate in giving its concurrence therein via Senate
Resolution No. 97. Procedurally, a writ of certiorari grounded on grave abuse of
discretion may be issued by the Court under Rule 65 of the Rules of Court when it is
amply shown that petitioners have no other plain, speedy and adequate remedy in the
ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction.[61] Mere abuse of discretion is not
enough. It must be grave abuse of discretion as when the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and must be
so patent and so gross as to amount to an evasion of a positive duty or to a virtual
refusal to perform the duty enjoined or to act at all in contemplation of law.[62] Failure
on the part of the petitioner to show grave abuse of discretion will result in the
dismissal of the petition.[63]
In rendering this Decision, this Court never forgets that the Senate, whose act is
under review, is one of two sovereign houses of Congress and is thus entitled to great
respect in its actions. It is itself a constitutional body independent and coordinate, and
thus its actions are presumed regular and done in good faith. Unless convincing proof
and persuasive arguments are presented to overthrow such presumptions, this Court
will resolve every doubt in its favor. Using the foregoing well-accepted definition of
grave abuse of discretion and the presumption of regularity in the Senates processes,
this Court cannot find any cogent reason to impute grave abuse of discretion to the
Senates exercise of its power of concurrence in the WTO Agreement granted it by
Sec. 21 of Article VII of the Constitution.[64]
It is true, as alleged by petitioners, that broad constitutional principles require the
State to develop an independent national economy effectively controlled by Filipinos;
and to protect and/or prefer Filipino labor, products, domestic materials and locally
produced goods. But it is equally true that such principles -- while serving as judicial
and legislative guides -- are not in themselves sources of causes of action. Moreover,
there are other equally fundamental constitutional principles relied upon by the
Senate which mandate the pursuit of a trade policy that serves the general welfare
and utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity and the promotion of industries which are competitive in both domestic and
foreign markets, thereby justifying its acceptance of said treaty. So too, the alleged
impairment of sovereignty in the exercise of legislative and judicial powers is
balanced by the adoption of the generally accepted principles of international law as
part of the law of the land and the adherence of the Constitution to the policy of
cooperation and amity with all nations.
economically, politically and culturally in the next century. He refers to the free market
espoused by WTO as the catalyst in this coming Asian ascendancy. There are at
present about 31 countries including China, Russia and Saudi Arabia negotiating for
membership in the WTO. Notwithstanding objections against possible limitations on
national sovereignty, the WTO remains as the only viable structure for multilateral
trading and the veritable forum for the development of international trade law. The
alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly
enriched with original membership, keenly aware of the advantages and
disadvantages of globalization with its on-line experience, and endowed with a vision
of the future, the Philippines now straddles the crossroads of an international strategy
for economic prosperity and stability in the new millennium. Let the people, through
their duly authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan,
Mendoza, Francisco, Hermosisima, Jr., and Torres, Jr., JJ., concur.
Padilla, and Vitug, JJ., in the result.

That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its
consent to the WTO Agreement thereby making it a part of the law of the land is a
legitimate exercise of its sovereign duty and power. We find no patent and gross
arbitrariness or despotism by reason of passion or personal hostility in such
exercise. It is not impossible to surmise that this Court, or at least some of its
members, may even agree with petitioners that it is more advantageous to the
national interest to strike down Senate Resolution No. 97. But that is not a legal
reason to attribute grave abuse of discretion to the Senate and to nullify its
decision. To do so would constitute grave abuse in the exercise of our own judicial
power and duty.Ineludably, what the Senate did was a valid exercise of its
authority. As to whether such exercise was wise, beneficial or viable is outside the
realm of judicial inquiry and review. That is a matter between the elected policy
makers and the people. As to whether the nation should join the worldwide march
toward trade liberalization and economic globalization is a matter that our people
should determine in electing their policy makers. After all, the WTO Agreement allows
withdrawal of membership, should this be the political desire of a member.

The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an
Asian Renaissance[65] where the East will become the dominant region of the world
 At issue in this case is the validity of a resolution, dated March 24, 1993, of the
Philippine Coconut Authority in which it declares that it will no longer require those
wishing to engage in coconut processing to apply to it for a license or permit as a
condition for engaging in such business.

Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as

APCD) brought this suit for certiorari and mandamus against respondent Philippine
Coconut Authority (PCA) to invalidate the latter's Board Resolution No. 018-93 and
the certificates of registration issued under it on the ground that the resolution in
question is beyond the power of the PCA to adopt, and to compel said administrative
agency to comply instead with the mandatory provisions of statutes regulating the
desiccated coconut industry, in particular, and the coconut industry, in general.

As disclosed by the parties' pleadings, the facts are as follows:

On November 5, 1992, seven desiccated coconut processing companies belonging to

the APCD brought suit in the Regional Trial Court, National Capital Judicial Region in
Makati, Metro Manila, to enjoin the PCA from issuing permits to certain applicants for
the establishment of new desiccated coconut processing plants. Petitioner alleged
that the issuance of licenses to the applicants would violate PCA's Administrative
Order No. 02, series of 1991, as the applicants were seeking permits to operate in
areas considered "congested" under the administrative order.1

On November 6, 1992, the trial court issued a temporary restraining order and, on
November 25, 1992, a writ of preliminary injunction, enjoining the PCA from
processing and issuing licenses to Primex Products, Inc., Coco Manila, Superstar
(Candelaria) and Superstar (Davao) upon the posting of a bond in the amount of
P100,000.00.2
Republic of the Philippines
Subsequently and while the case was pending in the Regional Trial Court, the
SUPREME COURT
Governing Board of the PCA issued on March 24, 1993 Resolution No. 018-93,
Manila
providing for the withdrawal of the Philippine Coconut Authority from all regulation of
EN BANC the coconut product processing industry. While it continues the registration of coconut
product processors, the registration would be limited to the "monitoring" of their
volumes of production and administration of quality standards. The full text of the
resolution reads:
G.R. No. 110526 February 10, 1998
RESOLUTION NO. 018-93
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner, POLICY DECLARATION DEREGULATING
vs. THE ESTABLISHMENT OF NEW COCONUT
PHILIPPINE COCONUT AUTHORITY, respondent. PROCESSING PLANTS

WHEREAS, it is the policy of the State to promote free enterprise unhampered by

protective regulations and unnecessary bureaucratic red tapes;
MENDOZA, J.:
WHEREAS, the deregulation of certain sectors of the coconut industry, such as
marketing of coconut oils pursuant to Presidential Decree No. 1960, the lifting of
export and commodity clearances under Executive Order No. 1016, and relaxation of
regulated capacity for the desiccated coconut sector pursuant to Presidential
Memorandum of February 11, 1988, has become a centerpiece of the present
dispensation;
WHEREAS, the issuance of permits or licenses prior to business operation is a form
of regulation which is not provided in the charter of nor included among the powers of
the PCA;
WHEREAS, the Governing Board of PCA has determined to follow and further
support the deregulation policy and effort of the government to promote free
enterprise;
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that,
henceforth, PCA shall no longer require any coconut oil mill, coconut oil refinery,
coconut desiccator, coconut product processor/factory, coconut fiber plant or any
similar coconut processing plant to apply with PCA and the latter shall no longer issue
any form of license or permit as condition prior to establishment or operation of such
mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the
aforementioned coconut product processors for the purpose of monitoring their
volumes of production, administration of quality standards with the corresponding
service fees/charges.
ADOPTED this 24th day of March 1993, at Quezon City.3
The PCA then proceeded to issue "certificates of registration" to those wishing to
operate desiccated coconut processing plants, prompting petitioner to appeal to the
Office of the President of the Philippines on April 26, 1993 not to approve the
resolution in question. Despite follow-up letters sent on May 25 and June 2, 1993,
petitioner received no reply from the Office of the President. The "certificates of
registration" issued in the meantime by the PCA has enabled a number of new
coconut mills to operate. Hence this petition.
Petitioner alleges:
I indiscriminately to new coconut millers, we hold that petitioner was justified in
RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR
BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY AN
ADMINISTRATIVE BODY.
II
ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS
WITHOUT ANY BASIS, ARBITRARY, UNREASONABLE AND THEREFORE IN
VIOLATION OF SUBSTANTIVE DUE PROCESS OF LAW.
III
IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED
THE PROCEDURAL DUE PROCESS REQUIREMENT OF CONSULTATION
PROVIDED IN PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO. 826
AND PCA ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991.
On the other hand, in addition to answering petitioner's arguments, respondent PCA
alleges that this petition should be denied on the ground that petitioner has a pending
appeal before the Office of the President. Respondent accuses petitioner of forum-
shopping in filing this petition and of failing to exhaust available administrative
remedies before coming to this Court. Respondent anchors its argument on the
general rule that one who brings an action under Rule 65 must show that one has no
appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.
I.
The rule of requiring exhaustion of administrative remedies before a party may seek
judicial review, so strenuously urged by the Solicitor General on behalf of respondent,
has obviously no application here. The resolution in question was issued by the PCA
in the exercise of its rule-making or legislative power. However, only judicial review of
decisions of administrative agencies made in the exercise of their quasi-
judicial function is subject to the exhaustion doctrine. The exhaustion doctrine stands
as a bar to an action which is not yet complete 4 and it is clear, in the case at bar,
that after its promulgation the resolution of the PCA abandoning regulation of
the desiccated coconut industry became effective. To be sure, the PCA is under
the direct supervision of the President of the Philippines but there is nothing in
P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining the powers
and functions of the PCA which requires rules and regulations issued by it to
be approved by the President before they become effective.
In any event, although the APCD has appealed the resolution in question to the
Office of the President, considering the fact that two months after they had sent
their first letter on April 26, 1993 they still had to hear from the President's
office, meanwhile respondent PCA was issuing certificates of registration
filing this case on June 25, 1993.5 Indeed, after writing the Office of the
President on April 26, 19936 petitioner sent inquiries to that office not once, but
twice, on May 26, 19937 and on June 2, 1993,8 but petitioner did not receive any
reply.
II.
We now turn to the merit of the present petition. The Philippine Coconut
Authority was originally created by P.D. 232 on June 30, 1973, to take over the
powers and functions of the Coconut Coordinating Council, the Philippine
Coconut Administration and the Philippine Coconut Research Institute. On
June 11, 1978, by P.D. No. 1468, it was made "an independent public
corporation . . . directly reporting to, and supervised by, the President of the
Philippines,"9 and charged with carrying out the State's policy "to promote the
rapid integrated development and growth of the coconut and other palm oil
industry in all its aspects and to ensure that the coconut farmers become direct
participants in, and beneficiaries of, such development and growth."10 through
a regulatory scheme set up by law.11
Through this scheme, the government, on August 28, 1982, temporarily
prohibited the opening of new coconut processing plants and, four months
later, phased out some of the existing ones in view of overproduction in the
coconut industry which resulted in cut-throat competition, underselling and
smuggling of poor quality products and ultimately in the decline of the export
performance of coconut-based commodities. The establishment of new plants
could be authorized only upon determination by the PCA of the existence of
certain economic conditions and the approval of the President of the
Philippines. Thus, Executive Order No. 826, dated August 28, 1982, provided:
Sec. 1. Prohibition. Except as herein provided, no government agency or
instrumentality shall hereafter authorize, approve or grant any permit or license
for the establishment or operation of new desiccated coconut processing
plants, including the importation of machinery or equipment for the purpose. In
the event of a need to establish a new plant, or expand the capacity, relocate or
upgrade the efficiencies of any existing desiccated plant, the Philippine
Coconut Authority may, upon proper determination of such need and
evaluation of the condition relating to:
a. the existing market demand;
b. the production capacity prevailing in the country or locality;
c. the level and flow of raw materials; and
d. other circumstances which may affect the growth or viability of the industry
concerned,
authorize or grant the application for, the establishment or expansion of
capacity, relocation or upgrading of efficiencies of such desiccated coconut
processing plant, subject to the approval of the President.
On December 6, 1982, a phase-out of some of the existing plants was ordered
by the government after finding that "a mere freeze in the present capacity of
existing plants will not afford a viable solution to the problem considering that
the total available limited market is not adequate to support all the existing
processing plants, making it imperative to reduce the number of existing
processing plants."12 Accordingly, it was ordered:13
Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action
as may be necessary to reduce the number of existing desiccated coconut
processing plants to a level which will insure the survival of the remaining
plants. The Authority is hereby directed to determine which of the existing
processing plants should be phased out and to enter into appropriate contracts
with such plants for the above purpose.
It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87,
authorizing the establishment and operation of additional DCN plants, in view
of the increased demand for desiccated coconut products in the world's
markets, particularly in Germany, the Netherlands and Australia. Even then, the
opening of new plants was made subject to "such implementing guidelines to
be set forth by the Authority" and "subject to the final approval of the
President."
The guidelines promulgated by the PCA, as embodied in Administrative Order
No. 002, series of 1991, inter alia authorized the opening of new plants in "non-
congested areas only as declared by the PCA" and subject to compliance by
applicants with "all procedures and requirements for registration under
Administrative Order No. 003, series of 1981 and this Order." In addition, as the
opening of new plants was premised on the increased global demand for
desiccated coconut products, the new entrants were required to submit sworn
statements of the names and addresses of prospective foreign buyers.
This form of "deregulation" was approved by President Aquino in her
memorandum, dated February 11, 1988, to the PCA. Affirming the regulatory
scheme, the President stated in her memorandum:
It appears that pursuant to Executive Order No. 826 providing measures for the
protection of the Desiccated Coconut Industry, the Philippine Coconut
Authority evaluated the conditions relating to: (a) the existing market demands;
(b) the production capacity prevailing in the country or locality; (c) the level and
flow of raw materials; and (d) other circumstances which may affect the growth
or viability of the industry concerned and that the result of such evaluation
favored the expansion of production and market of desiccated coconut
products.
In view hereof and the favorable recommendation of the Secretary of
Agriculture, the deregulation of the Desiccated Coconut Industry as
recommended in Resolution No. 058-87 adopted by the PCA Governing Board
on October 28, 1987 (sic) is hereby approved.14
These measures the restriction in 1982 on entry into the field, the reduction
the same year of the number of the existing coconut mills and then the lifting of
the restrictions in 1987 were adopted within the framework of regulation as
established by law "to promote the rapid integrated development and growth of
the coconut and other palm oil industry in all its aspects and to ensure that the
coconut farmers become direct participants in, and beneficiaries of, such
development and growth." 15 Contrary to the assertion in the dissent, the power
given to the Philippine Coconut Authority and before it to the Philippine
Coconut Administration "to formulate and adopt a general program of
development for the coconut and other palm oils industry" 16 is not a roving
commission to adopt any program deemed necessary to promote the
development of the coconut and other palm oils industry, but one to be
exercised in the context of this regulatory structure.
In plain disregard of this legislative purpose, the PCA adopted on March 24,
1993 the questioned resolution which allows not only the indiscriminate
opening of new coconut processing plants but the virtual dismantling of the
regulatory infrastructure whereby, forsaking controls theretofore placed in its
keeping, the PCA limits its function to the innocuous one of "monitoring"
compliance by coconut millers with quality standards and volumes of
production. In effect, the PCA would simply be compiling statistical data on
these matters, but in case of violations of standards there would be nothing
much it would do. The field would be left without an umpire who would retire to
the bleachers to become a mere spectator. As the PCA provided in its
Resolution No. 018-93:
NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that,
henceforth, PCA shall no longer require any coconut oil mill, coconut oil
refinery, coconut desiccator, coconut product processor/factory, coconut fiber
plant or any similar coconut processing plant to apply with PCA and the latter
shall no longer issue any form of license or permit as condition prior to
establishment or operation of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering
the aforementioned coconut product processors for the purpose of monitoring
their volumes of production, administration of quality standards with the
corresponding service fees/charges.
The issue is not whether the PCA has the power to adopt this resolution to
carry out its mandate under the law "to promote the accelerated growth and
development of the coconut and other palm oil industry." 17 The issue rather is
whether it can renounce the power to regulate implicit in the law creating it for
that is what the resolution in question actually is.
Under Art. II, 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the
PCA is "To formulate and adopt a general program of development for the
coconut and other palm oil industry in all its aspects." By limiting the purpose
of registration to merely "monitoring volumes of production [and]
administration of quality standards" of coconut processing plants, the PCA in
effect abdicates its role and leaves it almost completely to market forces how
the coconut industry will develop.
Art. II, 3 of P.D. No. 1468 further requires the PCA:
(h) To regulate the marketing and the exportation of copra and its by-products
by establishing standards for domestic trade and export and, thereafter, to
conduct an inspection of all copra and its by-products proposed for export to
determine if they conform to the standards established;
Instead of determining the qualifications of market players and preventing the
entry into the field of those who are unfit, the PCA now relies entirely on
competition with all its wastefulness and inefficiency to do the weeding
out, in its naive belief in survival of the fittest. The result can very well be a
repeat of 1982 when free enterprise degenerated into a "free-for-all," resulting
in cut-throat competition, underselling, the production of inferior products and
the like, which badly affected the foreign trade performance of the coconut
industry.
Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk
other statutory provisions, particularly those of P.D. No. 1644, to wit:
Sec. 1. The Philippine Coconut Authority shall have full power and authority to
regulate the marketing and export of copra, coconut oil and their by-products,
in furtherance of the steps being taken to rationalize the coconut oil milling
industry.
Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine
Coconut Authority may initiate and implement such measures as may be
necessary to attain the rationalization of the coconut oil milling industry,
including, but not limited to, the following measures:
(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil
and their by-products;
(b) Prescription of quality standards;
(c) Establishment of maximum quantities for particular periods and particular
markets;
(d) Inspection and survey of export shipments through an independent
international superintendent or surveyor.
In the exercise of its powers hereunder, the Philippine Coconut Authority shall
consult with, and be guided by, the recommendation of the coconut farmers,
through corporations owned or controlled by them through the Coconut
Industry Investment Fund and the private corporation authorized to be
organized under Letter of Instructions No. 926.
and the Revised Coconut Code (P.D. No. 1468), Art. II, 3, to wit:
(m) Except in respect of entities owned or controlled by the Government or by
the coconut farmers under Sections 9 and 10, Article III hereof, the Authority
shall have full power and authority to regulate the production, distribution and
utilization of all subsidized coconut-based products, and to require the
submission of such reports or documents as may be deemed necessary by the
Authority to ascertain whether the levy payments and/or subsidy claims are
due and correct and whether the subsidized products are distributed among,
and utilized by, the consumers authorized by the Authority.
The dissent seems to be saying that in the same way that restrictions on entry
into the field were imposed in 1982 and then relaxed in 1987, they can be totally
lifted now without prejudice to reimposing them in the future should it become
necessary to do so. There is really no renunciation of the power to regulate, it
is claimed. Trimming down of PCA's function to registration is not an
abdication of the power to regulate but is regulation itself. But how can this be
done when, under Resolution No. 018-93, the PCA no longer requires a license
as condition for the establishment or operation of a plant? If a number of
processing firms go to areas which are already congested, the PCA cannot
stop them from doing so. If there is overproduction, the PCA cannot order a cut
back in their production. This is because the licensing system is the
mechanism for regulation. Without it the PCA will not be able to regulate
coconut plants or mills.
In the first "whereas" clause of the questioned resolution as set out above, the
PCA invokes a policy of free enterprise that is "unhampered by protective
regulations and unnecessary bureaucratic red tape" as justification for
abolishing the licensing system. There can be no quarrel with the elimination of
"unnecessary red tape." That is within the power of the PCA to do and indeed it
should eliminate red tape. Its success in doing so will be applauded. But free
enterprise does not call for removal of "protective regulations."
Our Constitutions, beginning with the 1935 document, have repudiated laissez-
faire as an economic principle.18 Although the present Constitution enshrines
free enterprise as a policy,19 it nonetheless reserves to the government the
power to intervene whenever necessary to promote the general welfare. This is
clear from the following provisions of Art. XII of the Constitution which, so far
as pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the right to own,
establish, and operate economic enterprises, subject to the duty of the State to
promote distributive justice and to intervene when the common good so
demands.
Sec. 19. The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition
shall be allowed. (Emphasis added).
At all events, any change in policy must be made by the legislative department
of the government. The regulatory system has been set up by law. It is beyond
the power of an administrative agency to dismantle it. Indeed, petitioner
charges the PCA of seeking to render moot a case filed by some of its members
questioning the grant of licenses to certain parties by adopting the resolution
in question. It is alleged that members of petitioner complained to the court that
the PCA had authorized the establishment and operation of new plants in areas
which were already crowded, in violation of its Administrative Order No. 002,
series of 1991. In response, the Regional Trial Court issued a writ of preliminary
injunction, enjoining the PCA from issuing licenses to the private respondent in
that case.
These allegations of petitioner have not been denied here. It would thus seem
that instead of defending its decision to allow new entrants into the field
against petitioner's claim that the PCA decision violated the guidelines in
Administrative Order No. 002, series of 1991, the PCA adopted the resolution in
question to render the case moot. In so doing, the PCA abdicated its function of
regulation and left the field to untrammeled competition that is likely to
resurrect the evils of cut-throat competition, underselling and overproduction
which in 1982 required the temporary closing of the field to new players in
order to save the industry.
The PCA cannot rely on the memorandum of then President Aquino for
authority to adopt the resolution in question. As already stated, what President
Aquino approved in 1988 was the establishment and operation of new DCN
plants subject to the guidelines to be drawn by the PCA.20 In the first place, she
could not have intended to amend the several laws already mentioned, which
set up the regulatory system, by a mere memoranda to the PCA. In the second
place, even if that had been her intention, her act would be without effect
considering that, when she issued the memorandum in question on February
11, 1988, she was no longer vested with legislative authority.21
WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all
certificates of registration issued under it are hereby declared NULL and VOID
for having been issued in excess of the power of the Philippine Coconut
Authority to adopt or issue.
SO ORDERED. This resolves the Petition for Review on Certiorari seeking to set aside the
Decision1 of the Regional Trial Court of Quezon City, Branch 90 (RTC) dated
Narvasa, C.J., Regalado, Davide, Jr., Puno, Kapunan, Francisco, Panganiban November 5, 2002.
and Martinez, JJ., concur.
The case commenced upon petitioners filing of a Petition For Declaratory Relief With
Prayer For Issuance Of A Writ Of Preliminary Injunction And/Or Temporary
Restraining Order with the RTC on January 4, 2002. Petitioner, a non-stock
corporation duly organized and existing under the laws of the Philippines, is an
association of pesticide handlers duly licensed by respondent Fertilizer and Pesticide
Authority (FPA). It questioned the validity of Section 3.12 of the 1987 Pesticide
Regulatory Policies and Implementing Guidelines, which provides thus:

3.12 Protection of Proprietary Data

Data submitted to support the first full or conditional registration of a pesticide

active ingredient in the Philippines will be granted proprietary protection for a
period of seven years from the date of such registration. During this period
subsequent registrants may rely on these data only with third party
authorization or otherwise must submit their own data. After this period, all data
may be freely cited in support of registration by any applicant, provided convincing
proof is submitted that the product being registered is identical or substantially similar
to any current registered pesticide, or differs only in ways that would not significantly
increase the risk of unreasonable adverse effects.

Pesticides granted provisional registration under P.D. 1144 will be considered first
registered in 1977, the date of the Decree.

Pesticide products in which data is still under protection shall be referred to as

Republic of the Philippines
proprietary pesticides, and all others as commodity pesticides. (Emphasis supplied)
SUPREME COURT
Manila Petitioner argued that the specific provision on the protection of the proprietary data in
FPAs Pesticide Regulatory Policies and Implementing Guidelines is unlawful for
THIRD DIVISION
going counter to the objectives of Presidential Decree No. 1144 (P.D. No. 1144); for
exceeding the limits of delegated authority; and for encroaching on the exclusive
G.R. NO. 156041 February 21, 2007
jurisdiction of the Intellectual Property Office.
PEST MANAGEMENT ASSOCIATION OF THE PHILIPPINES (PMAP), represented
by its President, MANUEL J. CHAVEZ, Petitioner, On November 5, 2002, the RTC dismissed the petition for declaratory relief for lack of
merit. The RTC held that "the FPA did not exceed the limits of its delegated authority
vs.
in issuing the aforecited Section 3.12 of the Guidelines granting protection to
FERTILIZER AND PESTICIDE AUTHORITY (FPA), SECRETARY OF THE
proprietary data x x x because the issuance of the aforecited Section was a valid
DEPARTMENT OF AGRICULTURE, FPA OFFICER- IN-CHARGE CESAR M.
exercise of its power to regulate, control and develop the pesticide industry under
DRILON, AND FPA DEPUTY DIRECTOR DARIO C. SALUBARSE,Respondents.
P.D. 1144"2 and the assailed provision does "not encroach on one of the functions of
DECISION the Intellectual Properly Office (IPO)."3

AUSTRIA-MARTINEZ, J.: Dissatisfied with the RTC Decision, petitioner resorted to filing this petition for review
on certiorari where the following issues are raised:
I of proprietary data involves an investment of many years and large sums of money,
WHETHER OR NOT RESPONDENT FPA HAS ACTED BEYOND THE SCOPE OF
ITS DELEGATED POWER WHEN IT GRANTED A SEVEN-YEAR PROPRIETARY
PROTECTION TO DATA SUBMITTED TO SUPPORT THE FIRST FULL OR
CONDITIONAL REGISTRATION OF A PESTICIDE INGREDIENT IN THE
PHILIPPINES;
II
WHETHER OR NOT RESPONDENT FPA IS ENCROACHING ON THE EXCLUSIVE
JURISDICTION OF THE INTELLECTUAL PROPERTY OFFICE (IPO) WHEN IT
INCLUDED IN ITS PESTICIDE REGULATORY POLICIES AND IMPLEMENTING
GUIDELINES THE SUBJECT SEVEN-YEAR PROPRIETARY DATA PROTECTION;
III
WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION IS AN UNLAWFUL
RESTRAINT OF FREE TRADE;
IV
WHETHER OR NOT SAID PROPRIETARY DATA PROTECTION RUNS COUNTER
TO THE OBJECTIVES OF P.D. NO. 1144;
V government authority equipped with the required expertise to regulate, control and
WHETHER OR NOT THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH
90, COMMITTED A REVERSIBLE ERROR WHEN IT UPHELD THE VALIDITY OF
SECTION 3.12 OF THE PESTICIDE REGULATORY POLICIES AND
IMPLEMENTING GUIDELINES ISSUED BY RESPONDENT FPA.
Respondents, on the other hand, maintain that the provision on the protection of
proprietary data in the FPA's Pesticide Regulatory Policies and Implementing
Guidelines is valid and legal as it does not violate the objectives of P.D. No. 1144; the
proprietary data are a substantial asset which must be protected; the protection for a
limited number of years does not constitute unlawful restraint of free trade; and such
provision does not encroach upon the jurisdiction of the Intellectual Property Office.
Respondents expound that since under P.D. No. 1144, the FPA is mandated to
regulate, control and develop the pesticide industry, it was necessary to provide for
such protection of proprietary data, otherwise, pesticide handlers will proliferate to the
the detriment of the industry and the public since the inherent toxicity of pesticides are
hazardous and are potential environmental contaminants.
They also pointed out that the protection under the assailed Pesticide Regulatory
Policies and Implementing Guidelines is warranted, considering that the development
thus, the data generated by an applicant in support of his application for registration
are owned and proprietary to him. Moreover, since the protection accorded to the
proprietary data is limited in time, then such protection is reasonable and does not
constitute unlawful restraint of trade.
Lastly, respondents emphasize that the provision on protection of proprietary data
does not usurp the functions of the Intellectual Property Office (IPO) since a patent
and data protection are two different matters. A patent prohibits all unlicensed
making, using and selling of a particular product, while data protection accorded by
the FPA merely prevents copying or unauthorized use of an applicant's data, but any
other party may independently generate and use his own data. It is further argued
that under Republic Act No. 8293 (R.A. No. 8293), the grant of power to the IPO to
administer and implement State policies on intellectual property is not exclusionary as
the IPO is even allowed to coordinate with other government agencies to formulate
and implement plans and policies to strengthen the protection of intellectual property
rights.
The petition is devoid of merit.
The law being implemented by the assailed Pesticide Regulatory Policies and
Implementing Guidelines is P.D. No. 1144, entitled Creating the Fertilizer and
Pesticide Authority and Abolishing the Fertilizer Industry Authority. As stated in the
Preamble of said decree, "there is an urgent need to create a technically-oriented
develop both the fertilizer and the pesticide industries." (Underscoring supplied) The
decree further provided as follows:
Section 6. Powers and Functions. The FPA shall have jurisdiction, over all existing
handlers of pesticides, fertilizers and other agricultural chemical inputs. The FPA shall
have the following powers and functions:
I. Common to Fertilizers, Pesticides and other Agricultural Chemicals
xxx
4. To promulgate rules and regulations for the registration and licensing of handlers of
these products, collect fees pertaining thereto, as well as the renewal, suspension,
revocation, or cancellation of such registration or licenses and such other rules and
regulations as may be necessary to implement this Decree;
xxx
Section 7. Power to Issue Rules and Regulations to Implement Decree. The FPA is
hereby authorized to issue or promulgate rules and regulations to implement, and
carry out the purposes and provisions of this Decree.
Did the FPA go beyond its delegated power and undermine the objectives of P.D. No.
1144 by issuing regulations that provide for protection of proprietary data? The
answer is in the negative.
Under P.D. No. 1144, the FPA is given the broad power to issue rules and regulations
to implement and carry out the purposes and provisions of said decree, i.e., to
regulate, control and develop the pesticide industry. In furtherance of such ends, the
FPA sees the protection of proprietary data as one way of fulfilling its mandate.
In Republic v. Sandiganbayan,4 the Court emphasized that:
x x x [t]he interpretation of an administrative government agency, which is
tasked to implement a statute is generally accorded great respect and
ordinarily controls the construction of the courts. The reason behind this rule was
explained in Nestle Philippines, Inc. vs. Court of Appeals in this wise:
The rationale for this rule relates not only to the emergence of the multifarious needs
of a modern or modernizing society and the establishment of diverse administrative
agencies for addressing and satisfying those needs; it also relates to the
accumulation of experience and growth of specialized capabilities by the
administrative agency charged with implementing a particular statute. In Asturias
Sugar Central, Inc. vs. Commissioner of Customs, the Court stressed that executive
officials are presumed to have familiarized themselves with all the
considerations pertinent to the meaning and purpose of the law, and to have
formed an independent, conscientious and competent expert opinion thereon.
The courts give much weight to the government agency officials charged with
the implementation of the law, their competence, expertness, experience and
informed judgment, and the fact that they frequently are the drafters of the law
they interpret."
x x x.5 [Emphasis supplied]
Verily, in this case, the Court acknowledges the experience and expertise of FPA
officials who are best qualified to formulate ways and means of ensuring the quality
and quantity of pesticides and handlers thereof that should enter the Philippine
market, such as giving limited protection to proprietary data submitted by applicants
for registration. The Court ascribes great value and will not disturb the FPA's
determination that one way of attaining the purposes of its charter is by granting such
protection, specially where there is nothing on record which shows that said
administrative agency went beyond its delegated powers.
Moreover, petitioner has not succeeded in convincing the Court that the provision in
question has legal infirmities.1awphi1.net
There is no encroachment upon the powers of the IPO granted under R.A. No. 8293,
otherwise known as the Intellectual Property Code of the Philippines. Section 5
thereof enumerates the functions of the IPO. Nowhere in said provision does it state
nor can it be inferred that the law intended the IPO to have the exclusive authority to
protect or promote intellectual property rights in the Philippines. On the contrary,
paragraph (g) of said Section even provides that the IPO shall "[c]oordinate with other
government agencies and the private sector efforts to formulate and implement plans
and policies to strengthen the protection of intellectual property rights in the country."
Clearly, R.A. No. 8293 recognizes that efforts to fully protect intellectual property
rights cannot be undertaken by the IPO alone. Other agencies dealing with
intellectual property rights are, therefore, not precluded from issuing policies,
guidelines and regulations to give protection to such rights.
There is also no evidence whatsoever to support petitioner's allegation that the grant
of protection to proprietary data would result in restraining free trade. Petitioner did
not adduce any reliable data to prove its bare allegation that the protection of
proprietary data would unduly restrict trade on pesticides. Furthermore, as held
in Association of Philippine Coconut Desiccators v. Philippine Coconut
Authority,6 despite the fact that "our present Constitution enshrines free enterprise as
a policy, it nonetheless reserves to the government the power to intervene whenever
necessary to promote the general welfare." There can be no question that the
unregulated use or proliferation of pesticides would be hazardous to our environment.
Thus, in the aforecited case, the Court declared that "free enterprise does not call for
removal of protective regulations."7 More recently, in Coconut Oil Refiners
Association, Inc. v. Torres,8 the Court held that "[t]he mere fact that incentives and
privileges are granted to certain enterprises to the exclusion of others does not render
the issuance unconstitutional for espousing unfair competition." It must be clearly
explained and proven by competent evidence just exactly how such protective
regulation would result in the restraint of trade.
In sum, the assailed provision in the 1987 Pesticide Regulatory Policies and
Implementing Guidelines granting protection to proprietary data is well within the
authority of the FPA to issue so as to carry out its purpose of controlling, regulating
and developing the pesticide industry.
WHEREFORE, the petition is DENIED. The Decision of the Regional Trial Court of
Quezon City, Branch 90, in SP. Civil Case No. Q-01-42790 is AFFIRMED.
SO ORDERED.
 - versus - BRION,*

PERALTA,

BERSAMIN,

DEL CASTILLO,

ABAD,

VILLARAMA, JR.,

PEREZ,

MENDOZA,* and

SERENO,** JJ.

HON. RONALDO ZAMORA, JR. (Executive Secretary), HON. MAR ROXAS

(Secretary of Trade and Industry), HON. FELIPE MEDALLA (Secretary of
National Economic and Development Authority), GOV. RAFAEL
BUENAVENTURA (Bangko Sentral ng Pilipinas) and HON. LILIA BAUTISTA
(Chairman, Securities and Exchange Commission),

Respondents. Promulgated:
EN BANC

September 21, 2010

REPRESENTATIVES GERARDO S. G.R. No. 143855 x --------------------------------------------------------------------------------------- x
ESPINA, ORLANDO FUA, JR., PROSPERO AMATONG, ROBERT ACE S. DECISION
BARBERS, RAUL M. GONZALES, PROSPERO PICHAY, JUAN MIGUEL ZUBIRI
and FRANKLIN BAUTISTA,

Petitioners, Present: ABAD, J.:

CORONA, C.J.,

CARPIO,

CARPIO MORALES, This case calls upon the Court to exercise its power of judicial review and determine
the constitutionality of the Retail Trade Liberalization Act of 2000, which has been
VELASCO, JR.,* assailed as in breach of the constitutional mandate for the development of a self-
reliant and independent national economy effectively controlled by Filipinos.
NACHURA,*

LEONARDO-DE CASTRO,*
The Facts and the Case
On March 7, 2000 President Joseph E. Estrada signed into law Republic Act (R.A.)
8762, also known as the Retail Trade Liberalization Act of 2000. It expressly repealed
R.A. 1180, which absolutely prohibited foreign nationals from engaging in the retail
trade business. R.A. 8762 now allows them to do so under four categories:
On October 11, 2000 petitioners Magtanggol T. Gunigundo I, Michael T.
Defensor, Gerardo S. Espina, Benjamin S. Lim, Orlando Fua, Jr., Prospero Amatong,
Sergio Apostol,Robert Ace S. Barbers, Enrique Garcia, Jr., Raul M. Gonzales, Jaime
Jacob, Apolinario Lozada, Jr., Leonardo Montemayor, Ma. Elena Palma-Gil, Prospero
Pichay, Juan Miguel Zubiri and Franklin Bautista, all members of the House of
Representatives, filed the present petition, assailing the constitutionality of R.A. 8762
on the following grounds:

Category A Less than Exclusively for Filipino

US$2,500,000.00
Category B US$2,500,000.00 up but
less than US$7,500,000.00
citizens and corporations
wholly owned by Filipino
citizens.
For the first two years of
R.A. 8762s effectivity,
foreign ownership is
allowed up to 60%. After
the two-year period, 100%
foreign equity shall be
allowed.
First, the law runs afoul of Sections 9, 19, and 20 of Article II of the Constitution which
enjoins the State to place the national economy under the control of Filipinos to
achieve equal distribution of opportunities, promote industrialization and full
employment, and protect Filipino enterprise against unfair competition and trade
policies.
Second, the implementation of R.A. 8762 would lead to alien control of the retail
trade, which taken together with alien dominance of other areas of business, would
result in the loss of effective Filipino control of the economy.

Category C US$7,500,000.00 or more May be wholly owned by

Category D US$250,000.00 per store
of foreign enterprises
specializing in high-end or
luxury products
foreigners. Foreign
Third, foreign retailers like Walmart and K-Mart would crush Filipino retailers and sari-
investments for
sari store vendors, destroy self-employment, and bring about more unemployment.
establishing a store in
Categories B and C shall
not be less than the
equivalent in Philippine Fourth, the World Bank-International Monetary Fund had improperly imposed the
Pesos of US$830,000.00. passage of R.A. 8762 on the government as a condition for the release of certain
loans.
May be wholly owned by
foreigners.
Fifth, there is a clear and present danger that the law would promote monopolies or
combinations in restraint of trade.

Respondents Executive Secretary Ronaldo Zamora, Jr., Trade and Industry Secretary
R.A. 8762 also allows natural-born Filipino citizens, who had lost their citizenship and Mar Roxas, National Economic and Development Authority (NEDA) Secretary Felipe
now reside in the Philippines, to engage in the retail trade business with the same Medalla, Bangko Sentral ng Pilipinas Gov. Rafael Buenaventura, and Securities and
rights as Filipino citizens. Exchange Commission Chairman Lilia Bautista countered that:
First, petitioners have no legal standing to file the petition. They cannot invoke the
fact that they are taxpayers since R.A. 8762 does not involve the disbursement of
public funds. Nor can they invoke the fact that they are members of Congress since
they made no claim that the law infringes on their right as legislators.
Second, the petition does not involve any justiciable controversy. Petitioners of
course claim that, as members of Congress, they represent the small retail vendors in
their respective districts but the petition does not allege that the subject law violates
the rights of those vendors.
Third, petitioners have failed to overcome the presumption of constitutionality of R.A.
8762. Indeed, they could not specify how the new law violates the constitutional
provisions they cite. Sections 9, 19, and 20 of Article II of the Constitution are not self-
executing provisions that are judicially demandable.
Fourth, the Constitution mandates the regulation but not the prohibition of foreign
investments. It directs Congress to reserve to Filipino citizens certain areas of
investments upon the recommendation of the NEDA and when the national interest
so dictates. But the Constitution leaves to the discretion of the Congress whether or
not to make such reservation. It does not prohibit Congress from enacting laws
allowing the entry of foreigners into certain industries not reserved by the Constitution
to Filipino citizens.
The Issues Presented
Simplified, the case presents two issues:
1. Whether or not petitioner lawmakers have the legal standing to challenge the
constitutionality of R.A. 8762; and
2. Whether or not R.A. 8762 is unconstitutional.
The Courts Ruling
One. The long settled rule is that he who challenges the validity of a law must have a
standing to do so.[1] Legal standing or locus standi refers to the right of a party to
come to a court of justice and make such a challenge. More particularly, standing
refers to his personal and substantial interest in that he has suffered or will suffer
direct injury as a result of the passage of that law.[2] To put it another way, he must
show that he has been or is about to be denied some right or privilege to which he is
lawfully entitled or that he is about to be subjected to some burdens or penalties by
reason of the law he complains of.[3]
Here, there is no clear showing that the implementation of the Retail Trade
Liberalization Act prejudices petitioners or inflicts damages on them, either as
taxpayers[4] or as legislators.[5] Still the Court will resolve the question they raise since
the rule on standing can be relaxed for nontraditional plaintiffs like ordinary citizens,
taxpayers, and legislators when as in this case the public interest so requires or the
matter is of transcendental importance, of overarching significance to society, or of
paramount public interest.[6]
Two. Petitioners mainly argue that R.A. 8762 violates the mandate of the 1987
Constitution for the State to develop a self-reliant and independent national economy
effectively controlled by Filipinos. They invoke the provisions of the Declaration of
Principles and State Policies under Article II of the 1987 Constitution, which read as
follows:
Section 9. The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the people from
poverty through policies that provide adequate social services, promote full
employment, a rising standard of living, and an improved quality of life for all.
xxxx
Section 19. The State shall develop a self-reliant and independent national
economy effectively controlled by Filipinos.
Section 20. The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed investments.
Petitioners also invoke the provisions of the National Economy and Patrimony under
Article XII of the 1987 Constitution, which reads:
Section 10. The Congress shall, upon recommendation of the economic and
planning agency, when the national interest dictates, reserve to citizens of the
Philippines or to corporations or associations at least sixty per centum of
whose capital is owned by such citizens, or such higher percentage as
Congress may prescribe, certain areas of investments. The Congress shall
enact measures that will encourage the formation and operation of enterprises
whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within
its national jurisdiction and in accordance with its national goals and priorities.
xxxx
Section 12. The State shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and adopt measures that help
make them competitive.
Section 13. The State shall pursue a trade policy that serves the general welfare
and utilizes all forms and arrangements of exchange on the basis of equality
and reciprocity.
But, as the Court explained in Taada v. Angara,[7] the provisions of Article II of the
1987 Constitution, the declarations of principles and state policies, are not self-
executing.Legislative failure to pursue such policies cannot give rise to a cause of
action in the courts.
The Court further explained in Taada that Article XII of the 1987 Constitution lays
down the ideals of economic nationalism: (1) by expressing preference in favor of
qualified Filipinos in the grant of rights, privileges and concessions covering the
national economy and patrimony and in the use of Filipino labor, domestic materials
and locally-produced goods; (2) by mandating the State to adopt measures that help
make them competitive; and (3) by requiring the State to develop a self-reliant and
independent national economy effectively controlled by Filipinos.[8]
In other words, while Section 19, Article II of the 1987 Constitution requires the
development of a self-reliant and independent national economy effectively controlled
by Filipino entrepreneurs, it does not impose a policy of Filipino monopoly of the
economic environment. The objective is simply to prohibit foreign powers or interests
from maneuvering our economic policies and ensure that Filipinos are given
preference in all areas of development.
Indeed, the 1987 Constitution takes into account the realities of the outside world as it
requires the pursuit of a trade policy that serves the general welfare and utilizes all
forms and arrangements of exchange on the basis of equality and reciprocity; and
speaks of industries which are competitive in both domestic and foreign markets as
well as of the protection of Filipino enterprises against unfair foreign competition and
trade practices. Thus, while the Constitution mandates a bias in favor of Filipino
goods, services, labor and enterprises, it also recognizes the need for business
exchange with the rest of the world on the bases of equality and reciprocity and limits
protection of Filipino enterprises only against foreign competition and trade practices
that are unfair.[9]
In other words, the 1987 Constitution does not rule out the entry of foreign
investments, goods, and services. While it does not encourage their unlimited entry
into the country, it does not prohibit them either. In fact, it allows an exchange on the
basis of equality and reciprocity, frowning only on foreign competition that is
unfair.[10] The key, as in all economies in the world, is to strike a balance between
protecting local businesses and allowing the entry of foreign investments and
services.
More importantly, Section 10, Article XII of the 1987 Constitution gives Congress the
discretion to reserve to Filipinos certain areas of investments upon the
recommendation of the NEDA and when the national interest requires. Thus,
Congress can determine what policy to pass and when to pass it depending on the
economic exigencies. It can enact laws allowing the entry of foreigners into certain
industries not reserved by the Constitution to Filipino citizens. In this case, Congress
has decided to open certain areas of the retail trade business to foreign investments
instead of reserving them exclusively to Filipino citizens. The NEDA has not opposed
such policy.
First, aliens can only engage in retail trade business subject to the categories above-
enumerated; Second, only nationals from, or juridical entities formed or incorporated
in countries which allow the entry of Filipino retailers shall be allowed to engage in
retail trade business; and Third, qualified foreign retailers shall not be allowed to
engage in certain retailing activities outside their accredited stores through the use of
mobile or rolling stores or carts, the use of sales representatives, door-to-door selling,
restaurants and sari-sari stores and such other similar retailing activities.
In sum, petitioners have not shown how the retail trade liberalization has prejudiced
and can prejudice the local small and medium enterprises since its implementation
about a decade ago.

