ARTURO M. DE CASTRO vs.

JUDICIAL AND BAR COUNCIL (JBC) and PRESIDENT

GLORIA MACAPAGAL ARROYO
G.R. No. 191002, March 17, 2010

FACTS: The compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010 occurs just
days after the coming presidential elections on May 10, 2010.

These cases trace their genesis to the controversy that has arisen from the forthcoming compulsory
retirement of Chief Justice Puno on May 17, 2010, or seven days after the presidential election.
Under Section 4(1), in relation to Section 9, Article VIII, that vacancy shall be filled within
ninety days from the occurrence thereof from a list of at least three nominees prepared by the
Judicial and Bar Council for every vacancy. Also considering that Section 15, Article VII
(Executive Department) of the Constitution prohibits the President or Acting President from
making appointments within two months immediately before the next presidential elections and up
to the end of his term, except temporary appointments to executive positions when continued
vacancies therein will prejudice public service or endanger public safety.

The JBC, in its en banc meeting of January 18, 2010, unanimously agreed to start the process of
filling up the position of Chief Justice.

Conformably with its existing practice, the JBC automatically considered for the position of
Chief Justice the five most senior of the Associate Justices of the Court, namely: Associate Justice
Antonio T. Carpio; Associate Justice Renato C. Corona; Associate Justice Conchita Carpio
Morales; Associate Justice Presbitero J. Velasco, Jr.; and Associate Justice Antonio Eduardo B.
Nachura. However, the last two declined their nomination through letters dated January 18, 2010
and January 25, 2010, respectively.
The OSG contends that the incumbent President may appoint the next Chief Justice, because the
prohibition under Section 15, Article VII of the Constitution does not apply to appointments in the
Supreme Court. It argues that any vacancy in the Supreme Court must be filled within 90 days
from its occurrence, pursuant to Section 4(1), Article VIII of the Constitution; that had the framers
intended the prohibition to apply to Supreme Court appointments, they could have easily expressly
stated so in the Constitution, which explains why the prohibition found in Article VII (Executive
Department) was not written in Article VIII (Judicial Department); and that the framers also
incorporated in Article VIII ample restrictions or limitations on the Presidents power to appoint
members of the Supreme Court to ensure its independence from political vicissitudes and its
insulation from political pressures, such as stringent qualifications for the positions, the
establishment of the JBC, the specified period within which the President shall appoint a Supreme
Court Justice.

A part of the question to be reviewed by the Court is whether the JBC properly initiated the
process, there being an insistence from some of the oppositors-intervenors that the JBC could only
do so once the vacancy has occurred (that is, after May 17, 2010). Another part is, of course,
whether the JBC may resume its process until the short list is prepared, in view of the provision of
Section 4(1), Article VIII, which unqualifiedly requires the President to appoint one from the short
list to fill the vacancy in the Supreme Court (be it the Chief Justice or an Associate Justice) within
90 days from the occurrence of the vacancy.
ISSUE: Whether the incumbent President can appoint the successor of Chief Justice Puno upon
his retirement.

HELD:

Prohibition under Section 15, Article VII does not apply to appointments to fill a vacancy in the
Supreme Court or to other appointments to the Judiciary.

Two constitutional provisions are seemingly in conflict.

The first, Section 15, Article VII (Executive Department), provides: Section 15. Two months
immediately before the next presidential elections and up to the end of his term, a President or
Acting President shall not make appointments, except temporary appointments to executive
positions when continued vacancies therein will prejudice public service or endanger public
safety.

The other, Section 4 (1), Article VIII (Judicial Department), states: Section 4. (1). The Supreme
Court shall be composed of a Chief Justice and fourteen Associate Justices. It may sit en banc or
in its discretion, in division of three, five, or seven Members. Any vacancy shall be filled within
ninety days from the occurrence thereof.

