circumstances may be modified to such an extent that he who expects to receive property may be

EN BANC
[G.R. No. L-8964. July 31, 1956.]
JUAN EDADES, Plaintiff-Appellant, vs. SEVERINO EDADES, ET AL., Defendants-Appellees.
DECISION
BAUTISTA ANGELO, J.:
Plaintiff brought this action before the Court of First Instance of Pangasinan seeking a declaratory
judgment on his hereditary rights in the property of his alleged father and incidentally the recognition of
his status as an illegitimate son of Emigdio Edades.
In his complaint, he alleges that he is an illegitimate son of Emigdio Edades with Maria de Venecia,
having been born when said Emigdio Edades was legally married to Maxima Edades with whom
Emigdio had eight legitimate children; that he had always enjoyed the continuous and uninterrupted
possession of the status of illegitimate child by direct and positive acts of his father and of the legitimate
children of the latter; that as such illegitimate child he is entitled to share in the inheritance of his father
under the law; that as the legitimate children of his father will deny, as in fact they have denied his right
to inherit, and such denial may ripen into a costly litigation, he brought the present action for the
determination of his hereditary rights.
Defendants, instead of answering, filed a motion to dismiss on the ground that the complaint does not
state facts sufficient to constitute a cause of action. The court sustained the motion holding that “An
action for declaratory relief just for the purpose of clearing away doubt, uncertainty, or insecurity to
the Plaintiff’s status or rights would seem to be improper and outside the purview of a declaratory relief.
Neither can it be availed of for the purpose of compelling recognition of such rights, if disputed or
objected to.” Consequently, the court dismissed the complaint, without costs. From the order of
dismissal, Plaintiff has appealed and the case was certified to this court because only questions of law
are involved in the appeal.
deprived of it. Indeed, the moment of death is the determining point when an heir acquires a definite
right to the inheritance (5 Manresa, 5th ed., 324). This action therefore cannot be maintained if
considered strictly as one for declaratory relief.
But the present action, though captioned as one for declaratory relief, is not merely aimed at
determining the hereditary right of the Plaintiff to eventually preserve his right to the property of his
alleged father, but rather to establish his status as illegitimate child in order that, should his father die,
his right to inherit may, not be disputed, as at present, by the other Defendants who are the legitimate
children of his father. In fact, in paragraph 2 of complainant’s prayer he asks that Defendants be
ordered to recognize his status as illegitimate child with right to inherit. It is true that there is no express
provision in the new Civil Code which prescribe the step that may be taken to establish such status as
in case of a natural child who can bring an action for recognition (Article 285), but this silence
notwithstanding, we declare that a similar action may be brought under similar circumstances
considering that an illegitimate child other than natural is now given successional rights and there is
need to establish his status before such rights can be asserted and enforced. This right is impliedly
recognized by Article 289 which permits the investigation of the paternity or maternity of an illegitimate
child in the same manner as in the case of a natural child. Considering that the rules of procedure shall
be liberally construed to promote their object and avoid an expensive litigation (section 2, Rule 1), we
hold that the present action may be maintained in the light of the view herein expressed.
Wherefore, the order appealed from is revoked. The case is remanded to the trial court for further
proceedings in connection with the determination of the alleged status of the Plaintiff as an illegitimate
son of Emigdio Edades, without pronouncements as to costs.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador, Concepcion, Reyes J.B.L.,
Endencia, and Felix, JJ., concur.

ISSUE: whether or not the dismissal was proper

Under the law, an action for declaratory relief is proper when any person is interested “under a deed,
will, contract or other written instrument, or whose rights are affected by a statute or ordinance” in order
to determine any question of construction or validity arising under the instrument or statute, or to
declare his rights or duties thereunder (section 1, Rule 66). Moreover, the action should be predicated
on the following conditions: (1) there must be a justiciable controversy; (2) the controversy must be
between persons whose interest are adverse; (3) the party seeking declaratory relief must have a legal
interest in the controversy; (4) the issue involved must be ripened for judicial determination. (Tolentino
vs. Board of Accountancy, 90 Phil., 83).
The present case does not come within the purview of the law authorizing an action for declaratory relief
for it neither concerns a deed, will, contract or other written instrument, nor does it affect a statute or
ordinance, the construction or validity of which is involved. Nor is it predicated on any justiciable
controversy for admittedly the alleged rights of inheritance which Plaintiff desires to assert against
the Defendants as basis of the relief he is seeking for have not yet accrued for the simple reason that
his alleged father Emigdio Edades has not yet died. In fact, he is one of the herein Defendants. And the
law is clear that “the rights to the succession are transmitted from the moment of the death of the
decedent” (Article 777, new Civil Code). Up to that moment, the right to succession is merely
speculative for, in the meantime, the law may change, the will of the testator may vary, or the
EN BANC
[G.R. No. L-29535. February 27, 1971.]
IN THE MATTER OF THE PETITION OF FELISA LIM (Alias Lam Bit Sha) FOR REPATRIATION
UNDER COMMONWEALTH ACT NO. 63. FELISA LIM (Alias Lam Bit Sha), Petitioner-Appellee, v.
REPUBLIC OF THE PHILIPPINES, Oppositor-Appellant.
Jose G. Bunas, Jr. for Petitioner-Appellee.
Solicitor General Felix V. Makasiar and Solicitor Bernardo P. Pardo for Oppositor-Appellant.
DECISION
CONCEPCION, J.:
Appeal, taken by the Solicitor General, from a decision of the Court of First Instance of Zamboanga
City, the dispositive part of which reads as follows:jgc:chanrobles.com.ph
"WHEREFORE, the Court finding the petition to be meritorious on the ground that the petitioner Felisa
Lim has all the qualifications as required by law, hereby GRANTS the same and the herein petitioner
Felisa Lim is permitted to take her oath of allegiance as a Filipino citizen and declared
repatriated."cralaw virtua1aw library
On September 30, 1960, petitioner Felisa Lim (alias Lam Bit Sha) filed with said court a petition
alleging, inter alia, that she was formerly a citizen of the Philippines; that she lost her Philippine
citizenship, on December 10, 1943, by reason of marriage to a Chinese in Canton, China, by whom she
had two children; that her husband died in Canton, China, on April 15, 1955; that it is her intention to
reacquire Philippine citizenship and to renounce all allegiance and fidelity to any foreign potentate, state
or sovereignty and, particularly, to China, of which she is at present a citizen; that she has all the
qualifications to be repatriated, as shown by an affidavit of two Filipino citizens, appended to the
petition; and that she and her minor children are holders of immigration papers and were admitted into
the Philippines, as permanent residents, on March 14, 1960. Premised upon these allegations, Felisa
Lim prayed that she "be permitted to take the oath of allegiance as a Filipino citizen and thus
repatriated." Despite the opposition thereto of the Government, the lower court rendered the
aforementioned decision declaring that Felisa Lim was a citizen of the Philippines before he marriage
and that she may be repatriated as such citizen. Hence, this appeal by the Solicitor General who
maintains that the lower court erred "in declaring petitioner ‘repatriated’ as a citizen of the Philippines,"
upon the ground inter alia, that she had not duly established either the nationality of her alleged father,
Lorenzo, or her alleged relation with him, and that —
"‘Under our laws, there can be no action or proceeding for the judicial declaration of the citizenship of an
individual’ (Republic v. Maddela, supra).’Only as an incident of the adjudication of the rights of the
parties to a controversy may the Court pass upon and make a pronouncement relative to their status.
Otherwise, such pronouncement is beyond judicial power’ (Republic v. Maddela, supra)."cralaw
virtua1aw library
The appeal taken by the Government is well taken. The procedure for the repatriation of a female
citizen of the Philippines, who has lost her citizenship by reason of marriage to an alien, is as simple as
it can possibly be. All that is required of her, upon termination of her marital status, is for her to take the
necessary oath of allegiance to the Republic of the Philippines and to register said oath in the proper
civil registry. 1 In fact, the allegations and, particularly, the prayer in the petition of appellee herein
suggest that she is aware of the pertinent legal provisions. It is, moreover, apparent that her objective is
to settle her political status prior to marriage. In other words, thru her petition herein, she hopes to
establish that she was a citizen of the Philippines before she contracted marriage. As a consequence,
her petition is, in effect, one for a declaratory relief, which this Court has repeatedly held to be
inapplicable to the political status of natural persons.
Thus, the petitioner in Feliseta Tan v. Republic 2 had sought the cancellation of her alien certificate of
registration and that of her children, upon the ground that she is a Filipino citizen and that she is married
to the father of her children, who is a Chinese. She subsequently amended her petition so as to convert
it into one for a declaration that she is a citizen of the Philippines, she being the illegitimate child of a
Filipino woman and a Chinese citizen, and that her children are, likewise, citizens of the Philippines, she
having begotten them outside wedlock with another citizen of China, who was her common-law
husband. In due course, the lower court rendered judgment, the dispositive part of which
was:jgc:chanrobles.com.ph
"‘WHEREFORE, premises considered, the court hereby renders judgment declaring said Eleuteria
Feliseta Tan a Filipino citizen; that her registration as an alien has been a clear mistake on her part and
on the part of the City Treasurer of Ozamis City and therefore, the Commissioner of Immigration is
hereby ordered to cancel the Alien Certificate of Registration of the herein petitioner as well as those of
her children born out her relationship as husband and wife without benefit of marriage with Tan King
Pock, namely; Loreta Tan, Nenita Tan, Lourdes Tan, Leonila Tan, Tan King Pock, Jr. and William
Tan.’"
This judgment was set aside by the Supreme Court upon the ground that:jgc:chanrobles.com.ph
"Declaratory relief in this jurisdiction is a special civil action which may lie only when ‘any person
interested under a deed, will, contract or other written instrument, or whose rights are affected by
statute or ordinance,’ demands construction thereof for a declaration of his rights thereunder. None of
the above circumstances exists in the case under consideration. And this Court has already held that
there is no proceeding established by law or the rules by which any person claiming to be a citizen may
get a declaration in a court of justice to that effect or in regard to his citizenship.’
". . . If the petition seeks to compel the Commissioner of Immigration to cancel her and her children’s
alien certificate of registration, this petition would not lie because such a remedy of cancellation of alien
certificate of registration can only be held by virtue of a judgment of a competent court in an action
where the citizenship of parties is a material matter in issue, declaring the Filipino citizenship of the
petitioner and her children, and such declaration cannot be obtained directly because there is no
proceeding at present provided by law or the rules for such purpose."cralaw virtua1aw library
For the same reasons, in Santiago v. Commissioner of Immigration, 3 the decision of a Court of First
Instance declaring Santiago a Filipino citizen and ordering the cancellation of his alien certificate of
registration, as prayed for by Santiago, was reversed by the Supreme Court.
To the same effect was Board of Commissioners v. Domingo. 4 Said Board having ordered the
exclusion and deportation of one Muya, the latter instituted a certiorari proceeding in the Court of First
Instance of Manila to annul the decision of the Commissioners of Immigration. The case having been
dismissed for non-exhaustion of administrative remedies. Muya filed with the Court of First Instance of
Pangasinan an action for a declaratory judgment with mandamus and injunction, to declare him a
Filipino citizen, to restrain his deportation and compel the Commissioners of Immigration to release him.
Said court having issued a writ of mandatory injunction to set Muya free, the Board of Commissioners
applied from the Supreme Court for a writ of certiorari to annul said writ, which We did, upon the ground
among others, that "it is now well settled . . . that there is no proceeding established by law, or the rules,
for the judicial declaration of the citizenship of an individual . . . and that citizenship is not a proper
subject for declaratory judgment."cralaw virtua1aw library

In Tiu Navarro v. Commissioner of Immigration, 5 which was a proceeding to declare that petitioner
therein was a citizen of the Philippines and to, accordingly, cancel his alien certificate of registration, the
judgment rendered by the lower court granting the relief prayed for was, on appeal, reversed by the
Supreme Court, upon the theory that an action for a declaratory relief is not proper to resolve doubts
concerning one’s citizenship.

Channie Tan v. Republic 6 went a little farther. It held that, under a petition for naturalization alleging
that petitioner is a Chinese and praying that he be naturalized as a citizen of the Philippines, the court
had no authority to declare him a Filipino citizen. This view was reiterated in Tan Yu Chin v. Republic, 7
in which We postulated:jgc:chanrobles.com.ph

"Even assuming, therefore, that herein petitioner has shown that he is already a Filipino citizen, the
lower court exceeded its power, authority, and jurisdiction in declaring him to be such in these
naturalization proceedings."cralaw virtua1aw library

Of particular relevance to the case at bar is the following pronouncement made in Delumen v. Republic
of the Philippines: 8

". . . there is nothing in the petition which even intimates that the alleged status of the appellees as
Filipino citizens had in any instance been questioned or denied by any specific person or authority.
Indeed, the petition alleges that the appellees have considered themselves and were considered by
their friends and neighbors as Filipino citizens, voted in the general elections of 1946 and 1947, and
were registered voters for the elections of 1951, and it is not pretended that on any of said occasions
their citizenship was controverted. It is not accurate to say, as appellees do, that an actual controversy
arose after the filing by the Solicitor General of an opposition to the petition, for the reason that the
cause of action must be made out by the allegations or the complaint or petition, without the aid of the
answer. As a matter of fact, the answer herein alleges that the petition states no cause of action. In
essence, the appellees merely wanted to remove all doubts in their minds as to their citizenship, but an
action for declaratory judgment cannot be invoked solely to determine or try issues or to determine a
moot, abstract or theoretical question, or to decide claims which are uncertain or hypothetical. (1 C. J.
S., p. 1024.) And the fact that appellee’s desires are thwarted by their ‘own doubts, or by fears of others
. . . does not confer a cause of action.’ (Moran, Comments on the Rules of Court, 1952 ed., Vol. II, p.
148, citing Willing v. Chicago Auditorium Assn., 277 U.S., 274, 289, 48 Sup. Ct., 507, 509.)."cralaw
virtua1aw library

WHEREFORE, the decision appealed from should be, as it is hereby, reversed and another one shall
be entered dismissing the petition herein, with costs against petitioner-appellee Felisa Lim. It is so
ordered.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee, Barredo and Villamor, JJ.,
concur.

Makasiar, J., did not take part.