WHEREFORE, the Court DISMISSES the petition for lack of merit. No costs.
The control and regulation of trade in the interest of the public welfare is of course an
exercise of the police power of the State. A persons right to property, whether he is a
Filipino citizen or foreign national, cannot be taken from him without due process of
law. In 1954, Congress enacted the Retail Trade Nationalization Act or R.A. 1180 that SO ORDERED.
restricts the retail business to Filipino citizens. In denying the petition assailing the
validity of such Act for violation of the foreigners right to substantive due process of
law, the Supreme Court held that the law constituted a valid exercise of police
power.[11] The State had an interest in preventing alien control of the retail trade and
R.A. 1180 was reasonably related to that purpose. That law is not arbitrary.

Here, to the extent that R.A. 8762, the Retail Trade Liberalization Act, lessens the
restraint on the foreigners right to property or to engage in an ordinarily lawful
business, it cannot be said that the law amounts to a denial of the Filipinos right to
property and to due process of law. Filipinos continue to have the right to engage in
the kinds of retail business to which the law in question has permitted the entry of
foreign investors.

Certainly, it is not within the province of the Court to inquire into the wisdom of R.A.
8762 save when it blatantly violates the Constitution. But as the Court has said, there
is no showing that the law has contravened any constitutional mandate. The Court is
not convinced that the implementation of R.A. 8762 would eventually lead to alien
control of the retail trade business. Petitioners have not mustered any concrete and
strong argument to support its thesis. The law itself has provided strict safeguards on
foreign participation in that business. Thus

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO
D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M.
ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I.
LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA,
ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA,
EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES,
BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS
JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS'
COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE
OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO,
CONRADO AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK
OF THE PHILIPPINES, respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged
Hercules for his life on his way to Mycenae after performing his eleventh labor. The
two wrestled mightily and Hercules flung his adversary to the ground thinking him
dead, but Antaeus rose even stronger to resume their struggle. This happened
several times to Hercules' increasing amazement. Finally, as they continued
grappling, it dawned on Hercules that Antaeus was the son of Gaea and could never
die as long as any part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and
crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch
even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the
elemental forces of life and death, of men and women who, like Antaeus need the
sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the
distribution of this precious resource among our people. But it is more than a slogan.
Through the brooding centuries, it has become a battle-cry dramatizing the
increasingly urgent demand of the dispossessed among us for a plot of earth as their
place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice
to "insure the well-being and economic security of all the people," 1 especially the less
privileged. In 1973, the new Constitution affirmed this goal adding specifically that
"the State shall regulate the acquisition, ownership, use, enjoyment and disposition of
private property and equitably diffuse property ownership and profits." 2 Significantly,
there was also the specific injunction to "formulate and implement an agrarian reform
program aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it
also adopted one whole and separate Article XIII on Social Justice and Human
Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the
common people. These include a call in the following words for the adoption by the
State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded on
the right of farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive a just
share of the fruits thereof. To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform
Code, had already been enacted by the Congress of the Philippines on August 8,
1963, in line with the above-stated principles. This was substantially superseded
almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972,
along with martial law, to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for
landowners.
The people power revolution of 1986 did not change and indeed even energized the
thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino
issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D.
No. 27 and providing for the valuation of still unvalued lands covered by the decree as
well as the manner of their payment. This was followed on July 22, 1987 by
Presidential Proclamation No. 131, instituting a comprehensive agrarian reform
program (CARP), and E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines
took over legislative power from the President and started its own deliberations,
including extensive public hearings, on the improvement of the interests of farmers.
The result, after almost a year of spirited debate, was the enactment of R.A. No.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which
President Aquino signed on June 10, 1988. This law, while considerably changing the
earlier mentioned enactments, nevertheless gives them suppletory effect insofar as
they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common
legal questions, including serious challenges to the constitutionality of the several
measures mentioned above. They will be the subject of one common discussion and
resolution, The different antecedents of each case will require separate treatment,
however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228
and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and
owned by petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by
four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were
declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D.
No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds
inter alia of separation of powers, due process, equal protection and the constitutional
limitation that no private property shall be taken for public use without just
compensation.
They contend that President Aquino usurped legislative power when she promulgated
E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4,
of the Constitution, for failure to provide for retention limits for small landowners.
Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a
valid appropriation.
In connection with the determination of just compensation, the petitioners argue that
the same may be made only by a court of justice and not by the President of the
Philippines. They invoke the recent cases of EPZA v. Dulay 5 andManotok v. National
Food Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights
is payable in money or in cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also
deprives the petitioners of their property rights as protected by due process. The
equal protection clause is also violated because the order places the burden of
solving the agrarian problems on the owners only of agricultural lands. No similar
obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to
be the owners of the lands occupied by them, E.O. No. 228 ignored judicial
prerogatives and so violated due process. Worse, the measure would not solve the
agrarian problem because even the small farmers are deprived of their lands and the
retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been
upheld in the earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and
Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land
Reform Council. 9 The determination of just compensation by the executive
authorities conformably to the formula prescribed under the questioned order is at
best initial or preliminary only. It does not foreclose judicial intervention whenever
sought or warranted. At any rate, the challenge to the order is premature because no
valuation of their property has as yet been made by the Department of Agrarian
Reform. The petitioners are also not proper parties because the lands owned by them
do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not
provide for retention limits on tenanted lands and that in any event their petition is a
class suit brought in behalf of landowners with landholdings below 24 hectares. They
maintain that the determination of just compensation by the administrative authorities
is a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was
decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27,
E.O. Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by
R.A. No. 6657. Nevertheless, this statute should itself also be declared
unconstitutional because it suffers from substantially the same infirmities as the
earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente
Cruz, owner of a 1. 83- hectare land, who complained that the DAR was insisting on
the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise
agreement he had reached with his tenant on the payment of rentals. In a subsequent
motion dated April 10, 1989, he adopted the allegations in the basic amended petition
that the above- mentioned enactments have been impliedly repealed by R.A. No.
6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District,
Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an
organization composed of 1,400 planter-members. This petition seeks to prohibit the
implementation of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform
Program as decreed by the Constitution belongs to Congress and not the President.
Although they agree that the President could exercise legislative power until the
Congress was convened, she could do so only to enact emergency measures during
the transition period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to
be annulled for violating the constitutional provisions on just compensation, due
process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the
Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
(P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian
Reform Program from 1987 to 1992 which shall be sourced from the receipts of the
sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten
wealth received through the Presidential Commission on Good Government and such
other sources as government may deem appropriate. The amounts collected and
accruing to this special fund shall be considered automatically appropriated for the
purpose authorized in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated expropriation has yet
to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such
payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6,
thereof provides that the Land Bank of the Philippines "shall compensate the
landowner in an amount to be established by the government, which shall be based
on the owner's declaration of current fair market value as provided in Section 4
hereof, but subject to certain controls to be defined and promulgated by the
Presidential Agrarian Reform Council." This compensation may not be paid fully in
money but in any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be mutually
agreed upon by the beneficiary and the landowner or as may be prescribed or
approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was
made to make a careful study of the sugar planters' situation. There is no tenancy
problem in the sugar areas that can justify the application of the CARP to them. To
the extent that the sugar planters have been lumped in the same legislation with other
farmers, although they are a separate group with problems exclusively their own, their
right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of
Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual
sugar planters all over the country. On September 10, 1987, another motion for
intervention was filed, this time by Manuel Barcelona, et al., representing coconut and
riceland owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform
Program and that, in any event, the appropriation is invalid because of uncertainty in
the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O.
No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the
minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National
Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by
clear and convincing evidence the necessity for the exercise of the powers of eminent
domain, and the violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the
expropriation of the said land for an amount equal to the government assessor's
valuation of the land for tax purposes. On the other hand, if the landowner declares
his own valuation he is unjustly required to immediately pay the corresponding taxes
on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the
necessity for the expropriation as explained in the "whereas" clauses of the
Proclamation and submits that, contrary to the petitioner's contention, a pilot project to
determine the feasibility of CARP and a general survey on the people's opinion
thereon are not indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed
to show that they belong to a different class and should be differently treated. The
Comment also suggests the possibility of Congress first distributing public agricultural
lands and scheduling the expropriation of private agricultural lands later. From this
viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the
payment of public money without the corresponding appropriation. There is no rule
that only money already in existence can be the subject of an appropriation law.
Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although
denominated as an initial amount, is actually the maximum sum appropriated. The
word "initial" simply means that additional amounts may be appropriated later when
necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own
behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments
already raised, Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;
(3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did not
originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in
violation of due process and the requirement for just compensation, placed his
landholding under the coverage of Operation Land Transfer. Certificates of Land
Transfer were subsequently issued to the private respondents, who then refused
payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small
landholding under Operation Land transfer and asked for the recall and cancellation
of the Certificates of Land Transfer in the name of the private respondents. He claims
that on December 24, 1986, his petition was denied without hearing. On February 17,
1987, he filed a motion for reconsideration, which had not been acted upon when
E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and
academic because they directly effected the transfer of his land to the private
respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no
private property shall be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the
1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before
Congress convened is anomalous and arbitrary, besides violating the doctrine of
separation of powers. The legislative power granted to the President under the
Transitory Provisions refers only to emergency measures that may be promulgated in
the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due
process of law and to the retention of his small parcels of riceholding as guaranteed
under Article XIII, Section 4 of the Constitution. He likewise argues that, besides
denying him just compensation for his land, the provisions of E.O. No. 228 declaring
that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972
shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the
inclusion of even small landowners in the program along with other landowners with
lands consisting of seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because
the motion for reconsideration filed with the Minister of Agrarian Reform is still
unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues
that they were enacted pursuant to Section 6, Article XVIII of the Transitory
Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first
Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was
promulgated on October 21. 1972, the tenant-farmer of agricultural land was deemed
the owner of the land he was tilling. The leasehold rentals paid after that date should
therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed
was resolved on December 14, 1987. An appeal to the Office of the President would
be useless with the promulgation of E.O. Nos. 228 and 229, which in effect
sanctioned the validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to
owners of rice and corn lands not exceeding seven hectares as long as they are
cultivating or intend to cultivate the same. Their respective lands do not exceed the
statutory limit but are occupied by tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be
ejected or removed from his farmholding until such time as the respective rights of the
tenant- farmers and the landowner shall have been determined in accordance with
the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their
right of retention because the Department of Agrarian Reform has so far not issued
the implementing rules required under the above-quoted decree. They therefore ask
the Court for a writ of mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended
by LOI 474 removing any right of retention from persons who own other agricultural
lands of more than 7 hectares in aggregate area or lands used for residential,
commercial, industrial or other purposes from which they derive adequate income for
their family. And even assuming that the petitioners do not fall under its terms, the
regulations implementing P.D. No. 27 have already been issued, to wit, the
Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small
Landowners, with an accompanying Retention Guide Table), Memorandum Circular
No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474),
Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines
on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR
Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for
Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to
file the corresponding applications for retention under these measures, the petitioners
are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated
this case notwithstanding the pendency of their appeal to the President of the
Philippines. Moreover, the issuance of the implementing rules, assuming this has not
yet been done, involves the exercise of discretion which cannot be controlled through
the writ of mandamus. This is especially true if this function is entrusted, as in this
case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable
to them because they do not own more than seven hectares of agricultural land.
Moreover, assuming arguendo that the rules were intended to cover them also, the
said measures are nevertheless not in force because they have not been published
as required by law and the ruling of this Court in Tanada v. Tuvera.10 As for LOI 474,
the same is ineffective for the additional reason that a mere letter of instruction could
not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the
three departments of the government, the judiciary is nonetheless vested with the
power to annul the acts of either the legislative or the executive or of both when not
conformable to the fundamental law. This is the reason for what some quarters call
the doctrine of judicial supremacy. Even so, this power is not lightly assumed or
readily exercised. The doctrine of separation of powers imposes upon the courts a
proper restraint, born of the nature of their functions and of their respect for the other
departments, in striking down the acts of the legislative and the executive as
unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to
sustain. The theory is that before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both, to insure that the
Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of
the Supreme Court who took part in the deliberations and voted on the issue during
their session en banc.11 And as established by judge made doctrine, the Court will
assume jurisdiction over a constitutional question only if it is shown that the essential
requisites of a judicial inquiry into such a question are first satisfied. Thus, there must
be an actual case or controversy involving a conflict of legal rights susceptible of
judicial determination, the constitutional question must have been opportunely raised
by the proper party, and the resolution of the question is unavoidably necessary to the
decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases
before us, we hold that the same is satisfied by the petitioners and intervenors
because each of them has sustained or is in danger of sustaining an immediate injury
as a result of the acts or measures complained of. 13 And even if, strictly speaking,
they are not covered by the definition, it is still within the wide discretion of the Court
to waive the requirement and so remove the impediment to its addressing and
resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed
to question the constitutionality of several executive orders issued by President
Quirino although they were invoking only an indirect and general interest shared in
common with the public. The Court dismissed the objection that they were not proper
parties and ruled that "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in many other
cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when
confronted with constitutional issues like the ones now before it, 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 as God and its conscience
give it the light to probe its meaning and discover its purpose. Personal motives and
political considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not
hesitate to "make the hammer fall, and heavily," to use Justice Laurel's pithy
language, where the acts of these departments, or of any public official, betray the
people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it does not assert
any superiority over the other departments; it does not in reality nullify or invalidate an
act of the Legislature, but only asserts the solemn and sacred obligation assigned to it
by the Constitution to determine conflicting claims of authority under the Constitution
and to establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is involved in what
is termed "judicial supremacy" which properly is the power of judicial review under the
Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the
more serious challenges to the constitutionality of the several measures involved in
these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers
under martial law has already been sustained in Gonzales v. Estrella and we find no
reason to modify or reverse it on that issue. As for the power of President Aquino to
promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized
under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the
Congress of the Philippines was formally convened and took over legislative power
from her. They are not "midnight" enactments intended to pre-empt the legislature
because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e.,
Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it
correct to say that these measures ceased to be valid when she lost her legislative
power for, like any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the legislature that
enacted it. By the same token, President Aquino's loss of legislative power did not
have the effect of invalidating all the measures enacted by her when and as long as
she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that
they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its
provisions. 17 Indeed, some portions of the said measures, like the creation of the P50
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229,
have been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution.
Clearly, however, Proc. No. 131 is not an appropriation measure even if it does
provide for the creation of said fund, for that is not its principal purpose. An
appropriation law is one the primary and specific purpose of which is to authorize the
release of public funds from the treasury. 19 The creation of the fund is only incidental
to the main objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24
and Section 25(4) of Article VI, are not applicable. With particular reference to Section
24, this obviously could not have been complied with for the simple reason that the
House of Representatives, which now has the exclusive power to initiate
appropriation measures, had not yet been convened when the proclamation was
issued. The legislative power was then solely vested in the President of the
Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should
be invalidated because they do not provide for retention limits as required by Article
XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for
such limits now in Section 6 of the law, which in fact is one of its most controversial
provisions. This section declares:
Retention Limits. Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which
shall vary according to factors governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1) that
he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of
this Act shall retain the same areas as long as they continue to cultivate said
homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall
have only one subject, to be expressed in its title, deserves only short attention. It is
settled that the title of the bill does not have to be a catalogue of its contents and will
suffice if the matters embodied in the text are relevant to each other and may be
inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential
issuance, by whatever name it was called, had the force and effect of law because it
came from President Marcos. Such are the ways of despots. Hence, it is futile to
argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed
P.D. No. 27 because the former was only a letter of instruction. The important thing is
that it was issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had
to comply with the requirement for publication as this Court held in Tanada v.
Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2
of the Civil Code, they could not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474 was published, though, in
the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ
of mandamus cannot issue to compel the performance of a discretionary act,
especially by a specific department of the government. That is true as a general
proposition but is subject to one important qualification. Correctly and categorically
stated, the rule is that mandamus will lie to compel the discharge of the discretionary
duty itself but not to control the discretion to be exercised. In other words, mandamus
can issue to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed
by law, the courts will intervene by the extraordinary legal remedy of mandamus to
compel action. If the duty is purely ministerial, the courts will require specific action. If
the duty is purely discretionary, the courts by mandamus will require action only. For
example, if an inferior court, public official, or board should, for an unreasonable
length of time, fail to decide a particular question to the great detriment of all parties
concerned, or a court should refuse to take jurisdiction of a cause when the law
clearly gave it jurisdiction mandamus will issue, in the first case to require a decision,
and in the second to require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a
plain, speedy and adequate remedy available from the administrative authorities,
resort to the courts may still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent
domain that logically preclude the application of both powers at the same time on the
same subject. In the case of City of Baguio v. NAWASA, 24for example, where a law
required the transfer of all municipal waterworks systems to the NAWASA in
exchange for its assets of equivalent value, the Court held that the power being
exercised was eminent domain because the property involved was wholesome and
intended for a public use. Property condemned under the police power is noxious or
intended for a noxious purpose, such as a building on the verge of collapse, which
should be demolished for the public safety, or obscene materials, which should be
destroyed in the interest of public morals. The confiscation of such property is not
compensable, unlike the taking of property under the power of expropriation, which
requires the payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits
of the police power in a famous aphorism: "The general rule at least is that while
property may be regulated to a certain extent, if regulation goes too far it will be
recognized as a taking." The regulation that went "too far" was a law prohibiting
mining which might cause the subsidence of structures for human habitation
constructed on the land surface. This was resisted by a coal company which had
earlier granted a deed to the land over its mine but reserved all mining rights
thereunder, with the grantee assuming all risks and waiving any damage claim. The
Court held the law could not be sustained without compensating the grantor. Justice
Brandeis filed a lone dissent in which he argued that there was a valid exercise of the
police power. He said:
Every restriction upon the use of property imposed in the exercise of the police power
deprives the owner of some right theretofore enjoyed, and is, in that sense, an
abridgment by the State of rights in property without making compensation. But
restriction imposed to protect the public health, safety or morals from dangers
threatened is not a taking. The restriction here in question is merely the prohibition of
a noxious use. The property so restricted remains in the possession of its owner. The
state does not appropriate it or make any use of it. The state merely prevents the
owner from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may because of further
changes in local or social conditions the restriction will have to be removed and the
owner will again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police
power and the power of eminent domain, with the latter being used as an implement
of the former like the power of taxation. The employment of the taxing power to
achieve a police purpose has long been accepted. 26 As for the power of
expropriation, Prof. John J. Costonis of the University of Illinois College of Law
(referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which
sustained a zoning law under the police power) makes the following significant
remarks:
Euclid, moreover, was decided in an era when judges located the Police and eminent
domain powers on different planets. Generally speaking, they viewed eminent domain
as encompassing public acquisition of private property for improvements that would
be available for public use," literally construed. To the police power, on the other
hand, they assigned the less intrusive task of preventing harmful externalities a point
reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its
support of zoning. So long as suppression of a privately authored harm bore a
plausible relation to some legitimate "public purpose," the pertinent measure need
have afforded no compensation whatever. With the progressive growth of
government's involvement in land use, the distance between the two powers has
contracted considerably. Today government often employs eminent domain
interchangeably with or as a useful complement to the police power-- a trend
expressly approved in the Supreme Court's 1954 decision in Berman v. Parker, which
broadened the reach of eminent domain's "public use" test to match that of the police
power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of
blighted areas in the District of Columbia as a proper exercise of the police power. On
the role of eminent domain in the attainment of this purpose, Justice Douglas
declared:
If those who govern the District of Columbia decide that the Nation's Capital should
be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in
the way.
Once the object is within the authority of Congress, the right to realize it through the
exercise of eminent domain is clear.
28
For the power of eminent domain is merely the means to the end.
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in
1978, the U.S Supreme Court sustained the respondent's Landmarks Preservation
Law under which the owners of the Grand Central Terminal had not been allowed to
construct a multi-story office building over the Terminal, which had been designated a
historic landmark. Preservation of the landmark was held to be a valid objective of the
police power. The problem, however, was that the owners of the Terminal would be
deprived of the right to use the airspace above it although other landowners in the
area could do so over their respective properties. While insisting that there was here
no taking, the Court nonetheless recognized certain compensatory rights accruing to
Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by
the regulation. This "fair compensation," as he called it, was explained by Prof.
Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central
was authorized to transfer to neighboring properties the authorized but unused rights
accruing to the site prior to the Terminal's designation as a landmark the rights
which would have been exhausted by the 59-story building that the city refused to
countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the
Terminal site by constructing or selling to others the right to construct larger, hence
more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of
compensable taking is concerned. To the extent that the measures under challenge
merely prescribe retention limits for landowners, there is an exercise of the police
power for the regulation of private property in accordance with the Constitution. But
where, to carry out such regulation, it becomes necessary to deprive such owners of
whatever lands they may own in excess of the maximum area allowed, there is
definitely a taking under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere limitation of the
use of the land. What is required is the surrender of the title to and the physical
possession of the said excess and all beneficial rights accruing to the owner in favor
of the farmer-beneficiary. This is definitely an exercise not of the police power but of
the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the
several measures before us are challenged as violative of the due process and equal
protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no
retention limits are prescribed has already been discussed and dismissed. It is noted
that although they excited many bitter exchanges during the deliberation of the CARP
Law in Congress, the retention limits finally agreed upon are, curiously enough, not
being questioned in these petitions. We therefore do not discuss them here. The
Court will come to the other claimed violations of due process in connection with our
examination of the adequacy of just compensation as required under the power of
expropriation.
The argument of the small farmers that they have been denied equal protection
because of the absence of retention limits has also become academic under Section
6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits.
There is also the complaint that they should not be made to share the burden of
agrarian reform, an objection also made by the sugar planters on the ground that they
belong to a particular class with particular interests of their own. However, no
evidence has been submitted to the Court that the requisites of a valid classification
have been violated.
Classification has been defined as the grouping of persons or things similar to each
other in certain particulars and different from each other in these same
particulars. 31 To be valid, it must conform to the following requirements: (1) it must be
based on substantial distinctions; (2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and (4) it must apply equally to all
the members of the class. 32 The Court finds that all these requisites have been met
by the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be
treated alike both as to the rights conferred and the liabilities imposed. 33 The
petitioners have not shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but also owners of other
properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that
is clearly visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of
justice except only where its discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police
power only if there is a concurrence of the lawful subject and the lawful method. Put
otherwise, the interests of the public generally as distinguished from those of a
particular class require the interference of the State and, no less important, the
means employed are reasonably necessary for the attainment of the purpose sought
to be achieved and not unduly oppressive upon individuals. 34 As the subject and
purpose of agrarian reform have been laid down by the Constitution itself, we may
say that the first requirement has been satisfied. What remains to be examined is the
validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that
there be a valid objective; it is also necessary that the means employed to pursue it
be in keeping with the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral conviction or the
most urgent public need, subject only to a few notable exceptions, will excuse the
bypassing of an individual's rights. It is no exaggeration to say that a, person invoking
a right guaranteed under Article III of the Constitution is a majority of one even as
against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of
Article III of the Constitution. With regard to his property, the owner enjoys the added
protection of Section 9, which reaffirms the familiar rule that private property shall not
be taken for public use without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire
private lands intended for public use upon payment of just compensation to the
owner. Obviously, there is no need to expropriate where the owner is willing to sell
under terms also acceptable to the purchaser, in which case an ordinary deed of sale
may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or
cannot accept the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of the State
over the interests of the property owner. Private rights must then yield to the
irresistible demands of the public interest on the time-honored justification, as in the
case of the police power, that the welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means
absolute (as indeed no power is absolute). The limitation is found in the constitutional
injunction that "private property shall not be taken for public use without just
compensation" and in the abundant jurisprudence that has evolved from the
interpretation of this principle. Basically, the requirements for a proper exercise of the
power are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that
the State should first distribute public agricultural lands in the pursuit of agrarian
reform instead of immediately disturbing property rights by forcibly acquiring private
agricultural lands. Parenthetically, it is not correct to say that only public agricultural
lands may be covered by the CARP as the Constitution calls for "the just distribution
of all agricultural lands." In any event, the decision to redistribute private agricultural
lands in the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not justified in
reviewing that discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political
departments when they decide what is known as the political question. As explained
by Chief Justice Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a
question of policy. It refers to "those questions which, under the Constitution, are to
be decided by the people in their sovereign capacity; or in regard to which full
discretionary authority has been delegated to the legislative or executive branch of
the government." It is concerned with issues dependent upon the wisdom, not legality,
of a particular measure.
It is true that the concept of the political question has been constricted with the
enlargement of judicial power, which now includes the authority of the courts "to
determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government." 37 Even so, this should not be construed as a license for us to reverse
the other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the
CARP the redistribution of private landholdings (even as the distribution of public
agricultural lands is first provided for, while also continuing apace under the Public
Land Act and other cognate laws). The Court sees no justification to interpose its
authority, which we may assert only if we believe that the political decision is not
unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the entire St.
Mary's river between the American bank and the international line, as well as all of the
upland north of the present ship canal, throughout its entire length, was "necessary
for the purpose of navigation of said waters, and the waters connected therewith,"
that determination is conclusive in condemnation proceedings instituted by the United
States under that Act, and there is no room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already been settled for us by
the Constitution itself No less than the 1987 Charter calls for agrarian reform, which is
the reason why private agricultural lands are to be taken from their owners, subject to
the prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc.
No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that
the State adopt the necessary measures "to encourage and undertake the just
distribution of all agricultural lands to enable farmers who are landless to own directly
or collectively the lands they till." That public use, as pronounced by the fundamental
law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and
more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator. 39 It has been repeatedly stressed by this Court that the
measure is not the taker's gain but the owner's loss. 40 The word "just" is used to
intensify the meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full,
ample. 41
It bears repeating that the measures challenged in these petitions contemplate more
than a mere regulation of the use of private lands under the police power. We deal
here with an actual taking of private agricultural lands that has dispossessed the
owners of their property and deprived them of all its beneficial use and enjoyment, to
entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking
when the following conditions concur: (1) the expropriator must enter a private
property; (2) the entry must be for more than a momentary period; (3) the entry must
be under warrant or color of legal authority; (4) the property must be devoted to public
use or otherwise informally appropriated or injuriously affected; and (5) the utilization
of the property for public use must be in such a way as to oust the owner and deprive
him of beneficial enjoyment of the property. All these requisites are envisioned in the
measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit
upon its taking possession of the condemned property, as "the compensation is a
public charge, the good faith of the public is pledged for its payment, and all the
resources of taxation may be employed in raising the amount." 43 Nevertheless,
Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of rejection
or no response from the landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in LBP bonds in accordance
with this Act, the DAR shall take immediate possession of the land and shall request
the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name
of the Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is
claimed is entrusted to the administrative authorities in violation of judicial
prerogatives. Specific reference is made to Section 16(d), which provides that in case
of the rejection or disregard by the owner of the offer of the government to buy his
land-
... the DAR shall conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land, within fifteen (15)
days from the receipt of the notice. After the expiration of the above period, the matter
is deemed submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the
courts of justice and may not be usurped by any other branch or official of the
government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated
by President Marcos providing that the just compensation for property under
expropriation should be either the assessment of the property by the government or
the sworn valuation thereof by the owner, whichever was lower. In declaring these
decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees
constitutes impermissible encroachment on judicial prerogatives. It tends to render
this Court inutile in a matter which under this Constitution is reserved to it for final
determination.
Thus, although in an expropriation proceeding the court technically would still have
the power to determine the just compensation for the property, following the
applicable decrees, its task would be relegated to simply stating the lower value of the
property as declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint commissioners under Rule
67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the
taking of private property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict application of the
decrees during the proceedings would be nothing short of a mere formality or charade
as the court has only to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two. The court cannot
exercise its discretion or independence in determining what is just or fair. Even a
grade school pupil could substitute for the judge insofar as the determination of
constitutional just compensation is concerned.
xxx
In the present petition, we are once again confronted with the same question of
whether the courts under P.D. No. 1533, which contains the same provision on just
compensation as its predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to the basic
concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or
clerk to absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro
and con have been presented, and after all factors and considerations essential to a
fair and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from
the arbitrariness that rendered the challenged decrees constitutionally objectionable.
Although the proceedings are described as summary, the landowner and other
interested parties are nevertheless allowed an opportunity to submit evidence on the
real value of the property. But more importantly, the determination of the just
compensation by the DAR is not by any means final and conclusive upon the
landowner or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with
finality the said determination in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not
as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the DAR
and the LBP, in accordance with the criteria provided for in Sections 16 and 17, and
other pertinent provisions hereof, or as may be finally determined by the court, as the
just compensation for the land.
The compensation shall be paid in one of the following modes, at the option of the
landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned
Twenty-five percent (25%) cash, the balance to be paid in government financial
instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares Thirty
percent (30%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(c) For lands twenty-four (24) hectares and below Thirty-five percent (35%) cash,
the balance to be paid in government financial instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP preferred
shares, physical assets or other qualified investments in accordance with guidelines
set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of
the face value of the bonds shall mature every year from the date of issuance until the
tenth (10th) year: Provided, That should the landowner choose to forego the cash
portion, whether in full or in part, he shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner,
his successors-in- interest or his assigns, up to the amount of their face value, for any
of the following:
(i) Acquisition of land or other real properties of the government, including assets
under the Asset Privatization Program and other assets foreclosed by government
financial institutions in the same province or region where the lands for which the
bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled corporations or
shares of stock owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;
(iv) Security for loans with any government financial institution, provided the proceeds
of the loans shall be invested in an economic enterprise, preferably in a small and
medium- scale industry, in the same province or region as the land for which the
bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the use of
these bonds for these purposes will be limited to a certain percentage of the
outstanding balance of the financial instruments; Provided, further, That the PARC
shall determine the percentages mentioned above;
(vi) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to
accept just compensation therefor in less than money, which is the only medium of
payment allowed. In support of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property
expropriated is entitled to a just compensation, which should be neither more nor
less, whenever it is possible to make the assessment, than the money equivalent of
said property. Just compensation has always been understood to be the just and
complete equivalent of the loss which the owner of the thing expropriated has to
suffer by reason of the expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value of the
property at the time of its taking. Anything beyond that is more, and anything short of
that is less, than just compensation. It means a fair and full equivalent for the loss
sustained, which is the measure of the indemnity, not whatever gain would accrue to
the expropriating entity. The market value of the land taken is the just compensation
to which the owner of condemned property is entitled, the market value being that
sum of money which a person desirous, but not compelled to buy, and an owner,
willing, but not compelled to sell, would agree on as a price to be given and received
for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been
derived, the weight of authority is also to the effect that just compensation for property
expropriated is payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The condemnor
cannot compel the owner to accept anything but money, nor can the owner compel or
require the condemnor to pay him on any other basis than the value of the property in
money at the time and in the manner prescribed by the Constitution and the statutes.
When the power of eminent domain is resorted to, there must be a standard medium
of payment, binding upon both parties, and the law has fixed that standard as money
in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be
regarded as a reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in
money, which must be paid at least within a reasonable time after the taking, and it is
not within the power of the Legislature to substitute for such payment future
obligations, bonds, or other valuable advantage. 49(Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of
just compensation is money and no other. And so, conformably, has just
compensation been paid in the past solely in that medium. However, we do not deal
here with the traditional excercise of the power of eminent domain. This is not an
ordinary expropriation where only a specific property of relatively limited area is
sought to be taken by the State from its owner for a specific and perhaps local
purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and
of whatever kind as long as they are in excess of the maximum retention limits
allowed their owners. This kind of expropriation is intended for the benefit not only of
a particular community or of a small segment of the population but of the entire
Filipino nation, from all levels of our society, from the impoverished farmer to the land-
glutted owner. Its purpose does not cover only the whole territory of this country but
goes beyond in time to the foreseeable future, which it hopes to secure and edify with
the vision and the sacrifice of the present generation of Filipinos. Generations yet to
come are as involved in this program as we are today, although hopefully only as
beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less
than the Constitution itself that has ordained this revolution in the farms, calling for "a
just distribution" among the farmers of lands that have heretofore been the prison of
their dreams but can now become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us,
we estimate that hundreds of billions of pesos will be needed, far more indeed than
the amount of P50 billion initially appropriated, which is already staggering as it is by
our present standards. Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when
they called for agrarian reform as a top priority project of the government. It is a part
of this assumption that when they envisioned the expropriation that would be needed,
they also intended that the just compensation would have to be paid not in the
orthodox way but a less conventional if more practical method. There can be no doubt
that they were aware of the financial limitations of the government and had no
illusions that there would be enough money to pay in cash and in full for the lands
they wanted to be distributed among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now provided for by the CARP
Law, particularly the payment of the balance (if the owner cannot be paid fully with
money), or indeed of the entire amount of the just compensation, with other things of
value. We may also suppose that what they had in mind was a similar scheme of
payment as that prescribed in P.D. No. 27, which was the law in force at the time they
deliberated on the new Charter and with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any
categorical agreement among the members regarding the meaning to be given the
concept of just compensation as applied to the comprehensive agrarian reform
program being contemplated. There was the suggestion to "fine tune" the requirement
to suit the demands of the project even as it was also felt that they should "leave it to
Congress" to determine how payment should be made to the landowner and
reimbursement required from the farmer-beneficiaries. Such innovations as
"progressive compensation" and "State-subsidized compensation" were also
proposed. In the end, however, no special definition of the just compensation for the
lands to be expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the
assumptions we are making of the general sentiments and intention of the members
on the content and manner of the payment to be made to the landowner in the light of
the magnitude of the expenditure and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of
the just compensation provided for in the afore- quoted Section 18 of the CARP Law
is not violative of the Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and demands of society or oblivious to
the need for its enhancement. The Court is as acutely anxious as the rest of our
people to see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades. We are
aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in the restless countryside. That is
not in our view the intention of the Constitution, and that is not what we shall decree
today.
Accepting the theory that payment of the just compensation is not always required to
be made fully in money, we find further that the proportion of cash payment to the
other things of value constituting the total payment, as determined on the basis of the
areas of the lands expropriated, is not unduly oppressive upon the landowner. It is
noted that the smaller the land, the bigger the payment in money, primarily because
the small landowner will be needing it more than the big landowners, who can afford a
bigger balance in bonds and other things of value. No less importantly, the
government financial instruments making up the balance of the payment are
"negotiable at any time." The other modes, which are likewise available to the
landowner at his option, are also not unreasonable because payment is made in
shares of stock, LBP bonds, other properties or assets, tax credits, and other things
of value equivalent to the amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big
and small, not a little inconvenience. As already remarked, this cannot be avoided.
Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we
know they are of the need for their forebearance and even sacrifice, will not begrudge
us their indispensable share in the attainment of the ideal of agrarian reform.
Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229
does not seem to be viable any more as it appears that Section 4 of the said Order
has been superseded by Section 14 of the CARP Law. This repeats the requisites of
registration as embodied in the earlier measure but does not provide, as the latter did,
that in case of failure or refusal to register the land, the valuation thereof shall be that
given by the provincial or city assessor for tax purposes. On the contrary, the CARP
Law says that the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property
even before actual payment to him in full of just compensation, in contravention of a
well- accepted principle of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from
the owner to the expropriator only upon full payment of the just compensation.
Jurisprudence on this settled principle is consistent both here and in other democratic
jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the
condemnor until the judgment fixing just compensation is entered and paid, but the
condemnor's title relates back to the date on which the petition under the Eminent
Domain Act, or the commissioner's report under the Local Improvement Act, is
filed. 51
... although the right to appropriate and use land taken for a canal is complete at the
time of entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
53
In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that
title to property does not pass to the condemnor until just compensation had actually
been made. In fact, the decisions appear to be uniformly to this effect. As early as
1838, in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the
condemned property was a condition precedent to the investment of the title to the
property in the State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction upon the
statutes was that the fee did not vest in the State until the payment of the
compensation although the authority to enter upon and appropriate the land was
complete prior to the payment. Kennedy further said that "both on principle and
authority the rule is ... that the right to enter on and use the property is complete, as
soon as the property is actually appropriated under the authority of law for a public
use, but that the title does not pass from the owner without his consent, until just
compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation adopted in
this jurisdiction is such as to afford absolute reassurance that no piece of land can be
finally and irrevocably taken from an unwilling owner until compensation is paid ...
. (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as
October 21, 1972 and declared that he shall "be deemed the owner" of a portion of
land consisting of a family-sized farm except that "no title to the land owned by him
was to be actually issued to him unless and until he had become a full-fledged
member of a duly recognized farmers' cooperative." It was understood, however, that
full payment of the just compensation also had to be made first, conformably to the
constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972
of the land they acquired by virtue of Presidential Decree No. 27. (Emphasis
supplied.)
it was obviously referring to lands already validly acquired under the said decree,
after proof of full-fledged membership in the farmers' cooperatives and full payment of
just compensation. Hence, it was also perfectly proper for the Order to also provide in
its Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary
after October 21, 1972 (pending transfer of ownership after full payment of just
compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of
the land to the government on receipt by the landowner of the corresponding payment
or the deposit by the DAR of the compensation in cash or LBP bonds with an
accessible bank. Until then, title also remains with the landowner. 57 No outright
change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under
P.D. No. 27, as recognized under E.O. No. 228, are retained by him even now under
R.A. No. 6657. This should counter-balance the express provision in Section 6 of the
said law that "the landowners whose lands have been covered by Presidential Decree WHEREFORE, the Court holds as follows:
No. 27 shall be allowed to keep the area originally retained by them thereunder,
further, That original homestead grantees or direct compulsory heirs who still own the 1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
original homestead at the time of the approval of this Act shall retain the same areas SUSTAINED against all the constitutional objections raised in the herein petitions.
as long as they continue to cultivate said homestead."
2. Title to all expropriated properties shall be transferred to the State only upon full
In connection with these retained rights, it does not appear in G.R. No. 78742 that the payment of compensation to their respective owners.
appeal filed by the petitioners with the Office of the President has already been
resolved. Although we have said that the doctrine of exhaustion of administrative 3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained
remedies need not preclude immediate resort to judicial action, there are factual and recognized.
issues that have yet to be examined on the administrative level, especially the claim
4. Landowners who were unable to exercise their rights of retention under P.D. No.
that the petitioners are not covered by LOI 474 because they do not own other
27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions
agricultural lands than the subjects of their petition.
therein prescribed.
Obviously, the Court cannot resolve these issues. In any event, assuming that the
5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without
petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the
pronouncement as to costs.
Court holds that they are entitled to the new retention rights provided for by R.A. No.
6657, which in fact are on the whole more liberal than those granted by the decree. SO ORDERED.
V Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado,
The CARP Law and the other enactments also involved in these cases have been the
JJ., concur.
subject of bitter attack from those who point to the shortcomings of these measures
and ask that they be scrapped entirely. To be sure, these enactments are less than
perfect; indeed, they should be continuously re-examined and rehoned, that they may
be sharper instruments for the better protection of the farmer's rights. But we have to
start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground
but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable.
The CARP Law is not a tried and tested project. On the contrary, to use Justice
Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as
we venture forward, and, if necessary, by our own mistakes. We cannot expect
perfection although we should strive for it by all means. Meantime, we struggle as
best we can in freeing the farmer from the iron shackles that have unconscionably,
and for so long, fettered his soul to the soil.

By the decision we reach today, all major legal obstacles to the comprehensive
agrarian reform program are removed, to clear the way for the true freedom of the
farmer. We may now glimpse the day he will be released not only from want but also
from the exploitation and disdain of the past and from his own feelings of inadequacy
and helplessness. At last his servitude will be ended forever. At last the farm on which
he toils will be his farm. It will be his portion of the Mother Earth that will give him not
only the staff of life but also the joy of living. And where once it bred for him only deep
despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now
at last can he banish from his small plot of earth his insecurities and dark resentments
and "rebuild in it the music and the dream."

