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CONSTITUTIONAL LAW 1 Assignment June 22, 2013, 2-6pm A.

TOPICS: Articles I and II of the 1987 Philippine Constitution

G.R. No. L-25843 July 25, 1974 MELCHORA CABANAS, vs. FRANCISCO PILAPIL, defendant-appellant. Seno, Mendoza & Associates for plaintiff-appellee. plaintiff-appellee,

B. CASES: 1. 2. 3. 4. 5. 6. 7. 8.

9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 1998

Aquino vsEnrile 59 SCRA 183 Cabanas vsPilapil 58 SCRA 94 Macariolavs Asuncion 114 SCRA 77 Republic vsVillasor 54 SCRA 83 Wylie vsRarang 209 SCRA 357 Taxicab Operators vs BOT 119 SCRA 597 Balacuitvs CFI of Agusandel Norte 163 SCRA 182 Didipio Earth-Savers Multi-Purpose Assnvs Gozun G.R. No. 157882,March 30, 2006 Tuasonvd Register of Deeds of Caloocan City 157 SCRA 613 Defensor-Santiago vdGuingona G.R. No. 134577, Nov. 18, 1998 Pelaezvs Auditor General 15 SCRA 569 Chavez vs Romulo G.R. No. 157036, June 9, 2004 SalongavsFarrale 105 SCRA 459 OposavsFactoran 224 SCRA 792 GuingonavsCarague 196 SCRA 221 PMMA vs Court of Appeals 244 SCRA 770 JMM Promotion and management vs CA 260 SCRA 319 APCD vs PCA G.R. No. 110526, Feb. 10, G.R. No. 129093, Aug. 30, 2001 106 SCRA 444

Emilio Benitez, Jr. for defendant-appellant. FERNANDO, J.:p The disputants in this appeal from a question of law from a lower court decision are the mother and the uncle of a minor beneficiary of the proceeds of an insurance policy issued on the life of her deceased father. The dispute centers as to who of them should be entitled to act as trustee thereof. The lower court applying the appropriate Civil Code provisions decided in favor of the mother, the plaintiff in this case. Defendant uncle appealed. As noted, the lower court acted the way it did following the specific mandate of the law. In addition, it must have taken into account the principle that in cases of this nature the welfare of the child is the paramount consideration. It is not an unreasonable assumption that between a mother and an uncle, the former is likely to lavish more care on and pay greater attention to her. This is all the more likely considering that the child is with the mother. There are no circumstances then that did militate against what conforms to the natural order of things, even if the language of the law were not as clear. It is not to be lost sight of either that the judiciary pursuant to its role as an agency of the State as parens patriae, with an even greater stress on family unity under the present Constitution, did weigh in the balance the opposing claims and did come to the conclusion that the welfare of the child called for the mother to be entrusted with such responsibility. We have to affirm. The appealed decision made clear: "There is no controversy as to the facts. " The insured, Florentino Pilapil had a child, Millian Pilapil, with a married woman, the plaintiff, Melchora Cabanas. She was ten years old at the time the complaint was filed on October 10, 1964. The defendant, Francisco Pilapil, is the brother of the deceased. The deceased insured himself and instituted as beneficiary, his child, with his brother to act as trustee during her minority. Upon his death, the proceeds were paid to him. Hence this complaint by the mother, with whom the child is living, seeking the delivery of such sum. She filed the bond required by the Civil Code. Defendant would justify his claim to the retention of the amount in 2 question by invoking the terms of the insurance policy. After trial duly had, the lower court in a decision of May 10, 1965, rendered judgment ordering the defendant to deliver the proceeds of the policy in question to plaintiff. Its main reliance was on Articles 320 and 321 of the Civil Code. The former provides: "The father, or in his absence the mother, is the legal administrator of the property pertaining to the child under parental authority. If the property is worth more than two thousand pesos, the father or mother shall give a bond subject to the approval of the 3 Court of First Instance." The latter states: "The property which the unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title, belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental authority and whose company he 4 lives; ...
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19. LinavsPano 20. Phil Apparel Workers Union vs NLRC

C. REFERENCES: 1. 1987 Philippine Constitution 2. The 1987 Constitution of the Republic of the Philippines, A Commentary by Fr. Joaquin G. Bernas, S.J., 2009 edition (pp. 1-99) 3. Outline Reviewer in Political Law by Antonio E.B. Nachura, 2009 edition (pp. 1-90)

Republic SUPREME Manila SECOND DIVISION

of

the

Philippines COURT

Conformity to such explicit codal norm is apparent in this portion of the appealed decision: "The insurance proceeds belong to the beneficiary. The beneficiary is a minor under the custody and parental authority of the plaintiff, her mother. The said minor lives with plaintiff or lives in the company of the plaintiff. The said minor acquired this property by lucrative title. Said property, therefore, belongs to the minor child in ownership, and in usufruct to the plaintiff, her mother. Since under our law the usufructuary is entitled to possession, the plaintiff is entitled to possession of the insurance proceeds. The trust, insofar as it is in conflict with the above quoted provision of law, is pro tanto null and void. In order, however, to protect the rights of the minor, Millian Pilapil, the plaintiff should file an additional bond in the guardianship proceedings, Sp. Proc. No. 2418-R of this Court to raise her bond therein to 5 the total amount of P5,000.00." It is very clear, therefore, considering the above, that unless the applicability of the two cited Civil Code provisions can be disputed, the decision must stand. There is no ambiguity in the language employed. The words are rather clear. Their meaning is unequivocal. Time and time again, this Court has left no doubt that where codal or statutory norms are cast in categorical language, the task before it is not one 6 of interpretation but of application. So it must be in this case. So it was in the appealed decision. 1. It would take more than just two paragraphs as found in the brief for the defendant-appellant to blunt the force of legal commands that speak so plainly and so unqualifiedly. Even if it were a question of policy, the conclusion will remain unaltered. What is paramount, as mentioned at the outset, is the welfare of the child. It is in consonance with such primordial end that Articles 320 and 321 have been worded. There is recognition in the law of the deep ties that bind parent and child. In the event that there is less than full measure of concern for the offspring, the protection is supplied by the bond required. With the added circumstance that the child stays with the mother, not the uncle, without any evidence of lack of maternal care, the decision arrived at can stand the test of the strictest scrutiny. It is further fortified by the assumption, both logical and natural, that infidelity to the trust imposed by the deceased is much less in the case of a mother than in the case of an uncle. Manresa, commenting on Article 159 of the Civil Code of Spain, the source of Article 320 of the Civil Code, was of that view: Thus "El derecho y la obligacion de administrar el Patrimonio de los hijos es una consecuencia natural y lgica de la patria potestad y de la presuncin de que nadie cuidar de los bienes de acqullos con mas cario y solicitude que los padres. En nuestro Derecho antiguo puede decirse que se hallaba reconocida de una manera indirecta aquelia doctrina, y asi se desprende de la sentencia del Tribunal Supremeo de 30 de diciembre de 1864, que se refiere a la ley 24, tit. XIII de la Partida 5. De la propia suerte aceptan en general dicho principio los Codigos extranjeros, con las limitaciones y requisitos de 8 que trataremos mis adelante." 2. The appealed decision is supported by another cogent consideration. It is buttressed by its adherence to the concept that the judiciary, as an agency of the State acting as parens patriae, is called upon whenever a pending suit of litigation affects one who is a minor to accord priority to his best interest. It may happen, as it did occur here, that family relations may press their respective claims. It would be more in consonance not only with the natural order of things but the tradition of the country for a parent to be preferred. it could have been different if the conflict were between father and mother. Such is not the case at all. It is a mother asserting priority. Certainly the judiciary as the instrumentality of the State in its role of parens patriae, cannot remain insensible to the validity of her plea. In a recent 9 case, there is this quotation from an opinion of the United States Supreme Court: "This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature, and has no affinity to those arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of the people and the destruction of their liberties."
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What is more, there is this constitutional provision vitalizing this concept. It reads: "The State shall 10 strengthen the family as a basic social institution." If, as the Constitution so wisely dictates, it is the family as a unit that has to be strengthened, it does not admit of doubt that even if a stronger case were presented for the uncle, still deference to a constitutional mandate would have led the lower court to decide as it did. WHEREFORE, the decision of May 10, 1965 is affirmed. Costs against defendant-appellant. Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur. Barredo, J., took no part. Republic SUPREME Manila EN BANC A.M. No. 133-J May 31, 1982 BERNARDITA R. MACARIOLA, complainant, vs. HONORABLE ELIAS B. ASUNCION, Judge of the Court of First Instance of Leyte, respondent. MAKASIAR, J: In a verified complaint dated August 6, 1968 Bernardita R. Macariola charged respondent Judge Elias B. Asuncion of the Court of First Instance of Leyte, now Associate Justice of the Court of Appeals, with "acts unbecoming a judge." The factual setting of the case is stated in the report dated May 27, 1971 of then Associate Justice Cecilia Muoz Palma of the Court of Appeals now retired Associate Justice of the Supreme Court, to whom this case was referred on October 28, 1968 for investigation, thus: Civil Case No. 3010 of the Court of First Instance of Leyte was a complaint for partition filed by Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes, and Priscilla Reyes, plaintiffs, against Bernardita R. Macariola, defendant, concerning the properties left by the deceased Francisco Reyes, the common father of the plaintiff and defendant. In her defenses to the complaint for partition, Mrs. Macariola alleged among other things that; a) plaintiff Sinforosa R. Bales was not a daughter of the deceased Francisco Reyes; b) the only legal heirs of the deceased were defendant Macariola, she being the only offspring of the first marriage of Francisco Reyes with Felisa Espiras, and the remaining plaintiffs who were the children of the deceased by his of the Philippines COURT

second marriage with Irene Ondez; c) the properties left by the deceased were all the conjugal properties of the latter and his first wife, Felisa Espiras, and no properties were acquired by the deceased during his second marriage; d) if there was any partition to be made, those conjugal properties should first be partitioned into two parts, and one part is to be adjudicated solely to defendant it being the share of the latter's deceased mother, Felisa Espiras, and the other half which is the share of the deceased Francisco Reyes was to be divided equally among his children by his two marriages. On June 8, 1963, a decision was rendered by respondent Judge Asuncion in Civil Case 3010, the dispositive portion of which reads: IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court, upon a preponderance of evidence, finds and so holds, and hereby renders judgment (1) Declaring the plaintiffs Luz R. Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes and Priscilla Reyes as the only children legitimated by the subsequent marriage of Francisco Reyes Diaz to Irene Ondez; (2) Declaring the plaintiff Sinforosa R. Bales to have been an illegitimate child of Francisco Reyes Diaz; (3) Declaring Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506 and 1/4 of Lot 1145 as belonging to the conjugal partnership of the spouses Francisco Reyes Diaz and Felisa Espiras; (4) Declaring Lot No. 2304 and 1/4 of Lot No. 3416 as belonging to the spouses Francisco Reyes Diaz and Irene Ondez in common partnership; (5) Declaring that 1/2 of Lot No. 1184 as belonging exclusively to the deceased Francisco Reyes Diaz; (6) Declaring the defendant Bernardita R. Macariola, being the only legal and forced heir of her mother Felisa Espiras, as the exclusive owner of one-half of each of Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506; and the remaining one-half (1/2) of each of said Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506 and one-half (1/2) of one-fourth (1/4) of Lot No. 1154 as belonging to the estate of Francisco Reyes Diaz; (7) Declaring Irene Ondez to be the exclusive owner of one-half (1/2) of Lot No. 2304 and one-half (1/2) of one-fourth (1/4) of Lot No. 3416; the remaining one-half (1/2) of Lot 2304 and the remaining one-half (1/2) of one-fourth (1/4) of Lot No. 3416 as belonging to the estate of Francisco Reyes Diaz; (8) Directing the division or partition of the estate of Francisco Reyes Diaz in such a manner as to give or grant to Irene Ondez, as surviving widow of Francisco Reyes Diaz, a hereditary share of. one-twelfth (1/12) of the whole estate of Francisco Reyes Diaz (Art. 996 in relation to Art. 892, par 2, New Civil Code), and the remaining portion of the estate to be divided among the plaintiffs Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes, Priscilla Reyes and defendant Bernardita R. Macariola, in such a way that the extent of the total share of plaintiff Sinforosa R. Bales in the hereditary estate shall not exceed the equivalent of two-fifth (2/5) of the total share of any or each of the

other plaintiffs and the defendant (Art. 983, New Civil Code), each of the latter to receive equal shares from the hereditary estate, (Ramirez vs. Bautista, 14 Phil. 528; Diancin vs. Bishop of Jaro, O.G. [3rd Ed.] p. 33); (9) Directing the parties, within thirty days after this judgment shall have become final to submit to this court, for approval a project of partition of the hereditary estate in the proportion above indicated, and in such manner as the parties may, by agreement, deemed convenient and equitable to them taking into consideration the location, kind, quality, nature and value of the properties involved; (10) Directing the plaintiff Sinforosa R. Bales and defendant Bernardita R. Macariola to pay the costs of this suit, in the proportion of one-third (1/3) by the first named and two-thirds (2/3) by the second named; and (I 1) Dismissing all other claims of the parties [pp 27-29 of Exh. C]. The decision in civil case 3010 became final for lack of an appeal, and on October 16, 1963, a project of partition was submitted to Judge Asuncion which is marked Exh. A. Notwithstanding the fact that the project of partition was not signed by the parties themselves but only by the respective counsel of plaintiffs and defendant, Judge Asuncion approved it in his Order dated October 23, 1963, which for convenience is quoted hereunder in full: The parties, through their respective counsels, presented to this Court for approval the following project of partition: COMES NOW, the plaintiffs and the defendant in the above-entitled case, to this Honorable Court respectfully submit the following Project of Partition: l. The whole of Lots Nos. 1154, 2304 and 4506 shall belong exclusively to Bernardita Reyes Macariola; 2. A portion of Lot No. 3416 consisting of 2,373.49 square meters along the eastern part of the lot shall be awarded likewise to Bernardita R. Macariola; 3. Lots Nos. 4803, 4892 and 5265 shall be awarded to Sinforosa Reyes Bales; 4. A portion of Lot No. 3416 consisting of 1,834.55 square meters along the western part of the lot shall likewise be awarded to Sinforosa Reyes-Bales; 5. Lots Nos. 4474 and 4475 shall be divided equally among Luz Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes and Priscilla Reyes in equal shares;

