NATIONAL LAND TITLES AND DEEDS REGISTRATION ADMINISTRATION, petitioner, vs. CIVIL SERVICE COMMISSION and VIOLETA L.

GARCIA, respondents. The Solicitor General for petitioner. Raul R. Estrella for private respondent. SYLLABUS 1. ADMINISTRATIVE LAW; EXECUTIVE ORDER NO. 649; REORGANIZED LAND REGISTRATION COMMISSION TO NALTDRA; EXPRESSLY PROVIDED THE ABOLITION OF EXISTING POSITIONS. Executive Order No. 649 authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA). It abolished all the positions in the now defunct LRC and required new appointments to be issued to all employees of the NALTDRA. The question of whether or not a law abolishes an office is one of legislative intent about which there can be no controversy whatsoever if there is an explicit declaration in the law itself. A closer examination of Executive Order No. 649 which authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA), reveals that said law in express terms, provided for the abolition of existing positions. Thus, without need of any interpretation, the law mandates that from the moment an implementing order is issued, all positions in the Land Registration Commission are deemed non-existent. This, however, does not mean removal. Abolition of a position does not involve or mean removal for the reason that removal implies that the post subsists and that one is merely separated therefrom. (Arao vs. Luspo, 20 SCRA 722 [1967]) After abolition, there is in law no occupant. Thus, there can be no tenure to speak of. It is in this sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise. (De la Llana vs. Alba, 112 SCRA 294 [1982]) 2. ID.; ID.; ID.; REORGANIZATION, VALID WHEN PURSUED IN GOOD FAITH; CASE AT BAR. Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Two questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2) was it done in good faith? There is no dispute over the authority to carry out a valid reorganization in any branch or agency of the Government. Under Section 9, Article XVII of the 1973 Constitution. The power to reorganize is, however; not absolute. We have held in Dario vs. Mison that reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. This court has pronounced that if the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to an existing officer or office. Executive Order No. 649 was enacted to improve the services and better systematize the operation of the Land Registration Commission. A reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more

efficient. To this end, the requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to meet the changing circumstances and new development of the times. Private respondent Garcia who formerly held the position of Deputy Register of Deeds II did not have such qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The additional qualification was not intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid reorganization measure. 3. ID.; ID.; ID.; THERE IS NO VESTED PROPERTY RIGHT TO BE RE-EMPLOYED IN A REORGANIZED OFFICE; CASE AT BAR. There is no such thing as a vested interest or an estate in an office, or even an absolute right to hold it. Except constitutional offices which provide for special immunity as regards salary and tenure, no one can be said to have any vested right in an office or its salary. None of the exceptions to this rule are obtaining in this case. To reiterate, the position which private respondent Garcia would like to occupy anew was abolished pursuant to Executive Order No. 649, a valid reorganization measure. There is no vested property right to be re employed in a reorganized office. Not being a member of the Bar, the minimum requirement to qualify under the reorganization law for permanent appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position without violating the express mandate of the law. DECISION CAMPOS, JR., J p: The sole issue for our consideration in this case is whether or not membership in the bar, which is the qualification requirement prescribed for appointment to the position of Deputy Register of Deeds under Section 4 of Executive Order No. 649 (Reorganizing the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration or NALTDRA) should be required of and/or applied only to new applicants and not to those who were already in the service of the LRC as deputy register of deeds at the time of the issuance and implementation of the abovesaid Executive Order. The facts, as succinctly stated in the Resolution ** of the Civil Service Commission, are as follows: "The records show that in 1977, petitioner Garcia, a Bachelor of Laws graduate and a first grade civil service eligible was appointed Deputy Register of Deeds VII under permanent status. Said position was later reclassified to Deputy Register of Deeds III pursuant to PD 1529, to which position, petitioner was also appointed under permanent status up to September 1984. She was for two years, more or less, designated as Acting Branch Register of Deeds of Meycauayan, Bulacan. By virtue of Executive Order No. 649 (which took effect on February 9, 1981) which authorized the restructuring of the Land Registration Commission to National Land Titles and Deeds Registration Administration and regionalizing the Offices of the Registers therein, petitioner Garcia was issued an appointment as Deputy Register of Deeds II on October 1, 1984, under temporary status, for not being a member of the Philippine Bar. She appealed to the Secretary of Justice but her request was denied. Petitioner Garcia moved for reconsideration but her motion remained unacted. On October 23, 1984, petitioner Garcia was administratively

charged with Conduct Prejudicial to the Best Interest of the Service. While said case was pending decision, her temporary appointment as such was renewed in 1985. In a Memorandum dated October 30, 1986, the then Minister, now Secretary, of Justice notified petitioner Garcia of the termination of her services as Deputy Register of Deeds II on the ground that she was "receiving bribe money". Said Memorandum of Termination which took effect on February 9, 1987, was the subject of an appeal to the Inter-Agency Review Committee which in turn referred the appeal to the Merit Systems Protection Board (MSPB). In its Order dated July 6, 1987, the MSPB dropped the appeal of petitioner Garcia on the ground that since the termination of her services was due to the expiration of her temporary appointment, her separation is in order. Her motion for reconsideration was denied on similar ground." 1 However, in its Resolution 2 dated June 30, 1988, the Civil Service Commission directed that private respondent Garcia be restored to her position as Deputy Register of Deeds II or its equivalent in the NALTDRA. It held that "under the vested right theory the new requirement of BAR membership to qualify for permanent appointment as Deputy Register of Deeds II or higher as mandated under said Executive Order, would not apply to her (private respondent Garcia) but only to the filling up of vacant lawyer positions on or after February 9, 1981, the date said Executive Order took effect." 3 A fortiori, since private respondent Garcia had been holding the position of Deputy Register of Deeds II from 1977 to September 1984, she should not be affected by the operation on February 1, 1981 of Executive Order No. 649. Petitioner NALTDRA filed the present petition to assail the validity of the above Resolution of the Civil Service Commission. It contends that Sections 8 and 10 of Executive Order No. 649 abolished all existing positions in the LRC and transferred their functions to the appropriate new offices created by said Executive Order, which newly created offices required the issuance of new appointments to qualified office holders. Verily, Executive Order No. 649 applies to private respondent Garcia, and not being a member of the Bar, she cannot be reinstated to her former position as Deputy Register of Deeds II. We find merit in the petition. Executive Order No. 649 authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA). It abolished all the positions in the now defunct LRC and required new appointments to be issued to all employees of the NALTDRA. The question of whether or not a law abolishes an office is one of legislative intent about which there can be no controversy whatsoever if there is an explicit declaration in the law itself. 4 A closer examination of Executive Order No. 649 which authorized the reorganization of the Land Registration Commission (LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA), reveals that said law in express terms, provided for the abolition of existing positions, to wit: Sec. 8. Abolition of Existing Positions in the Land Registration Commission . . .

All structural units in the Land Registration Commission and in the registries of deeds, and all Positions therein shall cease to exist from the date specified in the implementing order to be issued by the President pursuant to the preceding paragraph. Their pertinent functions, applicable appropriations, records, equipment and property shall be transferred to the appropriate staff or offices therein created. (Emphasis Supplied.) Thus, without need of any interpretation, the law mandates that from the moment an implementing order is issued, all positions in the Land Registration Commission are deemed non-existent. This, however, does not mean removal. Abolition of a position does not involve or mean removal for the reason that removal implies that the post subsists and that one is merely separated therefrom. 5 After abolition, there is in law no occupant. Thus, there can be no tenure to speak of. It is in this sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise. 6 Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Two questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2) was it done in good faith? There is no dispute over the authority to carry out a valid reorganization in any branch or agency of the Government. Under Section 9, Article XVII of the 1973 Constitution, the applicable law at that time: Sec. 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 qualifications of their successors. The power to reorganize is, however; not absolute. We have held in Dario vs. Mison 7 that reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. This court has pronounced 8 that if the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to an existing officer or office. Executive Order No. 649 was enacted to improve the services and better systematize the operation of the Land Registration Commission. 9 A reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. 10 To this end, the requirement of Bar membership to qualify for key positions in the NALTDRA was imposed to meet the changing circumstances and new development of the times. 11 Private respondent Garcia who formerly held the position of Deputy Register of Deeds II did not have such qualification. It is thus clear that she cannot hold any key position in the NALTDRA, The additional qualification was not intended to remove her from office. Rather, it was a criterion imposed concomitant with a valid reorganization measure.

A final word, on the "vested right theory" advanced by respondent Civil Service Commission. There is no such thing as a vested interest or an estate in an office, or even an absolute right to hold it. Except constitutional offices which provide for special immunity as regards salary and tenure, no one can be said to have any vested right in an office or its salary. 12 None of the exceptions to this rule are obtaining in this case. To reiterate, the position which private respondent Garcia would like to occupy anew was abolished pursuant to Executive Order No. 649, a valid reorganization measure. There is no vested property right to be re employed in a reorganized office. Not being a member of the Bar, the minimum requirement to qualify under the reorganization law for permanent appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position without violating the express mandate of the law. WHEREFORE, premises considered, We hereby GRANT the petition and SET ASIDE the questioned Resolution of the Civil Service Commission reinstating private respondent to her former position as Deputy Register of Deeds II or its equivalent in the National Land Titles and Deeds Registration Administration.

CAMARINES NORTE ELECTRIC COOPERATIVE, INC. (CANORE-CO); RUBEN N. BARRAMEDA; ELVIS L. ESPIRITU; MERARDO G. ENERO, JR.; MARCELITO B. ABAS; and REYNALDO V. ABUNDO, petitioners, vs. HON. RUBEN D. TORRES, in his capacity as Executive Secretary; REX TANTIONGCO; HONESTO DE JESUS; ANDRES IBASCO; TEODULO M. MEA; and VICENTE LUKBAN, respondent. DECISION DAVIDE, JR., J.: May the Office of the President validly constitute an ad hoc committee to take over and manage the affairs of an electric cooperative? This is the key issue in this original action for certiorari and prohibition under Rule 65 of the Rules of Court wherein the petitioners seek to (a) annul and set aside Memorandum Order No. 409 of the Office of the President dated 3 December 1996 constituting an Ad Hoc Committee to take over and manage the affairs of the Camarines Norte Electric Cooperative, Inc., (hereafter CANORECO) until such time as a general membership meeting can be called to decide the serious issues affecting the said cooperative and normalcy in operations is restored"; and (b) prohibit the respondents from performing acts or continuing proceedings pursuant to the Memorandum Order. The factual backdrop of this case is not complicated. Petitioner CANORECO is an electric cooperative organized under the provisions of P.D. No. 269, otherwise known as the National Electrification Administration Decree, as amended by P.D. No. 1645. On 10 March 1990, then President Corazon C. Aquino signed into law R.A. No. 6938 and R.A. No. 6939. The former is the Cooperative Code of the Philippines, while the latter created the Cooperative Development Authority (CDA) and vested solely upon the CDA the power to register cooperatives. Article 122 of the Cooperative Code expressly provides that electric cooperatives shall be covered by the Code. Article 128 of the said Code and Section 17 of R.A. No. 6939 similarly provide that cooperatives created under P.D. No. 269, as amended by P.D. No. 1645, shall have three years within which to qualify and register with the CDA and that after they shall have so qualified and registered, the provisions of Sections 3 and 5 of P.D. No. 1645 shall no longer be applicable to them. These Sections 3 and 5 read as follows: SEC. 3. Section 5(a), Chapter II of Presidential Decree No. 269 is hereby amended by adding sub-paragraph (6) to read as follows: (6) To authorize the NEA Administrator to designate, subject to the confirmation of the Board Administrators, an Acting General Manager and/or Project Supervisor for a

Cooperative where vacancies in the said positions occur and/or when the interest of the Cooperative and the program so requires, and to prescribe the functions of said Acting General Manager and/or Project Supervisor, which powers shall not be nullified, altered or diminished by any policy or resolution of the Board of Directors of the Cooperative concerned. ... SEC. 5. Section 10, Chapter II of Presidential Decree No. 269 is hereby amended to read as follows: Section 10. Enforcement Powers and Remedies. -- In the exercise of its power of supervision and control over electric cooperatives and other borrower, supervised or controlled entities, the NEA is empowered to issue orders, rules and regulations and motu proprio or upon petition of third parties, to conduct investigations, referenda and other similar actions in all matters affecting said electric cooperatives and other borrower, or supervised or controlled entities. ... Finally, the repealing clause (Article 127) of the Cooperative Code provides: Provided, however, That nothing in this Code shall be interpreted to mean the amendment or repeal of any provision of Presidential Decree No. 269: Provided, further, That the electric cooperatives which qualify as such under this Code shall fall under the coverage thereof. CANORECO registered with the CDA pursuant to R.A. No. 6938 and R.A. No. 6939. On 8 March 1993, the CDA issued a Certificate of Provisional Registration (T-003-93) to CANORECO effective for two years. On 1 March 1995, the CDA extended this provisional registration until 4 May 1997. However, on 10 July 1996, CANORECO filed with the CDA its approved amendments to its Articles of Cooperation converting itself from a non-stock to a stock cooperative pursuant to the provisions of R.A. No. 6938 and the Omnibus Implementing Rules and Regulations on Electric Cooperatives. On the same date the CDA issued a Certificate of Registration of the amendments to CANORECO Articles of Cooperation certifying that CANORECO is registered as a full[f]ledged cooperative under and by virtue of R.A. 6938. Previously, on 11 March 1995, the Board of Directors of CANORECO approved Resolution No. 22 appointing petitioner Reynaldo V. Abundo as permanent General Manager. The Board was composed of Ruben N. Barrameda Elvis L. Espiritu --President Vice president

Merardo G. Enero, Jr. Marcelito B. Abas Antonio R. Obias Luis A. Pascua Norberto Z. Ochoa Leonida Z. Manalo

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Secretary Treasurer Director Director Director OIC GM/Ex-Officio

On 28 May 1995, Antonio Obias, Norberto Ochoa, Luis Pascua, and Felicito Ilan held a special meeting of the Board of Directors of CANORECO. The minutes of the meeting showed that President Ruben Barrameda, Vice-President Elvis Espiritu, and Treasurer Marcelito Abas were absent; that Obias acted as temporary chairman; that the latter informed those present that it was the responsibility of the Board after the annual meeting to meet and elect the new set of officers, but that despite the fact that he had called the attention of President Barrameda and Directors Abas and Espiritu for the holding thereof, the three chose not to appear; and that those present in the special meeting declared all positions in the board vacant and thereafter proceeded to hold elections by secret balloting with all the directors present considered candidates for the positions. The following won and were declared as the newly elected officers of the CANORECO: President . . . . . . . . Norberto Ochoa Vice President . . . . Antonio Obias Secretary . . . . . . . . Felicito Ilan Treasurer. . . . . . . . Luis Pascua Thereupon, these newly elected officers approved the following resolutions: 1) Resolution No. 27, c.s. -- confirming the election of the new set of officers of the Board of Directors of CANORECO 2) Resolution No. 28, c.s. -- recalling Resolution No. 22, c.s. appointing Mr. Reynaldo V. Abundo as permanent General Manager in view of the fact that such appointment was in violation of the provisions of R.A. 6713; declaring the position of General Manager as vacant; and designating Mr. Oscar Acobera as Officer-inCharge 3) Resolution No. 29, c.s. -- authorizing the Board President, or in his absence, the Vice-President, countersigned by the Treasurer, or in his absence, the

Secretary, to be the only officers who can transfer funds from savings to current accounts; and authorizing the Officer-in-Charge, Mr. Acobera, to issue checks without countersignature in an amount not to exceed P3,000.00 and in excess thereof, to be countersigned by the President and/or the Treasurer 4) Resolution No. 30, c.s. -- hiring the services of Atty. Juanito Subia as retainerlawyer for CANORECO. The petitioners challenged the above resolutions and the election of officers by filing with the CDA a Petition for Declaration of Nullity of Board Resolutions and Election of Officers with Prayer for Issuance of Injunction/Temporary Restraining Order, which the CDA docketed as CDA-CO Case No. 95-010. In its Resolution of 15 February 1996, the CDA resolved the petition in favor of the petitioners and decreed as follows: WHEREFORE, premises considered, the Board Meeting of May 28, 1995, participated by the respondents, and all the Resolutions issued on such occasion, are hereby declared NULL AND VOID AB INITIO. Likewise, the election of respondents Norberto Ochoa, Antonio Obias, Felicito Ilan, and Luis Pascua, as President, Vice-President, Secretary, and Treasurer, respectively, of CANORECO is hereby declared NULL AND VOID AB INITIO. Hence, respondents Norberto Ochoa, Antonio Obias, Felicito Ilan, and Luis Pascua are hereby ordered to refrain from representing themselves as President, Vice-President, Secretary, and Treasurer, respectively, of CANORECO. The same respondents are further ordered to refrain from acting as authorized signatories to the bank accounts of CANORECO. Further respondent Felicito Ilan is hereby ordered to refrain from exercising the duties and functions of a member of the Board of CANORECO until the election protest is resolved with finality by the proper forum. In the meantime, the incumbency of petitioner Merardo Enero, Jr. as Director of the CANORECO Board is hereby recognized. A status quo is hereby ordered as regards the position of General Manager, being held by Mr. Reynaldo Abundo, considering that the recall of his appointment was done under a void Resolution, and that the designation of Mr. Oscar Acodera as Officer-in-Charge, under the same void Resolution, has no force and effect. Finally, respondents Antonio Obias, Norberto Ochoa, Luisito Pascua, and petitioners Ruben Barrameda, Elvis Espiritu, Marcelito Abas and Merardo Enero, Jr. are hereby ordered to work together, as Board of Directors, for the common good of CANORECO and its consumer-members, and to maintain an atmosphere of sincere cooperation among the officers and members of CANORECO.

On 28 June 1996, in defiance of the abovementioned Resolution of the CDA and with the active participation of some officials of the National Electrification Administration (NEA), the group of Norberto Ochoa, Antonio Obias, Felicito Ilan, and Luis Pascua forcibly took possession of the offices of CANORECO and assumed the duties as officers thereof. On 26 September 1996, pursuant to the writ of execution and order to vacate issued by the CDA, the petitioners were able to reassume control of the CANORECO and to perform their respective functions. On 3 December 1996, the President of the Philippines issued Memorandum Order No. 409 onstituting an Ad Hoc Committee to temporarily take over and manage the affairs of CANORECO. It reads as follows: To efficiently and effectively address the worsening problem of the Camarines Norte Electric Cooperative, Inc. (CANORECO) and in order not to prejudice and endanger the interest of the people who rely on the said cooperative for their supply of electricity, an AD HOC Committee is hereby constituted to take over and manage the affairs of CANORECO until such time as a general membership meeting can be called to decide the serious issues affecting the said cooperative and normalcy in operations is restored. Further, if and when warranted, the present Board of Directors may be called upon by the Committee for advisory services without prejudice to the receipt of their per diems as may be authorized by existing rules and regulations. The AD HOC Committee shall be composed of the following: REX TANTIONGCO Presidential Assistant on Energy Affairs HONESTO DE JESUS Cooperative Development Authority Nominee ANDRES IBASCO Cooperative Development Authority Nominee TEODULO M. MEA National Electrification Administration Nominee VICENTE LUKBAN National Electrification Administration Nominee -Member -Member -Member -Member -Chairman

The said Committee shall have the following functions: 1. Designate the following upon the recommendation of the Chairman: 1.1 an Acting General Manager who shall handle the day-to-day operations of the Cooperative. In the meantime, the General Manager shall be deemed to be on leave without prejudice to the payment of his salaries legally due him; and 1.2 a Comptroller who shall handle the financial affairs of the Cooperative. 2. Ensure that: The AD HOC Committee shall submit a written report to the President, through the Office of the Executive Secretary, every two (2) weeks from the effectivity of this Order. A General Membership Meeting shall be called by the AD HOC Committee to determine whether or not there is a need to change the composition of the membership of the Cooperatives Board of Directors. If the need exists, the AD HOC Committee shall call for elections. Once the composition of the Board of Directors is finally settled, it shall decide on the appointment of a General Manager in accordance with prescribed laws, rules and regulations. Upon the appointment of a General Manager, the Committee shall become functus officio. This Memorandum Order shall take effect immediately. On 11 December 1996, the petitioners filed this petition wherein they claim that I. THE PRESIDENT HAS NO POWER TO TAKE OVER AND MANAGE OR TO ORDER THE TAKE-OVER OR MANAGEMENT OF CANORECO. II. [THE] TAKE-OVER OF CANORECO BY THE AD HOC COMMITTEE IS UNLAWFUL DESPITE DESIGNATION OF CANORECO CONSUMERS AS MEMBERS OF AD HOC COMMITTEE. III. [THE] RELEGATION OF PETITIONERS AS MERE ADVISERS TO THE AD HOC COMMITTEE AMOUNTS TO REMOVAL FROM OFFICE WHICH THE PRESIDENT HAS NO POWER TO DO. MOREOVER, PETITIONERS REMOVAL VIOLATES PETITIONERS RIGHT TO DUE PROCESS OF LAW. IV. THE PRESIDENT IS LIKEWISE WITHOUT POWER TO DESIGNATE OR ORDER THE DESIGNATION OF AN ACTING GENERAL MANAGER FOR CANORECO AND TO CONSIDER THE INCUMBENT REYNALDO V. ABUNDO TO BE ON LEAVE.