MANILA ELECTRIC COMPANY, petitioner, vs. PHILIPPINE CONSUMERS FOUNDATION, INC.,
EDGARDO S. ISIP, HON. JUDGE MANUEL M. CALANOG, JR., and HON. JUDGE TIRSO
D'C. VELASCO, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Interest republicae ut sit finis litium[1] - it is to the interest of the public that there should be an end
to litigation by the same parties and their privies over a subject fully and fairly adjudicated. From this
overwhelming concern springs the doctrine of res judicata an obvious rule of reason according stability
to judgments.
Challenged in this petition for review on certiorari are the a) Decision in Civil Case No. Q-89-3659
dated January 16, 1991 of the Regional Trial Court, Branch 76, Quezon City; [2] and b) its Order dated
September 10, 1991[3] denying the motion for reconsideration of the said Decision.
The pertinent facts are:
On September 11, 1974, former President Ferdinand E. Marcos, with the objective of enabling the
grantees of electric franchises to reduce their rates "within the reach of consumers",[4]promulgated
Presidential Decree No. 551[5] providing for the reduction from 5% to 2% of the franchise tax paid by
electric companies, thus:
SECTION 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax
payable by all grantees of franchises to generate, distribute and sell electric current for light, heat and
power shall be two (2%) of their gross receipts received from the sale of electric current and from
transactions incident to the generation, distribution and sale of electric current.
On February 5, 1982, the Philippine Consumers Foundation, Inc., (PCFI) filed with the Board of
Energy (BOE) a "Petition for Specific Performance, Damages and Violation of P. D. No. 551"[6] against
the Manila Electric Company (Meralco), docketed as BOE Case No. 82-198. PCFI sought for the
immediate refund by Meralco to its customers of all the savings it realized under P.D. No. 551, through
the reduction of its franchise tax from 5% to 2%, with interest at the legal rate; and for the payment of
damages and a fine in the amount of P50, 000.00 for violating P.D. 551. It moored its petition on
Section 4 of P.D. No. 551 which provides:
Sec. 4. All the savings realized by electric franchise holders from the reduction of the franchise tax
under Section 1 and tariff reductions and tax credits under Sections 2 and 3, shall be passed on to the
ultimate consumer. The Secretary of Finance shall promulgate rules and regulations and devise a
reporting systems to carry out the provisions of this Decree.
In its answer to the petition, Meralco alleged that it was duly authorized by the BOE in its Order
dated March 10, 1980 in BOE Case No. 79-692 to retain the disputed savings; and that the said Order
had long become final.
On November 25, 1982, the BOE issued its Decision dismissing PCFI's petition, declaring that
Meralco was indeed authorized by the BOE, in BOE Case No. 79-692, to retain the disputed savings
under P.D. 551, thus:
It is at once evident from the foregoing controlling facts and circumstances, particularly the
Order of this Board dated March 10, 1980, as confirmed by the reply-letter dated March 3, 1981,
that Meralco has been duly authorized to retain the savings realized under the provisions of P.D.
551. The authority granted in the said Order and letter is so clear and unequivocal as to leave any room
for contradictory interpretation. This Board, therefore, holds as untenable petitioners claim that
respondent Meralco was never authorized under the said Order and letter to hold on to the savings
realized under the said decree.
"The Board likewise finds to be devoid of merit petitioners contention that pursuant to Opinion No. 140,
Series of 1979, of the Minister of Justice, it is absolutely mandatory on the part of respondent Meralco
to pass on to its customers the savings under consideration. It must be pointed out that the Order of
March 10, 1980 was issued by this Board on the basis of the recommendation contained in the
Memorandum dated November 30, 1979 of the Minister of Finance, which was approved by the
President of the Philippines in his directive to this Board dated December 11, 1979 issued thru
Presidential Executive Assistant Jacobo Clave. This Board believes and so holds that the approval by
the President of the Philippines of the aforesaid Finance Ministrys recommendation had the effects of
(a) reversing or modifying the aforementioned Opinion of the Minister of Justice; and (b) confirming the
promulgation by the Ministry of Finance, conformably with the specific authority granted it under P.D.
No. 551, of an additional rule or regulation for the implementation of the said decree for the guidance of
this Board. In issuing the Order of March 10, 1980, therefore, the Board has done no more than follow
and be guided by the said additional rule or regulation.
"It is noteworthy to mention also that the registered oppositors in BOE Case No. 79-692
(formerly BPW Case No. 72-2146), where the respondent herein originally filed its motion
requesting for authority to defer the passing on to its customers of the franchise tax reduction
benefits under P.D. No. 551, have done nothing to seek relief from or to appeal to the
appropriate forum, the said Order of March 10, 1980. As a consequence, the disposition
contained therein have long become final.
xxxxxx
"That Meralco has been authorized to retain the savings resulting from the reduction of the
franchise tax under P.D. No. 551 is, therefore beyond question."[7] (Emphasis supplied)
PCFI filed a motion for reconsideration but was denied by the BOE. Hence, PCFI filed a Petition
for Certiorari with this Court, docketed as G.R. No. 63018. In a Resolution dated October 22, 1985, this
Court dismissed the petition for lack of merit, holding that:
We see no grave abuse of discretion warranting the setting aside of the BOE order.
"P.D. No. 551 ordered the Minister of Finance to issue implementing rules and regulations. The Minister
authorized all grantees of electric franchises, not Meralco alone, whose rates of return on their rate
bases were below the legal allowable level to either ask for increased rates or to defer the passing on of
benefits under the decree to consumers until just and reasonable returns could be had. Lengthy
investigations, audits, hearings, and determinations over practically an eight year period preceded the
questioned decision. The petitioners failed both below and in this petition to successfully refute the facts
ascertained in the audits and examinations. The BOE approved option formed the basis of subsequent
determinations of Meralco rates and the adopted formula became the basis of computations. When this
petition was filed on January 27, 1983, the November 25, 1982 ruling was already final and
executory. Moreover, the March 10, 1980 judgment rendered in BOE Case No. 79-692, where
Meralco had filed a motion for authority to defer passing on to customers the savings from the
reduction of franchise taxes, was not appealed or questioned by the petitioners. Instead, they
filed BOE Case No. 82-198 on February 5, 1982 or almost two years later, raising the same
issues against the same parties. BOEs questioned decision in Case No. 82-198 used the facts in
BOE Case No. 79-692 for its conclusions. Not only had the March 10, 1980 decision confirmed
the findings of the Minister of Finance on Meralcos accounts and finances but in filing the
second case, the petitioners were asking for a readjudication of the same issues in another
challenge to these same findings .x x x.[8] (Emphasis supplied)
Four years thereafter, PCFI and a certain Edgardo S. Isip, private respondents herein, filed with
respondent Regional Trial Court, Branch 76, Quezon City, a petition for declaratory relief, docketed
as Civil Case No. Q-89-3659. Private respondents prayed for a ruling on who should be entitled to the
savings realized by Meralco under P.D. No. 551. Once again, they insisted that pursuant to Section 4 of
P.D. No. 551, the savings belong to the ultimate consumers.
Meralco, in its answer, prayed for the dismissal of the petition on the ground of res judicata, citing
this Court's Resolution in G.R. No. 63018 which affirmed the BOE's Decision in BOE Case No. 82-198.
On January 16, 1991, respondent RTC rendered the assailed Decision declaring null and void the
Resolution of this Court in G.R. No. 63018 and on the basis of the Dissenting Opinion of the late Justice
Claudio Teehankee, held that the disputed savings belong to the consumers, thus:
Respondent Meralcos theory is devoid of merit. As correctly stated in the dissenting opinion of the
late Chief Justice Claudio Teehankee in the October 22, 1985 resolution of the Supreme Court in
SC G.R. No. 63018, the decision of the Board of Energy is ultra vires, hence, null and void. x x x.
"It is a well-settled rule in statutory construction that when the law is clear, it leaves no room for
interpretation. The memorandum issued by the Minister of Finance which was made the basis of the
decision of the Board of Energy has no legal effect because Sec. 4 of P.D. No. 551 is clear and
unequivocal.
xxxxxx
"Since the law is clear, what is left to be done by the administrative body or agency concerned is to
enforce the law. There is no room for an administrative interpretation of the law. In the instant case, the
Board interpreted PD 551 and chose not only to enforce it but to amend and modify the law on the basis
of a Memorandum and the authority issued by the Minister of Finance to all grantees of electric-
franchises, not Meralco alone, whose rates of return on their rate basis were below the legal allowable
level, to either ask for an increased rates or to defer the passing on of benefits under the decree to
consumers, until just and reasonable return could be had. This is beyond the authority granted by PD
551 to the Minister of Finance. PD 551 merely ordered the Minister of Finance to issue implementing
rules and regulations. He cannot amend or modify the clear mandate of the law. The act therefore of
the Minister of Finance was ultra vires, hence, null and void. Considering that said act became
the basis of the Board of Energys decision, it follows that said decision is likewise null and void
and the Supreme Court resolution affirming said decision is also null and void having
proceeded from a void judgment, hence, cannot be considered as valid judgment that will be a
bar to the present action."[9] (Emphasis supplied)
Meralco moved for a reconsideration of the above Decision but was denied by respondent court in
its Order of September 10, 1991.
Hence, Meralco's petition for review on certiorari anchored on the following grounds:
"I
RESPONDENT JUDGES ERRED IN HOLDING THAT CIVIL CASE NO. 89-3659 IS NOT BARRED BY
PRIOR JUDGMENT.
II
RESPONDENT JUDGES ERRED IN DECLARING NULL AND VOID A RESOLUTION OF THIS
HONORABLE SUPREME COURT.
III
RESPONDENT JUDGES ERRED IN HOLDING THAT THE REMEDY OF DECLARATORY RELIEF
WAS STILL AVAILABLE TO PRIVATE RESPONDENTS.
IV
RESPONDENT JUDGES ERRED IN NOT DISMISSING THE PETITION FOR DECLARATORY
RELIEF."[10]
Meralco contends that Civil Case No. Q -89-3659 is already barred by prior judgments, referring
to a) this Courts Resolution in G.R. No. 63018 sustaining the BOE's Decision in BOE Case No. 82-
198; and b) the Order dated March 10, 1980 of the same Board in BOE Case No. 79-692, both holding
that Meralco is authorized to retain its savings realized under P.D. 551.Meralco likewise argues that
respondent RTC cannot annul the Resolution of this Court in G.R. No. 63018 considering that trial
courts cannot set aside decisions of a superior court. And lastly, Meralco maintains that private
respondents can no longer avail of the remedy of an action for declaratory relief in view of the rule that
such action should be filed before a violation of the statute occurred. [11]
In their comment,[12] private respondents argue that this Court's Resolution in G.R. No. 63018
cannot be a bar to Civil Case No. Q-89-3659 for declaratory relief considering that it did not delve on the
essential issue raised in the latter case, i.e., who is entitled to the savings. Further, they claim that
public interest would be defeated by the application of res judicata.
The petition is meritorious.
The issue - whether or not Meralco is duly authorized to retain the savings resulting from the
reduction of the franchise tax under P.D. No. 551 as long as its rate of return falls below the 12 %
allowable rate recognized in this jurisdiction has long been settled. Thus, the relitigation of the same
issue in Civil Case No. Q-89-3659 cannot be sanctioned under the principle of res judicata.
Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter
settled by judgment.[13] In res judicata, the judgment in the first action is considered conclusive as to
every matter offered and received therein, as to any other admissible matter which might have been
offered for that purpose, and all other matters that could have been adjudged therein. [14] For a claim
of res judicata to prosper, the following requisites must concur: 1) there must be a final judgment or
order; 2) the court rendering it must have jurisdiction over the subject matter and the parties; 3) it must
be a judgment or order on the merits; and 4) there must be, between the two cases identity of parties,
subject matter and causes of action.[15]
All the above requisites are extant in the records and thus, beyond dispute.
Re: FIRST REQUISITE - there must be a final judgment:
It is beyond question that this Courts Resolution dated October 22, 1985 in G.R. No. 63018,
sustaining the BOEs Decision dated November 25, 1982 in BOE Case No. 82-198 which dismissed
PCFI's petition, attained finality on December 4, 1985. As a matter of fact, this Court had long ago
issued an Entry of Judgment stating that the said Resolution "became final and executory and is x x
x recorded in the Book of Entries of Judgements." Prior thereto, or on March 10, 1980, the BOE's Order
in BOE Case No. 79-672 became final when the oppositors therein did not appeal.
Re: SECOND REQUISITE - the court which rendered the final judgment must have jurisdiction
over the subject matter and the parties:
There is no question that the BOE has jurisdiction over the subject matter and the parties
herein. Under P.D. No. 1206,[16] The BOE is the agency authorized to "regulate and fix the power rates
to be charged by electric companies."[17] As such, it has jurisdiction over Meralco, an electric company,
and over the savings it realized under P.D. No. 551. It bears stressing that P.D. No. 551 was passed
precisely to enable the grantees of electric franchises to reduce their rates within the reach of
consumers. Clearly, the matter on how the disputed savings should be disposed of in order to realize a
reduction of rates is within the competence of the BOE.
Re: THIRD REQUISITE - it must be a judgment or order on the merits:
The BOE's Decision in BOE Case No. 82-198 is a judgment on the merits. A judgment is on the
merits when it determines the rights and liabilities of the parties based on the disclosed facts,
irrespective of formal, technical or dilatory objections. After according both parties the opportunities to
be heard, the BOE disposed of the controversy by resolving the rights of the parties under P.D. No.
551. In its Decision, the BOE declared in clear and unequivocal manner that Meralco "has been duly
authorized to retain the savings realized under the provisions of P.D. No. 551" and that private
respondent PCFIs argument to the contrary is "untenable." The BOE's Decision was upheld by this
Court in G.R. No. 63018.
Re: FOURTH REQUISITE - there must be between the two cases identity of parties, subject
matter and causes of action:
There is identity of parties between the two cases. BOE Case No. 82-198 was a contest between
private respondent PCFI, as petitioner, and Meralco, as respondent. Civil Case No. Q-89-3659 involves
the same contenders, except that respondent Edgardo Isip joined PCFI as a plaintiff. But his inclusion
as such plaintiff is inconsequential. A party by bringing forward, in a second case, additional parties
cannot escape the effects of the principle of res judicata when the facts remain the same. Res
judicata is not defeated by a minor difference of parties, as it does not require absolute but only
substantial identity of parties.[18]
The subject matters of BOE Case No. 82-198 and Civil Case No. Q-89-3659 are likewise identical
since both refer to the savings realized by Meralco from the reduction of the franchise tax under P.D.
No. 551. The subject matter of an action refers to the thing, wrongful act, contract or property which is
directly involved in the action, concerning which the wrong has been done and with respect to which the
controversy has arisen.[19] In both cases, the controversy is how the disputed savings shall be disposed
of - whether they shall be retained by Meralco or be passed on to the consumers.
With respect to identity of causes of action, this requisite is likewise present. In both cases, the act
alleged to be in violation of the legal right of private respondents is Meralco's retention of the savings it
realized under P.D. No. 551. While it is true that BOE Case No. 82-198 is one for specific performance,
while Civil Case No. Q-89-3659 is for declaratory relief - in the ultimate - both are directed towards only
one relief, i.e., the refund of the disputed savings to the consumers. To seek a court's declaration on
who should benefit from the disputed savings (whether Meralco or the consumers) will result in the
relitigation of an issue fairly and fully adjudicated in BOE Case No. 82-198.
Clearly, the test of identity of causes of action lies not in the form of an action. The difference of
actions in the aforesaid cases is of no moment. The doctrine of res judicata still applies considering that
the parties were litigating for the same thing and more importantly, the same contentions. [20] As can be
gleaned from the records, private respondents arguments in Civil Case No. Q-89-3659 bear extreme
resemblance with those raised in BOE Case No. 82-198.
Respondent RTC's Decision granting PCFI and Isip's petition for declaratory relief is in direct
derogation of the principle of res judicata. Twice, it has been settled that Meralco is duly authorized to
retain the savings it realized under P.D. No. 551 as long as its rate of return falls below the 12%
allowable rate. The pronouncement of the BOE in BOE Case No. 82-198 finding such fact to be
"beyond question" is clear and not susceptible of equivocation. This pronouncement was sustained by
this Court in G.R. No. 63018. In finding no grave abuse of discretion on the part of the BOE, this Court
saw the wisdom of its assailed Decision. Thus, this Court held: "[I]n dismissing the petition for specific
performance, the BOE authorized Meralco, in lieu of increasing its rates to get a more reasonable return
on investments while at the same time refunding to consumers the benefit of P.D. No. 551, to instead
defer the passing on of benefits but without the planned increases. Instead of giving back money to
consumers and then taking back the same in terms of increased rates, Meralco was allowed by the
BOE to follow the more simplified and rational procedure." [21]
Private respondents now argue that G.R. No. 63018 merely decreed the postponement of the
passing of Meralco's savings to the consumers until it could increase its rate charges. On this point, this
Court categorically ruled:
"X x x. And finally, as stated by the Solicitor General, if only to put the issue to final rest, BOEs
decision authorizing Meralco to retain the savings resulting from the reduction of franchise tax
as long as its rate of return falls below the 12% allowable rate is supported by P.D. No. 551, the
rules and administrative orders of the Ministry of Finance which had been duly authorized by the
decree itself and by directives of the President to carry out the provisions of the decree, and
most of all by equitable economic considerations without which the decree would lose its
purpose and viability."[22]
Corollarily, let it not be overlooked that the purpose of an action for declaratory relief is to secure
an authoritative statement of the rights and obligations of the parties under a statute, deed, contract etc.
for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues arising
from an alleged breach thereof. It may be entertained only beforethe breach or violation of the statute,
deed, contract etc., to which it refers.[23] The petition gives a practical remedy in ending controversies
which have not reached the stage where other relief is immediately available. It supplies the need for a
form of action that will set controversies at rest before they lead to repudiation of obligations, invasion of
rights, and the commission of wrongs.[24] Here, private respondents brought the petition for declaratory
relief long after the alleged violation of P.D. No. 551.
Lastly, we are dismayed by respondent RTC's adherence to the Dissenting Opinion, instead of the
Majority Opinion, of the members of this Court in G.R. No. 63018, as well as its temerity to declare a
Resolution of this Court "null and void" and "cannot be considered as valid judgment that will be a
bar to the present action."
A lower court cannot reverse or set aside decisions or orders of a superior court, especially of this
Court, for to do so will negate the principle of hierarchy of courts and nullify the essence of review. A
final judgment, albeit erroneous, is binding on the whole world. Thus, it is the duty of the lower courts to
obey the Decisions of this Court and render obeisance to its status as the apex of the hierarchy of
courts. "A becoming modesty of inferior courts demands conscious realization of the position that they
occupy in the interrelation and operation of the integrated judicial system of the nation." [25] "There is only
one Supreme Court from whose decisions all other courts should take their bearings," as eloquently
declared by Justice J. B. L. Reyes.[26]
Respondent RTC, and for this matter, all lower courts, ought to be reminded that a final and
executory decision or order can no longer be disturbed or reopened no matter how erroneous it may
be. Although judicial determinations are not infallible, judicial error should be corrected through appeals,
not through repeated suits on the same claim. [27] In setting aside the Resolution and Entry of Judgment
of this Court in G.R. No. 63018, respondent court grossly violated basic rules of civil procedure.
In fine, we stress that the rights of Meralco under P.D. No. 551, as determined by the BOE and
sustained by this Court, have acquired the character of res judicata and can no longer be challenged.
WHEREFORE, the petition is hereby GRANTED. The assailed RTC Decision dated January 16,
1991 and Order dated September 10, 1991 in Civil Case No. Q-89-3659 are REVERSED and SET
ASIDE.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing,
Pardo, Buena, Ynares-Santiago, De Leon, Jr., and Carpio, JJ., concur.
[G.R. No. L-5552. January 28, 1954.]
ANTONIO DELUMEN ET AL, Petitioners-Appellees, v. REPUBLIC OF THE
PHILIPPINES, Oppositor-Appellant.
Solicitor General Juan R. Liwag and Solicitor Florencio Villamor for Appellant.
Romeo M. Escareal for Appellees.
SYLLABUS
ACTIONS; DECLARATORY RELIEF; JUSTICIABLE CONTROVERSY. — For an action for declaratory
judgment to lie, there must be a justiciable controversy. The petition must show "an active antagonistic
assertion of a legal right on one side and a denial thereof on the other concerning a real, and not a
mere theoretical question or issue." An actual controversy does not arise upon the mere filing by the
Solicitor General of an opposition to the petition for declaratory relief, for the reason that the cause of
action must be made out by the allegations of the complaint or petition, unaided by the answer.
DECISION
PARAS, J.:
answer filed by the Solicitor General opposing the petition for declaratory relief, a justiciable controversy
thereby arose. We are of the opinion that appellant’s contention is tenable, since there is nothing in the
petition which even intimates that the alleged status of the appellees as Filipino citizens had in any
instance been questioned or denied by any specific person or authority. Indeed, the petition alleges that
the appellees have considered themselves and were considered by their friends and neighbors as
Filipino citizens, voted in the general elections of 1946 and 1947, and were registered voters for the
elections of 1951, and it is not pretended that on any of said occasions their citizenship was
controverted. It is not accurate to say, as appellees do, that an actual controversy arose after the filing
by the Solicitor General of an opposition to the petition, for the reason that the cause of action must be
made out by the allegations of the complaint or petition, without the aid of the answer. As a matter of
fact, the answer herein alleges that the petition states no cause of action. In essence, the appellees
merely wanted to remove all doubts in their minds as to their citizenship, but an action for declaratory
judgment cannot be invoked solely to determine or try issues or to determine a moot, abstract or
theoretical question, or to decide claims which are uncertain or hypothetical. (1 C. J. S., p. 1024.) And
the fact that appellees’ desires are thwarted by their "own doubts, or by fears of others . . . does not
confer a cause of action." (Moran, Comments on the Rules of Court, 1952 ed., Vol. II, p. 148, citing
Willing v. Chicago Auditorium Assn., 277 U.S., 274, 289, 48 Sup. Ct., 507, 509. )In view of what has
been said, it becomes unnecessary to discuss either the second contention of the Solicitor General that
the trial court erred in holding that the petition for declaratory relief may be utilized to obtain a judicial
pronouncement as to appellees’ citizenship, or his third contention that the evidence does not support
the conclusion in the appealed decision that the appellees are Filipino citizens.
Wherefore, the appealed decision is reversed and the petition dismissed without pronouncement as to
costs. So ordered.
Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo, Bautista Angelo and Labrador, JJ., concur.

On October 9, 1951, Antonio, Juan and Julito, surnamed Delumen, filed a petition in the Court of First
Instance of Samar, alleging that they are legitimate children of Paciencia Pua, a Filipino woman, and
Mariano Delumen who was declared a Filipino citizen by the same court in an order dated August 7,
1950, and praying said court to determine whether they are Filipino citizens and to declare their
corresponding rights and duties. It is further alleged in the petition that the petitioners have continuously
resided in the Philippines since their birth, have considered themselves as Filipinos, had exercised the
right to vote in the general elections of 1946 and 1947, and were registered voters for the elections in
1951. The Solicitor General, in behalf of the Republic of the Philippines, filed an answer alleging that the
petition states no cause of action, there being no adverse party against whom the petitioners have an
actual or justiciable controversy. After hearing, the Court of First Instance of Samar rendered a decision
declaring the appellees to be Filipinos by birth and blood. From this decision the Solicitor General has
appealed.

Under the first assignment of error, the appellant cites our decision in Hilarion C. Tolentino v. The Board
of Accountancy, Et. Al. * G. R. No. L-3062, September 28, 1951, wherein we held that: "A petition for
declaratory relief must be predicated on the following requisites: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party
seeking declaratory relief must have a legal interest in the controversy; and (4) the issue invoked must
be ripe for judicial determination."cralaw virtua1aw library

While the Solicitor General contends that a justiciable controversy is one involving "an active
antagonistic assertion of a legal right on one side and a denial thereof on the other concerning a real,
and not a mere theoretical question or issue (1 C. J. S., p. 1026)," and that in the present case "no
specific person was mentioned in the petition as having or claiming an adverse interest in the matter
and with whom the appellees have an actual controversy," the appellees argue that, by virtue of the
G.R. No. L-21036 June 30, 1977
COMMISSIONER OF CUSTOMS and COLLECTOR OF CUSTOMS FOR MANILA and CONRADO
SOLEDAD, EDMUNDO POSTRERO, MAXIMINO ABRUGENA, GERONIMO DERILO, SANTOS
GUINTO and EUSTAQUIO MARANAN, as employees and duly authorized representatives of the
House of Representatives, Congress of the Philippines, petitioners,
vs.
HON. JUDGE GAUDENCIO CLORIBEL, as Presiding Judge of Branch VI, Court of First Instance
of Manila, and JOSE and SUSANA COCHINGYAN, respondents.
Solicitor General Arturo A. Alafriz Assistant Solicitor General Pacifico P. de Castro, Solicitor Alejandro
B. Afurong, Special Attorney Jose T. Viduya and Attorney Ceferino de los Santos for petitioners.
Lino M. Patajo and Ramon Encarnacion, Jr. for private respondents.
BARREDO, J.:
Petition for certiorari and prohibition to annul and set aside several orders of respondent court all of
which together in effect: (1) permitted ex-parte private respondents Jose and Susana Conchingyan to
file a third-party complaint for mandamus against petitioners in a special civil. action for declaratory
relief in which said Cochingyans were defendants and which was already tried and almost ready for
decision; on the same day, (2) admitted said third-party complaint and (8) further issued immediately a
writ of preliminary mandatory injunction likewise ex-parte; and which (4) were intended to enforce said
writ of injunction.
There was pending before respondent court as Civil Case No. 52318, entitled Macario M. Ofilada vs.
Reparations Commission, Jose Cochingyan and Susana Cochingyan, a special civil action for
declaratory relief, wherein Ofilada, as the Second Receiver of the World War II Veterans Enterprises,
Inc. (Warvets) in Civil Case No. 34998, likewise pending in another Branch of the Court of First Instance
of Manila, sought a judicial declaration as to whether, under the allocation granted to said Warvets to
purchase reparations goods, the conversion into pesos of the dollar prices of said goods should be at
the rate of two pesos to one dollar or at the prevailing market rate at the time for payment, which would
be much higher. Civil Case No. 34998 was a minority suit filed by certain stockholders of Warvets
alleging irregularities in the management and disposition of the goods being purchased by the
corporation by virtue of the aforementioned allocation, hence the need for receivers, of which there
were two, the first being one Ramon E. Saura and the second, Ofilada. In the same Civil Case No.
34998, an order had been issued on October 9, 1962 ordering Ofilada to deliver to the Cochingyans the
second shipment of goods under Warvets' allocation. (The Cochingyans had a contract with Warvets
regarding said goods.) It appears, however, that a motion for the reconsideration of the just mentioned
order of October 9, 1962 had been filed and was still unresolved when on February 9, 1963, the
Honorable Judge Francisco Arca (now deceased) issued the following order:
Considering all the foregoing, the Court is of the opinion that the petition of Atty.
Magno to defer action on the motion for contempt against the intervenors should be
granted until after it can be definitely known whether or not the parties can settle this
case amicably. Resolutions on all pending incidents, such as the motion for
reconsideration of the order authorizing the release of the second shipment, and the
motions for the release of the third, fourth and fifth shipments, are also held in
abeyance until such time that the Court knows the result of the pending settlement
being negotiated among the parties.
In view of all the above, the Court hereby orders that all incidents pending resolution
be held in abeyance until after the parties have definitely decided whether they are
going to settle this case or not. (Emphasis supplied.)
It was shortly after the issuance of this order which in effect freezed the order of release of October 9,
1962, that the incidents subject of the instant petition took place. On February 13, 1963, the
Cochingyans filed in Civil Case No. 52318 then already tried although not yet decided by Judge
Gaudencio Cloribel (now also deceased) — who on February 9, 1963 had written the Secretary of
Justice asking for permission to go on leave for a week starting February 12, 1973 but who later
changed the starting date to February 13, 1973- an ex-parte motion asking permission to file a third
party complaint which was forthwith granted. On the same day, another motion was filed asking for
immediate admission of the third party complaint, which likewise, was forthwith granted. The third-party
complaint included in the prayer, among other reliefs, the following:
1. Immediately upon the filing of the herein third-party complaint this Honorable Court
issue a writ of preliminary mandatory injunction ex-parte, without notice to the other
parties, ordering the third-party defendants Commissioner of Customs and Collector
of Customs and Reparations Commission to release immediately to the third-party
plaintiffs the balance of the 202 packages of rayon clothing forming part of the
shipment of consumer goods originally consigned to the Reparations Commission
which arrived in Manila aboard the SS GUILLERMO on September 10, 1962, and
which to the present are still under the custody and possession of the Collector of
Customs and Commissioner of Customs, upon the filing of a bond by the third-party
plaintiffs in such amount as may be fixed by this Honorable Court to pay for any
damages that the third-party defendants may suffer should this Honorable Court find
that issuance of the preliminary mandatory injunction is not proper. (Page 87,
Record.)
Without loss of time and without hearing the third-party defendants, the following order, was issued on
the same day, February 12, 1963:
In a verified third-party complaint for mandamus against the Commissioner of
Customs, the Collector of Customs and others, third party plaintiffs Jose and Susana
Cochingyan, doing business under the name and style "The Catholic Church Mart",
alleged that a shipment of 402 packages of rayon cloth which was procured by the
Reparations Commission to cover an allocation granted by the Commission to the
World War II Veterans Enterprises (WARVETS for reparation consumer goods from
Japan arrived in Manila on September 10, 1962, consigned to the Reparations
Commission; that this Court in Civil Case No. 34998 entitled "Pilar Normandy et al.,
vs. Calixto Duque, et al." authorized in its order of October 9, 1962, the Second
Receiver of WARVETS, Mr. Macario M. Ofilada, to release said goods to Jose and
Susana Cochingyan; that pursuant to said order of October 9, 1962, Mr. Ofilada, in
his capacity as second receiver of WARVETS, signed a contract of absolute sale with
the Reparations Commission covering the described reparation consumer goods and
paid in full the purchase price of said goods; that after receiving full payment of the
purchase price of said goods the Commission instead of releasing the goods from
customs and delivering them requested the Collector of Customs to verify and make
 an appraisal of the value of the goods and complying with said request, the Collector
of Customs opened and inspected each and all of the bales and packages
compromising said shipment; that after completing said inspection and verification the
Collector of Customs advised the third-party plaintiffs herein that the shipment cannot
be released unless the advance sales' tax due on the goods be first paid; that said
Collector of Customs also advised the Reparations Commission that the goods, being
reparations goods and as such owned by the Philippine Government, cannot be
subject to seizure or forfeiture proceedings; that of the 402 packages the
Commissioner and Collector of Customs have released to the said third-party
plaintiffs only 200 packages but have retained 202 packages supposedly to secure
the payment of advance sales tax assessed on the shipment as recomputed on the
basis of an opinion of the Collector of Internal Revenue; that notwithstanding the fact
that there are no unpaid liens fines, surcharges taxes (except the advance sales tax
the payment of which was tendered by third-party plaintiffs and refused and the
amount deposited with the Clerk of this Court) customs duties, and consular fees (of
which the goods are exempt under Section 14 of the Reparations Law) and
notwithstanding the fact that there are no pending proceedings for the seizure and
forfeiture of the goods for the same have been imported by the Reparations
Commission which made the proper declaration of entry therefor, third-party
defendants Commissioner of Customs and Collector of Customs have refused without
any legal reason or justification whatsoever to release and deliver the balance of the
shipment to the third-party plaintiffs; that the duty of the Collector of Customs and
Commissioner of Customs to deliver or release said goods to third- party plaintiffs is
clear as under the circumstances above recited said officials have no discretion to
decide whether or not to release said goods.
Third-party plaintiffs further alleged that the delay in the release of the goods to them
has caused and will cause them grave and irreparable damage and injury; and unless
a writ of preliminary injunction were to be issued ex-parte they will suffer greater and
grave damages.
WHEREFORE, finding the petition for the issuance of a writ of preliminary injunction
to be meritorious, the same is hereby granted, and upon the filing by the third-party
plaintiffs of a bond in the sum of P5,000.00 to answer for all damages that the third-
party defendants may sustain by reason of this injunction if it be finally decided that
the third-party plaintiffs are not entitled thereto, let a writ of preliminary mandatory
injunction be issued ordering the third-party defendants Commissioner of Customs,
Collector of Customs, and the Reparations Commission, their representatives,
agents, subordinates and other persons acting in their behalf to release and deliver
immediately the third-party plaintiffs Jose and Susana Cochingyan, doing business
under the name and style 'The Catholic, Church Mart the 202 packages of rayon cloth
presently in their possession, custody and/or control, which goods are part of the
shipment of reparation consumer goods which arrived in Manila aboard the SS
Guillermo from Japan consigned to the Reparations Commission.
SO ORDERED.
The writ issued pursuant to this order was served on the Law Division of the Bureau of Customs at 4:55
o'clock in the afternoon of the same day, February 12, 1963. But compliance therewith did not
materialize. A motion to lift the writ was filed, and in the meanwhile, the Chairman of the Committee on
Reparations of the House of Representatives, which was then investigating the implementation of the
Warvets allocation, asserted jurisdiction over the goods by ordering the Collector of Customs to deliver
the same to the Sergeant-at-Arms of the House. Respondent court denied the motion to lift and
threatened the agents of the Committee on Reparations, herein co-petitioners, with contempt. Still,
there was no release. The goods were, therefore, still unreleased to the Cochingyans when the petition
now at bar was filed.
We deem it unnecessary to dwell on the many interesting issues extensively and brilliantly discussed by
distinguished counsel of both petitioners and respondents. In Our view of this case, the only question
We have to resolve in order to dispose of it is whether or not respondent court gravely abused its
discretion in allowing the filing of and in admitting the third-party complaint of the Cochingyans. In the
affirmative, it should follow that the writ of preliminary mandatory injunction in question would have no
legal basis, as also all subsequent orders of respondent court tending to enforce the same. And it is Our
considered opinion and so We hold that it was highly irregular and totally unwarranted for respondent
court to have allowed said third-party complaint. The circumstances surrounding the allowance and
admission thereof indicate that respondent court's action was hasty, baseless and arbitrary.
As already stated, Civil Case No. 52318 was a special civil action for declaratory relief under Rule 66 of
the Rules of 1940 which were in force when it was filed. The only purpose thereof was to secure from
the court the proper interpretation or construction of the reparations contract between the Reparations
Commission and Warvets in regard to the rate of conversion of the dollar to the peso of the purchase
price Warvets had to pay No positive or affirmative, much less any material relief, was 'using sought
therein. Indeed, it is in the very nature of a 'declaratory relief special civil action that "the Relief is
confined to a case of actual controversy within the Court's jurisdiction, without the need of injunction,
execution or other relief beyond the adjudication of the legal rights which are the subject of controversy
between the parties." ( 3 Moran, Comments on the Rules of Court, p. 146, 1970 ed.) In other words, the
plaintiff Ofilada in said case did not, as he could not pray for anything to be award or granted to him.
Now, as regards the nature and purpose of a third-party complaint, Section 1 of Rule 12 of the Rules of
1940 provided:
SECTION 1. Claim against one not a party to an action. — When a defendant claims
to be entitled against a person not a party to the action, hereinafter called the third-
party defendant, to contribution, indemnity, subrogation or any other relief, in respect
of the plaintiff' claim, he may file, with leave of court, against such person a pleading
which shall state the nature of his claim and shall be called the third-party complaint.
It is obvious from this definition that a third-party complaint is inconceivable when the main case is one
for nothing more' than a declaratory relief. In a third-party complaint, the defendant or third-party plaintiff
is supposed to seek contribution, indemnity, subrogation or any other relief from the third-party
defendant is respect to the claim of the plaintiff against him. In the case at bar, what possible relief
could the Cochingyans, as defendants in Civil Case No. 52318, for declaratory relief, have asked for by
way of contribution, indemnity, subrogation or any other relief from those they have named third-party
defendants, the Collector of Customs, Commissioner of Customs, Reparations Commission, their co-
defendant and Macario Ofilada, the very plaintiff, in respect to the construction or interpretation that
Ofilada was asking the court to make? At the risk of quoting again part thereof, the complete prayer in
the third-party complaint in question reads thus:
1. Immediately upon the filing of the herein third-party complaint this Honorable Court
issue a writ of preliminary mandatory injunction ex-parte, without notice to the other
parties, ordering the third-party defendants Commissioner of Customs and Collector
 of Customs and Reparations Commission to release immediately the third-party
plaintiffs the balance of the 202 packages of rayon clothing forming part of the
shipment of consumer goods originally consigned to the Reparations Commission
which arrived in Manila aboard the SS GUILLERMO on September 10, 1962, and
which to the present are still under the custody and possession of the collector of
Customs and Commissioner of Customs upon the filing of a bond by the third-party
plaintiffs in such amount as may be fixed by this Honorable Court to pay for any
damages that the third-party defendants may suffer should this Honorable Court find
that issuance of the preliminary mandatory injunction is not proper.