6. Lot No. 1184 and the remaining portion of Lot No. 3416 after taking the portions awarded under item (2) and (4) above shall be awarded to Luz Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes and Priscilla Reyes in equal shares, provided, however that the remaining portion of Lot No. 3416 shall belong exclusively to Priscilla Reyes. WHEREFORE, it is respectfully prayed that the Project of Partition indicated above which is made in accordance with the decision of the Honorable Court be approved. Tacloban City, October 16, 1963. (SGD) BONIFACIO RAMO Atty. for the Defendant Tacloban City (SGD) ZOTICO A. TOLETE Atty. for the Plaintiff Tacloban City While the Court thought it more desirable for all the parties to have signed this Project of Partition, nevertheless, upon assurance of both counsels of the respective parties to this Court that the Project of Partition, as above- quoted, had been made after a conference and agreement of the plaintiffs and the defendant approving the above Project of Partition, and that both lawyers had represented to the Court that they are given full authority to sign by themselves the Project of Partition, the Court, therefore, finding the above-quoted Project of Partition to be in accordance with law, hereby approves the same. The parties, therefore, are directed to execute such papers, documents or instrument sufficient in form and substance for the vesting of the rights, interests and participations which were adjudicated to the respective parties, as outlined in the Project of Partition and the delivery of the respective properties adjudicated to each one in view of said Project of Partition, and to perform such other acts as are legal and necessary to effectuate the said Project of Partition. SO ORDERED. Given in Tacloban City, this 23rd day of October, 1963. (SGD) ELIAS B. ASUNCION Judge EXH. B. The above Order of October 23, 1963, was amended on November 11, 1963, only for the purpose of giving authority to the Register of Deeds of the Province of Leyte to

issue the corresponding transfer certificates of title to the respective adjudicatees in conformity with the project of partition (see Exh. U). One of the properties mentioned in the project of partition was Lot 1184 or rather onehalf thereof with an area of 15,162.5 sq. meters. This lot, which according to the decision was the exclusive property of the deceased Francisco Reyes, was adjudicated in said project of partition to the plaintiffs Luz, Anacorita Ruperto, Adela, and Priscilla all surnamed Reyes in equal shares, and when the project of partition was approved by the trial court the adjudicatees caused Lot 1184 to be subdivided into five lots denominated as Lot 1184-A to 1184-E inclusive (Exh. V). Lot 1184-D was conveyed to Enriqueta D. Anota, a stenographer in Judge Asuncion's court (Exhs. F, F-1 and V-1), while Lot 1184-E which had an area of 2,172.5556 sq. meters was sold on July 31, 1964 to Dr. Arcadio Galapon (Exh. 2) who was issued transfer certificate of title No. 2338 of the Register of Deeds of the city of Tacloban (Exh. 12). On March 6, 1965, Dr. Arcadio Galapon and his wife Sold a portion of Lot 1184-E with an area of around 1,306 sq. meters to Judge Asuncion and his wife, Victoria S. Asuncion (Exh. 11), which particular portion was declared by the latter for taxation purposes (Exh. F). On August 31, 1966, spouses Asuncion and spouses Galapon conveyed their respective shares and interest in Lot 1184-E to "The Traders Manufacturing and Fishing Industries Inc." (Exit 15 & 16). At the time of said sale the stockholders of the corporation were Dominador Arigpa Tan, Humilia Jalandoni Tan, Jaime Arigpa Tan, Judge Asuncion, and the latter's wife, Victoria S. Asuncion, with Judge Asuncion as the President and Mrs. Asuncion as the secretary (Exhs. E-4 to E-7). The Articles of Incorporation of "The Traders Manufacturing and Fishing Industries, Inc." which we shall henceforth refer to as "TRADERS" were registered with the Securities and Exchange Commission only on January 9, 1967 (Exh. E) [pp. 378-385, rec.]. Complainant Bernardita R. Macariola filed on August 9, 1968 the instant complaint dated August 6, 1968 alleging four causes of action, to wit: [1] that respondent Judge Asuncion violated Article 1491, paragraph 5, of the New Civil Code in acquiring by purchase a portion of Lot No. 1184-E which was one of those properties involved in Civil Case No. 3010 decided by him; [2] that he likewise violated Article 14, paragraphs I and 5 of the Code of Commerce, Section 3, paragraph H, of R.A. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, Section 12, Rule XVIII of the Civil Service Rules, and Canon 25 of the Canons of Judicial Ethics, by associating himself with the Traders Manufacturing and Fishing Industries, Inc., as a stockholder and a ranking officer while he was a judge of the Court of First Instance of Leyte; [3] that respondent was guilty of coddling an impostor and acted in disregard of judicial decorum by closely fraternizing with a certain Dominador Arigpa Tan who openly and publicly advertised himself as a practising attorney when in truth and in fact his name does not appear in the Rolls of Attorneys and is not a member of the Philippine Bar; and [4] that there was a culpable defiance of the law and utter disregard for ethics by respondent Judge (pp. 1-7, rec.).

Respondent Judge Asuncion filed on September 24, 1968 his answer to which a reply was filed on October 16, 1968 by herein complainant. In Our resolution of October 28, 1968, We referred this case to then Justice Cecilia Muoz Palma of the Court of Appeals, for investigation, report and recommendation. After hearing, the said Investigating Justice submitted her report dated May 27, 1971 recommending that respondent Judge should be reprimanded or warned in connection with the first cause of action alleged in the complaint, and for the second cause of action, respondent should be warned in case of a finding that he is prohibited under the law to engage in business. On the third and fourth causes of action, Justice Palma recommended that respondent Judge be exonerated. The records also reveal that on or about November 9 or 11, 1968 (pp. 481, 477, rec.), complainant herein instituted an action before the Court of First Instance of Leyte, entitled " Bernardita R. Macariola, plaintiff, versus Sinforosa R. Bales, et al., defendants," which was docketed as Civil Case No. 4235, seeking the annulment of the project of partition made pursuant to the decision in Civil Case No. 3010 and the two orders issued by respondent Judge approving the same, as well as the partition of the estate and the subsequent conveyances with damages. It appears, however, that some defendants were dropped from the civil case. For one, the case against Dr. Arcadio Galapon was dismissed because he was no longer a real party in interest when Civil Case No. 4234 was filed, having already conveyed on March 6, 1965 a portion of lot 1184-E to respondent Judge and on August 31, 1966 the remainder was sold to the Traders Manufacturing and Fishing Industries, Inc. Similarly, the case against defendant Victoria Asuncion was dismissed on the ground that she was no longer a real party in interest at the time the aforesaid Civil Case No. 4234 was filed as the portion of Lot 1184 acquired by her and respondent Judge from Dr. Arcadio Galapon was already sold on August 31, 1966 to the Traders Manufacturing and Fishing industries, Inc. Likewise, the cases against defendants Serafin P. Ramento, Catalina Cabus, Ben Barraza Go, Jesus Perez, Traders Manufacturing and Fishing Industries, Inc., Alfredo R. Celestial and Pilar P. Celestial, Leopoldo Petilla and Remedios Petilla, Salvador Anota and Enriqueta Anota and Atty. Zotico A. Tolete were dismissed with the conformity of complainant herein, plaintiff therein, and her counsel. On November 2, 1970, Judge Jose D. Nepomuceno of the Court of First Instance of Leyte, who was directed and authorized on June 2, 1969 by the then Secretary (now Minister) of Justice and now Minister of National Defense Juan Ponce Enrile to hear and decide Civil Case No. 4234, rendered a decision, the dispositive portion of which reads as follows: A. IN THE CASE AGAINST JUDGE ELIAS B. ASUNCION (1) declaring that only Branch IV of the Court of First Instance of Leyte has jurisdiction to take cognizance of the issue of the legality and validity of the Project of Partition [Exhibit "B"] and the two Orders [Exhibits "C" and "C- 3"] approving the partition; (2) dismissing the complaint against Judge Elias B. Asuncion; I (3) adjudging the plaintiff, Mrs. Bernardita R. Macariola to pay defendant Judge Elias B. Asuncion, (a) the sum of FOUR HUNDRED [P400,000.00] for moral damages; THOUSAND PESOS

(b) the sum of TWO HUNDRED [P200,000.001 for exemplary damages;

THOUSAND

PESOS

(c) the sum of FIFTY THOUSAND PESOS [P50,000.00] for nominal damages; and (d) he sum of TEN THOUSAND PESOS [PI0,000.00] for Attorney's Fees. B. IN THE CASE AGAINST THE DEFENDANT MARIQUITA VILLASIN, FOR HERSELF AND FOR THE HEIRS OF THE DECEASED GERARDO VILLASIN (1) Dismissing the complaint against the defendants Mariquita Villasin and the heirs of the deceased Gerardo Villasin; (2) Directing the plaintiff to pay the defendants Mariquita Villasin and the heirs of Gerardo Villasin the cost of the suit. C. IN THE CASE AGAINST THE DEFENDANT SINFOROSA R. BALES, ET AL., WHO WERE PLAINTIFFS IN CIVIL CASE NO. 3010 (1) Dismissing the complaint against defendants Sinforosa R. Bales, Adela R. Herrer, Priscilla R. Solis, Luz R. Bakunawa, Anacorita R. Eng and Ruperto O. Reyes. D. IN THE CASE AGAINST DEFENDANT BONIFACIO RAMO (1) Dismissing the complaint against Bonifacio Ramo; (2) Directing the plaintiff to pay the defendant Bonifacio Ramo the cost of the suit. SO ORDERED [pp. 531-533, rec.] It is further disclosed by the record that the aforesaid decision was elevated to the Court of Appeals upon perfection of the appeal on February 22, 1971.

WE find that there is no merit in the contention of complainant Bernardita R. Macariola, under her first cause of action, that respondent Judge Elias B. Asuncion violated Article 1491, paragraph 5, of the New Civil Code in acquiring by purchase a portion of Lot No. 1184-E which was one of those properties involved in Civil Case No. 3010. 'That Article provides:

Article 1491. The following persons cannot acquire by purchase, even at a public or judicial action, either in person or through the mediation of another: xxx xxx xxx (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession [emphasis supplied]. The prohibition in the aforesaid Article applies only to the sale or assignment of the property which is the subject of litigation to the persons disqualified therein. WE have already ruled that "... for the prohibition to operate, the sale or assignment of the property must take place during the pendency of the litigation involving the property" (The Director of Lands vs. Ababa et al., 88 SCRA 513, 519 [1979], Rosario vda. de Laig vs. Court of Appeals, 86 SCRA 641, 646 [1978]). In the case at bar, when the respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E, the decision in Civil Case No. 3010 which he rendered on June 8, 1963 was already final because none of the parties therein filed an appeal within the reglementary period; hence, the lot in question was no longer subject of the litigation. Moreover, at the time of the sale on March 6, 1965, respondent's order dated October 23, 1963 and the amended order dated November 11, 1963 approving the October 16, 1963 project of partition made pursuant to the June 8, 1963 decision, had long become final for there was no appeal from said orders. Furthermore, respondent Judge did not buy the lot in question on March 6, 1965 directly from the plaintiffs in Civil Case No. 3010 but from Dr. Arcadio Galapon who earlier purchased on July 31, 1964 Lot 1184-E from three of the plaintiffs, namely, Priscilla Reyes, Adela Reyes, and Luz R. Bakunawa after the finality of the decision in Civil Case No. 3010. It may be recalled that Lot 1184 or more specifically one-half thereof was adjudicated in equal shares to Priscilla Reyes, Adela Reyes, Luz Bakunawa, Ruperto Reyes and Anacorita Reyes in the project of partition, and the same was subdivided into five lots denominated as Lot 1184-A to 1184-E. As aforestated, Lot 1184-E was sold on July 31, 1964 to Dr. Galapon for which he was issued TCT No. 2338 by the Register of Deeds of Tacloban City, and on March 6, 1965 he sold a portion of said lot to respondent Judge and his wife who declared the same for taxation purposes only. The subsequent sale on August 31, 1966 by spouses Asuncion and spouses Galapon of their respective shares and interest in said Lot 1184-E to the Traders Manufacturing and Fishing Industries, Inc., in which respondent was the president and his wife was the secretary, took place long after the finality of the decision in Civil Case No. 3010 and of the subsequent two aforesaid orders therein approving the project of partition. While it appears that complainant herein filed on or about November 9 or 11, 1968 an action before the Court of First Instance of Leyte docketed as Civil Case No. 4234, seeking to annul the project of partition and the two orders approving the same, as well as the partition of the estate and the subsequent conveyances, the same, however, is of no moment.