The petitioners assert that there is no provision in the Constitution or in a statute expressly, or even impliedly, authorizing the President or his representatives to take over or order the take-over of electric cooperatives. Although conceding that while the State, through its police power, has the right to interfere with private business or commerce, they maintain that the exercise thereof is generally limited to the regulation of the business or commerce and that the power to regulate does not include the power to take over, control, manage, or direct the operation of the business. Accordingly, the creation of the Ad Hoc Committee for the purpose of take-over was illegal and void. The petitioners further claim that Memorandum Order No. 409 removed them from their positions as members of the Board of Directors of CANORECO. The President does not have the authority to appoint, much less to remove, members of the board of directors of a private enterprise including electric cooperatives. He cannot rely on his power of supervision over the NEA to justify the designation of an acting general manager for CANORECO under P.D. No. 269 as amended by P.D. No. 1645, for CANORECO had already registered with the CDA pursuant to R.A. No. 6938 and R.A. No. 6939; hence, the latter laws now govern the internal affairs of CANORECO. On 3 January 1997, the petitioners filed an Urgent Motion for Issuance of a Temporary Restraining Order. On 9 January 1997, the petitioners filed a Manifestation and Motion informing the Court that on 8 January 1997 respondent Rex Tantiongco notified the petitioners that the Ad Hoc Committee was taking over the affairs and management of CANORECO effective as of that date. They reiterated their plea for the issuance of a temporary restraining order because the Ad Hoc Committee has taken control of CANORECO and usurped the functions of the individual petitioners. In the Resolution dated 13 January 1997, we required respondents to comment on the petition. Despite four extensions granted it, the Office of the Solicitor General (OSG) failed to file its Comment. Hence, in the resolution of 16 July 1997 we deemed the OSG to have waived the filing of its Comment and declared this case submitted for decision. The OSGs motion to admit its Comment, as well as the attached Comment, belatedly filed on 24 July 1997 was merely noted without action in the resolution of 13 August 1997. We also subsequently denied for lack of merit its motion for reconsideration. We find the instant petition impressed with merit. Having registered itself with the CDA pursuant to Section 128 of R.A. No. 6938 and Section 17 of R.A. No. 6939, CANORECO was brought under the coverage of said laws. Article 38 of R.A. No. 6938 vests upon the board of directors the conduct and management of the affairs of cooperatives, and Article 39 provides for the powers of the board of directors. These sections read:

Article 38. Composition of the Board of Directors. -The conduct and management of the affairs of a cooperative shall be vested in a board of directors which shall be composed of not less than five (5) nor more than fifteen (15) members elected by the general assembly for a term fixed in the by-laws but not exceeding a term of two (2) years and shall hold office until their successors are duly elected and qualified, or until duly removed. However, no director shall serve for more than three (3) consecutive terms. Article 39. Powers of the Board of Directors. -- The board of directors shall direct and supervise the business, manage the property of the cooperative and may, by resolution, exercise all such powers of the cooperative as are not reserved for the general assembly under this Code and the by-laws. As to the officers of cooperatives, Article 43 of the Code provides: ART. 43. Officers of the Cooperatives. The board of directors shall elect from among themselves only the chairman and vice-chairman, and elect or appoint other officers of the cooperative from outside of the board in accordance with their by-laws. All officers shall serve during good behavior and shall not be removed except for cause and after due hearing. Loss of confidence shall not be a valid ground for removal unless evidenced by acts or omissions causing loss of confidence in the honesty and integrity of such officer. No two (2) or more persons with relationship up to the third degree of consanguinity or affinity shall serve as elective or appointive officers in the same board. Under Article 34 of the Code, the general assembly of cooperatives has the exclusive power, which cannot be delegated, to elect or appoint the members of the board of directors and to remove them for cause. Article 51 thereof provides for removal of directors and officers as follows: ART. 51. Removal. -- An elective officer, director, or committee member may be removed by a vote of two-thirds (2/3) of the voting members present and constituting a quorum, in a regular or special general assembly meeting called for the purpose. The person involved shall be given an opportunity to be heard at said assembly. Memorandum Order No. 409 clearly removed from the Board of Directors of CANORECO the power to manage the affairs of CANORECO and transferred such power to the Ad Hoc Committee, albeit temporarily. Considering that (1) the take-over will be until such time that a general membership meeting can be called to decide the serious issues affecting the said cooperative and normalcy in operations is restored, and (2) the date such meeting shall be called and the determination of whether there is a need to change the composition of the membership of CANORECOs Board of Directors are exclusively left to the Ad Hoc Committee, it necessarily follows that the incumbent directors were, for all intents and purposes, suspended at the least, and removed, at the most, from their office. The said Memorandum did no less to the lawfully appointed General Manager by directing that upon the settlement of the issue concerning the composition of the board of directors the Committee shall decide on the

appointment of a general manager. In the meantime, it authorized the Committee to designate upon the recommendation of the Chairman an Acting Manager, with the lawfully appointed Manager considered on leave, but who is, however, entitled to the payment of his salaries. Nothing in law supported the take-over of the management of the affairs of CANORECO, and the suspension, if not removal, of the Board of Directors and the officers thereof. It must be pointed out that the controversy which resulted in the issuance of the Memorandum Order stemmed from a struggle between two groups vying for control of the management of CANORECO. One faction was led by the group of Norberto Ochoa, while the other was petitioners group whose members were, at that time, the incumbent directors and officers. It was the action of Ochoa and his cohorts in holding a special meeting on 28 May 1995 and then declaring vacant the positions of cooperative officers and thereafter electing themselves to the positions of president, vice-president, treasurer, and secretary of CANORECO which compelled the petitioners to file a petition with the CDA. The CDA thereafter came out with a decision favorable to the petitioners. Obviously there was a clear case of intra-cooperative dispute. Article 121 of the Cooperative Code is explicit on how the dispute should be resolved; thus: ART. 121. Settlement of Disputes. -- Disputes among members, officers, directors, and committee members, and intra-cooperative disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or mediation mechanisms embodied in the by-laws of the cooperative, and in applicable laws. Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of competent jurisdiction. Complementing this Article is Section 8 of R.A. No. 6939, which provides: SEC. 8. Mediation and Conciliation. Upon request of either or both or both parties, the [CDA] shall mediate and conciliate disputes with the cooperative or between cooperatives: Provided, That if no mediation or conciliation succeeds within three (3) months from request thereof, a certificate of non-resolution shall be issued by the commission prior to the filing of appropriate action before the proper courts. Even granting for the sake of argument that the party aggrieved by a decision of the CDA could pursue an administrative appeal to the Office of the President on the theory that the CDA is an agency under its direct supervision and control, still the Office of the President could not in this case, motu proprio or upon request of a party, supplant or overturn the decision of the CDA. The record does not disclose that the group of Norberto Ochoa appealed from the decision of the CDA in CDA-CO Case No. 95-010 to the Office of the President as the head of the Executive Department exercising

supervision and control over said agency. In fact the CDA had already issued a Cease and Desist Order dated 14 August 1996 ordering Antonio Obias, Norberto Ochoa, Luis Pascua, Felicito Ilan and their followers to cease and desist from acting as the Board of Directors and Officers of Camarines Norte Electric Cooperative (CANORECO) and to refrain from implementing their Resolution calling for the District V Election on August 17 and 24, 1996. Consequently, the said decision of the CDA had long become final and executory when Memorandum Order No. 409 was issued on 3 December 1996. That Memorandum cannot then be considered as one reversing the decision of the CDA which had attained finality. Under Section 15, Chapter III of Book VII of the Administrative Code of 1987 (Executive Order No. 292), decisions of administrative agencies become final and executory fifteen days after receipt of a copy thereof by the party adversely affected unless within that period an administrative appeal or judicial review, if proper, has been perfected. One motion for reconsideration is allowed. A final resolution or decision of an administrative agency also binds the Office of the President even if such agency is under the administrative supervision and control of the latter. We have stated before, and reiterate it now, that administrative decisions must end sometime, as fully as public policy demands that finality be written on judicial controversies. Public interest requires that proceedings already terminated should not be altered at every step, for the rule of non quieta movere prescribes that what had already been terminated should not be disturbed. A disregard of this principle does not commend itself to sound public policy. Neither can police power be invoked to clothe with validity the assailed Memorandum Order No. 409. Police power is the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals, and general welfare of society. It is lodged primarily in the legislature. By virtue of a valid delegation of legislative power, it may also be exercised by the President and administrative boards, as well as the lawmaking bodies on all municipal levels, including the barangay. Delegation of legislative powers to the President is permitted in Sections 23(2) and 28(2) of Article VI of the Constitution. The pertinent laws on cooperatives, namely, R.A. No. 6938, R.A. No. 6939, and P.D. No. 269 as amended by P.D. No. 1645 do not provide for the President or any other administrative body to take over the internal management of a cooperative. Article 98 of R.A. 6938 instead provides: ART. 98. Regulation of Public Service Cooperatives. -- (1) The internal affairs of public service cooperatives such as the rights and privileges of members, the rules and procedures for meetings of the general assembly, board of directors and committees; for the election and qualification of officers, directors, and committee members; allocation and distribution of surpluses, and all other matters relating to their internal affairs shall be governed by this Code.

We do not then hesitate to rule that Memorandum Order No. 409 has no constitutional and statutory basis. It violates the basic underlying principle enshrined in Article 4(2) of R.A. No. 6938 that cooperatives are democratic organizations and that their affairs shall be administered by persons elected or appointed in a manner agreed upon by the members. Likewise, it runs counter to the policy set forth in Section 1 of R.A. No. 6939 that the State shall, except as provided in said Act, maintain a policy of non-interference in the management and operation of cooperatives. WHEREFORE, the instant petition is GRANTED and Memorandum Order No. 409 of the President is hereby declared INVALID. SO ORDERED.

HEIRS OF SANTIAGO PASTORAL and AGUSTIN BATO, petitioners-appellants, vs. THE SECRETARY OF PUBLIC WORKS and COMMUNICATIONS, THE CITY ENGINEER OF DAGUPAN CITY and LEONARDO ESPANOL, respondents-appellees. Paulino S. Cabugao for petitioners-appellants.

GUTIERREZ, JR., J.: This case was certified to us by the Court of Appeals pursuant to Sections 17 and 21 of the Judiciary Act, as amended in relation to Section 3, Rule 50 of the Rules of Court on the ground that the issues raised are pure questions of law. The main issue centers on the authority of the Secretary of Public Works and Communications under Republic Act 2056 to declare the construction of dikes encroaching into public navigable waters as a public nuisance and to order their removal. Sometime in October 1958, residents of Bacayao Norte, Caranglaan, and Mayombo Districts of Dagupan City led by Leonardo Espanol filed complaints with the Secretary of Public Works and Communications (hereinafter referred to as Secretary) denouncing the heirs of Santiago Pastoral and Agustin Bato for "alleged encroachments into the Tulao River ... to the prejudice of public interest." The complaints were docketed as Cases Nos. RA-2056-26 and RA-2056-37 respectively. The Secretary designated the City Engineer of Dagupan City to conduct hearings in the two cases. All the parties were notified of the hearings set for both cases. Based on the evidence submitted by the parties, the Secretary rendered two separate decisions ordering the removal of the encroachments complained of within thirty (30) days from receipt of notice. Thus, in Case No. RA-2056-26, the heirs of Santiago Pastoral were ordered to remove the fishpond dikes indicated as Encroachments Nos. 1, 2, 3 and 4 in Exhibit "A" while in Case No. RA-2056-37, Agustin Bato was ordered to remove the fishpond dikes indicated as Encroachment No. 5 in Exhibit "A." The Secretary ruled that encroachments Nos. 1, 2, 3, 4 and 5 in Exhibit "A" had been illegally constructed within the channel of Tulao River. The Secretary declared the encouragement croachments as public nuisances under Republic Act 2056. Their motion for reconsideration having been denied by the Secretary, the respondents filed in the Court of First Instance of Pangasinan a petition for certiorari and prohibition with a prayer for a writ of preliminary injunction against the Secretary, the City Engineer of Dagupan City and Leonardo Espanol. The case was docketed as Civil Case No. D833. The petitioners (respondents in the administrative cases) alleged "... that respondent City Engineer informed petitioners that the 30-day period given them to remove the

fishpond dikes has expired and that his office will proceed to demolish the dikes on orders from the Secretary of Public Works and Communications; that they have title over the alleged encroachments and a fishpond permit issued by the Department of Agriculture and Natural Resources, through the Bureau of Fisheries, authorizing them to construct a fishpond on an adjoining parcel of their property not covered by title." The petitioners sought the annulment of the decision of the Secretary of Public Works and Communications on the ground of lack of jurisdiction and the issuance of a writ of prohibition commanding the respondents to desist absolutely and perpetually from further molesting in any manner the petitioners and interfering with the exercise of their rights over the lands in question. In his answer, the Secretary invoked his authority to remove the encroachments under Republic Act No. 2056 and stated that he had acted lawfully and justly and within the sound limits of his authority and jurisdiction thereunder. The parties agreed to submit the case for judgment on the pleadings and were allowed by the lower court to submit their respective memoranda. The trial court then rendered a decision in favor of the petitioners-appellants prompting the Secretary to interpose an appeal to the Court of Appeals. The Secretary assigned a single assignment of error, to wit:
THE TRIAL COURT COMMITTED ERROR IN HAVING ANNULLED THE DECISIONS RENDERED BY THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, IN CASES JURISDICTION, AND IN PERMANENTLY ENJOINING SAID SECRETARY FROM IMPLEMENTING THE ORDER TO REMOVE THE ENCROACMENTS PLACED BY THE APPEALLEES ON THE TULAO RIVER. (At p. 17, Rollo)

In support of this lone assignment of error, the petitioner raised the following arguments:
1) The Secretary was duly vested with jurisdiction both over the parties and subject matter of the controversy. 2) The Secretary duly conformed to the requirements of due process in the exercise of his authority under Republic Act No. 2056. 3) The Secretary did not, as concluded by the court a quo, rule on the validity of appellees' titles over the lots in question. 4) The issuance of fishpond permits by the Bureau of Fisheries did not preclude the Secretary from conducting due investigation and in ruling upon the same. 5) The Secretary's findings of fact are entitled to respect from the courts. (At pp. 17-18, Rollo)

As stated earlier, the main issue hinges on the authority of the Secretary of Public Works and Communications under Republic Act 2056 to declare that the construction or building of dams, dikes or any other works which encroach into any public navigable

river, stream, coastal waters and any other navigable public waters or waterways as well as the construction or building of dams, dikes or any other works in areas declared as communal fishing grounds is prohibited and to order their removal as "public nuisances or as prohibited constructions." The lower court concluded that the Secretary abused his authority under Republic Act No. 2056 on the following points: (1) The Secretary passed judgment on the validity of the titles of the petitioners over Encroachments 3, 4 and 5 when he declared such titles as null and void; and (2) the dikes denominated as Encroachments Nos. 1 and 2 were constructed by virtue of a permit legally issued in favor of the late Santiago Pastoral by the Bureau of Fisheries on July 19, 1948 because the area was deemed fit by said Office of fishpond purposes, and the construction of such dikes would not impede the flow of the river. The lower court opined that in constructing the dikes, the petitioners were only exercising a right legally granted to them and that "they shall remain to enjoy the privilege until such time that their permit shall have been cancelled." The petition is impressed with merit. The records belie the lower court's finding that the Secretary passed judgment on the titles of the lots in question. In connection with Encroachments Nos. 3 and 4, the Heirs of Santiago Pastoral presented a certified true copy of Original Certificate of Title No. 9 issued by the Register of Deeds of Dagupan City to show that the encroachments are within their titled lands. The Secretary, however, stated in his decision:
As regards the last two encroachments, the evidence shows that the southern boundary thereof is the original bank of the Tulao River. The properties in question, titled as they are, are clearly within the bed of the river. Even the testimony of Aniceto Luis, a representative of the Bureau of Lands in the investigation, shows without doubt, that the encroachments are within the river bed as may be gleaned from the following:
Q As it appears in the record, title was granted to Santiago Pastoral on this alleged encroachment No. 3 and 4 which falls squarely on the Tulao River and during the ocular inspection by the undersigned, the fact became evident that the river is highly navigable. Now, what explanation can you make as to why title was issued over a portion of a river, public river at that, which is highly navigable? A So far, our record does not show that it is a navigable river, but it is just stated that "the area applied for is a part of the Tulao River and therefore it is covered by water." (From the report of the Deputy Public Land Inspector E. Ventura dated March, 1954 in connection with the Sales application of Santiago Pastoral.) Q So in the report, it was stated that the land applied for by Santiago Pastoral is entirely covered by water and part of the river? A Yes, sir,

The propriety of the title over the last two encroachments is beyond the jurisdiction of this Office to inquire into, much less question, although it seems worth looking into by the proper authorities. Be that as it may, the fact remains that the dikes and other works

therein are encroachments into the Tulao River and, as such, are public nuisances within the contemplation of Republic Act No. 2056. (pp. 1-2, Decision in RA-2056-26)

Petitioner Agustin Bato also submitted a verified copy of the Original Certificate of Title No. 2 to show that encroachment No. 5 was privately owned. Anent this argument, the Secretary said:
xxx xxx xxx ... It has been found, however, that the land in question, although titled, is within the bed of the Tulao River. Even the representative of the Bureau of Lands bolstered such finding as may be gleaned from the following portion of his testimony:
Q But you stated that the technical description falls squarely to the Tulao River. What I am after is the condition of the land when the application was made. Do you have that in your records? " A Yes sir. Q Now, if I show the certificate of title that covered the portion of this land, will you agree with me that the technical description is the same as that appearing in your record? A Yes, they are the same. Q Mr. Luis, we have the technical description appearing in the certificate of title which you admitted to be the same as appearing in your record plotted, and it appears that the same land covered by the description falls squarely on the river? Is it still on the side of the river or in the river itself? I am referring to the encroachment No. 5 by Agustin Bato. A No, if this encroachment made by Agustin Bato is the same land as described in the technical description from the title, then it is within the river."

Moreover, Section 39 of Act No. 496, in defining the scope and efficacy of a certificate of title under the Torrens System, established some exceptions which the force of said title does not reach or affect. Among them are properties of the public domain. Since the portion appropriated is of public dominion, registration under Act No. 496 did not make the possessor a true owner thereof. (Celso Ledesma v. The Municipality of Iloilo, Concepcion Lopez, Maximo M. Kalaw and wife, and Julia Ledesma, defendants, 49 Phil. 769). (pp. 1-2, Decision in RA-2056-37)

In effect, the Secretary passed judgment only to the extent that, although the encroachments were inside titled properties, they are within the bed of a river. With this factual finding, he declared the encroachments, converted into fishponds within the Tulao River, as prohibited and ordered their removal pursuant to his authority under Republic Act 2056. He never declared that the titles of the petitioners over the lots in question were null and void. The Secretary's authority to determine questions of fact such as the existence of a river even inside titled properties was recognized in the cases of Lovina v. Moreno, (9 SCRA 557) and Taleon vs. Secretary of Public Works and Communications (20 SCRA 69). We stated that the fact-finding power of the Secretary of Public Works and Communications is merely "incidental to his duty to clear all navigable streams of unauthorized constructions and, hence its grant did not constitute an unlawful delegation of judicial

power. ... that although the titles were silent as to the existence of any stream inside the property, that did not confer a right to the stream, it being of a public nature and not subject to private appropriation, even by prescription." In the instant cases, the residents along the Tulao River complained about obstructions on the river. From a width of 70 to 105 meters, the river had been reduced to a width of only 10 to 15 meters. The river was navigable and even at low-tide was two to three meters deep. As regards the lower court's finding that the dikes designated as Encroachments Nos. 1 and 2 were constructed under the petitioners' Fishpond Permit issued by the Bureau of Fisheries in 1948 and, therefore, must be respected, the Secretary counters that such issuance of fishpond permit did not preclude him from conducting due investigation pursuant to his authority under Republic Act 2056. We agree. Section 1 of Republic Act 2056 is explicit in that "Any provision or provisions of law to the contrary notwithstanding, the construction or building of dams, dikes ... which encroaches into any public navigable river, stream, coastal waters and any other navigable public waters or waterways ... shall be ordered removed as public nuisance or as prohibited construction as herein provided ... The record shows that the petitioners' fishpond permit was issued in 1948 while the Act took effect on June 3, 1958. Therefore, the Secretary's more specific authority to remove dikes constructed in fishponds whenever they obstruct or impede the free passage of any navigable river or stream or would cause inundation of agricultural areas (Section 2, Republic Act 2056) takes precedence. Moreover, the power of the Secretary of Public Works to investigate and clear public streams from unauthorized encroachments and obstructions was granted as early as Act 3708 of the old Philippine Legislature and has been upheld by this Court in the cases of Palanca v. Commonwealth (69 Phil. 449) and Meneses v. Commonwealth (69 Phil. 647). The same rule was applied in Lovina v. Moreno, (supra) Santos etc., et al. v. Secretary of Public Works and Communications (19 SCRA 637). All in all, we find no grave abuse of discretion or an illegal exercise of authority on the part of the Secretary of Public Works and Communications in ordering the removal of the encroachments designated as Nos. 1, 2, 3, 4 and 5 of Exhibit "A". The rules of due process were observed in the conduct of investigation in the two cases. The parties concerned were all notified and hearings of the two cases were conducted by the Secretary through the City Engineer of Dagupan City. All parties were given opportunity to present evidence to prove their claims after which the Secretary rendered separate decisions pursuant to Republic Act 2056. The factual findings of the Secretary are substantiated by evidence in the administrative records. In the absence of any illegality, error of law, fraud or imposition, none of which were proved by the petitioners in the instant case, said findings should be respected. (Lovina v. Moreno, supra; Santos, etc., et al. v. Secretary of Public Works and

Communications, supra; See also Borja v. Moreno, 11 SCRA 568; Taleon v. Secretary of Public Works and Communications, 20 SCRA 69). WHEREFORE, the instant appeal is GRANTED. The questioned decision of the Court of First Instance of Pangasinan is REVERSED and SET ASIDE. The decisions of the then Secretary of Public Works and Communications in Cases No. RA 2056-26 and No. RA-2056-37 are REINSTATED. SO ORDERED.

G.R. No. L-26534 ANTONIO J. VILLEGAS, in his capacity as Mayor of the City of Manila, CAPTS. JAMES BARBERS, ANTONIO PARALEJAS and FELICISIMO LAZARO, in their respective capacity as Precinct or Station Commanders of the Manila Police Department, petitioners-appellees, vs. ABELARDO SUBIDO, in his capacity as Commissioner of Civil Service, respondent-appellant. Romeo L. Kahayon for petitioner-appellees. Assistant Solicitor General Pacifico P. de Castro, Solicitor Rosalio A. de Leon and Special Attorney Raymundo R. Villones for respondent-appellant. Fernando, J.:

The Power of respondent Commissioner of Civil Service to direct the Mayor of the City of Manila, petitioner Antonio J. Villegas, to replace the other petitioners, James Barbers, Antonio Paralejas and Felicisimo Lazaro as station commanders of the three Manila police precincts, is challenged in this prohibition proceeding filed with the Manila Court of First Instance. There is no dispute that petitioner, as Mayor, by virtue of the statutory grant of authority of "immediate control over the executive functions of the different departments,"1could pick the police officials to be entrusted with such responsibility. The choice fell on the three other petitioners, then police captains. Respondent Commissioner would dispute their designation as such on the ground of lack for each of them of "an Inspector First Class (Police Detective Major)" eligibility. Petitioners prevailed, the lower court being unable to locate any legal provision to warrant such an exercise of power on the part of respondent Commissioner. The case is before us now on appeal. For reasons to be more explicitly and fully set forth, we affirm. The petition for prohibition, with preliminary injunction being sought, was filed in the Court of First Instance of Manila on July 17, 1965. After the allegation as to parties, it was set forth therein that in an endorsement of June 30, 1965, respondent Commissioner directed that petitioners Barbers, Paralejas and Lazaro be replaced as station commanders of the three police precincts of Manila as their continued employment as such was illegal, the eligibility required being that of an inspector first class, allegedly not possessed by them.2 The petitioner Mayor replied on July 2, 1965, asserting that he felt obliged "to disregard said directive, it being in excess of the authority vested in [the Civil Service] Commission." As noted in such communication: "This Office is not aware of any provision of law requiring that Precinct or Station Commanders should be at least a Police or Detective Major or an Inspector First Class. Paragraph 4, Section 23 of Republic Act No. 2260, otherwise known as the Civil Service Act of 1959, which that Commission has invoked, contemplates positions in the competitive or classified service as provided for in an appropriation or budget measure to which an appointment, as the term appointment is used in Section 24 of the Civil Service Act of 1959, is required. Obviously, this provision of law cannot cover mere designations or assignments to an area of command. Thus, Precinct or Station Commanders in the