2. That after hearing on the merits this Honorable Court confirm and make final its
order of mandatory preliminary injunction.

The third-party plaintiffs further pray for such other relief as may be just and equitable
under the premises. (Pp. 87-88, Record.)

According to Moran:

Tests of Propriety.—The test to determine whether the claim for indemnity in a third-
party complaint in respect to plaintiff's claim is proper, are (a) whether it arises out of
the same transaction on which plaintiff's claim is based; or whether the third-party's
claim, although arising out of another or different contract or transaction, is connected
with plaintiff's claim; (U.S. Commercial Co. v. Guevara, et al., 48 O.G. 612.) (b)
whether the third-party defendant would be liable to the plaintiff or to the defendant for
all or part of the plaintiffs claim against the original defendant, although the third-
party defendant's liability arises out of another transaction; or (e) whether the third-
party defendant may assert any defense which the third-party plaintiff has, or may
have, against plaintiff's claim. (Capayas v. Court of First Instance, 77 Phil. 181.)
Failing these tests, the complaint is improper. ... (1 Moran, Comments on the Rules of
Court, p. 281, 1970 ed.)

It is thus too evident to call for more elaborate discussion that respondent court s action in allowing the
filing of Cochingyans' third-party complaint completely disregarded, due presumably to ignorance
thereof, the basic concepts of the remedies of declaratory relief and third-party complaint.

Moreover, respondent court also paid no heed to the requirement of Section 2 of Rule 12 of the 1940
Rules to the effect that: "Before the service of his answer a defendant may move ex parte or, after the
service of his answer, on notice to the plaintiff, for leave as third- party plaintiff to file a complaint against
a third-party defendant." In the present case, it is a fact that the motions of the Cochingyans for leave to
file their third-party complaint and for the admission thereof were granted ex parte notwithstanding that
the trial of the case had already been terminated.

IN CONSEQUENCE OF THE FOREGOING, We have no other alternative than to declare as We do

declare null and void all the orders herein complained of. 1 They are all hereby set aside and
respondent court is enjoined to desist from carrying any of them into effect, Costs against respondents
Jose and Susana Cochingyan.

Antonio, Muñoz-Palma, Concepcion, Jr., and Martin, JJ., concur.

THE VISAYAN PACKING CORPORATION, petitioner,
vs.
THE REPARATIONS COMMISSION and THE COURT OF APPEALS, respondents.
NARVASA, J.:
The proceedings at bar had their origin in an agreement denominated "Contract of Constitutional
Purchase and Sale of nterparation Goods" entered into between petitioner Visayan baking Corporation
(hereafter, simply VISPAC) and the Reparations Commission (hereafter, simply REPACOM). Subject of
the contract were a cannery plant, a tin manufacturing plant, and three (3) filing boats sold to VISPAC,
for which it bound itself to pay the total price of P1,135,712.47 in ten (10) equal yearly installments with
interest. 2
Prior to the due date of the first installment, REPACOM sent VISPAC a written reminder thereof.
VISPAC's response was to file in the Court of First Instance of Manila two (2) special civil actions for
declaratory relief, 3 alleging ambiguity in the contract between it and REPACOM consisting in the
agreement's failure to clearly state the precise time when the obligation to pay the first installment of the
price would arise. 4
On the other hand, when VISPAC subsequently failed, despite several demands, to pay the first
installment of the price (P135,712.47) on what REPACOM deemed to be the due date, the latter
instituted an ordinary civil action for collection thereof. 5 VISPAC moved to dismiss this collection suit on
the ground of the pendency of the declaratory relief actions, arguing that until and unless the latter were
resolved, no cause of action could be deemed to exist in favor of REPACOM for collection of said first
installment. The motion to dismiss was denied; and after trial, the Court of First Instance rendered
judgment dated March 27, 1963 ordering VISPAC to pay REPACOM the sum claimed, P135,712.47,
with interest at the legal rate from date of filing of the complaint until fully paid.
VISPAC appealed to the Court of Appeals claiming error on the part of the Trial Court in not holding that
the collection suit was barred by the pendency of the declaratory relief cases earlier instituted.
But the declaratory relief actions had been earlier dismissed by Order of the Court of First Instance
dated October 9, 1962, the Court holding that the issues raised would be necessarily threshed out in
the collection suit. VISPAC appealed to this Court 6 but was rebuffed. By decision rendered on May 31,
1965, this Court affirmed the dismissal of the declaratory relief suits, holding that the clarity of the terms
of the contract eliminated all occasion for interpretation thereof.
VISPAC also received an unfavorable verdict in its appeal to the Court of Appeals from the decision of
the Trial Court in the collection action against it. That Appellate Court, on October 2, 1968, promulgated
judgment affirming that of the Court of First Instance. It is this affirmance of the Court of Appeals that is
subject of the instant appeal taken to this Court by VISPAC. VISPAC's contention is that it was error on
the Appellate Court's part to have affirmed the Trial Court's decision for the collection of the first
installment of the price due from it under its contract with REPACOM, because that money claim should
have been set up as a compulsory counterclaim in the declaratory relief action, and since REPACOM
had not done this, but had instead set it up in a separate suit, the claim had thereby become barred.
It is indeed the rule, embodied in Section 4, Rule 9 of the Rules of Court, that a counterclaim not set up
shall be barred if it arises out of or is necessarily connected with the transaction or occurrence that is
the subject matter of the opposing party's claim and does not require for its adjudication the presence of
third parties of whom the court cannot acquire jurisdiction. In other words, a compulsory counterclaim
cannot be made the subject of a separate action but should be asserted in the same suit involving the
same transaction or occurrence giving rise to it. The omission is not however irremediable or irreversibly
fatal. The Rules provide that when a pleader fails to set up a counterclaim through oversight,
inadvertence, or excusable negligence, or when justice requires, he may, by leave of court, set up the
counterclaim or crossclaim by amendment before judgment. 7 Where the counterclaim is made the
subject of a separate suit, it may be abated upon a plea of auter action pendant or litis
pendentia, 8 and/or dismissed on the ground of res adjudicata. 9 Res adjudicata may be pleaded as a
ground for dismissal if the opposing party's claim, involving the same transaction or occurrence as the
counterclaim, has already been adjudicated on the merits by a court of competent jurisdiction, and the
judgment has become final; this, on the theory that what is barred by prior judgment are not only the
matters squarely raised and litigated, but all such other matters as could have been raised but were
not. 10
Now, there is nothing in the nature of a special civil action for declaratory relief that proscribes the filing
of a counterclaim based on the same transaction, deed or contract subject of the complaint. A special
civil action is after an not essentially different from all ordinary civil action, which is generally governed
by Rules 1 to 56 of the Rules of Court, except that the former deals with a special subject matter which
makes necessary some special regulation. 11But the Identity between their fundamental nature is such
that the same rules governing ordinary civil suits may and do apply to special civil actions if not
inconsistent with or if they may serve to supplement the provisions of the peculiar rules governing
special civil actions. 12
Ideally, in the case at bar, the separate action for collection should have been dismissed and set up as
a compulsory counterclaim in the declaratory relief suits, by way of an amended answer. This was not
done. The actions proceeded separately and were decided on the merits. The final verdict was that
the declaratory relief suits instituted by VISPAC were unmeritorious, quite without foundation and, in the
light of all the relevant facts, appear to have been initiated by VISPAC merely to obstruct and delay the
payment of the installments clearly due from it, payment of which was decreed in the collection
suit. Under the circumstances, and taking account of the not inconsiderable lenght of time that the case
at bar has been pending, it would be to do violence to substantial justice to pronounce the proceedings
fatally defective for breach of the rule on compulsory counterclaims. Rules of procedure are after all laid
down in order to attain justice. They cannot be applied to prevent the achievement of that goal. Form
cannot prevail over substance. 13
WHEREFORE, the petition is dismissed for lack of merit, with costs against the petitioner.
G.R. No. L-27247 April 20, 1983
IN THE MATTER OF THE PETITION FOR DECLARATORY JUDGMENT REGARDING THE
VALIDITY OF ORDINANCE NO. 386 OF THE CITY OF BAGUIO, BAGUIO CITIZENS ACTION INC.,
and JUNIOR CHAMBER OF BAGUIO CITY, INC., petitioners-appellants,
vs.
THE CITY COUNCIL AND CITY MAYOR OF THE CITY OF BAGUIO, respondents-appellees.
DE CASTRO, J:
In this petition for declaratory relief originally filed in the Court of First Instance of Baguio, Branch II,
what is involved is the validity of Ordinance 386 passed by the City Council of Baguio City which took
effect on February 23, 1967, quoted together with the explanatory note, as follows:
ORDINANCE 386
AN ORDINANCE CONSIDERING ALL SQUATTERS OF PUBLIC LAND, OTHER
THAN THOSE EARMARKED FOR PUBLIC USE IN THE CITY OF BAGUIO WHO
ARE DULY REGISTERED AS SUCH AT THE TIME OF THE PROMULGATION OF
THIS ORDINANCE AS BONAFIDE OCCUPANTS OF THEIR RESPECTIVE LOTS
AND WHICH SHALL HEREAFTER BE EMBRACED AS A CITY GOVERNMENT
HOUSING PROJECT AND PROVIDING FOR OTHER PURPOSES.
Upon strong recommendation of the Vice-Mayor and Presiding Officer, on Motion of
all the Councilors, seconded by the same, be it ordained by the City Council
assembled:
Section l.—All public lands within Baguio townsite which are occupied by squatters
who are duly registered as such at the time of the promulgation of this Ordinance
such public lands not designated by city and national authorities for public use, shall
be considered as embraced and comprising a City Government Housing Project;
PROVIDED, HOWEVER, That areas covered by Executive Orders or Presidential
Proclamations but the city had made official representation for the lifting of such
orders or proclamation shall be deemed to be part of the Baguio Townsite for the
purposes of this ordinance;
Section 2.—Building permits shall have been deemed issued to all squatters as
contemplated by this Ordinance, giving such squatters five years from the approval of
this Ordinance to satisfactorily comply with city building specifications and payment of
the corresponding city building permit fees;
Section 3.—All cases pending in court against squatters be dropped without prejudice
to the full prosecution of all subsequent violations in relation to the provisions of
existing city ordinances and/or resolutions;
Section 4.—All squatters be given all the necessary and needed protection of the City
Government against the stringent provisions of the Public Land Act, particularly on
public bidding, in that the lots occupied by said squatters be awarded to them by
direct sale through Presidential Proclamation;
Section 5.—The City Government shall not be interested in making financial profit out
of the project and that the appraisal and evaluation of the said lots shall be made at
minimum cost per square meters, the total cost of the lots made payable within the
period of ten years;
Section 6.—The minimum lot area requirements shall be disregarded in cases where
it could not be implemented due to existing congestion of houses, and that, if
necessary, areas applied for under this ordinance shall be reduced to that which is
practical under the circumstances; PROVIDED, HOWEVER, That squatters in
congested areas shall be given preference in the transfer to resettlement areas or
government housing projects earmarked as such under the provisions of this
ordinance, if and when it becomes necessary to ease congestion or when their lots
shall be traversed by the laying of roads or are needed for public use;
Section 7.—The amount of P20,000.00 or so much as is necessary, for the lot survey
of each squatter's lot be appropriated, such survey of which shall be conducted by
licensed private surveyors through public biddings; PROVIDED, That, said expenses
for survey shall be included in the overall cost of each lot;
Section 8.—The three-man control committed for the Quirino-Magsaysay housing
project which was previously created under City Ordinance No. 344, shall exercise
administration and supervision of the city government housing projects created under
this Ordinance shall, furthermore, be entrusted with the duty of: (1) Consolidating a
list of all city squatters who shall be benefitted in contemplation and under the
provisions of this Ordinance; (2) To assist and help the squatters in the preparation of
all the necessary and required paper work and relative items in connection with their
application over their respective lots; (3) To seek and locate other areas within the
Baguio Townsite conveniently situated and which will be earmarked as subsequently
housing projects of the city for landless bonafide city residents; and (4) To carry out
and implement the provisions of this Ordinance without the least possible delay.
EXPLANATORY NOTE
This ordinance is primarily designed to extend a helping hand to the numerous
landless city residents and the called 'Squatters' within the Baguio Townsite in their
desire to acquire residential lots which they may rightly call their own.
The reported people who have violated the City's building ordinances were not so
guarded by any criminal perversity, but where given to it more by circumstances of
necessity and that they are, therefore, entitled to a more human treatment, more of
understanding and more of pity rather than be herded before the courts, likened to
hardened criminals and deliberate violators of our laws and ordinances.
PRESENT AND VOTING:
 Hon. Norberto de Guzman — Vice Mayor Presiding Officer Hon. Gaudencio Floresca
— Councilor Hon. Jose S. Florendo — Councilor Hon. Francisco G. Mayo —
Councilor Hon. Braulio D. Yaranon — Councilor Hon. Sinforoso Fañgonil — Councilor
The petition for declaratory relief filed with the Court of First Instance of Baguio, Branch II, prays for a
judgment declaring the Ordinance as invalid and illegal ab initio. The respondents-appellees, the City
Council and the City Mayor, filed motions to dismiss the petition which were denied. Nonetheless, in the
decision thereafter rendered, the petition was dismissed on the grounds that: 1) another court, the Court
of First Instance of Baguio, Branch I, had declared the Ordinance valid in a criminal case filed against
the squatters for illegal construction, and the Branch II of the same court cannot, in a declaratory
proceeding, review and determine the validity of said judgment pursuant to the policy of judicial respect
and stability; 2) those who come within the protection of the ordinance have not been made parties to
the suit in accordance with Section 2 of Rule 64 and it has been held that the non-joinder of such
parties is a jurisdictional defect; and 3) the court is clothed with discretion to refuse to make any
declaration where the declaration is not necessary and proper at the time under all circumstances, e.g.
where the declaration would be of no practical help in ending the controversy or would not stabilize the
disputed legal relation, citing Section 5 of Rule 64; ICJS 1033-1034; 16 AM. JUR 287-289; Hoskyns vs.
National City Bank of New York, 85 Phil. 201.
Hence, the instant appeal which was perfected in accordance with the provisions of Rule 42, before the
approval of Republic Act No. 5440 on September 9, 1968.
1. The case before the Court of First Instance of Baguio, Branch 1, dealt with the criminal liability of the
accused for constructing their houses without obtaining building permits, contrary to Section 47 in
relation to Section 52 of the Revised Ordinances of Baguio, which act the said court considered as
pardoned by Section 2 of Ordinance 386. The court in said case upheld the power of the Municipal
Council to legalize the acts punished by the aforesaid provisions of the Revised Ordinances of Baguio,
stating that the Municipal Council is the policy determining body of Baguio City and therefore it can
amend, repeal, alter or modify its own laws as it did when it enacted Ordinance 386. In deciding the
case, the first branch of the court a quo did not declare the whole Ordinance valid. This is clear when it
stated that "had the issue been the legalization of illegal occupation of public land, covered by Republic
Act No. 947, ... the Ordinance in question should have been ultra vires and unconstitutional." 1 Said
court merely confined itself to Sections 2 and 3 of Ordinance 386. It did not make any definite
pronouncement whether or not the City Council has the power to legalize the illegal occupation of public
land which is the issue in the instant case. It is noteworthy that the court, in passing upon the validity of
the aforesaid sections, was apparently guided by the rule that where part of a statute is void as
repugnant to the organic law, while another part is valid, the valid portion, if separable from the invalid
may stand and be enforced. Contrary to what was said in the decision under review, the second branch
of the court a quo was not called upon to determine the validity of the judgment of the first branch.
2. The non-inclusion of the squatters mentioned in the Ordinance in question as party defendants in this
case cannot defeat the jurisdiction of the Court of First Instance of Baguio. There is nothing in Section 2
of Rule 64 of the Rules of Court which says that the non-joinder of persons who have or claim any
interest which would be affected by the declaration is a jurisdictional defect. Said section merely states
that "All persons shall be made parties who have or claim any interest which would be affected by the
declaration; and no declaration shall, except or otherwise provided in these rules, prejudice the rights of
persons not parties to the action." This section contemplates a situation where there are other persons
who would be affected by the declaration, but were not impleaded as necessary parties, in which case
the declaration shall not prejudice them. If at all, the case may be dismissed not on the ground of lack of
jurisdiction but for the reason stated in Section 5 of the same Rule stating that "the Court may refuse to
exercise the power to declare rights and to construe instruments in any case where a decision would
not terminate the uncertainty or controversy which gave rise to the action, or any case where the
declaration or construction is not necessary and proper at the time under all circumstances."
It must be noted that the reason for the law requiring the joinder of all necessary parties is that failure to
do so would deprive the declaration of the final and pacifying function the action for declaratory relief is
calculated to subserve, as they would not be bound by the declaration and may raise the Identical
issue.2 In the case at bar, although it is true that any declaration by the court would affect the squatters,
the latter are not necessary parties because the question involved is the power of the Municipal Council
to enact the Ordinances in question. Whether or not they are impleaded, any determination of the
controversy would be binding upon the squatters.
A different situation obtains in the case of Degala v. Reyes 3 cited in the decision under review. The
Degala case involves the validity of the trust created in the will of the testator. In the said case, the
Roman Catholic Church which was a necessary party, being the one which would be most vitally
affected by the declaration of the nullity of the will was not brought in as party. The Court therefore,
refused to make any declaratory judgment on ground of jurisdictional defect, for there can be no final
judgment that could be rendered and the Roman Catholic not being bound by such judgment might
raise the Identical issue, making therefore the declaration a mere exercise in futility.
This is not true in the instant case. A declaration on the nullity of the ordinance, would give the squatters
no right which they are entitled to protect. The party most interested to sustain and defend the legality of
the Ordinance is the body that passed it, the City Council, and together with the City Mayor, is already a
party in these proceedings.
3. The Ordinance in question is a patent nullity. It considered all squatters of public land in the City of
Baguio as bona-fide occupants of their respective lots. As we have stated in City of Manila v.
Garcia, 4 et al.:
Squatting is unlawful and no amount of acquiescence on the part of the city officials
will elevate it into a lawful act. In principle, a compound of illegal entry and official
permit to stay is obnoxious to our concept of proper official norm of conduct.
Because, such permit does not serve social justice; it fosters moral decadence. It
does not promote public welfare; it abets disrespect for the law. It has its roots in vice;
so it is an infected bargain. Official approval of squatting should not, therefore, be
permitted to obtain in this country where there is an orderly form of government.
In the same case, squatting was characterized as a widespread vice and a blight Thus:
Since the last global war, squatting on another's property in this country has become
a widespread vice. It was and is a blight Squatter's areas pose problems of health,
sanitation. They are breeding places for crime. They constitute proof that respect for
the law and the rights of others, even those of the government are being flouted.
Knowingly, squatters have embarked on the pernicious act of occupying property
whenever and wherever convenient to their interests without as much as leave, and
even against the will, of the owner. They are emboldened seemingly because of their
belief that they could violate the law with impunity. The pugnaciousness of some of
them has tied up the hands of legitimate owners. The latter are thus prevented from
recovering possession by peaceful means. Government lands have not been spared
 by them. They know, of course, that instrusion into property, government or private, is WHEREFORE, in view of the foregoing, Ordinance 386 is hereby rendered nullified and without force
wrong. But, then the wheels of justice grind slow, mainly because of lawyers who, by and effect.
means, fair or foul, are quite often successful in procuring delay of the day of
reckoning. Rampancy of forcible entry into government lands particularly, is abetted SO ORDERED.
by the apathy of some public officials to enforce the government's rights. Obstinacy of
these squatters is difficult to explain unless it is spawned by official tolerance, if not
outright encouragement or protection. Said squatters have become insensible to the
difference between right and wrong. To them, violation of law means nothing. With
the result that squatters still exists, much to the detriment of public interest. It is high
time that, in this aspect, sanity and the rule of law be restored. It is in this environment
that we look into the validity of the permits granted defendants herein.

In the above cited case, the land occupied by the squatters belongs to the City of Manila. In the instant
case, the land occupied by the squatters are portions of water sheds, reservations, scattered portions of
the public domain within the Baguio townsite. Certainly, there is more reason then to void the actions
taken by the City of Baguio through the questioned ordinance.

Being unquestionably a public land, no disposition thereof could be made by the City of Baguio without
prior legislative authority. It is the fundamental principle that the state possesses plenary power in law to
determine who shall be favored recipients of public domain, as well as under what terms such privilege
may be granted not excluding the placing of obstacles in the way of exercising what otherwise would be
ordinary acts of ownership. And the law has laid in the Director of Lands the power of exclusive control,
administrations, disposition and alienation of public land that includes the survey, classification, lease,
sale or any other form of concessions or disposition and management of the lands of public domains. 5

Nor could the enactment of Ordinance 386 be justified by stating that "this Ordinance is primarily
designed to extend a helping hand to the numerous landless city residents and the so called squatters
within the Baguio townsite in their desire to acquire residential lots which they may rightly call their own
and that the reported people who have violated the City's building ordinances were not so guided by
any criminal perversity, but were given to it more by circumstances of necessity and that they are,
therefore, entitled to a more human treatment, more understanding and more of pity rather than be
herded before the courts, likened to hardened criminals and deliberate violators of our laws and
ordinances."6

Our pronouncement in Astudillo vs. Board of Directors of PHHC 7 is relevant to this case. Thus—

In carrying out its social re-adjustment policies, the government could not simply lay
aside moral standards, and aim to favor usurpers, squatters, and intruders, unmindful
of the lawful and unlawful origin and character of their occupancy. Such a policy
would perpetuate conflicts instead of attaining their just solution. (Bernardo vs.
Bernardo, 96 Phil. 202, 206.)