The fact remains that respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E from Dr. Arcadio Galapon; hence, after the finality of the decision which he rendered on June 8, 1963 in Civil Case No. 3010 and his two questioned orders dated October 23, 1963 and November 11, 1963. Therefore, the property was no longer subject of litigation. The subsequent filing on November 9, or 11, 1968 of Civil Case No. 4234 can no longer alter, change or affect the aforesaid facts that the questioned sale to respondent Judge, now Court of Appeals Justice, was effected and consummated long after the finality of the aforesaid decision or orders. Consequently, the sale of a portion of Lot 1184-E to respondent Judge having taken place over one year after the finality of the decision in Civil Case No. 3010 as well as the two orders approving the project of partition, and not during the pendency of the litigation, there was no violation of paragraph 5, Article 1491 of the New Civil Code. It is also argued by complainant herein that the sale on July 31, 1964 of Lot 1184-E to Dr. Arcadio Galapon by Priscilla Reyes, Adela Reyes and Luz R. Bakunawa was only a mere scheme to conceal the illegal and unethical transfer of said lot to respondent Judge as a consideration for the approval of the project of partition. In this connection, We agree with the findings of the Investigating Justice thus: And so we are now confronted with this all-important question whether or not the acquisition by respondent of a portion of Lot 1184-E and the subsequent transfer of the whole lot to "TRADERS" of which respondent was the President and his wife the Secretary, was intimately related to the Order of respondent approving the project of partition, Exh. A. Respondent vehemently denies any interest or participation in the transactions between the Reyeses and the Galapons concerning Lot 1184-E, and he insists that there is no evidence whatsoever to show that Dr. Galapon had acted, in the purchase of Lot 1184-E, in mediation for him and his wife. (See p. 14 of Respondent's Memorandum). xxx xxx xxx On this point, I agree with respondent that there is no evidence in the record showing that Dr. Arcadio Galapon acted as a mere "dummy" of respondent in acquiring Lot 1184-E from the Reyeses. Dr. Galapon appeared to this investigator as a respectable citizen, credible and sincere, and I believe him when he testified that he bought Lot 1184-E in good faith and for valuable consideration from the Reyeses without any intervention of, or previous understanding with Judge Asuncion (pp. 391- 394, rec.). On the contention of complainant herein that respondent Judge acted illegally in approving the project of partition although it was not signed by the parties, We quote with approval the findings of the Investigating Justice, as follows: 1. I agree with complainant that respondent should have required the signature of the parties more particularly that of Mrs. Macariola on the project of partition submitted to

him for approval; however, whatever error was committed by respondent in that respect was done in good faith as according to Judge Asuncion he was assured by Atty. Bonifacio Ramo, the counsel of record of Mrs. Macariola, That he was authorized by his client to submit said project of partition, (See Exh. B and tsn p. 24, January 20, 1969). While it is true that such written authority if there was any, was not presented by respondent in evidence, nor did Atty. Ramo appear to corroborate the statement of respondent, his affidavit being the only one that was presented as respondent's Exh. 10, certain actuations of Mrs. Macariola lead this investigator to believe that she knew the contents of the project of partition, Exh. A, and that she gave her conformity thereto. I refer to the following documents: 1) Exh. 9 Certified true copy of OCT No. 19520 covering Lot 1154 of the Tacloban Cadastral Survey in which the deceased Francisco Reyes holds a "1/4 share" (Exh. 9-a). On tills certificate of title the Order dated November 11, 1963, (Exh. U) approving the project of partition was duly entered and registered on November 26, 1963 (Exh. 9-D); 2) Exh. 7 Certified copy of a deed of absolute sale executed by Bernardita Reyes Macariola on October 22, 1963, conveying to Dr. Hector Decena the one-fourth share of the late Francisco Reyes-Diaz in Lot 1154. In this deed of sale the vendee stated that she was the absolute owner of said one-fourth share, the same having been adjudicated to her as her share in the estate of her father Francisco Reyes Diaz as per decision of the Court of First Instance of Leyte under case No. 3010 (Exh. 7-A). The deed of sale was duly registered and annotated at the back of OCT 19520 on December 3, 1963 (see Exh. 9-e). In connection with the abovementioned documents it is to be noted that in the project of partition dated October 16, 1963, which was approved by respondent on October 23, 1963, followed by an amending Order on November 11, 1963, Lot 1154 or rather 1/4 thereof was adjudicated to Mrs. Macariola. It is this 1/4 share in Lot 1154 which complainant sold to Dr. Decena on October 22, 1963, several days after the preparation of the project of partition. Counsel for complainant stresses the view, however, that the latter sold her onefourth share in Lot 1154 by virtue of the decision in Civil Case 3010 and not because of the project of partition, Exh. A. Such contention is absurd because from the decision, Exh. C, it is clear that one-half of one- fourth of Lot 1154 belonged to the estate of Francisco Reyes Diaz while the other half of said one-fourth was the share of complainant's mother, Felisa Espiras; in other words, the decision did not adjudicate the whole of the one-fourth of Lot 1154 to the herein complainant (see Exhs. C-3 & C-4). Complainant became the owner of the entire one-fourth of Lot 1154 only by means of the project of partition, Exh. A. Therefore, if Mrs. Macariola sold Lot 1154 on October 22, 1963, it was for no other reason than that she was wen aware of the distribution of the properties of her deceased father as per Exhs. A and B. It is also significant at this point to state that Mrs. Macariola admitted during the crossexamination that she went to Tacloban City in connection with the sale of Lot 1154 to Dr. Decena (tsn p. 92, November 28, 1968) from which we can deduce that she could

not have been kept ignorant of the proceedings in civil case 3010 relative to the project of partition. Complainant also assails the project of partition because according to her the properties adjudicated to her were insignificant lots and the least valuable. Complainant, however, did not present any direct and positive evidence to prove the alleged gross inequalities in the choice and distribution of the real properties when she could have easily done so by presenting evidence on the area, location, kind, the assessed and market value of said properties. Without such evidence there is nothing in the record to show that there were inequalities in the distribution of the properties of complainant's father (pp. 386389, rec.). Finally, while it is. true that respondent Judge did not violate paragraph 5, Article 1491 of the New Civil Code in acquiring by purchase a portion of Lot 1184-E which was in litigation in his court, it was, however, improper for him to have acquired the same. He should be reminded of Canon 3 of the Canons of Judicial Ethics which requires that: "A judge's official conduct should be free from the appearance of impropriety, and his personal behavior, not only upon the bench and in the performance of judicial duties, but also in his everyday life, should be beyond reproach." And as aptly observed by the Investigating Justice: "... it was unwise and indiscreet on the part of respondent to have purchased or acquired a portion of a piece of property that was or had been in litigation in his court and caused it to be transferred to a corporation of which he and his wife were ranking officers at the time of such transfer. One who occupies an exalted position in the judiciary has the duty and responsibility of maintaining the faith and trust of the citizenry in the courts of justice, so that not only must he be truly honest and just, but his actuations must be such as not give cause for doubt and mistrust in the uprightness of his administration of justice. In this particular case of respondent, he cannot deny that the transactions over Lot 1184-E are damaging and render his actuations open to suspicion and distrust. Even if respondent honestly believed that Lot 1184-E was no longer in litigation in his court and that he was purchasing it from a third person and not from the parties to the litigation, he should nonetheless have refrained from buying it for himself and transferring it to a corporation in which he and his wife were financially involved, to avoid possible suspicion that his acquisition was related in one way or another to his official actuations in civil case 3010. The conduct of respondent gave cause for the litigants in civil case 3010, the lawyers practising in his court, and the public in general to doubt the honesty and fairness of his actuations and the integrity of our courts of justice" (pp. 395396, rec.). II With respect to the second cause of action, the complainant alleged that respondent Judge violated paragraphs 1 and 5, Article 14 of the Code of Commerce when he associated himself with the Traders Manufacturing and Fishing Industries, Inc. as a stockholder and a ranking officer, said corporation having been organized to engage in business. Said Article provides that: Article 14 The following cannot engage in commerce, either in person or by proxy, nor can they hold any office or have any direct, administrative, or financial intervention in commercial or industrial companies within the limits of the districts, provinces, or towns in which they discharge their duties:

1. Justices of the Supreme Court, judges and officials of the department of public prosecution in active service. This provision shall not be applicable to mayors, municipal judges, and municipal prosecuting attorneys nor to those who by chance are temporarily discharging the functions of judge or prosecuting attorney. xxx xxx xxx 5. Those who by virtue of laws or special provisions may not engage in commerce in a determinate territory. It is Our considered view that although the aforestated provision is incorporated in the Code of Commerce which is part of the commercial laws of the Philippines, it, however, partakes of the nature of a political law as it regulates the relationship between the government and certain public officers and employees, like justices and judges. Political Law has been defined as that branch of public law which deals with the organization and operation of the governmental organs of the State and define the relations of the state with the inhabitants of its territory (People vs. Perfecto, 43 Phil. 887, 897 [1922]). It may be recalled that political law embraces constitutional law, law of public corporations, administrative law including the law on public officers and elections. Specifically, Article 14 of the Code of Commerce partakes more of the nature of an administrative law because it regulates the conduct of certain public officers and employees with respect to engaging in business: hence, political in essence. It is significant to note that the present Code of Commerce is the Spanish Code of Commerce of 1885, with some modifications made by the "Commission de Codificacion de las Provincias de Ultramar," which was extended to the Philippines by the Royal Decree of August 6, 1888, and took effect as law in this jurisdiction on December 1, 1888. Upon the transfer of sovereignty from Spain to the United States and later on from the United States to the Republic of the Philippines, Article 14 of this Code of Commerce must be deemed to have been abrogated because where there is change of sovereignty, the political laws of the former sovereign, whether compatible or not with those of the new sovereign, are automatically abrogated, unless they are expressly re-enacted by affirmative act of the new sovereign. Thus, We held in Roa vs. Collector of Customs (23 Phil. 315, 330, 311 [1912]) that: By well-settled public law, upon the cession of territory by one nation to another, either following a conquest or otherwise, ... those laws which are political in their nature and pertain to the prerogatives of the former government immediately cease upon the transfer of sovereignty. (Opinion, Atty. Gen., July 10, 1899). While municipal laws of the newly acquired territory not in conflict with the, laws of the new sovereign continue in force without the express assent or affirmative act of the conqueror, the political laws do not. (Halleck's Int. Law, chap. 34, par. 14). However, such political laws of the prior sovereignty as are not in conflict with the constitution or institutions of the new sovereign, may be continued in force if the conqueror shall so

declare by affirmative act of the commander-in-chief during the war, or by Congress in time of peace. (Ely's Administrator vs. United States, 171 U.S. 220, 43 L. Ed. 142). In the case of American and Ocean Ins. Cos. vs. 356 Bales of Cotton (1 Pet. [26 U.S.] 511, 542, 7 L. Ed. 242), Chief Justice Marshall said: On such transfer (by cession) of territory, it has never been held that the relations of the inhabitants with each other undergo any change. Their relations with their former sovereign are dissolved, and new relations are created between them and the government which has acquired their territory. The same act which transfers their country, transfers the allegiance of those who remain in it; and the law which may be denominated political, is necessarily changed, although that which regulates the intercourse and general conduct of individuals, remains in force, until altered by the newlycreated power of the State. Likewise, in People vs. Perfecto (43 Phil. 887, 897 [1922]), this Court stated that: "It is a general principle of the public law that on acquisition of territory the previous political relations of the ceded region are totally abrogated. " There appears no enabling or affirmative act that continued the effectivity of the aforestated provision of the Code of Commerce after the change of sovereignty from Spain to the United States and then to the Republic of the Philippines. Consequently, Article 14 of the Code of Commerce has no legal and binding effect and cannot apply to the respondent, then Judge of the Court of First Instance, now Associate Justice of the Court of Appeals. It is also argued by complainant herein that respondent Judge violated paragraph H, Section 3 of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, which provides that: Sec. 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: xxx xxx xxx (h) Directly or indirectly having financial or pecuniary interest in any business, contract or transaction in connection with which he intervenes or takes part in his official capacity, or in which he is prohibited by the Constitution or by any Iaw from having any interest. Respondent Judge cannot be held liable under the aforestated paragraph because there is no showing that respondent participated or intervened in his official capacity in the business or transactions of the Traders Manufacturing and Fishing Industries, Inc. In the case at bar, the business of the corporation in which respondent participated has obviously no relation or connection with his judicial office. The

business of said corporation is not that kind where respondent intervenes or takes part in his capacity as Judge of the Court of First Instance. As was held in one case involving the application of Article 216 of the Revised Penal Code which has a similar prohibition on public officers against directly or indirectly becoming interested in any contract or business in which it is his official duty to intervene, "(I)t is not enough to be a public official to be subject to this crime; it is necessary that by reason of his office, he has to intervene in said contracts or transactions; and, hence, the official who intervenes in contracts or transactions which have no relation to his office cannot commit this crime.' (People vs. Meneses, C.A. 40 O.G. 11th Supp. 134, cited by Justice Ramon C. Aquino; Revised Penal Code, p. 1174, Vol. 11 [1976]). It does not appear also from the records that the aforesaid corporation gained any undue advantage in its business operations by reason of respondent's financial involvement in it, or that the corporation benefited in one way or another in any case filed by or against it in court. It is undisputed that there was no case filed in the different branches of the Court of First Instance of Leyte in which the corporation was either party plaintiff or defendant except Civil Case No. 4234 entitled " Bernardita R. Macariola, plaintiff, versus Sinforosa O. Bales, et al.," wherein the complainant herein sought to recover Lot 1184-E from the aforesaid corporation. It must be noted, however, that Civil Case No. 4234 was filed only on November 9 or 11, 1968 and decided on November 2, 1970 by CFI Judge Jose D. Nepomuceno when respondent Judge was no longer connected with the corporation, having disposed of his interest therein on January 31, 1967. Furthermore, respondent is not liable under the same paragraph because there is no provision in both the 1935 and 1973 Constitutions of the Philippines, nor is there an existing law expressly prohibiting members of the Judiciary from engaging or having interest in any lawful business. It may be pointed out that Republic Act No. 296, as amended, also known as the Judiciary Act of 1948, does not contain any prohibition to that effect. As a matter of fact, under Section 77 of said law, municipal judges may engage in teaching or other vocation not involving the practice of law after office hours but with the permission of the district judge concerned. Likewise, Article 14 of the Code of Commerce which prohibits judges from engaging in commerce is, as heretofore stated, deemed abrogated automatically upon the transfer of sovereignty from Spain to America, because it is political in nature. Moreover, the prohibition in paragraph 5, Article 1491 of the New Civil Code against the purchase by judges of a property in litigation before the court within whose jurisdiction they perform their duties, cannot apply to respondent Judge because the sale of the lot in question to him took place after the finality of his decision in Civil Case No. 3010 as well as his two orders approving the project of partition; hence, the property was no longer subject of litigation. In addition, although Section 12, Rule XVIII of the Civil Service Rules made pursuant to the Civil Service Act of 1959 prohibits an officer or employee in the civil service from engaging in any private business, vocation, or profession or be connected with any commercial, credit, agricultural or industrial undertaking without a written permission from the head of department, the same, however, may not fall within the purview of paragraph h, Section 3 of the Anti-Graft and Corrupt Practices Act because the last portion of said paragraph speaks of a prohibition by the Constitution or law on any public officer from having any interest in any business and not by a mere administrative rule or regulation. Thus, a