Manila Police Department are so designated for organizational purposes in order to delineate their specific area of command and effect greater efficiency in the administration of police affairs."3 Respondent Commissioner of Civil Service was however adamant, reiterating on July 9, 1965 his directive for the replacement of the other petitioners as station commanders.4 Then came the allegation why in this particular case respondent Commissioner of Civil Service acted without or in excess of jurisdiction or, at the very least, with grave abuse of discretion. As pointed out in the petition, the assignment or detail in this case of the other petitioners as precinct or station commanders did not constitute "appointment to positions in the competitive or classified service;" that such designation or detail was exclusively within the power and jurisdiction of petitioner Mayor under his specific power of direction, supervision and control vested in him by the Charter and in view of his responsibility as the chief executive of the City to maintain peace and order therein; that there is no law, or civil service regulation which requires any specific civil service eligibility for a precinct or station commander and that on the assumption that respondent Commissioner could determine the appropriate eligibility, the examination for police inspectors invoked by him were suspended by order of the President of the Philippines of March 23, 1964 insofar as the City of Manila was concerned.5 There were other allegations to show lack or excess of jurisdiction as well as grave abuse of discretion, but enough has been said to render clear why for petitioners the directive in question was beyond the power of respondent Commissioner to issue. In the answer by respondent Commissioner filed on July 29, 1965, the facts as set forth were admitted, but there was an explicit denial of the grounds relied upon to show lack or excess of jurisdiction or his acting with grave abuse of discretion.6 The stress in the affirmative and special defenses set forth was that the assignment of petitioners Barbers, Paralejas and Lazaro was not allowable under the Civil Service Act in view of the fact that there were as of that time eligibles to the position of inspector first class who could be so designated. Reliance was also had, as on the original directive of respondent Commissioner, of such designation of petitioners as not being "in conformity with the recommendation of the U.S. Agency for International Development to assign and shift [Manila Police Department] personnel to positions to which they have qualified in appropriate examinations."7 The decision now on appeal, promulgated on July 14, 1966, noted that respondent Commissioner did not dispute the civil service eligibilities and training of petitioners Barbers, Paralejas and Lazaro. Reference was made to the opening paragraph of the petition wherein the following appeared: "Petitioner Capt. Barbers passed his First Grade Civil Service (supervisor) Promotional Examination taken on March 31, 1962 with a high mark of 80.1 per cent; he is also a law graduate (1964) and graduated as a full scholar; he completed the Basic Course for Patrolman at the MPD training school (1945), the Advanced Course (1946), the Detective Course (1946) as class topnotcher with an average of 96.5 per cent and the Senior Police Refresher Course (1962) at the Philippine Army School Command, Ft. Bonifacio; and he also trained at the International Police Academy in Washington, D.C., the New York City Police Academy, the Pinkerton Detective Agency in New York, the Dade County Police Department in Miami, Florida, the U.S. Military Police School at Fort Gordon, Georgia, and the Michigan State University Communications Seminar. Petitioner Capt. Paralejas passed the civil service examination for

police lieutenant in 1945 with a rating of 77.90 per cent; he is a commerce graduate (1939) 2nd year law, F.E.U.; he completed the supervisors 2nd In-Service Training in the City of Manila (medalist) and the Senior Police Refresher Course (1962) at the Philippine School Command, Ft. Bonifacio. Petitioner Capt. Lazaro passed the Criminal Investigation in Secret Service examination (pensionado) given by the Civil Service Commission in 1947, with an average of 83.62%; he completed the supervisors 2nd In-Service Training in the City of Manila and the Senior Police Refresher Course (1962) at the Philippine Army School Command, Ft. Bonifacio, graduating as third honor; first grade eligible under Rep. Act 1080, being a member of the Philippine Bar."8 The decision then noted that while respondent Commissioner had ruled "that the appropriate eligibility for the position of precinct commander is that of police inspector, first class (police major), no valid reason has been advanced to show that such eligibility is appropriate and that of police captain is not."9 It was likewise made clear in the decision that there was no law prescribing that precinct commanders be police majors. Even on the assumption then that the "corrective measures" could be supplied by respondent Commissioner if "unsatisfactory situations are found" still the appropriate conclusion, according to the lower court, considering "the civil service eligibilities and training of petitionerscaptains, the failure of respondent Commissioner to show unsatisfactory situations in the assignment or designation of petitioners-captains as precinct commanders, and the reasons stated in the petition, [is that] respondent Commissioner has acted without or in excess of jurisdiction and with grave abuse of discretion in issuing and trying to enforce the directive in question."10 What cannot be denied, as stressed in such decision, is the absence of any law "which prescribes that precinct commanders be police majors," resulting necessarily in the directive of respondent Commissioner of Civil Service being declared null and void, the writ of prohibition thus being the appropriate remedy, with an injunction perpetually restraining him from the commission of the acts complained of. The question, to repeat, is one of power. What is clear is that it is petitioner City Mayor that could so designate the other petitioners to assume the position of station commanders. That power is his, and his alone. He is not required by law to share it with respondent Commissioner, who must justify by the valid conferment of authority the action taken by him in requiring that the City Mayor replace the other petitioners. Power is not to be presumed, it must be shown. Respondent Commissioner failed to do so. It was not surprising therefore that the lower court ruled against him. As set forth at the outset, we sustain the lower court and affirm the judgment appealed from. 1. The power of petitioner City Mayor as to who could be designated as station commanders of the three Manila police precincts is conceded. No dispute as to his authority to do so exists. The Charter is clear. The narrow question, therefore, is whether such designation could be frustrated by the directive of the respondent Commissioner. For this official to be justified in interposing a negative, he must show that an applicable law authorizes him to do so. It is well-settled that respondent Commissioner at the most may inquire only as to the eligibility of the

person thus chosen to fill up a vacant position. If he were, then respondent Commissioner of Civil Service must so attest. That function being discharged, his participation ceases. So we have held in the leading case of Villanueva v. Balallo,11 the opinion being penned by the present Chief Justice. Thus: "When the appointee is qualified, as petitioner herein admittedly is, then the Commissioner of Civil Service has no choice but to attest to the appointment. It has been repeatedly held that an appointment becomes complete upon the performance of the last act required by law of the appointing power. The attestation required of the Commissioner of Civil Service is merely a check to assure compliance with the civil service laws." In this particular case, the eligibility of the other petitioners as police captains is admitted. That was duly set forth in the decision now on appeal. More than that, their being exceptionally well-qualified, was likewise duly noted therein, a finding of fact binding on us as this appeal raises purely questions of law. The justification for the directive of respondent Commissioner is thus premised on his alleged power to insist on a specific eligibility for each of the other petitioners designated, that of "Inspector First Class (Police or Detective Major)." In his brief, however, he can point to no express provision that would confer on him such a power. His failure is understandable because there is none. At the most, then, he would rely on a reading of the Civil Service Act from which, mistakenly to our mind, he would infer such authority. According to his brief: "Said authority to fix appropriate eligibilities being corollary to respondent's 'exclusive jurisdiction over the approval under the Civil Service Law and rules of all appointments including promotions to positions in the competitive service" and/or being an implied power, there is therefore no need for an express provision setting forth in black and white what eligibilities are appropriate for what positions."12 There is thus an admission from respondent Commissioner himself that his power is necessarily limited. He would, however, construe such a restricted authority expansively. He would rely on an ambiguity. It would be a stultification of well-settled principles of public law if from the vagueness of a statute, competence to act could be predicated. If such a purpose were within the contemplation of Congress, an appropriate form of words could have been utilized. The absence of such language negates its existence. Respondent Commissioner would seek support for such untenable view by asserting that under certain provisions of the Act,13 he is empowered to issue rules and regulations as well as to promulgate standards, policies and guidelines. This is to rely on a frail reed. To do so is to offend against the primacy that should be accorded a statute as contrasted with decrees coming from the Executive Department, necessarily of lower category. What is worse, the rules in question are not issued by the President, but by one of his subordinates; their binding force then is not as great. Much less could they supersede applicable statutes, not only in what they command but also in what they omit. It does not admit of doubt that in the hierarchy of legal norms, such rules and standards definitely occupy an inferior status. If the statute is silent as to the existence of power, there the matter rests.

Only Congress can remedy the situation. It is not for respondent Commissioner to do so on the flimsy allegation that he possesses authority to promulgate rules and standards dealing specifically with the supervision, the preparation and rating of all civil service examinations,14 the making of investigation and special reports upon all matters relating to the enforcement of the civil service law,15 the authority to pass upon all removal, separation and suspension of permanent officers and employees in the competitive and classified service,16 and the determination of appeals instituted by any person believing himself to be aggrieved17 a power which does not have the remotest connection with an exercise by petitioner City Mayor of a competence exclusively lodged in him to designate the other petitioners as precinct commanders. This conclusion has reinforcement from authoritative pronouncements that of late have come from us. Thus, from a 1968 decision:18 "It would seem fairly obvious then that the law does not impose a rigid or mechanistic formula on the appointing power, compliance with which is inexorable and a deviation therefrom fatal. Far from it. If there be adherence to the concept that public office is a public trust, as there ought to be, the criterion should be what public welfare demands, what satisfies public interest. For it is axiomatic that public needs could best be attended to by officials, about whose competency and ability there is no question. To that overmastering requirement, personal ambition must of necessity yield. Discretion if not plenary, at least sufficient, should thus be granted to those entrusted with the responsibility of administering the officers concerned, primarily the department heads. They are in the most favorable position to determine who can best fulfill the functions of the office thus vacated. Unless, therefore, the law speaks in the most mandatory and peremptory tone, considering all the circumstances, there should be, as there has been, full recognition of the wide scope of such discretionary authority. Happily, there is nothing in the Civil Service Act, which is fittingly concerned with protecting the rights of those in the career service, that, rightly construed, calls for a different conclusion. It is well worth repeating that the broad authority of a department head appears indisputable. Such is the policy of the law, a policy reflected with fidelity in the decisions of this Court." Also, from Pineda v. Claudio,19 decided even more recently, the opinion coming from Justice Castro: "For it is not enough that an aspirant is qualified and eligible or that he is next in rank or line for promotion, albeit by passive prescription. It is just as necessary, in order for public administration to be dynamic and responsive to the needs of the times, that the local executive be allowed the choice of men of his confidence, provided they are qualified and eligible, who in his best estimation are possessed of the requisite reputation, integrity, knowledgeability, energy and judgment. After all, it is the local executive, more than anyone else, who is primarily responsible for efficient governmental administration in the locality and the effective maintenance of peace and order therein, and is directly answerable to the people who elected him. Nowhere is this more true than in the sensitive area of police administration." While the two above cases are not squarely in point, still the principle therein announced as to the respect to be accorded to the exercise of the authority to appoint by the official entrusted by law to do so and the minimum interference allowed the Commissioner of Civil Service under his power to inquire into the eligibility of the appointee lends further support to the conclusion arrived at. It would appear

clear, therefore, that respondent Commissioner does not possess any statutory authority to interfere with the power of petitioner City Mayor to make the designation of the other petitioners. 2. Respondent Commissioner, in his answer to the petition assailing his directive, would lend plausibility to his claim that he was legally empowered to do so by this argument: "Furthermore, said assignments are not in conformity with the recommendation of the U.S. Agency for International Development to assign and shift MPD personnel to positions to which they have qualified in appropriate examinations."20 To state such a contention is to reject it. As a foundation for the challenged directive it is, to put it mildly, far from stable. As an asserted basis to justify what respondent did, it is far from persuasive. To put it bluntly, as a source of power, its value is nil. It would not be easy to imagine a plea more offensive to our sovereignty and derogatory to our dignity as an independent nation lnRAB. All governmental powers are lodged in officials of our government both national and local. An alien agency at the most may be permitted to serve in an advisory capacity. It can suggest, but it cannot command. Its wishes do not constitute law. Our officials, therefore, are not bound to obey. If it were otherwise, then a posture of subserviency and mendicancy would be sanctioned. That this Court cannot allow.21 3. In the answer of respondent Commissioner, there was an implication that his directive finds support in the constitutional provision on the Civil Service. More specifically, he did point to the requirement that appointments in the civil service "shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination."22 Apparently, he had a change of mind subsequently as to such constitutional prop, for his brief was conspicuously silent in that respect. That sober second thought had much to recommend it. No such support is yielded by the above constitutional provision to his assertion of authority ZaaY4LlO. The Constitution on the civil service has only four brief sections, two of which, prohibiting partisan political activities and additional or double compensation, have clearly no relevance.23 The fourth section guarantees security of tenure, again without any bearing on the present litigation.24 It is only the first section then, referred to above, that may conceivably touch upon the issue involved, although in a rather remote way. For it is more the expression of an ideal than a source of authority. Note that in stressing merit and fitness, it recognized that it should "be determined as far as practicable by competitive examination." There was no creation of a Civil Service Commission. No such official as a Civil Service Commissioner was provided for. Respondent's position is a statutory creation, the extent of his powers being thus limited and circumscribed. It would thus be futile on his part to trace the existence of an alleged authority to the Constitution. As a matter of fact, if there are constitutional overtones to this litigation, petitioners, not the respondents, are the beneficiaries. As they did correctly point out, not even the President is vested with the power of control over local officials. He exercises only "general supervision . . . as may be provided

by law, . . . ."25 Respondent Civil Service Commissioner cannot be deemed then to be possessed of a greater prerogative, being himself an official of a lower category in the executive branch. Moreover, what the Constitution enjoins on the President as well as all those entrusted with executive functions is to "take care that the laws be faithfully executed."26 Certainly, it is a manifestation of less than fealty to such a duty if an executive official like respondent would enforce a statutory provision not as written but as expanded and enlarged by him through a process of strained construction. 4. One last word. Nothing is better settled in the law than that a public official exercises power, not rights. The government itself is merely an agency through which the will of the state is expressed and enforced. Its officers therefore are likewise agents entrusted with the responsibility of discharging its functions. As such there is no presumption that they are empowered to act. There must be a delegation of such authority, either express or implied. In the absence of a valid grant, they are devoid of power. What they do suffers from a fatal infirmity. That principle cannot be sufficiently stressed. In the appropriate language of Chief Justice Hughes: "It must be conceded that departmental zeal may not be permitted to outrun the authority conferred by statute."27 Neither the high dignity of the office nor the righteousness of the motive then is an acceptable substitute. Otherwise the rule of law becomes a myth. Such an eventuality, we must take all pains to avoid. WHEREFORE, the decision of the Court of First Instance of July 14, 1966 is affirmed. Without pronouncement as to costs.

G.R. No. 192935

December 7, 2010

LOUIS "BAROK" C. BIRAOGO, Petitioner, vs. THE PHILIPPINE TRUTH COMMISSION OF 2010, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 193036 REP. EDCEL C. LAGMAN, REP. RODOLFO B. ALBANO, JR., REP. SIMEON A. DATUMANONG, and REP. ORLANDO B. FUA, SR., Petitioners, vs. EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and DEPARTMENT OF BUDGET AND MANAGEMENT SECRETARY FLORENCIO B. ABAD, Respondents. DECISION MENDOZA, J.: When the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. --- Justice Jose P. Laurel1 The role of the Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of government are established, limited and defined, and by which these powers are distributed among the several departments.2 The Constitution is the basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of the land, must defer.3 Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply made to sway and accommodate the call of situations and much more tailor itself to the whims and caprices of government and the people who run it.4 For consideration before the Court are two consolidated cases5 both of which essentially assail the validity and constitutionality of Executive Order No. 1, dated July 30, 2010, entitled "Creating the Philippine Truth Commission of 2010." The first case is G.R. No. 192935, a special civil action for prohibition instituted by petitioner Louis Biraogo (Biraogo) in his capacity as a citizen and taxpayer. Biraogo assails Executive Order No. 1 for being violative of the legislative power of Congress under Section 1, Article VI of the Constitution6 as it usurps the constitutional authority of the legislature to create a public office and to appropriate funds therefor.7

The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed by petitioners Edcel C. Lagman, Rodolfo B. Albano Jr., Simeon A. Datumanong, and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent members of the House of Representatives. The genesis of the foregoing cases can be traced to the events prior to the historic May 2010 elections, when then Senator Benigno Simeon Aquino III declared his staunch condemnation of graft and corruption with his slogan, "Kung walang corrupt, walang mahirap." The Filipino people, convinced of his sincerity and of his ability to carry out this noble objective, catapulted the good senator to the presidency. To transform his campaign slogan into reality, President Aquino found a need for a special body to investigate reported cases of graft and corruption allegedly committed during the previous administration. Thus, at the dawn of his administration, the President on July 30, 2010, signed Executive Order No. 1 establishing the Philippine Truth Commission of 2010 (Truth Commission). Pertinent provisions of said executive order read: EXECUTIVE ORDER NO. 1 CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010 WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines solemnly enshrines the principle that a public office is a public trust and mandates that public officers and employees, who are servants of the people, must at all times be accountable to the latter, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest lives; WHEREAS, corruption is among the most despicable acts of defiance of this principle and notorious violation of this mandate; WHEREAS, corruption is an evil and scourge which seriously affects the political, economic, and social life of a nation; in a very special way it inflicts untold misfortune and misery on the poor, the marginalized and underprivileged sector of society; WHEREAS, corruption in the Philippines has reached very alarming levels, and undermined the peoples trust and confidence in the Government and its institutions; WHEREAS, there is an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter others from committing the evil, restore the peoples faith and confidence in the Government and in their public servants; WHEREAS, the Presidents battlecry during his campaign for the Presidency in the last elections "kung walang corrupt, walang mahirap" expresses a solemn pledge that if elected, he would end corruption and the evil it breeds;

WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and secure justice for all; WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise known as the Revised Administrative Code of the Philippines, gives the President the continuing authority to reorganize the Office of the President. NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration; and thereafter recommend the appropriate action or measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor. The Commission shall be composed of a Chairman and four (4) members who will act as an independent collegial body. SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their coprincipals, accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and recommendations to the President, Congress and the Ombudsman. In particular, it shall: a) Identify and determine the reported cases of such graft and corruption which it will investigate; b) Collect, receive, review and evaluate evidence related to or regarding the cases of large scale corruption which it has chosen to investigate, and to this end require any agency, official or employee of the Executive Branch, including government-owned or controlled corporations, to produce documents, books, records and other papers; c) Upon proper request or representation, obtain information and documents from the Senate and the House of Representatives records of investigations conducted by committees thereof relating to matters or subjects being investigated by the Commission;

d) Upon proper request and representation, obtain information from the courts, including the Sandiganbayan and the Office of the Court Administrator, information or documents in respect to corruption cases filed with the Sandiganbayan or the regular courts, as the case may be; e) Invite or subpoena witnesses and take their testimonies and for that purpose, administer oaths or affirmations as the case may be; f) Recommend, in cases where there is a need to utilize any person as a state witness to ensure that the ends of justice be fully served, that such person who qualifies as a state witness under the Revised Rules of Court of the Philippines be admitted for that purpose; g) Turn over from time to time, for expeditious prosecution, to the appropriate prosecutorial authorities, by means of a special or interim report and recommendation, all evidence on corruption of public officers and employees and their private sector coprincipals, accomplices or accessories, if any, when in the course of its investigation the Commission finds that there is reasonable ground to believe that they are liable for graft and corruption under pertinent applicable laws; h) Call upon any government investigative or prosecutorial agency such as the Department of Justice or any of the agencies under it, and the Presidential Anti-Graft Commission, for such assistance and cooperation as it may require in the discharge of its functions and duties; i) Engage or contract the services of resource persons, professionals and other personnel determined by it as necessary to carry out its mandate; j) Promulgate its rules and regulations or rules of procedure it deems necessary to effectively and efficiently carry out the objectives of this Executive Order and to ensure the orderly conduct of its investigations, proceedings and hearings, including the presentation of evidence; k) Exercise such other acts incident to or are appropriate and necessary in connection with the objectives and purposes of this Order. SECTION 3. Staffing Requirements. x x x. SECTION 4. Detail of Employees. x x x. SECTION 5. Engagement of Experts. x x x SECTION 6. Conduct of Proceedings. x x x. SECTION 7. Right to Counsel of Witnesses/Resource Persons. x x x. SECTION 8. Protection of Witnesses/Resource Persons. x x x.

SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. Any government official or personnel who, without lawful excuse, fails to appear upon subpoena issued by the Commission or who, appearing before the Commission refuses to take oath or affirmation, give testimony or produce documents for inspection, when required, shall be subject to administrative disciplinary action. Any private person who does the same may be dealt with in accordance with law. SECTION 10. Duty to Extend Assistance to the Commission. x x x. SECTION 11. Budget for the Commission. The Office of the President shall provide the necessary funds for the Commission to ensure that it can exercise its powers, execute its functions, and perform its duties and responsibilities as effectively, efficiently, and expeditiously as possible. SECTION 12. Office. x x x. SECTION 13. Furniture/Equipment. x x x. SECTION 14. Term of the Commission. The Commission shall accomplish its mission on or before December 31, 2012. SECTION 15. Publication of Final Report. x x x. SECTION 16. Transfer of Records and Facilities of the Commission. x x x. SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order. SECTION 18. Separability Clause. If any provision of this Order is declared unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof. SECTION 19. Effectivity. This Executive Order shall take effect immediately. DONE in the City of Manila, Philippines, this 30th day of July 2010. (SGD.) BENIGNO S. AQUINO III By the President: (SGD.) PAQUITO N. OCHOA, JR. Executive Secretary Nature of the Truth Commission

As can be gleaned from the above-quoted provisions, the Philippine Truth Commission (PTC) is a mere ad hoc body formed under the Office of the President with the primary task to investigate reports of graft and corruption committed by third-level public officers and employees, their coprincipals, accomplices and accessories during the previous administration, and thereafter to submit its finding and recommendations to the President, Congress and the Ombudsman. Though it has been described as an "independent collegial body," it is essentially an entity within the Office of the President Proper and subject to his control. Doubtless, it constitutes a public office, as an ad hoc body is one.8 To accomplish its task, the PTC shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987. It is not, however, a quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render awards in disputes between contending parties. All it can do is gather, collect and assess evidence of graft and corruption and make recommendations. It may have subpoena powers but it has no power to cite people in contempt, much less order their arrest. Although it is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing of an information in our courts of law. Needless to state, it cannot impose criminal, civil or administrative penalties or sanctions. The PTC is different from the truth commissions in other countries which have been created as official, transitory and non-judicial fact-finding bodies "to establish the facts and context of serious violations of human rights or of international humanitarian law in a countrys past."9 They are usually established by states emerging from periods of internal unrest, civil strife or authoritarianism to serve as mechanisms for transitional justice. Truth commissions have been described as bodies that share the following characteristics: (1) they examine only past events; (2) they investigate patterns of abuse committed over a period of time, as opposed to a particular event; (3) they are temporary bodies that finish their work with the submission of a report containing conclusions and recommendations; and (4) they are officially sanctioned, authorized or empowered by the State.10 "Commissions members are usually empowered to conduct research, support victims, and propose policy recommendations to prevent recurrence of crimes. Through their investigations, the commissions may aim to discover and learn more about past abuses, or formally acknowledge them. They may aim to prepare the way for prosecutions and recommend institutional reforms."11 Thus, their main goals range from retribution to reconciliation. The Nuremburg and Tokyo war crime tribunals are examples of a retributory or vindicatory body set up to try and punish those responsible for crimes against humanity. A form of a reconciliatory tribunal is the Truth and Reconciliation Commission of South Africa, the principal function of which was to heal the wounds of past violence and to prevent future conflict by providing a cathartic experience for victims. The PTC is a far cry from South Africas model. The latter placed more emphasis on reconciliation than on judicial retribution, while the marching order of the PTC is the identification and punishment of perpetrators. As one writer12 puts it:

The order ruled out reconciliation. It translated the Draconian code spelled out by Aquino in his inaugural speech: "To those who talk about reconciliation, if they mean that they would like us to simply forget about the wrongs that they have committed in the past, we have this to say: There can be no reconciliation without justice. When we allow crimes to go unpunished, we give consent to their occurring over and over again." The Thrusts of the Petitions Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court to declare it unconstitutional and to enjoin the PTC from performing its functions. A perusal of the arguments of the petitioners in both cases shows that they are essentially the same. The petitioners-legislators summarized them in the following manner: (a) E.O. No. 1 violates the separation of powers as it arrogates the power of the Congress to create a public office and appropriate funds for its operation. (b) The provision of Book III, Chapter 10, Section 31 of the Administrative Code of 1987 cannot legitimize E.O. No. 1 because the delegated authority of the President to structurally reorganize the Office of the President to achieve economy, simplicity and efficiency does not include the power to create an entirely new public office which was hitherto inexistent like the "Truth Commission." (c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it vested the "Truth Commission" with quasi-judicial powers duplicating, if not superseding, those of the Office of the Ombudsman created under the 1987 Constitution and the Department of Justice created under the Administrative Code of 1987. (d) E.O. No. 1 violates the equal protection clause as it selectively targets for investigation and prosecution officials and personnel of the previous administration as if corruption is their peculiar species even as it excludes those of the other administrations, past and present, who may be indictable. (e) The creation of the "Philippine Truth Commission of 2010" violates the consistent and general international practice of four decades wherein States constitute truth commissions to exclusively investigate human rights violations, which customary practice forms part of the generally accepted principles of international law which the Philippines is mandated to adhere to pursuant to the Declaration of Principles enshrined in the Constitution. (f) The creation of the "Truth Commission" is an exercise in futility, an adventure in partisan hostility, a launching pad for trial/conviction by publicity and a mere populist propaganda to mistakenly impress the people that widespread poverty will altogether vanish if corruption is eliminated without even addressing the other major causes of poverty.