Had the framers intended to extend the prohibition contained in Section 15, Article VII to the
appointment of Members of the Supreme Court, they could have explicitly done so. They could
not have ignored the meticulous ordering of the provisions. They would have easily and surely
written the prohibition made explicit in Section 15, Article VII as being equally applicable to the
appointment of Members of the Supreme Court in Article VIII itself, most likely in Section 4 (1),
Article VIII. That such specification was not done only reveals that the prohibition against the
President or Acting President making appointments within two months before the next presidential
elections and up to the end of the Presidents or Acting Presidents term does not refer to the
Members of the Supreme Court.

Had the framers intended to extend the prohibition contained in Section 15, Article VII to the
appointment of Members of the Supreme Court, they could have explicitly done so. They could
not have ignored the meticulous ordering of the provisions. They would have easily and surely
written the prohibition made explicit in Section 15, Article VII as being equally applicable to the
appointment of Members of the Supreme Court in Article VIII itself, most likely in Section 4 (1),
Article VIII. That such specification was not done only reveals that the prohibition against the
President or Acting President making appointments within two months before the next presidential
elections and up to the end of the Presidents or Acting Presidents term does not refer to the
Members of the Supreme Court.

Section 14, Section 15, and Section 16 are obviously of the same character, in that they affect the
power of the President to appoint. The fact that Section 14 and Section 16 refer only to
appointments within the Executive Department renders conclusive that Section 15 also applies
only to the Executive Department. This conclusion is consistent with the rule that every part of the
statute must be interpreted with reference to the context, i.e. that every part must be considered
together with the other parts, and kept subservient to the general intent of the whole enactment. It
is absurd to assume that the framers deliberately situated Section 15 between Section 14 and
Section 16, if they intended Section 15 to cover all kinds of presidential appointments. If that was
their intention in respect of appointments to the Judiciary, the framers, if only to be clear, would
have easily and surely inserted a similar prohibition in Article VIII, most likely within Section 4
(1) thereof.

Manila Prince Hotel v. GSIS, G.R. No. 122156, February 3, 1997

DECISION
(En Banc)

BELLOSILLO, J.:

I. THE FACTS

Pursuant to the privatization program of the Philippine Government, the GSIS sold in public
auction its stake in Manila Hotel Corporation (MHC). Only 2 bidders participated: petitioner
Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or
15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton
as its hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more
than the bid of petitioner.

Petitioner filed a petition before the Supreme Court to compel the GSIS to allow it to match the
bid of Renong Berhad. It invoked the Filipino First Policy enshrined in 10, paragraph 2, Article
XII of the 1987 Constitution, which provides that in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the State shall give preference to
qualified Filipinos.

II. THE ISSUES

1. Whether 10, paragraph 2, Article XII of the 1987 Constitution is a self-executing provision
and does not need implementing legislation to carry it into effect;
2. Assuming 10, paragraph 2, Article XII is self-executing, whether the controlling shares of
the Manila Hotel Corporation form part of our patrimony as a nation;
3. Whether GSIS is included in the term State, hence, mandated to implement 10, paragraph
2, Article XII of the Constitution; and
4. Assuming GSIS is part of the State, whether it should give preference to the petitioner, a
Filipino corporation, over Renong Berhad, a foreign corporation, in the sale of the controlling
shares of the Manila Hotel Corporation.
III. THE RULING

[The Court, voting 11-4, DISMISSED the petition.]

1. YES, 10, paragraph 2, Article XII of the 1987 Constitution is a self-executing provision and
does not need implementing legislation to carry it into effect.

Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-
self-executing but simply for purposes of style. But, certainly, the legislature is not precluded
from enacting further laws to enforce the constitutional provision so long as the contemplated
statute squares with the Constitution. Minor details may be left to the legislature without
impairing the self-executing nature of constitutional provisions.

xxx xxx xxx

Respondents . . . argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is
implied from the tenor of the first and third paragraphs of the same section which undoubtedly are
not self-executing. The argument is flawed. If the first and third paragraphs are not self-executing
because Congress is still to enact measures to encourage the formation and operation of
enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs legislation
to regulate and exercise authority over foreign investments within its national jurisdiction, as in
the third paragraph, then a fortiori, by the same logic, the second paragraph can only be self-
executing as it does not by its language require any legislation in order to give preference to
qualified Filipinos in the grant of rights, privileges and concessions covering the national economy
and patrimony. A constitutional provision may be self-executing in one part and non-self-
executing in another.