Indeed, the government has enunciated a militant policy against squatters. Thus,
Letter of Instruction No. 19 dated October 2, 1972 orders city and district engineers 'to
remove all illegal constructions including buildings ... and those built without permits
on public or private property' and providing for the relocation of squatters (68 O.G.
7962. See Letter of Instruction No. 19-A). As noted by Justice Sanchez, since the last
global war, squatting on another's property in this country has become a widespread
vice. (City of Manila vs.. Garcia, L-26053, Feb. 21, 1967, 19 SCRA 413, 418).
.R. No. L-11357 May 31, 1962
FELIPE B. OLLADA, etc., petitioner-appellant,
vs.
CENTRAL BANK OF THE PHILIPPINES, respondent-appellee.
Antonio V. Sanchez as amicus curiae.
Felipe B. Ollada for and in his own behalf as petitioner-appellant.
Nat. M. Balboa for respondent-appellee.
DIZON, J.:
Felipe B. Ollada is a certified public accountant, having passed the examination given by the Board of
Accountancy, and is duly qualified to practice his profession. On July 22, 1952, his name was placed in
the rolls of certified public accountants authorized and accredited to practice accountancy in the office
of the Central Bank of the Philippines. In December, 1955, by reason of a requirement of the Import-
Export Department of said bank that CPAs submit to an accreditation under oath before they could
certify financial statements of their clients applying for import dollar allocations with its office, Ollada's
previous accreditation was nullified.
Pursuant to the new requirement, the Import-Export Department of the Central Bank issued
APPLICATION FOR ACCREDITATION OF CERTIFIED PUBLIC ACCOUNTANTS (CB-IED Form No.
5) and ACCREDITATION CARD FOR CERTIFIED PUBLIC ACCOUNTANTS (CB-IED, Form No. 6) for
CPAs to accomplish under oath. Assailing said accreditation requirement on the ground that it was (a)
an unlawful invasion of the jurisdiction of the Board of Accountancy, (b) in excess of the powers of the
Central Bank and (c) unconstitutional in that it unlawfully restrained the legitimate pursuit of one's trade,
Ollada, for himself and allegedly on behalf of numerous other CPAs, filed a petition for Declaratory
Relief in the Court of First Instance of Manila to nullify said accreditation requirement.
On April 16, 1956 the Central Bank filed a motion to dismiss the petition for Declaratory Relief for lack of
cause of action. Its main contention was that the Central Bank has the responsibility of administering
the Monetary Banking System of the Republic and is authorized to prepare and issue, through its
Monetary Board, rules and regulations to make effective the discharge of such responsibility; that the
accreditation requirement alleged in the petition was issued in the exercise of such power and authority;
that the purpose of such requirement is not to regulate the practice of accountancy in the Philippines but
only the manner in which certified public accountants should transact business with the Central Bank.
On May 3, 1956, petitioner Ollada applied for a writ of preliminary injunction to restrain the respondent
Central Bank of the Philippines from enforcing the accreditation requirement aforesaid until final
adjudication of the case. In a memorandum submitted by said respondent opposing the issuance of the
writ, it manifested that it was willing to delete paragraph 13 from its CB-IED Form No. 5 (Application for
accreditation of certified public accountants), which required CPAs to answer the query whether they
agreed, if accredited with the Import-Export Department, Central Bank of the Philippines, to follow
strictly the rules and regulations promulgated by the Philippine Institute of Accountants and, if not, to
state their reasons therefor, and that it was also willing to modify paragraph 14 of the same form to read
as follows:
14. Do you agree, if accredited with the Import-Export Department, to follow strictly the rules
and regulations of the Central Bank of the Philippines concerning the practice of your
profession as CPA, with reference to its importing licensing functions which may hereinafter be
promulgated and which are not inconsistent with the rules and regulations promulgated by the
Board of Accountancy of the Philippines, and to give written notice(s) of any change(s) in your
professional status as practitioner, or the name and style under which you practice your
profession as Certified Public Accountant(s)? . . . If not, state your reasons: . . .
On May 22, 1956 the trial court required respondent to submit within ten days from notice, proof that it
had deleted paragraph 13 and modified paragraph 14 of its CB-IED Form No. 5, as manifested in its
memorandum, otherwise the writ of preliminary injunction prayed for by petitioner would be granted.
Having complied with said order by submitting CB-ID Form No. 5 (formerly CB-IED Form No. 5)
showing that paragraph 13 of CB-IED Form No. 5 had been deleted, and paragraph 14 thereof had
been modified, the court, on June 27, 1956, denied the petition for preliminary injunction. On June 29,
1956, petitioner filed a motion for reconsideration alleging that, despite the deletion of paragraph 13
from respondent's CB-IED Form No. 5, it was still enforcing the rules and regulations of the Philippine
Institute of Accountants in its CB-IED Form No. 6 (ACCREDITATION CARD FOR CERTIFIED PUBLIC
ACCOUNTANTS) which was still a part of the questioned accreditation requirement. All this
notwithstanding, however, on July 5, 1956 petitioner, in the interests of its clients, filed his application
for accreditation with the CB under protest.1äwphï1.ñët
On July 7, 1956, the court reconsidered its previous order and issued another granting the petition for
the writ of preliminary injunction upon the filing of a bond in the sum of P2,000.00 on the ground that
CPAs applying for accreditation with respondent were still required to execute under oath CB-IED Form
No. 6 (Accreditation card for certified public accountants) to be governed by the rules and regulations of
the Philippine Institute of Accountants. In a motion for the reconsideration of this last order, respondent
stated that CB-IED Form No. 6 of its Import-Export Department had been modified by CB-ID Form No. 6
wherein the requirement that the applicant should sign a statement under oath has been eliminated,
and that, upon accreditation, a CPA would be governed by the rules and regulations of the Central Bank
and not by those of the Philippine Institute of Accountants. The modified form (CB-ID Form No. 6) read
as follows:
I/We hereby agree to be governed by your rules and regulations relating to the practice of
my/our profession as Certified Public Accountant(s), particularly Memorandum to Accredited
CPAs No. 1 of the Central Bank of the Philippines dated June 15, 1956. Please recognize
my/our certification(s) of exhibit(s), of statement(s), schedule(s), or other form(s) of
accountancy work issued in behalf of my/our clients under the following signature(s).
Consequently, on July 12, 1956, the court set aside its order of July 7, 1956 granting the writ of
preliminary injunction.
Finally, on July 31, 1956, the lower court, resolving the motion to dismiss filed by respondent, dismissed
the complaint. The order to that effect says, in part, the following:
The only issue in this case is whether or not the respondent Central Bank of the Philippines
has the authority under its charter to require petitioner and all other certified public accountants
to accredit themselves before they can transact business with respondent's Import and Export
Department.
 This Court is of the opinion that the respondent is not barred from promulgating internal rules
and regulations necessary to carry out its purpose pursuant to the charter creating it provided,
however, that such rules and regulations are not contrary to law, public morals or public policy.
The only objectionable features of respondent's aforementioned requirement have already
been eliminated by said respondent having deleted from its CB-IED Form No. 5, known as
Application for Accreditation of Certified Public Accountants (Annex B of petitioner's Petition),
paragraph 13 and modified paragraph 14 thereof, as well as by modifying CB-IED Form No. 6
known as Accreditation Card for Certified Public Accountants (Annex C of Petitioner's Petition).
It appears, therefore, that after respondent had eliminated said objectionable features, the
petition for declaratory relief has become groundless and should be dismissed.
Upon motion of petitioner, We issued a resolution dated November 5, 1956 granting a writ of preliminary
injunction restraining respondent from requiring CPAs to comply with the accreditation requirement of its
Import-Export Department, on the ground that there was nothing in the record showing that the same
was issued by its Monetary Board or by someone else duly authorized by the latter.
The main issue involved in this appeal is whether upon the facts alleged in the petition for Declaratory
Relief and others elicited from the parties and made of record by them prior to the issuance of the order
appealed from, this case was properly dismissed.
The Monetary Board of the Central Bank has authority to prepare and issue such rules and regulations
it may consider necessary for the effective discharge of the responsibilities and exercise of the powers
assigned to it and to the Central Bank under the provisions of Section 1 (a), Republic Act No. 265. The
Governor of the Central Bank is also authorized to delegate his power to represent the Bank "to other
officers of the Bank upon his own responsibility" (See. 17[d], Rep. Act 265).
To implement its authority to temporarily suspend or restrict sales of exchange by the Central Bank and
subject all transactions in gold and foreign exchange to license by the latter (Sec. 74, Rep. Act 265), the
Monetary Board, approved Resolution No. 1528, Minutes No. 80 dated August 30, 1955 authorizing the
Import-Export Department to revise quota allocations and to prepare revised procedures for the
determination of violations of Central Bank Import-Export regulations. Among the revised procedures
adopted by the aforesaid Department was its accreditation system, the purpose of which was to correct
certain irregularities committed by some CPAs in their certification of the financial statements of their
clients applying for dollar allocations.
As held by the lower court, "the only objectionable feature of respondent's aforementioned requirement
had already been eliminated . . . from its CB-IED Form No. 5" and that CB-IED form No. 6 had also
been modified. For this reason, the court held that "the petition for declaratory relief has become
groundless" and, as a result, ordered its dismissal.
Again, in his brief petitioner reiterates the same view in the following language:
Without deciding the question of whether the petition under consideration has, in reality "become
groundless", we believe that, upon the facts appearing of record, said petition was correctly dismissed.
As stated heretofore, in connection with the motion to dismiss filed by respondent, petitioner filled a
written opposition in which he alleged that his petition
has sufficiently alleged ultimate facts which violated his right as a duly qualified and accredited
Certified Public Accountant by the Board of Accountancy (which is the only Government body
with absolute powers to regulate the practice of CPAs), and in addition to such allegations, he
has also alleged that by virtue of the violation of his right and that of numerous CPAs, he has
suffered serious injury in that the questioned requirement which is collaterally attacked by this
action (in the honest belief of the petitioner that the same) is an unlawful restraint of the fee
pursuit and practice of petitioner's profession as a CPA; and also that the action of the
respondent Central Bank of the Philippines complained of, is also an unlawful invasion into the
exclusive jurisdiction of the Board of Accountancy as the sole body vested by our laws to lay
down rules and regulations for the practice of public accountancy in the Philippines. . . .
In order to dismiss an action under the aforecited ground, Sutherland, Code of Pleadings,
Practice and Form, 167, has laid down the essential test which should serve as the controlling
guide in determining whether a petition states a cause of action, to wit:
1. Does the complaint show the plaintiff suffered an injury?
2. Is it an injury the law recognizes as a wrong?
3. Is the defendant liable for the alleged wrong?
4. If the defendant is liable, to what extent is he liable and what will be the legal
remedy from such injury? (Sutherland, Code of Pleadings, supra.)
It is clear from the allegations of the petition that the petitioner has sufficiently stated facts to
satisfy the foregoing requisites of a pleading in order that petitioner's action should be given
due course by this Court.
Petitioner submits that the respondent's requirement complained of (CB-IED Forms Nos. 5 and
6) is an act of constituting a violation of the Constitution and also a violation of the petitioners
right to freely practice his profession anywhere and in any government office in the
Philippines .... It is undisputed that the only body that can regulate the practice of accountancy
in the Philippines is the Board of Accountancy. The action thus of the respondent in requiring
the accreditation of CPAs before they can practice with the Central Bank of the Philippines is
an unlawful invasion into the exclusive jurisdiction of the said Board of Accountancy. Why was
petitioner's right as a CPA violated by the respondent? Because the respondent's placing of a
ban to CPAs including the petitioner with respect to certification of financial statements of their
clients applying for dollar(s) allocation in the Central Bank of the Philippines has resulted in the
unlawful restraint in the practice of CPAs in the office of the Central Bank of the Philippines.
(Emphasis supplied.) (Rec. on Appeal, pp. 17, 18-20.)
On April 20, 1956, petitioner-appellant filed his opposition to respondent's motion to dismiss on
the simple and fundamental ground that, from its face, the complaint's allegations of facts
make clear showing ofpetitioner's rights having been violated by respondent, and that the
(petitioner) has suffered serious injury therefrom that such injury is recognized by law as a
wrong, and that the respondent is liable therefrom to a great extent. (Emphasis supplied.)
(Petitioner's brief, p. 5.)
Petitioner commenced this action as, and clearly intended it to be one for Declaratory Relief under the
provisions of Rule 66 of the Rules of Court. On the question of when a special civil action of this nature
would prosper, we have already held that the complaint for declaratory relief will not prosper if filed after
a contract, statute or right has been breached or violated. In the present case such is precisely the
situation arising from the facts alleged in the petition for declaratory relief. As vigorously claimed by
petitioner himself, respondent had already invaded or violated his right and caused him injury — all
these giving him a complete cause of action enforceable in an appropriate ordinary civil action or
proceeding. The dismissal of the action was, therefore, proper in the light of our ruling in De Borja vs.
Villadolid, 47 O.G. (5) p. 2315, and Samson vs. Andal, G.R. No. L-3439, July 31, 1951, where we held
that an action for declaratory relief should be filed before there has been a breach of a contract, statutes
or right, and that it is sufficient to bar such action, that there had been a breach — which would
constitute actionable violation. The rule is that an action for Declaratory Relief is proper only if adequate
relief is not available through the means of other existing forms of action or proceeding (1 C.J.S. 1027-
1028).

WHEREFORE, the order of dismissal appealed from is hereby affirmed, without prejudice to the
aggrieved party seeking relief in another appropriate action. The writ of preliminary injunction issued by
Us on November 5, 1956 is hereby set aside, and the motion for contempt filed by petitioner on
September 30, 1957 is denied. With costs against appellant.
P. TAMBUNTING, G.R. No. 144101
JR. and COMMERCIAL
HOUSE OF FINANCE, INC.,
Petitioners,
Present :
PANGANIBAN, J., Chairman,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
CARPIO MORALES and
GARCIA, JJ.
SPOUSES EMILIO SUMABAT
and ESPERANZA BAELLO,
Respondents. Promulgated:
September 16, 2005
x-------------------------------------------x
DECISION
CORONA, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court assails the February
11, 2000 decision of the Regional Trial Court (RTC) of Caloocan City, Branch 120, in Civil Case No. C-
16822.
This case involves a dispute over a parcel of land situated in Caloocan City covered by TCT
No. (87655) 18837. It was previously registered in the names of respondents, spouses Emilio Sumabat
and Esperanza Baello. On May 3, 1973, respondents mortgaged it to petitioner Antonio Tambunting, Jr.
to secure the payment of a P7,727.95 loan.’’ In August 1976, respondents were informed that their
indebtedness had ballooned to P15,000 for their failure to pay the monthly amortizations. In May 1977,
because respondents defaulted in their obligation, petitioner Commercial House of Finance, Inc. (CHFI),
as assignee of the mortgage, initiated foreclosure proceedings on the mortgaged property but the same
did not push through. It was restrained by the then Court of First Instance (CFI) of Caloocan City,
Branch 33 (now RTC Branch 123) in Civil Case No. C-6329, a complaint for injunction filed by
respondents against petitioners. However, the case was subsequently dismissed for failure of the
parties to appear at the hearing on November 9, 1977.
On March 16, 1979, respondents filed an action for declaratory relief with the CFI of Caloocan
City, Branch 33, seeking a declaration of the extent of their actual indebtedness. It was docketed as
Civil Case No. C-7496. Petitioners were declared in default for failure to file an answer within the
reglementary period. They moved for the dismissal of the action on the ground that its subject, the
mortgage deed, had already been breached prior to the filing of the action. The motion was denied for
having been filed out of time and petitioners had already been declared in default.
On January 8, 1981, the CFI rendered its decision. It fixed respondents liability at P15,743.83
and authorized them to consign the amount to the court for proper disposition. In compliance with the
decision, respondents consigned the required amount on January 9, 1981.
In March 1995, respondents received a notice of sheriffs sale indicating that the mortgage had
been foreclosed by CHFI on February 8, 1995 and that an extrajudicial sale of the property would be
held on March 27, 1995.
On March 27, 1995, respondents instituted Civil Case No. C-16822, a petition for preliminary
injunction, damages and cancellation of annotation of encumbrance with prayer for the issuance of a
temporary restraining order, with the RTC of Caloocan City, Branch 120. However, the public auction
scheduled on that same day proceeded and the property was sold to CHFI as the highest bidder.
Respondents failed to redeem the property during the redemption period. Hence, title to the property
was consolidated in favor of CHFI and a new certificate of title (TCT No. 310191) was issued in its
name. In view of these developments, respondents amended their complaint to an action for nullification
of foreclosure, sheriffs sale and consolidation of title, reconveyance and damages.
On February 11, 2000, the RTC issued the assailed decision. It ruled that the 1981 CFI
decision in Civil Case No. C-7496 (fixing respondents liability at P15,743.83 and authorizing
consignation) had long attained finality. The mortgage was extinguished when respondents paid their
indebtedness by consigning the amount in court. Moreover, the ten-year period within which petitioners
should have foreclosed the property was already barred by prescription. They abused their right to
foreclose the property and exercised it in bad faith. As a consequence, the trial court nullified the
foreclosure and extrajudicial sale of the property, as well as the consolidation of title in CHFIs name in
1995. It then ordered the register of deeds of Caloocan City to cancel TCT No. 310191 and to reconvey
the property to respondents. It also held petitioners liable for moral damages, exemplary damages and
attorneys fees.
Petitioners moved for a reconsideration of the trial courts decision but it was denied. Hence, this
petition.
Petitioners claim that the trial court erred when it affirmed the validity of the consignation. They
insist that the CFI was barred from taking cognizance of the action for declaratory relief since,
petitioners being already in default in their loan amortizations, there existed a violation of the mortgage
deed even before the institution of the action. Hence, the CFI could not have rendered a valid judgment
in Civil Case No. C-7496 and the consignation made pursuant to a void judgment was likewise void.
Respondents also fault the trial court for holding that their right to foreclose the property had already
prescribed.
True, the trial court erred when it ruled that the 1981 CFI decision in Civil Case No. C-7496
was already final and executory.
An action for declaratory relief should be filed by a person interested under a deed, will,
contract or other written instrument, and whose rights are affected by a statute, executive order,
regulation or ordinance before breach or violation thereof.[1] The purpose of the action is to secure an
authoritative statement of the rights and obligations of the parties under a statute, deed,
contract, etc. for their guidance in its enforcement or compliance and not to settle issues arising from its
alleged breach.[2] It may be entertained only before the breach or violation of the statute, deed,
contract, etc. to which it refers.[3] Where the law or contract has already been contravened prior to the
filing of an action for declaratory relief, the court can no longer assume jurisdiction over the action.[4] In
other words, a court has no more jurisdiction over an action for declaratory relief if its subject, i.e., the
statute, deed, contract, etc., has already been infringed or transgressed before the institution of the
action. Under such circumstances, inasmuch as a cause of action has already accrued in favor of one
or the other party, there is nothing more for the court to explain or clarify short of a judgment or final
order.
Here, an infraction of the mortgage terms had already taken place before the filing of Civil
Case No. C-7496. Thus, the CFI lacked jurisdiction when it took cognizance of the case in 1979. And in
the absence of
jurisdiction, its decision was void and without legal effect. As this Court held in Arevalo v. Benedicto:[5]
 Furthermore, the want of jurisdiction by a court over the subject-matter renders its
judgment void and a mere nullity, and considering that a void judgment is in legal
effect no judgment, by which no rights are divested, from which no rights can be
obtained, which neither binds nor bars any one, and under which all acts performed
and all claims flowing out of are void, and considering further, that the decision, for
want of jurisdiction of the court, is not a decision in contemplation of law, and, hence,
can never become executory, it follows that such a void judgment cannot constitute a
bar to another case by reason of res judicata.
Nonetheless, the petition must fail.

Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten years.
An action to enforce a right arising from a mortgage should be enforced within ten years from
the time the right of action accrues.[6]Otherwise, it will be barred by prescription and the mortgage
creditor will lose his rights under the mortgage.

Here, petitioners right of action accrued in May 1977 when respondents defaulted in their
obligation to pay their loan amortizations. It was from that time that the ten-year period to enforce the
right under the mortgage started to run. The period was interrupted when respondents filed Civil Case
No. C-6329 sometime after May 1977 and the CFI restrained the intended foreclosure of the property.
However, the period commenced to run again on November 9, 1977 when the case was dismissed.

The respondents institution of Civil Case No. C-7496 in the CFI on March 16, 1979 did not
interrupt the running of the ten-year prescriptive period because, as discussed above, the court lacked
jurisdiction over the action for declaratory relief. All proceedings therein were without legal effect. Thus,
petitioners could have enforced their right under the mortgage, including its foreclosure, only until
November 7, 1987, the tenth year from the dismissal of Civil Case No. C-6329. Thereafter, their right to
do so was already barred by prescription.

The foreclosure held on February 8, 1995 was therefore some seven years too late. The same
thing can be said about the public auction held on March 27, 1995, the consolidation of title in CHFIs
favor and the issuance of TCT No. 310191 in its name. They were all void and did not exist in the eyes
of the law.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioners.
SO ORDERED.
REPUBLIC OF THE PHILIPPINES, G.R. No. 154380 In 1986, Ciprianos wife left for the United States bringing along their son Kristoffer. A few years
Petitioner, later, Cipriano discovered that his wife had been naturalized as an American citizen.

Present: Sometime in 2000, Cipriano learned from his son that his wife had obtained a divorce decree
and then married a certain Innocent Stanley. She, Stanley and her child by him currently live at 5566 A.
Davide, Jr., C.J., Walnut Grove Avenue, San Gabriel, California.
- versus - (Chairman),
Quisumbing, Cipriano thereafter filed with the trial court a petition for authority to remarry invoking Paragraph 2 of
Ynares-Santiago, Article 26 of the Family Code. No opposition was filed. Finding merit in the petition, the court granted
Carpio, and the same. The Republic, herein petitioner, through the Office of the Solicitor General (OSG), sought
Azcuna, JJ. reconsideration but it was denied.
CIPRIANO ORBECIDO III,
Respondent. Promulgated:
In this petition, the OSG raises a pure question of law:
WHETHER OR NOT RESPONDENT CAN REMARRY UNDER ARTICLE 26 OF THE
October 5, 2005 FAMILY CODE[4]
x--------------------------------------------------x

DECISION The OSG contends that Paragraph 2 of Article 26 of the Family Code is not applicable to the instant
case because it only applies to a valid mixed marriage; that is, a marriage celebrated between a Filipino
citizen and an alien. The proper remedy, according to the OSG, is to file a petition for annulment or for
QUISUMBING, J.: legal separation.[5] Furthermore, the OSG argues there is no law that governs respondents situation.
The OSG posits that this is a matter of legislation and not of judicial determination. [6]

Given a valid marriage between two Filipino citizens, where one party is later naturalized as a For his part, respondent admits that Article 26 is not directly applicable to his case but insists that when
foreign citizen and obtains a valid divorce decree capacitating him or her to remarry, can the Filipino his naturalized alien wife obtained a divorce decree which capacitated her to remarry, he is likewise
spouse likewise remarry under Philippine law? capacitated by operation of law pursuant to Section 12, Article II of the Constitution. [7]

Before us is a case of first impression that behooves the Court to make a definite ruling on this
apparently novel question, presented as a pure question of law.
In this petition for review, the Solicitor General assails the Decision[1] dated May 15, 2002, of
the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23 and its Resolution[2] dated July 4,
2002 denying the motion for reconsideration. The court a quo had declared that herein respondent
Cipriano Orbecido III is capacitated to remarry. The fallo of the impugned Decision reads:
WHEREFORE, by virtue of the provision of the second paragraph of Art. 26 of the
Family Code and by reason of the divorce decree obtained against him by his
American wife, the petitioner is given the capacity to remarry under the Philippine
Law.
IT IS SO ORDERED.[3]
At the outset, we note that the petition for authority to remarry filed before the trial court actually
constituted a petition for declaratory relief. In this connection, Section 1, Rule 63 of the Rules of Court
provides:
RULE 63
DECLARATORY RELIEF AND SIMILAR REMEDIES
Section 1. Who may file petitionAny person interested under a deed, will, contract or
other written instrument, or whose rights are affected by a statute, executive order or
regulation, ordinance, or other governmental regulation may, before breach or
violation thereof, bring an action in the appropriate Regional Trial Court to determine
any question of construction or validity arising, and for a declaration of his rights or
duties, thereunder.
...