(g) The mere fact that previous commissions were not constitutionally challenged is of no moment because neither laches nor estoppel can bar an eventual question on the constitutionality and validity of an executive issuance or even a statute."13 In their Consolidated Comment,14 the respondents, through the Office of the Solicitor General (OSG), essentially questioned the legal standing of petitioners and defended the assailed executive order with the following arguments: 1] E.O. No. 1 does not arrogate the powers of Congress to create a public office because the Presidents executive power and power of control necessarily include the inherent power to conduct investigations to ensure that laws are faithfully executed and that, in any event, the Constitution, Revised Administrative Code of 1987 (E.O. No. 292), 15 Presidential Decree (P.D.) No. 141616 (as amended by P.D. No. 1772), R.A. No. 9970,17 and settled jurisprudence that authorize the President to create or form such bodies. 2] E.O. No. 1 does not usurp the power of Congress to appropriate funds because there is no appropriation but a mere allocation of funds already appropriated by Congress. 3] The Truth Commission does not duplicate or supersede the functions of the Office of the Ombudsman (Ombudsman) and the Department of Justice (DOJ), because it is a factfinding body and not a quasi-judicial body and its functions do not duplicate, supplant or erode the latters jurisdiction. 4] The Truth Commission does not violate the equal protection clause because it was validly created for laudable purposes. The OSG then points to the continued existence and validity of other executive orders and presidential issuances creating similar bodies to justify the creation of the PTC such as Presidential Complaint and Action Commission (PCAC) by President Ramon B. Magsaysay, Presidential Committee on Administrative Performance Efficiency (PCAPE) by President Carlos P. Garcia and Presidential Agency on Reform and Government Operations (PARGO) by President Ferdinand E. Marcos.18 From the petitions, pleadings, transcripts, and memoranda, the following are the principal issues to be resolved: 1. Whether or not the petitioners have the legal standing to file their respective petitions and question Executive Order No. 1; 2. Whether or not Executive Order No. 1 violates the principle of separation of powers by usurping the powers of Congress to create and to appropriate funds for public offices, agencies and commissions; 3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman and the DOJ;

4. Whether or not Executive Order No. 1 violates the equal protection clause; and 5. Whether or not petitioners are entitled to injunctive relief. Essential requisites for judicial review Before proceeding to resolve the issue of the constitutionality of Executive Order No. 1, the Court needs to ascertain whether the requisites for a valid exercise of its power of judicial review are present. Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.19 Among all these limitations, only the legal standing of the petitioners has been put at issue. Legal Standing of the Petitioners The OSG attacks the legal personality of the petitioners-legislators to file their petition for failure to demonstrate their personal stake in the outcome of the case. It argues that the petitioners have not shown that they have sustained or are in danger of sustaining any personal injury attributable to the creation of the PTC. Not claiming to be the subject of the commissions investigations, petitioners will not sustain injury in its creation or as a result of its proceedings.20 The Court disagrees with the OSG in questioning the legal standing of the petitioners-legislators to assail Executive Order No. 1. Evidently, their petition primarily invokes usurpation of the power of the Congress as a body to which they belong as members. This certainly justifies their resolve to take the cudgels for Congress as an institution and present the complaints on the usurpation of their power and rights as members of the legislature before the Court. As held in Philippine Constitution Association v. Enriquez,21 To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution. An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be questioned by a member of Congress. In such a case, any member of Congress can have a resort to the courts. Indeed, legislators have a legal standing to see to it that the prerogative, powers and privileges vested by the Constitution in their office remain inviolate. Thus, they are allowed to question the validity of any official action which, to their mind, infringes on their prerogatives as legislators.22

With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing to question the creation of the PTC and the budget for its operations.23 It emphasizes that the funds to be used for the creation and operation of the commission are to be taken from those funds already appropriated by Congress. Thus, the allocation and disbursement of funds for the commission will not entail congressional action but will simply be an exercise of the Presidents power over contingent funds. As correctly pointed out by the OSG, Biraogo has not shown that he sustained, or is in danger of sustaining, any personal and direct injury attributable to the implementation of Executive Order No. 1. Nowhere in his petition is an assertion of a clear right that may justify his clamor for the Court to exercise judicial power and to wield the axe over presidential issuances in defense of the Constitution. The case of David v. Arroyo24 explained the deep-seated rules on locus standi. Thus: Locus standi is defined as "a right of appearance in a court of justice on a given question." In private suits, standing is governed by the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that "every action must be prosecuted or defended in the name of the real party in interest." Accordingly, the "realparty-in interest" is "the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit." Succinctly put, the plaintiffs standing is based on his own right to the relief sought. The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a "stranger," or in the category of a "citizen," or taxpayer." In either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a "citizen" or "taxpayer. Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public actions. The distinction was first laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayers suit is in a different category from the plaintiff in a citizens suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins: "In matter of mere public right, howeverthe people are the real partiesIt is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be remedied." With respect to taxpayers suits, Terr v. Jordan held that "the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his injury cannot be denied." However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid down the more stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an

executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public. This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity of a statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result." The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila Race Horse Trainers Association v. De la Fuente, Pascual v. Secretary of Public Works and Anti-Chinese League of the Philippines v. Felix. [Emphases included. Citations omitted] Notwithstanding, the Court leans on the doctrine that "the rule on standing is a matter of procedure, hence, can be relaxed for nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so requires, such as when the matter is of transcendental importance, of overreaching significance to society, or of paramount public interest."25 Thus, in Coconut Oil Refiners Association, Inc. v. Torres,26 the Court held that in cases of paramount importance where serious constitutional questions are involved, the standing requirements may be relaxed and a suit may be allowed to prosper even where there is no direct injury to the party claiming the right of judicial review. In the first Emergency Powers Cases,27 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders although they had only an indirect and general interest shared in common with the public. The OSG claims that the determinants of transcendental importance28 laid down in CREBA v. ERC and Meralco29 are non-existent in this case. The Court, however, finds reason in Biraogos assertion that the petition covers matters of transcendental importance to justify the exercise of jurisdiction by the Court. There are constitutional issues in the petition which deserve the attention of this Court in view of their seriousness, novelty and weight as precedents. Where the issues are of transcendental and paramount importance not only to the public but also to the Bench and the Bar, they should be resolved for the guidance of all.30 Undoubtedly, the Filipino people are more than interested to know the status of the Presidents first effort to bring about a promised change to the country. The Court takes cognizance of the petition not due to overwhelming political undertones that clothe the issue in the eyes of the public, but because the Court stands firm in its oath to perform its constitutional duty to settle legal controversies with overreaching significance to society. Power of the President to Create the Truth Commission In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a public office and not merely an adjunct body of the Office of the President.31 Thus, in order that the President may create a public office he must be empowered by the Constitution, a statute or an authorization vested in him by law. According to petitioner, such power cannot be presumed32 since there is no provision in the Constitution or any specific law that authorizes the President to create a truth commission.33 He adds that Section 31 of the Administrative Code of 1987, granting the President the continuing authority to reorganize his office, cannot serve as basis for

the creation of a truth commission considering the aforesaid provision merely uses verbs such as "reorganize," "transfer," "consolidate," "merge," and "abolish."34 Insofar as it vests in the President the plenary power to reorganize the Office of the President to the extent of creating a public office, Section 31 is inconsistent with the principle of separation of powers enshrined in the Constitution and must be deemed repealed upon the effectivity thereof.35 Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation of a public office lies within the province of Congress and not with the executive branch of government. They maintain that the delegated authority of the President to reorganize under Section 31 of the Revised Administrative Code: 1) does not permit the President to create a public office, much less a truth commission; 2) is limited to the reorganization of the administrative structure of the Office of the President; 3) is limited to the restructuring of the internal organs of the Office of the President Proper, transfer of functions and transfer of agencies; and 4) only to achieve simplicity, economy and efficiency.36 Such continuing authority of the President to reorganize his office is limited, and by issuing Executive Order No. 1, the President overstepped the limits of this delegated authority. The OSG counters that there is nothing exclusively legislative about the creation by the President of a fact-finding body such as a truth commission. Pointing to numerous offices created by past presidents, it argues that the authority of the President to create public offices within the Office of the President Proper has long been recognized.37 According to the OSG, the Executive, just like the other two branches of government, possesses the inherent authority to create fact-finding committees to assist it in the performance of its constitutionally mandated functions and in the exercise of its administrative functions.38 This power, as the OSG explains it, is but an adjunct of the plenary powers wielded by the President under Section 1 and his power of control under Section 17, both of Article VII of the Constitution.39 It contends that the President is necessarily vested with the power to conduct fact-finding investigations, pursuant to his duty to ensure that all laws are enforced by public officials and employees of his department and in the exercise of his authority to assume directly the functions of the executive department, bureau and office, or interfere with the discretion of his officials.40 The power of the President to investigate is not limited to the exercise of his power of control over his subordinates in the executive branch, but extends further in the exercise of his other powers, such as his power to discipline subordinates,41 his power for rule making, adjudication and licensing purposes42 and in order to be informed on matters which he is entitled to know.43 The OSG also cites the recent case of Banda v. Ermita,44 where it was held that the President has the power to reorganize the offices and agencies in the executive department in line with his constitutionally granted power of control and by virtue of a valid delegation of the legislative power to reorganize executive offices under existing statutes. Thus, the OSG concludes that the power of control necessarily includes the power to create offices. For the OSG, the President may create the PTC in order to, among others, put a closure to the reported large scale graft and corruption in the government.45

The question, therefore, before the Court is this: Does the creation of the PTC fall within the ambit of the power to reorganize as expressed in Section 31 of the Revised Administrative Code? Section 31 contemplates "reorganization" as limited by the following functional and structural lines: (1) restructuring the internal organization of the Office of the President Proper by abolishing, consolidating or merging units thereof or transferring functions from one unit to another; (2) transferring any function under the Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency under the Office of the President to any other Department/Agency or vice versa. Clearly, the provision refers to reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. These point to situations where a body or an office is already existent but a modification or alteration thereof has to be effected. The creation of an office is nowhere mentioned, much less envisioned in said provision. Accordingly, the answer to the question is in the negative. To say that the PTC is borne out of a restructuring of the Office of the President under Section 31 is a misplaced supposition, even in the plainest meaning attributable to the term "restructure" an "alteration of an existing structure." Evidently, the PTC was not part of the structure of the Office of the President prior to the enactment of Executive Order No. 1. As held in Buklod ng Kawaning EIIB v. Hon. Executive Secretary,46 But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not lose sight of the very source of the power that which constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), "the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President." For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. In Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that reorganization "involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions." It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President. Hence, it is subject to the Presidents continuing authority to reorganize. [Emphasis Supplied] In the same vein, the creation of the PTC is not justified by the Presidents power of control. Control is essentially the power to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former with that of the latter.47 Clearly, the power of control is entirely different from the power to create public offices. The former is inherent in the Executive, while the latter finds basis from either a valid delegation from Congress, or his inherent duty to faithfully execute the laws. The question is this, is there a valid delegation of power from Congress, empowering the President to create a public office?

According to the OSG, the power to create a truth commission pursuant to the above provision finds statutory basis under P.D. 1416, as amended by P.D. No. 1772.48 The said law granted the President the continuing authority to reorganize the national government, including the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities, transfer appropriations, and to standardize salaries and materials. This decree, in relation to Section 20, Title I, Book III of E.O. 292 has been invoked in several cases such as Larin v. Executive Secretary.49 The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to create a public office. Said decree is already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority to reorganize the administrative structure of the national government including the power to create offices and transfer appropriations pursuant to one of the purposes of the decree, embodied in its last "Whereas" clause: WHEREAS, the transition towards the parliamentary form of government will necessitate flexibility in the organization of the national government. Clearly, as it was only for the purpose of providing manageability and resiliency during the interim, P.D. No. 1416, as amended by P.D. No. 1772, became functus oficio upon the convening of the First Congress, as expressly provided in Section 6, Article XVIII of the 1987 Constitution. In fact, even the Solicitor General agrees with this view. Thus: ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted was the last whereas clause of P.D. 1416 says "it was enacted to prepare the transition from presidential to parliamentary. Now, in a parliamentary form of government, the legislative and executive powers are fused, correct? SOLICITOR GENERAL CADIZ: Yes, Your Honor. ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was issued. Now would you agree with me that P.D. 1416 should not be considered effective anymore upon the promulgation, adoption, ratification of the 1987 Constitution. SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416, Your Honor. ASSOCIATE JUSTICE CARPIO: The power of the President to reorganize the entire National Government is deemed repealed, at least, upon the adoption of the 1987 Constitution, correct. SOLICITOR GENERAL CADIZ: Yes, Your Honor.50 While the power to create a truth commission cannot pass muster on the basis of P.D. No. 1416 as amended by P.D. No. 1772, the creation of the PTC finds justification under Section 17, Article VII of the Constitution, imposing upon the President the duty to ensure that the laws are faithfully executed. Section 17 reads:

Section 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the laws be faithfully executed. (Emphasis supplied). As correctly pointed out by the respondents, the allocation of power in the three principal branches of government is a grant of all powers inherent in them. The Presidents power to conduct investigations to aid him in ensuring the faithful execution of laws in this case, fundamental laws on public accountability and transparency is inherent in the Presidents powers as the Chief Executive. That the authority of the President to conduct investigations and to create bodies to execute this power is not explicitly mentioned in the Constitution or in statutes does not mean that he is bereft of such authority.51 As explained in the landmark case of Marcos v. Manglapus:52 x x x. The 1987 Constitution, however, brought back the presidential system of government and restored the separation of legislative, executive and judicial powers by their actual distribution among three distinct branches of government with provision for checks and balances. It would not be accurate, however, to state that "executive power" is the power to enforce the laws, for the President is head of state as well as head of government and whatever powers inhere in such positions pertain to the office unless the Constitution itself withholds it. Furthermore, the Constitution itself provides that the execution of the laws is only one of the powers of the President. It also grants the President other powers that do not involve the execution of any provision of law, e.g., his power over the country's foreign relations. On these premises, we hold the view that although the 1987 Constitution imposes limitations on the exercise of specific powers of the President, it maintains intact what is traditionally considered as within the scope of "executive power." Corollarily, the powers of the President cannot be said to be limited only to the specific powers enumerated in the Constitution. In other words, executive power is more than the sum of specific powers so enumerated. It has been advanced that whatever power inherent in the government that is neither legislative nor judicial has to be executive. x x x. Indeed, the Executive is given much leeway in ensuring that our laws are faithfully executed. As stated above, the powers of the President are not limited to those specific powers under the Constitution.53 One of the recognized powers of the President granted pursuant to this constitutionally-mandated duty is the power to create ad hoc committees. This flows from the obvious need to ascertain facts and determine if laws have been faithfully executed. Thus, in Department of Health v. Camposano,54 the authority of the President to issue Administrative Order No. 298, creating an investigative committee to look into the administrative charges filed against the employees of the Department of Health for the anomalous purchase of medicines was upheld. In said case, it was ruled: The Chief Executives power to create the Ad hoc Investigating Committee cannot be doubted. Having been constitutionally granted full control of the Executive Department, to which respondents belong, the President has the obligation to ensure that all executive officials and employees faithfully comply with the law. With AO 298 as mandate, the legality of the

investigation is sustained. Such validity is not affected by the fact that the investigating team and the PCAGC had the same composition, or that the former used the offices and facilities of the latter in conducting the inquiry. [Emphasis supplied] It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to allow an inquiry into matters which the President is entitled to know so that he can be properly advised and guided in the performance of his duties relative to the execution and enforcement of the laws of the land. And if history is to be revisited, this was also the objective of the investigative bodies created in the past like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo Commission and the Zenarosa Commission. There being no changes in the government structure, the Court is not inclined to declare such executive power as non-existent just because the direction of the political winds have changed. On the charge that Executive Order No. 1 transgresses the power of Congress to appropriate funds for the operation of a public office, suffice it to say that there will be no appropriation but only an allotment or allocations of existing funds already appropriated. Accordingly, there is no usurpation on the part of the Executive of the power of Congress to appropriate funds. Further, there is no need to specify the amount to be earmarked for the operation of the commission because, in the words of the Solicitor General, "whatever funds the Congress has provided for the Office of the President will be the very source of the funds for the commission."55 Moreover, since the amount that would be allocated to the PTC shall be subject to existing auditing rules and regulations, there is no impropriety in the funding. Power of the Truth Commission to Investigate The Presidents power to conduct investigations to ensure that laws are faithfully executed is well recognized. It flows from the faithful-execution clause of the Constitution under Article VII, Section 17 thereof.56 As the Chief Executive, the president represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has the authority to directly assume the functions of the executive department.57 Invoking this authority, the President constituted the PTC to primarily investigate reports of graft and corruption and to recommend the appropriate action. As previously stated, no quasi-judicial powers have been vested in the said body as it cannot adjudicate rights of persons who come before it. It has been said that "Quasi-judicial powers involve the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by law itself in enforcing and administering the same law."58 In simpler terms, judicial discretion is involved in the exercise of these quasi-judicial power, such that it is exclusively vested in the judiciary and must be clearly authorized by the legislature in the case of administrative agencies. The distinction between the power to investigate and the power to adjudicate was delineated by the Court in Cario v. Commission on Human Rights.59 Thus: "Investigate," commonly understood, means to examine, explore, inquire or delve or probe into, research on, study. The dictionary definition of "investigate" is "to observe or study closely:

inquire into systematically: "to search or inquire into: x x to subject to an official probe x x: to conduct an official inquiry." The purpose of investigation, of course, is to discover, to find out, to learn, obtain information. Nowhere included or intimated is the notion of settling, deciding or resolving a controversy involved in the facts inquired into by application of the law to the facts established by the inquiry. The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find out by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in turn described as "(a)n administrative function, the exercise of which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry, judicial or otherwise, for the discovery and collection of facts concerning a certain matter or matters." "Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine, resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and duties of the parties to a court case) on the merits of issues raised: x x to pass judgment on: settle judicially: x x act as judge." And "adjudge" means "to decide or rule upon as a judge or with judicial or quasi-judicial powers: x x to award or grant judicially in a case of controversy x x." In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or decree, or to sentence or condemn. x x. Implies a judicial determination of a fact, and the entry of a judgment." [Italics included. Citations Omitted] Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency or office. The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function. To be considered as such, the act of receiving evidence and arriving at factual conclusions in a controversy must be accompanied by the authority of applying the law to the factual conclusions to the end that the controversy may be decided or resolved authoritatively, finally and definitively, subject to appeals or modes of review as may be provided by law.60 Even respondents themselves admit that the commission is bereft of any quasi-judicial power.61 Contrary to petitioners apprehension, the PTC will not supplant the Ombudsman or the DOJ or erode their respective powers. If at all, the investigative function of the commission will complement those of the two offices. As pointed out by the Solicitor General, the recommendation to prosecute is but a consequence of the overall task of the commission to conduct a fact-finding investigation."62 The actual prosecution of suspected offenders, much less adjudication on the merits of the charges against them,63 is certainly not a function given to the commission. The phrase, "when in the course of its investigation," under Section 2(g), highlights this fact and gives credence to a contrary interpretation from that of the petitioners. The function of determining probable cause for the filing of the appropriate complaints before the courts remains to be with the DOJ and the Ombudsman.64

At any rate, the Ombudsmans power to investigate under R.A. No. 6770 is not exclusive but is shared with other similarly authorized government agencies. Thus, in the case of Ombudsman v. Galicia,65 it was written: This power of investigation granted to the Ombudsman by the 1987 Constitution and The Ombudsman Act is not exclusive but is shared with other similarly authorized government agencies such as the PCGG and judges of municipal trial courts and municipal circuit trial courts. The power to conduct preliminary investigation on charges against public employees and officials is likewise concurrently shared with the Department of Justice. Despite the passage of the Local Government Code in 1991, the Ombudsman retains concurrent jurisdiction with the Office of the President and the local Sanggunians to investigate complaints against local elective officials. [Emphasis supplied]. Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to investigate criminal cases under Section 15 (1) of R.A. No. 6770, which states: (1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the exercise of its primary jurisdiction, it may take over, at any stage, from any investigatory agency of government, the investigation of such cases. [Emphases supplied] The act of investigation by the Ombudsman as enunciated above contemplates the conduct of a preliminary investigation or the determination of the existence of probable cause. This is categorically out of the PTCs sphere of functions. Its power to investigate is limited to obtaining facts so that it can advise and guide the President in the performance of his duties relative to the execution and enforcement of the laws of the land. In this regard, the PTC commits no act of usurpation of the Ombudsmans primordial duties. The same holds true with respect to the DOJ. Its authority under Section 3 (2), Chapter 1, Title III, Book IV in the Revised Administrative Code is by no means exclusive and, thus, can be shared with a body likewise tasked to investigate the commission of crimes. Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the PTC are to be accorded conclusiveness. Much like its predecessors, the Davide Commission, the Feliciano Commission and the Zenarosa Commission, its findings would, at best, be recommendatory in nature. And being so, the Ombudsman and the DOJ have a wider degree of latitude to decide whether or not to reject the recommendation. These offices, therefore, are not deprived of their mandated duties but will instead be aided by the reports of the PTC for possible indictments for violations of graft laws. Violation of the Equal Protection Clause Although the purpose of the Truth Commission falls within the investigative power of the President, the Court finds difficulty in upholding the constitutionality of Executive Order No. 1

in view of its apparent transgression of the equal protection clause enshrined in Section 1, Article III (Bill of Rights) of the 1987 Constitution. Section 1 reads: Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. The petitioners assail Executive Order No. 1 because it is violative of this constitutional safeguard. They contend that it does not apply equally to all members of the same class such that the intent of singling out the "previous administration" as its sole object makes the PTC an "adventure in partisan hostility."66 Thus, in order to be accorded with validity, the commission must also cover reports of graft and corruption in virtually all administrations previous to that of former President Arroyo.67 The petitioners argue that the search for truth behind the reported cases of graft and corruption must encompass acts committed not only during the administration of former President Arroyo but also during prior administrations where the "same magnitude of controversies and anomalies"68 were reported to have been committed against the Filipino people. They assail the classification formulated by the respondents as it does not fall under the recognized exceptions because first, "there is no substantial distinction between the group of officials targeted for investigation by Executive Order No. 1 and other groups or persons who abused their public office for personal gain; and second, the selective classification is not germane to the purpose of Executive Order No. 1 to end corruption."69 In order to attain constitutional permission, the petitioners advocate that the commission should deal with "graft and grafters prior and subsequent to the Arroyo administration with the strong arm of the law with equal force."70 Position of respondents According to respondents, while Executive Order No. 1 identifies the "previous administration" as the initial subject of the investigation, following Section 17 thereof, the PTC will not confine itself to cases of large scale graft and corruption solely during the said administration.71 Assuming arguendo that the commission would confine its proceedings to officials of the previous administration, the petitioners argue that no offense is committed against the equal protection clause for "the segregation of the transactions of public officers during the previous administration as possible subjects of investigation is a valid classification based on substantial distinctions and is germane to the evils which the Executive Order seeks to correct."72 To distinguish the Arroyo administration from past administrations, it recited the following: First. E.O. No. 1 was issued in view of widespread reports of large scale graft and corruption in the previous administration which have eroded public confidence in public institutions. There is, therefore, an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter others from committing the evil, restore the peoples faith and confidence in the Government and in their public servants.