xxx. 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. When our Constitution mandates that [i]n the grant
of rights, privileges, and concessions covering national economy and patrimony, the State shall
give preference to qualified Filipinos, it means just that - qualified Filipinos shall be preferred.
And when our Constitution declares that a right exists in certain specified circumstances an action
may be maintained to enforce such right notwithstanding the absence of any legislation on the
subject; consequently, if there is no statute especially enacted to enforce such constitutional right,
such right enforces itself by its own inherent potency and puissance, and from which all
legislations must take their bearings. Where there is a right there is a remedy. Ubi jus ibi
remedium.

2. YES, the controlling shares of the Manila Hotel Corporation form part of our patrimony as a
nation.
In its plain and ordinary meaning, the term patrimony pertains to heritage. When the Constitution
speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the
Constitution could have very well used the term natural resources, but also to the cultural heritage
of the Filipinos.

xxx xxx xxx

For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures,
loves and frustrations of the Filipinos; its existence is impressed with public interest; its own
historicity associated with our struggle for sovereignty, independence and nationhood. Verily,
Manila Hotel has become part of our national economy and patrimony. For sure, 51% of the
equity of the MHC comes within the purview of the constitutional shelter for it comprises the
majority and controlling stock, so that anyone who acquires or owns the 51% will have actual
control and management of the hotel. In this instance, 51% of the MHC cannot be disassociated
from the hotel and the land on which the hotel edifice stands. Consequently, we cannot sustain
respondents claim that the Filipino First Policy provision is not applicable since what is being
sold is only 51% of the outstanding shares of the corporation, not the Hotel building nor the land
upon which the building stands.

3. YES, GSIS is included in the term State, hence, it is mandated to implement 10, paragraph
2, Article XII of the Constitution.

It is undisputed that the sale of 51% of the MHC could only be carried out with the prior approval
of the State acting through respondent Committee on Privatization. [T]his fact alone makes the
sale of the assets of respondents GSIS and MHC a state action. In constitutional jurisprudence,
the acts of persons distinct from the government are considered state action covered by the
Constitution (1) when the activity it engages in is a public function; (2) when the government is
so significantly involved with the private actor as to make the government responsible for his
action; and, (3) when the government has approved or authorized the action. It is evident that the
act of respondent GSIS in selling 51% of its share in respondent MHC comes under the second
and third categories of state action. Without doubt therefore the transaction, although entered
into by respondent GSIS, is in fact a transaction of the State and therefore subject to the
constitutional command.

When the Constitution addresses the State it refers not only to the people but also to the
government as elements of the State. After all, government is composed of three (3) divisions of
power - legislative, executive and judicial. Accordingly, a constitutional mandate directed to the
State is correspondingly directed to the three (3) branches of government. It is undeniable that in
this case the subject constitutional injunction is addressed among others to the Executive
Department and respondent GSIS, a government instrumentality deriving its authority from the
State.
4. YES, GSIS should give preference to the petitioner in the sale of the controlling shares of the
Manila Hotel Corporation.

It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning
bidder. The bidding rules expressly provide that the highest bidder shall only be declared the
winning bidder after it has negotiated and executed the necessary contracts, and secured the
requisite approvals. Since the Filipino First Policy provision of the Constitution bestows
preference on qualified Filipinos the mere tending of the highest bid is not an assurance that the
highest bidder will be declared the winning bidder. Resultantly, respondents are not bound to
make the award yet, nor are they under obligation to enter into one with the highest bidder. For in
choosing the awardee respondents are mandated to abide by the dictates of the 1987 Constitution
the provisions of which are presumed to be known to all the bidders and other interested parties.

xxx xxx xxx

Paragraph V. J. 1 of the bidding rules provides that [i]f for any reason the Highest Bidder cannot
be awarded the Block of Shares, GSIS may offer this to other Qualified Bidders that have validly
submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms
of price per share. Certainly, the constitutional mandate itself is reason enough not to award the
block of shares immediately to the foreign bidder notwithstanding its submission of a higher, or
even the highest, bid. In fact, we cannot conceive of a stronger reason than the constitutional
injunction itself.