The requisites of a petition for declaratory relief are: (1) there must be a justiciable controversy; (2) the
The factual antecedents, as narrated by the trial court, are as follows.
controversy must be between persons whose interests are adverse; (3) that the party seeking the relief
has a legal interest in the controversy; and (4) that the issue is ripe for judicial determination.[8]
On May 24, 1981, Cipriano Orbecido III married Lady Myros M. Villanueva at the United Church of
Christ in the Philippines in Lam-an, Ozamis City. Their marriage was blessed with a son and a
This case concerns the applicability of Paragraph 2 of Article 26 to a marriage between two
daughter, Kristoffer Simbortriz V. Orbecido and Lady Kimberly V. Orbecido.
Filipino citizens where one later acquired alien citizenship, obtained a divorce decree, and remarried
while in the U.S.A. The interests of the parties are also adverse, as petitioner representing the State
asserts its duty to protect the institution of marriage while respondent, a private citizen, insists on a
declaration of his capacity to remarry. Respondent, praying for relief, has legal interest in the
controversy. The issue raised is also ripe for judicial determination inasmuch as when respondent
remarries, litigation ensues and puts into question the validity of his second marriage.
Coming now to the substantive issue, does Paragraph 2 of Article 26 of the Family Code apply to the
case of respondent? Necessarily, we must dwell on how this provision had come about in the first place,
and what was the intent of the legislators in its enactment?
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209,
otherwise known as the Family Code, which took effect on August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws
in force in the country where they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No.
227 was likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second
paragraph was added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance
with the laws in force in the country where they were solemnized, and valid there as
such, shall also be valid in this country, except those prohibited under Articles 35(1),
(4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry
under Philippine law. (Emphasis supplied)
On its face, the foregoing provision does not appear to govern the situation presented by the
case at hand. It seems to apply only to cases where at the time of the celebration of the marriage, the
parties are a Filipino citizen and a foreigner. The instant case is one where at the time the marriage was
solemnized, the parties were two Filipino citizens, but later on, the wife was naturalized as an American
citizen and subsequently obtained a divorce granting her capacity to remarry, and indeed she remarried
an American citizen while residing in the U.S.A.
Noteworthy, in the Report of the Public Hearings [9] on the Family Code, the Catholic Bishops
Conference of the Philippines (CBCP) registered the following objections to Paragraph 2 of Article 26:
1. The rule is discriminatory. It discriminates against those whose spouses
are Filipinos who divorce them abroad. These spouses who are divorced will
not be able to re-marry, while the spouses of foreigners who validly divorce
them abroad can.
2. This is the beginning of the recognition of the validity of divorce even for
Filipino citizens. For those whose foreign spouses validly divorce them
abroad will also be considered to be validly divorced here and can re-marry.
We propose that this be deleted and made into law only after more
widespread consultation. (Emphasis supplied.)
Legislative Intent
Records of the proceedings of the Family Code deliberations showed that the intent of
Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision
Committee, is to avoid the absurd situation where the Filipino spouse remains married to the alien
spouse who, after obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v.
Romillo, Jr.[10] The Van Dorn case involved a marriage between a Filipino citizen and a foreigner. The
Court held therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines,
and consequently, the Filipino spouse is capacitated to remarry under Philippine law.
Does the same principle apply to a case where at the time of the celebration of the marriage,
the parties were Filipino citizens, but later on, one of them obtains a foreign citizenship by
naturalization?
The jurisprudential answer lies latent in the 1998 case of Quita v. Court of Appeals.[11] In Quita,
the parties were, as in this case, Filipino citizens when they got married. The wife became a naturalized
American citizen in 1954 and obtained a divorce in the same year. The Court therein hinted, by way
of obiter dictum, that a Filipino divorced by his naturalized foreign spouse is no longer married under
Philippine law and can thus remarry.
Thus, taking into consideration the legislative intent and applying the rule of reason, we hold
that Paragraph 2 of Article 26 should be interpreted to include cases involving parties who, at the time
of the celebration of the marriage were Filipino citizens, but later on, one of them becomes naturalized
as a foreign citizen and obtains a divorce decree. The Filipino spouse should likewise be allowed to
remarry as if the other party were a foreigner at the time of the solemnization of the marriage. To rule
otherwise would be to sanction absurdity and injustice. Where the interpretation of a statute according
to its exact and literal import would lead to mischievous results or contravene the clear purpose of the
legislature, it should be construed according to its spirit and reason, disregarding as far as necessary
the letter of the law. A statute may therefore be extended to cases not within the literal meaning of its
terms, so long as they come within its spirit or intent.[12]
If we are to give meaning to the legislative intent to avoid the absurd situation where the
Filipino spouse remains married to the alien spouse who, after obtaining a divorce is no longer married
to the Filipino spouse, then the instant case must be deemed as coming within the contemplation of
Paragraph 2 of Article 26.
In view of the foregoing, we state the twin elements for the application of Paragraph 2 of Article
26 as follows:
1. There is a valid marriage that has been celebrated between a Filipino
citizen and a foreigner; and
2. A valid divorce is obtained abroad by the alien spouse capacitating him
or her to remarry.
The reckoning point is not the citizenship of the parties at the time of the celebration of the
marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse
capacitating the latter to remarry.
 In this case, when Ciprianos wife was naturalized as an American citizen, there was still a valid
marriage that has been celebrated between her and Cipriano. As fate would have it, the naturalized
alien wife subsequently obtained a valid divorce capacitating her to remarry. Clearly, the twin requisites
for the application of Paragraph 2 of Article 26 are both present in this case. Thus Cipriano, the divorced
Filipino spouse, should be allowed to remarry.

We are also unable to sustain the OSGs theory that the proper remedy of the Filipino spouse
is to file either a petition for annulment or a petition for legal separation. Annulment would be a long and
tedious process, and in this particular case, not even feasible, considering that the marriage of the
parties appears to have all the badges of validity. On the other hand, legal separation would not be a
sufficient remedy for it would not sever the marriage tie; hence, the legally separated Filipino spouse
would still remain married to the naturalized alien spouse.

However, we note that the records are bereft of competent evidence duly submitted by respondent
concerning the divorce decree and the naturalization of respondents wife. It is settled rule that one who
alleges a fact has the burden of proving it and mere allegation is not evidence.[13]

Accordingly, for his plea to prosper, respondent herein must prove his allegation that his wife was
naturalized as an American citizen. Likewise, before a foreign divorce decree can be recognized by our
own courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the
foreign law allowing it.[14] Such foreign law must also be proved as our courts cannot take judicial notice
of foreign laws. Like any other fact, such laws must be alleged and proved. [15] Furthermore, respondent
must also show that the divorce decree allows his former wife to remarry as specifically required in
Article 26. Otherwise, there would be no evidence sufficient to declare that he is capacitated to enter
into another marriage.

Nevertheless, we are unanimous in our holding that Paragraph 2 of Article 26 of the Family Code (E.O.
No. 209, as amended by E.O. No. 227), should be interpreted to allow a Filipino citizen, who has been
divorced by a spouse who had acquired foreign citizenship and remarried, also to remarry. However,
considering that in the present petition there is no sufficient evidence submitted and on record, we are
unable to declare, based on respondents bare allegations that his wife, who was naturalized as an
American citizen, had obtained a divorce decree and had remarried an American, that respondent is
now capacitated to remarry. Such declaration could only be made properly upon respondents
submission of the aforecited evidence in his favor.

ACCORDINGLY, the petition by the Republic of the Philippines is GRANTED. The

assailed Decision dated May 15, 2002, and Resolution dated July 4, 2002, of the Regional Trial Court of
Molave, Zamboanga del Sur, Branch 23, are hereby SET ASIDE.

No pronouncement as to costs.

SO ORDERED.
G.R. No. L-49705-09 February 8, 1979
1. Roldan, 225,674
Ernesto (KB)
TOMATIC ARATUC, SERGIO TOCAO, CISCOLARIO DIAZ, FRED TAMULA, MANGONTAWAR
GURO and BONIFACIO LEGASPI, petitioners, 2. Valdez, 217,789
vs. Estanislao (KBL)
The COMMISSION ON ELECTIONS, REGIONAL BOARD OF CANVASSERS for Region XII (Central
Mindanao), ABDULLAH DIMAPORO, JESUS AMPARO, ANACLETO BADOY, et al., respondents. 3. Dimporo, 199,244
Abdullah (KBL)
Nos. L-49717-21 February 8,1979.
4. Tocao, Sergio 199,062
(KB)
LINANG MANDANGAN, petitioner,
vs.
5. Badoy, 198,966
THE COMMISSION ON ELECTIONS, THE REGIONAL BOARD OF CANVASSERS for Region XII,
Anacleto (KBL)
and ERNESTO ROLDAN, respondents.
6. Amparo, Jesus 184,764
L-49705-09 — Lino M. Patajo for petitioners. (KBL)

Estanislao A. Fernandez for private respondents. 7. 183,646

Pangandaman,
Sambolayan
L-49717-21 — Estanislao A. Fernandez for petitioner.
(KBL)

Lino M. Patajo for private respondent. 8. Sinsuat, Datu 182,457

Blah (KBL)
Office of the Solicitor General, for Public respondents.
9. Baga, Tomas 171,656
(KBL)
BARREDO, J.:
10. Aratuc, 165,795
Tomatic (KB)
Petition in G. R. Nos. L-49705-09 for certiorari with restraining order and preliminary injunction filed by
six (6) independent candidates for representatives to tile Interim Batasang Pambansa who had joined 11. Mandangan, 165,032
together under the banner of the Kunsensiya ng Bayan which, however, was not registered as a political Linang(KB)
party or group under the 1976 Election Code, P.D. No. 1296, namely Tomatic Aratuc, Sorgio Tocao,
Ciscolario Diaz, Fred Tamula, Mangontawar Guro and Bonifacio Legaspi her referred to as petitioners, 12. Diaz, 159,977
to review the decision of the respondent Commission on Election (Comelec) resolving their appeal from Ciscolario (KB)
the Of the respondent Regional Board of Canvasses for Region XII regarding the canvass of the results
of the election in said region for representatives to the I.B.P. held on April 7, 1978. Similar petition in 13. Tamalu, Fred 153,734
G.R. Nos. L49717-21, for certiorari with restraining order and preliminary injunction filed by Linang (KB)
Mandangan, abo a candidate for representative in the same election in that region, to review the
decision of the Comelec declaring respondent Ernesto Roldan as entitled to be proclaimed as one of 14. Legaspi 148,200
the eight winners in said election. Bonifacio (KB)

The instant proceedings are sequels of Our decision in G.R. No. L- 48097, wherein Tomatic Aratuc et 15. Guro, 139,386
al. sought the suspension of the canvass then being undertaken by respondent dent Board in Cotabato Mangontawar
city and in which canvass, the returns in 1966 out of a total of 4,107 voting centers in the whole region (KB)
had already been canvassed showing partial results as follows:
16. Loma, 107,455
NAMES OF NO. OF Nemesio (KB)
CANDIDATES VOTES

17. Macapeges, 101,350
Malamama
(Independent)
(Votes Of the independent candidates who actually were not in contention omitted)" (Page 6, Record, L-
49705-09.)
A supervening panel headed by Commissioner of Elections, Hon- Venancio S. Duque, had conducted
of the complaints of the petitioners therein of alleged irregularities in the election records in all the voting
centers in the whole province of Lanao del Sur, the whole City of Marawi, eight (8) towns of Lanao del
Norte, namely, Baloi, Karomatan, Matungao, Munai, Nunungan, Pantao Ragat, Tagoloan and Tangcal,
seven (7) towns in Maguindanao, namely, Barrira, Datu Piang, Dinaig, Matanog Parang, South Upi and
Upi, ten (10) towns in North Cotabato, namely, Carmen, Kabacan, Kidapwan, Magpet, Matalam
Midsayap, Pigcawayan, Pikit, Pres. Roxas and Tulonan, and eleven (11) towns in Sultan Kudarat,
namely, Bagumbayan, Columbia Don Mariano Marcos, Esperanza, Isulan, Kalamansig, Lebak,
Lutayan, Palimbang, President Quirino and Tacurong, by reason for which, petitioners had asked that
the returns from said voting centers be excluded from the canvass. Before the start of the hearings, the
canvass was suspended but after the supervisory panel presented its report, on May 15, 1978, the
Comelec lifted its order of suspension and directed the resumption of the canvass to be done in Manila.
This order was the one assailed in this Court. We issued a restraining order.
After hearing the parties, the Court allowed the resumption of the canvass but issued the following
guidelines to be observed thereat:
1. That the resumption of said canvass shall be held in the Comelec main office in
Manila starting not later than June 1, 1978;
2. That in preparation therefor, respondent Commission on Elections shall see to it
that all the material election paragraph corresponding to all the voting center involved
in Election Nos. 78-8, 78-9, 78-10, 78-11 and 78-12 are taken to its main office in
Manila, more particularly, the ballot boxes, with the contents, used during the said
elections, the books of voters or records of voting and the lists or records of
registered voters, on or before May 31, 1978;
3. That as soon as the corresponding records are available, petitioners and their
counsel shall be allowed to examine the same under such security measures as the
respondent Board may determine, except the contents of the ballot boxes which shall
be opened only upon orders of either the respondent Board or respondent
Commission, after the need therefor has become evident, the purpose of such
examination being to enable petitioners, and their counsel to expeditiously determine
which of them they would wish to be scrutinized and passed upon by the Board as
supporting their charges of election frauds and anomalies, petitioners and their
counsel being admonished in this connection, that no dilatory tactics should be in by
them and that only such records substantial objections should be offered by them for
the scrutiny by the Board;
4. That none of the election returns reffered to in the petition herein shall be
canvassed without first giving the herein petitioners ample opportunity to make their
specific objections thereto, if they have any, and to show sufficient basis for the
rejection of any of the returns, and, in this connection, the respondent Regional Board
of Canvassers should give due consideration to the points raised in the memorandum
filed by said petitioners with the Commission on Election in the above cases dated
April 26, 1978;
5. That should it appear to the board upon summary scrutiny of the records to be
offered by petitioners indication that in the voting center actually held and/or that
election returns were prepared either before the day of the election returns or at any
other time, without regard thereto or that there has been massive substitution of
voters, or that ballots and/or returns were prepared by the same groups of persons or
individuals or outside of the voting centers, the Board should exclude the
corresponding returns from the canvass;
6. That appeals to the commission on Election of the Board may be made only after
all the returns in question in all the above, the above five cases shall have been
passed upon by the Board and, accordingly, no proclamation made until after the
Commission shall have finally resolved the appeal without prejudice to recourse to
this court, if warranted as provided by the Code and the Constitution, giving the
parties reasonable time therefor;
7. That the copies of the election returns found in the corresponding ballot boxes shall
be the one used in the canvass;
8. That the canvass shall be conducted with utmost dispatch, to the end that a
proclamation, if feasible, may be made not later than June 10, 1978; thus, the
canvass may be terminated as soon as it is evident that the possible number of votes
in the still uncanvassed returns with no longer affect the general results of the
elections here in controversy;
9. That respondent Commission shall promulgate such other directive not inconsistent
with this resolution y necessary to expedite the proceedings herein contemplated and
to accomplish the purposes herein intended. (Pp. 8-9, Record.
On June 1, 1978, upon proper motion, said guidelines were modified:
... in the sense that the ballot boxes for the voting centers just referred to need not be
taken to Manila, EXCEPT those of the particular voting centers as to which the
petitioners have the right to demand that the corresponding ballot boxes be opened in
order that the votes therein may be counted because said ballots unlike the election
returns, have not been tampered with or substituted, which instances the results of
the counting shall be specified and made known by petitioners to the Regional Board
of Canvassers not later than June 3, 1978; it being understood, that for the purposes
of the canvass, the petitioners shall not be allowed to invoke any objection not
already alleged in or comprehend within the allegations in their complaint in the
election cases above- mentioned. (Page 8, Id.)
Thus respondent Board proceeded with the canvass, with the herein petitioners presenting objections,
most of them supported by the report of handwriting and finger print experts who had examined the
voting records and lists of voters in 878 voting centers, out of 2,700 which they specified in their
(Pp. 11-12,
complaints or petitions in Election Cases 78-8, 78-9, 78-10, 78-11 and 7812 in the Comelec. In regard
Record.)
to 501 voting centers, the records cf. which, consisting of the voters lists and voting records were not
available- and could not be brought to Manila, petitions asked that the results therein be completely
excluded from the canvass. On July 11, 1978, respondent Board terminated its canvass and declared Without loss of time, the petitioners brought the resolution of respondent Board to the Comelec. Hearing
the result of the voting to be as follows: was held on April 25, 1978, after which , the case was declared submitted for decision. However, on
NAME OF VOTES August 30,1978, the Comelec issued a resolution stating inter alia that :
CANDIDATE OBTAIN
In order to enable the Commission to decide the appeal properly :
VALDEZ, 436,069
Estanislao
a. It will have to go deeper into the examination of the voting records and registration
records and in the case of voting centers whose voting and registration records which
DIMAPORO, 429,351
have not yet been submitted for the Commission to decide to open the ballot boxes;
Abdullah
and
PANGANDAMAN, 406,106
Sambolayan b. To interview and get statements under oath of impartial and disinterested persons
from the area to determine whether actual voting took place on April 7, 1978, as well
SINSUAT, Blah 403,445 as those of the military authorities in the areas affects (Page 12). Record, L-49705-09
.)
AMPARO, Jesus 399,997
On December 11, 1978, the Comelec required the parties "to file their respective written comments on
MANDANGAN, 387,025 the reports they shall periodically receive from the NBI-Comelec team of finger-print and signature
Linang experts within the inextendible period of seven (7) days from their receipt thereof". According to counsel
for Aratuc, et al., "Petitioners submitted their various comments on the report 4, the principal gist of
BAGA, Tomas 386,393 which was that it would appear uniformly in all the reports submitted by the Comelec-NBI experts that
the registered voters were not the ones who voted as shown by the fact that the thumbprints appearing
BADOY,Anacleto 374,933 in Form 1 were different from the thumbprints of the voters in Form 5. " But the Comelec denied a
motion of petitioners asking that the ballot boxes corresponding to the voting centers the record of
ROLDAN, 275,141 which are not available be opened and that a date be set when the statements of witnesses referred to
Ernesto in the August 30, 1978 resolution would be taken, on the ground that in its opinion, it was no longer
necessary to proceed with such opening of ballot boxes and taking of statements.
TOCAO, Sergio 239,914
For his part, counsel for petitioner M in G.R. No. L-49717-21 filed with Comelec on December 19,1978
ARATUC, 205,829
a Memorandum. To quote from the petition:
Tomatic

GURO, 190,489 On December 19, 1978, the KBL, through counsel, filed a Memorandum for the
Mangontawar Kilusang Bagong Lipunan (KBL) Candidates on the Comelec's Resolution of
December 11, 1978, a xerox copy of which is attached hereto and made a part hereof
DIAZ, Ciscolario 190,077 as Annex 2, wherein they discussed the following topics: (I) Brief History of the
President Case; (II) Summary of Our Position and Submission Before the Honorable
TAMULA, Fred 180,280 commission; and (III) KBL's Appeal Ad Cautelam. And the fourth topic, because of its
relevance to the case now before this Honorable Court, we hereby quote for ready
LEGASPI, 174,396 reference:
Bonifacio
IV
MACAPEGES, 160,271
Malamana
OUR POSITION WITH RESPECT TO THE
 ESOLUTION OF THE HONORABLE
SINSUAT, Blah 269,905

COMMISSION OF DECEMBER 11, 1978 ROLDAN, 268,287

Ernesto
We respectfully submit that the Resolution of this case by this Honorable Commission
should be limited to the precincts and municipalities involved in the KB'S Petitions in MANDANGAN, 251,226
Cases Nos. 78-8 to 78-12, on which evidence had been submitted by the parties, and Linang
on which the KB submitted the reports of their handwriting-print. Furthermore, it
should be limited by the appeal of the KB. For under the Supreme Court Resolution of TACAO, Sergio 229,124
May 23, 1978, original jurisdiction was given to the Board, with appeal to this
Honorable Commission-Considerations of other matters beyond these would be, in DIAZ, Ciscolario 187,986
our humble opinion, without jurisdiction.
ARATUC, 183,316
Tomatic
For the present, we beg to inform this Honorable Commission that we stand by the
reports and findings of the COMELEC/NBI experts as submitted by them to the
LEGASPI, 178,564
Regional Board of Canvassers and as confirmed by the said Regional Board of
Bonifacio
Canvassers in its Resolution of July 11, 1978, giving the 8 KBL candidates the
majorities we have already above mentioned. The Board did more than make a
TAMULA, Fred 177,270
summary scrutiny of the records' required by the Supreme Court Resolution,
Guideline No. 5, of May 23, 1978. Hence, if for lack of material time we cannot file
any Memorandum within the non-extendible period of seven (7) days, we would just GURO, 163,449
stand by said COMELEC/NBI experts' reports to the Regional Board, as confirmed by Mangontawar
the Board (subject to our appeal ad cautelam).
LOMA, Nemesio 129,450

The COMELEC sent to the parties copies of the reports of the NBI-COMELEC (Page 14, Record,
experts. For lack of material time due to the voluminous reports and number of voting L-49705-09.)
centers involved, the Christmas holidays, and our impression that the COMELEC will
exercise only its appellate jurisdiction, specially as per resolution of this Honorable
Court of May 23, 1978 (in G.R. No. L-48097), we, the KBL, did not comment any It is alleged in the Aratuc petition that:
more on said reports. (Pp. 5-6, Record, L-49717-21.)
The Comelec committee grave abuse of dicretion, amounting to lack of jurisdiction:
On January 13, 1979, the Comelec rendered its resolution being assailed in these cases, declaring the
final result of the canvass to be as follows:
1. In not pursuing further the examination of the registration records and voting
CANDIDATES VOTES records from the other voting centers questioned by petitioners after it found proof of
massive substitute voting in all of the voting records and registration records
VALDEZ, 319,514 examined by Comelec and NBI experts;
Estanislao
2. In including in the canvass returns from the voting centers whose book of voters
DIMAPORO, 289.751 and voting records could not be recovered by the Commission in spite of its repeated
Abdullah efforts to retrieve said records;