Second. The segregation of the preceding administration as the object of fact-finding is warranted by the reality that unlike with administrations long gone, the current administration will most likely bear the immediate consequence of the policies of the previous administration. Third. The classification of the previous administration as a separate class for investigation lies in the reality that the evidence of possible criminal activity, the evidence that could lead to recovery of public monies illegally dissipated, the policy lessons to be learned to ensure that anticorruption laws are faithfully executed, are more easily established in the regime that immediately precede the current administration. Fourth. Many administrations subject the transactions of their predecessors to investigations to provide closure to issues that are pivotal to national life or even as a routine measure of due diligence and good housekeeping by a nascent administration like the Presidential Commission on Good Government (PCGG), created by the late President Corazon C. Aquino under Executive Order No. 1 to pursue the recovery of ill-gotten wealth of her predecessor former President Ferdinand Marcos and his cronies, and the Saguisag Commission created by former President Joseph Estrada under Administrative Order No, 53, to form an ad-hoc and independent citizens committee to investigate all the facts and circumstances surrounding "Philippine Centennial projects" of his predecessor, former President Fidel V. Ramos.73 [Emphases supplied] Concept of the Equal Protection Clause One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section 1, Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide for a more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.74 "According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed."75 It "requires public bodies and institutions to treat similarly situated individuals in a similar manner."76 "The purpose of the equal protection clause is to secure every person within a states jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statue or by its improper execution through the states duly constituted authorities."77 "In other words, the concept of equal justice under the law requires the state to govern impartially, and it may not draw distinctions between individuals solely on differences that are irrelevant to a legitimate governmental objective."78 The equal protection clause is aimed at all official state actions, not just those of the legislature.79 Its inhibitions cover all the departments of the government including the political and executive departments, and extend to all actions of a state denying equal protection of the laws, through whatever agency or whatever guise is taken. 80

It, however, does not require the universal application of the laws to all persons or things without distinction. What it simply requires is equality among equals as determined according to a valid classification. Indeed, the equal protection clause permits classification. Such classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1) The classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to existing conditions only; and (4) It applies equally to all members of the same class.81 "Superficial differences do not make for a valid classification."82 For a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to the class.83 "The classification will be regarded as invalid if all the members of the class are not similarly treated, both as to rights conferred and obligations imposed. It is not necessary that the classification be made with absolute symmetry, in the sense that the members of the class should possess the same characteristics in equal degree. Substantial similarity will suffice; and as long as this is achieved, all those covered by the classification are to be treated equally. The mere fact that an individual belonging to a class differs from the other members, as long as that class is substantially distinguishable from all others, does not justify the non-application of the law to him."84 The classification must not be based on existing circumstances only, or so constituted as to preclude addition to the number included in the class. It must be of such a nature as to embrace all those who may thereafter be in similar circumstances and conditions. It must not leave out or "underinclude" those that should otherwise fall into a certain classification. As elucidated in Victoriano v. Elizalde Rope Workers' Union85 and reiterated in a long line of cases,86 The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which are different in fact be treated in law as though they were the same. The equal protection clause does not forbid discrimination as to things that are different. It does not prohibit legislation which is limited either in the object to which it is directed or by the territory within which it is to operate. The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of a valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. This Court

has held that the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary. [Citations omitted] Applying these precepts to this case, Executive Order No. 1 should be struck down as violative of the equal protection clause. The clear mandate of the envisioned truth commission is to investigate and find out the truth "concerning the reported cases of graft and corruption during the previous administration"87 only. The intent to single out the previous administration is plain, patent and manifest. Mention of it has been made in at least three portions of the questioned executive order. Specifically, these are: WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and secure justice for all; SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration; and thereafter recommend the appropriate action or measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor. SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their coprincipals, accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and recommendations to the President, Congress and the Ombudsman. [Emphases supplied] In this regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that is, a class of past administrations. It is not a class of its own. Not to include past administrations similarly situated constitutes arbitrariness which the equal protection clause cannot sanction. Such discriminating differentiation clearly reverberates to label the commission as a vehicle for vindictiveness and selective retribution. Though the OSG enumerates several differences between the Arroyo administration and other past administrations, these distinctions are not substantial enough to merit the restriction of the investigation to the "previous administration" only. The reports of widespread corruption in the Arroyo administration cannot be taken as basis for distinguishing said administration from earlier administrations which were also blemished by similar widespread reports of impropriety. They are not inherent in, and do not inure solely to, the Arroyo administration. As Justice Isagani Cruz put it, "Superficial differences do not make for a valid classification."88

The public needs to be enlightened why Executive Order No. 1 chooses to limit the scope of the intended investigation to the previous administration only. The OSG ventures to opine that "to include other past administrations, at this point, may unnecessarily overburden the commission and lead it to lose its effectiveness."89 The reason given is specious. It is without doubt irrelevant to the legitimate and noble objective of the PTC to stamp out or "end corruption and the evil it breeds."90 The probability that there would be difficulty in unearthing evidence or that the earlier reports involving the earlier administrations were already inquired into is beside the point. Obviously, deceased presidents and cases which have already prescribed can no longer be the subjects of inquiry by the PTC. Neither is the PTC expected to conduct simultaneous investigations of previous administrations, given the bodys limited time and resources. "The law does not require the impossible" (Lex non cogit ad impossibilia).91 Given the foregoing physical and legal impossibility, the Court logically recognizes the unfeasibility of investigating almost a centurys worth of graft cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary classification. The PTC, to be true to its mandate of searching for the truth, must not exclude the other past administrations. The PTC must, at least, have the authority to investigate all past administrations. While reasonable prioritization is permitted, it should not be arbitrary lest it be struck down for being unconstitutional. In the often quoted language of Yick Wo v. Hopkins,92 Though the law itself be fair on its face and impartial in appearance, yet, if applied and administered by public authority with an evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the constitution. [Emphasis supplied] It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The Court, however, is of the considered view that although its focus is restricted, the constitutional guarantee of equal protection under the laws should not in any way be circumvented. The Constitution is the fundamental and paramount law of the nation to which all other laws must conform and in accordance with which all private rights determined and all public authority administered.93 Laws that do not conform to the Constitution should be stricken down for being unconstitutional.94 While the thrust of the PTC is specific, that is, for investigation of acts of graft and corruption, Executive Order No. 1, to survive, must be read together with the provisions of the Constitution. To exclude the earlier administrations in the guise of "substantial distinctions" would only confirm the petitioners lament that the subject executive order is only an "adventure in partisan hostility." In the case of US v. Cyprian,95 it was written: "A rather limited number of such classifications have routinely been held or assumed to be arbitrary; those include: race, national origin, gender, political activity or membership in a political party, union activity or membership in a labor union, or more generally the exercise of first amendment rights." To reiterate, in order for a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to the class.96 "Such a classification must

not be based on existing circumstances only, or so constituted as to preclude additions to the number included within a class, but must be of such a nature as to embrace all those who may thereafter be in similar circumstances and conditions. Furthermore, all who are in situations and circumstances which are relative to the discriminatory legislation and which are indistinguishable from those of the members of the class must be brought under the influence of the law and treated by it in the same way as are the members of the class."97 The Court is not unaware that "mere underinclusiveness is not fatal to the validity of a law under the equal protection clause."98 "Legislation is not unconstitutional merely because it is not allembracing and does not include all the evils within its reach."99 It has been written that a regulation challenged under the equal protection clause is not devoid of a rational predicate simply because it happens to be incomplete.100 In several instances, the underinclusiveness was not considered a valid reason to strike down a law or regulation where the purpose can be attained in future legislations or regulations. These cases refer to the "step by step" process.101 "With regard to equal protection claims, a legislature does not run the risk of losing the entire remedial scheme simply because it fails, through inadvertence or otherwise, to cover every evil that might conceivably have been attacked."102 In Executive Order No. 1, however, there is no inadvertence. That the previous administration was picked out was deliberate and intentional as can be gleaned from the fact that it was underscored at least three times in the assailed executive order. It must be noted that Executive Order No. 1 does not even mention any particular act, event or report to be focused on unlike the investigative commissions created in the past. "The equal protection clause is violated by purposeful and intentional discrimination."103 To disprove petitioners contention that there is deliberate discrimination, the OSG clarifies that the commission does not only confine itself to cases of large scale graft and corruption committed during the previous administration.104 The OSG points to Section 17 of Executive Order No. 1, which provides: SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order. The Court is not convinced. Although Section 17 allows the President the discretion to expand the scope of investigations of the PTC so as to include the acts of graft and corruption committed in other past administrations, it does not guarantee that they would be covered in the future. Such expanded mandate of the commission will still depend on the whim and caprice of the President. If he would decide not to include them, the section would then be meaningless. This will only fortify the fears of the petitioners that the Executive Order No. 1 was "crafted to tailor-fit the prosecution of officials and personalities of the Arroyo administration."105 The Court tried to seek guidance from the pronouncement in the case of Virata v. Sandiganbayan,106 that the "PCGG Charter (composed of Executive Orders Nos. 1, 2 and 14)

does not violate the equal protection clause." The decision, however, was devoid of any discussion on how such conclusory statement was arrived at, the principal issue in said case being only the sufficiency of a cause of action. A final word The issue that seems to take center stage at present is - whether or not the Supreme Court, in the exercise of its constitutionally mandated power of Judicial Review with respect to recent initiatives of the legislature and the executive department, is exercising undue interference. Is the Highest Tribunal, which is expected to be the protector of the Constitution, itself guilty of violating fundamental tenets like the doctrine of separation of powers? Time and again, this issue has been addressed by the Court, but it seems that the present political situation calls for it to once again explain the legal basis of its action lest it continually be accused of being a hindrance to the nations thrust to progress. The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution, is vested with Judicial Power that "includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave of abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government." Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which is the power to declare a treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation unconstitutional. This power also includes the duty to rule on the constitutionality of the application, or operation of presidential decrees, proclamations, orders, instructions, ordinances, and other regulations. These provisions, however, have been fertile grounds of conflict between the Supreme Court, on one hand, and the two co-equal bodies of government, on the other. Many times the Court has been accused of asserting superiority over the other departments. To answer this accusation, the words of Justice Laurel would be a good source of enlightenment, to wit: "And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them."107 Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a co-equal body but rather simply making sure that any act of government is done in consonance with the authorities and rights allocated to it by the Constitution. And, if after said review, the Court finds no constitutional violations of any sort, then, it has no more authority of proscribing the actions under review. Otherwise, the Court will not be deterred to pronounce said act as void and unconstitutional. It cannot be denied that most government actions are inspired with noble intentions, all geared towards the betterment of the nation and its people. But then again, it is important to remember

this ethical principle: "The end does not justify the means." No matter how noble and worthy of admiration the purpose of an act, but if the means to be employed in accomplishing it is simply irreconcilable with constitutional parameters, then it cannot still be allowed.108 The Court cannot just turn a blind eye and simply let it pass. It will continue to uphold the Constitution and its enshrined principles. "The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be allowed to sap its strength nor greed for power debase its rectitude."109 Lest it be misunderstood, this is not the death knell for a truth commission as nobly envisioned by the present administration. Perhaps a revision of the executive issuance so as to include the earlier past administrations would allow it to pass the test of reasonableness and not be an affront to the Constitution. Of all the branches of the government, it is the judiciary which is the most interested in knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment. It must, however, be emphasized that the search for the truth must be within constitutional bounds for "ours is still a government of laws and not of men."110 WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared UNCONSTITUTIONAL insofar as it is violative of the equal protection clause of the Constitution. As also prayed for, the respondents are hereby ordered to cease and desist from carrying out the provisions of Executive Order No. 1. SO ORDERED. JOSE CATRAL MENDOZA Associate Justice

G.R. No. 155650

July 20, 2006

MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner, vs. COURT OF APPEALS, CITY OF PARAAQUE, CITY MAYOR OF PARAAQUE, SANGGUNIANG PANGLUNGSOD NG PARAAQUE, CITY ASSESSOR OF PARAAQUE, and CITY TREASURER OF PARAAQUE, respondents. DECISION CARPIO, J.: The Antecedents Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport (NAIA) Complex in Paraaque City under Executive Order No. 903, otherwise known as the Revised Charter of the Manila International Airport Authority ("MIAA Charter"). Executive Order No. 903 was issued on 21 July 1983 by then President Ferdinand E. Marcos. Subsequently, Executive Order Nos. 9091 and 2982 amended the MIAA Charter. As operator of the international airport, MIAA administers the land, improvements and equipment within the NAIA Complex. The MIAA Charter transferred to MIAA approximately 600 hectares of land,3 including the runways and buildings ("Airport Lands and Buildings") then under the Bureau of Air Transportation.4 The MIAA Charter further provides that no portion of the land transferred to MIAA shall be disposed of through sale or any other mode unless specifically approved by the President of the Philippines.5 On 21 March 1997, the Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061. The OGCC opined that the Local Government Code of 1991 withdrew the exemption from real estate tax granted to MIAA under Section 21 of the MIAA Charter. Thus, MIAA negotiated with respondent City of Paraaque to pay the real estate tax imposed by the City. MIAA then paid some of the real estate tax already due. On 28 June 2001, MIAA received Final Notices of Real Estate Tax Delinquency from the City of Paraaque for the taxable years 1992 to 2001. MIAA's real estate tax delinquency is broken down as follows: TAX DECLARATION E-016-01370 E-016-01374 E-016-01375 E-016-01376 E-016-01377 TAXABLE YEAR 1992-2001 1992-2001 1992-2001 1992-2001 1992-2001 TAX DUE 19,558,160.00 111,689,424.90 20,276,058.00 58,144,028.00 18,134,614.65 PENALTY 11,201,083.20 68,149,479.59 12,371,832.00 35,477,712.00 11,065,188.59 TOTAL 30,789,243.20 179,838,904.49 32,647,890.00 93,621,740.00 29,199,803.24

E-016-01378 E-016-01379 E-016-01380 *E-016-013-85 *E-016-01387 *E-016-01396 GRAND TOTAL

1992-2001 1992-2001 1992-2001 1998-2001 1998-2001 1998-2001

111,107,950.40 4,322,340.00 7,776,436.00 6,444,810.00 34,876,800.00 75,240.00

67,794,681.59 2,637,360.00 4,744,944.00 2,900,164.50 5,694,560.00 33,858.00

178,902,631.99 6,959,700.00 12,521,380.00 9,344,974.50 50,571,360.00 109,098.00 P 624,506,725.42

P392,435,861.95 P232,070,863.47

1992-1997 RPT was paid on Dec. 24, 1997 as per O.R.#9476102 for P4,207,028.75 #9476101 for P28,676,480.00 #9476103 for P49,115.006 On 17 July 2001, the City of Paraaque, through its City Treasurer, issued notices of levy and warrants of levy on the Airport Lands and Buildings. The Mayor of the City of Paraaque threatened to sell at public auction the Airport Lands and Buildings should MIAA fail to pay the real estate tax delinquency. MIAA thus sought a clarification of OGCC Opinion No. 061. On 9 August 2001, the OGCC issued Opinion No. 147 clarifying OGCC Opinion No. 061. The OGCC pointed out that Section 206 of the Local Government Code requires persons exempt from real estate tax to show proof of exemption. The OGCC opined that Section 21 of the MIAA Charter is the proof that MIAA is exempt from real estate tax. On 1 October 2001, MIAA filed with the Court of Appeals an original petition for prohibition and injunction, with prayer for preliminary injunction or temporary restraining order. The petition sought to restrain the City of Paraaque from imposing real estate tax on, levying against, and auctioning for public sale the Airport Lands and Buildings. The petition was docketed as CA-G.R. SP No. 66878. On 5 October 2001, the Court of Appeals dismissed the petition because MIAA filed it beyond the 60-day reglementary period. The Court of Appeals also denied on 27 September 2002 MIAA's motion for reconsideration and supplemental motion for reconsideration. Hence, MIAA filed on 5 December 2002 the present petition for review.7 Meanwhile, in January 2003, the City of Paraaque posted notices of auction sale at the Barangay Halls of Barangays Vitalez, Sto. Nio, and Tambo, Paraaque City; in the public market of Barangay La Huerta; and in the main lobby of the Paraaque City Hall. The City of Paraaque published the notices in the 3 and 10 January 2003 issues of the Philippine Daily Inquirer, a newspaper of general circulation in the Philippines. The notices announced the public auction sale of the Airport Lands and Buildings to the highest bidder on 7 February 2003, 10:00 a.m., at the Legislative Session Hall Building of Paraaque City.

A day before the public auction, or on 6 February 2003, at 5:10 p.m., MIAA filed before this Court an Urgent Ex-Parte and Reiteratory Motion for the Issuance of a Temporary Restraining Order. The motion sought to restrain respondents the City of Paraaque, City Mayor of Paraaque, Sangguniang Panglungsod ng Paraaque, City Treasurer of Paraaque, and the City Assessor of Paraaque ("respondents") from auctioning the Airport Lands and Buildings. On 7 February 2003, this Court issued a temporary restraining order (TRO) effective immediately. The Court ordered respondents to cease and desist from selling at public auction the Airport Lands and Buildings. Respondents received the TRO on the same day that the Court issued it. However, respondents received the TRO only at 1:25 p.m. or three hours after the conclusion of the public auction. On 10 February 2003, this Court issued a Resolution confirming nunc pro tunc the TRO. On 29 March 2005, the Court heard the parties in oral arguments. In compliance with the directive issued during the hearing, MIAA, respondent City of Paraaque, and the Solicitor General subsequently submitted their respective Memoranda. MIAA admits that the MIAA Charter has placed the title to the Airport Lands and Buildings in the name of MIAA. However, MIAA points out that it cannot claim ownership over these properties since the real owner of the Airport Lands and Buildings is the Republic of the Philippines. The MIAA Charter mandates MIAA to devote the Airport Lands and Buildings for the benefit of the general public. Since the Airport Lands and Buildings are devoted to public use and public service, the ownership of these properties remains with the State. The Airport Lands and Buildings are thus inalienable and are not subject to real estate tax by local governments. MIAA also points out that Section 21 of the MIAA Charter specifically exempts MIAA from the payment of real estate tax. MIAA insists that it is also exempt from real estate tax under Section 234 of the Local Government Code because the Airport Lands and Buildings are owned by the Republic. To justify the exemption, MIAA invokes the principle that the government cannot tax itself. MIAA points out that the reason for tax exemption of public property is that its taxation would not inure to any public advantage, since in such a case the tax debtor is also the tax creditor. Respondents invoke Section 193 of the Local Government Code, which expressly withdrew the tax exemption privileges of "government-owned and-controlled corporations" upon the effectivity of the Local Government Code. Respondents also argue that a basic rule of statutory construction is that the express mention of one person, thing, or act excludes all others. An international airport is not among the exceptions mentioned in Section 193 of the Local Government Code. Thus, respondents assert that MIAA cannot claim that the Airport Lands and Buildings are exempt from real estate tax. Respondents also cite the ruling of this Court in Mactan International Airport v. Marcos8 where we held that the Local Government Code has withdrawn the exemption from real estate tax granted to international airports. Respondents further argue that since MIAA has already paid

some of the real estate tax assessments, it is now estopped from claiming that the Airport Lands and Buildings are exempt from real estate tax. The Issue This petition raises the threshold issue of whether the Airport Lands and Buildings of MIAA are exempt from real estate tax under existing laws. If so exempt, then the real estate tax assessments issued by the City of Paraaque, and all proceedings taken pursuant to such assessments, are void. In such event, the other issues raised in this petition become moot. The Court's Ruling We rule that MIAA's Airport Lands and Buildings are exempt from real estate tax imposed by local governments. First, MIAA is not a government-owned or controlled corporation but an instrumentality of the National Government and thus exempt from local taxation. Second, the real properties of MIAA are owned by the Republic of the Philippines and thus exempt from real estate tax. 1. MIAA is Not a Government-Owned or Controlled Corporation Respondents argue that MIAA, being a government-owned or controlled corporation, is not exempt from real estate tax. Respondents claim that the deletion of the phrase "any governmentowned or controlled so exempt by its charter" in Section 234(e) of the Local Government Code withdrew the real estate tax exemption of government-owned or controlled corporations. The deleted phrase appeared in Section 40(a) of the 1974 Real Property Tax Code enumerating the entities exempt from real estate tax. There is no dispute that a government-owned or controlled corporation is not exempt from real estate tax. However, MIAA is not a government-owned or controlled corporation. Section 2(13) of the Introductory Provisions of the Administrative Code of 1987 defines a government-owned or controlled corporation as follows: SEC. 2. General Terms Defined. x x x x (13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock: x x x. (Emphasis supplied) A government-owned or controlled corporation must be "organized as a stock or non-stock corporation." MIAA is not organized as a stock or non-stock corporation. MIAA is not a stock corporation because it has no capital stock divided into shares. MIAA has no stockholders or voting shares. Section 10 of the MIAA Charter9 provides:

SECTION 10. Capital. The capital of the Authority to be contributed by the National Government shall be increased from Two and One-half Billion (P2,500,000,000.00) Pesos to Ten Billion (P10,000,000,000.00) Pesos to consist of: (a) The value of fixed assets including airport facilities, runways and equipment and such other properties, movable and immovable[,] which may be contributed by the National Government or transferred by it from any of its agencies, the valuation of which shall be determined jointly with the Department of Budget and Management and the Commission on Audit on the date of such contribution or transfer after making due allowances for depreciation and other deductions taking into account the loans and other liabilities of the Authority at the time of the takeover of the assets and other properties; (b) That the amount of P605 million as of December 31, 1986 representing about seventy percentum (70%) of the unremitted share of the National Government from 1983 to 1986 to be remitted to the National Treasury as provided for in Section 11 of E. O. No. 903 as amended, shall be converted into the equity of the National Government in the Authority. Thereafter, the Government contribution to the capital of the Authority shall be provided in the General Appropriations Act. Clearly, under its Charter, MIAA does not have capital stock that is divided into shares. Section 3 of the Corporation Code10 defines a stock corporation as one whose "capital stock is divided into shares and x x x authorized to distribute to the holders of such shares dividends x x x." MIAA has capital but it is not divided into shares of stock. MIAA has no stockholders or voting shares. Hence, MIAA is not a stock corporation. MIAA is also not a non-stock corporation because it has no members. Section 87 of the Corporation Code defines a non-stock corporation as "one where no part of its income is distributable as dividends to its members, trustees or officers." A non-stock corporation must have members. Even if we assume that the Government is considered as the sole member of MIAA, this will not make MIAA a non-stock corporation. Non-stock corporations cannot distribute any part of their income to their members. Section 11 of the MIAA Charter mandates MIAA to remit 20% of its annual gross operating income to the National Treasury.11 This prevents MIAA from qualifying as a non-stock corporation. Section 88 of the Corporation Code provides that non-stock corporations are "organized for charitable, religious, educational, professional, cultural, recreational, fraternal, literary, scientific, social, civil service, or similar purposes, like trade, industry, agriculture and like chambers." MIAA is not organized for any of these purposes. MIAA, a public utility, is organized to operate an international and domestic airport for public use. Since MIAA is neither a stock nor a non-stock corporation, MIAA does not qualify as a government-owned or controlled corporation. What then is the legal status of MIAA within the National Government?

MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions. MIAA is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers. Section 2(10) of the Introductory Provisions of the Administrative Code defines a government "instrumentality" as follows: SEC. 2. General Terms Defined. x x x x (10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. x x x (Emphasis supplied) When the law vests in a government instrumentality corporate powers, the instrumentality does not become a corporation. Unless the government instrumentality is organized as a stock or nonstock corporation, it remains a government instrumentality exercising not only governmental but also corporate powers. Thus, MIAA exercises the governmental powers of eminent domain,12 police authority13 and the levying of fees and charges.14 At the same time, MIAA exercises "all the powers of a corporation under the Corporation Law, insofar as these powers are not inconsistent with the provisions of this Executive Order."15 Likewise, when the law makes a government instrumentality operationally autonomous, the instrumentality remains part of the National Government machinery although not integrated with the department framework. The MIAA Charter expressly states that transforming MIAA into a "separate and autonomous body"16 will make its operation more "financially viable."17 Many government instrumentalities are vested with corporate powers but they do not become stock or non-stock corporations, which is a necessary condition before an agency or instrumentality is deemed a government-owned or controlled corporation. Examples are the Mactan International Airport Authority, the Philippine Ports Authority, the University of the Philippines and Bangko Sentral ng Pilipinas. All these government instrumentalities exercise corporate powers but they are not organized as stock or non-stock corporations as required by Section 2(13) of the Introductory Provisions of the Administrative Code. These government instrumentalities are sometimes loosely called government corporate entities. However, they are not government-owned or controlled corporations in the strict sense as understood under the Administrative Code, which is the governing law defining the legal relationship and status of government entities. A government instrumentality like MIAA falls under Section 133(o) of the Local Government Code, which states: SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: xxxx

(o) Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units.(Emphasis and underscoring supplied) Section 133(o) recognizes the basic principle that local governments cannot tax the national government, which historically merely delegated to local governments the power to tax. While the 1987 Constitution now includes taxation as one of the powers of local governments, local governments may only exercise such power "subject to such guidelines and limitations as the Congress may provide."18 When local governments invoke the power to tax on national government instrumentalities, such power is construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. Any doubt whether a person, article or activity is taxable is resolved against taxation. This rule applies with greater force when local governments seek to tax national government instrumentalities. Another rule is that a tax exemption is strictly construed against the taxpayer claiming the exemption. However, when Congress grants an exemption to a national government instrumentality from local taxation, such exemption is construed liberally in favor of the national government instrumentality. As this Court declared in Maceda v. Macaraig, Jr.: The reason for the rule does not apply in the case of exemptions running to the benefit of the government itself or its agencies. In such case the practical effect of an exemption is merely to reduce the amount of money that has to be handled by government in the course of its operations. For these reasons, provisions granting exemptions to government agencies may be construed liberally, in favor of non tax-liability of such agencies.19 There is, moreover, no point in national and local governments taxing each other, unless a sound and compelling policy requires such transfer of public funds from one government pocket to another. There is also no reason for local governments to tax national government instrumentalities for rendering essential public services to inhabitants of local governments. The only exception is when the legislature clearly intended to tax government instrumentalities for the delivery of essential public services for sound and compelling policy considerations. There must be express language in the law empowering local governments to tax national government instrumentalities. Any doubt whether such power exists is resolved against local governments. Thus, Section 133 of the Local Government Code states that "unless otherwise provided" in the Code, local governments cannot tax national government instrumentalities. As this Court held in Basco v. Philippine Amusements and Gaming Corporation: The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional laws enacted by Congress to carry into execution the powers vested in the federal government. (MC Culloch v. Maryland, 4 Wheat 316, 4 L Ed. 579)

This doctrine emanates from the "supremacy" of the National Government over local governments. "Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of power on the part of the States to touch, in that way (taxation) at least, the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or political subdivision can regulate a federal instrumentality in such a way as to prevent it from consummating its federal responsibilities, or even to seriously burden it in the accomplishment of them." (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied) Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool for regulation" (U.S. v. Sanchez, 340 US 42). The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which has the inherent power to wield it. 20 2. Airport Lands and Buildings of MIAA are Owned by the Republic a. Airport Lands and Buildings are of Public Dominion The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by the State or the Republic of the Philippines. The Civil Code provides: ARTICLE 419. Property is either of public dominion or of private ownership. ARTICLE 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (Emphasis supplied) ARTICLE 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property. ARTICLE 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, like "roads, canals, rivers, torrents, ports and bridges constructed by the State," are owned by the State. The term "ports" includes seaports and airports. The MIAA Airport

Lands and Buildings constitute a "port" constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus owned by the State or the Republic of the Philippines. The Airport Lands and Buildings are devoted to public use because they are used by the public for international and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character of the Airport Lands and Buildings as properties for public use. The operation by the government of a tollway does not change the character of the road as one for public use. Someone must pay for the maintenance of the road, either the public indirectly through the taxes they pay the government, or only those among the public who actually use the road through the toll fees they pay upon using the road. The tollway system is even a more efficient and equitable manner of taxing the public for the maintenance of public roads. The charging of fees to the public does not determine the character of the property whether it is of public dominion or not. Article 420 of the Civil Code defines property of public dominion as one "intended for public use." Even if the government collects toll fees, the road is still "intended for public use" if anyone can use the road under the same terms and conditions as the rest of the public. The charging of fees, the limitation on the kind of vehicles that can use the road, the speed restrictions and other conditions for the use of the road do not affect the public character of the road. The terminal fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute the bulk of the income that maintains the operations of MIAA. The collection of such fees does not change the character of MIAA as an airport for public use. Such fees are often termed user's tax. This means taxing those among the public who actually use a public facility instead of taxing all the public including those who never use the particular public facility. A user's tax is more equitable a principle of taxation mandated in the 1987 Constitution.21 The Airport Lands and Buildings of MIAA, which its Charter calls the "principal airport of the Philippines for both international and domestic air traffic,"22 are properties of public dominion because they are intended for public use. As properties of public dominion, they indisputably belong to the State or the Republic of the Philippines. b. Airport Lands and Buildings are Outside the Commerce of Man The Airport Lands and Buildings of MIAA are devoted to public use and thus are properties of public dominion. As properties of public dominion, the Airport Lands and Buildings are outside the commerce of man. The Court has ruled repeatedly that properties of public dominion are outside the commerce of man. As early as 1915, this Court already ruled in Municipality of Cavite v. Rojas that properties devoted to public use are outside the commerce of man, thus: According to article 344 of the Civil Code: "Property for public use in provinces and in towns comprises the provincial and town roads, the squares, streets, fountains, and public

waters, the promenades, and public works of general service supported by said towns or provinces." The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could not in 1907 withdraw or exclude from public use a portion thereof in order to lease it for the sole benefit of the defendant Hilaria Rojas. In leasing a portion of said plaza or public place to the defendant for private use the plaintiff municipality exceeded its authority in the exercise of its powers by executing a contract over a thing of which it could not dispose, nor is it empowered so to do. The Civil Code, article 1271, prescribes that everything which is not outside the commerce of man may be the object of a contract, and plazas and streets are outside of this commerce, as was decided by the supreme court of Spain in its decision of February 12, 1895, which says: "Communal things that cannot be sold because they are by their very nature outside of commerce are those for public use, such as the plazas, streets, common lands, rivers, fountains, etc." (Emphasis supplied) 23 Again in Espiritu v. Municipal Council, the Court declared that properties of public dominion are outside the commerce of man: xxx Town plazas are properties of public dominion, to be devoted to public use and to be made available to the public in general. They are outside the commerce of man and cannot be disposed of or even leased by the municipality to private parties. While in case of war or during an emergency, town plazas may be occupied temporarily by private individuals, as was done and as was tolerated by the Municipality of Pozorrubio, when the emergency has ceased, said temporary occupation or use must also cease, and the town officials should see to it that the town plazas should ever be kept open to the public and free from encumbrances or illegal private constructions.24 (Emphasis supplied) The Court has also ruled that property of public dominion, being outside the commerce of man, cannot be the subject of an auction sale.25 Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy on execution or auction sale of any property of public dominion is void for being contrary to public policy. Essential public services will stop if properties of public dominion are subject to encumbrances, foreclosures and auction sale. This will happen if the City of Paraaque can foreclose and compel the auction sale of the 600-hectare runway of the MIAA for non-payment of real estate tax. Before MIAA can encumber26 the Airport Lands and Buildings, the President must first withdraw from public use the Airport Lands and Buildings. Sections 83 and 88 of the Public Land Law or Commonwealth Act No. 141, which "remains to this day the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands,"27 provide:

SECTION 83. Upon the recommendation of the Secretary of Agriculture and Natural Resources, the President may designate by proclamation any tract or tracts of land of the public domain as reservations for the use of the Republic of the Philippines or of any of its branches, or of the inhabitants thereof, in accordance with regulations prescribed for this purposes, or for quasi-public uses or purposes when the public interest requires it, including reservations for highways, rights of way for railroads, hydraulic power sites, irrigation systems, communal pastures or lequas communales, public parks, public quarries, public fishponds, working men's village and other improvements for the public benefit. SECTION 88. The tract or tracts of land reserved under the provisions of Section eighty-three shall be non-alienable and shall not be subject to occupation, entry, sale, lease, or other disposition until again declared alienable under the provisions of this Act or by proclamation of the President. (Emphasis and underscoring supplied) Thus, unless the President issues a proclamation withdrawing the Airport Lands and Buildings from public use, these properties remain properties of public dominion and are inalienable. Since the Airport Lands and Buildings are inalienable in their present status as properties of public dominion, they are not subject to levy on execution or foreclosure sale. As long as the Airport Lands and Buildings are reserved for public use, their ownership remains with the State or the Republic of the Philippines. The authority of the President to reserve lands of the public domain for public use, and to withdraw such public use, is reiterated in Section 14, Chapter 4, Title I, Book III of the Administrative Code of 1987, which states: SEC. 14. Power to Reserve Lands of the Public and Private Domain of the Government. (1) The President shall have the power to reserve for settlement or public use, and for specific public purposes, any of the lands of the public domain, the use of which is not otherwise directed by law. The reserved land shall thereafter remain subject to the specific public purpose indicated until otherwise provided by law or proclamation; x x x x. (Emphasis supplied) There is no question, therefore, that unless the Airport Lands and Buildings are withdrawn by law or presidential proclamation from public use, they are properties of public dominion, owned by the Republic and outside the commerce of man. c. MIAA is a Mere Trustee of the Republic MIAA is merely holding title to the Airport Lands and Buildings in trust for the Republic. Section 48, Chapter 12, Book I of the Administrative Code allows instrumentalities like MIAA to hold title to real properties owned by the Republic, thus:

SEC. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: (1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless the authority therefor is expressly vested by law in another officer. (2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality. (Emphasis supplied) In MIAA's case, its status as a mere trustee of the Airport Lands and Buildings is clearer because even its executive head cannot sign the deed of conveyance on behalf of the Republic. Only the President of the Republic can sign such deed of conveyance.28 d. Transfer to MIAA was Meant to Implement a Reorganization The MIAA Charter, which is a law, transferred to MIAA the title to the Airport Lands and Buildings from the Bureau of Air Transportation of the Department of Transportation and Communications. The MIAA Charter provides: SECTION 3. Creation of the Manila International Airport Authority. x x x x The land where the Airport is presently located as well as the surrounding land area of approximately six hundred hectares, are hereby transferred, conveyed and assigned to the ownership and administration of the Authority, subject to existing rights, if any. The Bureau of Lands and other appropriate government agencies shall undertake an actual survey of the area transferred within one year from the promulgation of this Executive Order and the corresponding title to be issued in the name of the Authority. Any portion thereof shall not be disposed through sale or through any other mode unless specifically approved by the President of the Philippines. (Emphasis supplied) SECTION 22. Transfer of Existing Facilities and Intangible Assets. All existing public airport facilities, runways, lands, buildings and other property, movable or immovable, belonging to the Airport, and all assets, powers, rights, interests and privileges belonging to the Bureau of Air Transportation relating to airport works or air operations, including all equipment which are necessary for the operation of crash fire and rescue facilities, are hereby transferred to the Authority. (Emphasis supplied) SECTION 25. Abolition of the Manila International Airport as a Division in the Bureau of Air Transportation and Transitory Provisions. The Manila International Airport including the Manila Domestic Airport as a division under the Bureau of Air Transportation is hereby abolished. x x x x.

The MIAA Charter transferred the Airport Lands and Buildings to MIAA without the Republic receiving cash, promissory notes or even stock since MIAA is not a stock corporation. The whereas clauses of the MIAA Charter explain the rationale for the transfer of the Airport Lands and Buildings to MIAA, thus: WHEREAS, the Manila International Airport as the principal airport of the Philippines for both international and domestic air traffic, is required to provide standards of airport accommodation and service comparable with the best airports in the world; WHEREAS, domestic and other terminals, general aviation and other facilities, have to be upgraded to meet the current and future air traffic and other demands of aviation in Metro Manila; WHEREAS, a management and organization study has indicated that the objectives of providing high standards of accommodation and service within the context of a financially viable operation, will best be achieved by a separate and autonomous body; and WHEREAS, under Presidential Decree No. 1416, as amended by Presidential Decree No. 1772, the President of the Philippines is given continuing authority to reorganize the National Government, which authority includes the creation of new entities, agencies and instrumentalities of the Government[.] (Emphasis supplied) The transfer of the Airport Lands and Buildings from the Bureau of Air Transportation to MIAA was not meant to transfer beneficial ownership of these assets from the Republic to MIAA. The purpose was merely to reorganize a division in the Bureau of Air Transportation into a separate and autonomous body. The Republic remains the beneficial owner of the Airport Lands and Buildings. MIAA itself is owned solely by the Republic. No party claims any ownership rights over MIAA's assets adverse to the Republic. The MIAA Charter expressly provides that the Airport Lands and Buildings "shall not be disposed through sale or through any other mode unless specifically approved by the President of the Philippines." This only means that the Republic retained the beneficial ownership of the Airport Lands and Buildings because under Article 428 of the Civil Code, only the "owner has the right to x x x dispose of a thing." Since MIAA cannot dispose of the Airport Lands and Buildings, MIAA does not own the Airport Lands and Buildings. At any time, the President can transfer back to the Republic title to the Airport Lands and Buildings without the Republic paying MIAA any consideration. Under Section 3 of the MIAA Charter, the President is the only one who can authorize the sale or disposition of the Airport Lands and Buildings. This only confirms that the Airport Lands and Buildings belong to the Republic. e. Real Property Owned by the Republic is Not Taxable

Section 234(a) of the Local Government Code exempts from real estate tax any "[r]eal property owned by the Republic of the Philippines." Section 234(a) provides: SEC. 234. Exemptions from Real Property Tax. The following are exempted from payment of the real property tax: (a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person; x x x. (Emphasis supplied) This exemption should be read in relation with Section 133(o) of the same Code, which prohibits local governments from imposing "[t]axes, fees or charges of any kind on the National Government, its agencies and instrumentalities x x x." The real properties owned by the Republic are titled either in the name of the Republic itself or in the name of agencies or instrumentalities of the National Government. The Administrative Code allows real property owned by the Republic to be titled in the name of agencies or instrumentalities of the national government. Such real properties remain owned by the Republic and continue to be exempt from real estate tax. The Republic may grant the beneficial use of its real property to an agency or instrumentality of the national government. This happens when title of the real property is transferred to an agency or instrumentality even as the Republic remains the owner of the real property. Such arrangement does not result in the loss of the tax exemption. Section 234(a) of the Local Government Code states that real property owned by the Republic loses its tax exemption only if the "beneficial use thereof has been granted, for consideration or otherwise, to a taxable person." MIAA, as a government instrumentality, is not a taxable person under Section 133(o) of the Local Government Code. Thus, even if we assume that the Republic has granted to MIAA the beneficial use of the Airport Lands and Buildings, such fact does not make these real properties subject to real estate tax. However, portions of the Airport Lands and Buildings that MIAA leases to private entities are not exempt from real estate tax. For example, the land area occupied by hangars that MIAA leases to private corporations is subject to real estate tax. In such a case, MIAA has granted the beneficial use of such land area for a consideration to a taxable person and therefore such land area is subject to real estate tax. In Lung Center of the Philippines v. Quezon City, the Court ruled: Accordingly, we hold that the portions of the land leased to private entities as well as those parts of the hospital leased to private individuals are not exempt from such taxes. On the other hand, the portions of the land occupied by the hospital and portions of the hospital used for its patients, whether paying or non-paying, are exempt from real property taxes.29 3. Refutation of Arguments of Minority

The minority asserts that the MIAA is not exempt from real estate tax because Section 193 of the Local Government Code of 1991 withdrew the tax exemption of "all persons, whether natural or juridical" upon the effectivity of the Code. Section 193 provides: SEC. 193. Withdrawal of Tax Exemption Privileges Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions are hereby withdrawn upon effectivity of this Code. (Emphasis supplied) The minority states that MIAA is indisputably a juridical person. The minority argues that since the Local Government Code withdrew the tax exemption of all juridical persons, then MIAA is not exempt from real estate tax. Thus, the minority declares: It is evident from the quoted provisions of the Local Government Code that the withdrawn exemptions from realty tax cover not just GOCCs, but all persons. To repeat, the provisions lay down the explicit proposition that the withdrawal of realty tax exemption applies to all persons. The reference to or the inclusion of GOCCs is only clarificatory or illustrative of the explicit provision. The term "All persons" encompasses the two classes of persons recognized under our laws, natural and juridical persons. Obviously, MIAA is not a natural person. Thus, the determinative test is not just whether MIAA is a GOCC, but whether MIAA is a juridical person at all. (Emphasis and underscoring in the original) The minority posits that the "determinative test" whether MIAA is exempt from local taxation is its status whether MIAA is a juridical person or not. The minority also insists that "Sections 193 and 234 may be examined in isolation from Section 133(o) to ascertain MIAA's claim of exemption." The argument of the minority is fatally flawed. Section 193 of the Local Government Code expressly withdrew the tax exemption of all juridical persons "[u]nless otherwise provided in this Code." Now, Section 133(o) of the Local Government Code expressly provides otherwise, specifically prohibiting local governments from imposing any kind of tax on national government instrumentalities. Section 133(o) states: SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: xxxx (o) Taxes, fees or charges of any kinds on the National Government, its agencies and instrumentalities, and local government units. (Emphasis and underscoring supplied)

By express mandate of the Local Government Code, local governments cannot impose any kind of tax on national government instrumentalities like the MIAA. Local governments are devoid of power to tax the national government, its agencies and instrumentalities. The taxing powers of local governments do not extend to the national government, its agencies and instrumentalities, "[u]nless otherwise provided in this Code" as stated in the saving clause of Section 133. The saving clause refers to Section 234(a) on the exception to the exemption from real estate tax of real property owned by the Republic. The minority, however, theorizes that unless exempted in Section 193 itself, all juridical persons are subject to tax by local governments. The minority insists that the juridical persons exempt from local taxation are limited to the three classes of entities specifically enumerated as exempt in Section 193. Thus, the minority states: x x x Under Section 193, the exemption is limited to (a) local water districts; (b) cooperatives duly registered under Republic Act No. 6938; and (c) non-stock and nonprofit hospitals and educational institutions. It would be belaboring the obvious why the MIAA does not fall within any of the exempt entities under Section 193. (Emphasis supplied) The minority's theory directly contradicts and completely negates Section 133(o) of the Local Government Code. This theory will result in gross absurdities. It will make the national government, which itself is a juridical person, subject to tax by local governments since the national government is not included in the enumeration of exempt entities in Section 193. Under this theory, local governments can impose any kind of local tax, and not only real estate tax, on the national government. Under the minority's theory, many national government instrumentalities with juridical personalities will also be subject to any kind of local tax, and not only real estate tax. Some of the national government instrumentalities vested by law with juridical personalities are: Bangko Sentral ng Pilipinas,30 Philippine Rice Research Institute,31 Laguna Lake Development Authority,32 Fisheries Development Authority,33 Bases Conversion Development Authority,34 Philippine Ports Authority,35 Cagayan de Oro Port Authority,36 San Fernando Port Authority,37 Cebu Port Authority,38 and Philippine National Railways.39 The minority's theory violates Section 133(o) of the Local Government Code which expressly prohibits local governments from imposing any kind of tax on national government instrumentalities. Section 133(o) does not distinguish between national government instrumentalities with or without juridical personalities. Where the law does not distinguish, courts should not distinguish. Thus, Section 133(o) applies to all national government instrumentalities, with or without juridical personalities. The determinative test whether MIAA is exempt from local taxation is not whether MIAA is a juridical person, but whether it is a national government instrumentality under Section 133(o) of the Local Government Code. Section 133(o) is the specific provision of law prohibiting local governments from imposing any kind of tax on the national government, its agencies and instrumentalities.

Section 133 of the Local Government Code starts with the saving clause "[u]nless otherwise provided in this Code." This means that unless the Local Government Code grants an express authorization, local governments have no power to tax the national government, its agencies and instrumentalities. Clearly, the rule is local governments have no power to tax the national government, its agencies and instrumentalities. As an exception to this rule, local governments may tax the national government, its agencies and instrumentalities only if the Local Government Code expressly so provides. The saving clause in Section 133 refers to the exception to the exemption in Section 234(a) of the Code, which makes the national government subject to real estate tax when it gives the beneficial use of its real properties to a taxable entity. Section 234(a) of the Local Government Code provides: SEC. 234. Exemptions from Real Property Tax The following are exempted from payment of the real property tax: (a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person. x x x. (Emphasis supplied) Under Section 234(a), real property owned by the Republic is exempt from real estate tax. The exception to this exemption is when the government gives the beneficial use of the real property to a taxable entity. The exception to the exemption in Section 234(a) is the only instance when the national government, its agencies and instrumentalities are subject to any kind of tax by local governments. The exception to the exemption applies only to real estate tax and not to any other tax. The justification for the exception to the exemption is that the real property, although owned by the Republic, is not devoted to public use or public service but devoted to the private gain of a taxable person. The minority also argues that since Section 133 precedes Section 193 and 234 of the Local Government Code, the later provisions prevail over Section 133. Thus, the minority asserts: x x x Moreover, sequentially Section 133 antecedes Section 193 and 234. Following an accepted rule of construction, in case of conflict the subsequent provisions should prevail. Therefore, MIAA, as a juridical person, is subject to real property taxes, the general exemptions attaching to instrumentalities under Section 133(o) of the Local Government Code being qualified by Sections 193 and 234 of the same law. (Emphasis supplied) The minority assumes that there is an irreconcilable conflict between Section 133 on one hand, and Sections 193 and 234 on the other. No one has urged that there is such a conflict, much less has any one presenteda persuasive argument that there is such a conflict. The minority's

assumption of an irreconcilable conflict in the statutory provisions is an egregious error for two reasons. First, there is no conflict whatsoever between Sections 133 and 193 because Section 193 expressly admits its subordination to other provisions of the Code when Section 193 states "[u]nless otherwise provided in this Code." By its own words, Section 193 admits the superiority of other provisions of the Local Government Code that limit the exercise of the taxing power in Section 193. When a provision of law grants a power but withholds such power on certain matters, there is no conflict between the grant of power and the withholding of power. The grantee of the power simply cannot exercise the power on matters withheld from its power. Second, Section 133 is entitled "Common Limitations on the Taxing Powers of Local Government Units." Section 133 limits the grant to local governments of the power to tax, and not merely the exercise of a delegated power to tax. Section 133 states that the taxing powers of local governments "shall not extend to the levy" of any kind of tax on the national government, its agencies and instrumentalities. There is no clearer limitation on the taxing power than this. Since Section 133 prescribes the "common limitations" on the taxing powers of local governments, Section 133 logically prevails over Section 193 which grants local governments such taxing powers. By their very meaning and purpose, the "common limitations" on the taxing power prevail over the grant or exercise of the taxing power. If the taxing power of local governments in Section 193 prevails over the limitations on such taxing power in Section 133, then local governments can impose any kind of tax on the national government, its agencies and instrumentalities a gross absurdity. Local governments have no power to tax the national government, its agencies and instrumentalities, except as otherwise provided in the Local Government Code pursuant to the saving clause in Section 133 stating "[u]nless otherwise provided in this Code." This exception which is an exception to the exemption of the Republic from real estate tax imposed by local governments refers to Section 234(a) of the Code. The exception to the exemption in Section 234(a) subjects real property owned by the Republic, whether titled in the name of the national government, its agencies or instrumentalities, to real estate tax if the beneficial use of such property is given to a taxable entity. The minority also claims that the definition in the Administrative Code of the phrase "government-owned or controlled corporation" is not controlling. The minority points out that Section 2 of the Introductory Provisions of the Administrative Code admits that its definitions are not controlling when it provides: SEC. 2. General Terms Defined. Unless the specific words of the text, or the context as a whole, or a particular statute, shall require a different meaning: xxxx The minority then concludes that reliance on the Administrative Code definition is "flawed."