In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the
grant of rights, privileges and concessions covering the national economy and patrimony, thereby
exceeding the bid of a Filipino, there is no question that the Filipino will have to be allowed to
match the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the award
should go to the Filipino. It must be so if we are to give life and meaning to the Filipino First
Policy provision of the 1987 Constitution. For, while this may neither be expressly stated nor
contemplated in the bidding rules, the constitutional fiat is omnipresent to be simply disregarded.
To ignore it would be to sanction a perilous skirting of the basic law.
OPOSA vs. FACTORAN G.R. No. 101083. July 30, 1993 - - Digested Case
LANDMARK CASE: In 1990, 44 children, through their parents, sought to make the DENR
Secretary stop issuing licenses to cut timber, invoking their right to a healthful environment. They
brought the case in the name of all the children in the Philippines and in the name of the
generations yet unborn!
FACTS:
The petitioners, all minors, sought the help of the Supreme Court to order the respondent, then
Secretary of DENR, to cancel all existing Timber License Agreement (TLA) in the country and to
cease and desist from receiving, accepting, processing, renewing or approving new TLAs. They
alleged that the massive commercial logging in the country is causing vast abuses on rain-
forest.They further asserted that the rights of their generation and the rights of the generations yet
unborn to a balanced and healthful ecology. Plaintiffs further assert that the adverse and
detrimental consequences of continued and deforestation are so capable of unquestionable
demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding,
they expressed their intention to present expert witnesses as well as documentary, photographic
and film evidence in the course of the trial.
ISSUE:
Whether or not the petitioners have a locus standi.
HELD:
The SC decided in the affirmative. Locus standi means the right of the litigant to act or to be
heard.Under Section 16, Article II of the 1987 constitution, it states that: The state shall protect
and advance the right of the people to a balanced and healthful ecology in accord with the rhythm
and harmony of nature. Petitioners, minors assert that they represent their generation as well as
generation yet unborn. We find no difficulty in ruling that they can, for themselves, for others of
their generation and for the succeeding generations, file a class suit. Their personality to sue in
behalf of the succeeding generations can only be based on the concept of intergenerational
responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as
hereinafter expounded considers the rhythm and harmony of nature. Nature means the created
world in its entirety. Such rhythm and harmony indispensably include, inter alia, the judicious
disposition, utilization, management, renewal and conservation of the countrys forest, mineral,
land, waters fisheries, wildlife, off- shore areas and other natural resources to the end that their
exploration, development and utilization be equitably accessible to the present as well as future
generations. Needless to say, every generation has a responsibility to the next to preserve that
rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little
differently, the minors assertion of their right to a sound environment constitutes, at the same
time, the performance of their obligation to ensure the protection of that right for the generations
to come. This landmark case has been ruled as a class suit because the subject matter of the
complaint is of common and general interest, not just for several but for ALL CITIZENS OF THE
PHILIPPINES.

[G.R. No. 148126. November 10, 2003]

GEORGE T. VILLENA, CARLOS N. VILLENA, AURORA M. BONDOC and RONNIE C.

FERNANDEZ, and their Respective Spouses, petitioners, vs. Spouses ANTONIO C. CHAVEZ
and NOEMI MARCOS-CHAVEZ and CARLITA C. CHAVEZ, respondents.
DECISION
PANGANIBAN, J.:

Stare decisis simply means that a judgment reached in one case should be applied to successive
ones in which the facts are substantially identical, even though the parties may be different. Like
cases ought to be decided alike.
The Case