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 175368 April 11, 2013
LEAGUE OF PROVINCES OF THE PHILIPPINES, Petitioner,
vs.
DEPARTMENT OF ENVIRONMENT and NATURAL RESOURCES and HON.
ANGELO T. REYES, in his capacity as Secretary of DENR, Respondents.
DECISION
PERALTA, J.:
This is a petition for certiorari, prohibition and mandamus, 1 praying that this Court
order the following: ( 1) declare as unconstitutional Section 17(b)(3)(iii) of Republic
Act (R.A.) No. 7160, otherwise known as The Local Government Code of 1991 and
Section 24 of Republic Act (R.A.) No. 7076, otherwise known as the People's Small-
Scale Mining Act of 1991; (2) prohibit and bar respondents from exercising control
over provinces; and (3) declare as illegal the respondent Secretary of the Department
of Energy and Natural Resources' (DENR) nullification, voiding and cancellation of the
Small-Scale Mining permits issued by the Provincial Governor of Bulacan.
The Facts are as follows:
On March 28, 1996, Golden Falcon Mineral Exploration Corporation (Golden Falcon)
filed with the DENR Mines and Geosciences Bureau Regional Office No. III (MGB R-
III) an Application for Financial and Technical Assistance Agreement (FTAA) covering
an area of 61,136 hectares situated in the Municipalities of San Miguel, San
Ildefonso, Norzagaray and San Jose del Monte, Bulacan. 2
On April 29, 1998, the MGB R-III issued an Order denying Golden Falcon's
Application for Financial and Technical Assistance Agreement for failure to secure
area clearances from the Forest Management Sector and Lands Management Sector
of the DENR Regional Office No. III.3
On November 11, 1998, Golden Falcon filed an appeal with the DENR Mines and
Geosciences Bureau Central Office (MGB-Central Office), and sought reconsideration
of the Order dated April 29, 1998.4
On February 10, 2004, while Golden Falcon's appeal was pending, Eduardo D.
Mercado, Benedicto S. Cruz, Gerardo R. Cruz and Liberato Sembrano filed with the
Provincial Environment and Natural Resources Office (PENRO) of Bulacan their
respective Applications for Quarry Permit (AQP), which covered the same area
subject of Golden Falcon's Application for Financial and Technical Assistance
Agreement.5
On July 16, 2004, the MGB-Central Office issued an Order denying Golden Falcon's
appeal and affirming the MGB R-III's Order dated April 29, 1998.
On September 13, 2004, Atlantic Mines and Trading Corporation (AMTC) filed with
the PENRO of Bulacan an Application for Exploration Permit (AEP) covering 5,281
hectares of the area covered by Golden Falcon's Application for Financial and
Technical Assistance Agreement.6
On October 19, 2004, DENR-MGB Director Horacio C. Ramos, in response to MGB
R-III Director Arnulfo V. Cabantog's memorandum query dated September 8, 2004,
categorically stated that the MGB-Central Office's Order dated July 16, 2004 became
final on August 11, 2004, fifteen (15) days after Golden Falcon received the said
Order, per the Certification dated October 8, 2004 issued by the Postmaster II of the
Philippine Postal Corporation of Cainta, Rizal.7
Through letters dated May 5 and May 10, 2005, AMTC notified the PENRO of
Bulacan and the MGB R-III Director, respectively, that the subject Applications for
Quarry Permit fell within its (AMTC's) existing valid and prior Application for
Exploration Permit, and the the former area of Golden Falcon was open to mining
location only on August 11, 2004 per the Memorandum dated October 19, 2004 of the
MGB Director, Central Office.8
On June 24, 2005, Ricardo Medina, Jr., PENRO of Bulacan, indorsed AMTC's letter
to the Provincial Legal Officer, Atty. Eugenio F. Resurreccion, for his legal opinion on
which date of denial of Golden Falcon's application/appeal April 29, 1998 or July 16,
2004 is to be considered in the deliberation of the Provincial Mining Regulatory
Board (PMRB) for the purpose of determining when the land subject of the
Applications for Quarry Permit could be considered open for application.
On June 28, 2005, Provincial Legal Officer Eugenio Resurreccion issued a legal
opinion stating that the Order dated July 16, 2004 of the MGB-Central Office was a
mere reaffirmation of the Order dated April 29, 1998 of the MGB R-III; hence, the
Order dated April 29, 1998 should be the reckoning period of the denial of the
application of Golden Falcon.
On July 22, 2005, AMTC filed with the PMRB of Bulacan a formal protest against the
aforesaid Applications for Quarry Permit on the ground that the subject area was
already covered by its Application for Exploration Permit. 9
On August 8, 2005, MGB R-III Director Cabantog, who was the concurrent Chairman
of the PMRB, endorsed to the Provincial Governor of Bulacan, Governor Josefina M.
dela Cruz, the aforesaid Applications for Quarry Permit that had apparently been
converted to Applications for Small-Scale Mining Permit of Eduardo D. Mercado,
Benedicto S. Cruz, Gerardo R. Cruz and Lucila S. Valdez (formerly Liberato
Sembrano).10
On August 9, 2005, the PENRO of Bulacan issued four memoranda recommending to
Governor Dela Cruz the approval of the aforesaid Applications for Small-Scale Mining
Permit.11
On August 10, 2005, Governor Dela Cruz issued the corresponding Small-Scale
Mining Permits in favor of Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R. Cruz
and Lucila S. Valdez.12
Subsequently, AMTC appealed to respondent DENR Secretary the grant of the
aforesaid Small-Scale Mining Permits, arguing that: (1) The PMRB of Bulacan erred
in giving due course to the Applications for Small-Scale Mining Permit without first
resolving its formal protest; (2) The areas covered by the Small-Scale Mining Permits
fall within the area covered by AMTC's valid prior Application for Exploration Permit;
(3) The Applications for Quarry Permit were illegally converted to Applications for
Small-Scale Mining Permit; (4) DENR-MGB Director Horacio C. Ramos' ruling that the
subject areas became open for mining location only on August 11, 2004 was
controlling; (5) The Small-Scale Mining Permits were null and void because they
covered areas that were never declared People's Small-Scale Mining Program sites
as mandated by Section 4 of the People's Small-Scale Mining Act of 1991; and (6)
Iron ore is not considered as one of the quarry resources, as defined by Section 43 of
the Philippine Mining Act of 1995, which could be subjects of an Application for
Quarry Permit.13
On August 8, 2006, respondent DENR Secretary rendered a Decision14 in favor of
AMTC. The DENR Secretary agreed with MGB Director Horacio C. Ramos that the
area was open to mining location only on August 11, 2004, fifteen (15) days after the
receipt by Golden Falcon on July 27, 2004 of a copy of the MGB-Central Office's
Order dated July 16, 2004, which Order denied Golden Falcon's appeal. According to
the DENR Secretary, the filing by Golden Falcon of the letter-appeal suspended the
finality of the Order of denial issued on April 29, 1998 by the Regional Director until
the resolution of the appeal on July 16, 2004 by the MGB-Central Office. He stated
that the Applications for Quarry Permit were filed on February 10, 2004 when the area
was still closed to mining location; hence, the Small-Scale Mining Permits granted by
the PMRB and the Governor were null and void. On the other hand, the DENR
Secretary declared that AMTC filed its Application for Exploration Permit when the
area was already open to other mining applicants; thus, AMTCs Application for
Exploration Permit was valid. Moreover, the DENR Secretary held that the questioned
Small-Scale Mining Permits were issued in violation of Section 4 of R.A. No. 7076
and beyond the authority of the Provincial Governor pursuant to Section 43 of R.A.
No. 7942, because the area was never proclaimed to be under the People's Small-
Scale Mining Program. Further, the DENR Secretary stated that iron ore mineral is
not considered among the quarry resources.
The dispositive portion of the DENR Secretarys Decision reads:
WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines
and Trading Corp. is declared valid and may now be given due course. The Small-
Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of Eduardo
D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of Lucila S.
Valdez are declared NULL AND VOID. Consequently, the said permits are hereby
CANCELLED.15
Hence, petitioner League of Provinces filed this petition.
Petitioner is a duly organized league of local governments incorporated under R.A.
No. 7160. Petitioner declares that it is composed of 81 provincial governments,
including the Province of Bulacan. It states that this is not an action of one province
alone, but the collective action of all provinces through the League, as a favorable
ruling will not only benefit one province, but all provinces and all local governments.
Petitioner raises these issues:
I
WHETHER OR NOT SECTION 17(B)(3)(III) OF THE, 1991 LOCAL GOVERNMENT
CODE AND SECTION 24 OF THE PEOPLE'S SMALL-SCALE MINING ACT OF 1991
ARE UNCONSTITUTIONAL FOR PROVIDING FOR EXECUTIVE CONTROL AND
INFRINGING UPON THE LOCAL AUTONOMY OF PROVINCES.
II
WHETHER OR NOT THE ACT OF RESPONDENT [DENR] IN NULLIFYING,
VOIDING AND CANCELLING THE SMALL-SCALE MINING PERMITS AMOUNTS
TO EXECUTIVE CONTROL, NOT MERELY SUPERVISION AND USURPS THE
DEVOLVED POWERS OF ALL PROVINCES.16
To start, the Court finds that petitioner has legal standing to file this petition because it
is tasked under Section 504 of the Local Government Code of 1991 to promote local
autonomy at the provincial level;17 adopt measures for the promotion of the welfare of
all provinces and its officials and employees;18 and exercise such other powers and
perform such other duties and functions as the league may prescribe for the welfare
of the provinces.19
Before this Court determines the validity of an act of a co-equal and coordinate
branch of the Government, it bears emphasis that ingrained in our jurisprudence is
the time-honored principle that a statute is presumed to be valid.20This presumption is
rooted in the doctrine of separation of powers which enjoins upon the three
coordinate departments of the Government a becoming courtesy for each other's
acts.21 This Court, however, may declare a law, or portions thereof, unconstitutional
where a petitioner has shown a clear and unequivocal breach of the
Constitution,22 leaving no doubt or hesitation in the mind of the Court.23
In this case, petitioner admits that respondent DENR Secretary had the authority to
nullify the Small-Scale Mining Permits issued by the Provincial Governor of Bulacan,
as the DENR Secretary has control over the PMRB, and the implementation of the
Small-Scale Mining Program is subject to control by respondent DENR.
Control of the DENR/DENR Secretary over small-scale mining in the provinces is
granted by three statutes: (1) R.A. No. 7061 or The Local Government Code of 1991;
(2) R.A. No. 7076 or the People's Small Scale Mining Act of 1991; and (3) R.A. No.
7942, otherwise known as the Philippine Mining Act of 1995. 24 The pertinent
provisions of law sought to be declared as unconstitutional by petitioner are as
follows:
R.A. No. 7061 (The Local Government Code of 1991)
SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to
be self-reliant and shall continue exercising the powers and discharging the duties
and functions currently vested upon them. They shall also discharge the functions
and responsibilities of national agencies and offices devolved to them pursuant to this
Code. Local government units shall likewise exercise such other powers and
discharge such other functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services and facilities
enumerated herein.
(b) Such basic services and facilities include, but are not limited to, the following:
xxxx
(3) For a Province:c
xxxx
(iii) Pursuant to national policies and subject to supervision, control and review of the
DENR, enforcement of forestry laws limited to community-based forestry projects,
pollution control law, small-scale mining law, and other laws on the protection of the
environment; and mini-hydro electric projects for local purposes; x x x25
R.A. No. 7076 (People's Small-Scale Mining Act of 1991)
Sec. 24. Provincial/City Mining Regulatory Board. - There is hereby created under the
direct supervision and control of the Secretary a provincial/city mining regulatory
board, herein called the Board, which shall be the implementing agency of the
Department, and shall exercise the following powers and functions, subject to review
by the Secretary:
(a) Declare and segregate existing gold-rush areas for small-scale mining;
(b) Reserve future gold and other mining areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and regulations related to small-scale mining;
(e) Settle disputes, conflicts or litigations over conflicting claims within a peoples
small-scale mining area, an area that is declared a small-mining; and
(f) Perform such other functions as may be necessary to achieve the goals and
objectives of this Act.26
Petitioner contends that the aforecited laws and DENR Administrative Order No. 9640
(the Implementing Rules and Regulations of the Philippine Mining Act of 1995) did not
explicitly confer upon respondents DENR and the DENR Secretary the power to
reverse, abrogate, nullify, void, or cancel the permits issued by the Provincial
Governor or small-scale mining contracts entered into by the PMRB. The statutes are
also silent as to the power of respondent DENR Secretary to substitute his own
judgment over that of the Provincial Governor and the PMRB.
Moreover, petitioner contends that Section 17 (b)(3)(iii) of the Local Government
Code of 1991 and Section 24 of R.A. No. 7076, which confer upon respondents
DENR and the DENR Secretary the power of control are unconstitutional, as the
Constitution states that the President (and Executive Departments and her alter-egos)
has the power of supervision only, not control, over acts of the local government
units, and grants the local government units autonomy, thus:
The 1987 Constitution:
Article X, Section 4. The President of the Philippines shall exercise general
supervision over local governments. Provinces with respect to component cities and
municipalities, and cities and municipalities with respect to component barangays,
shall ensure that the acts of their component units are within the scope of their
prescribed powers and functions.27
Petitioner contends that the policy in the above-cited constitutional provision is
mirrored in the Local Government Code, which states:
SEC. 25. National Supervision over Local Government Units. - (a) Consistent with the
basic policy on local autonomy, the President shall exercise general supervision over
local government units to ensure that their acts are within the scope of their
prescribed powers and functions.
The President shall exercise supervisory authority directly over provinces, highly
urbanized cities, and independent component cities; through the province with
respect to component cities and municipalities; and through the city and municipality
with respect to barangays.28
Petitioner contends that the foregoing provisions of the Constitution and the Local
Government Code of 1991 show that the relationship between the President and the
Provinces or respondent DENR, as the alter ego of the President, and the Province of
Bulacan is one of executive supervision, not one of executive control. The term
"control" has been defined as the power of an officer to alter or modify or set aside
what a subordinate officer had done in the performance of his/her duties and to
substitute the judgment of the former for the latter, while the term "supervision" is the
power of a superior officer to see to it that lower officers perform their function in
accordance with law.29
Petitioner argues that respondent DENR Secretary went beyond mere executive
supervision and exercised control when he nullified the small-scale mining permits
granted by the Provincial Governor of Bulacan, as the former substituted the
judgment of the latter.
Petitioner asserts that what is involved here is a devolved power.
Under the Local Government Code of 1991, the power to regulate small-scale mining
has been devolved to all provinces. In the exercise of devolved powers, departmental
approval is not necessary.30
Petitioner contends that if the provisions in Section 24 of R.A. No. 7076 and Section
17 (b)(3)(iii) of the Local Government Code of 1991 granting the power of control to
the DENR/DENR Secretary are not nullified, nothing would stop the DENR Secretary
from nullifying, voiding and canceling the small-scale mining permits that have been
issued by a Provincial Governor.
Petitioner submits that the statutory grant of power of control to respondents is
unconstitutional, as the Constitution only allows supervision over local governments
and proscribes control by the executive departments.
In its Comment, respondents, represented by the Office of the Solicitor General,
stated that contrary to the assertion of petitioner, the power to implement the small-
scale mining law is expressly limited in Section 17 (b)(3)(iii) of the Local Government
Code, which provides that it must be carried out "pursuant to national policies and
subject to supervision, control and review of the DENR." Moreover, the fact that the
power to implement the small-scale mining law has not been fully devolved to
provinces is further amplified by Section 4 of the People's Small-Scale Mining Act of
1991, which provides, among others, that the People's Small-Scale Mining Program
shall be implemented by the DENR Secretary.
The petition lacks merit.
Paragraph 1 of Section 2, Article XII (National Economy and Patrimony) of the
Constitution31 provides that "the exploration, development and utilization of natural
resources shall be under the full control and supervision of the State."
Moreover, paragraph 3 of Section 2, Article XII of the Constitution provides that "the
Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens x x x."
Pursuant to Section 2, Article XII of the Constitution, R.A. No. 7076 or the People's
Small-Scale Mining Act of 1991, was enacted, establishing under Section 4 thereof a
People's Small-Scale Mining Program to be implemented by the DENR Secretary in
coordination with other concerned government agencies.
The People's Small-Scale Mining Act of 1991 defines "small-scale mining" as
"refer[ring] to mining activities, which rely heavily on manual labor using simple
implement and methods and do not use explosives or heavy mining equipment."32
It should be pointed out that the Administrative Code of 198733 provides that the
DENR is, subject to law and higher authority, in charge of carrying out the State's
constitutional mandate, under Section 2, Article XII of the Constitution, to control and
supervise the exploration, development, utilization and conservation of the country's
natural resources. Hence, the enforcement of small-scale mining law in the provinces
is made subject to the supervision, control and review of the DENR under the Local
Government Code of 1991, while the Peoples Small-Scale Mining Act of 1991
provides that the Peoples Small-Scale Mining Program is to be implemented by the
DENR Secretary in coordination with other concerned local government agencies.
Indeed, Section 4, Article X (Local Government) of the Constitution states that "[t]he
President of the Philippines shall exercise general supervision over local
governments," and Section 25 of the Local Government Code reiterates the same.
General supervision by the President means no more than seeing to it that laws are
faithfully executed or that subordinate officers act within the law.34
The Court has clarified that the constitutional guarantee of local autonomy in the
Constitution Art. X, Sec. 2 refers to the administrative autonomy of local government
units or, cast in more technical language, the decentralization of government
authority.35 It does not make local governments sovereign within the
State.36 Administrative autonomy may involve devolution of powers, but subject to
limitations like following national policies or standards,37 and those provided by the
Local Government Code, as the structuring of local governments and the allocation of
powers, responsibilities, and resources among the different local government units
and local officials have been placed by the Constitution in the hands of
Congress38 under Section 3, Article X of the Constitution.
Section 3, Article X of the Constitution mandated Congress to "enact a local
government code which shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization with effective
mechanisms of recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide for the
qualifications, election, appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters relating to the organization
and operation of the local units."
In connection with the enforcement of the small-scale mining law in the province,
Section 17 of the Local Government Code provides:
SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to
be self-reliant and shall continue exercising the powers and discharging the duties
and functions currently vested upon them. They shall also discharge the functions
and responsibilities of national agencies and offices devolved to them pursuant to this
Code. Local government units shall likewise exercise such other powers and
discharge such other functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services and facilities
enumerated herein.
(b) Such basic services and facilities include, but are not limited to, the following:
xxxx
(3) For a Province:c
xxxx
(iii) Pursuant to national policies and subject to supervision, control and review of the
DENR, enforcement of forestry laws limited to community-based forestry projects,
pollution control law, small-scale mining law, and other laws on the protection of the
environment; and mini-hydro electric projects for local purposes;39
Clearly, the Local Government Code did not fully devolve the enforcement of the
small-scale mining law to the provincial government, as its enforcement is subject to
the supervision, control and review of the DENR, which is in charge, subject to law
and higher authority, of carrying out the State's constitutional mandate to control and
supervise the exploration, development, utilization of the country's natural
resources.40
Section 17 (b)(3)(iii) of the Local Government Code of 1991 is in harmony with R.A.
No. 7076 or the People's Small-Scale Mining Act of 1991,41 which established a
People's Small-Scale Mining Program to be implemented by the Secretary of the
DENR, thus:
Sec. 2. Declaration of Policy. It is hereby declared of the State to promote, develop,
protect and rationalize viable small-scale mining activities in order to generate more
employment opportunities and provide an equitable sharing of the nation's wealth and
natural resources, giving due regard to existing rights as herein provided.
xxxx
Sec. 4. People's Small-Scale Mining Program. - For the purpose of carrying out the
declared policy provided in Section 2 hereof, there is hereby established a People's
Small-Scale Mining Program to be implemented by the Secretary of the Department
of Environment and Natural Resources, hereinafter called the Department, in
coordination with other concerned government agencies, designed to achieve an
orderly, systematic and rational scheme for the small-scale development and
utilization of mineral resources in certain mineral areas in order to address the social,
economic, technical, and environmental problems connected with small-scale mining
activities.
xxxx
Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created under
the direct supervision and control of the Secretary a provincial/city mining regulatory
board, herein called the Board, which shall be the implementing agency of the
Department, and shall exercise the following powers and functions, subject to review
by the Secretary:
(a) Declare and segregate existing gold-rush areas for small-scale mining;
(b) Reserve future gold and other mining areas for small-scale mining;
(c) Award contracts to small-scale miners;
(d) Formulate and implement rules and regulations related to small-scale mining;
(e) Settle disputes, conflicts or litigations over conflicting claims within a peoples
small-scale mining area, an area that is declared a small-mining; and
(f) Perform such other functions as may be necessary to achieve the goals and
objectives of this Act.42
DENR Administrative Order No. 34, series of 1992, containing the Rules and
Regulations to implement R.A. No. 7076, provides:
SEC. 21. Administrative Supervision over the People's Small-Scale Mining Program.
The following DENR officials shall exercise the following supervisory functions in
the implementation of the Program:
21.1 DENR Secretrary direct supervision and control over the program and
activities of the small-scale miners within the people's small-scale mining area;
21.2 Director the Director shall:
a. Recommend the depth or length of the tunnel or adit taking into account the: (1)
size of membership and capitalization of the cooperative; (2) size of mineralized
areas; (3) quantity of mineral deposits; (4) safety of miners; and (5) environmental
impact and other considerations;
b. Determine the right of small-scale miners to existing facilities in consultation with
the operator, claimowner, landowner or lessor of an affected area upon declaration of
a small-scale mining area;
c. Recommend to the Secretary the withdrawal of the status of the people's small-
scale mining area when it can no longer be feasibly operated on a small-scale basis;
and
d. See to it that the small-scale mining contractors abide by small-scale mines safety
rules and regulations.
xxxx
SEC. 22. Provincial/City Mining Regulatory Board. The Provincial/City Mining
Regulatory Board created under R.A. 7076 shall exercise the following powers and
functions, subject to review by the Secretary:
22.1 Declares and segregates existing gold rush area for small-scale mining;
22.2 Reserves for the future, mineralized areas/mineral lands for people's small-scale
mining;
22.3 Awards contracts to small-scale miners cooperative;
22.4 Formulates and implements rules and regulations related to R.A. 7076;
22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90)
days upon filing of protests or complaints; Provided, That any aggrieved party may
appeal within five (5) days from the Board's decision to the Secretary for final
resolution otherwise the same is considered final and executory; and
22.6 Performs such other functions as may be necessary to achieve the goals and
objectives of R.A. 7076.
SEC. 6. Declaration of People's Small-Scale Mining Areas. The Board created
under R.A. 7076 shall have the authority to declare and set aside People's Small-
Scale Mining Areas in sites onshore suitable for small-scale mining operations subject
to review by the DENR Secretary thru the Director.43
DENR Administrative Order No. 23, otherwise known as the Implementing Rules and
Regulations of R.A. No. 7942, otherwise known as the Philippine Mining Act of 1995,
adopted on August 15, 1995, provides under Section 123 44thereof that small-scale
mining applications should be filed with the PMRB45 and the corresponding permits
shall be issued by the Provincial Governor, except small-scale mining applications
within the mineral reservations.
Thereafter, DENR Administrative Order No. 96-40, otherwise known as the Revised
Implementing Rules and Regulations of R.A. No. 7942, otherwise known as the
Philippine Mining Act of 1995, adopted on December 19, 1996, provides that
applications for Small-Scale Mining Permits shall be filed with the Provincial
Governor/City Mayor through the concerned Provincial/City Mining Regulatory Board
for areas outside the Mineral Reservations and with the Director though the Bureau
for areas within the Mineral Reservations.46 Moreover, it provides that Local
Government Units shall, in coordination with the Bureau/ Regional Offices and subject
to valid and existing mining rights, "approve applications for small-scale mining, sand
and gravel, quarry x x x and gravel permits not exceeding five (5) hectares." 47
Petitioner contends that the Local Government Code of 1991, R.A. No. 7076, DENR
Administrative Orders Nos. 95-23 and 96-40 granted the DENR Secretary the broad
statutory power of control, but did not confer upon the respondents DENR and DENR
Secretary the power to reverse, abrogate, nullify, void, cancel the permits issued by
the Provincial Governor or small-scale mining contracts entered into by the Board.
The contention does not persuade.
The settlement of disputes over conflicting claims in small-scale mining is provided for
in Section 24 of R.A. No. 7076, thus:
Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created under
the direct supervision and control of the Secretary a provincial/city mining regulatory
board, herein called the Board, which shall be the implementing agency of the
Department, and shall exercise the following powers and functions, subject to review
by the Secretary:
xxxx
(e) Settle disputes, conflicts or litigations over conflicting claims within a people's
small-scale mining area, an area that is declared a small mining area; x x x
Section 24, paragraph (e) of R.A. No. 7076 cited above is reflected in Section 22,
paragraph 22.5 of the Implementing Rules and Regulations of R.A. No. 7076, to wit:
SEC. 22. Provincial/City Mining Regulatory Board. The Provincial/City Mining
Regulatory Board created under R.A. No. 7076 shall exercise the following powers
and functions, subject to review by the Secretary:
xxxx
22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90)
days upon filing of protests or complaints; Provided, That any aggrieved party may
appeal within five (5) days from the Board's decision to the Secretary for final
resolution otherwise the same is considered final and executory; x x x
In this case, in accordance with Section 22, paragraph 22.5 of the Implementing
Rules and Regulations of R.A. No. 7076, the AMTC filed on July 22, 2005 with the
PMRB of Bulacan a formal protest against the Applications for Quarry Permits of
Eduardo Mercado, Benedicto Cruz, Liberato Sembrano (replaced by Lucila Valdez)
and Gerardo Cruz on the ground that the subject area was already covered by its
Application for Exploration Permit.48 However, on August 8, 2005, the PMRB issued
Resolution Nos. 05-8, 05-9, 05-10 and 05-11, resolving to submit to the Provincial
Governor of Bulacan the Applications for Small-Scale Mining Permits of Eduardo
Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz for the granting/issuance
of the said permits.49 On August 10, 2005, the Provincial Governor of Bulacan issued
the Small-Scale Mining Permits to Eduardo Mercado, Benedicto Cruz, Lucila Valdez
and Gerardo Cruz based on the legal opinion of the Provincial Legal Officer and the
Resolutions of the PMRB of Bulacan.
Hence, AMTC filed an appeal with respondent DENR Secretary, appealing from
Letter-Resolution No. 05-1317 and Resolution Nos. 05-08, 05-09, 05-10 and 05-11,
all dated August 8, 2005, of the PMRB of Bulacan, which resolutions gave due course
and granted, on August 10, 2005, Small-Scale Mining Permits to Eduardo D.
Mercado, Benedicto S. Cruz, Lucila Valdez and Gerardo Cruz involving parcels of
mineral land situated at Camachin, Doa Remedios Trinidad, Bulacan.
The PMRB of Bulacan filed its Answer, stating that it is an administrative body,
created under R.A. No. 7076, which cannot be equated with the court wherein a full-
blown hearing could be conducted, but it is enough that the parties were given the
opportunity to present evidence. It asserted that the questioned resolutions it issued
were in accordance with the mining laws and that the Small-Scale Mining Permits
granted were registered ahead of AMTC's Application for Exploration Permit. Further,
the Board stated that the Governor of Bulacan had the power to approve the Small-
Scale Mining Permits under R.A. No. 7160.
The DENR Secretary found the appeal meritorious, and resolved these pivotal issues:
(1) when is the subject mining area open for mining location by other applicants; and
(2) who among the applicants have valid applications.1wphi1 The pertinent portion
of the decision of the DENR Secretary reads:
We agree with the ruling of the MGB Director that the area is open only to mining
location on August 11, 2004, fifteen (15) days after the receipt by Golden Falcon on
July 27, 2004 of a copy of the subject Order of July 16, 2004.1wphi1The filing by
Golden Falcon of the letter-appeal suspended the finality of the Order of Denial
issued on April 29, 1998 by the Regional Director until the Resolution thereof on July
16, 2004.
Although the subject AQPs/SSMPs were processed in accordance with the
procedures of the PMRB, however, the AQPs were filed on February 10, 2004 when
the area is still closed to mining location. Consequently, the SSMPs granted by the
PMRB and the Governor are null and void making thereby AEP No. III-02-04 of the
AMTC valid, it having been filed when the area is already open to other mining
applicants.
Records also show that the AQPs were converted into SSMPs. These are two (2)
different applications. The questioned SSMPs were issued in violation of Section 4 of
RA 7076 and beyond the authority of the Provincial Governor pursuant to Section 43
of RA 7942 because the area was never proclaimed as "People's Small-Scale Mining
Program." Moreover, iron ore mineral is not considered among the quarry resources.
xxxx
WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines
and Trading Corp. is declared valid and may now be given due course. The Small-
Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of Eduardo
D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of Lucila S.
Valdez are declared NULL AND VOID. Consequently, the said permits are hereby
CANCELLED.50
The Court finds that the decision of the DENR Secretary was rendered in accordance
with the power of review granted to the DENR Secretary in the resolution of disputes,
which is provided for in Section 24 of R.A. No. 707651 and Section 22 of its
Implementing Rules and Regulations.52 It is noted that although AMTC filed a protest
with the PMRB regarding its superior and prior Application for Exploration Permit over
the Applications for Quarry Permit, which were converted to Small-Scale Mining
Permits, the PMRB did not resolve the same, but issued Resolution Nos. 05-08 to 05-
11 on August 8, 2005, resolving to submit to the Provincial Governor of Bulacan the
Applications for Small-Scale Mining Permits of Eduardo Mercado, Benedicto Cruz,
Lucila Valdez and Gerardo Cruz for the granting of the said permits. After the
Provincial Governor of Bulacan issued the Small-Scale Mining Permits on August 10,
2005, AMTC appealed the Resolutions of the PMRB giving due course to the granting
of the Small-Scale Mining Permits by the Provincial Governor.
Hence, the decision of the DENR Secretary, declaring that the Application for
Exploration Permit of AMTC was valid and may be given due course, and canceling
the Small-Scale Mining Permits issued by the Provincial Governor, emanated from
the power of review granted to the DENR Secretary under R.A. No. 7076 and its
Implementing Rules and Regulations. The DENR Secretary's power to review and,
therefore, decide, in this case, the issue on the validity of the issuance of the Small-
Scale Mining Permits by the Provincial Governor as recommended by the PMRB, is a
quasi-judicial function, which involves the determination of what the law is, and what
the legal rights of the contending parties are, with respect to the matter in controversy
and, on the basis thereof and the facts obtaining, the adjudication of their respective
rights.53 The DENR Secretary exercises quasi-judicial function under R.A. No. 7076
and its Implementing Rules and Regulations to the extent necessary in settling
disputes, conflicts or litigations over conflicting claims. This quasi-judicial function of
the DENR Secretary can neither be equated with "substitution of judgment" of the
Provincial Governor in issuing Small-Scale Mining Permits nor "control" over the said
act of the Provincial Governor as it is a determination of the rights of AMTC over
conflicting claims based on the law.

In determining whether Section 17 (b)(3)(iii) of the Local Government Code of 1991

and Section 24 of R.A. No. 7076 are unconstitutional, the Court has been guided by
Beltran v. The Secretary of Health, 54 which held:

The fundamental criterion is that all reasonable doubts should be resolved in favor of
the constitutionality of a statute. Every law has in its favor the presumption of
constitutionality. For a law to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution. The ground for nullity must be clear and
beyond reasonable doubt. Those who petition this Court to declare a law, or parts
thereof, unconstitutional must clearly establish the basis therefor. Otherwise, the
petition must fail. 55

In this case, the Court finds that the grounds raised by petitioner to challenge the
constitutionality of Section 17 (b )(3)(iii) of the Local Government Code of 1991 and
Section 24 'of R.A. No.7076 failed to overcome the constitutionality of the said
provisions of law.

WHEREFORE, the petition is DISMISSED for lack of merit.

No costs.

SO ORDERED.
 C. It violates the equal protection clause of the constitution in that it legalizes
PAGCOR conducted gambling, while most other forms of gambling are outlawed,
together with prostitution, drug trafficking and other vices;

Republic of the Philippines D. It violates the avowed trend of the Cory government away from monopolistic and
SUPREME COURT crony economy, and toward free enterprise and privatization. (p. 2, Amended Petition;
Manila p. 7, Rollo)

EN BANC In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to
the declared national policy of the "new restored democracy" and the people's will as
expressed in the 1987 Constitution. The decree is said to have a "gambling objective"
and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII
G.R. No. 91649 May 14, 1991
and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN Petition; p. 21, Rollo).
AND LORENZO SANCHEZ,petitioners,
The procedural issue is whether petitioners, as taxpayers and practicing lawyers
vs.
(petitioner Basco being also the Chairman of the Committee on Laws of the City
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION
Council of Manila), can question and seek the annulment of PD 1869 on the alleged
(PAGCOR), respondent.
grounds mentioned above.
H.B. Basco & Associates for petitioners.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by
Valmonte Law Offices collaborating counsel for petitioners.
virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D.
Aguirre, Laborte and Capule for respondent PAGCOR.
1067-B also dated January 1, 1977 "to establish, operate and maintain gambling
casinos on land or water within the territorial jurisdiction of the Philippines." Its
operation was originally conducted in the well known floating casino "Philippine
Tourist." The operation was considered a success for it proved to be a potential
PARAS, J.: source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399
was passed on June 2, 1978 for PAGCOR to fully attain this objective.
A TV ad proudly announces:
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable
"The new PAGCOR responding through responsible gaming." the Government to regulate and centralize all games of chance authorized by existing
franchise or permitted by law, under the following declared policy
But the petitioners think otherwise, that is why, they filed the instant petition seeking
to annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to
PD 1869, because it is allegedly contrary to morals, public policy and order, and centralize and integrate all games of chance not heretofore authorized by existing
because franchises or permitted by law in order to attain the following objectives:

A. It constitutes a waiver of a right prejudicial to a third person with a right recognized (a) To centralize and integrate the right and authority to operate and conduct games
by law. It waived the Manila City government's right to impose taxes and license fees, of chance into one corporate entity to be controlled, administered and supervised by
which is recognized by law; the Government.

B. For the same reason stated in the immediately preceding paragraph, the law has
intruded into the local government's right to impose local taxes and license fees. This,
in contravention of the constitutionally enshrined principle of local autonomy;
(b) To establish and operate clubs and casinos, for amusement and recreation,
including sports gaming pools, (basketball, football, lotteries, etc.) and such other
forms of amusement and recreation including games of chance, which may be
allowed by law within the territorial jurisdiction of the Philippines and which will: (1)
generate sources of additional revenue to fund infrastructure and socio-civic projects,
such as flood control programs, beautification, sewerage and sewage projects,
Tulungan ng Bayan Centers, Nutritional Programs, Population Control and such other
essential public services; (2) create recreation and integrated facilities which will
expand and improve the country's existing tourist attractions; and (3) minimize, if not
totally eradicate, all the evils, malpractices and corruptions that are normally prevalent
on the conduct and operation of gambling clubs and casinos without direct
government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the
Philippines. Under its Charter's repealing clause, all laws, decrees, executive orders,
rules and regulations, inconsistent therewith, are accordingly repealed, amended or
modified.
It is reported that PAGCOR is the third largest source of government revenue, next to
the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR
earned P3.43 Billion, and directly remitted to the National Government a total of P2.5
Billion in form of franchise tax, government's income share, the President's Social
Fund and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and
charitable projects on its own or in cooperation with various governmental agencies,
and other private associations and organizations. In its 3 1/2 years of operation under
the present administration, PAGCOR remitted to the government a total of P6.2
Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its
nine (9) casinos nationwide, directly supporting the livelihood of Four Thousand Four
Hundred Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the
same is "null and void" for being "contrary to morals, public policy and public order,"
monopolistic and tends toward "crony economy", and is violative of the equal
protection clause and local autonomy as well as for running counter to the state
policies enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family)
and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the
most deliberate consideration by the Court, involving as it does the exercise of what
has been described as "the highest and most delicate function which belongs to the
judicial department of the government." (State v. Manuel, 20 N.C. 144; Lozano v.
Martinez, 146 SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and
coordinate branch of the government We need not be reminded of the time-honored
principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid.
Every presumption must be indulged in favor of its constitutionality. This is not to say
that We approach Our task with diffidence or timidity. Where it is clear that the
legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily,
as fall it must, on the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr.
Justice Zaldivar underscored the
. . . thoroughly established principle which must be followed in all cases where
questions of constitutionality as obtain in the instant cases are involved. All
presumptions are indulged in favor of constitutionality; one who attacks a statute
alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that a
law may work hardship does not render it unconstitutional; that if any reasonable
basis may be conceived which supports the statute, it will be upheld and the
challenger must negate all possible basis; that the courts are not concerned with the
wisdom, justice, policy or expediency of a statute and that a liberal interpretation of
the constitution in favor of the constitutionality of legislation should be adopted.
(Danner v. Hass, 194 N.W. 2nd534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta
v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes,
125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v.
Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the
legal personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping
with the Court's 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
this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan,
163 SCRA 371)
With particular regard to the requirement of proper party as applied in the cases
before us, We hold that the same is satisfied by the petitioners and intervenors
because each of them has sustained or is in danger of sustaining an immediate injury
as a result of the acts or measures complained of. And even if, strictly speaking they
are not covered by the definition, it is still within the wide discretion of the Court to
waive the requirement and so remove the impediment to its addressing and resolving
the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed
to question the constitutionality of several executive orders issued by President
Quirino although they were involving only an indirect and general interest shared in
common with the public. The Court dismissed the objection that they were not proper
parties and ruled that "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must
technicalities of procedure." We have since then applied the exception in many other
cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian
Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues
raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the
prohibition of gambling does not mean that the Government cannot regulate it in the
exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487)
As defined, it consists of (1) an imposition or restraint upon liberty or property, (2) in
order to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuming the greatest benefits. (Edu
v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its
origin to the charter. Along with the taxing power and eminent domain, it is inborn in
the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, refers to it succinctly as the plenary power of
the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The
police power of the State is a power co-extensive with self-protection and is most
aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board of
Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and illimitable of
powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables
the state to meet the agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and
centralize thru an appropriate institution all games of chance authorized by existing
franchise or permitted by law" (1st whereas clause, PD 1869). As was subsequently
proved, regulating and centralizing gambling operations in one corporate entity the
PAGCOR, was beneficial not just to the Government but to society in general. It is a
reliable source of much needed revenue for the cash strapped Government. It
provided funds for social impact projects and subjected gambling to "close scrutiny,
regulation, supervision and control of the Government" (4th Whereas Clause, PD
1869). With the creation of PAGCOR and the direct intervention of the Government,
the evil practices and corruptions that go with gambling will be minimized if not totally
eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of
Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is
violative of the principle of local autonomy. They must be referring to Section 13 par.
(2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any
"tax of any kind or form, income or otherwise, as well as fees, charges or levies of
whatever nature, whether National or Local."
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form,
income or otherwise as well as fees, charges or levies of whatever nature, whether
National or Local, shall be assessed and collected under this franchise from the
Corporation; nor shall any form or tax or charge attach in any way to the earnings of
the Corporation, except a franchise tax of five (5%) percent of the gross revenues or
earnings derived by the Corporation from its operations under this franchise. Such tax
shall be due and payable quarterly to the National Government and shall be in lieu of
all kinds of taxes, levies, fees or assessments of any kind, nature or description,
levied, established or collected by any municipal, provincial or national government
authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to
impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105
Phil. 337; Santos v. Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or
statute must plainly show an intent to confer that power or the municipality cannot
assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must
always yield to a legislative act which is superior having been passed upon by the
state itself which has the "inherent power to tax" (Bernas, the Revised [1973]
Philippine Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be
stressed that "municipal corporations are mere creatures of Congress" (Unson v.
Lacson, G.R. No. 7909, January 18, 1957) which has the power to "create and
abolish municipal corporations" due to its "general legislative powers" (Asuncion v.
Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has
the power of control over Local governments (Hebron v. Reyes, G.R. No. 9124, July
2, 1950). And if Congress can grant the City of Manila the power to tax certain
matters, it can also provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru
the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was
vested exclusively on the National Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered
cities and other local governments to issue license, permit or other form of franchise
to operate, maintain and establish horse and dog race tracks, jai-alai and other forms
of gambling is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse
and dog race tracks, jai-alai and other forms of gambling shall be issued by the
national government upon proper application and verification of the qualification of the
applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits"
for the operation of gambling. Necessarily, the power to demand or collect license
fees which is a consequence of the issuance of "licenses or permits" is no longer
vested in the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the National
Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also
exercises regulatory powers thus:
Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the
affiliated entities, and shall exercise all the powers, authority and the responsibilities
vested in the Securities and Exchange Commission over such affiliating entities
mentioned under the preceding section, including, but not limited to amendments of
Articles of Incorporation and By-Laws, changes in corporate term, structure,
capitalization and other matters concerning the operation of the affiliated entities, the
provisions of the Corporation Code of the Philippines to the contrary notwithstanding,
except only with respect to original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role
is governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and
actually is exempt from local taxes. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
The states have no power by taxation or otherwise, to retard, impede, burden or in
any manner control the operation of constitutional laws enacted by Congress to carry
into execution the powers vested in the federal government. (MC Culloch v. Marland,
4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire
absence of power on the part of the States to touch, in that way (taxation) at least, the
instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be
agreed that no state or political subdivision can regulate a federal instrumentality in
such a way as to prevent it from consummating its federal responsibilities, or even to
seriously burden it in the accomplishment of them. (Antieau, Modern Constitutional
Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activities or enterprise using
the power to tax as "a tool for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc
Culloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation
of the very entity which has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution
(on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such guidelines and
limitation as the congress may provide, consistent with the basic policy on local
autonomy. Such taxes, fees and charges shall accrue exclusively to the local
government. (emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to
"limitations" which Congress may provide by law. Since PD 1869 remains an
"operative" law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987
Constitution), its "exemption clause" remains as an exception to the exercise of the
power of local governments to impose taxes and fees. It cannot therefore be violative
but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436,
as cited in Bernas, The Constitution of the Republic of the Philippines, Vol. II, First
Ed., 1988, p. 374). It does not make local governments sovereign within the state or
an "imperium in imperio."
Local Government has been described as a political subdivision of a nation or state
which is constituted by law and has substantial control of local affairs. In a unitary
system of government, such as the government under the Philippine Constitution,
local governments can only be an intra sovereign subdivision of one sovereign nation,
it cannot be an imperium in imperio. Local government in such a system can only
mean a measure of decentralization of the function of government. (emphasis
supplied)
As to what state powers should be "decentralized" and what may be delegated to
local government units remains a matter of policy, which concerns wisdom. It is
therefore a political question. (Citizens Alliance for Consumer Protection v. Energy
Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with
gambling is a State concern and hence, it is the sole prerogative of the State to retain
it or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or express
charter power is generally necessary to empower the local corporation to deal with
the subject. . . . In the absence of express grant of power to enact, ordinance
provisions on this subject which are inconsistent with the state laws are void. (Ligan v.
Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757
following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as
cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the
Constitution, because "it legalized PAGCOR conducted gambling, while most
gambling are outlawed together with prostitution, drug trafficking and other vices" (p.
82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture
ignores the well-accepted meaning of the clause "equal protection of the laws." The
clause does not preclude classification of individuals who may be accorded different
treatment under the law as long as the classification is not unreasonable or arbitrary
(Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force
on all persons or things to be conformable to Article III, Section 1 of the Constitution
(DECS v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing
classes of individuals or objects upon which different rules shall operate (Laurel v.
Misa, 43 O.G. 2847). The Constitution does not require situations which are different
in fact or opinion to be treated in law as though they were the same (Gomez v.
Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the
equal protection is not clearly explained in the petition. The mere fact that some
gambling activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by
RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are
legalized under certain conditions, while others are prohibited, does not render the
applicable laws, P.D. 1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied. (Gomez v.
Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that all
occupations called by the same name must be treated the same way; the state may
do what it can to prevent which is deemed as evil and stop short of those cases in
which harm to the few concerned is not less than the harm to the public that would
insure if the rule laid down were made mathematically exact. (Dominican Hotel v.
Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory
Government away from monopolies and crony economy and toward free enterprise
and privatization" suffice it to state that this is not a ground for this Court to nullify P.D.
1869. If, indeed, PD 1869 runs counter to the government's policies then it is for the
Executive Department to recommend to Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare what the law is
and not what the law should be.1wphi1 Under our system of government, policy
issues are within the domain of the political branches of government and of the
people themselves as the repository of all state power. (Valmonte v. Belmonte, Jr.,
170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so
requires. No combinations in restraint of trade or unfair competition shall be allowed.
(Art. XII, National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily
prohibited by the Constitution. The state must still decide whether public interest
demands that monopolies be regulated or prohibited. Again, this is a matter of policy
for the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12
(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII
and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to
state also that these are merely statements of principles and, policies. As such, they
are basically not self-executing, meaning a law should be passed by Congress to
clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and the legislature. If the executive and the legislature
failed to heed the directives of the articles the available remedy was not judicial or
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v.
Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82
SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified,
it must be shown that there is a clear and unequivocal breach of the Constitution, not
merely a doubtful and equivocal one. In other words, the grounds for nullity must be
clear and beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition
this Court to declare a law, or parts thereof, unconstitutional must clearly establish the
basis for such a declaration. Otherwise, their petition must fail. Based on the grounds
raised by petitioners to challenge the constitutionality of P.D. 1869, the Court finds
that petitioners have failed to overcome the presumption. The dismissal of this
petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise
legislation considering the issues of "morality, monopoly, trend to free enterprise,
privatization as well as the state principles on social justice, role of youth and
educational values" being raised, is up for Congress to determine.