AMPARO, Jesus 286,180

3. In not excluding from the canvass returns from voting centers showing a very high
BADOY, Anacleto 285,985 percentage of voting and in not considering that high percentage of voting, coupled
with massive substitution of voters is proof of manufacturing of election returns;
BAGA, Tomas 271,473
4. In denying petitioners' petition for the opening of the ballot boxes from voting
PANGANDAMAN, 271,393 centers whose records are not available for examination to determine whether or not
Sambolayan there had been voting in said voting centers;
 5. In not Identifying the ballot boxes that had no padlocks and especially those that
were found to be empty while they were shipped to Manila pursuant to the directive of
the Commission in compliance with the guidelines of this Honorable Court;
6. In not excluding from the canvass returns where the results of examination of the
voting records and registration records show that the thumbprints of the voters in CE
Form 5 did not correspond to those of the registered voters as shown in CE Form 1;
7. In giving more credence to the affidavits of chairmen and members of the voting
centers, municipal treasurers and other election officials in the voting centers where
irregularities had been committed and not giving credence to the affidavits of
watchers of petitioners;
8. In not including among those questioned before the Board by petitioners those
included among the returns questioned by them in their Memorandum filed with the
Commission on April 26, 1978, which Memorandum was attached as Annex 'I' to their
petition filed with this Honorable Court G.R. No. L-48097 and which the Supreme
Court said in its Guidelines should be considered by the Board in the course of the
canvass (Guidelines No. 4). (Pp. 15-16, Record, Id.)
On the other hand, the Mandangan petition submits that the Comelec comitted the following errors:
1. In erroneously applying the earlier case of Diaz vs. Commission on Elections
(November 29, 1971; 42 SCRA 426), and particularly the highly restrictive criterion
that when the votes obtained by the candidates with the highest number of votes
exceed the total number of highest possible valid votes, the COMELEC ruled to
exclude from the canvass the election return reflecting such rests, under which the
COMELEC excluded 1,004 election returns, involving around 100,000 votes, 95 % of
which are for KBL candidates, particularly the petitioner Linang Mandangan, and
which rule is so patently unfair, unjust and oppressive.
2. In not holding that the real doctrine in the Diaz Case is not the total exclusion of
election returns simply because the total number of votes exceed the total number of
highest possible valid votes, but 'even if all the votes cast by persons Identified as
registered voters were added to the votes cast by persons who can not be definitely
ascertained as registered or not, and granting, ad arguendo, that all of them voted for
respondent Daoas, still the resulting total is much below the number of votes credited
to the latter in returns for Sagada, 'and that 'of the 2,188 ballots cast in Sagada,
nearly one-half (1,012) were cast by persons definitely Identified as not registered
therein or still more than 40 % of substitute voting which was the rule followed in the
later case of Bashier/Basman (Diaz Case, November 19,1971,42 SCRA 426,432).
3. In not applying the rule and formula in the later case of Bashier and Basman vs.
Commission on Election (February 24, 1972, 43 SCRA 238) which was the one
followed by the Regional Board of Canvassers, to wit:
In Basman vs Comelec (L-33728, Feb. 24, 1972) the Supreme
Court upheld the Supreme Court upheld the ruling of the
Commission setting the standard of 40 % excess votes to justify the
exclusion of election returns. In line with the above ruling, the Board
of Canvassers may likewise set aside election returns with 40 %
substitute votes. Likewise, where excess voting occured and the
excess was such as to destroy the presumption of innocent
mistake, the returns was excluded.
(COMELEC'S Resolution, Annex I hereof, p. 22), which this Honorable Court must
have meant when its Resolution of May 23, 1978 (G.R. No. 7), it referred to "massive
substitution of voters.
4. In examining, through the NBI/COMELEC experts, the records in more than 878
voting centers examined by the KB experts and passed upon by the Regional Board
of Canvassers which was all that was within its appellate jurisdiction is examination of
more election records to make a total of 1,085 voting centers (COMELEC'S
Resolution, Annex 1 hereof, p. 100), being beyond its jurisdiction and a denial of due
process as far as the KBL, particularly the petitioner Mandangan, were concerned
because they were informed of it only on December, 1978, long after the case has
been submitted for decision in September, 1978; and the statement that the KBL
acquiesced to the same is absolutely without foundation.
5. In excluding election returns from areas where the conditions of peace and order
were allegedly unsettled or where there was a military operation going on immediately
before and during election and where the voter turn out was high (90 % to 100 %),
and where the people had been asked to evacuate, as a ruling without jurisdiction
and in violation of due process because no evidence was at all submitted by the
parties before the Regional Board of Canvasssers. (Pp. 23-25, Record, L-47917-21.)
Now before discussing the merits of the foregoing contentions, it is necessary to clarify first the nature
and extent of the Supreme Court's power of review in the premises. The Aratuc petition is expressly
predicated on the ground that respondent Comelec "committed grave abuse of discretion, amounting to
lack of jurisdiction" in eight specifications. On the other hand, the Mandangan petition raises pure
questions of law and jurisdiction. In other words, both petitions invoked the Court's certiorari jurisdiction,
not its appellate authority of review.
This is as it should be. While under the Constitution of 1935, "the decisions, orders and rulings of the
Commission shall be subject to review by the Supreme Court" (Sec. 2, first paragraph, Article X) and
pursuant to the Rules of Court, the petition for "certiorari or review" shall be on the ground that the
Commission "has decided a question of substance not theretofore determined by the Supreme Court, or
has decided it in a way not in accord with law or the applicable decisions of the Supreme Court" (Sec. 3.
Rule 43), and such provisions refer not only to election contests but even to pre-proclamation
proceedings, the 1973 Constitution provides somewhat differently thus: "Any decision, order or ruling of
the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty
days from his receipt of a copy thereof" (Section 11, Article XII c), even as it ordains that the
Commission shall "be the sole judge of all contests relating to the elections, returns and qualifications of
all members of the National Assembly and elective provincial and city official" (Section 2(2).)
Correspondingly, the ElectionCode of 1978, which is the first legislative constructionof the pertinent
constitutional provisions, makes the Commission also the "sole judge of all pre-proclamation
controversies" and further provides that "any of its decisions, orders or rulings (in such contoversies)
shall be final and executory", just as in election contests, "the decision of the Commission shall be final,
and executory and inappealable." (Section 193)
It is at once evident from these constitutional and statutory modifications that there is a definite
tendency to enhance and invigorate the role of the Commission on Elections as the independent
constitutinal body charged with the safeguarding of free, peaceful and honest elections. The framers of
the new Constitution must be presumed ot have definite knowledge of what it means to make the
decisions, orders and rulings of the Commission "subject to review by the Supreme Court". And since
instead of maintaining that provision intact, it ordained that the Commission's actuations be instead
"brought to the Supreme Court on certiorari", We cannot insist that there was no intent to change the
nature of the remedy, considering that the limited scope of certiorari, compared to a review, is well
known in remedial law.
Withal, as already stated, the legislative construction of the modified peritinent constitutional provision is
to the effect that the actuations of the Commission are final, executory and even inappealable. While
such construction does not exclude the general certiorari jurisdiction of the Supreme Court which
inheres in it as the final guardian of the Constitution, particularly, of its imperious due process mandate,
it correspondingly narrows down the scope and extent of the inquiry the Court is supposed to undertake
to what is strictly the office of certiorari as distinguished from review. We are of the considered opinion
that the statutory modifications are consistent with the apparent new constitional intent. Indeed, it is
obvious that to say that actuations of the Commission may be brought to the Supreme Court on
certiorari technically connotes something less than saying that the same "shall be subject to review by
the Supreme Court", when it comes to the measure of the Court's reviewing authority or prerogative in
the premises.
A review includes digging into the merits and unearthing errors of judgment, while certiorari deals
exclusively with grave abuse of discretion, which may not exist even when the decision is otherwise
erroneous. certiorari implies an indifferent disregard of the law, arbitrariness and caprice, an omission to
weight pertinent considerations, a decision arrived at without rational deliberation. While the effecdts of
an error of judgment may not differ from that of an indiscretion, as a matter of policy, there are matters
taht by their nature ought to be left for final determination to the sound discretion of certain officers or
entities, reserving it to the Supreme Court to insure the faithful observance of due process only in cases
of patent arbitrariness.
Such, to Our mind, is the constitutional scheme relative to the Commission on Elections. Conceived by
the charter as the effective instrument to preserve the sanctity of popular suffrage, endowed with
independence and all the needed concommittant powers, it is but proper that the Court should accord
the greatest measure of presumption of regularity to its course of action and choice of means in
performing its duties, to the end that it may achieve its designed place in the democratic fabric of our
government. Ideally, its members should be free from all suspicions of partisan inclinations, but the fact
that actually some of them have had stints in the arena of politics should not, unless the contrary is
shown, serve as basis for denying to its actuations the respect and consideration that the Constitution
contemplates should be accorded to it, in the same manner that the Supreme Court itself which from
time to time may have members drawn from the political ranks or even from military is at all times
deemed insulated from every degree or form of external pressure and influence as well as improper
internal motivations that could arise from such background or orientation.
We hold, therefore that under the existing constitution and statutory provisions, the certiorari jurisdiction
of the Court over orders, and decisions of the Comelec is not as broad as it used to be and should be
confined to instances of grave abuse of discretion amounting to patent and substantial denial of due
process. Accordingly, it is in this light that We the opposing contentions of the parties in this cases.
THE MANDANGAN CASE
Being more simple in Our view, We shall deal with the petition in G.R. No. L-49717-21 first.
The errors assigned in this petition boil down to two main propositions, namely, (1) that it was an error
of law on the part of respondent Comelec to have applied to the extant circumstances hereof the ruling
of this Court in Diaz vs. Comelec 42 SCRA 426 instead of that of Bashier vs. Comelec 43 SCRA 238;
and (2) that respondent Comelec exceeded its jurisdiction and denied due process to petitioner
Mandangan in extending its inquiry beyond the election records of "the 878 voting centers examined by
the KB experts and passed upon by the Regional Board of Canvassers" and in excluding from the
canvass the returns showing 90 to 100 % voting, from voting centers where military operations were by
the Army to be going on, to the extent that said voting centers had to be transferred to the poblaciones
the same being by evidence.
Anent the first proposition, it must be made clear that the Diaz and Bashier rulings are not mutually
exclusive of each other, each being an outgrowth of the basic rationale of statistical improbability laid
down in Lagumbay vs. Comelec and , 16 SCRA 175. Whether they be apply together or separately or
which of them be applied depends on the situation on hand. In the factual milieu of the instant case as
found by the Comelec, We see no cogent reason, and petitioner has not shown any, why returns in
voting centers showing that the votes of the candidate obtaining highest number of votes of the
candidate obtaining the highest number of votes exceeds the highest possible number of valid votes
cast therein should not be deemed as spurious and manufactured just because the total number of
excess votes in said voting centers were not more than 40 %. Surely, this is not the occasion, consider
the historical antecedents relative to the highly questionable manner in which elections have been bad
in the past in the provinces herein involved, of which the Court has judicial notice as attested by its
numerous decisions in cases involving practically every such election, of the Court to move a whit back
from the standards it has enunciated in those decisions.
In regard to the jurisdictional and due process points raised by herein petitioner, it is of decisive
importance to bear in mind that under Section 168 of the Revised Election Code of 1978, "the
Commission (on Elections) shall have direct control and supervision on over the board of canvassers"
and that relatedly, Section 175 of the same Code provides that it "shall be the sole judge of all pre-
proclamation controversies." While nominally, the procedure of bringing to the Commission objections to
the actuations of boards of canvassers has been quite loosely referred to in certain quarters, even by
the Commission and by this Court, such as in the guidelines of May 23,1978 quoted earlier in this
opinion, as an appeal, the fact of the matter is that the authority of the Commission in reviewing such
actuations does not spring from any appellate jurisdiction conferred by any specific provision of law, for
there is none such provision anywhere in the Election Code, but from the plenary prerogative of direct
control and supervision endowed to it by the above-quoted provisions of Section 168. And in
administrative law, it is a too well settled postulate to need any supporting citation here, that a superior
body or office having supervision and control over another may do directly what the latter is supposed to
do or ought to have done.
Consequently, anything said in Lucman vs. Dimaporo, 33 SCRA 387, cited by petitioner, to the contrary
notwithstanding, We cannot fault respondent Comelec for its having extended its inquiry beyond that
undertaken by the Board of Canvass On the contrary, it must be stated that Comelec correctly and
commendably asserted its statutory authority born of its envisaged constitutional duties vis-a-vis the
preservation of the purity of elections and electoral processes and p in doing what petitioner it should
not have done. Incidentally, it cannot be said that Comelec went further than even what Aratuc et al.
have asked, since said complaints had impugned from the outset not only the returns from the 878
voting centers examined by their experts but all those mentioned in their complaints in the election
cases filed originally with the Comelec enumerated in the opening statements hereof, hence respondent
Comelec had that much field to work on.
The same principle should apply in respect to the ruling of the Commission regarding the voting centers
affected by military operations. It took cognizance of the fact, not considered by the board of canvass,
that said voting centers had been transferred to the poblaciones. And, if only for purposes of pre-
proclamation proceedings, We are persuaded it did not constitute a denial of due process for the
Commission to have taken into account, without the need or presentation of evidence by the parties, a
matter so publicly notorious as the unsettled situation of peace and order in localities in the provinces
herein involved that their may perhaps be taken judicial notice of, the same being capable of
unquestionable demonstration. (See 1, Rule 129)
In this connection, We may as well perhaps, say here as later that regrettably We cannot, however, go
along with the view, expressed in the dissent of our respected Chief Justice, that from the fact that
some of the voting centers had been transferred to the poblaciones there is already sufficient basis for
Us to rule that the Commission should have also subjected all the returns from the other voting centers
of the some municipalities, if not provinces, to the same degree of scrutiny as in the former. The
majority of the Court feels that had the Commission done so, it would have fallen into the error by
petitioner Mandangan about denial of due process, for it is relatively unsafe to draw adverse
conclusions as to the exact conditions of peace and order in those other voting centers without at list
some prima facie evidence to rely on considering that there is no allegation, much less any showing at
all that the voting centers in question are so close to those excluded by the Comelec on as to warrant
the inescapable conclusion that the relevant circumstances by the Comelec as obtaining in the latter
were Identical to those in the former.
Premises considered the petition in G.R. Nos. L-49717-21 is hereby dismiss for lack of merit.
THE ARATUC ET AL. PETITION
Of the eight errors assigned by herein petitioners earlier adverted to, the seventh and the sight do not
require any extended disquisition. As to the issue of whether the elections in the voting centers
concerned were held on April 7, 1978, the date designated by law, or earlier, to which the seventh
alleged error is addressed, We note that apparently petitioners are not seriously pressing on it anymore,
as evidenced by the complete absence of any reference thereto during the oral argument of their
counsel and the practically cavalier discussion thereof in the petition. In any event, We are satisfied
from a careful review of the analysis by the Comelec in its resolution now before Us that it took pains to
consider as meticulously as the nature of the evidence presented by both parties would permit all the
contentions of petitioners relative to the weight that should be given to such evidence. The detailed
discussion of said evidence is contained in not less than nineteen pages (pp. 70-89) of the resolution. In
these premises, We are not prepared to hold that Comelec acted wantonly and arbitrarily in drawing its
conclusions adverse to petitioners' position. If errors there are in any of those conclusions, they are
errors of judgment which are not reviewable in certiorari, so long as they are founded on substantial
evidence.
As to eighth assigned error. the thrust of respondents, comment is that the results in the voting centers
mentioned in this assignment of error had already been canvassed at the regional canvass center in
Cotabato City. Again, We cannot say that in sustaining the board of canvassers in this regard, Comelec
gravely abused its discretion, if only because in the guidelines set by this Court, what appears to have
been referred to is, rightly or wrongly, the resumption only of the canvass, which does not necessarily
include the setting aside and repetition of the canvass already made in Cotabato City.
The second and fourth assignments of error concern the voting centers the corresponding voters' record
(C.E. Form 1) and record of voting, (C.E. Form 5) of which have never been brought to Manila because
they, were not available The is not clear as to how many are these voting centers. According to
petitioners they are 501, but in the Comelec resolution in question, the number mentioned is only 408,
and this number is directly challenged in the petition. Under the second assignment, it is contended that
the Comelec gravely abused its discretion in including in the canvass the election returns from these
voting centers and, somewhat alternatively, it is alleged as fourth assignment that the petitioners motion
for the opening of the ballot boxes pertaining to said voting centers was arbitraly denied by respondent
Comelec.
The resolution under scrutiny explains the situation that confronted the Commission in regard to the 408
voting centers reffered to as follows :
The Commission had the option of excluding from the canvass the election returns
under category. By deciding to exclude, the Commission would be summarily
disenfranchising the voters registered in the voting centers affected without any basis.
The Commission could also order the inclusion in the canvass of these elections
returns under the injunction of the Supreme Court that extremes caution must be
exercised in rejecting returns unless these are palpably irregular. The Commission
chose to give prima facie validity to the election returns mentioned and uphold the
votes cast by the voters in those areas. The Commission held the view that the failure
of some election officials to comply with Commission orders(to submit the records)
should not parties to such official disobedience. In the case of Lino Luna vs.
Rodriguez, 39 Phil. 208, the Supreme Court ruled that when voters have honestly
cast their ballots, the same should not be nullified because the officers appointed
under the law to direct the election and guard the purity of the ballot have not
complied with their duty. (cited in Laurel on Elections, p. 24)
On page 14 of the comment of the Solicitor General, however, it is stated that:
At all events, the returns corresponding to these voting centers were examined by the
Comelec and 141 of such returns were excluded, as follows:
SUMMARY
PROVINCE TOTAL EXCLUDED INCLUDED
Lanao del Norte 30 — 30
Lanao del Sur 342 137 205
Maguindanao 21 1 20
North Cotabato 7 1 6