Before this Court is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the
May 9, 2001 Decision[2] of the Court of Appeals (CA) in CA-GR SP No. 58329. The decretal
portion of the Decision reads as follows:
WHEREFORE, the judgment dated March 29, 2000 of Branch 56 of the RTC of Angeles City is
hereby REVERSED and SET ASIDE, and a new judgment entered in favor of the petitioners,
ordering the respondents and all persons claiming rights under them to vacate from the subject lots
and to remove their houses and/or any other structures or constructions thereon.[3]
The overturned Decision of the Regional Trial Court (RTC) of Angeles City, Branch 56,[4]
affirmed in toto the Municipal Trial Court (MTC) of Angeles City, Branch II.[5]
The Facts

The facts of the case are summarized by the CA in this wise:

In a Complaint for Illegal Detainer with Damages filed on October 15, 1998, the [respondents]
alleged that they are the owners of four (4) parcels of land designated as Lot Nos. 164, 165, 166,
and 167 of the Cadastral Survey of Angeles City, and covered, respectively, by Transfer
Certificates of Title Nos. 83247, 83246, 83248 and 83249, all issued by the Register of Deeds of
Angeles City. These four (4) parcels of land have been consolidated and subdivided into several
blocks and lots, and are now collectively designated as Bagong Silang Phase III-C. By mere
permission and tolerance of the [respondents], the [petitioners] have occupied and erected their
homes on four (4) of the said lots, as follows:
George T. Villena and wife = Block 5, Lot 14
Carlos N. Villena and wife = Block 5, Lot 13
Aurora M. Bondoc and husband = Block 2, Lot 4
Ronnie C. Hernandez and wife = Block 3, Lot 5
All the [petitioners] are members of the Bagong Silang Phase III-C Homeowners Association,
Inc., with office address at Cutud, Angeles City. The [respondents] allowed the [petitioners] and
other members of the said homeowners association to continue occupying the subject lots and
ultimately to acquire ownership of the lots occupied, in consideration of a certain amount to be
paid to the [respondents] as equity.
The [respondents] further alleged that the other members of the said homeowners association paid
to the [respondents] their respective equity for their right to continue occupying and ultimately
acquiring ownership of the occupied lots. However, notwithstanding repeated demands made upon
the [petitioners], they have refused and failed without any justifiable ground to pay their
respective equity. In view of such failure to pay, the [petitioners] have forfeited their right to
continue occupying the lots in question. Formal demand letters were then sent by registered mail
to the [petitioners], wherein they were given a period of thirty (30) days from receipt within which
to vacate and remove their houses from the subject lots. The period given to the [petitioners]
lapsed on April 11, 1998, but up to the present time, the [petitioners] refused and failed without
any justifiable reason or ground to vacate and remove their houses from the said lots.
The [respondents] then prayed in their Complaint that the [petitioners] be ordered to vacate and
remove their houses from the lots currently occupied; that each of the [petitioners] be ordered to
pay the [respondents] P1,000.00 a month as reasonable rental for the use and occupation of the
lots starting from April 11, 1998 until they have finally vacated and removed their houses from
said lots; and that the [petitioners] jointly and severally pay the [respondents] P25,000.00 as actual
and compensatory damages, P2,000.00 as appearance fee per hearing, exemplary damages, and
the costs of the suit.
In their answer with compulsory counter-claim filed on November 3, 1998, the [petitioners]
countered that the [respondents] have no cause of action to institute the present action, considering
that the properties in question are under the community mortgage program implemented by the
National Home Mortgage Finance Corporation. Moreover, the [petitioners] claimed that they are
lawful tenants of the premises, and that they have been paying their equity to their originator, the
Urban Land and Development Foundation[,] Inc. However, they were not issued the
corresponding receipts evidencing payment and a copy of their contract. The [petitioners] further
averred that they were willing to continue paying their equity until the same shall have been fully
paid, but their originator, without justifiable reason, refused to accept the tender of payment made
by them. The [petitioners] subsequently agreed with their originator that the payment of equity
should be continued only upon the release of a Purchase Commitment Line (PCL).
In addition, the [petitioners] alleged that they are qualified beneficiaries under Republic Act No.
7279, otherwise known as the Urban Development and Housing Act of 1992; hence, they cannot
be summarily evicted and their dwelling houses demolished unless and until they have been
relocated. According to the [petitioners], they are also builders in good faith and should be
indemnified for the improvements they constructed on the properties in question.
The [petitioners] prayed in their answer that the complaint be dismissed; that they be declared
lawful tenants and qualified beneficiaries under R.A. 7279; that the [respondents] be ordered to
sell the lots in question to them, and to pay attorneys fees and the costs of suit.
After the pre-trial conference, both parties submitted their position papers. On September 15,
1999, MTC Branch II of Angeles City rendered a decision dismissing both the [respondents]
complaint and the [petitioners] counter-claim, on the ground that the filing of an ejectment case
based on the alleged violation of the parties agreement which has not yet been rescinded is
premature, and that it is beyond the competence of the said court to act on the case, as rescission
or specific performance is beyond the jurisdiction of the said court.
The [respondents] appealed such adverse judgment to the RTC of Angeles City, which appeal was
raffled to Branch 56 of the said court. On March 29, 2000, RTC Branch 56 of Angeles City
rendered a decision affirming in toto the MTC judgment.[6]
Ruling of the Court of Appeals