As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521

Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any
case, in its favor the presumption of validity and constitutionality which petitioners
Valmonte and the KMU have not overturned. Petitioners have not undertaken to
identify the provisions in the Constitution which they claim to have been violated by
that statute. This Court, however, is not compelled to speculate and to imagine how
the assailed legislation may possibly offend some provision of the Constitution. The
Court notes, further, in this respect that petitioners have in the main put in question
the wisdom, justice and expediency of the establishment of the OPSF, issues which
are not properly addressed to this Court and which this Court may not constitutionally
pass upon. Those issues should be addressed rather to the political departments of
government: the President and the Congress.

Parenthetically, We wish to state that gambling is generally immoral, and this is

precisely so when the gambling resorted to is excessive. This excessiveness
necessarily depends not only on the financial resources of the gambler and his family
but also on his mental, social, and spiritual outlook on life. However, the mere fact
that some persons may have lost their material fortunes, mental control, physical
health, or even their lives does not necessarily mean that the same are directly
attributable to gambling. Gambling may have been the antecedent, but certainly not
necessarily the cause. For the same consequences could have been preceded by an
overdose of food, drink, exercise, work, and even sex.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento,
Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 80391 February 28, 1989
SULTAN ALIMBUSAR P. LIMBONA, petitioner,
vs.
CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING,
ACMAD TOMAWIS, GERRY TOMAWIS, JESUS ORTIZ, ANTONIO DELA FUENTE,
DIEGO PALOMARES, JR., RAUL DAGALANGIT, and BIMBO
SINSUAT, respondents.
Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.
Makabangkit B. Lanto for respondents.
SARMIENTO, J.:
The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The
antecedent facts are as follows:
1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a
member of the Sangguniang Pampook, Regional Autonomous Government, Region
XII, representing Lanao del Sur.
2. On March 12, 1987 petitioner was elected Speaker of the Regional Legislative
Assembly or Batasang Pampook of Central Mindanao (Assembly for brevity).
3. Said Assembly is composed of eighteen (18) members. Two of said members,
respondents Acmad Tomawis and Pakil Dagalangit, filed on March 23, 1987 with the
Commission on Elections their respective certificates of candidacy in the May 11,
1987 congressional elections for the district of Lanao del Sur but they later withdrew
from the aforesaid election and thereafter resumed again their positions as members
of the Assembly.
4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the
Committee on Muslim Affairs of the House of Representatives, invited Mr. Xavier
Razul, Pampook Speaker of Region XI, Zamboanga City and the petitioner in his
capacity as Speaker of the Assembly, Region XII, in a letter which reads:
The Committee on Muslim Affairs well undertake consultations and dialogues with
local government officials, civic, religious organizations and traditional leaders on the
recent and present political developments and other issues affecting Regions IX and
XII.
The result of the conference, consultations and dialogues would hopefully chart the
autonomous governments of the two regions as envisioned and may prod the
President to constitute immediately the Regional Consultative Commission as
mandated by the Commission.
You are requested to invite some members of the Pampook Assembly of your
respective assembly on November 1 to 15, 1987, with venue at the Congress of the
Philippines. Your presence, unstinted support and cooperation is (sic) indispensable.
5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary
Johnny Alimbuyao of the Assembly to wire all Assemblymen that there shall be no
session in November as "our presence in the house committee hearing of Congress
take (sic) precedence over any pending business in batasang pampook ... ."
6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary
Alimbuyao sent to the members of the Assembly the following telegram:
TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM
RECEIVED FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY
MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM AFFAIRS
REQUESTED ME TO ASSIST SAID COMMITTEE IN THE DISCUSSION OF THE
PROPOSED AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE ALL
ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN NOVEMBER AS OUR
PRESENCE IN THE HOUSE COMMITTEE HEARING OF CONGRESS TAKE
PRECEDENCE OVER ANY PENDING BUSINESS IN BATASANG PAMPOOK OF
MATALAM FOLLOWS UNQUOTE REGARDS.
7. On November 2, 1987, the Assembly held session in defiance of petitioner's
advice, with the following assemblymen present:
1. Sali, Salic
2. Conding, Pilipinas (sic)
3. Dagalangit, Rakil
4. Dela Fuente, Antonio
5. Mangelen, Conte
6. Ortiz, Jesus the names of the new comers in order for them to cast their votes on the previous
motion to declare the position of the Speaker vacant. But before doing so, I move also
7. Palomares, Diego that the designation of the Speaker Pro Tempore as the Presiding Officer and Mr.
Johnny Evangelists as Acting Secretary in the session last November 2, 1987 be
8. Sinsuat, Bimbo reconfirmed in today's session.

9. Tomawis, Acmad HON. SALIC ALI: I second the motions.

10. Tomawis, Jerry
After declaring the presence of a quorum, the Speaker Pro-Tempore was authorized
to preside in the session. On Motion to declare the seat of the Speaker vacant, all
Assemblymen in attendance voted in the affirmative, hence, the chair declared said
seat of the Speaker vacant. 8. On November 5, 1987, the session of the Assembly
resumed with the following Assemblymen present:
PRESIDING OFFICER: Any comment or objections on the two motions presented?
Me chair hears none and the said motions are approved. ...
Twelve (12) members voted in favor of the motion to declare the seat of the Speaker
vacant; one abstained and none voted against. 1
Accordingly, the petitioner prays for judgment as follows:

1. Mangelen Conte-Presiding Officer WHEREFORE, petitioner respectfully prays that-

2. Ali Salic (a) This Petition be given due course;

3. Ali Salindatu (b) Pending hearing, a restraining order or writ of preliminary injunction be issued
enjoining respondents from proceeding with their session to be held on November 5,
4. Aratuc, Malik 1987, and on any day thereafter;

5. Cajelo, Rene (c) After hearing, judgment be rendered declaring the proceedings held by
respondents of their session on November 2, 1987 as null and void;
6. Conding, Pilipinas (sic)
(d) Holding the election of petitioner as Speaker of said Legislative Assembly or
7. Dagalangit, Rakil
Batasan Pampook, Region XII held on March 12, 1987 valid and subsisting, and
8. Dela Fuente, Antonio
(e) Making the injunction permanent.
9. Ortiz, Jesus 2
Petitioner likewise prays for such other relief as may be just and equitable.
10 Palomares, Diego
Pending further proceedings, this Court, on January 19, 1988, received a resolution
11. Quijano, Jesus filed by the Sangguniang Pampook, "EXPECTING ALIMBUSAR P. LIMBONA FROM
MEMBERSHIP OF THE SANGGUNIANG PAMPOOK AUTONOMOUS REGION
12. Sinsuat, Bimbo XII," 3 on the grounds, among other things, that the petitioner "had caused to be
prepared and signed by him paying [sic] the salaries and emoluments of Odin Abdula,
13. Tomawis, Acmad who was considered resigned after filing his Certificate of Candidacy for
Congressmen for the First District of Maguindanao in the last May 11, elections. . .
14. Tomawis, Jerry and nothing in the record of the Assembly will show that any request for reinstatement
by Abdula was ever made . . ." 4 and that "such action of Mr. Lim bona in paying
An excerpt from the debates and proceeding of said session reads: Abdula his salaries and emoluments without authority from the Assembly . . .
constituted a usurpation of the power of the Assembly," 5 that the petitioner "had
HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the
recently caused withdrawal of so much amount of cash from the Assembly resulting
presence of our colleagues who have come to attend the session today, I move to call
to the non-payment of the salaries and emoluments of some Assembly [sic]," 6 and
that he had "filed a case before the Supreme Court against some members of the
Assembly on question which should have been resolved within the confines of the
Assembly," 7 for which the respondents now submit that the petition had become
"moot and academic". 8
The first question, evidently, is whether or not the expulsion of the petitioner (pending
litigation) has made the case moot and academic.
We do not agree that the case has been rendered moot and academic by reason
simply of the expulsion resolution so issued. For, if the petitioner's expulsion was
done purposely to make this petition moot and academic, and to preempt the Court, it
will not make it academic.
On the ground of the immutable principle of due process alone, we hold that the
expulsion in question is of no force and effect. In the first place, there is no showing
that the Sanggunian had conducted an investigation, and whether or not the petitioner
had been heard in his defense, assuming that there was an investigation, or
otherwise given the opportunity to do so. On the other hand, what appears in the
records is an admission by the Assembly (at least, the respondents) that "since
November, 1987 up to this writing, the petitioner has not set foot at the Sangguniang
Pampook." 9 "To be sure, the private respondents aver that "[t]he Assemblymen, in a
conciliatory gesture, wanted him to come to Cotabato City," 10 but that was "so that
their differences could be threshed out and settled." 11Certainly, that avowed wanting
or desire to thresh out and settle, no matter how conciliatory it may be cannot be a
substitute for the notice and hearing contemplated by law.
While we have held that due process, as the term is known in administrative law,
does not absolutely require notice and that a party need only be given the opportunity
to be heard, 12 it does not appear herein that the petitioner had, to begin with, been
made aware that he had in fact stood charged of graft and corruption before his
collegues. It cannot be said therefore that he was accorded any opportunity to rebut
their accusations. As it stands, then, the charges now levelled amount to mere
accusations that cannot warrant expulsion.
In the second place, (the resolution) appears strongly to be a bare act of vendetta by
the other Assemblymen against the petitioner arising from what the former perceive to
be abduracy on the part of the latter. Indeed, it (the resolution) speaks of "a case
[having been filed] [by the petitioner] before the Supreme Court . . . on question which
should have been resolved within the confines of the Assemblyman act which some
members claimed unnecessarily and unduly assails their integrity and character as
representative of the people" 13 an act that cannot possibly justify expulsion. Access
to judicial remedies is guaranteed by the Constitution, 14 and, unless the recourse
amounts to malicious prosecution, no one may be punished for seeking redress in the
courts.
We therefore order reinstatement, with the caution that should the past acts of the
petitioner indeed warrant his removal, the Assembly is enjoined, should it still be so
minded, to commence proper proceedings therefor in line with the most elementary
requirements of due process. And while it is within the discretion of the members of
the Sanggunian to punish their erring colleagues, their acts are nonetheless subject
to the moderating band of this Court in the event that such discretion is exercised with
grave abuse.
It is, to be sure, said that precisely because the Sangguniang Pampook(s) are
"autonomous," the courts may not rightfully intervene in their affairs, much less strike
down their acts. We come, therefore, to the second issue: Are the so-called
autonomous governments of Mindanao, as they are now constituted, subject to the
jurisdiction of the national courts? In other words, what is the extent of self-
government given to the two autonomous governments of Region IX and XII?
The autonomous governments of Mindanao were organized in Regions IX and XII by
Presidential Decree No. 1618 15 promulgated on July 25, 1979. Among other things,
the Decree established "internal autonomy" 16 in the two regions "[w]ithin the
framework of the national sovereignty and territorial integrity of the Republic of the
Philippines and its Constitution," 17 with legislative and executive machinery to
exercise the powers and responsibilities 18specified therein.
It requires the autonomous regional governments to "undertake all internal
administrative matters for the respective regions," 19 except to "act on matters which
are within the jurisdiction and competence of the National Government," 20 "which
include, but are not limited to, the following:
(1) National defense and security;
(2) Foreign relations;
(3) Foreign trade;
(4) Currency, monetary affairs, foreign exchange, banking and quasi-banking, and
external borrowing,
(5) Disposition, exploration, development, exploitation or utilization of all natural
resources;
(6) Air and sea transport
(7) Postal matters and telecommunications;
(8) Customs and quarantine;
(9) Immigration and deportation;
(10) Citizenship and naturalization;
(11) National economic, social and educational planning; and
(12) General auditing. 21
In relation to the central government, it provides that "[t]he President shall have the
power of general supervision and control over the Autonomous Regions ..." 22
Now, autonomy is either decentralization of administration or decentralization of
power. There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden the base
of government power and in the process to make local governments "more
responsive and accountable," 23 "and ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national
development and social progress." 24 At the same time, it relieves the central
government of the burden of managing local affairs and enables it to concentrate on
national concerns. The President exercises "general supervision" 25 over them, but
only to "ensure that local affairs are administered according to law." 26 He has no
control over their acts in the sense that he can substitute their judgments with his
own. 27
Decentralization of power, on the other hand, involves an abdication of political power
in the favor of local governments units declare to be autonomous . In that case, the
autonomous government is free to chart its own destiny and shape its future with
minimum intervention from central authorities. According to a constitutional author,
decentralization of power amounts to "self-immolation," since in that event, the
autonomous government becomes accountable not to the central authorities but to its
constituency. 28
But the question of whether or not the grant of autonomy Muslim Mindanao under the
1987 Constitution involves, truly, an effort to decentralize power rather than mere
administration is a question foreign to this petition, since what is involved herein is a
local government unit constituted prior to the ratification of the present Constitution.
Hence, the Court will not resolve that controversy now, in this case, since no
controversy in fact exists. We will resolve it at the proper time and in the proper case.
Under the 1987 Constitution, local government units enjoy autonomy in these two
senses, thus:
Section 1. The territorial and political subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and barangays. Here shall be autonomous
regions in Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30
xxx xxx xxx
See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas
sharing common and distinctive historical and cultural heritage, economic and social
structures, and other relevant characteristics within the framework of this Constitution
and the national sovereignty as well as territorial integrity of the Republic of the
Philippines. 31
An autonomous government that enjoys autonomy of the latter category [CONST.
(1987), art. X, sec. 15.] is subject alone to the decree of the organic act creating it and
accepted principles on the effects and limits of "autonomy." On the other hand, an
autonomous government of the former class is, as we noted, under the supervision of
the national government acting through the President (and the Department of Local
Government). 32 If the Sangguniang Pampook (of Region XII), then, is autonomous in
the latter sense, its acts are, debatably beyond the domain of this Court in perhaps
the same way that the internal acts, say, of the Congress of the Philippines are
beyond our jurisdiction. But if it is autonomous in the former category only, it comes
unarguably under our jurisdiction. An examination of the very Presidential Decree
creating the autonomous governments of Mindanao persuades us that they were
never meant to exercise autonomy in the second sense, that is, in which the central
government commits an act of self-immolation. Presidential Decree No. 1618, in the
first place, mandates that "[t]he President shall have the power of general supervision
and control over Autonomous Regions."33 In the second place, the Sangguniang
Pampook, their legislative arm, is made to discharge chiefly administrative services,
thus:
SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall
exercise local legislative powers over regional affairs within the framework of national
development plans, policies and goals, in the following areas:
(1) Organization of regional administrative system;
(2) Economic, social and cultural development of the Autonomous Region;
(3) Agricultural, commercial and industrial programs for the Autonomous Region;
(4) Infrastructure development for the Autonomous Region;
(5) Urban and rural planning for the Autonomous Region;
(6) Taxation and other revenue-raising measures as provided for in this Decree;
(7) Maintenance, operation and administration of schools established by the
Autonomous Region;
(8) Establishment, operation and maintenance of health, welfare and other social
services, programs and facilities;
(9) Preservation and development of customs, traditions, languages and culture that instead, they opened the sessions themselves behind his back in an apparent act
indigenous to the Autonomous Region; and of mutiny. Under the circumstances, we find equity on his side. For this reason, we
uphold the "recess" called on the ground of good faith.
(10) Such other matters as may be authorized by law,including the enactment of such
measures as may be necessary for the promotion of the general welfare of the people It does not appear to us, moreover, that the petitioner had resorted to the aforesaid
in the Autonomous Region. "recess" in order to forestall the Assembly from bringing about his ouster. This is not
apparent from the pleadings before us. We are convinced that the invitation was what
The President shall exercise such powers as may be necessary to assure that precipitated it.
enactment and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap
ng Pook are in compliance with this Decree, national legislation, policies, plans and In holding that the "recess" in question is valid, we are not to be taken as establishing
programs. a precedent, since, as we said, a recess can not be validly declared without a session
having been first opened. In upholding the petitioner herein, we are not giving him
34
The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa. a carte blanche to order recesses in the future in violation of the Rules, or otherwise
to prevent the lawful meetings thereof.
Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the
expulsion in question, with more reason can we review the petitioner's removal as Neither are we, by this disposition, discouraging the Sanggunian from reorganizing
Speaker. itself pursuant to its lawful prerogatives. Certainly, it can do so at the proper time. In
the event that be petitioner should initiate obstructive moves, the Court is certain that
Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: it is armed with enough coercive remedies to thwart them. 39
(1) the Sanggunian, in convening on November 2 and 5, 1987 (for the sole purpose of
declaring the office of the Speaker vacant), did so in violation of the Rules of the In view hereof, we find no need in dwelling on the issue of quorum.
Sangguniang Pampook since the Assembly was then on recess; and (2) assuming
that it was valid, his ouster was ineffective nevertheless for lack of quorum. WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang
Pampook, Region XII, is ENJOINED to (1) REINSTATE the petitioner as Member,
Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were Sangguniang Pampook, Region XII; and (2) REINSTATE him as Speaker thereof. No
invalid. It is true that under Section 31 of the Region XII Sanggunian Rules, costs.
"[s]essions shall not be suspended or adjourned except by direction of the
Sangguniang Pampook," 35 but it provides likewise that "the Speaker may, on [sic] his SO ORDERED.
discretion, declare a recess of "short intervals." 36 Of course, there is disagreement
between the protagonists as to whether or not the recess called by the petitioner Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
effective November 1 through 15, 1987 is the "recess of short intervals" referred to; Gancayco, Bidin, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.
the petitioner says that it is while the respondents insist that, to all intents and
purposes, it was an adjournment and that "recess" as used by their Rules only refers Padilla, J., took no part.
to "a recess when arguments get heated up so that protagonists in a debate can talk
things out informally and obviate dissenssion [sic] and disunity. 37 The Court agrees
with the respondents on this regard, since clearly, the Rules speak of "short
intervals." Secondly, the Court likewise agrees that the Speaker could not have validly
called a recess since the Assembly had yet to convene on November 1, the date
session opens under the same Rules. 38 Hence, there can be no recess to speak of
that could possibly interrupt any session. But while this opinion is in accord with the
respondents' own, we still invalidate the twin sessions in question, since at the time
the petitioner called the "recess," it was not a settled matter whether or not he could.
do so. In the second place, the invitation tendered by the Committee on Muslim
Affairs of the House of Representatives provided a plausible reason for the
intermission sought. Thirdly, assuming that a valid recess could not be called, it does
not appear that the respondents called his attention to this mistake. What appears is

SECOND DIVISION
[G.R. No. 129093. August 30, 2001]
HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and
HON. CALIXTO CATAQUIZ, petitioners, vs. HON. FRANCISCO DIZON PAO and
TONY CALVENTO, respondents.
DECISION
QUISUMBING, J.:
For our resolution is a petition for review on certiorari seeking the reversal of the
decision[1] dated February 10, 1997 of the Regional Trial Court of San Pedro, Laguna,
Branch 93, enjoining petitioners from implementing or enforcing Kapasiyahan Bilang
508, Taon 1995, of the Sangguniang Panlalawigan of Laguna and its subsequent
Order[2] dated April 21, 1997 denying petitioners motion for reconsideration.
On December 29, 1995, respondent Tony Calvento was appointed agent by the
Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the
operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for
a mayors permit to open the lotto outlet. This was denied by Mayor Cataquiz in a
letter dated February 19, 1996. The ground for said denial was an ordinance passed
by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T.
1995 which was issued on September 18, 1995. The ordinance reads:
ISANG KAPASIYAHAN TINUTUTULAN ANG MGA ILLEGAL GAMBLING LALO NA
ANG LOTTO SA LALAWIGAN NG LAGUNA
SAPAGKAT, ang sugal dito sa lalawigan ng Laguna ay talamak na;
SAPAGKAT, ang sugal ay nagdudulot ng masasamang impluwensiya lalot higit sa
mga kabataan;
KUNG KAYAT DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at Kgg.
Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano at buong
pagkakaisang sinangayunan ng lahat ng dumalo sa pulong;
IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano mang uri
ng sugal dito sa lalawigan ng Laguna lalot higit ang Lotto;
IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang pinuno ng
Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-ibayuhin ang
pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng Laguna lalo na
ang Jueteng.[3]
As a result of this resolution of denial, respondent Calvento filed a complaint for
declaratory relief with prayer for preliminary injunction and temporary restraining
order. In the said complaint, respondent Calvento asked the Regional Trial Court of
San Pedro Laguna, Branch 93, for the following reliefs: (1) a preliminary injunction or
temporary restraining order, ordering the defendants to refrain from implementing or
enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon. Municipal Mayor
Calixto R. Cataquiz to issue a business permit for the operation of a lotto outlet; and
(3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.
On February 10, 1997, the respondent judge, Francisco Dizon Pao, promulgated his
decision enjoining the petitioners from implementing or enforcing resolution
or Kapasiyahan Blg. 508, T. 1995. The dispositive portion of said decision reads:
WHEREFORE, premises considered, defendants, their agents and representatives
are hereby enjoined from implementing or enforcing resolution or kapasiyahan blg.
508, T. 1995 of the Sangguniang Panlalawigan ng Laguna prohibiting the operation of
the lotto in the province of Laguna.
SO ORDERED.[4]
Petitioners filed a motion for reconsideration which was subsequently denied in an
Order dated April 21, 1997, which reads:
Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and the
Sangguniang Panlalawigan of Laguna, thru counsel, with the opposition filed by
plaintiffs counsel and the comment thereto filed by counsel for the defendants which
were duly noted, the Court hereby denies the motion for lack of merit.
SO ORDERED.[5]
On May 23, 1997, petitioners filed this petition alleging that the following errors were
committed by the respondent trial court:
I
THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM
IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE SANGGUNIANG
PANLALAWIGAN OF LAGUNA PROHIBITING THE OPERATION OF THE LOTTO
IN THE PROVINCE OF LAGUNA.
II
THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY THE
PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR PROGRAM
MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR OFFICES, PRIOR
CONSULTATION AND APPROVAL BY THE LOCAL GOVERNMENT UNITS
CONCERNED AND OTHER CONCERNED SECTORS IS REQUIRED.
Petitioners contend that the assailed resolution is a valid policy declaration of the
Provincial Government of Laguna of its vehement objection to the operation of lotto
and all forms of gambling. It is likewise a valid exercise of the provincial governments
police power under the General Welfare Clause of Republic Act 7160, otherwise
known as the Local Government Code of 1991.[6] They also maintain that
respondents lotto operation is illegal because no prior consultations and approval by
the local government were sought before it was implemented contrary to the express
provisions of Sections 2 (c) and 27 of R.A. 7160.[7]
For his part, respondent Calvento argues that the questioned resolution is, in effect, a
curtailment of the power of the state since in this case the national legislature itself
had already declared lotto as legal and permitted its operations around the
country.[8] As for the allegation that no prior consultations and approval were sought
from the sangguniang panlalawigan of Laguna, respondent Calvento contends this is
not mandatory since such a requirement is merely stated as a declaration of policy
and not a self-executing provision of the Local Government Code of 1991.[9] He also
states that his operation of the lotto system is legal because of the authority given to
him by the PCSO, which in turn had been granted a franchise to operate the lotto by
Congress.[10]
The Office of the Solicitor General (OSG), for the State, contends that the Provincial
Government of Laguna has no power to prohibit a form of gambling which has been
authorized by the national government.[11] He argues that this is based on the
principle that ordinances should not contravene statutes as municipal governments
are merely agents of the national government. The local councils exercise only
delegated legislative powers which have been conferred on them by Congress. This
being the case, these councils, as delegates, cannot be superior to the principal or
exercise powers higher than those of the latter. The OSG also adds that the question
of whether gambling should be permitted is for Congress to determine, taking into
account national and local interests. Since Congress has allowed the PCSO to
operate lotteries which PCSO seeks to conduct in Laguna, pursuant to its legislative
grant of authority, the provinces Sangguniang Panlalawigan cannot nullify the
exercise of said authority by preventing something already allowed by Congress.
The issues to be resolved now are the following: (1) whether Kapasiyahan Blg. 508,
T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a mayors
permit based thereon are valid; and (2) whether prior consultations and approval by
the concerned Sanggunian are needed before a lotto system can be operated in a
given local government unit.
The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a
mayors permit for the operation of a lotto outlet in favor of private
respondent. According to the mayor, he based his decision on an existing ordinance
prohibiting the operation of lotto in the province of Laguna. The ordinance, however,
merely states the objection of the council to the said game. It is but a mere policy
statement on the part of the local council, which is not self-executing. Nor could it
serve as a valid ground to prohibit the operation of the lotto system in the province of
Laguna. Even petitioners admit as much when they stated in their petition that:
5.7. The terms of the Resolution and the validity thereof are express and clear. The
Resolution is a policy declaration of the Provincial Government of Laguna of its
vehement opposition and/or objection to the operation of and/or all forms of gambling
including the Lotto operation in the Province of Laguna.[12]
As a policy statement expressing the local governments objection to the lotto, such
resolution is valid. This is part of the local governments autonomy to air its views
which may be contrary to that of the national governments. However, this freedom to
exercise contrary views does not mean that local governments may actually enact
ordinances that go against laws duly enacted by Congress. Given this premise, the
assailed resolution in this case could not and should not be interpreted as a measure
or ordinance prohibiting the operation of lotto.
The game of lotto is a game of chance duly authorized by the national government
through an Act of Congress. Republic Act 1169, as amended by Batas Pambansa
Blg. 42, is the law which grants a franchise to the PCSO and allows it to operate the
lotteries. The pertinent provision reads:
Section 1. The Philippine Charity Sweepstakes Office.- The Philippine Charity
Sweepstakes Office, hereinafter designated the Office, shall be the principal
government agency for raising and providing for funds for health programs, medical
assistance and services and charities of national character, and as such shall have
the general powers conferred in section thirteen of Act Numbered One thousand four
hundred fifty-nine, as amended, and shall have the authority:
A. To hold and conduct charity sweepstakes races, lotteries, and other similar
activities, in such frequency and manner, as shall be determined, and subject to such
rules and regulations as shall be promulgated by the Board of Directors.
This statute remains valid today. While lotto is clearly a game of chance, the national
government deems it wise and proper to permit it. Hence, the Sangguniang
Panlalawigan of Laguna, a local government unit, cannot issue a resolution or an
ordinance that would seek to prohibit permits. Stated otherwise, what the national
legislature expressly allows by law, such as lotto, a provincial board may not disallow
by ordinance or resolution.
In our system of government, the power of local government units to legislate and
enact ordinances and resolutions is merely a delegated power coming from
Congress. As held in Tatel vs. Virac,[13]ordinances should not contravene an existing
statute enacted by Congress. The reasons for this is obvious, as elucidated
in Magtajas v. Pryce Properties Corp.[14]
Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred upon them by Congress as the
national lawmaking body. The delegate cannot be superior to the principal or exercise
powers higher than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have derived their
power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot
exist. As it creates, so it may destroy. As it may destroy, it may abridge and
control. Unless there is some constitutional limitation on the right, the legislature
might, by a single act, and if we can suppose it capable of so great a folly and so
great a wrong, sweep from existence all of the municipal corporations in the state,
and the corporation could not prevent it. We know of no limitation on the right so far
as the corporation themselves are concerned. They are, so to phrase it, the mere
tenants at will of the legislature (citing Clinton vs. Ceder Rapids, etc. Railroad Co., 24
Iowa 455).
Nothing in the present constitutional provision enhancing local autonomy dictates a
different conclusion.
The basic relationship between the national legislature and the local government units
has not been enfeebled by the new provisions in the Constitution strengthening the
policy of local autonomy. Without meaning to detract from that policy, we here confirm
that Congress retains control of the local government units although in significantly
reduced degree now than under our previous Constitutions. The power to create still
includes the power to destroy. The power to grant still includes the power to withhold
or recall. True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax (citing Art. X, Sec. 5,
Constitution), which cannot now be withdrawn by mere statute. By and large,
however, the national legislature is still the principal of the local government units,
which cannot defy its will or modify or violate it.[15]
Ours is still a unitary form of government, not a federal state. Being so, any form of
autonomy granted to local governments will necessarily be limited and confined within
the extent allowed by the central authority. Besides, the principle of local autonomy
under the 1987 Constitution simply means decentralization. It does not make local
governments sovereign within the state or an imperium in imperio.[16]
To conclude our resolution of the first issue, respondent mayor of San Pedro, cannot
avail of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of Laguna as
justification to prohibit lotto in his municipality. For said resolution is nothing but an
expression of the local legislative unit concerned. The Boards enactment, like spring
water, could not rise above its source of power, the national legislature.
As for the second issue, we hold that petitioners erred in declaring that Sections 2 (c)
and 27 of Republic Act 7160, otherwise known as the Local Government Code of
1991, apply mandatorily in the setting up of lotto outlets around the country. These
provisions state:
Section 2. Declaration of Policy. x x x
(c) It is likewise the policy of the State to require all national agencies and offices to
conduct periodic consultations with appropriate local government units, non-
governmental and peoples organizations, and other concerned sectors of the
community before any project or program is implemented in their respective
jurisdictions.
Section 27. Prior Consultations Required. No project or program shall be
implemented by government authorities unless the consultations mentioned in
Section 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian
concerned is obtained; Provided, that occupants in areas where such projects are to
be implemented shall not be evicted unless appropriate relocation sites have been
provided, in accordance with the provisions of the Constitution.
From a careful reading of said provisions, we find that these apply only to national
programs and/or projects which are to be implemented in a particular local
community. Lotto is neither a program nor a project of the national government, but of
a charitable institution, the PCSO. Though sanctioned by the national government, it
is far fetched to say that lotto falls within the contemplation of Sections 2 (c) and 27 of
the Local Government Code.
Section 27 of the Code should be read in conjunction with Section 26
thereof.[17] Section 26 reads:
Section 26. Duty of National Government Agencies in the Maintenance of Ecological
Balance. It shall be the duty of every national agency or government-owned or
controlled corporation authorizing or involved in the planning and implementation of
any project or program that may cause pollution, climatic change, depletion of non-
renewable resources, loss of crop land, range-land, or forest cover, and extinction of
animal or plant species, to consult with the local government units, nongovernmental
organizations, and other sectors concerned and explain the goals and objectives of
the project or program, its impact upon the people and the community in terms of
environmental or ecological balance, and the measures that will be undertaken to
prevent or minimize the adverse effects thereof.
Thus, the projects and programs mentioned in Section 27 should be interpreted to
mean projects and programs whose effects are among those enumerated in Section
26 and 27, to wit, those that: (1) may cause pollution; (2) may bring about climatic
change; (3) may cause the depletion of non-renewable resources; (4) may result in
loss of crop land, range-land, or forest cover; (5) may eradicate certain animal or
plant species from the face of the planet; and (6) other projects or programs that may
call for the eviction of a particular group of people residing in the locality where these
will be implemented. Obviously, none of these effects will be produced by the
introduction of lotto in the province of Laguna.

Moreover, the argument regarding lack of consultation raised by petitioners is clearly

an afterthought on their part. There is no indication in the letter of Mayor Cataquiz that
this was one of the reasons for his refusal to issue a permit. That refusal was
predicated solely but erroneously on the provisions of Kapasiyahan Blg. 508, Taon
1995, of the Sangguniang Panlalawigan of Laguna.

In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz from
enforcing or implementing the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang
Panlalawigan of Laguna. That resolution expresses merely a policy statement of the
Laguna provincial board. It possesses no binding legal force nor requires any act of
implementation. It provides no sufficient legal basis for respondent mayors refusal to
issue the permit sought by private respondent in connection with a legitimate
business activity authorized by a law passed by Congress.

WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional
Trial Court of San Pedro, Laguna enjoining the petitioners from implementing or
enforcing Resolution or Kapasiyahan Blg. 508, T. 1995, of the Provincial Board of
Laguna is hereby AFFIRMED. No costs.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.