violation of the aforesaid rule by any officer or employee in the civil service, that is, engaging in private business without a written permission from the Department Head may not constitute graft and corrupt practice as defined by law. On the contention of complainant that respondent Judge violated Section 12, Rule XVIII of the Civil Service Rules, We hold that the Civil Service Act of 1959 (R.A. No. 2260) and the Civil Service Rules promulgated thereunder, particularly Section 12 of Rule XVIII, do not apply to the members of the Judiciary. Under said Section 12: "No officer or employee shall engage directly in any private business, vocation, or profession or be connected with any commercial, credit, agricultural or industrial undertaking without a written permission from the Head of Department ..." It must be emphasized at the outset that respondent, being a member of the Judiciary, is covered by Republic Act No. 296, as amended, otherwise known as the Judiciary Act of 1948 and by Section 7, Article X, 1973 Constitution. Under Section 67 of said law, the power to remove or dismiss judges was then vested in the President of the Philippines, not in the Commissioner of Civil Service, and only on two grounds, namely, serious misconduct and inefficiency, and upon the recommendation of the Supreme Court, which alone is authorized, upon its own motion, or upon information of the Secretary (now Minister) of Justice to conduct the corresponding investigation. Clearly, the aforesaid section defines the grounds and prescribes the special procedure for the discipline of judges. And under Sections 5, 6 and 7, Article X of the 1973 Constitution, only the Supreme Court can discipline judges of inferior courts as well as other personnel of the Judiciary. It is true that under Section 33 of the Civil Service Act of 1959: "The Commissioner may, for ... violation of the existing Civil Service Law and rules or of reasonable office regulations, or in the interest of the service, remove any subordinate officer or employee from the service, demote him in rank, suspend him for not more than one year without pay or fine him in an amount not exceeding six months' salary." Thus, a violation of Section 12 of Rule XVIII is a ground for disciplinary action against civil service officers and employees. However, judges cannot be considered as subordinate civil service officers or employees subject to the disciplinary authority of the Commissioner of Civil Service; for, certainly, the Commissioner is not the head of the Judicial Department to which they belong. The Revised Administrative Code (Section 89) and the Civil Service Law itself state that the Chief Justice is the department head of the Supreme Court (Sec. 20, R.A. No. 2260) [1959]); and under the 1973 Constitution, the Judiciary is the only other or second branch of the government (Sec. 1, Art. X, 1973 Constitution). Besides, a violation of Section 12, Rule XVIII cannot be considered as a ground for disciplinary action against judges because to recognize the same as applicable to them, would be adding another ground for the discipline of judges and, as aforestated, Section 67 of the Judiciary Act recognizes only two grounds for their removal, namely, serious misconduct and inefficiency. Moreover, under Section 16(i) of the Civil Service Act of 1959, it is the Commissioner of Civil Service who has original and exclusive jurisdiction "(T)o decide, within one hundred twenty days, after submission to it, all administrative cases against permanent officers and employees in the competitive service, and, except as provided by law, to have final authority to pass upon their removal, separation,

and suspension and upon all matters relating to the conduct, discipline, and efficiency of such officers and employees; and prescribe standards, guidelines and regulations governing the administration of discipline" (emphasis supplied). There is no question that a judge belong to the non-competitive or unclassified service of the government as a Presidential appointee and is therefore not covered by the aforesaid provision. WE have already ruled that "... in interpreting Section 16(i) of Republic Act No. 2260, we emphasized that only permanent officers and employees who belong to the classified service come under the exclusive jurisdiction of the Commissioner of Civil Service" (Villaluz vs. Zaldivar, 15 SCRA 710,713 [1965], Ang-Angco vs. Castillo, 9 SCRA 619 [1963]). Although the actuation of respondent Judge in engaging in private business by joining the Traders Manufacturing and Fishing Industries, Inc. as a stockholder and a ranking officer, is not violative of the provissions of Article 14 of the Code of Commerce and Section 3(h) of the Anti-Graft and Corrupt Practices Act as well as Section 12, Rule XVIII of the Civil Service Rules promulgated pursuant to the Civil Service Act of 1959, the impropriety of the same is clearly unquestionable because Canon 25 of the Canons of Judicial Ethics expressly declares that: A judge should abstain from making personal investments in enterprises which are apt to be involved in litigation in his court; and, after his accession to the bench, he should not retain such investments previously made, longer than a period sufficient to enable him to dispose of them without serious loss. It is desirable that he should, so far as reasonably possible, refrain from all relations which would normally tend to arouse the suspicion that such relations warp or bias his judgment, or prevent his impartial attitude of mind in the administration of his judicial duties. ... WE are not, however, unmindful of the fact that respondent Judge and his wife had withdrawn on January 31, 1967 from the aforesaid corporation and sold their respective shares to third parties, and it appears also that the aforesaid corporation did not in anyway benefit in any case filed by or against it in court as there was no case filed in the different branches of the Court of First Instance of Leyte from the time of the drafting of the Articles of Incorporation of the corporation on March 12, 1966, up to its incorporation on January 9, 1967, and the eventual withdrawal of respondent on January 31, 1967 from said corporation. Such disposal or sale by respondent and his wife of their shares in the corporation only 22 days after the incorporation of the corporation, indicates that respondent realized that early that their interest in the corporation contravenes the aforesaid Canon 25. Respondent Judge and his wife therefore deserve the commendation for their immediate withdrawal from the firm after its incorporation and before it became involved in any court litigation III With respect to the third and fourth causes of action, complainant alleged that respondent was guilty of coddling an impostor and acted in disregard of judicial decorum, and that there was culpable defiance of the law and utter disregard for ethics. WE agree, however, with the recommendation of the Investigating Justice that respondent Judge be exonerated because the aforesaid causes of action are groundless, and WE quote the pertinent portion of her report which reads as follows: The basis for complainant's third cause of action is the claim that respondent associated and closely fraternized with Dominador Arigpa Tan who openly and publicly advertised himself as a practising attorney (see Exhs. I, I-1 and J) when in

truth and in fact said Dominador Arigpa Tan does not appear in the Roll of Attorneys and is not a member of the Philippine Bar as certified to in Exh. K. The "respondent denies knowing that Dominador Arigpa Tan was an "impostor" and claims that all the time he believed that the latter was a bona fide member of the bar. I see no reason for disbelieving this assertion of respondent. It has been shown by complainant that Dominador Arigpa Tan represented himself publicly as an attorneyat-law to the extent of putting up a signboard with his name and the words "Attorneyat Law" (Exh. I and 1- 1) to indicate his office, and it was but natural for respondent and any person for that matter to have accepted that statement on its face value. "Now with respect to the allegation of complainant that respondent is guilty of fraternizing with Dominador Arigpa Tan to the extent of permitting his wife to be a godmother of Mr. Tan's child at baptism (Exh. M & M-1), that fact even if true did not render respondent guilty of violating any canon of judicial ethics as long as his friendly relations with Dominador A. Tan and family did not influence his official actuations as a judge where said persons were concerned. There is no tangible convincing proof that herein respondent gave any undue privileges in his court to Dominador Arigpa Tan or that the latter benefitted in his practice of law from his personal relations with respondent, or that he used his influence, if he had any, on the Judges of the other branches of the Court to favor said Dominador Tan. Of course it is highly desirable for a member of the judiciary to refrain as much as possible from maintaining close friendly relations with practising attorneys and litigants in his court so as to avoid suspicion 'that his social or business relations or friendship constitute an element in determining his judicial course" (par. 30, Canons of Judicial Ethics), but if a Judge does have social relations, that in itself would not constitute a ground for disciplinary action unless it be clearly shown that his social relations be clouded his official actuations with bias and partiality in favor of his friends (pp. 403-405, rec.). In conclusion, while respondent Judge Asuncion, now Associate Justice of the Court of Appeals, did not violate any law in acquiring by purchase a parcel of land which was in litigation in his court and in engaging in business by joining a private corporation during his incumbency as judge of the Court of First Instance of Leyte, he should be reminded to be more discreet in his private and business activities, because his conduct as a member of the Judiciary must not only be characterized with propriety but must always be above suspicion. WHEREFORE, THE RESPONDENT ASSOCIATE JUSTICE OF THE COURT OF APPEALS IS HEREBY REMINDED TO BE MORE DISCREET IN HIS PRIVATE AND BUSINESS ACTIVITIES. SO ORDERED. Teehankee, Guerrero, De Castro, Melencio-Herrera, Plana, Vasquez, Relova and Gutierrez, JJ., concur. Concepcion Jr., J., is on leave. Fernando, C.J., Abad Santos and Esolin JJ., took no part.

10

Republic SUPREME Manila SECOND DIVISION

of

the

Philippines COURT

G.R. No. L-30671 November 28, 1973 REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents. Office of the Solicitor General Felix V. Makasiar and Solicitor Bernardo P. Pardo for petitioner. Andres T. Velarde and Marcelo B. Fernan for respondents. FERNANDO, J.: The Republic of the Philippines in this certiorari and prohibition proceeding challenges the validity of an order issued by respondent Judge Guillermo P. Villasor, then of the Court of First Instance of Cebu, 1 Branch I, declaring a decision final and executory and of an alias writ of execution directed against the funds of the Armed Forces of the Philippines subsequently issued in pursuance thereof, the alleged ground being excess of jurisdiction, or at the very least, grave abuse of discretion. As thus simply and tersely put, with the facts being undisputed and the principle of law that calls for application indisputable, the outcome is predictable. The Republic of the Philippines is entitled to the writs prayed for. Respondent Judge ought not to have acted thus. The order thus impugned and the alias writ of execution must be nullified. In the petition filed by the Republic of the Philippines on July 7, 1969, a summary of facts was set forth thus: "7. On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in favor of respondents P. J. Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation, and against the petitioner herein, confirming the arbitration award in the amount of P1,712,396.40, subject of Special Proceedings. 8. On June 24, 1969, respondent Honorable Guillermo P. Villasor, issued an Order declaring the aforestated decision of July 3, 1961 final and executory, directing the Sheriffs of Rizal Province, Quezon City [as well as] Manila to execute the said decision. 9. Pursuant to the said Order dated June 24, 1969, the corresponding Alias Writ of Execution [was issued] dated June 26, 1969, .... 10. On the strength of the afore-mentioned Alias Writ of Execution dated June 26, 1969, the Provincial Sheriff of Rizal (respondent herein) served notices of garnishment dated June 28, 1969 with several Banks, specially on the "monies due the Armed Forces of the Philippines in the form of deposits sufficient to cover the amount mentioned in the said Writ of Execution"; the Philippine Veterans Bank received the same notice of garnishment on June 30, 1969 .... 11. The funds of the Armed Forces of the Philippines on deposit with the Banks, particularly, with the Philippine Veterans Bank and the Philippine National Bank [or] their branches are public funds duly appropriated and allocated for the payment of

pensions of retirees, pay and allowances of military and civilian personnel and for maintenance and operations of the Armed Forces of the Philippines, as per Certification dated July 3, 1969 by the AFP 2 Controller,..." . The paragraph immediately succeeding in such petition then alleged: "12. Respondent Judge, Honorable Guillermo P. Villasor, acted in excess of jurisdiction [or] with grave abuse of discretion amounting to lack of jurisdiction in granting the issuance of an alias writ of execution against the properties of the Armed Forces of the Philippines, hence, the Alias Writ of Execution and notices of 3 garnishment issued pursuant thereto are null and void." In the answer filed by respondents, through counsel Andres T. Velarde and Marcelo B. Fernan, the facts set forth were admitted with the only 4 qualification being that the total award was in the amount of P2,372,331.40. The Republic of the Philippines, as mentioned at the outset, did right in filing this certiorari and prohibition proceeding. What was done by respondent Judge is not in conformity with the dictates of the Constitution. . It is a fundamental postulate of constitutionalism flowing from the juristic concept of sovereignty that the state as well as its government is immune from suit unless it gives its consent. It is readily understandable why it must be so. In the classic formulation of Holmes: "A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends." 5 Sociological jurisprudence supplies an answer not dissimilar. So it was indicated in a recent decision, 6 Providence Washington Insurance Co. v. Republic of the Philippines , with its affirmation that "a continued adherence to the doctrine of non-suability is not to be deplored for as against the inconvenience that may be caused private parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious functions are far greater if such a fundamental principle were abandoned and the availability of judicial remedy were not thus restricted. With the well known propensity on the part of our people to go to court, at the least provocation, the loss of time and energy required to defend against law suits, in the absence of such a basic principle that constitutes such an 7 effective obstacle, could very well be imagined." This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised charter. 8 It is therein expressly provided: "The State may not be sued without its consent." A corollary, both dictated by logic and sound sense from a basic concept is that public funds cannot be the object of a garnishment proceeding even if the consent to be sued had been previously granted and the state 9 liability adjudged. Thus in the recent case of Commissioner of Public Highways v. San Diego, such a well-settled doctrine was restated in the opinion of Justice Teehankee: "The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimant's action 'only up to the completion of proceedings anterior to the stage of execution' and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their 10 legitimate and specific objects, as appropriated by law." Such a principle applies even to an attempted garnishment of a salary that had accrued in favor of an employee. Director of Commerce and 11 Industry v. Concepcion, speaks to that effect. Justice Malcolm as ponente left no doubt on that score. Thus: "A rule which has never been seriously questioned, is that money in the hands of public officers, although it may be due government employees, is not liable to the creditors of these employees in the process of garnishment. One reason is, that the State, by virtue of its sovereignty, may not be sued in