The CA held that the right of petitioners to continue occupying the subject properties hinged on
their continued payment of the agreed amount as equity.[7] Even after formal letters of demand to
vacate the premises had been sent to them, however, they still did not make any effort to pay their
equity to protect their right to continue occupying those lots. Thus, the appellate court ruled that
their failure to pay made their occupancy unlawful, in consequence of which they became subject
to an ejectment suit.
The CA rejected the contention of petitioners that they were protected by RA 7279. According to
the appellate court, there was no express declaration by the local government unit that the parcels
of land owned by respondents were to be used for socialized housing. Neither was there proof of
the allegation that they had applied therefor under the Community Mortgage Program of the
National Home Mortgage Finance Corporation under Section 31 of RA 7279. Besides, even
granting that petitioners were protected under RA 7279, they were still liable to pay amortization
or face eviction.
Likewise debunked was the allegation of petitioners that respondents were not the real parties in
interest. Being the owners of the lots occupied by the former, the latter had a material interest in
the suit and stood to be benefited or injured by any judgment affecting those parcels of land.
Hence, this Petition.[8]
The Issues

Petitioners raise the following issues for our consideration:

I. Whether or not the Honorable Court of Appeals committed grave abuse of discretion amounting
to lack or excess of jurisdiction in reversing and setting aside the Decisions of the Municipal Trial
Court, Branch II and of the Regional Trial Court, Branch 56 both of Angeles City[;]
II. Whether or not the Honorable Municipal Trial Court has jurisdiction over the case;
III. Whether or not the non-inclusion of the Bagong Silang Homeowners Association Inc., is fatal
to respondents[] cause of action[;]
IV. Whether or not ejectment is proper in the case at bar;
V. Whether or not the absence of contractual relation[s] between the respondents and the
petitioners bar[s] the filing of any action by the respondents against the petitioner.[9]
The primordial issue to be resolved is whether unlawful detainer is the proper action to resolve
this case. If it is, then the MTC indeed had jurisdiction over the case, and the CA was correct in
overturning the RTCs ruling that the MTC had no jurisdiction over the case.
The Courts Ruling

The Petition is meritorious.