EN BANC
[G.R. No. 125350. December 3, 2002]
HON. RTC JUDGES MERCEDES G. DADOLE (Executive Judge, Branch 28),
ULRIC R. CAETE (Presiding Judge, Branch 25), AGUSTINE R. VESTIL
(Presiding Judge, Branch 56), HON. MTC JUDGES TEMISTOCLES M. BOHOLST
(Presiding Judge, Branch 1), VICENTE C. FANILAG (Judge Designate, Branch
2), and WILFREDO A. DAGATAN (Presiding Judge, Branch 3), all of Mandaue
City, petitioners, vs. COMMISSION ON AUDIT, respondent.
DECISION
CORONA, J.:
Before us is a petition for certiorari under Rule 64 to annul the decision[1] and
resolution[2], dated September 21, 1995 and May 28, 1996, respectively, of the
respondent Commission on Audit (COA) affirming the notices of the Mandaue City
Auditor which diminished the monthly additional allowances received by the petitioner
judges of the Regional Trial Court (RTC) and Municipal Trial Court (MTC) stationed in
Mandaue City.
The undisputed facts are as follows:
In 1986, the RTC and MTC judges of Mandaue City started receiving monthly
allowances of P1,260 each through the yearly appropriation ordinance enacted by the
Sangguniang Panlungsod of the said city. In 1991, Mandaue City increased the
amount to P1,500 for each judge.
On March 15, 1994, the Department of Budget and Management (DBM) issued the
disputed Local Budget Circular No. 55 (LBC 55) which provided that:
xxx xxx xxx
2.3.2. In the light of the authority granted to the local government units under the
Local Government Code to provide for additional allowances and other benefits to
national government officials and employees assigned in their locality, such additional
allowances in the form of honorarium at rates not exceeding P1,000.00 in provinces
and cities and P700.00 in municipalities may be granted subject to the following
conditions:
a) That the grant is not mandatory on the part of the LGUs;
b) That all contractual and statutory obligations of the LGU including the
implementation of R.A. 6758 shall have been fully provided in the budget;
c) That the budgetary requirements/limitations under Section 324 and 325 of R.A.
7160 should be satisfied and/or complied with; and
d) That the LGU has fully implemented the devolution of functions/personnel in
accordance with R.A. 7160.[3] (italics supplied)
xxx xxx xxx
The said circular likewise provided for its immediate effectivity without need of
publication:
5.0 EFFECTIVITY
This Circular shall take effect immediately.
Acting on the DBM directive, the Mandaue City Auditor issued notices of disallowance
to herein petitioners, namely, Honorable RTC Judges Mercedes G. Dadole, Ulric R.
Caete, Agustin R. Vestil, Honorable MTC Judges Temistocles M. Boholst, Vicente C.
Fanilag and Wilfredo A. Dagatan, in excess of the amount authorized by LBC 55.
Beginning October, 1994, the additional monthly allowances of the petitioner judges
were reduced to P1,000 each. They were also asked to reimburse the amount they
received in excess of P1,000 from April to September, 1994.
The petitioner judges filed with the Office of the City Auditor a protest against the
notices of disallowance. But the City Auditor treated the protest as a motion for
reconsideration and indorsed the same to the COA Regional Office No. 7. In turn, the
COA Regional Office referred the motion to the head office with a recommendation
that the same be denied.
On September 21, 1995, respondent COA rendered a decision denying petitioners
motion for reconsideration. The COA held that:
The issue to be resolved in the instant appeal is whether or not the City Ordinance of
Mandaue which provides a higher rate of allowances to the appellant judges may
prevail over that fixed by the DBM under Local Budget Circular No. 55 dated March
15, 1994.
xxx xxx xxx
Applying the foregoing doctrine, appropriation ordinance of local government units is
subject to the organizational, budgetary and compensation policies of budgetary
authorities (COA 5th Ind., dated March 17, 1994 re: Province of Antique; COA letter
dated May 17, 1994 re: Request of Hon. Renato Leviste, Cong. 1 st Dist. Oriental
Mindoro). In this regard, attention is invited to Administrative Order No. 42 issued on
March 3, 1993 by the President of the Philippines clarifying the role of DBM in the
compensation and classification of local government positions under RA No. 7160
vis-avis the provisions of RA No. 6758 in view of the abolition of the JCLGPA. Section
1 of said Administrative Order provides that:
Section 1. The Department of Budget and Management as the lead administrator of
RA No. 6758 shall, through its Compensation and Position Classification Bureau,
continue to have the following responsibilities in connection with the implementation
of the Local Government Code of 1991:
a) Provide guidelines on the classification of local government positions and on the
specific rates of pay therefore;
b) Provide criteria and guidelines for the grant of all allowances and additional forms
of compensation to local government employees; xxx. (underscoring supplied)
To operationalize the aforecited presidential directive, DBM issued LBC No. 55, dated
March 15, 1994, whose effectivity clause provides that:
xxx xxx xxx
5.0 EFFECTIVITY
This Circular shall take effect immediately.
It is a well-settled rule that implementing rules and regulations promulgated by
administrative or executive officer in accordance with, and as authorized by law, has
the force and effect of law or partake the nature of a statute (Victorias Milling Co.,
Inc., vs. Social Security Commission, 114 Phil. 555, cited in Agpalos Statutory
Construction, 2nd Ed. P. 16; Justice Cruzs Phil. Political Law, 1984 Ed., p. 103;
Espanol vs. Phil Veterans Administration, 137 SCRA 314; Antique Sawmills Inc. vs.
Tayco, 17 SCRA 316).
xxx xxx xxx
There being no statutory basis to grant additional allowance to judges in excess of
P1,000.00 chargeable against the local government units where they are stationed,
this Commission finds no substantial grounds or cogent reason to disturb the decision
of the City Auditor, Mandaue City, disallowing in audit the allowances in question.
Accordingly, the above-captioned appeal of the MTC and RTC Judges of Mandaue
City, insofar as the same is not covered by Circular Letter No. 91-7, is hereby
dismissed for lack of merit.
xxx xxx xxx[4]
On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, for and in behalf of
the petitioner judges, filed a motion for reconsideration of the decision of the COA. In
a resolution dated May 28, 1996, the COA denied the motion.
Hence, this petition for certiorari by the petitioner judges, submitting the following
questions for resolution:
I
HAS THE CITY OF MANDAUE STATUTORY AND CONSTITUTIONAL BASIS TO
PROVIDE ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO JUDGES
STATIONED IN AND ASSIGNED TO THE CITY?
II
CAN AN ADMINISTRATIVE CIRCULAR OR GUIDELINE SUCH AS LOCAL
BUDGET CIRCULAR NO. 55 RENDER INOPERATIVE THE POWER OF THE
LEGISLATIVE BODY OF A CITY BY SETTING A LIMIT TO THE EXTENT OF THE
EXERCISE OF SUCH POWER?
III
HAS THE COMMISSION ON AUDIT CORRECTLY INTERPRETED LOCAL
BUDGET CIRCULAR NO. 55 TO INCLUDE MEMBERS OF THE JUDICIARY IN
FIXING THE CEILING OF ADDITIONAL ALLOWANCES AND BENEFITS TO BE
PROVIDED TO JUDGES STATIONED IN AND ASSIGNED TO MANDAUE CITY BY
THE CITY GOVERNMENT AT P1,000.00 PER MONTH NOTWITHSTANDING THAT
THEY HAVE BEEN RECEIVING ALLOWANCES OF P1,500.00 MONTHLY FOR
THE PAST FIVE YEARS?
IV
IS LOCAL BUDGET CIRCULAR NO. 55 DATED MARCH 15, 1994 ISSUED BY THE
DEPARTMENT OF BUDGET AND MANAGEMENT VALID AND ENFORCEABLE
CONSIDERING THAT IT WAS NOT DULY PUBLISHED IN ACCODANCE WITH
LAW?[5]
Petitioner judges argue that LBC 55 is void for infringing on the local autonomy of
Mandaue City by dictating a uniform amount that a local government unit can
disburse as additional allowances to judges stationed therein. They maintain that said
circular is not supported by any law and therefore goes beyond the supervisory
powers of the President. They further allege that said circular is void for lack of
publication.
On the other hand, the yearly appropriation ordinance providing for additional
allowances to judges is allowed by Section 458, par. (a)(1)[xi], of RA 7160, otherwise
known as the Local Government Code of 1991, which provides that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The sangguniang
panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its inhabitants
pursuant to Section 16 of this Code and in the proper exercise of the corporate
powers of the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective
city government, and in this connection, shall:
xxx xxx xxx
(xi) When the finances of the city government allow, provide for additional allowances
and other benefits to judges, prosecutors, public elementary and high school
teachers, and other national government officials stationed in or assigned to the
city; (italics supplied)
Instead of filing a comment on behalf of respondent COA, the Solicitor General filed a
manifestation supporting the position of the petitioner judges. The Solicitor General
argues that (1) DBM only enjoys the power to review and determine whether the
disbursements of funds were made in accordance with the ordinance passed by a
local government unit while (2) the COA has no more than auditorial visitation powers
over local government units pursuant to Section 348 of RA 7160 which provides for
the power to inspect at any time the financial accounts of local government units.
Moreover, the Solicitor General opines that the DBM and the respondent are only
authorized under RA 7160 to promulgate a Budget Operations Manual for local
government units, to improve and systematize methods, techniques and procedures
employed in budget preparation, authorization, execution and accountability pursuant
to Section 354 of RA 7160. The Solicitor General points out that LBC 55 was not
exercised under any of the aforementioned provisions.
Respondent COA, on the other hand, insists that the constitutional and statutory
authority of a city government to provide allowances to judges stationed therein is not
absolute. Congress may set limitations on the exercise of autonomy. It is for the
President, through the DBM, to check whether these legislative limitations are being
followed by the local government units.
One such law imposing a limitation on a local government units autonomy is Section
458, par. (a) (1) [xi], of RA 7160, which authorizes the disbursement of additional
allowances and other benefits to judges subject to the condition that the finances of
the city government should allow the same. Thus, DBM is merely enforcing the
condition of the law when it sets a uniform maximum amount for the additional
allowances that a city government can release to judges stationed therein.
Assuming arguendo that LBC 55 is void, respondent COA maintains that the
provisions of the yearly approved ordinance granting additional allowances to judges
are still prohibited by the appropriation laws passed by Congress every year. COA
argues that Mandaue City gets the funds for the said additional allowances of judges
from the Internal Revenue Allotment (IRA). But the General Appropriations Acts of
1994 and 1995 do not mention the disbursement of additional allowances to judges
as one of the allowable uses of the IRA. Hence, the provisions of said ordinance
granting additional allowances, taken from the IRA, to herein petitioner judges are
void for being contrary to law.
To resolve the instant petition, there are two issues that we must address: (1) whether
LBC 55 of the DBM is void for going beyond the supervisory powers of the President
and for not having been published and (2) whether the yearly appropriation ordinance
enacted by the City of Mandaue that provides for additional allowances to judges
contravenes the annual appropriation laws enacted by Congress.
We rule in favor of the petitioner judges.
On the first issue, we declare LBC 55 to be null and void.
We recognize that, although our Constitution[6] guarantees autonomy to local
government units, the exercise of local autonomy remains subject to the power of
control by Congress and the power of supervision by the President. Section 4 of
Article X of the 1987 Philippine Constitution provides that:
Sec. 4. The President of the Philippines shall exercise general supervision over local
governments. x x x
In Pimentel vs. Aguirre[7], we defined the supervisory power of the President and
distinguished it from the power of control exercised by Congress. Thus:
This provision (Section 4 of Article X of the 1987 Philippine Constitution) has been
interpreted to exclude the power of control. In Mondano v. Silvosa,[i][5] the Court
contrasted the President's power of supervision over local government officials with
that of his power of control over executive officials of the national government. It was
emphasized that the two terms -- supervision and control -- differed in meaning and
extent. The Court distinguished them as follows:
"x x x In administrative law, supervision means overseeing or the power or authority
of an officer to see that subordinate officers perform their duties. If the latter fail or
neglect to fulfill them, the former may take such action or step as prescribed by law to
make them perform their duties. Control, on the other hand, means the power of an
officer to alter or modify or nullify or set aside what a subordinate officer ha[s] done in
the performance of his duties and to substitute the judgment of the former for that of
the latter."[ii][6]
In Taule v. Santos,[iii][7] we further stated that the Chief Executive wielded no more
authority than that of checking whether local governments or their officials were
performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of their
authority. "Supervisory power, when contrasted with control, is the power of mere
oversight over an inferior body; it does not include any restraining authority over such
body,"[iv][8] we said.
In a more recent case, Drilon v. Lim,[v][9] the difference between control and
supervision was further delineated. Officers in control lay down the rules in the
performance or accomplishment of an act. If these rules are not followed, they may, in
their discretion, order the act undone or redone by their subordinates or even decide
to do it themselves. On the other hand, supervision does not cover such
authority.Supervising officials merely see to it that the rules are followed, but they
themselves do not lay down such rules, nor do they have the discretion to modify or
replace them. If the rules are not observed, they may order the work done or redone,
but only to conform to such rules. They may not prescribe their own manner of
execution of the act. They have no discretion on this matter except to see to it that the
rules are followed.
Under our present system of government, executive power is vested in the
President.[vi][10] The members of the Cabinet and other executive officials are merely
alter egos. As such, they are subject to the power of control of the President, at
whose will and behest they can be removed from office; or their actions and decisions
changed, suspended or reversed.[vii][11] In contrast, the heads of political subdivisions
are elected by the people. Their sovereign powers emanate from the electorate, to
whom they are directly accountable. By constitutional fiat, they are subject to the
Presidents supervision only, not control, so long as their acts are exercised within the
sphere of their legitimate powers. By the same token, the President may not withhold
or alter any authority or power given them by the Constitution and the law.
Clearly then, the President can only interfere in the affairs and activities of a local
government unit if he or she finds that the latter has acted contrary to law. This is the
scope of the Presidents supervisory powers over local government units. Hence, the
President or any of his or her alter egos cannot interfere in local affairs as long as the
concerned local government unit acts within the parameters of the law and the
Constitution. Any directive therefore by the President or any of his or her alter
egos seeking to alter the wisdom of a law-conforming judgment on local affairs of a
local government unit is a patent nullity because it violates the principle of local
autonomy and separation of powers of the executive and legislative departments in
governing municipal corporations.
Does LBC 55 go beyond the law it seeks to implement? Yes.
LBC 55 provides that the additional monthly allowances to be given by a local
government unit should not exceed P1,000 in provinces and cities and P700 in
municipalities. Section 458, par. (a)(1)(xi), of RA 7160, the law that supposedly
serves as the legal basis of LBC 55, allows the grant of additional allowances to
judges when the finances of the city government allow. The said provision does not
authorize setting a definite maximum limit to the additional allowances granted to
judges. Thus, we need not belabor the point that the finances of a city government
may allow the grant of additional allowances higher than P1,000 if the revenues of the
said city government exceed its annual expenditures. Thus, to illustrate, a city
government with locally generated annual revenues of P40 million and expenditures
of P35 million can afford to grant additional allowances of more than P1,000 each to,
say, ten judges inasmuch as the finances of the city can afford it.
Setting a uniform amount for the grant of additional allowances is an inappropriate
way of enforcing the criterion found in Section 458, par. (a)(1)(xi), of RA 7160. The
DBM over-stepped its power of supervision over local government units by imposing
a prohibition that did not correspond with the law it sought to implement. In other
words, the prohibitory nature of the circular had no legal basis.
Furthermore, LBC 55 is void on account of its lack of publication, in violation of our
ruling in Taada vs. Tuvera[8] where we held that:
xxx. Administrative rules and regulations must also be published if their purpose is to
enforce or implement existing law pursuant to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of an administrative agency and the public, need not be published.
Neither is publication required of the so-called letters of instruction issued by
administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.
Respondent COA claims that publication is not required for LBC 55 inasmuch as it is
merely an interpretative regulation applicable to the personnel of an LGU. We
disagree. In De Jesus vs. Commission on Audit[9] where we dealt with the same
issue, this Court declared void, for lack of publication, a DBM circular that disallowed
payment of allowances and other additional compensation to government officials and
employees. In refuting respondent COAs argument that said circular was merely an
internal regulation, we ruled that:
On the need for publication of subject DBM-CCC No. 10, we rule in the affirmative.
Following the doctrine enunciated in Taada v. Tuvera, publication in the Official
Gazette or in a newspaper of general circulation in the Philippines is required
since DBM-CCC No. 10 is in the nature of an administrative circular the purpose
of which is to enforce or implement an existing law. Stated differently, to be
effective and enforceable, DBM-CCC No. 10 must go through the requisite publication
in the Official Gazette or in a newspaper of general circulation in the Philippines.
In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which
completely disallows payment of allowances and other additional compensation to
government officials and employees, starting November 1, 1989, is not a mere
interpretative or internal regulation. It is something more than that. And why not, when
it tends to deprive government workers of their allowance and additional
compensation sorely needed to keep body and soul together. At the very least,
before the said circular under attack may be permitted to substantially reduce
their income, the government officials and employees concerned should be
apprised and alerted by the publication of subject circular in the Official
Gazette or in a newspaper of general circulation in the Philippines to the end
that they be given amplest opportunity to voice out whatever opposition they
may have, and to ventilate their stance on the matter. This approach is more in
keeping with democratic precepts and rudiments of fairness and
transparency. (emphasis supplied)
In Philippine International Trading Corporation vs. Commission on Audit [10], we again
declared the same circular as void, for lack of publication, despite the fact that it was
re-issued and then submitted for publication. Emphasizing the importance of
publication to the effectivity of a regulation, we therein held that:
It has come to our knowledge that DBM-CCC No. 10 has been re-issued in its entirety
and submitted for publication in the Official Gazette per letter to the National Printing
Office dated March 9, 1999. Would the subsequent publication thereof cure the defect
and retroact to the time that the above-mentioned items were disallowed in audit?
The answer is in the negative, precisely for the reason that publication is required as
a condition precedent to the effectivity of a law to inform the public of the contents of
the law or rules and regulations before their rights and interests are affected by the
same. From the time the COA disallowed the expenses in audit up to the filing of
herein petition the subject circular remained in legal limbo due to its non-publication.
As was stated in Taada v. Tuvera, prior publication of laws before they become
effective cannot be dispensed with, for the reason that it would deny the public
knowledge of the laws that are supposed to govern it.[11]
We now resolve the second issue of whether the yearly appropriation ordinance
enacted by Mandaue City providing for fixed allowances for judges contravenes any
law and should therefore be struck down as null and void.
According to respondent COA, even if LBC 55 were void, the ordinances enacted by
Mandaue City granting additional allowances to the petitioner judges would still (be)
bereft of legal basis for want of a lawful source of funds considering that the
IRA cannot be used for such purposes. Respondent COA showed that Mandaue
Citys funds consisted of locally generated revenues and the IRA. From 1989 to 1995,
Mandaue Citys yearly expenditures exceeded its locally generated revenues, thus
resulting in a deficit. During all those years, it was the IRA that enabled Mandaue City
to incur a surplus. Respondent avers that Mandaue City used its IRA to pay for said
additional allowances and this violated paragraph 2 of the Special Provisions, page
1060, of RA 7845 (The General Appropriations Act of 1995) [12] and paragraph 3 of the
Special Provision, page 1225, of RA 7663 (The General Appropriations Act of
1994)[13] which specifically identified the objects of expenditure of the IRA. Nowhere in
said provisions of the two budgetary laws does it say that the IRA can be used for
additional allowances of judges. Respondent COA thus argues that the provisions in
the ordinance providing for such disbursement are against the law, considering that
the grant of the subject allowances is not within the specified use allowed by the
aforesaid yearly appropriations acts.
We disagree.
Respondent COA failed to prove that Mandaue City used the IRA to spend for the
additional allowances of the judges. There was no evidence submitted by COA
showing the breakdown of the expenses of the city government and the funds used
for said expenses. All the COA presented were the amounts expended, the locally
generated revenues, the deficit, the surplus and the IRA received each year. Aside
from these items, no data or figures were presented to show that Mandaue City
deducted the subject allowances from the IRA. In other words, just because Mandaue
Citys locally generated revenues were not enough to cover its expenditures, this did
not mean that the additional allowances of petitioner judges were taken from the IRA
and not from the citys own revenues.
Moreover, the DBM neither conducted a formal review nor ordered a disapproval of
Mandaue Citys appropriation ordinances, in accordance with the procedure outlined
by Sections 326 and 327 of RA 7160 which provide that:
Section 326. Review of Appropriation Ordinances of Provinces, Highly Urbanized
Cities, Independent Component Cities, and Municipalities within the Metropolitan
Manila Area. The Department of Budget and Management shall review ordinances
authorizing the annual or supplemental appropriations of provinces, highly-urbanized
cities, independent component cities, and municipalities within the Metropolitan
Manila Area in accordance with the immediately succeeding Section.
Section 327. Review of Appropriation Ordinances of Component Cities and
Municipalities.- The sangguninang panlalawigan shall review the ordinance
authorizing annual or supplemental appropriations of component cities and
municipalities in the same manner and within the same period prescribed for the
review of other ordinances.
If within ninety (90) days from receipt of copies of such ordinance, the
sangguniang panlalawigan takes no action thereon, the same shall be deemed
to have been reviewed in accordance with law and shall continue to be in full
force and effect. (emphasis supplied)
Within 90 days from receipt of the copies of the appropriation ordinance, the DBM
should have taken positive action. Otherwise, such ordinance was deemed to have
been properly reviewed and deemed to have taken effect. Inasmuch as, in the instant
case, the DBM did not follow the appropriate procedure for reviewing the subject
ordinance of Mandaue City and allowed the 90-day period to lapse, it can no longer
question the legality of the provisions in the said ordinance granting additional
allowances to judges stationed in the said city.
WHEREFORE, the petition is hereby GRANTED, and the assailed decision and
resolution, dated September 21, 1995 and May 28, 1996, respectively, of the
Commission on Audit are hereby set aside.

No costs.

SO ORDERED.
EN BANC
G.R. No. 161872 April 13, 2004
REV. ELLY CHAVEZ PAMATONG, ESQUIRE, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
TINGA, J.:
Petitioner Rev. Elly Velez Pamatong filed his Certificate of Candidacy for President on
December 17, 2003. Respondent Commission on Elections (COMELEC) refused to
give due course to petitioners Certificate of Candidacy in its Resolution No.
6558 dated January 17, 2004. The decision, however, was not unanimous since
Commissioners Luzviminda G. Tancangco and Mehol K. Sadain voted to include
petitioner as they believed he had parties or movements to back up his candidacy.
On January 15, 2004, petitioner moved for reconsideration of Resolution No.
6558. Petitioners Motion for Reconsideration was docketed as SPP (MP) No. 04-001.
The COMELEC, acting on petitioners Motion for Reconsideration and on similar
motions filed by other aspirants for national elective positions, denied the same under
the aegis of Omnibus Resolution No. 6604 dated February 11, 2004. The COMELEC
declared petitioner and thirty-five (35) others nuisance candidates who could not
wage a nationwide campaign and/or are not nominated by a political party or are not
supported by a registered political party with a national constituency. Commissioner
Sadain maintained his vote for petitioner. By then, Commissioner Tancangco had
retired.
In this Petition For Writ of Certiorari, petitioner seeks to reverse the resolutions which
were allegedly rendered in violation of his right to "equal access to opportunities for
public service" under Section 26, Article II of the 1987
Constitution,1 by limiting the number of qualified candidates only to those who can
afford to wage a nationwide campaign and/or are nominated by political parties. In so
doing, petitioner argues that the COMELEC indirectly amended the constitutional
provisions on the electoral process and limited the power of the sovereign people to
choose their leaders. The COMELEC supposedly erred in disqualifying him since he
is the most qualified among all the presidential candidates, i.e., he possesses all the
constitutional and legal qualifications for the office of the president, he is capable of
waging a national campaign since he has numerous national organizations under his
leadership, he also has the capacity to wage an international campaign since he has
practiced law in other countries, and he has a platform of government. Petitioner
likewise attacks the validity of the form for the Certificate of Candidacy prepared by
the COMELEC. Petitioner claims that the form does not provide clear and reasonable
guidelines for determining the qualifications of candidates since it does not ask for the
candidates bio-data and his program of government.
First, the constitutional and legal dimensions involved.
Implicit in the petitioners invocation of the constitutional provision ensuring "equal
access to opportunities for public office" is the claim that there is a constitutional right
to run for or hold public office and, particularly in his case, to seek the presidency.
There is none. What is recognized is merely a privilege subject to limitations imposed
by law. Section 26, Article II of the Constitution neither bestows such a right nor
elevates the privilege to the level of an enforceable right. There is nothing in the plain
language of the provision which suggests such a thrust or justifies an interpretation of
the sort.
The "equal access" provision is a subsumed part of Article II of the Constitution,
entitled "Declaration of Principles and State Policies." The provisions under the Article
are generally considered not self-executing,2 and there is no plausible reason for
according a different treatment to the "equal access" provision. Like the rest of the
policies enumerated in Article II, the provision does not contain any judicially
enforceable constitutional right but merely specifies a guideline for legislative or
executive action.3 The disregard of the provision does not give rise to any cause of
action before the courts.4
An inquiry into the intent of the framers5 produces the same determination that the
provision is not self-executory. The original wording of the present Section 26, Article
II had read, "The State shall broaden opportunities to public office and prohibit public
dynasties."6 Commissioner (now Chief Justice) Hilario Davide, Jr. successfully
brought forth an amendment that changed the word "broaden" to the phrase "ensure
equal access," and the substitution of the word "office" to "service." He explained his
proposal in this wise:
I changed the word "broaden" to "ENSURE EQUAL ACCESS TO" because what is
important would be equal access to the opportunity. If you broaden, it would
necessarily mean that the government would be mandated to create as many
offices as are possible to accommodate as many people as are also possible.
That is the meaning of broadening opportunities to public service. So, in order that
we should not mandate the State to make the government the number one
employer and to limit offices only to what may be necessary and expedient yet
offering equal opportunities to access to it, I change the word
"broaden."7 (emphasis supplied)
Obviously, the provision is not intended to compel the State to enact positive
measures that would accommodate as many people as possible into public office.
The approval of the "Davide amendment" indicates the design of the framers to cast
the provision as simply enunciatory of a desired policy objective and not reflective of
the imposition of a clear State burden.
Moreover, the provision as written leaves much to be desired if it is to be regarded as
the source of positive rights. It is difficult to interpret the clause as operative in the
absence of legislation since its effective means and reach are not properly defined.
Broadly written, the myriad of claims that can be subsumed under this rubric appear
to be entirely open-ended.8 Words and phrases such as "equal access,"
"opportunities," and "public service" are susceptible to countless interpretations owing
to their inherent impreciseness. Certainly, it was not the intention of the framers to
inflict on the people an operative but amorphous foundation from which innately
unenforceable rights may be sourced.
As earlier noted, the privilege of equal access to opportunities to public office may be
subjected to limitations. Some valid limitations specifically on the privilege to seek
elective office are found in the provisions9 of the Omnibus Election Code on
"Nuisance Candidates" and COMELEC Resolution No. 645210 dated December 10,
2002 outlining the instances wherein the COMELEC may motu proprio refuse to give
due course to or cancel a Certificate of Candidacy.
As long as the limitations apply to everybody equally without discrimination, however,
the equal access clause is not violated. Equality is not sacrificed as long as the
burdens engendered by the limitations are meant to be borne by any one who is
minded to file a certificate of candidacy. In the case at bar, there is no showing that
any person is exempt from the limitations or the burdens which they create.
Significantly, petitioner does not challenge the constitutionality or validity of Section
69 of the Omnibus Election Code and COMELEC Resolution No. 6452 dated 10
December 2003. Thus, their presumed validity stands and has to be accorded due
weight.
Clearly, therefore, petitioners reliance on the equal access clause in Section 26,
Article II of the Constitution is misplaced.
The rationale behind the prohibition against nuisance candidates and the
disqualification of candidates who have not evinced a bona fide intention to run for
office is easy to divine. The State has a compelling interest to ensure that its electoral
exercises are rational, objective, and orderly. Towards this end, the State takes into
account the practical considerations in conducting elections. Inevitably, the greater
the number of candidates, the greater the opportunities for logistical confusion, not to
mention the increased allocation of time and resources in preparation for the election.
These practical difficulties should, of course, never exempt the State from the conduct
of a mandated electoral exercise. At the same time, remedial actions should be
available to alleviate these logistical hardships, whenever necessary and proper.
Ultimately, a disorderly election is not merely a textbook example of inefficiency, but a
rot that erodes faith in our democratic institutions. As the United States Supreme
Court held:
[T]here is surely an important state interest in requiring some preliminary showing of a
significant modicum of support before printing the name of a political organization and
its candidates on the ballot the interest, if no other, in avoiding confusion, deception
and even frustration of the democratic [process].11
The COMELEC itself recognized these practical considerations when it
promulgated Resolution No. 6558 on 17 January 2004, adopting the study
Memorandum of its Law Department dated 11 January 2004. As observed in the
COMELECs Comment:
There is a need to limit the number of candidates especially in the case of candidates
for national positions because the election process becomes a mockery even if those
who cannot clearly wage a national campaign are allowed to run. Their names would
have to be printed in the Certified List of Candidates, Voters Information Sheet and
the Official Ballots. These would entail additional costs to the government. For the
official ballots in automated counting and canvassing of votes, an additional page
would amount to more or less FOUR HUNDRED FIFTY MILLION PESOS
(450,000,000.00).
xxx[I]t serves no practical purpose to allow those candidates to continue if they
cannot wage a decent campaign enough to project the prospect of winning, no matter
how slim.12
The preparation of ballots is but one aspect that would be affected by allowance of
"nuisance candidates" to run in the elections. Our election laws provide various
entitlements for candidates for public office, such as watchers in every polling
place,13 watchers in the board of canvassers,14 or even the receipt of electoral
contributions.15Moreover, there are election rules and regulations the formulations of
which are dependent on the number of candidates in a given election.
Given these considerations, the ignominious nature of a nuisance candidacy
becomes even more galling. The organization of an election with bona
fide candidates standing is onerous enough. To add into the mix candidates with no
serious intentions or capabilities to run a viable campaign would actually impair the
electoral process. This is not to mention the candidacies which are palpably ridiculous
so as to constitute a one-note joke. The poll body would be bogged by irrelevant
minutiae covering every step of the electoral process, most probably posed at the
instance of these nuisance candidates. It would be a senseless sacrifice on the part
of the State.
Owing to the superior interest in ensuring a credible and orderly election, the State
could exclude nuisance candidates and need not indulge in, as the song goes, "their
trips to the moon on gossamer wings."
The Omnibus Election Code and COMELEC Resolution No. 6452 are cognizant of
the compelling State interest to ensure orderly and credible elections by excising
impediments thereto, such as nuisance candidacies that distract and detract from the The COMELEC is directed to hold and complete the reception of evidence and report
larger purpose. The COMELEC is mandated by the Constitution with the its findings to this Court with deliberate dispatch.
administration of elections16 and endowed with considerable latitude in adopting
means and methods that will ensure the promotion of free, orderly and honest SO ORDERED.
elections.17 Moreover, the Constitution guarantees that only bona fide candidates for
public office shall be free from any form of harassment and discrimination.18 The
determination of bona fidecandidates is governed by the statutes, and the concept, to
our mind is, satisfactorily defined in the Omnibus Election Code.

Now, the needed factual premises.

However valid the law and the COMELEC issuance involved are, their proper
application in the case of the petitioner cannot be tested and reviewed by this Court
on the basis of what is now before it. The assailed resolutions of the COMELEC do
not direct the Court to the evidence which it considered in determining that petitioner
was a nuisance candidate. This precludes the Court from reviewing at this instance
whether the COMELEC committed grave abuse of discretion in disqualifying
petitioner, since such a review would necessarily take into account the matters which
the COMELEC considered in arriving at its decisions.

Petitioner has submitted to this Court mere photocopies of various documents

purportedly evincing his credentials as an eligible candidate for the presidency. Yet
this Court, not being a trier of facts, can not properly pass upon the reproductions as
evidence at this level. Neither the COMELEC nor the Solicitor General appended any
document to their respective Comments.

The question of whether a candidate is a nuisance candidate or not is both legal and
factual. The basis of the factual determination is not before this Court. Thus, the
remand of this case for the reception of further evidence is in order.

A word of caution is in order. What is at stake is petitioners aspiration and offer to

serve in the government. It deserves not a cursory treatment but a hearing which
conforms to the requirements of due process.

As to petitioners attacks on the validity of the form for the certificate of candidacy,
suffice it to say that the form strictly complies with Section 74 of the Omnibus Election
Code. This provision specifically enumerates what a certificate of candidacy should
contain, with the required information tending to show that the candidate possesses
the minimum qualifications for the position aspired for as established by the
Constitution and other election laws.

IN VIEW OF THE FOREGOING, COMELEC Case No. SPP (MP) No. 04-001 is
hereby remanded to the COMELEC for the reception of further evidence, to
determine the question on whether petitioner Elly Velez Lao Pamatong is a nuisance
candidate as contemplated in Section 69 of the Omnibus Election Code.
Republic of the Philippines bonding company of good reputation, acceptable to the Commission, in the sums of
SUPREME COURT P60,000.00 and P40,000.00, for President and Vice-President, respectively, and
Manila P32,000.00 for Senator and Member of the House of Representatives;

EN BANC 3. That, in consequence of said Republic Act No. 4421 and the aforementioned action
of the Commission on Elections, every candidate has to pay the premium charged by
G.R. No. L-24761 September 7, 1965 bonding companies, and, to offer thereto, either his own properties, worth, at least,
the amount of the surety bond, or properties of the same worth, belonging to other
LEON G. MAQUERA, petitioner, persons willing to accommodate him, by way of counter-bond in favor of said bonding
vs. companies;
JUAN BORRA, CESAR MIRAFLOR, and GREGORIO SANTAYANA, in their
respective capacities as Chairman and Members of the Commission on 4. That the effect of said Republic Act No. 4421 is, therefore, to prevent or disqualify
Elections, and the COMMISSION ON ELECTIONS, respondents. from running for President, Vice-President, Senator or Member of the House of
Representatives those persons who, although having the qualifications prescribed by
--------------------------- the Constitution therefore, cannot file the surety bond aforementioned, owing to
failure to pay the premium charged by the bonding company and/or lack of the
G.R. No. L-24828 September 7, 1965
property necessary for said counter-bond;
FELIPE N. AUREA and MELECIO MALABANAN, petitioners,
5. That said Republic Act No. 4421 has, likewise, the effect of disqualifying for
vs.
provincial, city or municipal elective offices, persons who, although possessing the
COMMISSION ON ELECTIONS, respondent.
qualifications prescribed by law therefor, cannot pay said premium and/or do not have
Leon G. Maquera in his own behalf as petitioner. the property essential for the aforementioned counter-bond;
Ramon Barrios for respondents.
6. That said Republic Act No. 4421 has, accordingly, the effect of imposing property
RESOLUTION qualifications in order that a person could run for a public office and that the people
could validly vote for him;

PER CURIAM:
Upon consideration of case G.R. No. L-24761, "Leon G. Maquera vs. Juan Borra, et
al.," and case G.R. No. L-24828, "Felipe N. Aurea and Melecio Malabanan vs.
Commission on Elections," and it appearing:
1. That Republic Act No. 4421 requires "all candidates for national, provincial, city and
municipal offices" to post a surety bond equivalent to the one-year salary or
emoluments of the position to which he is a candidate, which bond shall be forfeited
in favor of the national, provincial, city or municipal government concerned if the
candidate, except when declared winner, fails to obtain at least 10% of the votes cast
for the office to which he has filed his certificate of candidacy, there being not more
than four (4) candidates for the same office;"
2. That, in compliance with said Republic Act No. 4421, the Commission on Elections
had, on July 20, 1965, decided to require all candidates for President, Vice-President,
Senator and Member of the House of Representatives to file a surety bond, by a
7. That said property qualifications are inconsistent with the nature and essence of
the Republican system ordained in our Constitution and the principle of social justice
underlying the same, for said political system is premised upon the tenet that
sovereignty resides in the people and all government authority emanates from them,
and this, in turn, implies necessarily that the right to vote and to be voted for shall not
be dependent upon the wealth of the individual concerned, whereas social justice
presupposes equal opportunity for all, rich and poor alike, and that, accordingly, no
person shall, by reason of poverty, be denied the chance to be elected to public
office; and
8. That the bond required in Republic Act No. 4421 and the confiscation of said bond
are not predicated upon the necessity of defraying certain expenses or of
compensating services given in connection with elections, and is, therefore, arbitrary
and oppressive.
The Court RESOLVED, without prejudice to rendering an extended decision, to
declare that said Republic Act No. 4421 is unconstitutional and hence null and void,
and, hence, to enjoin respondents herein, as well as their representatives and agents,
from enforcing and/or implementing said constitutional enactment.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-72119 May 29, 1987
VALENTIN L. LEGASPI, petitioner,
vs.
CIVIL SERVICE COMMISSION, respondent.
CORTES, J.:
The fundamental right of the people to information on matters of public concern is
invoked in this special civil action for mandamus instituted by petitioner Valentin L.
Legaspi against the Civil Service Commission. The respondent had earlier denied
Legaspi's request for information on the civil service eligibilities of certain persons
employed as sanitarians in the Health Department of Cebu City. These government
employees, Julian Sibonghanoy and Mariano Agas, had allegedly represented
themselves as civil service eligibles who passed the civil service examinations for
sanitarians.
Claiming that his right to be informed of the eligibilities of Julian Sibonghanoy and
Mariano Agas, is guaranteed by the Constitution, and that he has no other plain,
speedy and adequate remedy to acquire the information, petitioner prays for the
issuance of the extraordinary writ of mandamus to compel the respondent
Commission to disclose said information.
This is not the first tune that the writ of mandamus is sought to enforce the
fundamental right to information. The same remedy was resorted to in the case
of Tanada et. al. vs. Tuvera et. al., (G.R. No. L-63915, April 24,1985,136 SCRA 27)
wherein the people's right to be informed under the 1973 Constitution (Article IV,
Section 6) was invoked in order to compel the publication in the Official Gazette of
various presidential decrees, letters of instructions and other presidential issuances.
Prior to the recognition of the right in said Constitution the statutory right to
information provided for in the Land Registration Act (Section 56, Act 496, as
amended) was claimed by a newspaper editor in another mandamus proceeding, this
time to demand access to the records of the Register of Deeds for the purpose of
gathering data on real estate transactions involving aliens (Subido vs. Ozaeta, 80
Phil. 383 [1948]).
The constitutional right to information on matters of public concern first gained
recognition in the Bill of Rights, Article IV, of the 1973 Constitution, which states:
Sec. 6. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be afforded the citizen subject to such
limitations as may be provided by law.
The foregoing provision has been retained and the right therein provided amplified in
Article III, Sec. 7 of the 1987 Constitution with the addition of the phrase, "as well as
to government research data used as basis for policy development." The new
provision reads:
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis. for policy development, shall be afforded the citizen, subject to such stations
as may be provided by law.
These constitutional provisions are self-executing. They supply the rules by means of
which the right to information may be enjoyed (Cooley, A Treatise on the
Constitutional Limitations 167 [1927]) by guaranteeing the right and mandating the
duty to afford access to sources of information. Hence, the fundamental right therein
recognized may be asserted by the people upon the ratification of the constitution
without need for any ancillary act of the Legislature. (Id. at, p. 165) What may be
provided for by the Legislature are reasonable conditions and limitations upon the
access to be afforded which must, of necessity, be consistent with the declared State
policy of full public disclosure of all transactions involving public interest (Constitution,
Art. 11, Sec. 28). However, it cannot be overemphasized that whatever limitation may
be prescribed by the Legislature, the right and the duty under Art. III Sec. 7 have
become operative and enforceable by virtue of the adoption of the New Charter.
Therefore, the right may be properly invoked in a mandamus proceeding such as this
one.
The Solicitor General interposes procedural objections to Our giving due course to
this Petition. He challenges the petitioner's standing to sue upon the ground that the
latter does not possess any clear legal right to be informed of the civil service
eligibilities of the government employees concerned. He calls attention to the alleged
failure of the petitioner to show his actual interest in securing this particular
information. He further argues that there is no ministerial duty on the part of the
Commission to furnish the petitioner with the information he seeks.
1. To be given due course, a Petition for mandamus must have been instituted by a
party aggrieved by the alleged inaction of any tribunal, corporation, board or person
which unlawfully excludes said party from the enjoyment of a legal right. (Ant;-
Chinese League of the Philippines vs. Felix, 77 Phil. 1012 [1947]). The petitioner in
every case must therefore be an "aggrieved party" in the sense that he possesses a
clear legal right to be enforced and a direct interest in the duty or act to be performed.
In the case before Us, the respondent takes issue on the personality of the petitioner
to bring this suit. It is asserted that, the instant Petition is bereft of any allegation of
Legaspi's actual interest in the civil service eligibilities of Julian Sibonghanoy and
Mariano Agas, At most there is a vague reference to an unnamed client in whose
behalf he had allegedly acted when he made inquiries on the subject (Petition, Rollo,
p. 3).
But what is clear upon the face of the Petition is that the petitioner has firmly
anchored his case upon the right of the people to information on matters of public
concern, which, by its very nature, is a public right. It has been held that:
* * * when the question is one of public right and the object of the mandamus is to
procure the enforcement of a public duty, the people are regarded as the real party in
interest and the relator at whose instigation the proceedings are instituted need not
show that he has any legal or special interest in the result, it being sufficient to show
that he is a citizen and as such interested in the execution of the laws * * * (Tanada
et. al. vs. Tuvera, et. al., G.R. No. L- 63915, April 24, 1985, 136 SCRA 27, 36).
From the foregoing, it becomes apparent that when a mandamus proceeding involves
the assertion of a public right, the requirement of personal interest is satisfied by the
mere fact that the petitioner is a citizen, and therefore, part of the general "public"
which possesses the right.
The Court had opportunity to define the word "public" in the Subido case, supra, when
it held that even those who have no direct or tangible interest in any real estate
transaction are part of the "public" to whom "(a)ll records relating to registered lands
in the Office of the Register of Deeds shall be open * * *" (Sec. 56, Act No. 496, as
amended). In the words of the Court:
* * * "Public" is a comprehensive, all-inclusive term. Properly construed, it embraces
every person. To say that only those who have a present and existing interest of a
pecuniary character in the particular information sought are given the right of
inspection is to make an unwarranted distinction. *** (Subido vs. Ozaeta, supra at p.
387).
The petitioner, being a citizen who, as such is clothed with personality to seek redress
for the alleged obstruction of the exercise of the public right. We find no cogent
reason to deny his standing to bring the present suit.
2. For every right of the people recognized as fundamental, there lies a corresponding
duty on the part of those who govern, to respect and protect that right. That is the
very essence of the Bill of Rights in a constitutional regime. Only governments
operating under fundamental rules defining the limits of their power so as to shield
individual rights against its arbitrary exercise can properly claim to be constitutional
(Cooley, supra, at p. 5). Without a government's acceptance of the limitations
imposed upon it by the Constitution in order to uphold individual liberties, without an
acknowledgment on its part of those duties exacted by the rights pertaining to the
citizens, the Bill of Rights becomes a sophistry, and liberty, the ultimate illusion.
In recognizing the people's right to be informed, both the 1973 Constitution and the
New Charter expressly mandate the duty of the State and its agents to afford access
to official records, documents, papers and in addition, government research data
used as basis for policy development, subject to such limitations as may be provided
by law. The guarantee has been further enhanced in the New Constitution with the
adoption of a policy of full public disclosure, this time "subject to reasonable
conditions prescribed by law," in Article 11, Section 28 thereof, to wit:
Subject to reasonable conditions prescribed by law, the State adopts and implements
a policy of full public disclosure of all its transactions involving public interest. (Art. 11,
Sec. 28).
In the Tanada case, supra, the constitutional guarantee was bolstered by what this
Court declared as an imperative duty of the government officials concerned to publish
all important legislative acts and resolutions of a public nature as well as all executive
orders and proclamations of general applicability. We granted mandamus in said
case, and in the process, We found occasion to expound briefly on the nature of said
duty:
* * * That duty must be enforced if the Constitutional right of the people to be informed
on matters of public concern is to be given substance and reality. The law itself
makes a list of what should be published in the Official Gazette. Such listing, to our
mind, leaves respondents with no discretion whatsoever as to what must be in
included or excluded from such publication. (Tanada v. Tuvera, supra, at 39).
(Emphasis supplied).
The absence of discretion on the part of government agencia es in allowing the
examination of public records, specifically, the records in the Office of the Register of
Deeds, is emphasized in Subido vs. Ozaeta, supra:
Except, perhaps when it is clear that the purpose of the examination is unlawful, or
sheer, idle curiosity, we do not believe it is the duty under the law of registration
officers to concern themselves with the motives, reasons, and objects of the person
seeking access to the records. It is not their prerogative to see that the information
which the records contain is not flaunted before public gaze, or that scandal is not
made of it. If it be wrong to publish the contents of the records, it is the legislature and
not the officials having custody thereof which is called upon to devise a remedy. ***
(Subido v. Ozaeta, supra at 388). (Emphasis supplied).
It is clear from the foregoing pronouncements of this Court that government agencies
are without discretion in refusing disclosure of, or access to, information of public
concern. This is not to lose sight of the reasonable regulations which may be imposed
by said agencies in custody of public records on the manner in which the right to
information may be exercised by the public. In the Subido case, We recognized the
authority of the Register of Deeds to regulate the manner in which persons desiring to
do so, may inspect, examine or copy records relating to registered lands. However,
the regulations which the Register of Deeds may promulgate are confined to:
* * * prescribing the manner and hours of examination to the end that damage to or
loss of, the records may be avoided, that undue interference with the duties of the
custodian of the books and documents and other employees may be prevented, that
the right of other persons entitled to make inspection may be insured * * * (Subido vs.
Ozaeta, 80 Phil. 383, 387)
Applying the Subido ruling by analogy, We recognized a similar authority in a
municipal judge, to regulate the manner of inspection by the public of criminal docket
records in the case of Baldoza vs. Dimaano (Adm. Matter No. 1120-MJ, May 5, 1976,
71 SCRA 14). Said administrative case was filed against the respondent judge for his
alleged refusal to allow examination of the criminal docket records in his sala. Upon a
finding by the Investigating Judge that the respondent had allowed the complainant to
open and view the subject records, We absolved the respondent. In effect, We have
also held that the rules and conditions imposed by him upon the manner of examining
the public records were reasonable.
In both the Subido and the Baldoza cases, We were emphatic in Our statement that
the authority to regulate the manner of examining public records does not carry with it
the power to prohibit. A distinction has to be made between the discretion to refuse
outright the disclosure of or access to a particular information and the authority to
regulate the manner in which the access is to be afforded. The first is a limitation
upon the availability of access to the information sought, which only the Legislature
may impose (Art. III, Sec. 6, 1987 Constitution). The second pertains to the
government agency charged with the custody of public records. Its authority to
regulate access is to be exercised solely to the end that damage to, or loss of, public
records may be avoided, undue interference with the duties of said agencies may be
prevented, and more importantly, that the exercise of the same constitutional right by
other persons shall be assured (Subido vs. Ozaetal supra).
Thus, while the manner of examining public records may be subject to reasonable
regulation by the government agency in custody thereof, the duty to disclose the
information of public concern, and to afford access to public records cannot be
discretionary on the part of said agencies. Certainly, its performance cannot be made
contingent upon the discretion of such agencies. Otherwise, the enjoyment of the
constitutional right may be rendered nugatory by any whimsical exercise of agency
discretion. The constitutional duty, not being discretionary, its performance may be
compelled by a writ of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the public
right to be enforced and the concomitant duty of the State are unequivocably set forth
in the Constitution. The decisive question on the propriety of the issuance of the writ
of mandamus in this case is, whether the information sought by the petitioner is within
the ambit of the constitutional guarantee.
3. The incorporation in the Constitution of a guarantee of access to information of
public concern is a recognition of the essentiality of the free flow of ideas and
information in a democracy (Baldoza v. Dimaano, Adm. Matter No. 1120-MJ, May 5,
1976, 17 SCRA 14). In the same way that free discussion enables members of
society to cope with the exigencies of their time (Thornhill vs. Alabama, 310 U.S.
88,102 [1939]), access to information of general interest aids the people in
democratic decision-making (87 Harvard Law Review 1505 [1974]) by giving them a
better perspective of the vital issues confronting the nation.
But the constitutional guarantee to information on matters of public concern is not
absolute. It does not open every door to any and all information. Under the
Constitution, access to official records, papers, etc., are "subject to limitations as may
be provided by law" (Art. III, Sec. 7, second sentence). The law may therefore exempt
certain types of information from public scrutiny, such as those affecting national
security (Journal No. 90, September 23, 1986, p. 10; and Journal No. 91, September
24, 1986, p. 32, 1986 Constitutional Commission). It follows that, in every case, the
availability of access to a particular public record must be circumscribed by the nature
of the information sought, i.e., (a) being of public concern or one that involves public
interest, and, (b) not being exempted by law from the operation of the constitutional
guarantee. The threshold question is, therefore, whether or not the information sought
is of public interest or public concern.
a. This question is first addressed to the government agency having custody of the
desired information. However, as already discussed, this does not give the agency
concerned any discretion to grant or deny access. In case of denial of access, the
government agency has the burden of showing that the information requested is not
of public concern, or, if it is of public concern, that the same has been exempted by
law from the operation of the guarantee. To hold otherwise will serve to dilute the
constitutional right. As aptly observed, ". . . the government is in an advantageous
position to marshall and interpret arguments against release . . ." (87 Harvard Law
Review 1511 [1974]). To safeguard the constitutional right, every denial of access by
the government agency concerned is subject to review by the courts, and in the
proper case, access may be compelled by a writ of Mandamus.
In determining whether or not a particular information is of public concern there is no
rigid test which can be applied. "Public concern" like "public interest" is a term that
eludes exact definition. Both terms embrace a broad spectrum of subjects which the
public may want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citizen. In the final
analysis, it is for the courts to determine in a case by case basis whether the matter at
issue is of interest or importance, as it relates to or affects the public.
The public concern invoked in the case of Tanada v. Tuvera, supra, was the need for
adequate notice to the public of the various laws which are to regulate the actions and
conduct of citizens. In Subido vs. Ozaeta, supra, the public concern deemed covered
by the statutory right was the knowledge of those real estate transactions which some
believed to have been registered in violation of the Constitution.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz,
Paras, Gancayco, Padilla, Bidin and Sarmiento, JJ., concur.
Feliciano, J., is on leave.

The information sought by the petitioner in this case is the truth of the claim of certain
government employees that they are civil service eligibles for the positions to which
they were appointed. The Constitution expressly declares as a State policy that:

Appointments in the civil service shall be made only according to merit and fitness to
be determined, as far as practicable, and except as to positions which are policy
determining, primarily confidential or highly technical, by competitive examination.
(Art. IX, B, Sec. 2.[2]).

Public office being a public trust, [Const. Art. XI, Sec. 1] it is the legitimate concern of
citizens to ensure that government positions requiring civil service eligibility are
occupied only by persons who are eligibles. Public officers are at all times
accountable to the people even as to their eligibilities for their respective positions.

b. But then, it is not enough that the information sought is of public interest. For
mandamus to lie in a given case, the information must not be among the species
exempted by law from the operation of the constitutional guarantee.

In the instant, case while refusing to confirm or deny the claims of eligibility, the
respondent has failed to cite any provision in the Civil Service Law which would limit
the petitioner's right to know who are, and who are not, civil service eligibles. We take
judicial notice of the fact that the names of those who pass the civil service
examinations, as in bar examinations and licensure examinations for various
professions, are released to the public. Hence, there is nothing secret about one's
civil service eligibility, if actually possessed. Petitioner's request is, therefore, neither
unusual nor unreasonable. And when, as in this case, the government employees
concerned claim to be civil service eligibles, the public, through any citizen, has a
right to verify their professed eligibilities from the Civil Service Commission.