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its own courts except by express authorization by the Legislature, and to subject its officers to garnishment would be to permit indirectly what is prohibited directly. Another reason is that moneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the Government, belong to the latter, although the defendant in garnishment may be entitled to a specific portion thereof. And still another reason which covers both of the foregoing is that every consideration of public policy 12 forbids it." In the light of the above, it is made abundantly clear why the Republic of the Philippines could rightfully allege a legitimate grievance. WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and setting aside both the order of June 24, 1969 declaring executory the decision of July 3, 1961 as well as the alias writ of execution issued thereunder. The preliminary injunction issued by this Court on July 12, 1969 is hereby made permanent. Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur. Barredo, J, took no part. Republic SUPREME Manila THIRD DIVISION G.R. No. 74135 May 28, 1992 M. H. WYLIE and CAPT. JAMES WILLIAMS, petitioners, vs. AURORA I. RARANG and THE HONORABLE INTERMEDIATE APPELLATE COURT, respondents. GUTIERREZ, JR., J.: The pivotal issue in this petition centers on the extent of the "immunity from suit" of the officials of a United States Naval Base inside Philippine territory. In February, 1978, petitioner M. H. Wylie was the assistant administrative officer while petitioner Capt. James Williams was the commanding officer of the U. S. Naval Base in Subic Bay, Olongapo City. Private respondent Aurora I. Rarang was an employee in the office of the Provost Marshal assigned as merchandise control guard. M. H. Wylie, in his capacity as assistant administrative officer of the U.S. Naval Station supervised the publication of the "Plan of the Day" (POD) which was published daily by the US Naval Base station. The POD featured important announcements, necessary precautions, and general matters of interest to of the Philippines COURT

military personnel. One of the regular features of the POD was the "action line inquiry." On February 3, 1978, the POD published, under the "NAVSTA ACTION LINE INQUIRY" the following: Question: I have observed that Merchandise Control inspector/inspectress are (sic) consuming for their own benefit things they have confiscated from Base Personnel. The observation is even more aggravated by consuming such confiscated items as cigarettes and food stuffs PUBLICLY. This is not to mention "Auring" who is in herself, a disgrace to her division and to the Office of the Provost Marshal. In lieu of this observation, may I therefore, ask if the head of the Merchandise Control Division is aware of this malpractice? Answer: Merchandise Control Guards and all other personnel are prohibited from appropriating confiscated items for their own consumption or use. Two locked containers are installed at the Main Gate area for deposit of confiscated items and the OPM evidence custodian controls access to these containers. Merchandise Control Guards are permitted to eat their meals at their worksite due to heavy workload. Complaints regarding merchandise control guards procedure or actions may be made directly at the Office of the Provost Marshal for immediate and necessary action. Specific dates and time along with details of suspected violations would be most appreciated. Telephone 4-3430/4-3234 for further information or to report noted or suspected irregularities. Exhibits E & E-1. (Rollo, pp. 11-12) The private respondent was the only one who was named "Auring" in the Office of the Provost Marshal. That the private respondent was the same "Auring" referred to in the POD was conclusively proven when on February 7, 1978, petitioner M. H. Wylie wrote her a letter of apology for the "inadvertent" publication. The private respondent then commenced an action for damages in the Court of First Instance of Zambales (now Regional Trial Court) against M. H. Wylie, Capt. James Williams and the U. S. Naval Base. She alleged that the article constituted false, injurious, and malicious defamation and libel tending to impeach her honesty, virtue and reputation exposing her to public hatred, contempt and ridicule; and that the libel was published and circulated in the English language and read by almost all the U. S. Naval Base personnel. She prayed that she be awarded P300,000.00 as moral damages; exemplary damages which the court may find proper; and P50,000.00 as attorney's fees. In response to the complaint, the defendants filed a motion to dismiss anchored on three grounds: 1. Defendants M. H. Wylie and Capt. James Williams acted in the performance of their official functions as officers of the United States Navy and are, therefore, immune from suit; 2. The United States Naval Base is an instrumentality of the US government which cannot be sued without its consent; and 3. This Court has no jurisdiction over the subject matter as well as the parties in this case. (Record on Appeal, pp. 133-134)

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The motion was, however, denied. In their answer, the defendants reiterated the lack of jurisdiction of the court over the case. In its decision, the trial court ruled that the acts of defendants M. H. Wylie and Cpt. James Williams were not official acts of the government of the United States of America in the operation and control of the Base but personal and tortious acts which are exceptions to the general rule that a sovereign country cannot be sued in the court of another country without its consent. In short, the trial court ruled that the acts and omissions of the two US officials were not imputable against the US government but were done in the individual and personal capacities of the said officials. The trial court dismissed the suit against the US Naval Base. The dispositive portion of the decision reads as follows: WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants jointly and severally, as follows: 1) Ordering defendants M. H. Wylie and Capt. James Williams to pay the plaintiff Aurora Rarang the sum of one hundred thousand (P100,000.00) pesos by way of moral and exemplary damages; 2) Ordering defendants M. H. Wylie and Capt. James Williams to pay the plaintiff the sum of thirty thousand (P30,000.00) pesos by way of attorney's fees and expenses of litigation; and 3) To pay the costs of this suit. Counterclaims are dismissed. Likewise, the suit against the U.S. Naval Base is ordered dismissed. (Record on Appeal, p. 154) On appeal, the petitioners reiterated their stance that they are immune from suit since the subject publication was made in their official capacities as officers of the U. S. Navy. They also maintained that they did not intentionally and maliciously cause the questioned publication. The private respondent, not satisfied with the amount of damages awarded to her, also appealed the trial court's decision. Acting on these appeals, the Intermediate Appellate Court, now Court of Appeals, modified the trial court's decision, to wit: WHEREFORE, the judgment of the court below is modified so that the defendants are ordered to pay the plaintiff, jointly and severally, the sum of P175,000.00 as moral damages and the sum of P60,000.00 as exemplary damages. The rest of the judgment appealed from is hereby affirmed in toto. Costs against the defendantsappellants. (Rollo, p. 44)

The appellate court denied a motion for reconsideration filed by the petitioners. Hence, this petition. In a resolution dated March 9, 1987, we gave due course to the petition. The petitioners persist that they made the questioned publication in the performance of their official functions as administrative assistant, in the case of M. H. Wylie, and commanding officer, in the case of Capt. James Williams of the US Navy assigned to the U. S. Naval Station, Subic Bay, Olongapo City and were, therefore, immune from suit for their official actions. In the case of United States of America v. Guinto (182 SCRA 644 [1990]), we discussed the principle of the state immunity from suit as follows: The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987 Constitution, is one of the generally accepted principles of international law that we have adopted as part of the law of our land under Article II, Section 2. xxx xxx xxx Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority of states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society of nations. Upon its admission to such society, the state is automatically obligated to comply with these principles in its relations with other states. As applied to the local state, the doctrine of state immunity is based on the justification given by Justice Holmes that "there can be no legal right against the authority which makes the law on which the right depends." (Kawanakoa v. Polybank, 205 U.S. 349) There are other practical reasons for the enforcement of the doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet imperium. All states are sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would, in the language of a celebrated case, "unduly vex the peace of nations." (Da Haber v. Queen of Portugal, 17 Q. B. 171) While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be regarded as against the state itself although it has not been formally impleaded. (Garcia v. Chief of Staff, 16 SCRA 120) In such a

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situation, the state may move to dismiss the complaint on the ground that it has been filed without its consent. The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the privilege it grants the state to defeat any legitimate claim against it by simply invoking its non-suability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does not say the state may not be sued under any circumstance. On the contrary, the rule says that the state may not be sued without its consent, which clearly imports that it may be sued if it consents. The consent of the state to be sued may be manifested expressly or impliedly. Express consent may be embodied in a general law or a special law. Consent is implied when the state enters into a contract it itself commences litigation. xxx xxx xxx The above rules are subject to qualification. Express consent is effected only by the will of the legislature through the medium of a duly enacted statute. (Republic v. Purisima, 78 SCRA 470) We have held that not all contracts entered into by the government will operate as a waiver of its non-suability; distinction must be made between its sovereign and proprietary acts. (United States of America v. Ruiz, 136 SCRA 487) As for the filing of a complaint by the government, suability will result only where the government is claiming affirmative relief from the defendant. (Lim v. Brownell, 107 Phil. 345) (at pp. 652-655) In the same case we had opportunity to discuss extensively the nature and extent of immunity from suit of United States personnel who are assigned and stationed in Philippine territory, to wit: In the case of the United States of America, the customary rule of international law on state immunity is expressed with more specificity in the RP-US Bases Treaty. Article III thereof provides as follows: It is mutually agreed that the United States shall have the rights, power and authority within the bases which are necessary for the establishment, use, operation and defense thereof or appropriate for the control thereof and all the rights, power and authority within the limits of the territorial waters and air space adjacent to, or in the vicinity of, the bases which are necessary to provide access to them or appropriate for their control. The petitioners also rely heavily on Baer v. Tizon, (57 SCRA 1) along with several other decisions, to support their position that they are not suable in the cases below, the United States not having waived its sovereign immunity from suit. It is emphasized that in Baer, the Court held: xxx xxx xxx

The invocation of the doctrine of immunity from suit of a foreign state without its consent is appropriate. More specifically, insofar as alien armed forces is concerned, the starting point is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas corpus petition for the release of petitioners confined by American army authorities, Justice Hilado, speaking for the Court, cited Coleman v. Tennessee, where it was explicitly declared: "It is well settled that a foreign army, permitted to march through a friendly country or to be stationed in it, by permission of its government or sovereign, is exempt from the civil and criminal jurisdiction of the place." Two years later, in Tubb and Tedrow v. Griess, this Court relied on the ruling in Raquiza v. Bradford and cited in support thereof excerpts from the works of the following authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair and Lauterpacht. Accuracy demands the clarification that after the conclusion of the Philippine-American Military Bases Agreement, the treaty provisions should control on such matter, the assumption being that there was a manifestation of the submission to jurisdiction on the part of the foreign power whenever appropriate. More to the point is Syquia v. Almeda Lopez, where plaintiffs as lessors sued the Commanding General of the United States Army in the Philippines, seeking the restoration to them of the apartment buildings they owned leased to the United States armed forces station in the Manila area. A motion to dismiss on the ground of non-suability was filed and upheld by respondent Judge. The matter was taken to this Court in a mandamus proceeding. It failed. It was the ruling that respondent Judge acted correctly considering that the "action must be considered as one against the U.S. Government." The opinion of Justice Montemayor continued: "It is clear that the courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U.S. Government has not given its consent to the filing of this suit which is essentially against her, though not in name. Moreover, this is not only a case of a citizen filing a suit against his own Government without the latter's consent but it is of a citizen filing an action against a foreign government without said government's consent, which renders more obvious the lack of jurisdiction of the courts of his country. The principles of law behind this rule are so elementary and of such general acceptance that we deem it unnecessary to cite authorities in support thereof."

It bears stressing at this point that the above observations do not confer on the United States of America a blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they are also insulated from

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suit in this country merely because they have acted as agents of the United States in the discharge of their official functions. There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied. This was our ruling in United States of America v. Ruiz, (136 SCRA 487) where the transaction in question dealt with the improvement of the wharves in the naval installation at Subic Bay. As this was a clearly governmental function, we held that the contract did not operate to divest the United States of its sovereign immunity from suit. In the words of Justice Vicente Abad Santos: The traditional rule of immunity excepts a State from being sued in the courts of another State without its consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules of International Law are not petrified; they are constantly developing and evolving. And because the activities of states have multiplied, it has been necessary to distinguish them between sovereign and governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State immunity now extends only to acts jure imperii. The restrictive application of State immunity is now the rule in the United States, the United Kingdom and other states in Western Europe. xxx xxx xxx The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the defense of both the United States and the Philippines, indisputably a function of the government of the highest order; they are not utilized for nor dedicated to commercial or business purposes. The other petitioners in the cases before us all aver they have acted in the discharge of their official functions as officers or agents of the United States. However, this is a matter of evidence. The charges against them may not be summarily dismissed on their mere assertion that their acts are imputable to the United States of America, which has not given its consent to be sued. In fact, the defendants are sought to be

held answerable for personal torts in which the United States itself is not involved. If found liable, they and they alone must satisfy the judgment. (At pp. 655-658) In the light of these precedents, we proceed to resolve the present case. The POD was published under the direction and authority of the commanding officer, U.S. Naval Station Subic Bay. The administrative assistant, among his other duties, is tasked to prepare and distribute the POD. On February 3, 1978, when the questioned article was published in the POD, petitioner Capt. James Williams was the commanding officer while petitioner M.H. Wylie was the administrative assistant of the US Naval Station at Subic bay. The NAVSTA ACTION LINE INQUIRY is a regular feature of the POD. It is a telephone answering device in the office of the Administrative Assistant. The Action Line is intended to provide personnel access to the Commanding Officer on matters they feel should be brought to his attention for correction or investigation. The matter of inquiry may be phoned in or mailed to the POD. (TSN, September 9, 1980, pp. 12-13, Jerry Poblon) According to M. H. Wylie, the action line naming "Auring" was received about three (3) weeks prior to its being published in the POD on February 3, 1978. It was forwarded to Rarang's office of employment, the Provost Marshal, for comment. The Provost Marshal office's response ". . . included a short note stating that if the article was published, to remove the name ." (Exhibit 8-A, p. 5) The Provost Marshal's response was then forwarded to the executive officer and to the commanding officer for approval. The approval of the Commanding officer was forwarded to the office of the Administrative Assistant for inclusion in the POD. A certain Mrs. Dologmodin, a clerk typist in the office of the Administrative Assistant prepared the smooth copy of the POD. Finally, M. H. Wylie, the administrative assistant signed the smooth copy of the POD but failed to notice the reference to "Auring" in the action line inquiry. (Exh. 8-A, pp. 4-5, Questions Nos. 14-15). There is no question, therefore, that the two (2) petitioners actively participated in screening the features and articles in the POD as part of their official functions. Under the rule that U.S. officials in the performance of their official functions are immune from suit, then it should follow that the petitioners may not be held liable for the questioned publication. It is to be noted, however, that the petitioners were sued in their personal capacities for their alleged tortious acts in publishing a libelous article. The question, therefore, arises are American naval officers who commit a crime or tortious act while discharging official functions still covered by the principle of state immunity from suit? Pursuing the question further, does the grant of rights, power, and authority to the United States under the RP-US Bases Treaty cover immunity of its officers from crimes and torts? Our answer is No. Killing a person in cold blood while on patrol duty, running over a child while driving with reckless imprudence on an official trip, or slandering a person during office hours could not possibly be covered by the immunity agreement. Our laws and, we presume, those of the United States do not allow the commission of crimes in the name of official duty.