The minority's argument is a non sequitur. True, Section 2 of the Administrative Code recognizes that a statute may require a different meaning than that defined in the Administrative Code. However, this does not automatically mean that the definition in the Administrative Code does not apply to the Local Government Code. Section 2 of the Administrative Code clearly states that "unless the specific words x x x of a particular statute shall require a different meaning," the definition in Section 2 of the Administrative Code shall apply. Thus, unless there is specific language in the Local Government Code defining the phrase "government-owned or controlled corporation" differently from the definition in the Administrative Code, the definition in the Administrative Code prevails. The minority does not point to any provision in the Local Government Code defining the phrase "government-owned or controlled corporation" differently from the definition in the Administrative Code. Indeed, there is none. The Local Government Code is silent on the definition of the phrase "government-owned or controlled corporation." The Administrative Code, however, expressly defines the phrase "government-owned or controlled corporation." The inescapable conclusion is that the Administrative Code definition of the phrase "governmentowned or controlled corporation" applies to the Local Government Code. The third whereas clause of the Administrative Code states that the Code "incorporates in a unified document the major structural, functional and procedural principles and rules of governance." Thus, the Administrative Code is the governing law defining the status and relationship of government departments, bureaus, offices, agencies and instrumentalities. Unless a statute expressly provides for a different status and relationship for a specific government unit or entity, the provisions of the Administrative Code prevail. The minority also contends that the phrase "government-owned or controlled corporation" should apply only to corporations organized under the Corporation Code, the general incorporation law, and not to corporations created by special charters. The minority sees no reason why government corporations with special charters should have a capital stock. Thus, the minority declares: I submit that the definition of "government-owned or controlled corporations" under the Administrative Code refer to those corporations owned by the government or its instrumentalities which are created not by legislative enactment, but formed and organized under the Corporation Code through registration with the Securities and Exchange Commission. In short, these are GOCCs without original charters. xxxx It might as well be worth pointing out that there is no point in requiring a capital structure for GOCCs whose full ownership is limited by its charter to the State or Republic. Such GOCCs are not empowered to declare dividends or alienate their capital shares. The contention of the minority is seriously flawed. It is not in accord with the Constitution and existing legislations. It will also result in gross absurdities.

First, the Administrative Code definition of the phrase "government-owned or controlled corporation" does not distinguish between one incorporated under the Corporation Code or under a special charter. Where the law does not distinguish, courts should not distinguish. Second, Congress has created through special charters several government-owned corporations organized as stock corporations. Prime examples are the Land Bank of the Philippines and the Development Bank of the Philippines. The special charter40 of the Land Bank of the Philippines provides: SECTION 81. Capital. The authorized capital stock of the Bank shall be nine billion pesos, divided into seven hundred and eighty million common shares with a par value of ten pesos each, which shall be fully subscribed by the Government, and one hundred and twenty million preferred shares with a par value of ten pesos each, which shall be issued in accordance with the provisions of Sections seventy-seven and eighty-three of this Code. (Emphasis supplied) Likewise, the special charter41 of the Development Bank of the Philippines provides: SECTION 7. Authorized Capital Stock Par value. The capital stock of the Bank shall be Five Billion Pesos to be divided into Fifty Million common shares with par value of P100 per share. These shares are available for subscription by the National Government. Upon the effectivity of this Charter, the National Government shall subscribe to Twenty-Five Million common shares of stock worth Two Billion Five Hundred Million which shall be deemed paid for by the Government with the net asset values of the Bank remaining after the transfer of assets and liabilities as provided in Section 30 hereof. (Emphasis supplied) Other government-owned corporations organized as stock corporations under their special charters are the Philippine Crop Insurance Corporation,42 Philippine International Trading Corporation,43 and the Philippine National Bank44 before it was reorganized as a stock corporation under the Corporation Code. All these government-owned corporations organized under special charters as stock corporations are subject to real estate tax on real properties owned by them. To rule that they are not government-owned or controlled corporations because they are not registered with the Securities and Exchange Commission would remove them from the reach of Section 234 of the Local Government Code, thus exempting them from real estate tax. Third, the government-owned or controlled corporations created through special charters are those that meet the two conditions prescribed in Section 16, Article XII of the Constitution. The first condition is that the government-owned or controlled corporation must be established for the common good. The second condition is that the government-owned or controlled corporation must meet the test of economic viability. Section 16, Article XII of the 1987 Constitution provides: SEC. 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the

common good and subject to the test of economic viability. (Emphasis and underscoring supplied) The Constitution expressly authorizes the legislature to create "government-owned or controlled corporations" through special charters only if these entities are required to meet the twin conditions of common good and economic viability. In other words, Congress has no power to create government-owned or controlled corporations with special charters unless they are made to comply with the two conditions of common good and economic viability. The test of economic viability applies only to government-owned or controlled corporations that perform economic or commercial activities and need to compete in the market place. Being essentially economic vehicles of the State for the common good meaning for economic development purposes these government-owned or controlled corporations with special charters are usually organized as stock corporations just like ordinary private corporations. In contrast, government instrumentalities vested with corporate powers and performing governmental or public functions need not meet the test of economic viability. These instrumentalities perform essential public services for the common good, services that every modern State must provide its citizens. These instrumentalities need not be economically viable since the government may even subsidize their entire operations. These instrumentalities are not the "government-owned or controlled corporations" referred to in Section 16, Article XII of the 1987 Constitution. Thus, the Constitution imposes no limitation when the legislature creates government instrumentalities vested with corporate powers but performing essential governmental or public functions. Congress has plenary authority to create government instrumentalities vested with corporate powers provided these instrumentalities perform essential government functions or public services. However, when the legislature creates through special charters corporations that perform economic or commercial activities, such entities known as "government-owned or controlled corporations" must meet the test of economic viability because they compete in the market place. This is the situation of the Land Bank of the Philippines and the Development Bank of the Philippines and similar government-owned or controlled corporations, which derive their income to meet operating expenses solely from commercial transactions in competition with the private sector. The intent of the Constitution is to prevent the creation of government-owned or controlled corporations that cannot survive on their own in the market place and thus merely drain the public coffers. Commissioner Blas F. Ople, proponent of the test of economic viability, explained to the Constitutional Commission the purpose of this test, as follows: MR. OPLE: Madam President, the reason for this concern is really that when the government creates a corporation, there is a sense in which this corporation becomes exempt from the test of economic performance. We know what happened in the past. If a government corporation loses, then it makes its claim upon the taxpayers' money through new equity infusions from the government and what is always invoked is the common

good. That is the reason why this year, out of a budget of P115 billion for the entire government, about P28 billion of this will go into equity infusions to support a few government financial institutions. And this is all taxpayers' money which could have been relocated to agrarian reform, to social services like health and education, to augment the salaries of grossly underpaid public employees. And yet this is all going down the drain. Therefore, when we insert the phrase "ECONOMIC VIABILITY" together with the "common good," this becomes a restraint on future enthusiasts for state capitalism to excuse themselves from the responsibility of meeting the market test so that they become viable. And so, Madam President, I reiterate, for the committee's consideration and I am glad that I am joined in this proposal by Commissioner Foz, the insertion of the standard of "ECONOMIC VIABILITY OR THE ECONOMIC TEST," together with the common good.45 Father Joaquin G. Bernas, a leading member of the Constitutional Commission, explains in his textbook The 1987 Constitution of the Republic of the Philippines: A Commentary: The second sentence was added by the 1986 Constitutional Commission. The significant addition, however, is the phrase "in the interest of the common good and subject to the test of economic viability." The addition includes the ideas that they must show capacity to function efficiently in business and that they should not go into activities which the private sector can do better. Moreover, economic viability is more than financial viability but also includes capability to make profit and generate benefits not quantifiable in financial terms.46 (Emphasis supplied) Clearly, the test of economic viability does not apply to government entities vested with corporate powers and performing essential public services. The State is obligated to render essential public services regardless of the economic viability of providing such service. The noneconomic viability of rendering such essential public service does not excuse the State from withholding such essential services from the public. However, government-owned or controlled corporations with special charters, organized essentially for economic or commercial objectives, must meet the test of economic viability. These are the government-owned or controlled corporations that are usually organized under their special charters as stock corporations, like the Land Bank of the Philippines and the Development Bank of the Philippines. These are the government-owned or controlled corporations, along with government-owned or controlled corporations organized under the Corporation Code, that fall under the definition of "government-owned or controlled corporations" in Section 2(10) of the Administrative Code. The MIAA need not meet the test of economic viability because the legislature did not create MIAA to compete in the market place. MIAA does not compete in the market place because there is no competing international airport operated by the private sector. MIAA performs an essential public service as the primary domestic and international airport of the Philippines. The operation of an international airport requires the presence of personnel from the following government agencies:

1. The Bureau of Immigration and Deportation, to document the arrival and departure of passengers, screening out those without visas or travel documents, or those with hold departure orders; 2. The Bureau of Customs, to collect import duties or enforce the ban on prohibited importations; 3. The quarantine office of the Department of Health, to enforce health measures against the spread of infectious diseases into the country; 4. The Department of Agriculture, to enforce measures against the spread of plant and animal diseases into the country; 5. The Aviation Security Command of the Philippine National Police, to prevent the entry of terrorists and the escape of criminals, as well as to secure the airport premises from terrorist attack or seizure; 6. The Air Traffic Office of the Department of Transportation and Communications, to authorize aircraft to enter or leave Philippine airspace, as well as to land on, or take off from, the airport; and 7. The MIAA, to provide the proper premises such as runway and buildings for the government personnel, passengers, and airlines, and to manage the airport operations. All these agencies of government perform government functions essential to the operation of an international airport. MIAA performs an essential public service that every modern State must provide its citizens. MIAA derives its revenues principally from the mandatory fees and charges MIAA imposes on passengers and airlines. The terminal fees that MIAA charges every passenger are regulatory or administrative fees47 and not income from commercial transactions. MIAA falls under the definition of a government instrumentality under Section 2(10) of the Introductory Provisions of the Administrative Code, which provides: SEC. 2. General Terms Defined. x x x x (10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. x x x (Emphasis supplied) The fact alone that MIAA is endowed with corporate powers does not make MIAA a government-owned or controlled corporation. Without a change in its capital structure, MIAA remains a government instrumentality under Section 2(10) of the Introductory Provisions of the Administrative Code. More importantly, as long as MIAA renders essential public services, it

need not comply with the test of economic viability. Thus, MIAA is outside the scope of the phrase "government-owned or controlled corporations" under Section 16, Article XII of the 1987 Constitution. The minority belittles the use in the Local Government Code of the phrase "government-owned or controlled corporation" as merely "clarificatory or illustrative." This is fatal. The 1987 Constitution prescribes explicit conditions for the creation of "government-owned or controlled corporations." The Administrative Code defines what constitutes a "government-owned or controlled corporation." To belittle this phrase as "clarificatory or illustrative" is grave error. To summarize, MIAA is not a government-owned or controlled corporation under Section 2(13) of the Introductory Provisions of the Administrative Code because it is not organized as a stock or non-stock corporation. Neither is MIAA a government-owned or controlled corporation under Section 16, Article XII of the 1987 Constitution because MIAA is not required to meet the test of economic viability. MIAA is a government instrumentality vested with corporate powers and performing essential public services pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. As a government instrumentality, MIAA is not subject to any kind of tax by local governments under Section 133(o) of the Local Government Code. The exception to the exemption in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under the Local Government Code. Such exception applies only if the beneficial use of real property owned by the Republic is given to a taxable entity. Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of public dominion. Properties of public dominion are owned by the State or the Republic. Article 420 of the Civil Code provides: Art. 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (Emphasis supplied) The term "ports x x x constructed by the State" includes airports and seaports. The Airport Lands and Buildings of MIAA are intended for public use, and at the very least intended for public service. Whether intended for public use or public service, the Airport Lands and Buildings are properties of public dominion. As properties of public dominion, the Airport Lands and Buildings are owned by the Republic and thus exempt from real estate tax under Section 234(a) of the Local Government Code. 4. Conclusion Under Section 2(10) and (13) of the Introductory Provisions of the Administrative Code, which governs the legal relation and status of government units, agencies and offices within the entire government machinery, MIAA is a government instrumentality and not a government-owned or

controlled corporation. Under Section 133(o) of the Local Government Code, MIAA as a government instrumentality is not a taxable person because it is not subject to "[t]axes, fees or charges of any kind" by local governments. The only exception is when MIAA leases its real property to a "taxable person" as provided in Section 234(a) of the Local Government Code, in which case the specific real property leased becomes subject to real estate tax. Thus, only portions of the Airport Lands and Buildings leased to taxable persons like private parties are subject to real estate tax by the City of Paraaque. Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted to public use, are properties of public dominion and thus owned by the State or the Republic of the Philippines. Article 420 specifically mentions "ports x x x constructed by the State," which includes public airports and seaports, as properties of public dominion and owned by the Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are expressly exempt from real estate tax under Section 234(a) of the Local Government Code. This Court has also repeatedly ruled that properties of public dominion are not subject to execution or foreclosure sale. WHEREFORE, we GRANT the petition. We SET ASIDE the assailed Resolutions of the Court of Appeals of 5 October 2001 and 27 September 2002 in CA-G.R. SP No. 66878. We DECLARE the Airport Lands and Buildings of the Manila International Airport Authority EXEMPT from the real estate tax imposed by the City of Paraaque. We declare VOID all the real estate tax assessments, including the final notices of real estate tax delinquencies, issued by the City of Paraaque on the Airport Lands and Buildings of the Manila International Airport Authority, except for the portions that the Manila International Airport Authority has leased to private parties. We also declare VOID the assailed auction sale, and all its effects, of the Airport Lands and Buildings of the Manila International Airport Authority.

[A.M. No. RTJ-99-1510. November 6, 2000]

COMMISSIONER RUFUS B. RODRIGUEZ, complainant, vs. JUDGE RODOLFO R. BONIFACIO, RTC, Branch 151, Pasig City, respondent. RESOLUTION YNARES-SANTIAGO, J.: For allegedly granting improvidently a petition for Habeas Corpus in Special Proceeding No. 10931 entitled In the Matter of the Petition for Habeas Corpus of Ma Jing, respondent was charged in a verified complaint with Violation of the Code of Judicial Conduct, Grave Misconduct, Gross Ignorance of the Law, Gross Incompetence, Gross Inefficiency and Knowingly Rendering An Unjust Judgment relative to the abovementioned case. The Office of the Court Administrator (OCA) referred the verified complaint to respondent judge for his comment thereon within ten (10) days from notice. On July 30, 1999, respondent judge filed his comment denying the charges against him and prayed for the dismissal of the case against him for utter lack of merit. The case was subsequently referred to the OCA for evaluation, report and recommendation. In an evaluation report dated September 21, 1999, the OCA recommended the dismissal of the administrative complaint against respondent judge for being sub judice, pointing out that the issues therein are the same as those pending resolution by the Court of Appeals in CA-G.R. SP No. 53425 entitled Rufus B. Rodriguez v. Hon. Rodolfo R. Bonifacio, et al. The Court of Appeals subsequently promulgated a Decision in CA-G.R. SP No. 53425 dated May 4, 2000 setting aside for lack of legal basis the assailed Order of respondent Judge dated June 24, 1999 which found herein complainant guilty of indirect contempt. In the meantime, in a Resolution dated November 24, 1999, the Court resolved to: 1.] docket the case as a regular administrative proceeding; and 2.] refer the case to Court of Appeals Associate Justice Conchita Carpio-Morales for investigation, report and recommendation within ninety (90) days from notice. In compliance with the foregoing directive, Justice Morales submitted a Report summarizing the factual antecedents of the case thus: On May 7, 1999 at about 11 p.m., the National Bureau of Investigation (NBI) in coordination with the Department of Labor and Employment (DOLE) and the Bureau of Immigration (BI) conducted simultaneous raids at the Royal Flame Club, Space World and Narcissus Club which are all located in Ermita, Manila as a result of which 20 female Chinese nationals were caught in the act of entertaining customers and guests.

No Alien Employment Permits or Alien Employment Registration Certificates having been presented by these nationals, they were turned over to the BI for custody and verification of their alien status. They were thereupon confined at the BI Detention Center at Camp Bagong Diwa, Taguig, Metro Manila on May 8, 1999. On May 17, 1999, Chinese National Ma Jing, one of the 20 apprehended Chinese, filed a petition for habeas corpus at the Pasig Regional Trial Court (RTC) which was raffled to Branch 151 thereof. The caption of the petition did not name any respondent but it alleged as follows: xxx xxx xxx

2. On or about 07 May 1999 at about 10:00 oclock in the evening, petitioner, a temporary visitor in the Philippines from the Peoples Republic of China, was taken from a nightclub (Royal Flame) in Metro Manila by individuals who represented themselves as Agents of the National Bureau of Investigation (NBI), Bureau of Immigration and Deportation (BID) and/or Department of Labor and Employment (DOLE) and since then confined, restrained and deprived her of her liberty and [is] now confined at the BID Detention Center, Camp Bagong Diwa, Taguig, Metro Manila. 3. In spite of the fact that petitioner has been confined from then on, to date, no formal complaint or accusation for any specific offenses has been filed against her nor any judicial writ or order for her commitment has at any time been issued so far. 4. According to reliable information, the petitioner is now being unlawfully detained and deprived of her liberty by the Warden and/or Chief of the BID Detention Center, at Camp Bagong Diwa, Bicutan, Tagig, Metro Manila at the behest of the Chief of a special operation unit of the NBI combined with BID and DOLE agents and whose office is at NBI, NBI Bldg., Taft Ave., Manila. (emphasis and underscoring supplied) Acting Presiding Judge Rodolfo Bonifacio of Branch 151 of the Pasig RTC issued a writ. On May 21, 1999, Atty. Rommel J. de Leon, Technical Assistant, Commissioners Office, BI, submitted a RETURN OF THE WRIT alleging, inter alia: xxx xxx xxx

4. That an investigation was conducted by Special Prosecutor Ramoncito L. Tolentino by (sic) the Bureau of Immigration; 5. That during the said investigation the subject foreign nationals including the petitioner failed to produce any travel documents while the National Bureau of Investigation showed their Affidavit of Arrest, pictures taken at Royal Flame Club and other evidences in support of their claim, copy of said Affidavit of Arrest and pictures are attached hereto as Annexes B and C respectively;

6. That on May 13, 1999, Special Prosecutor Ramon L. Tolentino issued a Charge Sheet charging said alien for violation of Section 37 (a) [7] of the Philippine Immigration Act of 1940, as amended, a copy of the charge sheet is attached hereto as Annex D; 7. That during the hearing at the Bureau of Immigration on May 20, 1999, the Counsel for petitioner and a certain Willy Ang manifested that the petitioner together with her companion are going to submit [an] application for Voluntary Deportation; 8. That based on the foregoing premises it is crystal clear that the petitioner is lawfully detained by the Bureau of Immigration; and 9. That moreso (sic), if ever the petitioner would submit an application for Voluntary Deportation as manifested by his Counsel Atty. San Pedro and their representative Mr. Willy Ang this petition would already be moot and academic. After conducting a hearing on the petition for habeas corpus, Judge Bonifacio, by Order of May 27, 1999, held: xxx xxx xxx

Upon due inquiry, the Court finds that the petitioner is not really an undocumented alien as she has a valid PROC passport No. 1437777 and Visa No. 1201 issued by the Philippine Embassy on March 18, 1999. Her stay in the Philippines has been duly extended up to June 30, 1999 under O.R. No. M 7922945. The Charge Sheet, however, remains as a mere accusation, i.e. that petitioner is a mere suspect, working as a Guest Relation Officer at the Royal Flame Club without securing the necessary working permit/visa from the Bureau of Immigration. She was not notified though of the charges against her nor was she afforded due process. No commitment order was issued by the Commissioner of Immigration or any competent authority to justify her continued detention. xxx xxx xxx

In Dramayo, the Supreme Court has ruled categorically that accusation is not synonymous with guilt. The strongest suspicion must not be permitted to sway judgment (People vs. Austria, 195 SCRA 700). The illegal arrest of petitioner without warrant of arrest or seizure on 07 May 1999 and arbitrary detention, to date, is not remedied by the supposed filing in a Charge Sheet dated 13 May 1999 but assumably filed only on 14 May 1999. Petitioner had been detained without any valid charge from 07 May 1999 to 14 May 1999. The filing of the Charge Sheet did not (sic) the illegal detention of the petitioner. xxx Accordingly the said Order of May 27, 1999 disposed:

IN THE LIGHT OF THE FOREGOING, the Court finds no cogent reason to hold petitioner under continued detention so that Ma Jings immediate release is hereby ordered, unless otherwise held on a different case and/or valid judicial process. The following day, May 28, 1999 respondent Bureau of Immigration by counsel Atty. Rommel J. de Leon, Technical Assistant, Commissioners Office filed a Motion for Reconsideration of the May 27, 1999 [Order]. On May 31, 1999, Ma Jing not having been released from detention, filed a Motion to Declare Parties Guilty of Contempt naming BI Commissioner Rufus B. Rodriguez, Atty. de Leon, BI Detention Center Warden Enrico R. Paner and BI employees Mar Novales and Richie Galvadores as contemnors. By Order of June 15, 1999, Judge Bonifacio denied the BIs Motion for Reconsideration of the Order of May 27, 1999 and directed BI Commissioner Rodriguez and his corespondents in the Motion to hold them in contempt of court for failure to obey the Order of May 27, 1999. In the same Order of June 15, 1999, Judge Bonifacio ordered Commissioner Rodriguez and co-respondents to immediately release Ma Jing in accordance with his May 27, 1999 Order. Also on June 15, 1999, the BI issued a summary deportation order to Ma Jing who refused to receive it. The following day or on June 16, 1999, the BI filed at Branch 151 of the RTC Pasig a Notice of Appeal (to the Court of Appeals) of the May 27, 1999 Order and the June 15, 1999 Order. On June 18, 1999, Commissioner Rodriguez and his co-respondents, in compliance with the show cause order, filed an Explanation dated June 17, 1999 stating, inter alia, that they were never ordered in the May 17, 1999 Order to release Ma Jing; that except for Commissioner Rodriguez, the other respondents had no authority to release Ma Jing from the Detention Center; that the contempt proceedings in the case at bar was not initiated by the Court motu propio, hence, the indirect contempt should be commenced by a verified petition and not by merely filing a Motion as was done in the instant case, following Sec. 4 of Rule 71 of the 1997 Rules of Civil Procedure which they therein quoted; and that the Motion for Reconsideration of the May 17, 1999 Order stayed the execution thereof as did the Notice of Appeal (filed on June 17, 1999) of the same order. In the meantime, the other Chinese nationals petitions for voluntary deportation were, by separate orders, granted by the BI. By June 24, 1999, Judge Bonifacio found Commissioner Rodriguez and co-respondents guilty of indirect contempt and ordered their arrest and detention at the Pasig City jail

until they have complied with the Order dated May 27, 1999 in the light of the following disquisition: xxx proceedings in habeas corpus are separate and distinct from any deportation proceedings taking place at the Bureau of Immigration and Deportation. They (habeas corpus proceedings) rarely, if ever, touch the merits of the deportation case and require no pronouncement with respect thereto. In its May 27, 1999 Order, this Court ordered the immediate release of petitioner Ma Jing, principally upon the following reasons: (i) the petitioner was unlawfully arrested without any warrant of arrest and, thereafter, arbitrarily detained, in disregard of her rights, even as an alien, to due process of law; and (ii) a warrant of arrest issued by the Commissioner of the Bureau of Immigration, to be valid, must be for the sole purpose of executing a final order of deportation. xxx xxx xxx

1. It is not correct to say that the May 27, 1999 Order should not be obeyed because it did not specifically direct Hon. Rufus D (sic) Rodriguez, P/Supt. Angelito O. Tan, Mar Navales and Richie Galvadores as the persons who should obey the said Order. The Writ of Habeas Corpus dated May 17, 1999 as directed, among others, to The Chief of the Special Operation UnitNBI and/or the Warden or Chief of the BID Detention Center, Camp Bagong Diwa, Taguig, Metro, Manila. As such, all the respondents fall under the classification BID Agents and are thus included in the persons to whom the writ of habeas corpus is directed. xxx xxx xxx

2. Neither is the Court impressed with the argument that P/Supt. Angelito O. Tan, Atty. Rommel J. de Leon, Enrico R. Paner, Mar Navales and Richie Galvadores do not have the authority to release the petitioner from the BID Detention Center, such authority pertaining only to the Commissioner, BID. The authority for the release of petitioner Ma Jing is precisely the May 27, 1999 Order of this Court which directs her immediate release. There can be no doubt on the jurisdiction of this Court on habeas corpus cases, as the case at bar, and the validity of its lawful orders issued pursuant to the exercise of such jurisdiction. It is significant that Hon. Rufus Rodriguez has not disauthorized or revoked or in any way disowned the refusal of his subordinates to obey the subject court order, as he would certainly have done if his authority had been improperly invoked. xxx xxx xxx

3. Neither is this Court persuaded by the argument that the May 27, 1999 Order was not yet executory because BIDs Motion for Reconsideration stayed its execution. By its very nature, habeas corpus proceedings are always characterized by promptness or speed. It is always timely to recall this categorical affirmation in the ponencia of Justice Malcolm in the landmark case of Villavicencio v. Lukban, supra: The writ of habeas corpus was devised as a speedy and effectual remedy to relieve persons from unlawful restraint, and as the best and only sufficient defense of personal freedom. Therefore, only an injunction from a Higher Court could restrain enforceability of the May 27, 1999 Order which, by its unmistakable language, directed the immediate release of petitioner Ma Jing. 4. There is also a puerile claim that the contempt proceeding was improper because it was commenced by mere motion and not by a verified petition. The Revised Rules of Court (should be 1997 Rules of Civil Procedure) cannot be any clearer. The appropriate section is quite explicit.: After a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt (b) Disobedience of or resistance to a lawful writ, process, order or judgment of a court It is very clear that, as to form, the only requirement is that the charge be in writing. x x x xxx xxx xxx

5. On the claim that the Notice of Appeal filed by BID on June 17 stayed execution of the May 27, 1999 Order, suffice it to say that, as already discussed above, being a writ of liberty, habeas corpus proceedings are always characterized by promptness or speed. Therefore, the May 27, 1999 Order of release was inherently immediately executory, and only an injunction from a Higher Court could restrain its immediate enforceability. 6. Finally, the respondents submit the argument that it is no longer legally possible for the BID to order the release of the petitioner because of the issuance of a Summary Deportation Order against her. The first time the respondents first disobeyed the May 27, 1999 Order was on May 28, 1999. There was no deportation order yet at that time. The Court cannot accede to the proposition that the subsequent issuance of the deportation order should have the effect of erasing or pardoning the contempt already committed by the respondents as early as May 28, 1999.

Moreover, the release of petitioner Ma Jing is not really a primordial consideration insofar as the pending incident is concerned. The ultimate purpose of this inquiry is to determine whether the respondents are guilty of indirect contempt, i.e., disobedience of or resistance to a lawful writ, process, order, or judgment of a court. The Court finds that such disobedience has been indubitably established by the various Sheriffs Reports extant in the records of this case, and that the reasons advanced by the respondents in their Explanation dated June 17, 1999 are not the real reasons which impelled said disobedience, as the same conclusively stems from the perception of the Hon. Rufus Rodriguez and his subalterns that the Court has no authority to order the release of petitioner Ma Jing. Even assuming that the respondents were of the opinion that the subject Order was grossly erroneous, they could have availed of the remedy of certiorari immediately after its promulgation. But they, certainly, cannot adamantly and belligerently defy the Order of the Courts simply because they have a contrary opinion. Confronted with the mandatory directive of May 27, 1999 to release petitioner Ma Jing, the obstinate refusal of the respondents to obey the same constitutes indirect contempt. (Underscoring supplied). On June 25, 1999, a Friday, at about 2 oclock in the afternoon, Commissioner Rodriguez, et al. were, pursuant to the June 24, 1999 Order, arrested by the NBI whose Director was specifically ordered by Judge Bonifacio to serve the warrant. Commissioner Rodriguez et al. lost no time in filing at the Court of Appeals on June 25, 1999 an Urgent Petition for Certiorari against Judge Bonifacio, docketed as CA-G.R. No. 53425, followed by an Amended Petition, assailing the Judges Order of June 24, 1999. By Order of June 25, 1999, the Court of Appeals issued a writ of preliminary mandatory injunction commanding the immediate release of Commissioner Rodriguez et al. after posting a bond and directing Judge Bonifacio to file his comment on the petition. At 10:00 p.m. of June 25, 1999, Commissioner Rodriguez, et al. were released after posting a bond. On the basis of the foregoing facts, the Investigating Justice recommends respondent judge be fined Fifty Thousand (P50,000.00) Pesos for gross ignorance of the law and warned that a repetition or the commission of a similar infraction will be dealt with more severely, reasoning thus: Under Rule 71 of the 1997 Rules of Civil Procedure, contempt proceedings may be commenced as follows: SEC. 4. How proceedings commenced. - Proceedings for indirect contempt may be initiated motu proprio by the court against which the contempt was committed by an

order or any other formal charge requiring the respondent to show cause why he should not be punished for contempt. In all other cases, charges for indirect contempt shall be commenced by a verified petition with supporting particulars and certified true copies of the documents or papers involved therein, and upon full compliance with the requirements for filing initiatory pleadings for civil actions in the court concerned. If the contempt charges arose out of or are related to a principal action pending in the court, the petition for contempt shall allege that fact but said petition shall be docketed, heard and decided separately, unless the court in its discretion orders the consolidation of the contempt charge and the principal action for joint hearing and decision. The petition for habeas corpus alleged that Ma Jing was [a]ccording to reliable information being unlawfully deprived of her liberty by the Warden and/or Chief of the BID Detention Center at the behest of the Chief of a special operations unit of the NBI combined with BID and DLE agents whose office is at NBI. It did not name herein complainant as respondent. Neither did the May 27, 1999 Order direct herein complainant to release Ma Jing. It was when Ma Jing filed on May 31, 1999 a Motion to Cite in Contempt that herein complainants name was for the first time drawn in the case. Under the circumstances, compliance with the second mode of initiating a petition for contempt under Sec. 4 of Rule 71 of the 1997 Code of Civil Procedure, - filing a verified petition with supporting particulars and certified true copies of documents or papers involved therein, and upon full compliance with the requirements for initiating pleadings for civil action in the court concerned was in order. It is in this light that the undersigned investigator finds that respondent ERRED in giving due course to the mere motion to cite in contempt and finding herein complainant guilty thereof by Order of June 24, 1999, especially given the fact that in the ExplanationAnswer to the show cause Order of respondent herein, complainant et al. quoted Sec. 4 of Rule 71 and alleged that as [t]he contempt proceedings w[ere] not initiated by the Court motu proprio, the indirect contempt should be commenced by a verified petition and not by mere filing [of a] motion as was done in the instant case. xxx xxx xxx

For administrative liability to attach for errors of judgment, the error must be gross, patent or deliberate (Re: Judge Silverio S. Tayao, A.M. No. 93-8-1204, 229 SCRA 723 [1994]. For administrative liability to attach for gross ignorance of the law and/or knowingly rendering an unjust order or judgment, it must be established that the order or judgment is not only erroneous but [that] he was actuated by bad faith, dishonesty, hatred, revenge, corrupt purpose or some other like motive (Guerrero v. Villamor, A.M. No. RTJ-90-617, 296 SCRA 88 [1998]).

For a judge may not be held administratively accountable for every erroneous order or decision he renders (Rodrigo v. Quijano, 79 10 [1997]) [sic] otherwise it would render judicial office untenable for no one called upon to try the facts or interpret the law in the process of administering justice can be infallible (vide Lopez v. Corpus, 78 SCRA 374 [1997] (sic); Pilipinas Bank v. Tirona-Liwag, 190 SCRA 834 [1994]). The undersigned finds that respondents error in giving due course to the Motion to Declare Parties Guilty of Contempt was patent, given that circumstances mentioned above. Respondents invoking of Sec. 3 of the same Rule 71 (of the 1997 Rules of Civil Procedure, not revised Rules of Court as he stated) which to him clearly shows that the only requirement is that the charge be in writing, citing Tomas C. Aguador v. Malcolm S. Enerio, et al., G.R. No. L-20383, January 30, 1971, betrays his ignorance that this Aguador case was decided in 1971, long before Sec. 4, Rule 71, which is a new provision, was incorporated in the 1997 Rules of Civil Procedure. And, as from the following portion of respondents Order of June 24, 1999, to wit: Incidentally, the Bureau of Immigration and Deportation is not a sovereign entity where the commissioner reigns supreme. It is a mere Bureau and a becoming modesty of inferior offices demands a conscious realization of the position that they occupy in the interrelation and operation of the huge governmental bureaucracy. Most decidedly, this Court does not believe that the Honorable Commissioner of Immigration and Deportation however exalted he may personally feel his position to be is beyond the processes of Courts of the land. it is gathered that he was actuated by anger or hatred in so acting on the motion for contempt, administrative liability attaches for his gross ignorance of the law. As for the rest of the assailed Orders bases of the other charges at bar, complainants charge that they violate the law and the jurisprudence he cited not being indubitable in the light of respondents own citations of the law and jurisprudence, the undersigned does not find respondent to have acted arrantly. The issue thus becomes judicial in character and would not warrant faulting him administratively (Godinez v. Alano, 303 SCRA 259 [1999]). The Court agrees with the investigating Justice that respondent judge should indeed be sanctioned, but finds the recommended penalty not commensurate to the gravity of respondents malfeasance for the following reasons: First, the degree of restraint respondent should have observed in the exercise of his contempt powers leaves much to be desired, given the prevailing facts of this case much more so, considering that the same bears with it the taint of personal hostility and passion against the party to whom it is directed. Time and again magistrates have been reminded that

the salutary rule is that the power to punish for contempt must be exercised in the preservative not vindictive principle, and on the corrective not retaliatory idea of punishment. The courts and other tribunals vested with the power of contempt must exercise the power for contempt for purposes that are impersonal, because that power is intended as a safeguard not for the judges as persons but for the functions that they exercise. Besides the basic equipment of possessing the requisite learning in the law, a magistrate must exhibit that hallmark judicial temperament of utmost sobriety and selfrestraint which are indispensable qualities of every judge. A judge anywhere should be the last person to be perceived as a petty tyrant holding imperious sway over his domain. Such an image is, however, evoked by the actuations of respondent judge in this case. It has time and again been stressed that the role of a judge in relation to those who appear before his court must be one of temperance, patience and courtesy. A judge who is commanded at all times to be mindful of his high calling and his mission as a dispassionate and impartial arbiter of justice is expected to be a cerebral man who deliberately holds in check the tug and pull of purely personal preferences which he shares with his fellow mortals. Judges have been admonished to observe judicial decorum which requires that a magistrate must at all times be temperate in his language refraining from inflammatory or excessive rhetoric or from resorting to the language of vilification. In this regard, Rule 3.04 of the Code of Judicial Conduct states that Rule 3.04. A judge should be patient, attentive and courteous to all lawyers, especially the inexperienced, to litigants, witnesses, and others appearing before the court. A judge should avoid unconsciously falling into the attitude of mind that the litigants are made for the courts instead of the courts for the litigants. Respondent judge needs to be reminded that government service is people-oriented. Patience is an essential part of dispensing justice and courtesy is a mark of culture and good breeding. Belligerent behavior has no place in government service where personnel are enjoined to act with self-restraint and civility at all times even when confronted with rudeness and insolence. Second, it is imperative that judges be conversant with basic legal principles. The Code of Judicial Conduct, in fact, enjoins judges to be faithful to the law and maintain professional competence. Respondent judge owes it to the public and to the legal profession to know the law he is supposed to apply in a given controversy. Indeed A judge is called upon to exhibit more than just a cursory acquaintance with statutes and procedural rules; it is imperative that he be conversant with basic legal principles and aware of well-settled authoritative doctrines. He should strive for excellence

exceeded only by his passion for truth, to the end that he be the personification of justice and the Rule of Law. In this case, respondent judge displayed a deplorable deficiency in his grasp of the basic principles governing contempt. As defined, indirect contempt is one committed out of or not in the presence of the court that tends to belittle, degrade, obstruct or embarrass the court and justice. On the other hand, direct contempt consists of or is characterized by misbehavior committed in the presence of or so near a court or judge as to interrupt the proceedings before the same within the meaning of Section 1, Rule 71 of the Rules of Civil Procedure. There is no question that disobedience or resistance to a lawful writ, process, order, judgment or command of a court or injunction granted by a court or judge constitutes indirect contempt. Section 4, Rule 71 of the Rules, provides for two (2) modes of commencing proceedings for indirect contempt, to wit: 1.] It may be initiated motu proprio by the court against which the contempt was committed by an order or any other formal charge requiring the respondent to show cause why he should not be punished for contempt. 2.] In all other cases, charges for indirect contempt shall be commenced by a verified petition with supporting particulars and certified true copies of documents or papers involved therein, and upon full compliance with the requirements for filing initiatory pleadings for civil actions in the court concerned. (all initiatory pleadings should be accompanied with a certificate of non-forum shopping, Sec. 5 Rule 7). As can be gleaned from the records of the case, the contempt proceedings commenced by Ma Jing was made through a motion and not a verified petition as required by the above-cited Section. Respondent Judge relied on Section 3, Rule 71 of the Rules, completely disregarding the provisions of Section 4 which explicitly lays down the manner in which indirect contempt proceedings may be filed. Contempt of court has been distinctly described as an offense against the State and not against the judge personally. To reiterate, a judge must always remember that the power of the court to punish for contempt should be exercised for purposes that are not personal, because that power is intended as a safeguard, not for judges as persons, but for the functions they exercise. Viewed vis--vis the foregoing circumscription of a courts power to punish for contempt, it bears stressing that the court must exercise the power of contempt judiciously and sparingly with utmost self-restraint with the end in view of utilizing the same for correction and preservation of the dignity of the court, not for retaliation or vindication. In this case, respondent judge failed to observe the procedure expressly spelled out in Section 4, Rule 71 of the Rules.

As stated earlier, a judge is called upon to exhibit more than a cursory acquaintance with statutes and procedural rules; it is imperative that he be conversant with basic legal principles. Canon 4 of the Canon of Judicial Ethics requires that a judge should be studious of the principles of law and Canon 18 mandates that he should administer his office with due regard to the integrity of the system of the law itself, remembering that he is not a depositary of arbitrary power, but a judge under the sanction of law. Observance of the law which he is bound to know and sworn to uphold is required of every judge. When the law is sufficiently basic, a judge owes it to his office to simply apply it; anything less than that would be constitutive of gross ignorance of the law. In short, when the law is so elementary, not to be aware of it constitutes gross ignorance of the law. Third, assuming ex gratia argumenti that there was indeed a valid contempt charge filed against herein complainant, the validity of the charge will not extricate respondent judge from his predicament. The records disclose that the Return of the Writ stated that a Charge Sheet was filed on May 13, 1999 against Ma Jing for violation of Section 37 [a] (7) of the Philippine Immigration Act of 1940. Despite this, respondent judge issued an Order dated May 27, 1999 directing Ma Jings immediate release. It was grievous error for respondent judge, in the face of these factual circumstances disclosed by the records, to give due course to the petition for habeas corpus despite the pendency of a deportation case against Ma Jing. Where the BID had not yet completed its hearing and investigation proceedings with respect to an alien and there is no showing that it is unduly delaying its decision, habeas corpus proceedings are premature and should be dismissed. Along the same vein, when an alien is detained by the BID pursuant to an order of deportation, as in this case where a Summary Deportation Order had already been issued by the BID, Courts of First Instance, now Regional Trial Courts, have no power to release the said alien on bail even in habeas corpus proceedings, because there is no law authorizing it. It, furthermore, must be pointed out that on May 28, 1999, complainant-respondent filed a Motion for Reconsideration of the said order but respondent judge denied the same in an Order dated June 15, 1999, and required complainant and his co-respondents to show cause why they should not be cited in contempt. On the same date, a Summary Deportation Order was issued in the BID Case against Ma Jing. The filing of the motion for reconsideration effectively tolled the period within which to appeal respondent judges decision dated May 27, 1999. It was not a pro forma motion, as respondent judge himself did not say so in the June 15, 1999 order denying the motion. The twoday period to appeal provided in Section 39, B.P. Blg. 129 certainly did not proscribe the filing of the motion for reconsideration of the judgment in the habeas corpus case. The motion for reconsideration was filed on May 28, 1999, a day after the decision dated May 27, 1999 was received by complainant. The Notice of Appeal, on the other hand was filed on June 17, 1999. Complainant and co-respondents received the order dated June 15, 1999 of respondent judge on June 16, 1999. Since under Section 15, Rule 102 of the Rules of Court, the prisoner shall be released if the officer or person detaining him does not desire to appeal, complainant did not commit indirect contempt

because of the timely filing of the motion for reconsideration and later the notice of appeal. Be that as it may, there was a valid judicial process justifying Ma Jings detention even before respondent judge rendered his decision as shown by the Return of the Writ which averred, among others, that a Charge Sheet was filed against Ma Jing. Even granting that the arrest of Ma Jing was initially illegal, the filing of the Charge Sheet cured whatever incipient infirmity there was in her arrest. Respondent judge therefore had no authority to release the party who was thus committed. Section 4, Rule 102 of the Rules of Court provides: SEC. 4. When writ not allowed or discharge authorized. If it appears that the person to be restrained of his liberty is in the custody of an officer under process issued by a court or judge; or by virtue of a judgment or order of a court of record, and that court or judge had jurisdiction to issue the process, render the judgment, or make the order, the writ shall not be allowed; or if the jurisdiction appears after the writ is allowed, the person shall not be discharged by reason of any informality or defect in the process, judgment or order. Nor shall anything in this rule be held to authorize the discharge of a person charged with or convicted of an offense in the Philippines, or of a person suffering imprisonment under lawful judgment. Once a person detained is duly charged in court, he may no longer question his detention through a petition for issuance of a writ of habeas corpus. His remedy would be to quash the information and/or the warrant of arrest duly issued. The writ of habeas corpus should not be allowed after the party sought to be released had been charged before any court. The term court includes quasi-judicial bodies like the Deportation Board of the Bureau of Immigration. It is significant to note vis--vis the foregoing disquisitions that in it Decision dated May 4, 2000in CA-G.R. SP No. 53425, the Court of Appeals faulted respondent judge with grave abuse of discretion and gross ignorance of the law in issuing the June 24, 1999 Order on similar grounds. In castigating respondent judge, the appellate court minced no words: When the inefficiency springs from a failure to consider so basic and elemental a rule, a law or a principle in the discharge of his duties, a judge is either too incompetent and undeserving of the position and title he holds or is too vicious that the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority xxx Thus, when the law transgressed is elementary the failure to know to observe it, constitute gross ignorance of the law. To be able to render substantial justice and to maintain public confidence in the legal system, judges are expected to keep abreast of all laws and prevailing jurisprudence, consistent with the standard that magistrates must be the embodiments of competence, integrity and independence. Lastly, it appears from the record that respondent judges malfeasance is not merely confined to the abuse of his judicial prerogatives and ignorance of basic legal precepts

but also to the predilection of making false representations to suit his ends. Nowhere is this propensity more evident in this case than in the attendant circumstances upon which he based the Order dated June 28, 1999 denying the complainants Notice of Appeal. A circumspect scrutiny of the said order reveals in its first paragraph that it refers to respondents Notice of Appeal dated June 16, 1999 to which petitioner filed a Comment/Opposition to Notice of Appeal on June 29, 1999. A careful examination of the Comment/Opposition itself discloses that the pleading was filed on June 29, 1999. No satisfactory explanation has been given for this judicial aberration. Needless to state, the allusion contained in an order to a pleading filed after its issuance can lead to no other conclusion than that the said order was antedated and, thus, falsified in the absence of any explanation to shed light on the discrepancy. The foregoing act not only seriously undermines and adversely reflects on the honesty and integrity of respondent judge as an officer of the court; it also betrays a character flaw which speaks ill of his person. Suffice it to state in this regard that [M]aking false representations is a vice which no judge should imbibe. As the judge is the visible representation of the law, and more importantly justice, he must therefore, be the first to abide by the law and weave an example for the others to follow. A verification with the OCA discloses that aside from the instant complaint, respondent judge has other pending administrative complaints filed against him for the same or similar offenses. In A.M. No. RTJ-99-845, respondent judge stands charged with Serious Misconduct Re: JDRC Case No. 2913, while in A.M. No. RTJ-00-972 he stands indicted for Gross Ignorance of the Law, Bias, Abuse of Authority and Malicious Intent to Hinder and Frustrate the Administration of Justice by Interfering with Orders and Processes of a Co-equal Court. Needless to state, these circumstances only further erode the peoples faith and confidence in the judiciary for it is the duty of all members of the bench to avoid any impression of impropriety to protect the image and integrity of the judiciary which in recent times has been the object of criticism and controversy. Taking into account the prevailing circumstances of this case, the Court believes that in lieu of the fine recommended by the investigating Justice, a three (3) month suspension without pay would be a more appropriate penalty. WHEREFORE, respondent Judge Rodolfo R. Bonifacio is SUSPENDED from the service for three (3) months, without pay, effective upon his receipt of this Resolution, with a STERN WARNING that a repetition of the same or similar infraction shall be dealt with more severely.