The civil service eligibility of a sanitarian being of public concern, and in the absence
of express limitations under the law upon access to the register of civil service
eligibles for said position, the duty of the respondent Commission to confirm or deny
the civil service eligibility of any person occupying the position becomes imperative.
Mandamus, therefore lies.

WHEREFORE, the Civil Service Commission is ordered to open its register of

eligibles for the position of sanitarian, and to confirm or deny, the civil service
eligibility of Julian Sibonghanoy and Mariano Agas, for said position in the Health
Department of Cebu City, as requested by the petitioner Valentin L. Legaspi.
Republic of the Philippines Sir:
SUPREME COURT
Manila As a lawyer, member of the media and plain citizen of our Republic, I am requesting
that I be furnished with the list of names of the opposition members of (the) Batasang
EN BANC Pambansa who were able to secure a clean loan of P2 million each on guarranty (sic)
of Mrs. Imelda Marcos. We understand that OIC Mel Lopez of Manila was one of
G.R. No. 74930 February 13, 1989 those aforesaid MPs. Likewise, may we be furnished with the certified true copies of
the documents evidencing their loan. Expenses in connection herewith shall be borne
RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO, by us.
ROLANDO BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO
BAGATSING, JUN "NINOY" ALBA, PERCY LAPID, ROMMEL CORRO and If we could not secure the above documents could we have access to them?
ROLANDO FADUL, petitioners,
vs. We are premising the above request on the following provision of the Freedom
FELICIANO BELMONTE, JR., respondent. Constitution of the present regime.

Ricardo C. Valmonte for and in his own behalf and his co-petitioners. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
The Solicitor General for respondent. official acts, transactions or decisions, shall be afforded the citizen subject to such
limitation as may be provided by law. (Art. IV, Sec. 6).

We trust that within five (5) days from receipt hereof we will receive your favorable
CORTES, J.: response on the matter.

Petitioners in this special civil action for mandamus with preliminary injunction invoke Very truly yours,
their right to information and pray that respondent be directed:
(Sgd.) RICARDO C. VALMONTE

[Rollo, p. 7.]
(a) to furnish petitioners the list of the names of the Batasang Pambansa members
belonging to the UNIDO and PDP-Laban who were able to secure clean loans To the aforesaid letter, the Deputy General Counsel of the GSIS replied:
immediately before the February 7 election thru the intercession/marginal note of the
then First Lady Imelda Marcos; and/or June 17, 1986

(b) to furnish petitioners with certified true copies of the documents evidencing their Atty. Ricardo C. Valmonte
respective loans; and/or 108 E. Benin Street
Caloocan City
(c) to allow petitioners access to the public records for the subject information.
(Petition, pp. 4-5; paragraphing supplied.] Dear Compaero:

The controversy arose when petitioner Valmonte wrote respondent Belmonte the Possibly because he must have thought that it contained serious legal implications,
following letter: President & General Manager Feliciano Belmonte, Jr. referred to me for study and
reply your letter to him of June 4, 1986 requesting a list of the opposition members of
June 4, 1986 Batasang Pambansa who were able to secure a clean loan of P2 million each on
guaranty of Mrs. Imelda Marcos.
Hon. Feliciano Belmonte
GSIS General Manager My opinion in this regard is that a confidential relationship exists between the GSIS
Arroceros, Manila and all those who borrow from it, whoever they may be; that the GSIS has a duty to
its customers to preserve this confidentiality; and that it would not be proper for the
GSIS to breach this confidentiality unless so ordered by the courts.
As a violation of this confidentiality may mar the image of the GSIS as a reputable
financial institution, I regret very much that at this time we cannot respond positively
to your request.
Very truly yours,
(Sgd.) MEYNARDO A. TIRO
Deputy General Counsel
[Rollo, p. 40.]
On June 20, 1986, apparently not having yet received the reply of the Government
Service and Insurance System (GSIS) Deputy General Counsel, petitioner Valmonte
wrote respondent another letter, saying that for failure to receive a reply, "(W)e are
now considering ourselves free to do whatever action necessary within the premises
to pursue our desired objective in pursuance of public interest." [Rollo, p. 8.]
On June 26, 1986, Valmonte, joined by the other petitioners, filed the instant suit.
On July 19, 1986, the Daily Express carried a news item reporting that 137 former
members of the defunct interim and regular Batasang Pambansa, including ten (10)
opposition members, were granted housing loans by the GSIS [Rollo, p. 41.]
Separate comments were filed by respondent Belmonte and the Solicitor General.
After petitioners filed a consolidated reply, the petition was given due course and the
parties were required to file their memoranda. The parties having complied, the case
was deemed submitted for decision.
In his comment respondent raises procedural objections to the issuance of a writ of
mandamus, among which is that petitioners have failed to exhaust administrative
remedies.
Respondent claims that actions of the GSIS General Manager are reviewable by the
Board of Trustees of the GSIS. Petitioners, however, did not seek relief from the
GSIS Board of Trustees. It is therefore asserted that since administrative remedies
were not exhausted, then petitioners have no cause of action.
To this objection, petitioners claim that they have raised a purely legal
issue, viz., whether or not they are entitled to the documents sought, by virtue of their
constitutional right to information. Hence, it is argued that this case falls under one of
the exceptions to the principle of exhaustion of administrative remedies.
Among the settled principles in administrative law is that before a party can be
allowed to resort to the courts, he is expected to have exhausted all means of
administrative redress available under the law. The courts for reasons of law, comity
and convenience will not entertain a case unless the available administrative
remedies have been resorted to and the appropriate authorities have been given
opportunity to act and correct the errors committed in the administrative forum.
However, the principle of exhaustion of administrative remedies is subject to settled
exceptions, among which is when only a question of law is involved [Pascual v.
Provincial Board, 106 Phil. 466 (1959); Aguilar v. Valencia, et al., G.R. No. L-30396,
July 30, 1971, 40 SCRA 210; Malabanan v. Ramento, G.R. No. L-2270, May 21,
1984, 129 SCRA 359.] The issue raised by petitioners, which requires the
interpretation of the scope of the constitutional right to information, is one which can
be passed upon by the regular courts more competently than the GSIS or its Board of
Trustees, involving as it does a purely legal question. Thus, the exception of this case
from the application of the general rule on exhaustion of administrative remedies is
warranted. Having disposed of this procedural issue, We now address ourselves to
the issue of whether or not mandamus hes to compel respondent to perform the acts
sought by petitioners to be done, in pursuance of their right to information.
We shall deal first with the second and third alternative acts sought to be done, both
of which involve the issue of whether or not petitioners are entitled to access to the
documents evidencing loans granted by the GSIS.
This is not the first time that the Court is confronted with a controversy directly
involving the constitutional right to information. In Taada v. Tuvera, G.R. No. 63915,
April 24,1985, 136 SCRA 27 and in the recent case of Legaspi v. Civil Service
Commission, G.R. No. 72119, May 29, 1987,150 SCRA 530, the Court upheld the
people's constitutional right to be informed of matters of public interest and ordered
the government agencies concerned to act as prayed for by the petitioners.
The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 which states:
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.
The right of access to information was also recognized in the 1973 Constitution, Art.
IV Sec. 6 of which provided:
The right of the people to information on 'matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be afforded the citizen subject to such
limitations as may be provided by law.
An informed citizenry with access to the diverse currents in political, moral and artistic
thought and data relative to them, and the free exchange of ideas and discussion of
issues thereon, is vital to the democratic government envisioned under our
Constitution. The cornerstone of this republican system of government is delegation
of power by the people to the State. In this system, governmental agencies and
institutions operate within the limits of the authority conferred by the people. Denied
access to information on the inner workings of government, the citizenry can become
prey to the whims and caprices of those to whom the power had been delegated. The
postulate of public office as a public trust, institutionalized in the Constitution (in Art.
XI, Sec. 1) to protect the people from abuse of governmental power, would certainly
be were empty words if access to such information of public concern is denied,
except under limitations prescribed by implementing legislation adopted pursuant to
the Constitution.
Petitioners are practitioners in media. As such, they have both the right to gather and
the obligation to check the accuracy of information the disseminate. For them, the
freedom of the press and of speech is not only critical, but vital to the exercise of their
professions. The right of access to information ensures that these freedoms are not
rendered nugatory by the government's monopolizing pertinent information. For an
essential element of these freedoms is to keep open a continuing dialogue or process
of communication between the government and the people. It is in the interest of the
State that the channels for free political discussion be maintained to the end that the
government may perceive and be responsive to the people's will. Yet, this open
dialogue can be effective only to the extent that the citizenry is informed and thus able
to formulate its will intelligently. Only when the participants in the discussion are
aware of the issues and have access to information relating thereto can such bear
fruit.
The right to information is an essential premise of a meaningful right to speech and
expression. But this is not to say that the right to information is merely an adjunct of
and therefore restricted in application by the exercise of the freedoms of speech and
of the press. Far from it. The right to information goes hand-in-hand with the
constitutional policies of full public disclosure * and honesty in the public service. ** It
is meant to enhance the widening role of the citizenry in governmental decision-
making as well as in checking abuse in government.
Yet, like all the constitutional guarantees, the right to information is not absolute. As
stated in Legaspi, the people's right to information is limited to "matters of public
concern," and is further "subject to such limitations as may be provided by law."
Similarly, the State's policy of full disclosure is limited to "transactions involving public
interest," and is "subject to reasonable conditions prescribed by law."
Hence, before mandamus may issue, it must be clear that the information sought is of
"public interest" or "public concern," and is not exempted by law from the operation of
the constitutional guarantee [Legazpi v. Civil Service Commission, supra, at p. 542.]
The Court has always grappled with the meanings of the terms "public interest" and
"public concern". As observed in Legazpi:
In determining whether or not a particular information is of public concern there is no
rigid test which can be applied. "Public concern" like "public interest" is a term that
eludes exact definition. Both terms embrace a broad spectrum of subjects which the
public may want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citezen. In the final
analysis, it is for the courts to determine on a case by case basis whether the matter
at issue is of interest or importance, as it relates to or affects the public. [Ibid. at p.
541]
In the Taada case the public concern deemed covered by the constitutional right to
information was the need for adequate notice to the public of the various laws which
are to regulate the actions and conduct of citezens. In Legaspi, it was the "legitimate
concern of citezensof ensure that government positions requiring civil service
eligibility are occupied only by persons who are eligibles" [Supra at p. 539.]
The information sought by petitioners in this case is the truth of reports that certain
Members of the Batasang Pambansa belonging to the opposition were able to secure
"clean" loans from the GSIS immediately before the February 7, 1986 election
through the intercession of th eformer First Lady, Mrs. Imelda Marcos.
The GSIS is a trustee of contributions from the government and its employees and
the administrator of various insurance programs for the benefit of the latter.
Undeniably, its funds assume a public character. More particularly, Secs. 5(b) and 46
of P.D. 1146, as amended (the Revised Government Service Insurance Act of 1977),
provide for annual appropriations to pay the contributions, premiums, interest and
other amounts payable to GSIS by the government, as employer, as well as the
obligations which the Republic of the Philippines assumes or guarantees to pay.
Considering the nature of its funds, the GSIS is expected to manage its resources
with utmost prudence and in strict compliance with the pertinent laws or rules and
regulations. Thus, one of the reasons that prompted the revision of the old GSIS law
(C.A. No. 186, as amended) was the necessity "to preserve at all times the actuarial
solvency of the funds administered by the System" [Second Whereas Clause, P.D.
No. 1146.] Consequently, as respondent himself admits, the GSIS "is not supposed to
grant 'clean loans.'" [Comment, p. 8.] It is therefore the legitimate concern of the
public to ensure that these funds are managed properly with the end in view of
maximizing the benefits that accrue to the insured government employees. Moreover,
the supposed borrowers were Members of the defunct Batasang Pambansa who
themselves appropriated funds for the GSIS and were therefore expected to be the
first to see to it that the GSIS performed its tasks with the greatest degree of fidelity
and that an its transactions were above board.
In sum, the public nature of the loanable funds of the GSIS and the public office held
by the alleged borrowers make the information sought clearly a matter of public
interest and concern.
A second requisite must be met before the right to information may be enforced
through mandamus proceedings, viz., that the information sought must not be among
those excluded by law.
Respondent maintains that a confidential relationship exists between the GSIS and its
borrowers. It is argued that a policy of confidentiality restricts the indiscriminate
dissemination of information.
Yet, respondent has failed to cite any law granting the GSIS the privilege of
confidentiality as regards the documents subject of this petition. His position is
apparently based merely on considerations of policy. The judiciary does not settle
policy issues. The Court can only declare what the law is, and not what the law
should be. Under our system of government, policy issues are within the domain of
the political branches of the government, and of the people themselves as the
repository of all State power.
Respondent however contends that in view of the right to privacy which is equally
protected by the Constitution and by existing laws, the documents evidencing loan
transactions of the GSIS must be deemed outside the ambit of the right to
information.
There can be no doubt that right to privacy is constitutionally protected. In the
landmark case of Morfe v. Mutuc [130 Phil. 415 (1968), 22 SCRA 424], this Court,
speaking through then Mr. Justice Fernando, stated:
... The right to privacy as such is accorded recognition independently of its
identification with liberty; in itself, it is fully deserving of constitutional protection. The
language of Prof. Emerson is particularly apt: "The concept of limited government has
always included the idea that governmental powers stop short of certain intrusions
into the personal life of the citizen. This is indeed one of the basic distinctions
between absolute and limited government. UItimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of the absolute. state, In contrast, a
system of limited government safeguards a private sector, which belongs to the
individual, firmly distinguishing it from the public sector, which the state can control.
Protection of this private sector protection, in other words, of the dignity and
integrity of the individual has become increasingly important as modem society has
developed. All the forces of technological age industrialization, urbanization, and
organization operate to narrow the area of privacy and facilitate intrusion into it. In
modern terms, the capacity to maintain and support this enclave of private life marks
the difference between a democratic and a totalitarian society." [at pp. 444-445.]
When the information requested from the government intrudes into the privacy of a
citizen, a potential conflict between the rights to information and to privacy may arise.
However, the competing interests of these rights need not be resolved in this case.
Apparent from the above-quoted statement of the Court in Morfe is that the right to
privacy belongs to the individual in his private capacity, and not to public and
governmental agencies like the GSIS. Moreover, the right cannot be invoked by
juridical entities like the GSIS. As held in the case of Vassar College v. Loose Wills
Biscuit Co. [197 F. 982 (1912)], a corporation has no right of privacy in its name since
the entire basis of the right to privacy is an injury to the feelings and sensibilities of
the party and a corporation would have no such ground for relief.
Neither can the GSIS through its General Manager, the respondent, invoke the right
to privacy of its borrowers. The right is purely personal in nature [Cf. Atkinson v. John
Doherty & Co., 121 Mich 372, 80 N.W. 285, 46 L.RA. 219 (1899); Schuyler v. Curtis,
147 N.Y. 434, 42 N.E. 22, 31 L.R.A. 286 (1895)), and hence may be invoked only by
the person whose privacy is claimed to be violated.
It may be observed, however, that in the instant case, the concerned borrowers
themselves may not succeed if they choose to invoke their right to privacy,
considering the public offices they were holding at the time the loans were alleged to
have been granted. It cannot be denied that because of the interest they generate
and their newsworthiness, public figures, most especially those holding responsible
positions in government, enjoy a more limited right to privacy as compared to ordinary
individuals, their actions being subject to closer public scrutiny [Cf.Ayer Productions
Pty. Ltd. v. Capulong, G.R. Nos. 82380 and 82398, April 29, 1988; See also Cohen v.
Marx, 211 P. 2d 321 (1949).]
Respondent next asserts that the documents evidencing the loan transactions of the
GSIS are private in nature and hence, are not covered by the Constitutional right to
information on matters of public concern which guarantees "(a)ccess
to official records, and to documents, and papers pertaining to official acts,
transactions, or decisions" only.
It is argued that the records of the GSIS, a government corporation performing
proprietary functions, are outside the coverage of the people's right of access
to official records.
It is further contended that since the loan function of the GSIS is merely incidental to
its insurance function, then its loan transactions are not covered by the constitutional
policy of full public disclosure and the right to information which is applicable only to
"official" transactions.
First of all, the "constituent ministrant" dichotomy characterizing government
function has long been repudiated. In ACCFA v. Confederation of Unions and
Government Corporations and Offices (G.R. Nos. L-21484 and L-23605, November
29, 1969, 30 SCRA 6441, the Court said that the government, whether carrying out its
sovereign attributes or running some business, discharges the same function of
service to the people.
Consequently, that the GSIS, in granting the loans, was exercising a proprietary
function would not justify the exclusion of the transactions from the coverage and
scope of the right to information.
Moreover, the intent of the members of the Constitutional Commission of 1986, to
include government-owned and controlled corporations and transactions entered into
by them within the coverage of the State policy of fun public disclosure is manifest
from the records of the proceedings:
xxx xxx xxx
THE PRESIDING OFFICER (Mr. Colayco).
Commissioner Suarez is recognized.
MR. SUAREZ. Thank you. May I ask the Gentleman a few question?
MR. OPLE. Very gladly.
MR. SUAREZ. Thank you.
When we declare a "policy of full public disclosure of all its transactions" referring
to the transactions of the State and when we say the "State" which I suppose
would include all of the various agencies, departments, ministries and
instrumentalities of the government....
MR. OPLE. Yes, and individual public officers, Mr. Presiding Officer.
MR. SUAREZ. Including government-owned and controlled corporations.
MR. OPLE. That is correct, Mr. Presiding Officer.
MR. SUAREZ. And when we say "transactions" which should be distinguished from
contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps
leading to the consummation of the contract, or does he refer to the contract itself?
MR. OPLE. The "transactions" used here I suppose is generic and, therefore, it can
cover both steps leading to a contract, and already a consummated contract, Mr.
Presiding Officer.
MR. SUAREZ. This contemplates inclusion of negotiations leading to the
consummation of the transaction.
MR. OPLE. Yes, subject only to reasonable safeguards on the national interest.
MR. SUAREZ. Thank you. [V Record of the Constitutional Commission 24-25.]
(Emphasis supplied.)
Considering the intent of the framers of the Constitution which, though not binding
upon the Court, are nevertheless persuasive, and considering further that
government-owned and controlled corporations, whether performing proprietary or
governmental functions are accountable to the people, the Court is convinced that
transactions entered into by the GSIS, a government-controlled corporation created
by special legislation are within the ambit of the people's right to be informed pursuant
to the constitutional policy of transparency in government dealings.
In fine, petitioners are entitled to access to the documents evidencing loans granted
by the GSIS, subject to reasonable regulations that the latter may promulgate relating
to the manner and hours of examination, to the end that damage to or loss of the
records may be avoided, that undue interference with the duties of the custodian of
the records may be prevented and that the right of other persons entitled to inspect
the records may be insured [Legaspi v. Civil Service Commission, supra at p. 538,
quoting Subido v. Ozaeta, 80 Phil. 383, 387.] The petition, as to the second and third
alternative acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners,
i.e., "to furnish petitioners the list of the names of the Batasang Pambansa members
belonging to the UNIDO and PDP-Laban who were able to secure clean loans
immediately before the February 7 election thru the intercession/marginal note of the
then First Lady Imelda Marcos."
Although citizens are afforded the right to information and, pursuant thereto, are
entitled to "access to official records," the Constitution does not accord them a right to
compel custodians of official records to prepare lists, abstracts, summaries and the
like in their desire to acquire information on matters of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that the
applicant has a well-defined, clear and certain legal right to the thing demanded and
that it is the imperative duty of defendant to perform the act required. The
corresponding duty of the respondent to perform the required act must be clear and
specific [Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126 SCRA 203;
Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.] The request
of the petitioners fails to meet this standard, there being no duty on the part of
respondent to prepare the list requested.
WHEREFORE, the instant petition is hereby granted and respondent General
Manager of the Government Service Insurance System is ORDERED to allow
petitioners access to documents and records evidencing loans granted to Members of
the former Batasang Pambansa, as petitioners may specify, subject to reasonable
regulations as to the time and manner of inspection, not incompatible with this
decision, as the GSIS may deem necessary.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 92024 November 9, 1990
CONGRESSMAN ENRIQUE T. GARCIA (Second District of Bataan), petitioner,
vs.
THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND
INDUSTRY, LUZON PETROCHEMICAL CORPORATION, and PILIPINAS SHELL
CORPORATION, respondents.
Abraham C. La Vina for petitioner.
Sycip, Salazar, Hernandez & Gatmaitan for Luzon Petrochemical Corporation.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for Pilipinas Shell
Petroleum Corporation.
GUTIERREZ, JR., J.:
This is a petition to annul and set aside the decision of the Board of Investments
(BOI)/Department of Trade and Industry (DTI) approving the transfer of the site of the
proposed petrochemical plant from Bataan to Batangas and the shift of feedstock for
that plant from naphtha only to naphtha and/or liquefied petroleum gas (LPG).
This petition is a sequel to the petition in G.R. No. 88637 entitled "Congressman
Enrique T. Garcia v. the Board of Investments", September 7, 1989, where this Court
issued a decision, ordering the BOI as follows:
WHEREFORE, the petition for certiorari is granted. The Board of Investments is
ordered: (1) to publish the amended application for registration of the Bataan
Petrochemical Corporation, (2) to allow the petitioner to have access to its records on
the original and amended applications for registration, as a petrochemical
manufacturer, of the respondent Bataan Petrochemical Corporation, excluding,
however, privileged papers containing its trade secrets and other business and
financial information, and (3) to set for hearing the petitioner's opposition to the
amended application in order that he may present at such hearing all the evidence in
his possession in support of his opposition to the transfer of the site of the BPC
petrochemical plant to Batangas province. The hearing shall not exceed a period of
ten (10) days from the date fixed by the BOI, notice of which should be served by
personal service to the petitioner through counsel, at least three (3) days in advance.
The hearings may be held from day to day for a period of ten (10) days without
postponements. The petition for a writ of prohibition or preliminary injunction is
denied. No costs. (Rollo, pages 450-451)
However, acting on the petitioner's motion for partial reconsideration asking that we
rule on the import of P.D. Nos. 949 and 1803 and on the foreign investor's claim of
right of final choice of plant site, in the light of the provisions of the Constitution and
the Omnibus Investments Code of 1987, this Court on October 24, 1989, made the
observation that P.D. Nos. 949 and 1803 "do not provide that the Limay site should
be the only petrochemical zone in the country, nor prohibit the establishment of a
petrochemical plant elsewhere in the country, that the establishment of a
petrochemical plant in Batangas does not violate P.D. No. 949 and P.D. No. 1803.
Our resolution skirted the issue of whether the investor given the initial inducements
and other circumstances surrounding its first choice of plant site may change it simply
because it has the final choice on the matter. The Court merely ruled that the
petitioner appears to have lost interest in the case by his failure to appear at the
hearing that was set by the BOI after receipt of the decision, so he may be deemed to
have waived the fruit of the judgment. On this ground, the motion for partial
reconsideration was denied.
A motion for reconsideration of said resolution was filed by the petitioner asking that
we resolve the basic issue of whether or not the foreign investor has the right of final
choice of plant site; that the non-attendance of the petitioner at the hearing was
because the decision was not yet final and executory; and that the petitioner had not
therefor waived the right to a hearing before the BOI.
In the Court's resolution dated January 17, 1990, we stated:
Does the investor have a "right of final choice" of plant site? Neither under the 1987
Constitution nor in the Omnibus Investments Code is there such a 'right
of final choice.' In the first place, the investor's choice is subject to processing and
approval or disapproval by the BOI (Art. 7, Chapter II, Omnibus Investments Code).
By submitting its application and amended application to the BOI for approval, the
investor recognizes the sovereign prerogative of our Government, through the BOI, to
approve or disapprove the same after determining whether its proposed project will
be feasible, desirable and beneficial to our country. By asking that his opposition to
the LPC's amended application be heard by the BOI, the petitioner likewise
acknowledges that the BOI, not the investor, has the last word or the "final choice" on
the matter.
Secondly, as this case has shown, even a choice that had been approved by the BOI
may not be 'final', for supervening circumstances and changes in the conditions of a
place may dictate a corresponding change in the choice of plant site in order that the
project will not fail. After all, our country will benefit only when a project succeeds, not
when it fails. (Rollo, pp. 538-539)
Nevertheless, the motion for reconsideration of the petitioner was denied.
A minority composed of Justices Melencio-Herrera, Gancayco, Sarmiento and
this ponente voted to grant the motion for reconsideration stating that the hearing set
by the BOI was premature as the decision of the Court was not yet final and
executory; that as contended by the petitioner the Court must first rule on whether or
not the investor has the right of final choice of plant site for if the ruling is in the
affirmative, the hearing would be a useless exercise; that in the October 19, 1989
resolution, the Court while upholding validity of the transfer of the plant site did not
rule on the issue of who has the final choice; that they agree with the observation of
the majority that "the investor has no final choice either under the 1987 Constitution or
in the Omnibus Investments Code and that it is the BOI who decides for the
government" and that the plea of the petitioner should be granted to give him the
chance to show the justness of his claim and to enable the BOI to give a second hard
look at the matter.
Thus, the herein petition which relies on the ruling of the Court in the resolution of
January 17, 1990 in G.R. No. 88637 that the investor has no right of final choice
under the 1987 Constitution and the Omnibus Investments Code.
Under P.D. No. 1803 dated January 16, 1981, 576 hectares of the public domain
located in Lamao, Limay, Bataan were reserved for the Petrochemical Industrial Zone
under the administration, management, and ownership of the Philippine National Oil
Company (PNOC).
The Bataan Refining Corporation (BRC) is a wholly government owned corporation,
located at Bataan. It produces 60% of the national output of naphtha.
Taiwanese investors in a petrochemical project formed the Bataan Petrochemical
Corporation (BPC) and applied with BOI for registration as a new domestic producer
of petrochemicals. Its application specified Bataan as the plant site. One of the terms
and conditions for registration of the project was the use of "naphtha cracker" and
"naphtha" as feedstock or fuel for its petrochemical plant. The petrochemical plant
was to be a joint venture with PNOC. BPC was issued a certificate of registration on
February 24, 1988 by BOI.
BPC was given pioneer status and accorded fiscal and other incentives by BOI, like:
(1) exemption from taxes on raw materials, (2) repatriation of the entire proceeds of
liquidation investments in currency originally made and at the exchange rate obtaining
at the time of repatriation; and (3) remittance of earnings on investments. As
additional incentive, the House of Representatives approved a bill introduced by the
petitioner eliminating the 48% ad valoremtax on naphtha if and when it is used as raw
materials in the petrochemical plant. (G.R. No. 88637, September 7, 1989, pp. 2-3.
Rollo, pp. 441-442)
However, in February, 1989, A.T. Chong, chairman of USI Far East Corporation, the
major investor in BPC, personally delivered to Trade Secretary Jose Concepcion a
letter dated January 25, 1989 advising him of BPC's desire to amend the original
registration certification of its project by changing the job site from Limay, Bataan, to
Batangas. The reason adduced for the transfer was the insurgency and unstable
labor situation, and the presence in Batangas of a huge liquefied petroleum gas
(LPG) depot owned by the Philippine Shell Corporation.
The petitioner vigorously opposed the proposal and no less than President Aquino
expressed her preference that the plant be established in Bataan in a conference with
the Taiwanese investors, the Secretary of National Defense and The Chief of Staff of
the Armed Forces.
Despite speeches in the Senate and House opposing the Transfer of the project to
Batangas, BPC filed on April 11, 1989 its request for approval of the amendments. Its
application is as follows: "(l) increasing the investment amount from US $220 million
to US $320 million; (2) increasing the production capacity of its naphtha cracker,
polythylene plant and polypropylene plant; (3) changing the feedstock from naphtha
only to "naphtha and/or liquefied petroleum gas;" and (4) transferring the job site from
Limay, Bataan, to Batangas. (Annex B to Petition; Rollo, p. 25)
Notwithstanding opposition from any quarters and the request of the petitioner
addressed to Secretary Concepcion to be furnished a copy of the proposed
amendment with its attachments which was denied by the BOI on May 25, 1989, BOI
approved the revision of the registration of BPC's petrochemical project. (Petition,
Annex F; Rollo, p. 32; See pp. 4 to 6, Decision in G.R. No. 88637; supra.)
BOI Vice-Chairman Tomas I. Alcantara testifying before the Committee on Ways and
Means of the Senate asserted that:
The BOI has taken a public position preferring Bataan over Batangas as the site of
the petrochemical complex, as this would provide a better distribution of industries
around the Metro Manila area. ... In advocating the choice of Bataan as the project
site for the petrochemical complex, the BOI, however, made it clear, and I would like
to repeat this that the BOI made it clear in its view that the BOI or the government for
that matter could only recomend as to where the project should be located. The BOI
recognizes and respect the principle that the final chouce is still with the proponent
who would in the final analysis provide the funding or risk capital for the
project. (Petition, P. 13; Annex D to the petition)
This position has not been denied by BOI in its pleadings in G.R. No. 88637 and in
the present petition.
Section 1, Article VIII of the 1987 Constitution provides:
SECTION 1. The judicial power shall be vested in one Supreme Court and in such
lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government.
There is before us an actual controversy whether the petrochemical plant should
remain in Bataan or should be transferred to Batangas, and whether its feedstock
originally of naphtha only should be changed to naphtha and/or liquefied petroleum
gas as the approved amended application of the BPC, now Luzon Petrochemical
Corporation (LPC), shows. And in the light of the categorical admission of the BOI
that it is the investor who has the final choice of the site and the decision on the
feedstock, whether or not it constitutes a grave abuse of discretion for the BOI to yield
to the wishes of the investor, national interest notwithstanding.
We rule that the Court has a constitutional duty to step into this controversy and
determine the paramount issue. We grant the petition.
First, Bataan was the original choice as the plant site of the BOI to which the BPC
agreed. That is why it organized itself into a corporation bearing the name Bataan.
There is available 576 hectares of public land precisely reserved as the petrochemical
zone in Limay, Bataan under P.D. No. 1803. There is no need to buy expensive real
estate for the site unlike in the proposed transfer to Batangas. The site is the result of
careful study long before any covetous interests intruded into the choice. The site is
ideal. It is not unduly constricted and allows for expansion. The respondents have not
shown nor reiterated that the alleged peace and order situation in Bataan or unstable
labor situation warrant a transfer of the plant site to Batangas. Certainly, these were
taken into account when the firm named itself Bataan Petrochemical Corporation.
Moreover, the evidence proves the contrary.
Second, the BRC, a government owned Filipino corporation, located in Bataan
produces 60% of the national output of naphtha which can be used as feedstock for
the plant in Bataan. It can provide the feedstock requirement of the plant. On the
other hand, the country is short of LPG and there is need to import the same for use
of the plant in Batangas. The local production thereof by Shell can hardly supply the
needs of the consumers for cooking purposes. Scarce dollars will be diverted,
unnecessarily, from vitally essential projects in order to feed the furnaces of the
transferred petrochemical plant.
Third, naphtha as feedstock has been exempted by law from the ad valorem tax by
the approval of Republic Act No. 6767 by President Aquino but excluding LPG from
exemption from ad valorem tax. The law was enacted specifically for the
petrochemical industry. The policy determination by both Congress and the President
is clear. Neither BOI nor a foreign investor should disregard or contravene expressed
policy by shifting the feedstock from naphtha to LPG.
Fourth, under Section 10, Article XII of the 1987 Constitution, it is the duty of the State
to "regulate and exercise authority over foreign investments within its national
jurisdiction and in accordance with its national goals and priorities." The development
of a self-reliant and independent national economy effectively controlled by Filipinos
is mandated in Section 19, Article II of the Constitution.
In Article 2 of the Omnibus Investments Code of 1987 "the sound development of the
national economy in consonance with the principles and objectives of economic
nationalism" is the set goal of government.
Fifth, with the admitted fact that the investor is raising the greater portion of the capital
for the project from local sources by way of loan which led to the so-called "petroscam
scandal", the capital requirements would be greatly minimized if LPC does not have
to buy the land for the project and its feedstock shall be limited to naphtha which is
certainly more economical, more readily available than LPG, and does not have to be
imported.
Sixth, if the plant site is maintained in Bataan, the PNOC shall be a partner in the
venture to the great benefit and advantage of the government which shall have a
participation in the management of the project instead of a firm which is a huge
multinational corporation.
In the light of all the clear advantages manifest in the plant's remaining in Bataan,
practically nothing is shown to justify the transfer to Batangas except a near-absolute
discretion given by BOI to investors not only to freely choose the site but to transfer it
from their own first choice for reasons which remain murky to say the least.
And this brings us to a prime consideration which the Court cannot rightly ignore.
Section 1, Article XII of the Constitution provides that:
xxx xxx xxx
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
xxx xxx xxx
Every provision of the Constitution on the national economy and patrimony is infused
with the spirit of national interest. The non-alienation of natural resources, the State's
full control over the development and utilization of our scarce resources, agreements
with foreigners being based on real contributions to the economic growth and general
welfare of the country and the regulation of foreign investments in accordance with
national goals and priorities are too explicit not to be noticed and understood.
A petrochemical industry is not an ordinary investment opportunity. It should not be
treated like a garment or embroidery firm, a shoe-making venture, or even an
assembler of cars or manufacturer of computer chips, where the BOI reasoning may
be accorded fuller faith and credit. The petrochemical industry is essential to the
national interest. In other ASEAN countries like Indonesia and Malaysia, the
government superintends the industry by controlling the upstream or cracker facility.
In this particular BPC venture, not only has the Government given unprecedented
favors, among them:
foreign dictation. In this case, it is not even a foreign government but an ordinary
investor whom the BOI allows to dictate what we shall do with our heritage.
WHEREFORE, the petition is hereby granted. The decision of the respondent Board
of Investments approving the amendment of the certificate of registration of the Luzon
Petrochemical Corporation on May 23, 1989 under its Resolution No. 193, Series of
1989, (Annex F to the Petition) is SET ASIDE as NULL and VOID. The original
certificate of registration of BPC' (now LPC) of February 24, 1988 with Bataan as the
plant site and naphtha as the feedstock is, therefore, ordered maintained.
SO ORDERED.
Cruz, Gancayco, Padilla, Bidin, Sarmiento and Medialdea, JJ., concur.

(1) For an initial authorized capital of only P20 million, the Central Bank gave an Fernan, C.J., Paras, JJ., took no part.
eligible relending credit or relending facility worth US $50 million and a debt to swap
arrangement for US $30 million or a total accommodation of US $80 million which at Feliciano, J., is on leave.
current exchange rates is around P2080 million.

(2) A major part of the company's capitalization shall not come from foreign sources
but from loans, initially a Pl Billion syndicated loan, to be given by both government
banks and a consortium of Philippine private banks or in common parlance, a case of
'guiniguisa sa sariling manteca.'

(3) Tax exemptions and privileges were given as part of its 'preferred pioneer status.'

(4) Loan applications of other Philippine firms will be crowded out of the Asian
Development Bank portfolio because of the petrochemical firm's massive loan
request. (Taken from the proceedings before the Senate Blue Ribbon Committee).

but through its regulatory agency, the BOI, it surrenders even the power to make a
company abide by its initial choice, a choice free from any suspicion of unscrupulous
machinations and a choice which is undoubtedly in the best interests of the Filipino
people.

The Court, therefore, holds and finds that the BOI committed a grave abuse of
discretion in approving the transfer of the petrochemical plant from Bataan to
Batangas and authorizing the change of feedstock from naphtha only to naphtha
and/or LPG for the main reason that the final say is in the investor all other
circumstances to the contrary notwithstanding. No cogent advantage to the
government has been shown by this transfer. This is a repudiation of the independent
policy of the government expressed in numerous laws and the Constitution to run its
own affairs the way it deems best for the national interest.