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The case of Chavez v. Sandiganbayan, 193 SCRA 282 [1991] gives the law on immunity from suit of public officials: The general rule is that public officials can be held personally accountable for acts claimed to have been performed in connection with official duties where they have acted ultra vires or where there is showing of bad faith. xxx xxx xxx Moreover, the petitioner's argument that the immunity proviso under Section 4(a) of Executive Order No. 1 also extends to him is not well-taken. A mere invocation of the immunity clause does not ipso facto result in the charges being automatically dropped. In the case of Presidential Commission on Good Government v. Pea (159 SCRA 556 [1988] then Chief Justice Claudio Teehankee, added a clarification of the immunity accorded PCGG officials under Section 4(a) of Executive Order No. 1 as follows: With respect to the qualifications expressed by Mr. Justice Feliciano in his separate opinion, I just wish to point out two things: First, the main opinion does not claim absolute immunity for the members of the Commission. The cited section of Executive Order No. 1 provides the Commission's members immunity from suit thus: "No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the task contemplated by this order." No absolute immunity like that sought by Mr. Marcos in his Constitution for himself and his subordinates is herein involved. It is understood that the immunity granted the members of the Commission by virtue of the unimaginable magnitude of its task to recover the plundered wealth and the State's exercise of police power was immunity from liability for damages in the official discharge of the task granted the members of the Commission much in the same manner that judges are immune from suit in the official discharge of the functions of their office. . . . (at pp. 581-582) xxx xxx xxx Immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a privileged status not claimed by any other official of the Republic. ( id., at page 586) Where the petitioner exceeds his authority as Solicitor General, acts in bad faith, or, as contended by the private respondent, "maliciously conspir(es) with the PCGG

commissioners in persecuting respondent Enrile by filing against him an evidently baseless suit in derogation of the latter's constitutional rights and liberties" ( Rollo, p. 417), there can be no question that a complaint for damages does not confer a license to persecute or recklessly injure another. The actions governed by Articles 19, 20, 21, and 32 of the Civil Code on Human Relations may be taken against public officers or private citizens alike. . . . (pp. 289-291) We apply the same ruling to this case. The subject article in the US Newsletter POD dated February 3, 1978 mentions a certain "Auring" as ". . a disgrace to her division and to the Office of the Provost Marshal." The same article explicitly implies that Auring was consuming and appropriating for herself confiscated items like cigarettes and foodstuffs. There is no question that the Auring alluded to in the Article was the private respondent as she was the only Auring in the Office of the Provost Marshal. Moreover, as a result of this article, the private respondent was investigated by her supervisor. Before the article came out, the private respondent had been the recipient of commendations by her superiors for honesty in the performance of her duties. It may be argued that Captain James Williams as commanding officer of the naval base is far removed in the chain of command from the offensive publication and it would be asking too much to hold him responsible for everything which goes wrong on the base. This may be true as a general rule. In this particular case, however, the records show that the offensive publication was sent to the commanding officer for approval and he approved it. The factual findings of the two courts below are based on the records. The petitioners have shown no convincing reasons why our usual respect for the findings of the trial court and the respondent court should be withheld in this particular case and why their decisions should be reversed. Article 2176 of the Civil Code prescribes a civil liability for damages caused by a person's act or omission constituting fault or negligence, to wit: Art. 2176. Whoever by act or omission, causes damage to another, there being fault or negligence is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. "Fault" or "negligence" in this Article covers not only acts "not punishable by law" but also acts criminal in character, whether intentional or voluntary or negligent." (Andamo v. Intermediate Appellate Court, 191 SCRA 195 [1990]). Moreover, Article 2219(7) of the Civil Code provides that moral damages may be recovered in case of libel, slander or any other form of defamation. In effect, the offended party in these cases is given the right to receive from the guilty party moral damages for injury to his feelings and reputation in addition to punitive or exemplary damages. (Occena v. Icamina, 181 SCRA 328 [1990]). In another case, Heirs of Basilisa Justiva v. Gustilo, 7 SCRA 72 [1963], we ruled that the allegation of forgery of documents could be a defamation, which in the light of Article 2219(7) of the Civil Code could by analogy be ground for payment of moral damages, considering the wounded feelings and besmirched reputation of the defendants.

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Indeed the imputation of theft contained in the POD dated February 3, 1978 is a defamation against the character and reputation of the private respondent. Petitioner Wylie himself admitted that the Office of the Provost Marshal explicitly recommended the deletion of the name Auring if the article were published. The petitioners, however, were negligent because under their direction they issued the publication without deleting the name "Auring." Such act or omission is ultra vires and cannot be part of official duty. It was a tortious act which ridiculed the private respondent. As a result of the petitioners' act, the private respondent, according to the record, suffered besmirched reputation, serious anxiety, wounded feelings and social humiliation, specially so, since the article was baseless and false. The petitioners, alone, in their personal capacities are liable for the damages they caused the private respondent. WHEREFORE, the petition is hereby DISMISSED. The questioned decision and resolution of the then Intermediate Appellate Court, now Court of Appeals, are AFFIRMED. Bidin, Davide, Jr. and Romero, JJ., concur. Feliciano, J., took no part. Republic SUPREME Manila EN BANC G.R. No. L-59234 September 30, 1982 TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION CORPORATION, petitioners, vs. THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND TRANSPORTATION, respondents. MELENCIO-HERRERA, J.: This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order" filed by the Taxicab Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of Memorandum Circular No. 77-42, dated October 10, 1977, of the Board of Transportation, and Memorandum Circular No. 52, dated August 15, 1980, of the Bureau of Land Transportation. Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic corporation composed of taxicab operators, who are grantees of Certificates of Public Convenience to operate taxicabs within the City of Manila and to any other place in Luzon accessible to vehicular traffic. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the members of TOMMI, each being an operator and grantee of such certificate of public convenience. of the Philippines COURT

On October 10, 1977, respondent Board of Transportation (BOT) issued Memorandum Circular No. 7742 which reads: SUBJECT: Phasing out and Replacement of Old and Dilapidated Taxis WHEREAS, it is the policy of the government to insure that only safe and comfortable units are used as public conveyances; WHEREAS, the riding public, particularly in Metro-Manila, has, time and again, complained against, and condemned, the continued operation of old and dilapidated taxis; WHEREAS, in order that the commuting public may be assured of comfort, convenience, and safety, a program of phasing out of old and dilapidated taxis should be adopted; WHEREAS, after studies and inquiries made by the Board of Transportation, the latter believes that in six years of operation, a taxi operator has not only covered the cost of his taxis, but has made reasonable profit for his investments; NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six years shall be operated as taxi, and in implementation of the same hereby promulgates the following rules and regulations: 1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cards for 1978, only taxis of Model 1972 and later shall be accepted for registration and allowed for operation; 2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979, only taxis of Model 1973 and later shall be accepted for registration and allowed for operation; and every year thereafter, there shall be a six-year lifetime of taxi, to wit: 1980 Model 1974 1981 Model 1975, etc. All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as of the last day of registration of each particular year and their respective plates shall be surrendered directly to the Board of Transportation for subsequent turnover to the Land Transportation Commission.

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For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro-Manila. Its implementation outside Metro- Manila shall be carried out only after the project has been implemented in Metro-Manila and 1 only after the date has been determined by the Board. Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public conveyances. To quote said Circular: Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are now banned from operating as public utilities in Metro Manila. As such the units involved should be considered as automatically dropped as public utilities and, therefore, do not require any further dropping order from the BOT. Henceforth, taxi units within the National Capitol Region having year models over 6 years old shall be refused registration. The following schedule of phase-out is herewith prescribed for the guidance of all concerned: Year Model Automatic Phase-Out Year 1980 1974 1975 1976 1977 etc. Strict compliance here is desired.
2

On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early hearing of their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and documentary evidence, offered the same, and manifested that they would submit additional documentary proofs. Said proofs were submitted on March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of Additional Evidence and Submission of the Case for 3 Resolution." On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide Main Petition" praying that the case be resolved or decided not later than December 10, 1981 to enable them, in case of denial, to avail of whatever remedy they may have under the law for the protection of their interests before their 1975 model cabs are phased-out on January 1, 1982. Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the records of the case could not be located. On December 29, 1981, the present Petition was instituted wherein the following queries were posed for consideration by this Court: A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner required by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to procedural due process? B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by Presidential Decree No. 101, would the implementation and enforcement of the assailed memorandum circulars violate the petitioners' constitutional rights to. (1) Equal protection of the law; (2) Substantive due process; and (3) Protection against arbitrary and unreasonable classification and standard?

1981 1982 1983

etc.

On Procedural and Substantive Due Process: Presidential Decree No. 101 grants to the Board of Transportation the power 4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed by operators of public utility motor vehicles. Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers:

In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model 1972, in 1979; those of model 1973, in 1980; and those of model 1974, in 1981. On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 80-7553, seeking to nullify MC No. 77-42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of taxicabs of model 1974, as well as those of earlier models which were phased-out, provided that, at the time of registration, they are roadworthy and fit for operation.

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Sec. 2. Exercise of powers. In the exercise of the powers granted in the preceding section, the Board shag proceed promptly along the method of legislative inquiry. Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol Group, the support agencies within the Department of Public Works, Transportation and Communications, or any other government office or agency that may be able to furnish useful information or data in the formulation of the Board of any policy, plan or program in the implementation of this Decree. The Board may also can conferences, require the submission of position papers or other documents, information, or data by operators or other persons that may be affected by the implementation of this Decree, or employ any other suitable means of inquiry. In support of their submission that they were denied procedural due process, petitioners contend that they were not caged upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the questioned BOT Circular. It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should first call a conference or require the submission of position papers or other documents from operators or persons who may be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. operators of public conveyances are not the only primary sources of the data and information that may be desired by the BOT. Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972): Pevious notice and hearing as elements of due process, are constitutionally required for the protection of life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon a past act or event which has to be established or ascertained. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis supplied) Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and, therefore, their actual physical condition should be taken into consideration at the time of registration. As public contend, however, it is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door to the adoption of multiple standards, possible collusion, and even graft and corruption. A reasonable standard must be adopted to

apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard. The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair return on investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per shift. With that standard of reasonableness and absence of arbitrariness, the requirement of due process has been met. On Equal Protection of the Law: Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should be pointed out that implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the pertinent portion: For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the project has been implemented in Metro Manila and 4 only after the date has been determined by the Board. In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected, with the BOT in the process of conducting studies regarding the operation of taxicabs in other cities. The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of other places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge. Considering that traffic conditions are not the same in every city, a substantial distinction exists so that infringement of the equal protection clause can hardly be successfully claimed. As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety and comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its police power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people. It can prohibit all things hurtful to comfort, 5 6 safety and welfare of society. It may also regulate property rights. In the language of Chief Justice Enrique M. Fernando "the necessities imposed by public welfare may justify the exercise of governmental authority to regulate even if thereby certain groups may plausibly assert that their 7 interests are disregarded". In so far as the non-application of the assailed Circulars to other transportation services is concerned, it need only be recalled that the equal protection clause does not imply that the same treatment be accorded all and sundry. It applies to things or persons Identically or similarly situated. It permits of classification of the object or subject of the law provided classification is reasonable or based on substantial distinction, which make for real differences, and that it must apply equally to each member 8 of the class. What is required under the equal protection clause is the uniform operation by legal means so that all persons under Identical or similar circumstance would be accorded the same 9 treatment both in privilege conferred and the liabilities imposed. The challenged Circulars satisfy the foregoing criteria.