Sultan Kudarat 12 2 10
totals ----- 412 141 271
(Page 301, Record.)
This assertion has not been denied by petitioners.
Thus, it appears that precisely use of the absence or unavailability of the CE Forms 1 and 5
corresponding to the more than 400 voting centers concerned in our present discussion the Comelec
examined the returns from said voting centers to determine their trustworthiness by scrutinizing the
purported relevant data appearing on their faces, believing that such was the next best thing that could
be done to avoid total disenfranchisement of the voters in all of them On the Other hand, Petitioners'
insist that the right thing to do was to order the opening of the ballot boxes involved.
In connection with such opposing contentions, Comelec's explanation in its resolution is:
... The commission had it seen fit to so order, could have directed the opening of the
ballot boxes. But the Commission did not see the necessity of going to such length in
a that was in nature and decided that there was sufficient bases for the revolution of
the appeal. That the Commission has discretion to determine when the ballot boxes
should be opened is implicit in the guidelines set by the Supreme Court which states
that '. . . the ballot bones [which] shall be opened only upon orders of either the
respondent Board or respondent Commission, after the need therefor has become
evident ... ' (guideline No. 3; emphasissupplied). Furthermore, the Court on June 1,
1978, amended the guidelines that the "ballot boxes for the voting centers ... need not
be taken to Manila EXCEPT those of the centers as to which the petitioners have the
right to demand that the corresponding ballot boxes be opened ... provided that the
voting centers concerned shall be specified and made known by petitioners to the
Regional Board of Canvassers not later than June 3,1978 ... ' (Emphasis supplied).
The KB, candidates did not take advantage of the option granted them under these
guidelines.( Pp 106-107, Record.)
Considering that Comelec, if it had wished to do so, had the facilities to Identify on its own the voting
centers without CE Forms I and 5, thereby precluding the need for the petitioners having to specify
them, and under the circumstances the need for opening the ballot boxes in question should have
appeared to it to be quite apparent, it may be contended that Comelec would have done greater service
to the public interest had it proceeded to order such opening, as it had announced it had thoughts of
doing in its resolution of August 30, 1978. On the other hand, We cannot really blame the Commission
too much, since the exacting tenor of the guidelines issued by Us left it with very little elbow room, so to
speak, to use its own discretion independently of what We had ordered. What could have saved matters
altogether would have been a timely move on the part of petitioners on or before June 3, 1978, as
contemplated in Our resolution. After all come to think of it, that the possible outcome of the opening of
the ballot boxes would favor the petitioners was not a certainty — the contents them could conceivably
boomerang against them, such as, for example, if the ballots therein had been found to be regular and
preponderantly for their opponents. Having in mind that significantly, petitioners filed their motion for
only on January 9, 1979, practically on the eve of the promulgation of the resolution, We hold that by
having adhered to Our guidelines of June 1, 1978, Comelec certainly cannot be held to be guilty of
having gravely abused its discretion, in examining and passing on the returns from the voting centers
reffered to in the second and fourth assignments of error in the canvass or in denying petitioners' motion
for the of the ballot boxes concerned.
The first, third and sixth assignment of involve related matters and maybe discussed together. They all
deal with the inclusion in or exclusion from the canvass of returns on the basis of the percentage of
voting in specified voting centers and the corresponding findings of the Comelec on the extent of
substitute voting therein as indicated by the result of either the technical examination by experts of the
signatures and thumb-prints of the voters threat.
To begin with, petitioners' complaint that the Comelec did not examine and study 1,694 of the records in
an the 2,775 voting centers questioned by them is hardly accurate. To be more exact, the Commission
excluded a total of 1,267 returns coming under four categories namely: 1,001 under the Diaz, supra,
ruling, 79 because of 90-100 % turnout of voters despite military operations, 105 palpably manufactured
owe and 82 returns excluded by the board of canvass on other grounds. Thus, 45.45 % of the of the
petitioners were sustained by the Comelec. In contrast, in the board of canvassers, only 453 returns
were excluded. The board was reversed as to 6 of these, and 821 returns were excluded by Comelec
over and above those excluded by the board. In other words, the Comelec almost doubled the
exclusions by the board.
Petitioners would give the impression by their third assignment of error that Comelec refused to
consider high percentage of voting, coupled with mass substitute voting, as proof that the pertinent
returns had been manufactured. That such was not the case is already shown in the above
specifications. To add more, it can be gleaned from the resolution that in t to the 1,065 voting centers in
Lanao del Sur and Marawi City where a high percentage of voting appeared, the returns from the 867
voting centers were excluded by the Comelec and only 198 were included a ratio of roughly 78 % to 22
%. The following tabulation drawn from the figures in the resolution shows how the Comelec went over
those returns center by center and acted on them individually:
90% — 100% VOTING
MARAWI CITY AND LANAO DEL SUR
NO. OF V/C THAT V/C WITH 90% to 100%
MUNICIPALITIES FUNCTIONED VOTING
We are convinced, apart from presuming regularity in the performance of its duties, that there is enough
showing in the record that it did examine and study the returns and pertinent records corresponding to
all the 2775 voting centers subject of petitioners' complaints below. In one part of its resolution the
Comelec states:
The Commission as earlier stated examined on its own the Books of Voters (Comelec
Form No. 1) and the Voters Rewards Comelec Form No. 5) to determine for itself
which of these elections form needed further examination by the COMELEC-NBI
experts. The Commission, aware of the nature of this pre-proclamation controversy,
believes that it can decide, using common sense and perception, whether the election
forms in controversy needed further examination by the experts based on the
presence or absence of patent signs of irregularity. (Pp. 137-138, Record.)
In the face of this categorical assertion of fact of the Commission, the bare charge of petitioners that the
records pertaining to the 1,694 voting centers assailed by them should not create any ripple of serious
doubt. As We view this point under discussion, what is more factually accurate is that those records
complained of were not examined with the aid of experts and that Comelec passed upon the returns
concerned "using common sense and perception only." And there is nothing basically objectionable in
this. The defunct Presidential Senate and House Electoral Tribunals examine passed upon and voided
millions of votes in several national elections without the assistance of experts and "using" only
common sense and perception". No one ever raised any eyebrows about such procedure. Withal, what
we discern from the resolution is that Comelec preliminary screened the records and whatever it could
not properly pass upon by "using common sense and perception" it left to the experts to work on. We
might disagree with he Comelec as to which voting center should be excluded or included, were We to
go over the same records Ourselves, but still a case of grave abuse of discretion would not come out,
considering that Comelec cannot be said to have acted whimsically or capriciously or without any
rational basis, particularly if it is considered that in many respects and from the very nature of our
respective functions, becoming candor would dictate to Us to concede that the Commission is in a
better position to appreciate and assess the vital circumstances closely and accurately. By and large,
therefore, the first, third and sixth assignments of error of the petitioners are not well taken.
The fifth assignment of error is in Our view moot and academic. The Identification of the ballot boxes in
defective condition, in some instances open and allegedly empty, is at best of secondary import
because, as already discussed, the records related thereto were after all examined, studied and passed
upon. If at all, deeper inquiry into this point would be of real value in an electoral protest.
CONCLUSION
Before closing, it may not be amiss to state here that the Court had initially agreed to dispose of the
cases in a minute resolution, without prejudice to an extended or reasoned out opinion later, so that the
Court's decision may be known earlier. Considering, however, that no less than the Honorable Chief
Justice has expressed misgivings as to the propriety of yielding to the conclusions of respondent
Commission because in his view there are strong considerations warranting farther meticulous inquiry
of what he deems to be earmarks of seemingly traditional faults in the manner elections are held in the
municipalities and provinces herein involved, and he is joined in this pose by two other distinguished
colleagues of Ours, the majority opted to ask for more time to put down at least some of the important
considerations that impelled Us to see the matters in dispute the other way, just as the minority bidded
for the opportunity to record their points of view. In this manner, all concerned will perhaps have ample
basis to place their respective reactions in proper perspective.
In this connection, the majority feels it is but meet to advert to the following portion of the ratiocination of
respondent Board of Canvassers adopted by respondent Commission with approval in its resolution
under question:
First of all this Board was guided by the legal doctrine that canvassing boards must
exercise "extreme caution" in rejecting returns and they may do so only when the
returns are palpably irregular. A conclusion that an election return is obviously
manufactured or false and consequently should be disregarded in the canvass must
be approached with extreme caution, and only upon the most convincing proof. Any
plausible explanation one which is acceptable to a reasonable man in the light of
experience and of the probabilities of the situation, should suffice to avoid outright
nullification, with the resulting t of those who exercised their right of suffrage. (Anni vs.
Isquierdo et at L-35918, Jude 28,1974; Villavon v. Comelec L-32008, August
31,1970; Tagoranao v. Comelec 22 SCRA 978). In the absence of strong evidence
establishing the spuriousness of the return, the basis rule of their being accorded
prima facie status as bona fide reports of the results of the count of the votes for
canvassing and proclamation purposes must be applied, without prejudice to the
question being tried on the merits with the presentation of evidence, testimonial and
real in the corresponding electoral protest. (Bashier vs. Comelec L-33692, 33699,
33728, 43 SCRA 238, February 24, 1972). The decisive factor is that where it has
been duly de ed after investigation and examination of the voting and registration
records hat actual voting and election by the registered voters had taken place in the
questioned voting centers, the election returns cannot be disregarded and excluded
with the resting disenfranchisement of the voters, but must be accorded prima facie
status as bona fide reports of the results of the voting for canvassing and registration
purposes. Where the grievances relied upon is the commission of irregularities and
violation of the Election Law the proper remedy is election protest. (Anni vs. Isquierdo
et al. Supra). (P. 69, Record, L-49705-09).
The writer of this opinion has taken care to personally check on the citations to be doubly sure they
were not taken out of context, considering that most, if not all of them arose from similar situations in the
very venues of the actual milieu of the instant cases, and We are satisfied they do fit our chosen
posture. More importantly, they actually came from the pens of different members of the Court, already
retired or still with Us, distinguished by their perspicacity and their perceptive prowess. In the context of
the constitutional and legislative intent expounded at the outset of this opinion and evident in the
modifications of the duties and responsibilities of the Commission on Elections vis-a-vis the matters that
have concerned Us herein, particularly the elevation of the Commission as the "sole judge of pre-
proclamation controversies" as well as of all electoral contests, We find the afore-quoted doctrines
compelling as they reveal through the clouds of existing jurisprudence the pole star by which the future
should be guided in delineating and circumscribing separate spheres of action of the Commission as it
functions in its equally important dual role just indicated bearing as they do on the purity and sanctity of
elections in this country.
In conclusion, the Court finds insufficient merit in the petition to warrant its being given due course.
Petition dismissed, without pronouncement as to costs. Justices Fernando, Antonio and Guerrero who
are presently on official missions abroad voted for such dismissal.
Fernando, Antonio, Concepcion Jr., Santos Fernandez, and Guerrero, JJ., concur.
Teehankee, J. took no part.
Aquino and Abad Santos, Jr., took no part.
DARIO vs. MISON
SARMIENTO, J.:
The Court writes finis to this contreversy that has raged bitterly for the several months. It does so out of
ligitimate presentement of more suits reaching it as a consequence of the government reorganization
and the instability it has wrought on the performance and efficiency of the bureaucracy. The Court is
apprehensive that unless the final word is given and the ground rules are settled, the issue will fester,
and likely foment on the constitutional crisis for the nation, itself biset with grave and serious problems.
The facts are not in dispute.
On March 25, 1986, President Corazon Aquino promulgated Proclamation No. 3, "DECLARING A
NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE, PROTECTING
THEIR BASIC RIGHTS, ADOPTING A PROVISIONAL CONSTITUTION, AND PROVIDING FOR AN
ORDERLY TRANSITION TO A GOVERNMENT UNDER A NEW CONSTITUTION." Among other
things, Proclamation No. 3 provided:
SECTION 1. ...
The President shall give priority to measures to achieve the mandate of the people to:
(a) Completely reorganize the government, eradicate unjust and oppressive
structures, and all iniquitous vestiges of the previous regime; 1
...
Pursuant thereto, it was also provided:
SECTION 1. In the reorganization of the government, priority shall be given to measures to
promote economy, efficiency, and the eradication of graft and corruption.
SECTION 2. All elective and appointive officials and employees under the 1973 Constitution
shall continue in office until otherwise provided by proclamation or executive order or upon the
appointment and qualification of their successors, if such is made within a period of one year
from February 25, 1986.
SECTION 3. Any public officer or employee separated from the service as a result of the
organization effected under this Proclamation shall, if entitled under the laws then in force,
receive the retirement and other benefits accruing thereunder.
SECTION 4. The records, equipment, buildings, facilities and other properties of all
government offices shall be carefully preserved. In case any office or body is abolished or
reorganized pursuant to this Proclamation, its FUNDS and properties shall be transferred to
the office or body to which its powers, functions and responsibilities substantially pertain. 2
Actually, the reorganization process started as early as February 25, 1986, when the President, in her
first act in office, called upon "all appointive public officials to submit their courtesy resignation(s)
beginning with the members of the Supreme Court." 3 Later on, she abolished the Batasang
Pambansa4 and the positions of Prime Minister and Cabinet 5 under the 1973 Constitution.
Since then, the President has issued a number of executive orders and directives reorganizing various
other government offices, a number of which, with respect to elected local officials, has been challenged
in this Court, 6and two of which, with respect to appointed functionaries, have likewise been questioned
herein. 7
On May 28, 1986, the President enacted Executive Order No. 17, "PRESCRIBING RULES AND
REGULATIONS FOR THE IMPLEMENTATION OF SECTION 2, ARTICLE III OF THE FREEDOM
CONSTITUTION." Executive Order No. 17 recognized the "unnecessary anxiety and demoralization
among the deserving officials and employees" the ongoing government reorganization had generated,
and prescribed as "grounds for the separation/replacement of personnel," the following:
SECTION 3. The following shall be the grounds for separation replacement of personnel:
1) Existence of a case for summary dismissal pursuant to Section 40 of the Civil
Service Law;
2) Existence of a probable cause for violation of the Anti-Graft and Corrupt Practices
Act as determined by the Mnistry Head concerned;
3) Gross incompetence or inefficiency in the discharge of functions;
4) Misuse of public office for partisan political purposes;
5) Any other analogous ground showing that the incumbent is unfit to remain in the
service or his separation/replacement is in the interest of the service.8
On January 30, 1987, the President promulgated Executive Order No. 127, "REORGANIZING THE
MINISTRY OF FINANCE." 9 Among other offices, Executive Order No. 127 provided for the
reorganization of the Bureau of Customs 10 and prescribed a new staffing pattern therefor.
11
Three days later, on February 2, 1987, the Filipino people adopted the new Constitution.
On January 6, 1988, incumbent Commissioner of Customs Salvador Mison issued a Memorandum, in
the nature of "Guidelines on the Implementation of Reorganization Executive Orders," 12 prescribing the
procedure in personnel placement. It also provided:
1. By February 28, 1988, the employees covered by Executive Order 127 and the
grace period extended to the Bureau of Customs by the President of the Philippines
on reorganization shall be:
 a) informed of their re-appointment, or
b) offered another position in the same department or agency or
c) informed of their termination. 13
On the same date, Commissioner Mison constituted a Reorganization Appeals Board charged with
adjudicating appeals from removals under the above Memorandum. 14 On January 26, 1988,
Commissioner Mison addressed several notices to various Customs officials, in the tenor as follows:
Sir:
Please be informed that the Bureau is now in the process of implementing the Reorganization
Program under Executive Order No. 127.
Pursuant to Section 59 of the same Executive Order, all officers and employees of the
Department of Finance, or the Bureau of Customs in particular, shall continue to perform their
respective duties and responsibilities in a hold-over capacity, and that those incumbents
whose positions are not carried in the new reorganization pattern, or who are not re-
appointed, shall be deemed separated from the service.
In this connection, we regret to inform you that your services are hereby terminated as of
February 28, 1988. Subject to the normal clearances, you may receive the retirement benefits
to which you may be entitled under existing laws, rules and regulations.
In the meantime, your name will be included in the consolidated list compiled by the Civil
Service Commission so that you may be given priority for future employment with the
Government as the need arises.
Sincerely yours,
(Sgd) SALVADOR M. MISON
Commissioner15
As far as the records will yield, the following were recipients of these notices:
Cesar Dario is the petitioner in G.R. No. 81954; Vicente Feria, Jr., is the petitioner in G.R. No. 81967;
Messrs. Adolfo Caserano Pacifico Lagleva Julian C. Espiritu, Dennis A. Azarraga Renato de Jesus,
Nicasio C. Gamboa, Mesdames Corazon Rallos Nieves and Felicitacion R. Geluz Messrs. Leodegario
H. Floresca, Subaer Pacasum Ms. Zenaida Lanaria Mr. Jose B. Ortiz, Ms. Gliceria R. Dolar, Ms.
Cornelia Napa, Pablo B. Santos, Fermin Rodriguez, Ms. Daligay Bautista, Messrs. Leonardo Jose,
Alberto Lontok, Porfirio Tabino Jose Barredo, Roberto Arnaldo, Ms. Ester Tan, Messrs. Pedro Bakal,
Rosario David, Rodolfo Afuang, Lorenzo Catre,, Ms. Leoncia Catre, and Roberto Abaca, are the
petitioners in G.R. No. 82023; the last 279 16 individuals mentioned are the private respondents in G.R.
No. 85310.
As far as the records will likewise reveal, 17 a total of 394 officials and employees of the Bureau of
Customs were given individual notices of separation. A number supposedly sought reinstatement with
the Reorganization Appeals Board while others went to the Civil Service Commission. The first thirty-
one mentioned above came directly to this Court.
On June 30, 1988, the Civil Service Commission promulgated its ruling ordering the reinstatement of
the 279 employees, the 279 private respondents in G.R. No. 85310, the dispositive portion of which
reads as follows:
WHEREFORE, it is hereby ordered that:
1. Appellants be immediately reappointed to positions of comparable or equivalent
rank in the Bureau of Customs without loss of seniority rights;
2. Appellants be paid their back salaries reckoned from the dates of their illegal
termination based on the rates under the approved new staffing pattern but not lower
than their former salaries.
This action of the Commission should not, however, be interpreted as an exoneration of the
appellants from any accusation of wrongdoing and, therefore, their reappointments are without
prejudice to:
1. Proceeding with investigation of appellants with pending administrative cases, and
where investigations have been finished, to promptly, render the appropriate
decisions;
2. The filing of appropriate administrative complaints against appellants with
derogatory reports or information if evidence so warrants.
SO ORDERED. 18
On July 15, 1988, Commissioner Mison, represented by the Solicitor General, filed a motion for
reconsideration Acting on the motion, the Civil Service Commission, on September 20, 1988, denied
reconsideration. 19
On October 20, 1988, Commissioner Mison instituted certiorari proceedings with this Court, docketed,
as above-stated, as G.R. No. 85310 of this Court.
On November 16,1988, the Civil Service Commission further disposed the appeal (from the resolution
of the Reorganization Appeals Board) of five more employees, holding as follows:
WHEREFORE, it is hereby ordered that:
1. Appellants be immediately reappointed to positions of comparable or equivalent
rank in the Bureau of Customs without loss of seniority rights; and
2. Appellants be paid their back salaries to be reckoned from the date of their illegal
termination based on the rates under the approved new staffing pattern but not lower
than their former salaries.
 This action of the Commission should not, however, be interpreted as an exoneration of the
herein appellants from any accusation of any wrongdoing and therefore, their reappointments
are without prejudice to:
1. Proceeding with investigation of appellants with pending administrative cases, if
any, and where investigations have been finished, to promptly, render the appropriate
decisions; and
2. The filing of appropriate administrative complaints against appellant with
derogatory reports or information, if any, and if evidence so warrants.
SO ORDERED. 20
On January 6, 1989, Commissioner Mison challenged the Civil Service Commission's Resolution in this
Court; his petitioner has been docketed herein as G.R. No. 86241. The employees ordered to be
reinstated are Senen Dimaguila, Romeo Arabe, Bemardo Quintong,Gregorio Reyes, and Romulo
Badillo. 21
On June 10, 1988, Republic Act No. 6656, "AN ACT TO PROTECT THE SECURITY OF TENURE OF
CIVIL SERVICE OFFICERS AND EMPLOYEES IN THE IMPLEMENTATION OF GOVERNMENT
REORGANIZATION," 22was signed into law. Under Section 7, thereof:
Sec. 9. All officers and employees who are found by the Civil Service Commission to have
been separated in violation of the provisions of this Act, shall be ordered reinstated or
reappointed as the case may be without loss of seniority and shall be entitled to full pay for the
period of separation. Unless also separated for cause, all officers and employees, including
casuals and temporary employees, who have been separated pursuant to reorganization shall,
if entitled thereto, be paid the appropriate separation pay and retirement and other benefits
under existing laws within ninety (90) days from the date of the effectivity of their separation or
from the date of the receipt of the resolution of their appeals as the case may be: Provided,
That application for clearance has been filed and no action thereon has been made by the
corresponding department or agency. Those who are not entitled to said benefits shall be paid
a separation gratuity in the amount equivalent to one (1) month salary for every year of
service. Such separation pay and retirement benefits shall have priority of payment out of the
savings of the department or agency concerned. 23
On June 23, 1988, Benedicto Amasa and William Dionisio, customs examiners appointed by
Commissioner Mison pursuant to the ostensible reorganization subject of this controversy, petitioned
the Court to contest the validity of the statute. The petition is docketed as G.R. No. 83737.
On October 21, 1988, thirty-five more Customs officials whom the Civil Service Commission had
ordered reinstated by its June 30,1988 Resolution filed their own petition to compel the Commissioner
of Customs to comply with the said Resolution. The petition is docketed as G.R. No. 85335.
On November 29, 1988, we resolved to consolidate all seven petitions.
On the same date, we resolved to set the matter for hearing on January 12, 1989. At the said hearing,
the parties, represented by their counsels (a) retired Justice Ruperto Martin; (b) retired Justice Lino
Patajo. (c) former Dean Froilan Bacungan (d) Atty. Lester Escobar (e) Atty. Faustino Tugade and (f)
Atty. Alexander Padilla, presented their arguments. Solicitor General Francisco Chavez argued on
behalf of the Commissioner of Customs (except in G.R. 85335, in which he represented the Bureau of
Customs and the Civil Service Commission).lâwphî1.ñèt Former Senator Ambrosio Padilla also
appeared and argued as amicus curiae Thereafter, we resolved to require the parties to submit their
respective memoranda which they did in due time.
There is no question that the administration may validly carry out a government reorganization —
insofar as these cases are concerned, the reorganization of the Bureau of Customs — by mandate not
only of the Provisional Constitution, supra, but also of the various Executive Orders decreed by the
Chief Executive in her capacity as sole lawmaking authority under the 1986-1987 revolutionary
government. It should also be noted that under the present Constitution, there is a recognition, albeit
implied, that a government reorganization may be legitimately undertaken, subject to certain
conditions. 24
The Court understands that the parties are agreed on the validity of a reorganization per se the only
question being, as shall be later seen: What is the nature and extent of this government reorganization?
The Court disregards the questions raised as to procedure, failure to exhaust administrative remedies,
the standing of certain parties to sue, 25 and other technical objections, for two reasons, "[b]ecause of
the demands of public interest, including the need for stability in the public service," 26 and because of
the serious implications of these cases on the administration of the Philippine civil service and the rights
of public servants.
The urgings in G.R. Nos. 85335 and 85310, that the Civil Service Commission's Resolution dated June
30, 1988 had attained a character of finality for failure of Commissioner Mison to apply for judicial
review or ask for reconsideration seasonalbly under Presidential Decree No. 807, 27 or under Republic
Act No. 6656, 28 or under the Constitution, 29 are likewise rejected. The records show that the Bureau of
Customs had until July 15, 1988 to ask for reconsideration or come to this Court pursuant to Section 39
of Presidential Decree No. 807. The records likewise show that the Solicitor General filed a motion for
reconsideration on July 15, 1988.30 The Civil Service Commission issued its Resolution denying
reconsideration on September 20, 1988; a copy of this Resolution was received by the Bureau on
September 23, 1988.31 Hence the Bureau had until October 23, 1988 to elevate the matter
on certiorari to this Court.32 Since the Bureau's petition was filed on October 20, 1988, it was filed on
time.
We reject, finally, contentions that the Bureau's petition (in G.R. 85310) raises no jurisdictional
questions, and is therefore bereft of any basis as a petition for certiorari under Rule 65 of the Rules of
Court. 33 We find that the questions raised in Commissioner Mison's petition (in G.R. 85310) are,
indeed, proper for certiorari, if by "jurisdictional questions" we mean questions having to do with "an
indifferent disregard of the law, arbitrariness and caprice, or omission to weigh pertinent considerations,
a decision arrived at without rational deliberation, 34 as distinguished from questions that require
"digging into the merits and unearthing errors of judgment 35 which is the office, on the other hand, of
review under Rule 45 of the said Rules. What cannot be denied is the fact that the act of the Civil
Service Commission of reinstating hundreds of Customs employees Commissioner Mison had
separated, has implications not only on the entire reorganization process decreed no less than by the
Provisional Constitution, but on the Philippine bureaucracy in general; these implications are of such a
magnitude that it cannot be said that — assuming that the Civil Service Commission erred — the
Commission committed a plain "error of judgment" that Aratuc says cannot be corrected by the
extraordinary remedy of certiorari or any special civil action. We reaffirm the teaching of Aratuc — as
regards recourse to this Court with respect to rulings of the Civil Service Commission — which is that
judgments of the Commission may be brought to the Supreme Court through certiorari alone, under
Rule 65 of the Rules of Court.
In Aratuc we declared:
It is once evident from these constitutional and statutory modifications that there is a definite
tendency to enhance and invigorate the role of the Commission on Elections as the
independent constitutional body charged with the safeguarding of free, peaceful and honest
elections. The framers of the new Constitution must be presumed to have definite knowledge
of what it means to make the decisions, orders and rulings of the Commission "subject to
review by the Supreme Court'. And since instead of maintaining that provision intact, it
ordained that the Commission's actuations be instead 'brought to the Supreme Court
on certiorari", We cannot insist that there was no intent to change the nature of the remedy,
considering that the limited scope of certiorari, compared to a review, is well known in remedial
law.36
We observe no fundamental difference between the Commission on Elections and the Civil Service
Commission (or the Commission on Audit for that matter) in terms of the constitutional intent to leave
the constitutional bodies alone in the enforcement of laws relative to elections, with respect to the
former, and the civil service, with respect to the latter (or the audit of government accounts, with respect
to the Commission on Audit). As the poll body is the "sole judge" 37 of all election cases, so is the Civil
Service Commission the single arbiter of all controversies pertaining to the civil service.
It should also be noted that under the new Constitution, as under the 1973 Charter, "any decision,
order, or ruling of each Commission may be brought to the Supreme Court on certiorari," 38 which,
as Aratuc tells us, "technically connotes something less than saying that the same 'shall be subject to
review by the Supreme Court,' " 39 which in turn suggests an appeal by petition for review under Rule
45. Therefore, our jurisdiction over cases emanating from the Civil Service Commission is limited to
complaints of lack or excess of jurisdiction or grave abuse of discretion tantamount to lack or excess of
jurisdiction, complaints that justify certiorari under Rule 65.
While Republic Act No. 6656 states that judgments of the Commission are "final and executory"40 and
hence, unappealable, under Rule 65, certiorari precisely lies in the absence of an appeal. 41
Accordingly, we accept Commissioner Mison petition (G.R. No. 85310) which clearly charges the Civil
Service Commission with grave abuse of discretion, a proper subject of certiorari, although it may not
have so stated in explicit terms.
As to charges that the said petition has been filed out of time, we reiterate that it has been filed
seasonably. It is to be stressed that the Solicitor General had thirty days from September 23, 1988 (the
date the Resolution, dated September 20,1988, of the Civil Service Commission, denying
reconsideration, was received) to commence the instant certiorari proceedings. As we stated, under the
Constitution, an aggrieved party has thirty days within which to challenge "any decision, order, or
ruling" 42 of the Commission. To say that the period should be counted from the Solicitor's receipt of the
main Resolution, dated June 30, 1988, is to say that he should not have asked for reconsideration But
to say that is to deny him the right to contest (by a motion for reconsideration) any ruling, other than the
main decision, when, precisely, the Constitution gives him such a right. That is also to place him at a
"no-win" situation because if he did not move for a reconsideration, he would have been faulted for
demanding certioraritoo early, under the general rule that a motion for reconsideration should preface a
resort to a special civil action. 43Hence, we must reckon the thirty-day period from receipt of the order of
denial.
We come to the merits of these cases.
G.R. Nos. 81954, 81967, 82023, and 85335:
The Case for the Employees
The petitioner in G.R. No. 81954, Cesar Dario was one of the Deputy Commissioners of the Bureau of
Customs until his relief on orders of Commissioner Mison on January 26, 1988. In essence, he