Main Issue:
Propriety of Unlawful Detainer
The CA ruled that petitioners possession or occupancy of the subject premises was by mere
tolerance of respondents. Hence, once petitioners failed to pay the agreed amount as equity, their
right to continue occupying the lots was lost.
We disagree. Contradictory were the statements of the appellate court that, on the one hand, there
was no contract between the parties; and yet, on the other, that petitioners failed to pay the agreed
equity. The fact that the CA found that there was failure to pay the equity was an indication of an
agreement. To be sure, petitioners possession of the subject premises was not by mere tolerance of
respondents.
In the Complaint[10] of respondents, filed before Branch II of the Municipal Trial Court of
Angeles City, they themselves alleged the presence of an agreement between the parties as
follows:
10. That in consideration of a certain amount to be paid to the [respondents] by each of the
[petitioners] as equity for their right to continue occupying and ultimately acquire ownership of
the lots that they occupy, the said homeowners association has made arrangements with the
[respondents] to allow the [petitioners] and other members of the said homeowners association to
continue occupying and ultimately acquire ownership of the lots that they occupy[.][11]
Further, in the Special Power of Attorney[12] annexed to their Complaint, they constituted and
appointed Teodorico B. Sanchez and/or Arturo M. Yadan as their attorneys-in-fact to do, among
others, the following:
1. To collect and receive any amount or amounts as equity for the sale thereof to them from the
occupants or any other interested buyer or buyers of any portion or portions of the following-
described parcels of land:
xxx xxx xxx
of which we are the absolute and exclusive owners, and which comprise the parcels of land being
acquired by the members or beneficiaries of the BAGONG SILANG PHASE III-C
HOMEOWNERS ASSOCIATION, at Brgy. Cutud, Angeles City[.][13]
Based on the admissions of respondents themselves, they entered into an agreement with
petitioners. Necessarily, the latters occupancy of the lots in question was not based merely on the
formers tolerance or permission. Thus, petitioners were not necessarily bound by an implied
promise to vacate upon demand, failing which, a summary action for ejectment would have
become proper.
The MTCs findings of fact on this point are instructive:
About the only thing that the parties have met on a common ground is that: [Respondents] have
entered into an arrangement/agreement with Bagong Silang Homeowners Association, Inc. that
called for the payment of certain amounts as equity for [petitioners] right to continue occupying
the lots with the end in view of eventually becoming the owners thereof, that pursuant to such
agreement [petitioners] have paid certain amounts as acquisition fees or as equity but later
discontinued making payments in view of the non-issuance of the so-called purchase commitment
line/loan, and as a consequence, [respondents] are now accusing [petitioners] for violating the
agreement and on the basis of such breach of the agreement by [petitioners], demands for the latter
to vacate the lots were made by [respondents].[14]
When respondents alleged that the Bagong Silang Phase III-C Homeowners Association made
arrangements with them to allow petitioners and other members of the association to continue to
occupy and ultimately to acquire ownership of the lots in question, respondents explicitly admitted
that a contract had indeed been entered into. The eventual transfer of ownership of real property
evidenced that obligation. What is clear is that in their Complaint, respondents alleged that
petitioners had violated the stipulations of their agreement as follows:
11. That the other members of the Ba[g]ong Silang Phase III-C Homeowners Association, Inc.,
paid to the [respondents] their respective equity for their right to continue occupying and
ultimately acquire ownership of the lots that they occupy, but notwithstanding repeated demands
made on them, up to the present time, the [petitioners] have refused and failed without any
justifiable ground or reason to pay their respective equity to the [respondents], and, in view of
such refusal and failure, the [petitioners] have forfeited their right to continue occupying and
ultimately acquire ownership of the lots that they occupy[.][15]
Petitioners, on the other hand, denied any breach on their part and argued that the principal issue
was one of interpretation, enforcement and/or rescission of the contract. Under these
circumstances, proof of violation of the provisions of the contract is a condition precedent to
resolution or rescission.[16] The contract can be declared rescinded only when its nature has been
clarified and the eventual violation thereof, if any, has been established. Upon such rescission, in
turn, hinges a pronouncement that the possession of the realty has become unlawful. Thus, the
basic issue is not possession but interpretation, enforcement and/or rescission of the contract -- a
matter that is beyond the jurisdiction of the Municipal Trial Court to hear and determine.
An allegation of a violation of a contract or agreement in a detainer suit may be proved by the
presentation of competent evidence, upon which an MTC judge might make a finding to that
effect. But certainly, that court cannot declare and hold that the contract is rescinded, as such
power is vested in the RTC.[17]
The rescission of the contract is the basis of, and therefore a condition precedent for, the illegality
of a partys possession of a piece of realty.[18] Without judicial intervention and determination,
even a stipulation entitling one party to take possession of the land and building in case the other
party violates the contract cannot confer upon the former the right to take possession thereof, if
that move is objected to.[19]
To be sure, the jurisdiction of a court is determined by the allegations in the complaint.[20] Thus,
in ascertaining whether or not an action is one for unlawful detainer falling within the exclusive
jurisdiction of the inferior courts, the averments of the complaint and the character of the relief
sought should be examined.
Also, as correctly pleaded by petitioners, a similar case had been decided by the CA in CA-GR SP
No. 58679, in which it ruled that the proper action should have been a complaint for rescission or
specific performance, not for illegal detainer. In that case, the same plaintiffs filed the same
charges against a different but similarly situated set of defendants.
The appellate court ruled therein that there was an existing agreement or contract that determined
the nature of the parties relationship.[21] Thus, it held that the proper action should have been for
rescission of contract or specific performance, not unlawful detainer.[22] When the CA Decision
was elevated, this Court denied the appeal for failure to show that a reversible error had been
committed by the appellate court. Thereafter, the Decision became final and executory on April
23, 2002.[23]
Said the appellate court in the previous case:
Inasmuch as the relationship existing between the parties is not a lessor-lessee relationship but one
that emanated from the agreement between appellants and the Urban Land and Development
Foundation, Inc., the so-called originator of the Bagong Silang Homeowners Association, Inc., the
relief being sought then by appellants appears to be improper. If ever there was no payment of
equity as provided for under the said agreement, the same cannot be considered as non-payment of
rentals. Thus, it cannot be a sufficient basis for filing an ejectment case against appellees, the
proper remedy being an action for rescission of contract or specific performance.[24]
We stress that when a court has laid down a principle of law as applicable to a certain state of
facts, it will adhere to that principle and apply it to all future cases in which the facts are
substantially the same.[25] Stare decisis et non quieta movere. Stand by the decisions and disturb
not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached
in one case should be applied to those that follow if the facts are substantially the same, even
though the parties may be different.[26] It proceeds from the first principle of justice that, absent
any powerful countervailing considerations, like cases ought to be decided alike.[27]
Having ruled that the MTC had indeed no jurisdiction to take cognizance of this case in the first
place, we see no more need to address the other issues raised by petitioners.
WHEREFORE, the Petition is hereby GRANTED and the assailed Decision of the Court of
Appeals is OVERTURNED. Consequently, the Decisions of the MTC and the RTC of Angeles
City are REINSTATED. No pronouncement as to costs.
SO ORDERED.