19

Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare a law unconstitutional, the infringement of constitutional right must be clear, 10 categorical and undeniable. WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs. SO ORDERED. Fernando, CJ., Barredo, Makasiar, Concepcion, Jr., Guerrero, Abad Santos, De Castro, Plana, Escolin, Vasquez, Relova and Gutierrez, Jr., JJ., concur. Teehankee and Aquino, JJ., concur in the result. Republic SUPREME Manila EN BANC G.R. No. L-38429 June 30, 1988 CARLOS BALACUIT, LAMBERTO TAN and SERGIO YU CARCEL, petitioners-appellants, vs. COURT OF FIRST INSTANCE OF AGUSAN DEL NORTE AND BUTUAN CITY, Branch 11, and the CITY OF BUTUAN, respondents-appellees. Romeo B. Sanchez, Eduardo Deza Mercado and Wilfred D. Asis for petitioners. The City Legal Officer for respondents-appeliees. GANCAYCO, J.: At issue in the petition for review before Us is the validity and constitutionality of Ordinance No. 640 passed by the Municipal Board of the City of Butuan on April 21, 1969, the title and text of which are reproduced below: ORDINANCE--640 ORDINANCE PENALIZING ANY PERSON, GROUP OF PERSONS, ENTITY OR CORPORATION ENGAGED IN THE BUSINESS OF SELLING ADMISSION TICKETS TO ANY MOVIE OR OTHER PUBLIC EXHIBITIONS, GAMES, CONTESTS OR OTHER PERFORMANCES TO REQUIRE CHILDREN BETWEEN SEVEN (7) AND TWELVE (12) YEARS OF AGE TO PAY FULL PAYMENT FOR TICKETS of the Philippines COURT

INTENDED FOR ADULTS BUT SHOULD CHARGE ONLY ONE-HALF OF THE SAID TICKET xxx xxx xxx Be it ordained by the Municipal Board of the City of Butuan in session assembled, that: SECTION 1It shall be unlawful for any person, group of persons, entity, or corporation engaged in the business of selling admission tickets to any movie or other public exhibitions, games, contests, or other performances to require children between seven (7) and twelve (12) years of age to pay full payment for admission tickets intended for adults but should charge only one-half of the value of the said tickets. SECTION 2Any person violating the provisions of this Ordinance shall upon conviction be punished by a fine of not less than TWO HUNDRED PESOS (P200.00) but not more than SIX HUNDRED PESOS (P600.00) or an imprisonment of not less than TWO (2) MONTHS or not more than SIX (6) MONTHS or both such firm and imprisonment in the discretion of the Court. If the violator be a firm or corporation the penalty shall be imposed upon the Manager, Agent or Representative of such firm or corporation. SECTION 3This ordinance shall take effect upon its approval. Petitioners are Carlos Balacuit Lamberto Tan, and Sergio Yu Carcel managers of the Maya and Dalisay Theaters, the Crown Theater, and the Diamond Theater, respectively. Aggrieved by the effect of Ordinance No. 640, they filed a complaint before the Court of First Instance of Agusan del Norte and Butuan City docketed as Special Civil Case No. 237 on June 30, 1969 praying, inter alia, that the 1 subject ordinance be declared unconstitutional and, therefore, void and unenforceable. Upon motion of the petitioners, a temporary restraining order was issued on July 14, 1969 by the court 3 a quo enjoining the respondent City of Butuan and its officials from enforcing Ordinance No. 640. On 4 July 29, 1969, respondents filed their answer sustaining the validity of the ordinance. On January 30, 1973, the litigants filed their stipulation of facts. On June 4, 1973, the respondent court 6 rendered its decision, the dispositive part of which reads: IN THE LIGHT OF ALL THE FOREGOING, the Court hereby adjudges in favor of the respondents and against the petitioners, as follows: 1. Declaring Ordinance No. 640 of the City of Butuan constitutional and valid: Provided, however, that the fine for a single offense shall not exceed TWO
5 2

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HUNDRED PESOS, as prescribed in the aforequoted Section 15 (nn) of Rep. Act No. 523; 2. Dissolving the restraining order issued by this Court; and; 3. Dismissing the complaint, with costs against the petitioners. 4. SO ORDERED. 7 Petitioners filed their motion for reconsideration of the decision of the court a quo which was denied in 9 a resolution of the said court dated November 10, 1973. Hence, this petition. Petitioners attack the validity and constitutionality of Ordinance No. 640 on the grounds that it is ultra vires and an invalid exercise of police power. Petitioners contend that Ordinance No. 640 is not within the power of' the Municipal Board to enact as provided for in Section 15(n) of Republic Act No. 523, the Charter of the City of Butuan, which states: Sec. 15. General powers and duties of the Board Except as otherwise provided by law, and subject to the conditions and limitations thereof, the Municipal Board shall have the following legislative powers: xxx xxx xxx (n) To regulate and fix the amount of the license fees for the following; . . . theaters, theatrical performances, cinematographs, public exhibitions and all other performances and places of amusements ... xxx xxx xxx Respondent City of Butuan, on the other hand, attempts to justify the enactment of the ordinance by invoking the general welfare clause embodied in Section 15 (nn) of the cited law, which provides: (nn) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this Act, and to fix the penalties for the violation of the ordinances, which shall not exceed a two hundred peso fine or six months imprisonment, or both such fine and imprisonment, for a single offense.
8

We can see from the aforecited Section 15(n) that the power to regulate and fix the amount of license fees for theaters, theatrical performances, cinematographs, public exhibitions and other places of amusement has been expressly granted to the City of Butuan under its charter. But the question which needs to be resolved is this: does this power to regulate include the authority to interfere in the fixing of prices of admission to these places of exhibition and amusement whether under its general grant of power or under the general welfare clause as invoked by the City? This is the first time this Court is confronted with the question of direct interference by the local government with the operation of theaters, cinematographs and the like to the extent of fixing the prices of admission to these places. Previous decisions of this Court involved the power to impose license fees upon businesses of this nature as a corollary to the power of the local government to regulate them. Ordinances which required moviehouses or theaters to increase the price of their admission tickets supposedly to cover the license fees have been held to be invalid for these impositions were considered as not merely license fees but taxes for purposes of revenue and not regulation which the cities have no 10 11 power to exact, unless expressly granted by its charter. Applying the ruling in Kwong Sing v. City of Manila, where the word "regulate" was interpreted to include the power to control, to govern and to restrain, it would seem that under its power to regulate places of exhibitions and amusement, the Municipal Board of the City of Butuan could make proper police regulations as to the mode in which the business shall be exercised. While in a New York case, an ordinance which regulates the business of selling admission tickets to public exhibitions or performances by virtue of the power of cities under the General City Law "to maintain order, enforce the laws, protect property and preserve and care for the safety, health, comfort and general welfare of the inhabitants of the city and visitors thereto; and for any of said purposes, to regulate and license occupations" was considered not to be within the scope of any duty or power implied in the charter. It was held therein that the power of regulation of public exhibitions and places of amusement within the city granted by the charter does not carry with it any authority to interfere with the price of admission to such places or the resale of tickets or tokens of admission. In this jurisdiction, it is already settled that the operation of theaters, cinematographs and other places of public exhibition are subject to regulation by the municipal council in the exercise of delegated police 14 15 power by the local government. Thus, in People v. Chan, an ordinance of the City of Manila prohibiting first run cinematographs from selling tickets beyond their seating capacity was upheld as 16 constitutional for being a valid exercise of police power. Still in another case, the validity of an ordinance of the City of Bacolod prohibiting admission of two or more persons in moviehouses and other amusement places with the use of only one ticket was sustained as a valid regulatory police measure not only in the interest of preventing fraud in so far as municipal taxes are concerned but also in accordance with public health, public safety, and the general welfare. The City of Butuan, apparently realizing that it has no authority to enact the ordinance in question under its power to regulate embodied in Section 15(n), now invokes the police power as delegated to it under the general welfare clause to justify the enactment of said ordinance. To invoke the exercise of police power, not only must it appear that the interest of the public generally requires an interference with private rights, but the means adopted must be reasonably necessary for 17 the accomplishment of the purpose and not unduly oppressive upon individuals. The legislature may
13 12

21

not, under the guise of protecting the public interest, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. In other words, the determination as to what is a proper exercise of its police power is not final or conclusive, but is subject to the supervision of 18 the courts. Petitioners maintain that Ordinance No. 640 violates the due process clause of the Constitution for being oppressive, unfair, unjust, confiscatory, and an undue restraint of trade, and violative of the right of persons to enter into contracts, considering that the theater owners are bound under a contract with the film owners for just admission prices for general admission, balcony and lodge. In Homeowners' Association of the Philippines, Inc. v. Municipal Board of the City of Manila, Court held:
19

this

The authority of municipal corporations to regulate is essentially police power, Inasmuch as the same generally entails a curtailment of the liberty, the rights and/or the property of persons, which are protected and even guaranteed by the Constitution, the exercise of police power is necessarily subject to a qualification, limitation or restriction demanded by the regard, the respect and the obedience due to the prescriptions of the fundamental law, particularly those forming part of the Constitution of Liberty, otherwise known as the Bill of Rights the police power measure must be reasonable. In other words, individual rights may be adversely affected by the exercise of police power to the extent only and only to the extent-that may be fairly required by the legitimate demands of public interest or public welfare. What is the reason behind the enactment of Ordinance No. 640? A reading of the minutes of the regular session of the Municipal Board when the ordinance in question was passed shows that a certain Councilor Calo, the proponent of the measure, had taken into account the complaints of parents that for them to pay the full price of admission for their children is too financially burdensome. The trial court advances the view that "even if the subject ordinance does not spell out its raison d'etre in all probability the respondents were impelled by the awareness that children are entitled to share in the joys of their elders, but that considering that, apart from size, children between the ages of seven and twelve cannot fully grasp the nuance of movies or other public exhibitions, games, contests or other 19 performances, the admission prices with respect to them ought to be reduced. a We must bear in mind that there must be public necessity which demands the adoption of proper measures to secure the ends sought to be attained by the enactment of the ordinance, and the large discretion is necessarily vested in the legislative authority to determine not only what the interests of the 20 public require, but what measures are necessary for the protection of such interests. The methods or means used to protect the public health, morals, safety or welfare, must have some relation to the end in view, for under the guise of the police power, personal rights and those pertaining to private property 21 will not be permitted to be arbitralily invaded by the legislative department.

We agree with petitioners that the ordinance is not justified by any necessity for the public interest. The police power legislation must be firmly grounded on public interest and welfare, and a reasonable 22 relation must exist between purposes and means. The evident purpose of the ordinance is to help ease the burden of cost on the part of parents who have to shell out the same amount of money for the admission of their children, as they would for themselves, A reduction in the price of admission would mean corresponding savings for the parents; however, the petitioners are the ones made to bear the cost of these savings. The ordinance does not only make the petitioners suffer the loss of earnings but it likewise penalizes them for failure to comply with it. Furthermore, as petitioners point out, there will be difficulty in its implementation because as already experienced by petitioners since the effectivity of the ordinance, children over 12 years of age tried to pass off their age as below 12 years in order to avail of the benefit of the ordinance. The ordinance does not provide a safeguard against this undesirable practice and as such, the respondent City of Butuan now suggests that birth certificates be exhibited by movie house patrons to prove the age of children. This is, however, not at all practicable. We can see that the ordinance is clearly unreasonable if not unduly oppressive upon the business of petitioners. Moreover, there is no discernible relation between the ordinance and the promotion of public health, safety, morals and the general welfare. Respondent City of Butuan claims that it was impelled to protect the youth from the pernicious practice of movie operators and other public exhibitions promoters or the like of demanding equal price for their admission tickets along with the adults. This practice is allegedly repugnant and unconscionable to the interest of the City in the furtherance of the prosperity, peace, good order, comfort, convenience and the general well-being of its inhabitants. There is nothing pernicious in demanding equal price for both children and adults. The petitioners are merely conducting their legitimate businesses. The object of every business entrepreneur is to make a profit out of his venture. There is nothing immoral or injurious in charging the same price for both children and adults. In fact, no person is under compulsion to purchase a ticket. It is a totally voluntary act on the part of the purchaser if he buys a ticket to such performances. Respondent City of Butuan claims that Ordinance No. 640 is reasonable and necessary to lessen the economic burden of parents whose minor children are lured by the attractive nuisance being maintained by the petitioners. Respondent further alleges that by charging the full price, the children are being exploited by movie house operators. We fail to see how the children are exploited if they pay the full price of admission. They are treated with the same quality of entertainment as the adults. The supposition of the trial court that because of their age children cannot fully grasp the nuances of such entertainment as adults do fails to convince Us that the reduction in admission ticket price is justifiable. In fact, by the very claim of respondent that movies and the like are attractive nuisances, it is difficult to comprehend why the municipal board passed the subject ordinance. How can the municipal authorities consider the movies an attractive nuisance and yet encourage parents and children to patronize them by lowering the price of admission for children? Perhaps, there is some ,truth to the argument of petitioners that Ordinance No. 640 is detrimental to the public good and the general welfare of society for it encourages children of tender age to frequent the movies, rather than attend to their studies in school or be in their homes. Moreover, as a logical consequence of the ordinance, movie house and theater operators will be discouraged from exhibiting wholesome movies for general patronage, much less children's pictures if only to avoid compliance with the ordinance and still earn profits for themselves. For after all, these movie house and theater operators cannot be compelled to exhibit any particular kind of film except

22

those films which may be dictated by public demand and those which are restricted by censorship laws. So instead of children being able to share in the joys of their elders as envisioned by the trial court, there will be a dearth of wholesome and educational movies for them to enjoy. There are a number of cases decided by the Supreme Court and the various state courts of the United States which upheld the right of the proprietor of a theater to fix the price of an admission ticket as against the right of the state to interfere in this regard and which We consider applicable to the case at bar. A theater ticket has been described to be either a mere license, revocable at the will of the proprietor of the theater or it may be evidence of a contract whereby, for a valuable consideration, the purchaser has acquired the right to enter the theater and observe the performance on condition that he behaves 23 properly. Such ticket, therefore, represents a right, Positive or conditional, as the case may be, according to the terms of the original contract of sale. This right is clearly a right of property. The ticket which represents that right is also, necessarily, a species of property. As such, the owner thereof, in the absence of any condition to the contrary in the contract by which he obtained it, has the clear right to 24 dispose of it, to sell it to whom he pleases and at such price as he can obtain. So that an act prohibiting the sale of tickets to theaters or other places of amusement at more than the regular price 25 was held invalid as conflicting with the state constitution securing the right of property. In Collister vs. Hayman,
26