questions the legality of his dismiss, which he alleges was upon the authority of Section 59 of Executive
Order No. 127, supra, hereinbelow reproduced as follows:
SEC. 59. New Structure and Pattern. Upon approval of this Executive Order, the officers and
employees of the Ministry shall, in a holdover capacity, continue to perform their respective
duties and responsibilities and receive the corresponding salaries and benefits unless in the
meantime they are separated from government service pursuant to Executive Order No. 17
(1986) or Article III of the Freedom Constitution.
The new position structure and staffing pattern of the Ministry shall be approved and
prescribed by the Minister within one hundred twenty (120) days from the approval of this
Executive Order and the authorized positions created hereunder shall be filled with regular
appointments by him or by the President, as the case may be. Those incumbents whose
positions are not included therein or who are not reappointed shall be deemed separated from
the service. Those separated from the service shall receive the retirement benefits to which
they may be entitled under existing laws, rules and regulations. Otherwise, they shall be paid
the equivalent of one month basic salary for every year of service, or the equivalent nearest
fraction thereof favorable to them on the basis of highest salary received but in no case shall
such payment exceed the equivalent of 12 months salary.
No court or administrative body shall issue any writ of preliminary injunction or restraining
order to enjoin the separation/replacement of any officer or employee effected under this
Executive Order.44
a provision he claims the Commissioner could not have legally invoked. He avers that he could not have
been legally deemed to be an "[incumbent] whose [position] [is] not included therein or who [is] not
reappointed"45 to justify his separation from the service. He contends that neither the Executive Order
(under the second paragraph of the section) nor the staffing pattern proposed by the Secretary of
Finance 46 abolished the office of Deputy Commissioner of Customs, but, rather, increased it to
three. 47 Nor can it be said, so he further maintains, that he had not been "reappointed" 48 (under the
second paragraph of the section) because "[[r]eappointment therein presupposes that the position to
which it refers is a new one in lieu of that which has been abolished or although an existing one, has
absorbed that which has been abolished." 49 He claims, finally, that under the Provisional Constitution,
the power to dismiss public officials without cause ended on February 25, 1987, 50 and that thereafter,
public officials enjoyed security of tenure under the provisions of the 1987 Constitution.51
Like Dario Vicente Feria, the petitioner in G.R. No. 81967, was a Deputy Commissioner at the Bureau
until his separation directed by Commissioner Mison. And like Dario he claims that under the 1987
Constitution, he has acquired security of tenure and that he cannot be said to be covered by Section 59
of Executive Order No. 127, having been appointed on April 22, 1986 — during the effectivity of the
Provisional Constitution. He adds that under Executive Order No. 39, "ENLARGING THE POWERS
AND FUNCTIONS OF THE COMMISSIONER OF CUSTOMS,"52 the Commissioner of Customs has the
power "[t]o appoint all Bureau personnel, except those appointed by the President," 53 and that his
position, which is that of a Presidential appointee, is beyond the control of Commissioner Mison for
purposes of reorganization.
The petitioners in G.R. No. 82023, collectors and examiners in venous ports of the Philippines, say, on
the other hand, that the purpose of reorganization is to end corruption at the Bureau of Customs and
that since there is no finding that they are guilty of corruption, they cannot be validly dismissed from the
service.
The Case for Commissioner Mison
In his comments, the Commissioner relies on this Court's resolution in Jose v. Arroyo54 in which the
following statement appears in the last paragraph thereof:
The contention of petitioner that Executive Order No. 127 is violative of the provision of the
1987 Constitution guaranteeing career civil service employees security of tenure overlooks the
provisions of Section 16, Article XVIII (Transitory Provisions) which explicitly authorize the
removal of career civil service employees "not for cause but as a result of the reorganization
pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the
ratification of this Constitution." By virtue of said provision, the reorganization of the Bureau of
Customs under Executive Order No. 127 may continue even after the ratification of the
Constitution, and career civil service employees may be separated from the service without
cause as a result of such reorganization.55
For this reason, Mison posits, claims of violation of security of tenure are allegedly no defense. He
further states that the deadline prescribed by the Provisional Constitution (February 25, 1987) has been
superseded by the 1987 Constitution, specifically, the transitory provisions thereof, 56 which allows a
reorganization thereafter (after February 25, 1987) as this very Court has so declared in Jose v. Arroyo.
Mison submits that contrary to the employees' argument, Section 59 of Executive Order No. 127 is
applicable (in particular, to Dario and Feria in the sense that retention in the Bureau, under the
Executive Order, depends on either retention of the position in the new staffing pattern or reappointment
of the incumbent, and since the dismissed employees had not been reappointed, they had been
considered legally separated. Moreover, Mison proffers that under Section 59 incumbents are
considered on holdover status, "which means that all those positions were considered vacant." 57 The
Solicitor General denies the applicability of Palma-Fernandez v. De la Paz 58 because that case
supposedly involved a mere transfer and not a separation. He rejects, finally, the force and effect of
Executive Order Nos. 17 and 39 for the reason that Executive Order No. 17, which was meant to
implement the Provisional Constitution, 59 had ceased to have force and effect upon the ratification of
the 1987 Constitution, and that, under Executive Order No. 39, the dismissals contemplated were "for
cause" while the separations now under question were "not for cause" and were a result of government
reorganize organization decreed by Executive Order No. 127. Anent Republic Act No. 6656, he
expresses doubts on the constitutionality of the grant of retroactivity therein (as regards the
reinforcement of security of tenure) since the new Constitution clearly allows reorganization after its
effectivity.
G.R. Nos. 85310 and 86241
The Position of Commissioner Mison
Commissioner's twin petitions are direct challenges to three rulings of the Civil Service Commission: (1)
the Resolution, dated June 30, 1988, reinstating the 265 customs employees above-stated; (2) the
Resolution, dated September 20, 1988, denying reconsideration; and (3) the Resolution, dated
November 16, 1988, reinstating five employees. The Commissioner's arguments are as follows:
1. The ongoing government reorganization is in the nature of a "progressive" 60 reorganization "impelled
by the need to overhaul the entire government bureaucracy" 61 following the people power revolution of
1986;
2. There was faithful compliance by the Bureau of the various guidelines issued by the President, in
particular, as to deliberation, and selection of personnel for appointment under the new staffing pattern;
3. The separated employees have been, under Section 59 of Executive Order No. 127, on mere
holdover standing, "which means that all positions are declared vacant;" 62
4. Jose v. Arroyo has declared the validity of Executive Order No. 127 under the transitory provisions of
the 1987 Constitution;
5. Republic Act No. 6656 is of doubtful constitutionality.
The Ruling of the Civil Service Commission
The position of the Civil Service Commission is as follows:
1. Reorganizations occur where there has been a reduction in personnel or redundancy of functions;
there is no showing that the reorganization in question has been carried out for either purpose — on the
contrary, the dismissals now disputed were carried out by mere service of notices;
2. The current Customs reorganization has not been made according to Malacañ;ang guidelines;
information on file with the Commission shows that Commissioner Mison has been appointing
unqualified personnel;
3. Jose v. Arroyo, in validating Executive Order No. 127, did not countenance illegal removals;
4. Republic Act No. 6656 protects security of tenure in the course of reorganizations.
The Court's ruling
Reorganization, Fundamental Principles of. —
I.
The core provision of law involved is Section 16 Article XVIII, of the 1987 Constitution. We quote:
Sec. 16. Career civil service employees separated from the service not for cause but as a
result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the
reorganization following the ratification of this Constitution shag be entitled to appropriate
separation pay and to retirement and other benefits accruing to them under the laws of general
application in force at the time of their separation. In lieul thereof, at the option of the
employees, they may be considered for employment in the Government or in any of its
subdivisions, instrumentalities, or agencies, including government-owned or controlled
corporations and their subsidiaries. This provision also applies to career officers whose
resignation, tendered in line with the existing policy, had been accepted. 63
The Court considers the above provision critical for two reasons: (1) It is the only provision — in so far
as it mentions removals not for cause — that would arguably support the challenged dismissals by mere
notice, and (2) It is the single existing law on reorganization after the ratification of the 1987 Charter,
except Republic Act No. 6656, which came much later, on June 10, 1988. [Nota been Executive Orders
No. 116 (covering the Ministry of Agriculture & Food), 117 (Ministry of Education, Culture & Sports), 119
(Health), 120 (Tourism), 123 (Social Welfare & Development), 124 (Public Works & Highways), 125
transportation & Communications), 126 (Labor & Employment), 127 (Finance), 128 (Science &
Technology), 129 (Agrarian Reform), 131 (Natural Resources), 132 (Foreign Affairs), and 133 (Trade &
Industry) were all promulgated on January 30,1987, prior to the adoption of the Constitution on
February 2, 1987].64
It is also to be observed that unlike the grants of power to effect reorganizations under the past
Constitutions, the above provision comes as a mere recognition of the right of the Government to
reorganize its offices, bureaus, and instrumentalities. Under Section 4, Article XVI, of the 1935
Constitution:
Section 4. All officers and employees in the existing Government of the Philippine Islands shall
continue in office until the Congress shall provide otherwise, but all officers whose
appointments are by this Constitution vested in the President shall vacate their respective
office(s) upon the appointment and qualification of their successors, if such appointment is
made within a period of one year from the date of the inauguration of the Commonwealth of
the Philippines. 65
Under Section 9, Article XVII, of the 1973 Charter:
Section 9. All officials and employees in the existing Government of the Republic of the
Philippines shall continue in office until otherwise provided by law or decreed by the incumbent
President of the Philippines, but all officials whose appointments are by this Constitution
vested in the Prime Minister shall vacate their respective offices upon the appointment and
qualification of their successors. 66
The Freedom Constitution is, as earlier seen, couched in similar language:
SECTION 2. All elective and appointive officials and employees under the 1973 Constitution
shall continue in office until otherwise provided by proclamation or executive order or upon the
appointment and qualification of their successors, if such is made within a period of one year
from February 25, 1986.67
Other than references to "reorganization following the ratification of this Constitution," there is no
provision for "automatic" vacancies under the 1987 Constitution.
Invariably, transition periods are characterized by provisions for "automatic" vacancies. They are
dictated by the need to hasten the passage from the old to the new Constitution free from the "fetters" of
due process and security of tenure.
At this point, we must distinguish removals from separations arising from abolition of office (not by virtue
of the Constitution) as a result of reorganization carried out by reason of economy or to remove
redundancy of functions. In the latter case, the Government is obliged to prove good faith. 68 In case of
removals undertaken to comply with clear and explicit constitutional mandates, the Government is not
hard put to prove anything, plainly and simply because the Constitution allows it.
Evidently, the question is whether or not Section 16 of Article XVIII of the 1987 Constitution is a grant of
a license upon the Government to remove career public officials it could have validly done under an
"automatic" vacancy-authority and to remove them without rhyme or reason.
As we have seen, since 1935, transition periods have been characterized by provisions for "automatic"
vacancies. We take the silence of the 1987 Constitution on this matter as a restraint upon the
Government to dismiss public servants at a moment's notice.
What is, indeed, apparent is the fact that if the present Charter envisioned an "automatic" vacancy, it
should have said so in clearer terms, as its 1935, 1973, and 1986 counterparts had so stated.
The constitutional "lapse" means either one of two things: (1) The Constitution meant to continue the
reorganization under the prior Charter (of the Revolutionary Government), in the sense that the latter
provides for "automatic" vacancies, or (2) It meant to put a stop to those 'automatic" vacancies. By itself,
however, it is ambiguous, referring as it does to two stages of reorganization — the first, to its
conferment or authorization under Proclamation No. 3 (Freedom Charter) and the second, to its
implementation on its effectivity date (February 2, 1987).lâwphî1.ñèt But as we asserted, if the intent of
Section 16 of Article XVIII of the 1987 Constitution were to extend the effects of reorganize tion under
the Freedom Constitution, it should have said so in clear terms. It is illogical why it should talk of two
phases of reorganization when it could have simply acknowledged the continuing effect of the first
reorganization.
Second, plainly the concern of Section 16 is to ensure compensation for victims" of constitutional
revamps — whether under the Freedom or existing Constitution — and only secondarily and impliedly,
to allow reorganization. We turn to the records of the Constitutional Commission:
INQUIRY OF MR. PADILLA
On the query of Mr. Padilla whether there is a need for a specific reference to Proclamation
No. 3 and not merely state "result of the reorganization following the ratification of this
Constitution', Mr. Suarez, on behalf of the Committee, replied that it is necessary, inasmuch as
there are two stages of reorganization covered by the Section.
Mr. Padilla pointed out that since the proposal of the Commission on Government
Reorganization have not been implemented yet, it would be better to use the phrase
 "reorganization before or after the ratification of the Constitution' to simplify the Section. Mr.
Suarez instead suggested the phrase "as a result of the reorganization effected before or after
the ratification of the Constitution' on the understanding that the provision would apply to
employees terminated because of the reorganization pursuant to Proclamation No. 3 and even
those affected by the reorganization during the Marcos regime. Additionally, Mr. Suarez
pointed out that it is also for this reason that the Committee specified the two Constitutions the
Freedom Constitution — and the 1986 [1987] Constitution. 69
Simply, the provision benefits career civil service employees separated from the service. And the
separation contemplated must be due to or the result of (1) the reorganization pursuant to Proclamation
No. 3 dated March 25, 1986, (2) the reorganization from February 2, 1987, and (3) the resignations of
career officers tendered in line with the existing policy and which resignations have been accepted. The
phrase "not for cause" is clearly and primarily exclusionary, to exclude those career civil service
employees separated "for cause." In other words, in order to be entitled to the benefits granted under
Section 16 of Article XVIII of the Constitution of 1987, two requisites, one negative and the other
positive, must concur, to wit:
1. the separation must not be for cause, and
2. the separation must be due to any of the three situations mentioned above.
By its terms, the authority to remove public officials under the Provisional Constitution ended on
February 25, 1987, advanced by jurisprudence to February 2, 1987. 70 It Can only mean, then, that
whatever reorganization is taking place is upon the authority of the present Charter, and necessarily,
upon the mantle of its provisions and safeguards. Hence, it can not be legitimately stated that we are
merely continuing what the revolutionary Constitution of the Revolutionary Government had started. We
are through with reorganization under the Freedom Constitution — the first stage. We are on the
second stage — that inferred from the provisions of Section 16 of Article XVIII of the permanent basic
document.
This is confirmed not only by the deliberations of the Constitutional Commission, supra, but is apparent
from the Charter's own words. It also warrants our holding in Esguerra and Palma-Fernandez, in which
we categorically declared that after February 2, 1987, incumbent officials and employees have acquired
security of tenure, which is not a deterrent against separation by reorganization under the quondam
fundamental law.
Finally, there is the concern of the State to ensure that this reorganization is no "purge" like the
execrated reorganizations under martial rule. And, of course, we also have the democratic character of
the Charter itself.
Commissioner Mison would have had a point, insofar as he contends that the reorganization is open-
ended ("progressive"), had it been a reorganization under the revolutionary authority, specifically of the
Provisional Constitution. For then, the power to remove government employees would have been truly
wide ranging and limitless, not only because Proclamation No. 3 permitted it, but because of the nature
of revolutionary authority itself, its totalitarian tendencies, and the monopoly of power in the men and
women who wield it.
What must be understood, however, is that notwithstanding her immense revolutionary powers, the
President was, nevertheless, magnanimous in her rule. This is apparent from Executive Order No. 17,
which established safeguards against the strong arm and ruthless propensity that accompanies
reorganizations — notwithstanding the fact that removals arising therefrom were "not for cause," and in
spite of the fact that such removals would have been valid and unquestionable. Despite that, the Chief
Executive saw, as we said, the "unnecessary anxiety and demoralization" in the government rank and
file that reorganization was causing, and prescribed guidelines for personnel action. Specifically, she
said on May 28, 1986:
WHEREAS, in order to obviate unnecessary anxiety and demoralization among the deserving
officials and employees, particularly in the career civil service, it is necessary to prescribe the
rules and regulations for implementing the said constitutional provision to protect career civil
servants whose qualifications and performance meet the standards of service demanded by
the New Government, and to ensure that only those found corrupt, inefficient and undeserving
are separated from the government service; 71
Noteworthy is the injunction embodied in the Executive Order that dismissals should be made on the
basis of findings of inefficiency, graft, and unfitness to render public service.*
The President's Memorandum of October 14, 1987 should furthermore be considered. We quote, in
part:
Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that
there will be no further layoffs this year of personnel as a result of the government
reorganization. 72
Assuming, then, that this reorganization allows removals "not for cause" in a manner that would have
been permissible in a revolutionary setting as Commissioner Mison so purports, it would seem that the
Commissioner would have been powerless, in any event, to order dismissals at the Customs Bureau left
and right. Hence, even if we accepted his "progressive" reorganization theory, he would still have to
come to terms with the Chief Executive's subsequent directives moderating the revolutionary authority's
plenary power to separate government officials and employees.
Reorganization under the 1987 Constitution, Nature, Extent, and Limitations of; Jose v. Arroyo, clarified.
—
The controversy seems to be that we have, ourselves, supposedly extended the effects of government
reorganization under the Provisional Constitution to the regime of the 1987 Constitution. Jose v.
Arroyo73 is said to be the authority for this argument. Evidently, if Arroyo indeed so ruled, Arroyo would
be inconsistent with the earlier pronouncement of Esguerra and the later holding of Palma-
Fernandez. The question, however, is: Did Arroyo, in fact, extend the effects of reorganization under the
revolutionary Charter to the era of the new Constitution?
There are a few points about Arroyo that have to be explained. First, the opinion expressed therein that
"[b]y virtue of said provision the reorganization of the Bureau of Customs under Executive Order No.
127 may continue even after the ratification of this constitution and career civil service employees may
be separated from the service without cause as a result of such reorganization" 74 is in the nature of an
obiter dictum. We dismissed Jose's petition 75 primarily because it was "clearly premature, speculative,
and purely anticipatory, based merely on newspaper reports which do not show any direct or threatened
injury," 76 it appearing that the reorganization of the Bureau of Customs had not been, then, set in
motion. Jose therefore had no cause for complaint, which was enough basis to dismiss the petition. The
remark anent separation "without cause" was therefore not necessary for the disposition of the case.
In Morales v. Parades,77 it was held that an obiter dictum "lacks the force of an adjudication and should
not ordinarily be regarded as such."78
Secondly, Arroyo is an unsigned resolution while Palma Fernandez is a full-blown decision, although
both are en banc cases. While a resolution of the Court is no less forceful than a decision, the latter has
a special weight.
Thirdly, Palma-Fernandez v. De la Paz comes as a later doctrine. (Jose v. Arroyo was promulgated on
August 11, 1987 while Palma-Fernandez was decided on August 31, 1987.) It is well-established that a
later judgment supersedes a prior one in case of an inconsistency.
As we have suggested, the transitory provisions of the 1987 Constitution allude to two stages of the
reorganization, the first stage being the reorganization under Proclamation No. 3 — which had already
been consummated — the second stage being that adverted to in the transitory provisions themselves
— which is underway. Hence, when we spoke, in Arroyo, of reorganization after the effectivity of the
new Constitution, we referred to the second stage of the reorganization. Accordingly, we cannot be said
to have carried over reorganization under the Freedom Constitution to its 1987 counterpart.
Finally, Arroyo is not necessarily incompatible with Palma-Fernandez (or Esguerra).
As we have demonstrated, reorganization under the aegis of the 1987 Constitution is not as stern as
reorganization under the prior Charter. Whereas the latter, sans the President's subsequently imposed
constraints, envisioned a purgation, the same cannot be said of the reorganization inferred under the
new Constitution because, precisely, the new Constitution seeks to usher in a democratic regime. But
even if we concede ex gratia argumenti that Section 16 is an exception to due process and no-removal-
"except for cause provided by law" principles enshrined in the very same 1987 Constitution, 79 which
may possibly justify removals "not for cause," there is no contradiction in terms here because, while the
former Constitution left the axe to fall where it might, the present organic act requires that removals "not
for cause" must be as a result of reorganization. As we observed, the Constitution does not provide for
"automatic" vacancies. It must also pass the test of good faith — a test not obviously required under the
revolutionary government formerly prevailing, but a test well-established in democratic societies and in
this government under a democratic Charter.
When, therefore, Arroyo permitted a reorganization under Executive Order No. 127 after the ratification
of the 1987 Constitution, Arroyo permitted a reorganization provided that it is done in good faith.
Otherwise, security of tenure would be an insuperable implement. 80
Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good
faith. 81 As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of
economy or to make bureaucracy more efficient. In that event, no dismissal (in case of a dismissal) or
separation actually occurs because the position itself ceases to exist. And in that case, security of
tenure would not be a Chinese wall. Be that as it may, if the "abolition," which is nothing else but a
separation or removal, is done for political reasons or purposely to defeat sty of tenure, or otherwise not
in good faith, no valid "abolition' takes place and whatever "abolition' is done, is void ab initio. There is
an invalid "abolition" as where there is merely a change of nomenclature of positions, 82 or where claims
of economy are belied by the existence of ample funds. 83
It is to be stressed that by predisposing a reorganization to the yardstick of good faith, we are not, as a
consequence, imposing a "cause" for restructuring. Retrenchment in the course of a reorganization in
good faith is still removal "not for cause," if by "cause" we refer to "grounds" or conditions that call for
disciplinary action.**
Good faith, as a component of a reorganization under a constitutional regime, is judged from the facts of
each case. However, under Republic Act No. 6656, we are told:
SEC. 2. No officer or employee in the career service shall be removed except for a valid cause
and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona
fide reorganization, a position has been abolished or rendered redundant or there is a need to
merge, divide, or consolidate positions in order to meet the exigencies of the service, or other
lawful causes allowed by the Civil Service Law. The existence of any or some of the following
circumstances may be considered as evidence of bad faith in the removals made as a result of
reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:
(a) Where there is a significant increase in the number of positions in the new staffing pattern
of the department or agency concerned; (b) Where an office is abolished and another
performing substantially the same functions is created; (c) Where incumbents are replaced by
those less qualified in terms of status of appointment, performance and merit; (d) Where there
is a reclassification of offices in the department or agency concerned and the reclassified
offices perform substantially the same functions as the original offices; (e) Where the removal
violates the order of separation provided in Section 3 hereof. 84
It is in light hereof that we take up questions about Commissioner Mison's good faith, or lack of it.
Reorganization of the Bureau of Customs,
Lack of Good Faith in. —
The Court finds that after February 2, 1987 no perceptible restructuring of the Customs hierarchy —
except for the change of personnel — has occurred, which would have justified (an things being equal)
the contested dismisses. The contention that the staffing pattern at the Bureau (which would have
furnished a justification for a personnel movement) is the same s pattern prescribed by Section 34 of
Executive Order No. 127 already prevailing when Commissioner Mison took over the Customs helm,
has not been successfully contradicted 85 There is no showing that legitimate structural changes have
been made — or a reorganization actually undertaken, for that matter — at the Bureau since
Commissioner Mison assumed office, which would have validly prompted him to hire and fire
employees. There can therefore be no actual reorganization to speak of, in the sense, say, of reduction
of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of
functions, but a revamp of personnel pure and simple.
The records indeed show that Commissioner Mison separated about 394 Customs personnel but
replaced them with 522 as of August 18, 1988. 86 This betrays a clear intent to "pack" the Bureau of
Customs. He did so, furthermore, in defiance of the President's directive to halt further layoffs as a
consequence of reorganization. 87Finally, he was aware that layoffs should observe the procedure laid
down by Executive Order No. 17.
We are not, of course, striking down Executive Order No. 127 for repugnancy to the Constitution. While
the act is valid, still and all, the means with which it was implemented is not. 88
Executive Order No. 127, Specific Case of. —
With respect to Executive Order No. 127, Commissioner Mison submits that under Section 59 thereof,
"[t]hose incumbents whose positions are not included therein or who are not reappointed shall be
deemed separated from the service." He submits that because the 394 removed personnel have not
been "reappointed," they are considered terminated. To begin with, the Commissioner's appointing
power is subject to the provisions of Executive Order No. 39. Under Executive Order No. 39, the
Commissioner of Customs may "appoint all Bureau personnel, except those appointed by the
President." 89
Accordingly, with respect to Deputy Commissioners Cesar Dario and Vicente Feria, Jr., Commissioner
Mison could not have validly terminated them, they being Presidential appointees.
Secondly, and as we have asserted, Section 59 has been rendered inoperative according to our holding
in Palma-Fernandez.
That Customs employees, under Section 59 of Executive Order No. 127 had been on a mere holdover
status cannot mean that the positions held by them had become vacant. In Palma-Fernandez, we said
in no uncertain terms:
The argument that, on the basis of this provision, petitioner's term of office ended on 30
January 1987 and that she continued in the performance of her duties merely in a hold over
capacity and could be transferred to another position without violating any of her legal rights, is
untenable. The occupancy of a position in a hold-over capacity was conceived to facilitate
reorganization and would have lapsed on 25 February 1987 (under the Provisional
Constitution), but advanced to February 2, 1987 when the 1987 Constitution became effective
(De Leon. et al., vs. Hon. Benjamin B. Esquerra, et. al., G.R. No. 78059, 31 August 1987).
After the said date the provisions of the latter on security of tenure govern. 90
It should be seen, finally, that we are not barring Commissioner Mison from carrying out a
reorganization under the transitory provisions of the 1987 Constitution. But such a reorganization should
be subject to the criterion of good faith.
Resume. —
In resume, we restate as follows:
1. The President could have validly removed government employees, elected or appointed, without
cause but only before the effectivity of the 1987 Constitution on February 2, 1987 (De Leon v.
Esguerra, supra; Palma-Fernandez vs. De la Paz, supra); in this connection, Section 59 (on non-
reappointment of incumbents) of Executive Order No. 127 cannot be a basis for termination;
2. In such a case, dismissed employees shall be paid separation and retirement benefits or upon their
option be given reemployment opportunities (CONST. [1987], art. XVIII, sec. 16; Rep. Act No. 6656,
sec. 9);
3. From February 2, 1987, the State does not lose the right to reorganize the Government resulting in
the separation of career civil service employees [CONST. (1987), supra] provided, that such a
reorganization is made in good faith. (Rep. Act No. 6656, supra.)
G.R. No. 83737
This disposition also resolves G.R. No. 83737. As we have indicated, G.R. No. 83737 is a challenge to
the validity of Republic Act No. 6656. In brief, it is argued that the Act, insofar as it strengthens security
of tenure 91 and as far as it provides for a retroactive effect, 92 runs counter to the transitory provisions
of the new Constitution on removals not for cause.
It can be seen that the Act, insofar as it provides for reinstatament of employees separated without "a
valid cause and after due notice and hearing" 93 is not contrary to the transitory provisions of the new
Constitution. The Court reiterates that although the Charter's transitory provisions mention separations
"not for cause," separations thereunder must nevertheless be on account of a valid reorganization and
which do not come about automatically. Otherwise, security of tenure may be invoked. Moreover, it can
be seen that the statute itself recognizes removals without cause. However, it also acknowledges the
possibility of the leadership using the artifice of reorganization to frustrate security of tenure. For this
reason, it has installed safeguards. There is nothing unconstitutional about the Act.
We recognize the injury Commissioner Mison's replacements would sustain. We also commisserate
with them. But our concern is the greater wrong inflicted on the dismissed employees on account of
their regal separation from the civil service.
WHEREFORE, THE RESOLUTIONS OF THE CIVIL SERVICE COMMISSION, DATED JUNE 30,
1988, SEPTEMBER 20, 1988, NOVEMBER 16, 1988, INVOLVED IN G.R. NOS. 85310, 85335, AND
86241, AND MAY 8, 1989, INVOLVED IN G.R. NO. 85310, ARE AFFIRMED.
THE PETITIONS IN G.R. NOS. 81954, 81967, 82023, AND 85335 ARE GRANTED. THE PETITIONS
IN G.R. NOS. 83737, 85310 AND 86241 ARE DISMISSED.
THE COMMISSIONER OF CUSTOMS IS ORDERED TO REINSTATE THE EMPLOYEES
SEPARATED AS A RESULT OF HIS NOTICES DATED JANUARY 26, 1988.
THE EMPLOYEES WHOM COMMISSIONER MISON MAY HAVE APPOINTED AS REPLACEMENTS
ARE ORDERED TO VACATE THEIR POSTS SUBJECT TO THE PAYMENT OF WHATEVER
BENEFITS THAT MAY BE PROVIDED BY LAW.
NO COSTS.
IT IS SO ORDERED.
Gutierrez, Jr., Paras, Gancayco, Bidin, Cortes, Griñ;o-Aquino and Medialdea, JJ., concur.
Padilla, J., took no part.