Taada, et al., v. Angara, et al., G.R. No. 118295, May 2, 1997

DECISION
(En Banc)

PANGANIBAN, J.:

I. THE FACTS

Petitioners Senators Taada, et al. questioned the constitutionality of the concurrence by the
Philippine Senate of the Presidents ratification of the international Agreement establishing the
World Trade Organization (WTO). They argued that the WTO Agreement violates the mandate of
the 1987 Constitution to develop a self-reliant and independent national economy effectively
controlled by Filipinos . . . (to) give preference to qualified Filipinos (and to) promote the
preferential use of Filipino labor, domestic materials and locally produced goods. Further, they
contended that the 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 our Constitution, and render meaningless the
phrase effectively controlled by Filipinos.

II. THE ISSUE

Does the 1987 Constitution prohibit our country from participating in worldwide trade
liberalization and economic globalization and from integrating into a global economy that is
liberalized, deregulated and privatized?

III. THE RULING

[The Court DISMISSED the petition. It sustained the concurrence of the Philippine Senate of the
Presidents ratification of the Agreement establishing the WTO.]

NO, the 1987 Constitution DOES NOT prohibit our country from participating in worldwide trade
liberalization and economic globalization and from integrating into a global economy that is
liberalized, deregulated and privatized.

There are enough balancing provisions in the Constitution to allow the Senate to ratify the
Philippine concurrence in the WTO Agreement.

[W]hile 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. 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.
xxx xxx xxx

[T]he constitutional policy of a self-reliant and independent national economy 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.

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, 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.

xxx xxx xxx

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 leglative 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.

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. Ineludibly, 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.