One can but remember the words of a great Filipino leader who in part said he would
not mind having a government run like hell by Filipinos than one subservient to
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. 92541 November 13, 1991
MA. CARMEN G. AQUINO-SARMIENTO, petitioner,
vs.
MANUEL L. MORATO (in his capacity as Chairman of the MTRCB) and the
MOVIE & TELEVISION REVIEW AND CLASSIFICATION BOARD, respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner.
Francisco Ma. Chanco for respondents.
BIDIN, J.:
At issue in this petition is the citizen's right of access to official records as guaranteed
by the constitution.
In February 1989, petitioner, herself a member of respondent Movie and Television
Review and Classification Board (MTRCB), wrote its records officer requesting that
she be allowed to examine the board's records pertaining to the voting slips
accomplished by the individual board members after a review of the movies and
television productions. It is on the basis of said slips that films are either banned, cut
or classified accordingly.
Acting on the said request, the records officer informed petitioner that she has to
secure prior clearance from respondent Manuel Morato, as chairman of MTRCB, to
gain access to the records sought to be examined.
Petitioner's request was eventually denied by respondent Morato on the ground that
whenever the members of the board sit in judgment over a film, their decisions as
reflected in the individual voting slips partake the nature of conscience votes and as
such, are purely and completely private and personal. It is the submission of
respondents that the individual voting slips is the exclusive property of the member
concerned and anybody who wants access thereto must first secure his (the
member's) consent, otherwise, a request therefor may be legally denied.
Petitioner argues, on the other hand, that the records she wishes to examine are
public in character and other than providing for reasonable conditions regulating the
manner and hours of examination, respondents Morato and the classification board
have no authority to deny any citizen seeking examination of the board's records.
On February 27, 1989, respondent Morato called an executive meeting of the MTRCB
to discuss, among others, the issue raised by petitioner. In said meeting, seventeen
(17) members of the board voted to declare their individual voting records as
classified documents which rendered the same inaccessible to the public without
clearance from the chairman. Thereafter, respondent Morato denied petitioner's
request to examine the voting slips. However, it was only much later, i.e., on July 27,
1989, that respondent Board issued Resolution No. 10-89 which declared as
confidential, private and personal, the decision of the reviewing committee and the
voting slips of the members.
Petitioner brought the matter to the attention of the Executive Secretary, which in turn,
referred the same to respondent Morato for appropriate comment.
Another incident which gave rise to this petition occurred in a board meeting held on
June 22, 1989. In that meeting, respondent Morato told the board that he has ordered
some deletions on the movie "Mahirap ang Magmahal" notwithstanding the fact that
said movie was earlier approved for screening by the Board with classification "R-18
without cuts". He explained that his power to unilaterally change the decision of the
Review Committee is authorized by virtue of MTRCB Resolution No. 88-1-25 (dated
June 22,1988) which allows the chairman of the board "to downgrade a film (already)
reviewed especially those which are controversial."
Petitioner informed the Board, however, that respondent Morato possesses no
authority to unilaterally reverse a decision of the review committee under PD 1986
(Creating the Movie and Television Review and Classification Board).
After the matter was referred by the Deputy Executive Secretary to the Justice
Secretary, the latter opined that PD 1896 does not vest respondent Morato any
authority to unilaterally reverse the decision of the review committee but declined to
comment on the constitutionality of Res. No. 10-89 on the ground that the resolution
thereof is a judicial prerogative (Rollo, pp. 38-42).
The Justice Secretary's opinion to the contrary notwithstanding, respondent Morato
opted to ignore it.
Hence, this petition anchored on the following:
A. MORATO AND THE MTRCB BY APPROVING AND ENFORCING RESOLUTION
NO. 10-89 ACTED WITH GRAVE ABUSE OF DISCRETION TANTAMOUNT TO
LACK OF JURISDICTION BECAUSE THE SAME VIOLATES ARTICLE III SECTION
7 OF THE 1987 CONSTITUTION.
B. MTRCB RESOLUTION NO. 88-1-25 HAS NO LEGAL BASIS AND CONSTITUTES
AN UNLAWFUL DELEGATION OF DISCRETIONARY POWERS.
C. MORATO AND THE MTRCB BY REFUSING TO ABIDE BY OPINION NO. 1
SERIES OF 1990 OF THE SECRETARY OF JUSTICE AND BY INSISTING ON THE
VALIDITY OF RESOLUTION NO. 88-1-25 ACTED CAPRICIOUSLY, ARBITRARILY,
IN BAD FAITH, IN EXCESS OF THEIR JURISDICTION, AND WITH GRAVE ABUSE
OF DISCRETION.
Petitioner therefore seeks the nullification of 1) MTRCB Resolution No. 88-1-25 which
allows the Chairman of the Board to unilaterally downgrade a film (already) reviewed
especially those which are controversial and 2) MTRCB RESOLUTION No. 10-89
(dated July 27, 1989) declaring as strictly confidential, private and personal a) the
decision of a reviewing committee which previously reviewed a certain film and b) the
individual voting slips of the members of the committee that reviewed the film.
Respondents argue at the outset that the instant petition should be dismissed outright
for having failed to comply with the doctrine of exhaustion of administrative remedies.
We disagree. The doctrine of exhaustion of administrate remedies simply provides
that before a party litigant is allowed resort to the courts, he is required to comply with
all administrative remedies available under the law (Rosales v. Court of Appeals, 165
SCRA 344 [1988]). The rationale behind this salutory principle is that for reasons of
practical considerations, comity and convenience, the courts of law will not entertain a
case until all the available administrative remedies provided by law have been
resorted to and the appropriate authorities have been given ample opportunity to act
and to correct the errors committed in the administrative level. If the error is rectified,
judicial intervention would then be unnecessary.
Nonetheless, the doctrine of exhaustion of administrative remedies is not absolute.
The applicability of the principle admits of certain exceptions, such as: 1) when no
administrative review is provided by law; 2) when the only question involved is one of
law (Valmonte v. Valmonte, 170 SCRA 256 [1989], citing Aguilar v. Valencia, 40
SCRA 210 [1971]; Malabanan v. Ramento, 129 SCRA 359 [1984]; Bagatsing v.
Ramirez, 74 SCRA 306; Del Mar v. Philippine Veterans Administration, 51 SCRA 340
[1973]; Pascual v. Provincial Board, 106 Phil. 466 [1959]; 3) where the party invoking
the doctrine is guilty of estoppel (Vda. de Tan v. Veterans' Backpay Commission
[1969]; 4) where the challenged administrative action is patently illegal, arbitrary and
oppressive (Azur v. Provincial Board, 27 SCRA 50 [1969]; National Development Co.
v. Collector of Customs of Manila, 9 SCRA 429 [1963]; 5) where there is
unreasonable delay or official inaction that would greatly prejudice the complainant
(Gravador v. Mamigo, 20 SCRA 742 [1967]; Azuelo v. Arnaldo, 108 Phil. 293 [1960];
6) where to exhaust administrative review is impractical and unreasonable (Cipriano
v. Marcelino, 43 SCRA 291); and 7) where the rule of qualified political agency
applies (Demaisip v. Court of Appeals, 106 Phil. 237 [1906]).
The issue raised in the instant petition is one of law, hence the doctrine of non-
exhaustion of administrative remedy relied upon by respondents is inapplicable and
cannot be given any effect. At any rate, records are replete with events pointing to the
fact that petitioner adhered to the administrative processes in the disposition of the
assailed resolutions of public respondents prior to filing the instant petition by, among
others, writing the Executive Secretary and bringing the matter to the attention of the
Office of the President (Rollo, pp. 145-147). Respondents' claim that petitioner failed
to exhaust administrative remedies must therefore fail.
Having disposed of the procedural objection raised by respondents, We now proceed
to resolve the issues raised by petitioner. In this regard, We find respondents' refusal
to allow petitioner to examine the records of respondent MTRCB, pertaining to the
decisions of the review committee as well as the individual voting slips of its
members, as violative of petitioner's constitutional right of access to public records.
More specifically, Sec. 7, Art. III of the Constitution provides that:
The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law. (emphasis supplied)
As We held in Legaspi v. Civil Service Commission (150 SCRA 530 [1987]), this
constitutional provision is self-executory and supplies "the rules by means of which
the right to information may be enjoyed (Cooley, A Treatise on Constitutional
Limitations 167 [1927]) by guaranteeing the right and mandating the duty to afford
access to sources of information. Hence, the fundamental right therein recognized
may be asserted by the people upon the ratification of the constitution without need
for any ancillary act of the Legislature (Id. at 165). What may be provided for by the
Legislature are reasonable conditions and limitations upon the access to be afforded
which must, of necessity, be consistent with the declared State Policy of full public
disclosure of all transactions involving public interest (Constitution, Art. II, Sec. 28)."
(See also Taada v. Tuvera, 136 SCRA 27 [1985]; Valmonte v. Belmonte, Jr., 170
SCRA 256 [1989]).
Respondents contend, however, that what is rendered by the members of the board
in reviewing films and reflected in their individual voting slip is their individual vote of
conscience on the motion picture or television program and as such, makes the
individual voting slip purely private and personal; an exclusive property of the member
concerned.
The term private has been defined as "belonging to or concerning, an individual
person, company, or interest"; whereas, public means "pertaining to, or belonging to,
or affecting a nation, state, or community at large" (People v. Powell, 274 NW 372
[1937]). May the decisions of respondent Board and the individual members
concerned, arrived at in an official capacity, be considered private? Certainly not. As
may be gleaned from the decree (PD 1986) creating the respondent classification
board, there is no doubt that its very existence is public is character; it is an office
created to serve public interest. It being the case, respondents can lay no valid claim
to privacy. The right to privacy belongs to the individual acting in his private capacity
and not to a governmental agency or officers tasked with, and acting in, the discharge
of public duties (See Valmonte v. Belmonte, Jr., supra.) There can be no invasion of
privacy in the case at bar since what is sought to be divulged is a product of action
undertaken in the course of performing official functions. To declare otherwise would
be to clothe every public official with an impregnable mantle of protection against
public scrutiny for their official acts.
Further, the decisions of the Board and the individual voting slips accomplished by
the members concerned are acts made pursuant to their official functions, and as
such, are neither personal nor private in nature but rather public in character. They
are, therefore, public records access to which is guaranteed to the citizenry by no less
than the fundamental law of the land. Being a public right, the exercise thereof cannot
be made contingent on the discretion, nay, whim and caprice, of the agency charged
with the custody of the official records sought to be examined. The constitutional
recognition of the citizen's right of access to official records cannot be made
dependent upon the consent of the members of the board concerned, otherwise, the
said right would be rendered nugatory. As stated by this Court in Subido v.
Ozaeta (80 Phil. 383 [1948]):
Except, perhaps when it is clear that the purpose of the examinations is unlawful, or
sheer, idle curiosity, we do not believe it is the duty under the law of registration
officers to concern themselves with the motives, reasons, and objects of the person
seeking access to the records. It is not their prerogative to see that the information
which the records contain is not flaunted before public gaze, or that scandal is not
made of it. If it be wrong to publish the contents of the records, it is the legislature and
not the officials having custody thereof which is called upon to devise a
remedy. (emphasis supplied)
It is significant to point out that this Court in the 1948 case of Subido v. Ozaeta,
supra, upheld the right to information based on the statutory right then provided in
Sec. 56 of the Land Registration Act (Act 496, as amended). Consequently, We see
no cogent reason why said right, now constitutionalized, should be given less efficacy
and primacy than what the fundament law mandates.
The Court is not unaware of RA 6713 (Code of Conduct and Ethical Standards for
Public Officials and Employees) which provides, among others, certain exceptions as
regards the availability of official records or documents to the requesting public, e.g.,
closed door Cabinet sessions and deliberations of this Court. Suffice it to state,
however, that the exceptions therein enumerated find no application in the case at
bar. Petitioner request is not concerned with the deliberations of respondent Board
but with its documents or records made after a decision or order has been rendered.
Neither will the examination involve disclosure of trade secrets or matters pertaining
to national security which would otherwise limit the right of access to official records
(See Legaspi v. Civil Service Commission, supra).
We are likewise not impressed with the proposition advanced by respondents that
respondent Morato is empowered by PD 1986 to unilaterally downgrade or upgrade a
film reviewed especially those which are controversial. The pertinent provisions of
said decree provides:
Sec 4. Decision. The decision of the BOARD either approving or disapproving for
exhibition in the Philippines a motion picture, television program, still and other
pictorial advertisement submitted to it for examination and preview must be rendered
within a period of ten (10) days which shall be counted from the date of receipt by the
BOARD of an application for the purpose . . .
For each review session, the Chairman of the Board shall designate a sub-committee
composed of at least three BOARD members to undertake the work of review. Any
disapproval or deletion must be approved by a majority of the sub-committee
members so designated. After receipt of the written decision of the sub-committee, a
motion for reconsideration in writing may be made, upon which the Chairman of the
Board shall designate a sub-committee of five BOARD members to undertake a
second review session, whose decision on behalf of the Board shall be rendered
through a majority of the sub-committee members so designated and present at the
second review session. This second review session shall be presided over by the
Chairman, or the Vice-Chairman. The decision of the BOARD in the second review
session shall be rendered within five (5) days from the date of receipt of the motion
for reconsideration.
Every decision of the BOARD disapproving a motion picture, television program or
publicity material for exhibition in the Philippines must be in writing, and shall state the
reasons or grounds for such disapproval. No film or motion picture intended for
exhibition at the moviehouses or theaters or on television shall be disapproved by
reason of its topic, theme or subject matter, but upon the merits of each picture or
program considered in its entirety.
The second decision of the BOARD shall be final, with the exception of a decision
disapproving or prohibiting a motion picture or television program in its entirety which
shall be appealable to the President of the Philippines, who may himself decide the
appeal, or be assisted either by an ad hoe committee he may create or by the
Appeals Committee herein created.
An Appeals Committee in the Office of the President of the Philippines is hereby
created composed of a Chairman and four (4) members to be appointed by the
President of the Philippines, which shall submit its recommendation to the President.
The Office of the Presidential Assistant for Legal Affairs shall serve as the Secretariat
of the Appeals Committee.
The decision of the President of the Philippines on any appealed matter shall be final.
Implementing Rules and Regulations
Sec 11. Review by Sub-Committee of Three. a) A proper application having been
filed, the Chairman of the Board shall, as the exigencies of the service may permit,
designate a Sub-Committee of at least three Board Members who shall meet, with
notice to the applicant, within ten days from receipt of the completed application. The
Sub-Committee shall then preview the motion picture subject of the application.
b) Immediately after the preview, the applicant or his representative shall withdraw to
await the results of the deliberation of the Sub-Committee. After reaching a decision,
the Sub-Committee shall summon the applicant or his representative and inform him
of its decision giving him an opportunity either to request reconsideration or to offer
certain cuts or deletions in exchange for a better classification. The decision shall be
in writing, stating, in case of disapproval of the film or denial of the classification rating
desired or both, the reason or reasons for such disapproval or denial and the
classification considered by the Sub-Committee member dissenting from the majority
opinion may express his dissent in writing.
c) The decision including the dissenting opinion, if any, shall immediately be
submitted to the Chairman of the Board for transmission to the applicant.
Sec 12. Review by Sub-Committee of Five. Within five days from receipt of a copy
of the decision of the Sub-Committee referred to in the preceding section, the
applicant may file a motion for reconsideration in writing of that decision. On receipt of
the motion, the Chairman of the Board shall designate a Sub-Committee of Five
Board Members which shall consider the motion and, within five days of receipt of
such motion, conduct a second preview of the film. The review shall, to the extent
applicable, follow the same procedure provided in the preceding section.
Sec 13. Reclassification. An applicant desiring a change in the classification rating
given his film by either the Sub-Committee of Three? or Committee of Five mentioned
in the immediately preceeding two sections may re-edit such film and apply anew with
the Board for its review and reclassification.
Sec 14. Appeal. The decision of the Committee of Five Board Members in the
second review shall be final, with the exception of a decision disapproving or
prohibiting a motion picture in its entirety which shall be appealable to the President
of the Philippines who may himself decide the appeal or refer it to the Appeals
Committee in the Office of the President for adjudication.
On the other hand, the powers and functions of the MTRCB Chairman are found in
Section 5 of the same decree as follows:
Sec. 5. Executive Officer. The Chairman of the BOARD shall be the Chief
Executive Officer of the BOARD. He shall exercise the following functions, powers
and duties:
(a) Execute, implement and enforce the decisions, orders, awards, rules and
regulations issued by the BOARD;
(b) Direct and supervise the operations and the internal affairs of the BOARD;
(c) Establish the internal organization and administrative procedures of the BOARD,
and recommend to the BOARD the appointment of the necessary administrative and
subordinate personnel; and
(d) Exercise such other powers and functions and perform such duties as are not
specifically lodged in the BOARD.
It is at once apparent from a reading of the above provisions of PD 1986 that
respondent Morato, as Chairman of the MTRCB, is not vested with any authority to
reverse or overrule by himself alone a decision rendered by a committee which
conducted a review of motion pictures or television programs.
The power to classify motion pictures into categories such as "General Patronage" or
"For Adults Only" is vested with the respondent Board itself and not with the
Chairman thereof (Sec. 3 [e], PD 1986). As Chief Executive Officer, respondent
Morato's function as Chairman of the Board calls for the implementation and
execution, not modification or reversal, of the decisions or orders of the latter (Sec. 5
[a], Ibid.). The power of classification having been reposed by law exclusively with the
respondent Board, it has no choice but to exercise the same as mandated by law, i.e.,
as a collegial body, and not transfer it elsewhere or discharge said power through the
intervening mind of another. Delegata potestas non potest delegari a delegated
power cannot be delegated. And since the act of classification involves an exercise of
the Board's discretionary power with more reason the Board cannot, by way of the
assailed resolution, delegate said power for it is an established rule in administrative
law that discretionary authority cannot be a subject of delegation.
WHEREFORE, the instant petition is GRANTED. Resolution Nos. 10-89 and 88-1-25
issued by the respondent Board are hereby declared null and void.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Padilla, Medialdea, Regalado and Davide, Jr., JJ., concur.
Grio-Aquino and Romero, JJ., took no part.
EN BANC
[G.R. No. 133250. July 9, 2002]
FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and
AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.
DECISION
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary
injunction and a temporary restraining order. The petition seeks to compel the Public
Estates Authority (PEA for brevity) to disclose all facts on PEAs then on-going
renegotiations with Amari Coastal Bay and Development Corporation (AMARI for
brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA
from signing a new agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public
Highways, signed a contract with the Construction and Development Corporation of
the Philippines (CDCP for brevity) to reclaim certain foreshore and offshore areas of
Manila Bay. The contract also included the construction of Phases I and II of the
Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works in
consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree
No. 1084 creating PEA. PD No. 1084 tasked PEA to reclaim land, including foreshore
and submerged areas, and to develop, improve, acquire, x x x lease and sell any and
all kinds of lands.[1] On the same date, then President Marcos issued Presidential
Decree No. 1085 transferring to PEA the lands reclaimed in the foreshore and
offshore of the Manila Bay[2] under the Manila-Cavite Coastal Road and Reclamation
Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA
to amend its contract with CDCP, so that [A]ll future works in MCCRRP x x x shall be
funded and owned by PEA. Accordingly, PEA and CDCP executed a Memorandum of
Agreement dated December 29, 1981, which stated:
(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of
works on a unit price/lump sum basis for items of work to be agreed upon, subject to
price escalation, retention and other terms and conditions provided for in Presidential
Decree No. 1594. All the financing required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede
and transfer in favor of PEA, all of the rights, title, interest and participation of CDCP
in and to all the areas of land reclaimed by CDCP in the MCCRRP as of December
30, 1981 which have not yet been sold, transferred or otherwise disposed of by
CDCP as of said date, which areas consist of approximately Ninety-Nine Thousand
Four Hundred Seventy Three (99,473) square meters in the Financial Center Area
covered by land pledge No. 5 and approximately Three Million Three Hundred Eighty
Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed
areas at varying elevations above Mean Low Water Level located outside the
Financial Center Area and the First Neighborhood Unit.[3]
On January 19, 1988, then President Corazon C. Aquino issued Special Patent No.
3517, granting and transferring to PEA the parcels of land so reclaimed under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total
area of one million nine hundred fifteen thousand eight hundred ninety four
(1,915,894) square meters. Subsequently, on April 9, 1988, the Register of Deeds of
the Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311,
and 7312, in the name of PEA, covering the three reclaimed islands known as the
Freedom Islands located at the southern portion of the Manila-Cavite Coastal Road,
Paraaque City. The Freedom Islands have a total land area of One Million Five
Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square
meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA for brevity) with
AMARI, a private corporation, to develop the Freedom Islands. The JVA also required
the reclamation of an additional 250 hectares of submerged areas surrounding these
islands to complete the configuration in the Master Development Plan of the Southern
Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA through
negotiation without public bidding.[4] On April 28, 1995, the Board of Directors of PEA,
in its Resolution No. 1245, confirmed the JVA. [5] On June 8, 1995, then President
Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the
JVA.[6]
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege
speech in the Senate and denounced the JVA as the grandmother of all scams. As a
result, the Senate Committee on Government Corporations and Public Enterprises,
and the Committee on Accountability of Public Officers and Investigations, conducted
a joint investigation. The Senate Committees reported the results of their investigation
in Senate Committee Report No. 560 dated September 16, 1997. [7] Among the
conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to
AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself
is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential
Administrative Order No. 365 creating a Legal Task Force to conduct a study on the
legality of the JVA in view of Senate Committee Report No. 560. The members of the
Legal Task Force were the Secretary of Justice,[8] the Chief Presidential Legal
Counsel,[9] and the Government Corporate Counsel.[10] The Legal Task Force upheld
the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.[11]
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that
there were on-going renegotiations between PEA and AMARI under an order issued
by then President Fidel V. Ramos. According to these reports, PEA Director Nestor
Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed
the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition
with Application for the Issuance of a Temporary Restraining Order and Preliminary
Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The Court
dismissed the petition for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case before the proper court. [12]
On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer,
filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order. Petitioner contends the
government stands to lose billions of pesos in the sale by PEA of the reclaimed lands
to AMARI. Petitioner prays that PEA publicly disclose the terms of any renegotiation
of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987
Constitution on the right of the people to information on matters of public
concern. Petitioner assails the sale to AMARI of lands of the public domain as a
blatant violation of Section 3, Article XII of the 1987 Constitution prohibiting the sale of
alienable lands of the public domain to private corporations. Finally, petitioner asserts
that he seeks to enjoin the loss of billions of pesos in properties of the State that are
of public dominion.
After several motions for extension of time,[13] PEA and AMARI filed their Comments
on October 19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28,
1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of
the renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining
order; and (c) to set the case for hearing on oral argument. Petitioner filed a
Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the Court
denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and
required the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement
(Amended JVA, for brevity). On May 28, 1999, the Office of the President under the
administration of then President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner
now prays that on constitutional and statutory grounds the renegotiated contract be
declared null and void.[14]
The Issues
The issues raised by petitioner, PEA[15] and AMARI[16] are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE
MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE
THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE
OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Courts Ruling
First issue: whether the principal reliefs prayed for in the petition are moot and
academic because of subsequent events.
The petition prays that PEA publicly disclose the terms and conditions of the on-going
negotiations for a new agreement. The petition also prays that the Court enjoin PEA
from privately entering into, perfecting and/or executing any new agreement with
AMARI.
PEA and AMARI claim the petition is now moot and academic because AMARI
furnished petitioner on June 21, 1999 a copy of the signed Amended JVA containing
the terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfied
petitioners prayer for a public disclosure of the renegotiations. Likewise, petitioners
prayer to enjoin the signing of the Amended JVA is now moot because PEA and
AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the
Office of the President has approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by
simply fast-tracking the signing and approval of the Amended JVA before the Court
could act on the issue. Presidential approval does not resolve the constitutional issue
or remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by
the President cannot operate to moot the petition and divest the Court of its
jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to
enjoin the signing of the Amended JVA on constitutional grounds necessarily includes
preventing its implementation if in the meantime PEA and AMARI have signed one in
violation of the Constitution. Petitioners principal basis in assailing the renegotiation of
the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private corporations. If the
Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its
implementation, and if already implemented, to annul the effects of such
unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks
to transfer title and ownership to 367.5 hectares of reclaimed lands and
submerged areas of Manila Bay to a single private corporation. It now becomes
more compelling for the Court to resolve the issue to insure the government itself
does not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the
instant case, if the Amended JVA runs counter to the Constitution, the Court can still
prevent the transfer of title and ownership of alienable lands of the public domain in
the name of AMARI. Even in cases where supervening events had made the cases
moot, the Court did not hesitate to resolve the legal or constitutional issues raised to
formulate controlling principles to guide the bench, bar, and the public. [17]
Also, the instant petition is a case of first impression. All previous decisions of the
Court involving Section 3, Article XII of the 1987 Constitution, or its counterpart
provision in the 1973 Constitution,[18] covered agricultural lands sold to private
corporations which acquired the lands from private parties. The transferors of the
private corporations claimed or could claim the right to judicial confirmation of their
imperfect titles[19] under Title II of Commonwealth Act. 141 (CA No. 141 for
brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation,
reclaimed lands and submerged areas for non-agricultural purposes
by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141. Certain
undertakings by AMARI under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation of their titles
because the lands covered by the Amended JVA are newly reclaimed or still to be
reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive
and notorious occupation of agricultural lands of the public domain for at least thirty
years since June 12, 1945 or earlier. Besides, the deadline for filing applications for
judicial confirmation of imperfect title expired on December 31, 1987.[20]
Lastly, there is a need to resolve immediately the constitutional issue raised in this
petition because of the possible transfer at any time by PEA to AMARI of title and
ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is
obligated to transfer to AMARI the latters seventy percent proportionate share in the
reclaimed areas as the reclamation progresses. The Amended JVA even allows
AMARI to mortgage at any time the entire reclaimed area to raise financing for the
reclamation project.[21]
Second issue: whether the petition merits dismissal for failing to observe the
principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief
directly from the Court. The principle of hierarchy of courts applies generally to cases
involving factual questions. As it is not a trier of facts, the Court cannot entertain
cases involving factual issues. The instant case, however, raises constitutional issues
of transcendental importance to the public.[22] The Court can resolve this case without
determining any factual issue related to the case. Also, the instant case is a petition
for mandamus which falls under the originaljurisdiction of the Court under Section 5,
Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the
instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of
administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose
publicly certain information without first asking PEA the needed information. PEA
claims petitioners direct resort to the Court violates the principle of exhaustion of
administrative remedies. It also violates the rule that mandamus may issue only if
there is no other plain, speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera[23] where the Court granted
the petition for mandamus even if the petitioners there did not initially demand from
the Office of the President the publication of the presidential decrees. PEA points out
that in Taada, the Executive Department had an affirmative statutory duty under
Article 2 of the Civil Code[24] and Section 1 of Commonwealth Act No. 638[25] to
publish the presidential decrees. There was, therefore, no need for the petitioners
in Taada to make an initial demand from the Office of the President. In the instant
case, PEA claims it has no affirmative statutory duty to disclose publicly information
about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the
principle of exhaustion of administrative remedies to the instant case in view of the
failure of petitioner here to demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a
government corporation. Under Section 79 of the Government Auditing Code,[26]2 the
disposition of government lands to private parties requires public bidding. PEA was
under a positive legal duty to disclose to the public the terms and conditions
for the sale of its lands. The law obligated PEA to make this public disclosure even
without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of
a negotiated contract, not of a public bidding. Considering that PEA had an
affirmative statutory duty to make the public disclosure, and was even in breach of
this legal duty, petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely legal or
constitutional question.[27] The principal issue in the instant case is the capacity of
AMARI to acquire lands held by PEA in view of the constitutional ban prohibiting the
alienation of lands of the public domain to private corporations. We rule that the
principle of exhaustion of administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to
enforce his constitutional right to information without a showing that PEA refused to
perform an affirmative duty imposed on PEA by the Constitution. PEA also claims that
petitioner has not shown that he will suffer any concrete injury because of the signing
or implementation of the Amended JVA. Thus, there is no actual controversy requiring
the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayers suit because the petition seeks to
compel PEA to comply with its constitutional duties. There are two constitutional
issues involved here. First is the right of citizens to information on matters of public
concern. Second is the application of a constitutional provision intended to insure the
equitable distribution of alienable lands of the public domain among Filipino
citizens. The thrust of the first issue is to compel PEA to disclose publicly information
on the sale of government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second
issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the
public domain in violation of the Constitution, compelling PEA to comply with a
constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the
public. In Chavez v. PCGG,[28] the Court upheld the right of a citizen to bring a
taxpayers suit on matters of transcendental importance to the public, thus -
Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of transcendental importance to the public. He asserts that
ordinary taxpayers have a right to initiate and prosecute actions questioning the
validity of acts or orders of government agencies or instrumentalities, if the issues
raised are of paramount public interest, and if they immediately affect the social,
economic and moral well being of the people.
Moreover, the mere fact that he is a citizen satisfies the requirement of personal
interest, when the proceeding involves the assertion of a public right, such as in this
case. He invokes several decisions of this Court which have set aside the procedural
matter of locus standi, when the subject of the case involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue concerns a public right
and the object of mandamus is to obtain the enforcement of a public duty, the people
are regarded as the real parties in interest; and because it is sufficient that petitioner
is a citizen and as such is interested in the execution of the laws, he need not show
that he has any legal or special interest in the result of the action. In the aforesaid
case, the petitioners sought to enforce their right to be informed on matters of public
concern, a right then recognized in Section 6, Article IV of the 1973 Constitution, in
connection with the rule that laws in order to be valid and enforceable must be
published in the Official Gazette or otherwise effectively promulgated. In ruling for the
petitioners' legal standing, the Court declared that the right they sought to be enforced
is a public right recognized by no less than the fundamental law of the land.
Legaspi v. Civil Service Commission, while reiterating Taada, further declared that
when a mandamus proceeding involves the assertion of a public right, the
requirement of personal interest is satisfied by the mere fact that petitioner is a citizen
and, therefore, part of the general 'public' which possesses the right.
Further, in Albano v. Reyes, we said that while expenditure of public funds may not
have been involved under the questioned contract for the development, management
and operation of the Manila International Container Terminal, public interest [was]
definitely involved considering the important role [of the subject contract] . . . in the
economic development of the country and the magnitude of the financial
consideration involved. We concluded that, as a consequence, the disclosure
provision in the Constitution would constitute sufficient authority for upholding the
petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to information and
access to official records, documents and papers a right guaranteed under Section 7,
Article III of the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino
citizen. Because of the satisfaction of the two basic requisites laid down by decisional
law to sustain petitioner's legal standing, i.e. (1) the enforcement of a public right (2)
espoused by a Filipino citizen, we rule that the petition at bar should be allowed.
We rule that since the instant petition, brought by a citizen, involves the enforcement
of constitutional rights - to information and to the equitable diffusion of natural
resources - matters of transcendental public importance, the petitioner has the
requisite locus standi.
Fifth issue: whether the constitutional right to information includes official
information on on-going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the peoples right to information on
matters of public concern in this manner:
Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining
to official acts, transactions, or decisions, as well as to government research data
used as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law. (Emphasis supplied)
The State policy of full transparency in all transactions involving public interest
reinforces the peoples right to information on matters of public concern. This State
policy is expressed in Section 28, Article II of the Constitution, thus:
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving
public interest. (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-
making and in the operations of the government, as well as provide the people
sufficient information to exercise effectively other constitutional rights. These twin
provisions are essential to the exercise of freedom of expression. If the government
does not disclose its official acts, transactions and decisions to citizens, whatever
citizens say, even if expressed without any restraint, will be speculative and amount
to nothing. These twin provisions are also essential to hold public officials at all times
x x x accountable to the people,[29] for unless citizens have the proper information,
they cannot hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the formulation of
government policies and their effective implementation. An informed citizenry is
essential to the existence and proper functioning of any democracy. As explained by
the Court in Valmonte v. Belmonte, Jr.[30]
An essential element of these freedoms is to keep open a continuing dialogue or
process of communication between the government and the people. It is in the
interest of the State that the channels for free political discussion be maintained to the
end that the government may perceive and be responsive to the peoples will. Yet, this
open dialogue can be effective only to the extent that the citizenry is informed and
thus able to formulate its will intelligently. Only when the participants in the discussion
are aware of the issues and have access to information relating thereto can such bear
fruit.
PEA asserts, citing Chavez v. PCGG,[31] that in cases of on-going negotiations the
right to information is limited to definite propositions of the government. PEA
maintains the right does not include access to intra-agency or inter-agency
recommendations or communications during the stage when common assertions are
still in the process of being formulated or are in the exploratory stage.
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional
stage or before the closing of the transaction. To support its contention, AMARI cites
the following discussion in the 1986 Constitutional Commission:
Mr. Suarez. And when we say transactions which should be distinguished from
contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps
leading to the consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The transactions used here, I suppose is generic and therefore, it can
cover both steps leading to a contract and already a consummated contract,
Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the
consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you.[32] (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can
invoke the right. Requiring government officials to reveal their deliberations at the pre-
decisional stage will degrade the quality of decision-making in government
agencies. Government officials will hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of their discussions, putting
them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA
to disclose publicly, and information the constitutional right to information requires
PEA to release to the public. Before the consummation of the contract, PEA must, on
its own and without demand from anyone, disclose to the public matters relating to
the disposition of its property.These include the size, location, technical description
and nature of the property being disposed of, the terms and conditions of the
disposition, the parties qualified to bid, the minimum price and similar
information. PEA must prepare all these data and disclose them to the public at the
start of the disposition process, long before the consummation of the contract,
because the Government Auditing Code requires public bidding. If PEA fails to
make this disclosure, any citizen can demand from PEA this information at any time
during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being
undertaken by the bidding or review committee is not immediately accessible under
the right to information. While the evaluation or review is still on-going, there are no
official acts, transactions, or decisions on the bids or proposals. However, once the
committee makes its official recommendation, there arises a definite
proposition on the part of the government. From this moment, the publics right to
information attaches, and any citizen can access all the non-proprietary information
leading to such definite proposition. In Chavez v. PCGG,[33] the Court ruled as
follows:
Considering the intent of the framers of the Constitution, we believe that it is
incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed settlement
they have decided to take up with the ostensible owners and holders of ill-gotten
wealth. Such information, though, must pertain to definite propositions of the
government, not necessarily to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the process of
being formulated or are in the exploratory stage. There is need, of course, to observe
the same restrictions on disclosure of information in general, as discussed earlier
such as on matters involving national security, diplomatic or foreign relations,
intelligence and other classified information. (Emphasis supplied)
Contrary to AMARIs contention, the commissioners of the 1986 Constitutional
Commission understood that the right to information contemplates inclusion of
negotiations leading to the consummation of the transaction. Certainly, a
consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is
consummated, and if one is consummated, it may be too late for the public to expose
its defects.
Requiring a consummated contract will keep the public in the dark until the contract,
which may be grossly disadvantageous to the government or even illegal, becomes
a fait accompli.This negates the State policy of full transparency on matters of public
concern, a situation which the framers of the Constitution could not have
intended. Such a requirement will prevent the citizenry from participating in the public
discussion of any proposed contract, effectively truncating a basic right enshrined in
the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a
retreat by the State of its avowed policy of full disclosure of all its transactions
involving public interest.
The right covers three categories of information which are matters of public concern,
namely: (1) official records; (2) documents and papers pertaining to official acts,
transactions and decisions; and (3) government research data used in formulating
policies. The first category refers to any document that is part of the public records in
the custody of government agencies or officials. The second category refers to
documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies
or officials. The third category refers to research data, whether raw, collated or
processed, owned by the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes
evaluation reports, recommendations, legal and expert opinions, minutes of meetings,
terms of reference and other documents attached to such reports or minutes, all
relating to the JVA. However, the right to information does not compel PEA to prepare
lists, abstracts, summaries and the like relating to the renegotiation of the JVA.[34] The
right only affords access to records, documents and papers, which means the
opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also
subject to reasonable regulations to protect the integrity of the public records and to
minimize disruption to government operations, like rules specifying when and how to
conduct the inspection and copying.[35]
The right to information, however, does not extend to matters recognized as
privileged information under the separation of powers. [36] The right does not also
apply to information on military and diplomatic secrets, information affecting national
security, and information on investigations of crimes by law enforcement agencies
before the prosecution of the accused, which courts have long recognized as
confidential.[37] The right may also be subject to other limitations that Congress may
impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged
information rooted in the separation of powers. The information does not cover
Presidential conversations, correspondences, or discussions during closed-door
Cabinet meetings which, like internal deliberations of the Supreme Court and other
collegiate courts, or executive sessions of either house of Congress, [38] are
recognized as confidential. This kind of information cannot be pried open by a co-
equal branch of government. A frank exchange of exploratory ideas and
assessments, free from the glare of publicity and pressure by interested parties, is
essential to protect the independence of decision-making of those tasked to exercise
Presidential, Legislative and Judicial power.[39] This is not the situation in the instant
case.
We rule, therefore, that the constitutional right to information includes official
information on on-going negotiations before a final contract. The information,
however, must constitute definite propositions by the government and should not
cover recognized exceptions like privileged information, military and diplomatic
secrets and similar matters affecting national security and public order. [40] Congress
has also prescribed other limitations on the right to information in several
legislations.[41]
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI
of lands, reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in
the Regalian doctrine which holds that the State owns all lands and waters of the
public domain.Upon the Spanish conquest of the Philippines, ownership of all lands,
territories and possessions in the Philippines passed to the Spanish Crown. [42] The
King, as the sovereign ruler and representative of the people, acquired and owned all
lands and territories in the Philippines except those he disposed of by grant or sale to
private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting,
however, the State, in lieu of the King, as the owner of all lands and waters of the
public domain.The Regalian doctrine is the foundation of the time-honored principle of
land ownership that all lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain. [43] Article 339 of the Civil Code of
1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian
doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the
ownership and disposition of reclaimed lands in the Philippines. On May 18, 1907, the
Philippine Commission enacted Act No. 1654 which provided for the lease, but not
the sale, of reclaimed lands of the government to corporations and individuals.
Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874, the
Public Land Act, which authorized the lease, but not the sale, of reclaimed lands
of the government to corporations and individuals. On November 7, 1936, the
National Assembly passed Commonwealth Act No. 141, also known as the Public
Land Act, which authorized the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. CA No. 141 continues to this day as
the general law governing the classification and disposition of lands of the public
domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all
waters within the maritime zone of the Spanish territory belonged to the public domain
for public use.[44] The Spanish Law of Waters of 1866 allowed the reclamation of the
sea under Article 5, which provided as follows:
Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise provided
by the terms of the grant of authority.
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party
undertaking the reclamation, provided the government issued the necessary permit
and did not reserve ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar
character;
2. That belonging exclusively to the State which, without being of general public use,
is employed in some public service, or in the development of the national wealth,
such as walls, fortresses, and other works for the defense of the territory, and mines,
until granted to private individuals.
Property devoted to public use referred to property open for use by the public. In
contrast, property devoted to public service referred to property used for some
specific public service and open only to those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but
also to property not so used but employed to develop the national wealth. This
class of property constituted property of public dominion although employed for some
economic or commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of
public dominion into private property, to wit:
Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State.
This provision, however, was not self-executing. The legislature, or the executive
department pursuant to law, must declare the property no longer needed for public
use or territorial defense before the government could lease or alienate the property
to private parties.[45]
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated
the lease of reclaimed and foreshore lands. The salient provisions of this law were as
follows:
Section 1. The control and disposition of the foreshore as defined in existing law,
and the title to all Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise throughout the Philippine
Islands, shall be retained by the Government without prejudice to vested rights and
without prejudice to rights conceded to the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or public lands
made or reclaimed by the Government by dredging or filling or otherwise to be divided
into lots or blocks, with the necessary streets and alleyways located thereon, and
shall cause plats and plans of such surveys to be prepared and filed with the Bureau
of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give
notice to the public that such parts of the lands so made or reclaimed as are
not needed for public purposes will be leased for commercial and business
purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-
General may by executive order prescribe. (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands
reclaimed by the government. The Act also vested in the government control and
disposition of foreshore lands. Private parties could lease lands reclaimed by the
government only if these lands were no longer needed for public purpose. Act No.
1654 mandated public bidding in the lease of government reclaimed lands. Act No.
1654 made government reclaimed lands sui generis in that unlike other public lands
which the government could sell to private parties, these reclaimed lands were
available only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of
1866. Act No. 1654 did not prohibit private parties from reclaiming parts of the sea
under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by
private parties with government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public
Land Act.[46] The salient provisions of Act No. 2874, on reclaimed lands, were as
follows:
Sec. 6. The Governor-General, upon the recommendation of the Secretary of
Agriculture and Natural Resources, shall from time to time classify the lands of
the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable
public lands, the Governor-General, upon recommendation by the Secretary of
Agriculture and Natural Resources, shall from time to time declare what lands
are open to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral
land, shall be classified as suitable for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural purposes, and
shall be open to disposition or concession, shall be disposed of under the provisions
of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall
be disposed of to private parties by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the Secretary of Agriculture and
Natural Resources, shall declare that the same are not necessary for the public
service and are open to disposition under this chapter. The lands included in
class (d) may be disposed of by sale or lease under the provisions of this
Act. (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to classify lands of the
public domain into x x x alienable or disposable [47] lands. Section 7 of the Act
empowered the Governor-General to declare what lands are open to disposition or
concession. Section 8 of the Act limited alienable or disposable lands only to those
lands which have been officially delimited and classified.
Section 56 of Act No. 2874 stated that lands disposable under this title[48] shall be
classified as government reclaimed, foreshore and marshy lands, as well as other
lands. All these lands, however, must be suitable for residential, commercial,
industrial or other productive non-agricultural purposes. These provisions vested
upon the Governor-General the power to classify inalienable lands of the public
domain into disposable lands of the public domain. These provisions also empowered
the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well
as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public
domain classified as government reclaimed, foreshore and marshy lands shall be
disposed of to private parties by lease only and not otherwise. The Governor-
General, before allowing the lease of these lands to private parties, must formally
declare that the lands were not necessary for the public service. Act No. 2874
reiterated the State policy to lease and not to sell government reclaimed, foreshore
and marshy lands of the public domain, a policy first enunciated in 1907 in Act No.
1654. Government reclaimed, foreshore and marshy lands remained sui generis, as
the only alienable or disposable lands of the public domain that the government could
not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore
and marshy public lands for non-agricultural purposes retain their inherent potential
as areas for public service. This is the reason the government prohibited the sale, and
only allowed the lease, of these lands to private parties. The State always reserved
these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed,
foreshore and marshy lands into other non-agricultural lands under Section 56
(d). Lands falling under Section 56 (d) were the only lands for non-agricultural
purposes the government could sell to private parties. Thus, under Act No. 2874, the
government could not sell government reclaimed, foreshore and marshy lands to
private parties, unless the legislature passed a law allowing their sale.[49]
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant
to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by
private parties with government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino
people. The 1935 Constitution, in adopting the Regalian doctrine, declared in Section
1, Article XIII, that
Section 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy and
other natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines or
to corporations or associations at least sixty per centum of the capital of which is
owned by such citizens, subject to any existing right, grant, lease, or concession at
the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land,
shall not be alienated, and no license, concession, or lease for the exploitation,
development, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for another twenty-five years, except
as to water rights for irrigation, water supply, fisheries, or industrial uses other than
the development of water power, in which cases beneficial use may be the measure
and limit of the grant. (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public
agricultural lands, which were the only natural resources the State could
alienate. Thus, foreshore lands, considered part of the States natural resources,
became inalienable by constitutional fiat, available only for lease for 25 years,
renewable for another 25 years. The government could alienate foreshore lands only
after these lands were reclaimed and classified as alienable agricultural lands of the
public domain. Government reclaimed and marshy lands of the public domain, being
neither timber nor mineral lands, fell under the classification of public agricultural
lands.[50] However, government reclaimed and marshy lands, although subject to
classification as disposable public agricultural lands, could only be leased and not
sold to private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed
and marshy lands of the public domain was only a statutory prohibition and the
legislature could therefore remove such prohibition. The 1935 Constitution did not
prohibit individuals and corporations from acquiring government reclaimed and
marshy lands of the public domain that were classified as agricultural lands under
existing public land laws. Section 2, Article XIII of the 1935 Constitution provided as
follows:
Section 2. No private corporation or association may acquire, lease, or hold
public agricultural lands in excess of one thousand and twenty four hectares,
nor may any individual acquire such lands by purchase in excess of one
hundred and forty hectares, or by lease in excess of one thousand and twenty-four
hectares, or by homestead in excess of twenty-four hectares. Lands adapted to
grazing, not exceeding two thousand hectares, may be leased to an individual, private
corporation, or association. (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section
58 of Act No. 2874 to open for sale to private parties government reclaimed and
marshy lands of the public domain. On the contrary, the legislature continued the long
established State policy of retaining for the government title and ownership of
government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141,
also known as the Public Land Act, which compiled the then existing laws on lands of
the public domain. CA No. 141, as amended, remains to this day the existing
general law governing the classification and disposition of lands of the public domain
other than timber and mineral lands.[51]
Section 6 of CA No. 141 empowers the President to classify lands of the public
domain into alienable or disposable[52] lands of the public domain, which prior to such
classification are inalienable and outside the commerce of man. Section 7 of CA No.
141 authorizes the President to declare what lands are open to disposition or
concession. Section 8 of CA No. 141 states that the government can declare open for
disposition or concession only lands that are officially delimited and classified.
Sections 6, 7 and 8 of CA No. 141 read as follows:
Sec. 6. The President, upon the recommendation of the Secretary of Agriculture
and Commerce, shall from time to time classify the lands of the public domain
into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to
another,[53] for the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or
disposable public lands, the President, upon recommendation by the Secretary of
Agriculture and Commerce, shall from time to time declare what lands are open
to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited and classified and, when practicable,
surveyed, and which have not been reserved for public or quasi-public uses, nor
appropriated by the Government, nor in any manner become private property, nor
those on which a private right authorized and recognized by this Act or any other valid
law may be claimed, or which, having been reserved or appropriated, have ceased to
be so. x x x.
Thus, before the government could alienate or dispose of lands of the public domain,
the President must first officially classify these lands as alienable or disposable, and
then declare them open to disposition or concession. There must be no law reserving
these lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and
marshy lands of the public domain, are as follows:
Sec. 58. Any tract of land of the public domain which, being neither timber nor
mineral land, is intended to be used for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions of this
chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the
case may be, to any person, corporation, or association authorized to purchase or
lease public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine
shall be disposed of to private parties by lease only and not otherwise, as soon
as the President, upon recommendation by the Secretary of Agriculture, shall
declare that the same are not necessary for the public service and are open to
disposition under this chapter. The lands included in class (d) may be disposed of
by sale or lease under the provisions of this Act. (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution,
Section 58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore
and marshy disposable lands of the public domain. All these lands are intended for
residential, commercial, industrial or other non-agricultural purposes. As before,
Section 61 allowed only the lease of such lands to private parties. The government
could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or
those lands for non-agricultural purposes not classified as government reclaimed,
foreshore and marshy disposable lands of the public domain. Foreshore lands,
however, became inalienable under the 1935 Constitution which only allowed the
lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain
intended for residential, commercial, industrial or other productive purposes other
than agricultural shall be disposed of under the provisions of this chapter and
not otherwise. Under Section 10 of CA No. 141, the term disposition includes lease
of the land. Any disposition of government reclaimed, foreshore and marshy
disposable lands for non-agricultural purposes must comply with Chapter IX, Title III
of CA No. 141,[54] unless a subsequent law amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation
v. Court of Appeals,[55] Justice Reynato S. Puno summarized succinctly the law on
this matter, as follows:
Foreshore lands are lands of public dominion intended for public use. So too are
lands reclaimed by the government by dredging, filling, or other means. Act 1654
mandated that the control and disposition of the foreshore and lands under water
remained in the national government. Said law allowed only the leasing of reclaimed
land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and
lands reclaimed by the government were to be disposed of to private parties by lease
only and not otherwise. Before leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture and Natural Resources, had first to
determine that the land reclaimed was not necessary for the public service. This
requisite must have been met before the land could be disposed of. But even then,
the foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by lease. The
land remained property of the State. (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, Commonwealth Act No. 141
has remained in effect at present.
The State policy prohibiting the sale to private parties of government reclaimed,
foreshore and marshy alienable lands of the public domain, first implemented in 1907
was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. The
prohibition on the sale of foreshore lands, however, became a constitutional edict
under the 1935 Constitution. Foreshore lands became inalienable as natural
resources of the State, unless reclaimed by the government and classified as
agricultural lands of the public domain, in which case they would fall under the
classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy
disposable lands of the public domain continued to be only leased and not sold to
private parties.[56]These lands remained sui generis, as the only alienable or
disposable lands of the public domain the government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties
government reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. CA No. 141 does not authorize the
President to reclassify government reclaimed and marshy lands into other non-
agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the
only alienable or disposable lands for non-agricultural purposes that the government
could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority
before lands under Section 59 that the government previously transferred to
government units or entities could be sold to private parties. Section 60 of CA No. 141
declares that
Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of
the Secretary of Agriculture and Natural Resources, be reasonably necessary for the
purposes for which such sale or lease is requested, and shall not exceed one
hundred and forty-four hectares: Provided, however, That this limitation shall not
apply to grants, donations, or transfers made to a province, municipality or branch or
subdivision of the Government for the purposes deemed by said entities conducive to
the public interest; but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except
when authorized by Congress: x x x. (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the
legislative authority required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141
exempted government units and entities from the maximum area of public lands that
could be acquired from the State. These government units and entities should not just
turn around and sell these lands to private parties in violation of constitutional or
statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes to
government units and entities could be used to circumvent constitutional limitations
on ownership of alienable or disposable lands of the public domain. In the same
manner, such transfers could also be used to evade the statutory prohibition in CA
No. 141 on the sale of government reclaimed and marshy lands of the public domain
to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on
these lands.[57]
In case of sale or lease of disposable lands of the public domain falling under
Section 59 of CA No. 141, Sections 63 and 67 require a public bidding. Sections 63
and 67 of CA No. 141 provide as follows:
Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for
public purposes, the Director of Lands shall ask the Secretary of Agriculture and
Commerce (now the Secretary of Natural Resources) for authority to dispose of the
same. Upon receipt of such authority, the Director of Lands shall give notice by public
advertisement in the same manner as in the case of leases or sales of agricultural
public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall
be made to the highest bidder. x x x. (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or
sales of alienable or disposable lands of the public domain. [58]
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of
the Spanish Law of Waters of 1866. Private parties could still reclaim portions of the
sea with government permission. However, the reclaimed land could become
private land only if classified as alienable agricultural land of the public
domain open to disposition under CA No. 141. The 1935 Constitution prohibited the
alienation of all natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public
dominion found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of
1950 state that
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State.
Again, the government must formally declare that the property of public dominion is
no longer needed for public use or public service, before the same could be classified
as patrimonial property of the State.[59] In the case of government reclaimed and
marshy lands of the public domain, the declaration of their being disposable, as well
as the manner of their disposition, is governed by the applicable provisions of CA No.
141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public
dominion those properties of the State which, without being for public use, are
intended for public service or the development of the national wealth. Thus,
government reclaimed and marshy lands of the State, even if not employed for public
use or public service, if developed to enhance the national wealth, are classified as
property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the
Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that
Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, wildlife, and other natural
resources of the Philippines belong to the State. With the exception of agricultural,
industrial or commercial, residential, and resettlement lands of the public
domain, natural resources shall not be alienated, and no license, concession, or
lease for the exploration, development, exploitation, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years, renewable for
not more than twenty-five years, except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water power, in which
cases, beneficial use may be the measure and the limit of the grant. (Emphasis
supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the
exception of agricultural, industrial or commercial, residential, and resettlement lands
of the public domain. In contrast, the 1935 Constitution barred the alienation of all
natural resources except public agricultural lands. However, the term public
agricultural lands in the 1935 Constitution encompassed industrial, commercial,
residential and resettlement lands of the public domain.[60] If the land of public domain
were neither timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973 Constitutions,
therefore, prohibited the alienation of all natural resources except agricultural
lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to
individuals who were citizens of the Philippines. Private corporations, even if wholly
owned by Philippine citizens, were no longer allowed to acquire alienable lands of the
public domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973
Constitution declared that
Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of
land of the public domain which may be developed, held or acquired by, or leased to,
any qualified individual, corporation, or association, and the conditions therefor. No
private corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area nor may any
citizen hold such lands by lease in excess of five hundred hectares or acquire by
purchase, homestead or grant, in excess of twenty-four hectares. No private
corporation or association may hold by lease, concession, license or permit, timber or
forest lands and other timber or forest resources in excess of one hundred thousand
hectares. However, such area may be increased by the Batasang Pambansa upon
recommendation of the National Economic and Development Authority. (Emphasis
supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of
the public domain only through lease. Only individuals could now acquire alienable
lands of the public domain, and private corporations became absolutely barred
from acquiring any kind of alienable land of the public domain. The constitutional
ban extended to all kinds of alienable lands of the public domain, while the statutory
ban under CA No. 141 applied only to government reclaimed, foreshore and marshy
alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree
No. 1084 creating PEA, a wholly government owned and controlled corporation with a
special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following
purposes and powers:
Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging,
filling or other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and
sell any and all kinds of lands, buildings, estates and other forms of real property,
owned, managed, controlled and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the
efficient, economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream,
watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified. (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the
public domain. Foreshore areas are those covered and uncovered by the ebb and
flow of the tide.[61] Submerged areas are those permanently under water regardless of
the ebb and flow of the tide.[62] Foreshore and submerged areas indisputably belong
to the public domain[63] and are inalienable unless reclaimed, classified as alienable
lands open to disposition, and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable
lands of the public domain did not apply to PEA since it was then, and until today, a
fully owned government corporation. The constitutional ban applied then, as it still
applies now, only to private corporations and associations. PD No. 1084 expressly
empowers PEA to hold lands of the public domain even in excess of the area
permitted to private corporations by statute. Thus, PEA can hold title to private
lands, as well as title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the
public domain, there must be legislative authority empowering PEA to sell these
lands. This legislative authority is necessary in view of Section 60 of CA No.141,
which states
Sec. 60. x x x; but the land so granted, donated or transferred to a province,
municipality, or branch or subdivision of the Government shall not be alienated,
encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress; x x x. (Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed
foreshore and submerged alienable lands of the public domain. Nevertheless, any
legislative authority granted to PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on private corporations from
acquiring alienable lands of the public domain. Hence, such legislative authority could
only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted
the Regalian doctrine. The 1987 Constitution declares that all natural resources
are owned by the State, and except for alienable agricultural lands of the public
domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the
1987 Constitution state that
Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the State. With the exception
of agricultural lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be under the full
control and supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber,
mineral lands, and national parks. Agricultural lands of the public domain may be
further classified by law according to the uses which they may be devoted. Alienable
lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not more than five hundred
hectares, or acquire not more than twelve hectares thereof by purchase, homestead,
or grant.
Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law,
the size of lands of the public domain which may be acquired, developed, held, or
leased and the conditions therefor. (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning
private corporations from acquiring any kind of alienable land of the public
domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations
to hold alienable lands of the public domain only through lease. As in the 1935 and
1973 Constitutions, the general law governing the lease to private corporations of
reclaimed, foreshore and marshy alienable lands of the public domain is still CA No.
141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except
through lease, alienable lands of the public domain is not well understood. During the
deliberations of the 1986 Constitutional Commission, the commissioners probed the
rationale behind this ban, thus:
FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5
which says:
`No private corporation or association may hold alienable lands of the public domain
except by lease, not to exceed one thousand hectares in area.
If we recall, this provision did not exist under the 1935 Constitution, but this was
introduced in the 1973 Constitution. In effect, it prohibits private corporations from
acquiring alienable public lands. But it has not been very clear in jurisprudence
what the reason for this is. In some of the cases decided in 1982 and 1983, it was
indicated that the purpose of this is to prevent large landholdings. Is that the
intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were
instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-square
meter land where a chapel stood because the Supreme Court said it would be in
violation of this. (Emphasis supplied)
In Ayog v. Cusi,[64] the Court explained the rationale behind this constitutional ban in
this way:
Indeed, one purpose of the constitutional prohibition against purchases of public
agricultural lands by private corporations is to equitably diffuse land ownership or to
encourage owner-cultivatorship and the economic family-size farm and to prevent a
recurrence of cases like the instant case. Huge landholdings by corporations or
private persons had spawned social unrest.
However, if the constitutional intent is to prevent huge landholdings, the Constitution
could have simply limited the size of alienable lands of the public domain that
corporations could acquire. The Constitution could have followed the limitations on
individuals, who could acquire not more than 24 hectares of alienable lands of the
public domain under the 1973 Constitution, and not more than 12 hectares under the
1987 Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the
land in the name of a corporation would be more effective in preventing the break-up
of farmlands. If the farmland is registered in the name of a corporation, upon the
death of the owner, his heirs would inherit shares in the corporation instead of
subdivided parcels of the farmland. This would prevent the continuing break-up of
farmlands into smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on
individuals from acquiring more than the allowed area of alienable lands of the public
domain.Without the constitutional ban, individuals who already acquired the maximum
area of alienable lands of the public domain could easily set up corporations to
acquire more alienable public lands. An individual could own as many corporations as
his means would allow him. An individual could even hide his ownership of a
corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on
acquisition by individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer
ownership of only a limited area of alienable land of the public domain to a qualified
individual. This constitutional intent is safeguarded by the provision prohibiting
corporations from acquiring alienable lands of the public domain, since the vehicle to
circumvent the constitutional intent is removed. The available alienable public lands
are gradually decreasing in the face of an ever-growing population. The most
effective way to insure faithful adherence to this constitutional intent is to grant or sell
alienable lands of the public domain only to individuals. This, it would seem, is the
practical benefit arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas clause,
consists of three properties, namely:
1. [T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;
2. [A]nother area of 2,421,559 square meters contiguous to the three islands; and
3. [A]t AMARIs option as approved by PEA, an additional 350 hectares more or less
to regularize the configuration of the reclaimed area. [65]
PEA confirms that the Amended JVA involves the development of the Freedom
Islands and further reclamation of about 250 hectares x x x, plus an option granted to
AMARI to subsequently reclaim another 350 hectares x x x. [66]
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84
hectares of the 750-hectare reclamation project have been reclaimed, and the
rest of the 592.15 hectares are still submerged areas forming part of Manila
Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00
for PEAs actual cost in partially reclaiming the Freedom Islands. AMARI will also
complete, at its own expense, the reclamation of the Freedom Islands. AMARI will
further shoulder all the reclamation costs of all the other areas, totaling 592.15
hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70
percent and 30 percent, respectively, the total net usable area which is defined in the
Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARIs share in the net usable area, totaling 367.5 hectares, will be
issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides that
x x x, PEA shall have the duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARIs Land share based on the
Land Allocation Plan. PEA, when requested in writing by AMARI, shall then cause
the issuance and delivery of the proper certificates of title covering AMARIs
Land Share in the name of AMARI, x x x; provided, that if more than seventy
percent (70%) of the titled area at any given time pertains to AMARI, PEA shall
deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI, until
such time when a corresponding proportionate area of additional land pertaining to
PEA has been titled. (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum
of 367.5 hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI
joint venture PEAs statutory authority, rights and privileges to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that
PEA hereby contributes to the joint venture its rights and privileges to perform
Rawland Reclamation and Horizontal Development as well as own the Reclamation
Area, thereby granting the Joint Venture the full and exclusive right, authority and
privilege to undertake the Project in accordance with the Master Development Plan.
The Amended JVA is the product of a renegotiation of the original JVA dated April 25,
1995 and its supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own
under the Amended JVA 367.5 hectares of reclaimed foreshore and submerged
areas in Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution
which state that:
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the State. With the exception
of agricultural lands, all other natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural
lands. Private corporations or associations may not hold such alienable lands
of the public domain except by lease, x x x.(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of
Manila Bay are alienable or disposable lands of the public domain. In its
Memorandum,[67] PEA admits that
Under the Public Land Act (CA 141, as amended), reclaimed lands are classified
as alienable and disposable lands of the public domain:
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x. (Emphasis supplied)
Likewise, the Legal Task Force[68] constituted under Presidential Administrative Order
No. 365 admitted in its Report and Recommendation to then President Fidel V.
Ramos, [R]eclaimed lands are classified as alienable and disposable lands of
the public domain.[69] The Legal Task Force concluded that
D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the
rights of ownership and disposition over reclaimed lands have been transferred to
PEA, by virtue of which PEA, as owner, may validly convey the same to any qualified
person without violating the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land,
except by lease (Sec. 3, Art. XVII,[70] 1987 Constitution), does not apply to reclaimed
lands whose ownership has passed on to PEA by statutory grant.
Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged
areas of Manila Bay are part of the lands of the public domain, waters x x x and other
natural resources and consequently owned by the State. As such, foreshore and
submerged areas shall not be alienated, unless they are classified as agricultural
lands of the public domain. The mere reclamation of these areas by PEA does not
convert these inalienable natural resources of the State into alienable or disposable
lands of the public domain. There must be a law or presidential proclamation officially
classifying these reclaimed lands as alienable or disposable and open to disposition
or concession. Moreover, these reclaimed lands cannot be classified as alienable or
disposable if the law has reserved them for some public or quasi-public use.[71]
Section 8 of CA No. 141 provides that only those lands shall be declared open to
disposition or concession which have been officially delimited and
classified.[72] The President has the authority to classify inalienable lands of the
public domain into alienable or disposable lands of the public domain, pursuant to
Section 6 of CA No. 141. In Laurel vs. Garcia,[73] the Executive Department
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the
Philippine Government for use as the Chancery of the Philippine Embassy.Although
the Chancery had transferred to another location thirteen years earlier, the Court still
ruled that, under Article 422[74] of the Civil Code, a property of public dominion retains
such character until formally declared otherwise. The Court ruled that
The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of
the public domain, not available for private appropriation or ownership until
there is a formal declaration on the part of the government to withdraw it from
being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]. (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land
patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila
Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Patent
No. 3517 in the name of PEA for the 157.84 hectares comprising the partially
reclaimed Freedom Islands.Subsequently, on April 9, 1999 the Register of Deeds of
the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of
PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates
of title corresponding to land patents. To this day, these certificates of title are still in
the name of PEA.
PD No. 1085, coupled with President Aquinos actual issuance of a special patent
covering the Freedom Islands, is equivalent to an official proclamation classifying the
Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085
and President Aquinos issuance of a land patent also constitute a declaration that the
Freedom Islands are no longer needed for public service. The Freedom Islands are
thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already
reclaimed the Freedom Islands although subsequently there were partial erosions on
some areas. The government had also completed the necessary surveys on these
islands. Thus, the Freedom Islands were no longer part of Manila Bay but part of the
land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the public
domain into agricultural, forest or timber, mineral lands, and national parks. Being
neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public
domain. Under the 1987 Constitution, agricultural lands of the public domain are the
only natural resources that the State may alienate to qualified private parties. All other
natural resources, such as the seas or bays, are waters x x x owned by the State
forming part of the public domain, and are inalienable pursuant to Section 2, Article
XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a
private corporation, reclaimed the islands under a contract dated November 20, 1973
with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish
Law of Waters of 1866, argues that if the ownership of reclaimed lands may be given
to the party constructing the works, then it cannot be said that reclaimed lands are
lands of the public domain which the State may not alienate.[75] Article 5 of the
Spanish Law of Waters reads as follows:
Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise
provided by the terms of the grant of authority. (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim
from the sea only with proper permission from the State. Private parties could own the
reclaimed land only if not otherwise provided by the terms of the grant of authority.
This clearly meant that no one could reclaim from the sea without permission from the
State because the sea is property of public dominion. It also meant that the State
could grant or withhold ownership of the reclaimed land because any reclaimed land,
like the sea from which it emerged, belonged to the State. Thus, a private person
reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public dominion like
the sea it replaced.[76] Article 5 of the Spanish Law of Waters of 1866 adopted the
time-honored principle of land ownership that all lands that were not acquired from
the government, either by purchase or by grant, belong to the public domain.[77]
Article 5 of the Spanish Law of Waters must be read together with laws subsequently
enacted on the disposition of public lands. In particular, CA No. 141 requires that
lands of the public domain must first be classified as alienable or disposable before
the government can alienate them. These lands must not be reserved for public or
quasi-public purposes.[78]Moreover, the contract between CDCP and the government
was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This
contract could not have converted the Freedom Islands into private lands of a private
corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws
authorizing the reclamation of areas under water and revested solely in the National
Government the power to reclaim lands. Section 1 of PD No. 3-A declared that
The provisions of any law to the contrary notwithstanding, the reclamation of
areas under water, whether foreshore or inland, shall be limited to the National
Government or any person authorized by it under a proper contract. (Emphasis
supplied)
x x x.
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because
reclamation of areas under water could now be undertaken only by the National
Government or by a person contracted by the National Government. Private parties
may reclaim from the sea only under a contract with the National Government, and no
longer by grant or permission as provided in Section 5 of the Spanish Law of Waters
of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the
National Governments implementing arm to undertake all reclamation projects of the
government, which shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity. Under such contract, a private party
receives compensation for reclamation services rendered to PEA. Payment to the
contractor may be in cash, or in kind consisting of portions of the reclaimed land,
subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain. The reclaimed land can be used as payment in kind only if
the reclaimed land is first classified as alienable or disposable land open to
disposition, and then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional
592.15 hectares which are still submerged and forming part of Manila Bay. There is
no legislative or Presidential act classifying these submerged areas as
alienable or disposable lands of the public domain open to disposition. These
submerged areas are not covered by any patent or certificate of title. There can be no
dispute that these submerged areas form part of the public domain, and in their
present state are inalienable and outside the commerce of man. Until reclaimed
from the sea, these submerged areas are, under the Constitution, waters x x x owned
by the State, forming part of the public domain and consequently inalienable.Only
when actually reclaimed from the sea can these submerged areas be classified as
public agricultural lands, which under the Constitution are the only natural resources
that the State may alienate. Once reclaimed and transformed into public agricultural
lands, the government may then officially classify these lands as alienable or
disposable lands open to disposition.Thereafter, the government may declare these
lands no longer needed for public service. Only then can these reclaimed lands be
considered alienable or disposable lands of the public domain and within the
commerce of man.
The classification of PEAs reclaimed foreshore and submerged lands into alienable or
disposable lands open to disposition is necessary because PEA is tasked under its
charter to undertake public services that require the use of lands of the public
domain. Under Section 5 of PD No. 1084, the functions of PEA include the following:
[T]o own or operate railroads, tramways and other kinds of land transportation, x x x;
[T]o construct, maintain and operate such systems of sanitary sewers as may be
necessary; [T]o construct, maintain and operate such storm drains as may be
necessary. PEA is empowered to issue rules and regulations as may be necessary
for the proper use by private parties of any or all of the highways, roads, utilities,
buildings and/or any of its properties and to impose or collect fees or tolls for their
use. Thus, part of the reclaimed foreshore and submerged lands held by the PEA
would actually be needed for public use or service since many of the functions
imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be primarily
responsible for integrating, directing, and coordinating all reclamation projects for and
on behalf of the National Government. The same section also states that [A]ll
reclamation projects shall be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a proper contract executed by it
with any person or entity; x x x. Thus, under EO No. 525, in relation to PD No. 3-A
and PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No.
525 recognized PEA as the government entity to undertake the reclamation of lands
and ensure their maximum utilization in promoting public welfare and
interests.[79] Since large portions of these reclaimed lands would obviously be
needed for public service, there must be a formal declaration segregating reclaimed
lands no longer needed for public service from those still needed for public service.
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA shall belong to
or be owned by the PEA, could not automatically operate to classify inalienable lands
into alienable or disposable lands of the public domain. Otherwise, reclaimed
foreshore and submerged lands of the public domain would automatically become
alienable once reclaimed by PEA, whether or not classified as alienable or
disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO
No. 525, vests in the Department of Environment and Natural Resources (DENR for
brevity) the following powers and functions:
Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and disposable
public lands, mineral resources and, in the process of exercising such control,
impose appropriate taxes, fees, charges, rentals and any such form of levy and
collect such revenues for the exploration, development, utilization or gathering of
such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning
the development, exploration and utilization of the countrys marine, freshwater,
and brackish water and over all aquatic resources of the country and shall
continue to oversee, supervise and police our natural resources; cancel or
cause to cancel such privileges upon failure, non-compliance or violations of any
regulation, order, and for all other causes which are in furtherance of the conservation
of natural resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all
lands of the public domain and serve as the sole agency responsible for
classification, sub-classification, surveying and titling of lands in consultation with
appropriate agencies.[80] (Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State, DENR
exercises supervision and control over alienable and disposable public lands. DENR
also exercises exclusive jurisdiction on the management and disposition of all lands
of the public domain. Thus, DENR decides whether areas under water, like foreshore
or submerged areas of Manila Bay, should be reclaimed or not. This means that PEA
needs authorization from DENR before PEA can undertake reclamation projects in
Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the
public domain. Hence, DENR decides whether reclaimed lands of PEA should be
classified as alienable under Sections 6[81] and 7[82] of CA No. 141. Once DENR
decides that the reclaimed lands should be so classified, it then recommends to the
President the issuance of a proclamation classifying the lands as alienable or
disposable lands of the public domain open to disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in
compliance with the Revised Administrative Code and Sections 6 and 7 of CA No.
141.
In short, DENR is vested with the power to authorize the reclamation of areas under
water, while PEA is vested with the power to undertake the physical reclamation of
areas under water, whether directly or through private contractors. DENR is also
empowered to classify lands of the public domain into alienable or disposable lands
subject to the approval of the President. On the other hand, PEA is tasked to develop,
sell or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged
areas does not make the reclaimed lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the
National Government of lands of the public domain to PEA does not make the lands
alienable or disposable lands of the public domain, much less patrimonial lands of
PEA.
Absent two official acts a classification that these lands are alienable or disposable
and open to disposition and a declaration that these lands are not needed for public
service, lands reclaimed by PEA remain inalienable lands of the public domain. Only
such an official classification and formal declaration can convert reclaimed lands into
alienable or disposable lands of the public domain, open to disposition under the
Constitution, Title I and Title III[83] of CA No. 141 and other applicable laws.[84]
PEAs Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the
public domain, the reclaimed lands shall be disposed of in accordance with CA No.
141, the Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed
lands transferred to a branch or subdivision of the government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x.[85] (Emphasis by PEA)
In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised Administrative
Code of 1987, which states that
Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x.
Thus, the Court concluded that a law is needed to convey any real property belonging
to the Government. The Court declared that -
It is not for the President to convey real property of the government on his or her own
sole will. Any such conveyance must be authorized and approved by a law
enacted by the Congress. It requires executive and legislative
concurrence. (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority
allowing PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977,
provides that
The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to
the contract for the reclamation and construction of the Manila-Cavite Coastal Road
Project between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines dated November 20, 1973 and/or any
other contract or reclamation covering the same area is hereby transferred,
conveyed and assigned to the ownership and administration of the Public
Estates Authority established pursuant to PD No. 1084; Provided, however, That the
rights and interests of the Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the
obligations of the Republic of the Philippines (Department of Public Highways) arising
from, or incident to, the aforesaid contract between the Republic of the Philippines
and the Construction and Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates
Authority shall issue in favor of the Republic of the Philippines the corresponding
shares of stock in said entity with an issued value of said shares of stock (which) shall
be deemed fully paid and non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates
Authority shall execute such contracts or agreements, including appropriate
agreements with the Construction and Development Corporation of the Philippines,
as may be necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of Natural
Resources in favor of the Public Estates Authority without prejudice to the
subsequent transfer to the contractor or his assignees of such portion or
portions of the land reclaimed or to be reclaimed as provided for in the above-
mentioned contract. On the basis of such patents, the Land Registration
Commission shall issue the corresponding certificate of title. (Emphasis
supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides
that -
Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the
PEA which shall be responsible for its administration, development, utilization or
disposition in accordance with the provisions of Presidential Decree No. 1084. Any
and all income that the PEA may derive from the sale, lease or use of reclaimed lands
shall be used in accordance with the provisions of Presidential Decree No. 1084.
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell
its reclaimed lands. PD No. 1085 merely transferred ownership and administration of
lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands
reclaimed by PEA shall belong to or be owned by PEA. EO No. 525 expressly states
that PEA should dispose of its reclaimed lands in accordance with the provisions of
Presidential Decree No. 1084, the charter of PEA.
PEAs charter, however, expressly tasks PEA to develop, improve, acquire,
administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands x x
x owned, managed, controlled and/or operated by the government.[87] (Emphasis
supplied) There is, therefore, legislative authority granted to PEA to sell its
lands, whether patrimonial or alienable lands of the public domain. PEA may sell
to private parties its patrimonial properties in accordance with the PEA charter free
from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEAs
patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to
private individuals since, with the legislative authority, there is no longer any statutory
prohibition against such sales and the constitutional ban does not apply to
individuals. PEA, however, cannot sell any of its alienable or disposable lands of the
public domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable
land of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be
transferred by PEA to the contractor or his assignees (Emphasis supplied) would not
apply to private corporations but only to individuals because of the constitutional
ban. Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987
Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands
open to disposition, and further declared no longer needed for public service, PEA
would have to conduct a public bidding in selling or leasing these lands. PEA must
observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction,
in the absence of a law exempting PEA from holding a public auction.[88] Special
Patent No. 3517 expressly states that the patent is issued by authority of the
Constitution and PD No. 1084, supplemented by Commonwealth Act No. 141, as
amended. This is an acknowledgment that the provisions of CA No. 141 apply to the
disposition of reclaimed alienable lands of the public domain unless otherwise
provided by law. Executive Order No. 654,[89] which authorizes PEA to determine the
kind and manner of payment for the transfer of its assets and properties, does not
exempt PEA from the requirement of public auction. EO No. 654 merely authorizes
PEA to decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government
Auditing Code, the government is required to sell valuable government property
through public bidding. Section 79 of PD No. 1445 mandates that
Section 79. When government property has become unserviceable for any cause,
or is no longer needed, it shall, upon application of the officer accountable therefor,
be inspected by the head of the agency or his duly authorized representative in the
presence of the auditor concerned and, if found to be valueless or unsaleable, it may
be destroyed in their presence. If found to be valuable, it may be sold at public
auction to the highest bidder under the supervision of the proper committee on
award or similar body in the presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in any newspaper
of general circulation, or where the value of the property does not warrant the
expense of publication, by notices posted for a like period in at least three public
places in the locality where the property is to be sold. In the event that the public
auction fails, the property may be sold at a private sale at such price as may be
fixed by the same committee or body concerned and approved by the
Commission.
It is only when the public auction fails that a negotiated sale is allowed, in which case
the Commission on Audit must approve the selling price.[90] The Commission on Audit
implements Section 79 of the Government Auditing Code through Circular No. 89-
296[91] dated January 27, 1989. This circular emphasizes that government assets
must be disposed of only through public auction, and a negotiated sale can be
resorted to only in case of failure of public auction.
At the public auction sale, only Philippine citizens are qualified to bid for PEAs
reclaimed foreshore and submerged alienable lands of the public domain. Private
corporations are barred from bidding at the auction sale of any kind of alienable land
of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10,
1991. PEA imposed a condition that the winning bidder should reclaim another 250
hectares of submerged areas to regularize the shape of the Freedom Islands, under a
60-40 sharing of the additional reclaimed areas in favor of the winning bidder. [92] No
one, however, submitted a bid. On December 23, 1994, the Government Corporate
Counsel advised PEA it could sell the Freedom Islands through negotiation, without
need of another public bidding, because of the failure of the public bidding on
December 10, 1991.[93]
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands
and the additional 250 hectares still to be reclaimed, it also granted an option to
AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract,
enlarged the reclamation area to 750 hectares.[94] The failure of public bidding on
December 10, 1991, involving only 407.84 hectares,[95] is not a valid justification for a
negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides,
the failure of public bidding happened on December 10, 1991, more than three years
before the signing of the original JVA on April 25, 1995. The economic situation in the
country had greatly improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is
absolute and clear: Private corporations or associations may not hold such alienable
lands of the public domain except by lease, x x x. Even Republic Act No. 6957 (BOT
Law, for brevity), cited by PEA and AMARI as legislative authority to sell reclaimed
lands to private parties, recognizes the constitutional ban. Section 6 of RA No. 6957
states
Sec. 6. Repayment Scheme. - For the financing, construction, operation and
maintenance of any infrastructure projects undertaken through the build-operate-and-
transfer arrangement or any of its variations pursuant to the provisions of this Act, the
project proponent x x x may likewise be repaid in the form of a share in the revenue of
the project or other non-monetary payments, such as, but not limited to, the grant of a
portion or percentage of the reclaimed land, subject to the constitutional
requirements with respect to the ownership of the land: x x x. (Emphasis
supplied)
A private corporation, even one that undertakes the physical reclamation of a
government BOT project, cannot acquire reclaimed alienable lands of the public
domain in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI,
authorizes local governments in land reclamation projects to pay the contractor or
developer in kind consisting of a percentage of the reclaimed land, to wit:
Section 302. Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment plan
may consist of the grant of a portion or percentage of the reclaimed land or the
industrial estate constructed.
Although Section 302 of the Local Government Code does not contain a proviso
similar to that of the BOT Law, the constitutional restrictions on land ownership
automatically apply even though not expressly mentioned in the Local Government
Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or
developer, if a corporate entity, can only be paid with leaseholds on portions of the
reclaimed land. If the contractor or developer is an individual, portions of the
reclaimed land, not exceeding 12 hectares[96] of non-agricultural lands, may be
conveyed to him in ownership in view of the legislative authority allowing such
conveyance. This is the only way these provisions of the BOT Law and the Local
Government Code can avoid a direct collision with Section 3, Article XII of the 1987
Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the act of conveying the ownership of the reclaimed lands
to public respondent PEA transformed such lands of the public domain to private
lands. This theory is echoed by AMARI which maintains that the issuance of the
special patent leading to the eventual issuance of title takes the subject land away
from the land of public domain and converts the property into patrimonial or private
property. In short, PEA and AMARI contend that with the issuance of Special Patent
No. 3517 and the corresponding certificates of titles, the 157.84 hectares comprising
the Freedom Islands have become private lands of PEA. In support of their theory,
PEA and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held
Once the patent was granted and the corresponding certificate of title was issued, the
land ceased to be part of the public domain and became private property over which
the Director of Lands has neither control nor jurisdiction.
2. Lee Hong Hok v. David,[98] where the Court declared -
After the registration and issuance of the certificate and duplicate certificate of title
based on a public land patent, the land covered thereby automatically comes under
the operation of Republic Act 496 subject to all the safeguards provided therein.
3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court ruled -
While the Director of Lands has the power to review homestead patents, he may do
so only so long as the land remains part of the public domain and continues to be
under his exclusive control; but once the patent is registered and a certificate of title is
issued, the land ceases to be part of the public domain and becomes private property
over which the Director of Lands has neither control nor jurisdiction.
4. Manalo v. Intermediate Appellate Court,[100] where the Court held
When the lots in dispute were certified as disposable on May 19, 1971, and free
patents were issued covering the same in favor of the private respondents, the said
lots ceased to be part of the public domain and, therefore, the Director of Lands lost
jurisdiction over the same.
5.Republic v. Court of Appeals,[101] where the Court stated
Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally
effected a land grant to the Mindanao Medical Center, Bureau of Medical Services,
Department of Health, of the whole lot, validly sufficient for initial registration under
the Land Registration Act. Such land grant is constitutive of a fee simple title or
absolute title in favor of petitioner Mindanao Medical Center.Thus, Section 122 of the
Act, which governs the registration of grants or patents involving public lands,
provides that Whenever public lands in the Philippine Islands belonging to the
Government of the United States or to the Government of the Philippines are
alienated, granted or conveyed to persons or to public or private corporations, the
same shall be brought forthwith under the operation of this Act (Land Registration Act,
Act 496) and shall become registered lands.
The first four cases cited involve petitions to cancel the land patents and the
corresponding certificates of titles issued to private parties. These four cases
uniformly hold that the Director of Lands has no jurisdiction over private lands or that
upon issuance of the certificate of title the land automatically comes under the
Torrens System. The fifth case cited involves the registration under the Torrens
System of a 12.8-hectare public land granted by the National Government to
Mindanao Medical Center, a government unit under the Department of Health. The
National Government transferred the 12.8-hectare public land to serve as the site for
the hospital buildings and other facilities of Mindanao Medical Center, which
performed a public service. The Court affirmed the registration of the 12.8-hectare
public land in the name of Mindanao Medical Center under Section 122 of Act No.
496. This fifth case is an example of a public land being registered under Act No. 496
without the land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the
name of PEA, a wholly government owned corporation performing public as well as
proprietary functions. No patent or certificate of title has been issued to any private
party. No one is asking the Director of Lands to cancel PEAs patent or certificates of
title. In fact, the thrust of the instant petition is that PEAs certificates of title should
remain with PEA, and the land covered by these certificates, being alienable lands of
the public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant
private or public ownership of the land. Registration is not a mode of acquiring
ownership but is merely evidence of ownership previously conferred by any of the
recognized modes of acquiring ownership. Registration does not give the registrant a
better right than what the registrant had prior to the registration. [102] The registration of
lands of the public domain under the Torrens system, by itself, cannot convert public
lands into private lands.[103]
Jurisprudence holding that upon the grant of the patent or issuance of the certificate
of title the alienable land of the public domain automatically becomes private land
cannot apply to government units and entities like PEA. The transfer of the Freedom
Islands to PEA was made subject to the provisions of CA No. 141 as expressly stated
in Special Patent No. 3517 issued by then President Aquino, to wit:
NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the
Philippines and in conformity with the provisions of Presidential Decree No.
1084, supplemented by Commonwealth Act No. 141, as amended, there are
hereby granted and conveyed unto the Public Estates Authority the aforesaid tracts of
land containing a total area of one million nine hundred fifteen thousand eight
hundred ninety four (1,915,894) square meters; the technical description of which are
hereto attached and made an integral part hereof. (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not
covered by PD No. 1084. Section 60 of CA No. 141 prohibits, except when authorized
by Congress, the sale of alienable lands of the public domain that are transferred to
government units or entities. Section 60 of CA No. 141 constitutes, under Section 44
of PD No. 1529, a statutory lien affecting title of the registered land even if not
annotated on the certificate of title.[104] Alienable lands of the public domain held by
government entities under Section 60 of CA No. 141 remain public lands because
they cannot be alienated or encumbered unless Congress passes a law authorizing
their disposition. Congress, however, cannot authorize the sale to private
corporations of reclaimed alienable lands of the public domain because of the
constitutional ban. Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of
CA No. 141 does not automatically convert alienable lands of the public domain into
private or patrimonial lands. The alienable lands of the public domain must be
transferred to qualified private parties, or to government entities not tasked to dispose
of public lands, before these lands can become private or patrimonial
lands. Otherwise, the constitutional ban will become illusory if Congress can declare
lands of the public domain as private or patrimonial lands in the hands of a
government agency tasked to dispose of public lands. This will allow private
corporations to acquire directly from government agencies limitless areas of lands
which, prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National
Government to reclaim foreshore and submerged areas of the public domain. Thus,
EO No. 525 declares that
EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being
proposed to be undertaken in various parts of the country which need to be evaluated
for consistency with national programs;
Whereas, there is a need to give further institutional support to the Governments
declared policy to provide for a coordinated, economical and efficient reclamation of
lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be
limited to the National Government or any person authorized by it under proper
contract;
Whereas, a central authority is needed to act on behalf of the National
Government which shall ensure a coordinated and integrated approach in the
reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as
a government corporation to undertake reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing
authority to reorganize the national government including the transfer, abolition, or
merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution and pursuant to Presidential
Decree No. 1416, do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on
behalf of the National Government. All reclamation projects shall be approved by
the President upon recommendation of the PEA, and shall be undertaken by the PEA
or through a proper contract executed by it with any person or entity; Provided, that,
reclamation projects of any national government agency or entity authorized under its
charter shall be undertaken in consultation with the PEA upon approval of the
President.
xxx.
As the central implementing agency tasked to undertake reclamation projects
nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the
government agency charged with leasing or selling reclaimed lands of the public
domain. The reclaimed lands being leased or sold by PEA are not private lands, in
the same manner that DENR, when it disposes of other alienable lands, does not
dispose of private lands but alienable lands of the public domain. Only when qualified
private parties acquire these lands will the lands become private lands. In the hands
of the government agency tasked and authorized to dispose of alienable of
disposable lands of the public domain, these lands are still public, not private
lands.
Furthermore, PEAs charter expressly states that PEA shall hold lands of the public
domain as well as any and all kinds of lands. PEA can hold both lands of the public
domain and private lands. Thus, the mere fact that alienable lands of the public
domain like the Freedom Islands are transferred to PEA and issued land patents or
certificates of title in PEAs name does not automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA
as private lands will sanction a gross violation of the constitutional ban on private
corporations from acquiring any kind of alienable land of the public domain. PEA will
simply turn around, as PEA has now done under the Amended JVA, and transfer
several hundreds of hectares of these reclaimed and still to be reclaimed lands to a
single private corporation in only one transaction. This scheme will effectively nullify
the constitutional ban in Section 3, Article XII of the 1987 Constitution which was
intended to diffuse equitably the ownership of alienable lands of the public domain
among Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the
public domain since PEA can acquire x x x any and all kinds of lands. This will open
the floodgates to corporations and even individuals acquiring hundreds of hectares of
alienable lands of the public domain under the guise that in the hands of PEA these
lands are private lands. This will result in corporations amassing huge landholdings
never before seen in this country - creating the very evil that the constitutional ban
was designed to prevent. This will completely reverse the clear direction of
constitutional development in this country. The 1935 Constitution allowed private
corporations to acquire not more than 1,024 hectares of public lands. [105] The 1973
Constitution prohibited private corporations from acquiring any kind of public land,
and the 1987 Constitution has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No.
496 or PD No. 1529, automatically become private lands is contrary to existing
laws. Several laws authorize lands of the public domain to be registered under the
Torrens System or Act No. 496, now PD No. 1529, without losing their character as
public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529,
respectively, provide as follows:
Act No. 496
Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons
or the public or private corporations, the same shall be brought forthwith under the
operation of this Act and shall become registered lands.
PD No. 1529
Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith
under the operation of this Decree. (Emphasis supplied)
Based on its legislative history, the phrase conveyed to any person in Section 103 of
PD No. 1529 includes conveyances of public lands to public corporations.
Alienable lands of the public domain granted, donated, or transferred to a province,
municipality, or branch or subdivision of the Government, as provided in Section 60 of
CA No. 141, may be registered under the Torrens System pursuant to Section 103 of
PD No. 1529. Such registration, however, is expressly subject to the condition in
Section 60 of CA No. 141 that the land shall not be alienated, encumbered or
otherwise disposed of in a manner affecting its title, except when authorized by
Congress. This provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be alienated or
encumbered unless expressly authorized by Congress. The need for legislative
authority prevents the registered land of the public domain from becoming private
land that can be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public
domain may be registered under the Torrens System. Section 48, Chapter 12, Book I
of the Code states
Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the
name of any political subdivision or of any corporate agency or instrumentality,
by the executive head of the agency or instrumentality. (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a
public wharf may be titled in the name of a government corporation regulating port
operations in the country. Private property purchased by the National Government for
expansion of an airport may also be titled in the name of the government agency
tasked to administer the airport.Private property donated to a municipality for use as a
town plaza or public school site may likewise be titled in the name of the
municipality.[106] All these properties become properties of the public domain, and if
already registered under Act No. 496 or PD No. 1529, remain registered land. There
is no requirement or provision in any existing law for the de-registration of land from
the Torrens System.
Private lands taken by the Government for public use under its power of eminent
domain become unquestionably part of the public domain. Nevertheless, Section 85
of PD No. 1529 authorizes the Register of Deeds to issue in the name of the National
Government new certificates of title covering such expropriated lands. Section 85 of
PD No. 1529 states
Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest
therein, is expropriated or taken by eminent domain, the National Government,
province, city or municipality, or any other agency or instrumentality exercising such
right shall file for registration in the proper Registry a certified copy of the judgment
which shall state definitely by an adequate description, the particular property or
interest expropriated, the number of the certificate of title, and the nature of the public
use. A memorandum of the right or interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee simple is taken, a new certificate
shall be issued in favor of the National Government, province, city,
municipality, or any other agency or instrumentality exercising such right for the land
so taken. The legal expenses incident to the memorandum of registration or issuance
of a new certificate of title shall be for the account of the authority taking the land or
interest therein. (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively
private or patrimonial lands. Lands of the public domain may also be registered
pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the
Freedom Islands or of the lands to be reclaimed from submerged areas of Manila
Bay. In the words of AMARI, the Amended JVA is not a sale but a joint venture with a
stipulation for reimbursement of the original cost incurred by PEA for the earlier
reclamation and construction works performed by the CDCP under its 1973 contract
with the Republic. Whether the Amended JVA is a sale or a joint venture, the fact
remains that the Amended JVA requires PEA to cause the issuance and delivery of
the certificates of title conveying AMARIs Land Share in the name of AMARI. [107]
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which
provides that private corporations shall not hold such alienable lands of the public
domain except by lease. The transfer of title and ownership to AMARI clearly means
that AMARI will hold the reclaimed lands other than by lease. The transfer of title and
ownership is a disposition of the reclaimed lands, a transaction considered a sale or
alienation under CA No. 141,[108] the Government Auditing Code,[109] and Section 3,
Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and
submerged areas form part of the public domain and are inalienable. Lands reclaimed
from foreshore and submerged areas also form part of the public domain and are also
inalienable, unless converted pursuant to law into alienable or disposable lands of the
public domain. Historically, lands reclaimed by the government are sui generis, not
available for sale to private parties unlike other alienable public lands. Reclaimed
lands retain their inherent potential as areas for public use or public service. Alienable
lands of the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such equitable
distribution, the 1973 and 1987 Constitutions have barred private corporations from
acquiring any kind of alienable land of the public domain. Those who attempt to
dispose of inalienable natural resources of the State, or seek to circumvent the
constitutional ban on alienation of lands of the public domain to private corporations,
do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now
covered by certificates of title in the name of PEA, are alienable lands of the public
domain. PEA may lease these lands to private corporations but may not sell or
transfer ownership of these lands to private corporations. PEA may only sell these
lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open
to disposition and declared no longer needed for public service. The government can
make such classification and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as agricultural lands of the public
domain, which are the only natural resources the government can alienate. In their
present state, the 592.15 hectares of submerged areas are inalienable and outside
the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation,
ownership of 77.34 hectares[110] of the Freedom Islands, such transfer is void for
being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares[111] of still submerged areas of Manila Bay, such transfer is void for being
contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation
of natural resources other than agricultural lands of the public domain. PEA may
reclaim these submerged areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and further declare them no longer
needed for public service. Still, the transfer of such reclaimed alienable lands of the
public domain to AMARI will be void in view of Section 3, Article XII of the 1987
Constitution which prohibits private corporations from acquiring any kind of alienable
land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution. Under Article 1409[112] of the Civil Code, contracts whose object or
purpose is contrary to law, or whose object is outside the commerce of men, are
inexistent and void from the beginning. The Court must perform its duty to defend and
uphold the Constitution, and therefore declares the Amended JVA null and void ab
initio.

Seventh issue: whether the Court is the proper forum to raise the issue of
whether the Amended JVA is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no necessity to
rule on this last issue. Besides, the Court is not a trier of facts, and this last issue
involves a determination of factual matters.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari
Coastal Bay Development Corporation are PERMANENTLY ENJOINED from
implementing the Amended Joint Venture Agreement which is hereby declared NULL
and VOID ab initio.

SO ORDERED.