... And certainly a place of entertainment is in no legal sense a public utility; and quite as certainly, its activities are not such that their enjoyment can be regarded under any conditions from the point of view of an emergency. The interest of the public in theaters and other places of entertainment may be more nearly, and with better reason, assimilated to the like interest in provision stores and markets and in the rental of houses and apartments for residence purposes; although in importance it fails below such an interest in the proportion that food and shelter are of more moment than amusement or instruction. As we have shown there is no legislative power to fix the prices of provisions or clothing, or the rental charges for houses and apartments, in the absence of some controlling emergency; and we are unable to perceive any dissimilarities of such quality or degree as to justify a different rule in respect of amusements and entertainment ... We are in consonance with the foregoing observations and conclusions of American courts. In this jurisdiction, legislation had been passed controlling the prices of goods commodities and drugs during 28 29 periods of emergency, limiting the net profits of public utility as well as regulating rentals of 30 residential apartments for a limited period, as a matter of national policy in the interest of public health and safety, economic security and the general welfare of the people. And these laws cannot be impugned as unconstitutional for being violative of the due process clause. However, the same could not be said of theaters, cinematographs and other exhibitions. In no sense could these businesses be considered public utilities. The State has not found it appropriate as a national policy to interfere with the admission prices to these performances. This does not mean however, that theaters and exhibitions are not affected with public interest even to a certain degree. Motion pictures have been considered important both as a medium for the communication of Ideas and expression of the artistic impulse. Their effects on the perceptions by our people of issues and public 31 officials or public figures as well as the prevailing cultural traits are considerable. People of all ages flock to movie houses, games and other public exhibitions for recreation and relaxation. The government realizing their importance has seen it fit to enact censorship laws to regulate the movie 32 industry. Their aesthetic entertainment and even educational values cannot be underestimated. Even police measures regulating the operation of these businesses have been upheld in order to safeguard public health and safety. Nonetheless, as to the question of the subject ordinance being a valid exercise of police power, the same must be resolved in the negative. While it is true that a business may be regulated, it is equally true that such regulation must be within the bounds of reason, that is, the regulatory ordinance must be reasonable, and its provisions cannot be oppressive amounting to an arbitrary interference with the business or calling subject of regulation. A lawful business or calling may not, under the guise of 33 regulation, be unreasonably interfered with even by the exercise of police power. A police measure for the regulation of the conduct, control and operation of a business should not encroach upon the 34 legitimate and lawful exercise by the citizens of their property rights. The right of the owner to fix a price at which his property shall be sold or used is an inherent attribute of the property itself and, as such, within the protection of the due process clause."" Hence, the proprietors of a theater have a right to manage their property in their own way, to fix what prices of admission they think most for their own 36 advantage, and that any person who did not approve could stay away.

it was held:

The defendants were conducting a private business, which, even if clothed with a public interest, was without a franchise to accommodate the public, and they had the right to control it, the same as the proprietors of any other business, subject to such obligations as were placed upon them by statute. Unlike a carrier of passengers, for instance, with a franchise from the state, and hence under obligation to transport anyone who applies and to continue the business year in and year out, the proprietors of a theater can open and close their place at will, and no one can make a lawful complaint. They can charge what they choose for admission to their theater. They can limit the number admitted. They can refuse to sell tickets and collect the price of admission at the door. They can preserve order and enforce quiet while the performance is going on. They can make it a part of the contract and condition of admission, by giving due notice and printing the condition in the ticket that no one shall be admitted under 21 years of age, or that men only or women only shall be admitted, or that a woman cannot enter unless she is accompanied by a male escort, and the like. The proprietors, in the control of their business, may regulate the terms of admission in any reasonable way. If those terms are not satisfactory, no one is obliged to buy a ticket or make the contract. If the terms are satisfactory, and the contract is made, the minds of the parties meet upon the condition, and the purchaser impliedly promises to perform it. In Tyson and Bro. United Theater Ticket Officers, Inc. vs. Banton, Court held:
27

the United States Supreme

23

Respondent City of Butuan argues that the presumption is always in favor of the validity of the ordinance. This maybe the rule but it has already been held that although the presumption is always in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is 37 established by proper evidence. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public 38 policy or is unreasonable, oppressive, partial, discriminating or in derogation of a common right. Ordinance No. 640 clearly invades the personal and property rights of petitioners for even if We could assume that, on its face, the interference was reasonable, from the foregoing considerations, it has been fully shown that it is an unwarranted and unlawful curtailment of the property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it cannot, under the guise of exercising police power, be upheld as valid. WHEREFORE, the decision of the trial court in Special Civil Case No. 237 is hereby REVERSED and SET ASIDE and a new judgment is hereby rendered declaring Ordinance No. 640 unconstitutional and, therefore, null and void. This decision is immediately executory. SO ORDERED. Yap, C.J., Narvasa, Cruz, Paras, Padilla, Bidin, Sarmiento and Grio-Aquino, JJ., concur. Separate Opinions GUTIERREZ, JR., J., Separate opinion The issue before the Court is a simple one. Does Butuan City have the power to compel theatre owners to charge only half fares for children below twelve even as they charge all other moviegoers full prices for admission into moviehouses? Instead of nullifying the municipal ordinance through a broad and sweeping justification of property rights, I believe, however, that we should do so on a more limited ground directly bearing on the issue. I find no rational basis for classifying children as a distinct group insofar as paying for admission into a moviehouse is concerned. There is absolutely no pretense that the municipal ordinance is intended to protect children, enhance their morals, promote their health, safeguard their safety, improve their education, or otherwise promote the general welfare. In fact, the effect of the ordinance may be the opposite. With the price of movie tickets suddenly within the reach of many children, they may neglect their studies or use money intended for food or school supplies to enter moviehouses. Movie owners who are compelled to accept half prices for a newly increased group of young patrons will be tempted to allow them to enter moviehouses indiscriminately, including those where scenes of violence, crime, or even sex are portrayed. Addiction of the young to movie going is definitely injurious to their health.

The avowed purpose of the ordinance--to ease the burden of costs for parents who have to shell out the same amount of money for the admission of their children as they would for themselves is not covered by police power. If the city cannot compel refreshment parlors to charge half-prices for hamburgers, soft drinks, pizzas, or cakes consumed by children by what authority can it impose the obligation of similarly easing parents' burdens upon the owners of moviehouses? As discussed by the minority opinion, the legislature may not., under the guise of protecting the public interest, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. The imposition enacted by the municipal board of Butuan City has not been justified by its proponents as a restriction necessary for public health or public welfare. No reasonable relationship has been shown between a valid purpose and the proper means to accomplish it. I hesitate, however, to make a brief for owners of theatres and expound a laissez faire approach insofar as their businesses are concerned. Movie houses may not be public utilities but as places of entertainment affected with a certain degree of public interest, they are subject to reasonable regulation. That regulation is stronger and more restrictive than that of regular or ordinary businesses. The following citation for instance, is pure obiter insofar as half-prices for minors are concerned: ... [T]he proprietors of a theater can open and close their place at will, and no one can make lawful complaint. They can charge what they choose for admission to their theater. They can limit the number admitted. They can refuse to sell tickets and collect the price of admission at the door. They can preserve order and enforce quiet while the performance is going on. They can make it a part of the contract and a condition of admission, by giving due notice and printing the condition in the ticket that no one shall be admitted under 21 years of age, or that men only or women only shall be admitted, or that a woman cannot enter unless she is accompanied by a male escort, and the like. The proprietors, in the control of their business, may regulate the terms of admission in any reasonable way. If those terms are not satisfactory, no one is obliged to buy a ticket or make the contract. If the terms are satisfactory, and the contract is made, the minds of the parties meet upon the condition, and the purchaser impliedly promises to perform it. (Collister v. Hayman, 76 N.E. 20,183 N.Y. 250, 253, 1 L.R.A. [N.S.] 1188, 11 Am. St. Rep. 740, An Cas. 344). I see no reason at this time why we should pass upon situations that are not before us or warn municipal governments beforehand to avoid enacting certain regulations when nobody knows exactly what circumstances may call for those regulations. For instance, A theater ticket has been described to be either a mere license, revocable at the will of the proprietor of the theater or it may be evidence of a contract whereby, for a valuable consideration, the purchaser has acquired the right to enter the theater and observe the performance on condition that he behaves properly (Law of the State.

24

Screen and Radio by Marchetti, 1939, ec., page 268). Such ticket, therefore, represents a right, positive or conditional, as the case may be, according to the terms of the original contract of sale. This right is clearly a right of property. The ticket which represents that right is also, necessarily, a species of property. As such, the owner thereof, in the absence of any condition to the contrary y in the contract by which he obtained it, has the clear right to dispose of it, to sell it to whom he pleases and at such price as he can obtain Ibids, citing Ex-parte Quarg, 84 Pac., 766,149 Cal. 79, 80, 5 L.R.A. [N.S], 183, 117 Am. St. Rep. 11 5, 9 Ann. Ca. 747; Also People v. Steele, 231, III. 340, 344, 14 R.A. [N.S.] 361, 121 Am. St. Rep. 321, 83 N.E. 236). .... xxx xxx xxx .... A lawful business or calling may not, under the guise of regulation, be unreasonably interfered with even by the exercise of police power. (Ogden City v. Leo, 54 Utah 556, 182 P. 530) A police measure for the regulation of the conduct, control and operation of a business should not encroach upon the legitimate and lawful exercise by the citizens of their property rights (Pampanga Bus Co., Inc. v. Municipality of Tarlac, 3 SCRA 816). The right of the owner to fix a price at which his property shall be sold or used is an inherent attribute of the property itself and, as such, within the protection of the due process clause (Tyson and Bro.--United Theater Ticket Officers, Inc. v. Banton, supra). Hence the proprietors of a theater have a right to manage their property in their own way, to fix what prices of admission they think most for their own advantage, and that ally person who did not approve could stay away (Ibid, citing v. Clifford v. Brandon, 2 Campb. 358, 368.). may be interpreted as carte blanche for movie owners to practically ignore municipal regulation and do as they please. More appropriate to my maid is to state that while tile Butuan City ordinance is invalid, it does not necessarily follow that all forms of regulation are proscribed. We have ruled in People v. Chan (65 Phil. 612): In the first place, it must be noted that there can be no doubt that the City of Manila exercises police power, by delegation and that in the exercise of that power it is authorized to enact ordinances for, the regulation of the operation of theatres and cinematographs (sec. 2444(m) and (ee) of the Revised Administrative Code: U.S. v. Gomez Jesus, 31 Phil. 218; U.S. v. Pompeya, 31 Phil. 245). On April 17, 1935, Ordinance No. 2347 was approved. In section 1 it provides that all first run theatres or cinematographs should register their seating capacity with the City Treasurer, and in section 1 it prohibits the sale of tickets in said theatres or cinematographs in excess of their registered seating capacity. Before the approval of Ordinance No. 2347, Ordinance No. 2188, approved on July 22, 1933, was in force, section 1 of which divides cinematographs into three different

classes: first, second and third. The first class includes those located on certain and specified streets like Rosario, Escolta, etc., which exhibit films for the first time; those belonging to the second class are those which, not being located on said streets, also exhibit films for the first time, and those which, being located on said streets, regularly show films for the second time or which have the exclusive right to show secondhand films; and the third class comprehends all those which are not included in the first and second classes. xxx xxx xxx To the foregoing must be added, and this is of common knowledge, that the films which are shown for the first time attract a large attendance, and the theatre or cinematograph, whether it is first or second class, presenting shows for the first time, would be suffocatingly overcrowded if the number of tickets were not limited. This is the reason for the prohibition of the sale of tickets in excess of the seating capacity. The prohibition applies with equal force wherever the same reason exists, that is, to first and second class theatres which show films for the first time. (at pp. 612- 613) There being a rational basis for the restriction of sales of tickets beyond seating capacity, the ordinance is perfectly valid. The same is true for the situation found in Samson v. Mayor of Bacolod City (60 SCRA 274): When it is further remembered that insofar as movie houses and other places of amusement are concerned. (According to Section 17[1] of the City Charter of Bacolod, Commonwealth Act No. 326 119381: 'To regulate and fix the amount of the fees for the following: ... theatres, theatrical performances, cinematographs, public exhibitions, circuses and all other performances and places of amusements ....") the least doubt cannot be entertained as to the validity of a measure prohibiting a proprietor, lessee or operator of an amusement place to admit two or more persons with only one admission ticket, not only in the interest of preventing fraud insofar as municipal taxes are concerned but also in accordance with public health, public safety and the general welfare. (Cf. People v. Chan, 65 Phil. 611 [1938]). An American Supreme Court decision, Western Turf Association v. Greenberg, (204 US 359 [1907] the opinion being penned by Justice Harlan is equally illuminating: 'The statute is only a regulation of places of public entertainment and amusement upon terms of equal and exact justice to everyone holding a ticket of admission, and who is not, at the time, under the influence of liquor, or boisterous in conduct, or of lewd and immoral character. .... Such a regulation, in itself just, is likewise promotive of peace and good order among those who attend places of public entertainment and amusement. It is neither an arbitrary exertion of the state's inherent or governmental power, nor a violation of any right secured by the constitution of the United States. (at pp. 363364). The City of Butuan tries to justify the challenged ordinance by invoking police power. The invocation is improper. The definitions of police power, including its exercise based on the general welfare clause, are emphasized to show that the respondents' arguments have no merit

25

Police power is inherent in the State but not in municipal corporations. For a municipal corporation to exercise police power, there must be a legislative grant which necessarily also sets the limits for the exercise of the power. In the Philippines, the grant of authority to the municipality to exercise police power is embodied in Section 2238 of the Revised Administrative Code, otherwise known as the General Welfare Clause. Chartered cities are granted similar authority in their respective charters The general welfare clause has two branches. The first authorizes the municipal council to enact such ordinances and make such regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal council by law. The second branch authorizes the municipality to enact such ordinances as may be necessary and proper for the health and safety, promote the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and inhabitants thereof, and for the protection of property therein. (U.S. v. Salaveria 39 Phil. 103). This Court has generally been liberal in sustaining municipal action based on the general welfare clause. In the case before us, however, there appears to be no basis for sustaining the ordinance even on a generous interpretation of the general welfare clause. Separate Opinions GUTIERREZ, JR., J., Separate opinion The issue before the Court is a simple one. Does Butuan City have the power to compel theatre owners to charge only half fares for children below twelve even as they charge all other moviegoers full prices for admission into moviehouses? Instead of nullifying the municipal ordinance through a broad and sweeping justification of property rights, I believe, however, that we should do so on a more limited ground directly bearing on the issue. I find no rational basis for classifying children as a distinct group insofar as paying for admission into a moviehouse is concerned. There is absolutely no pretense that the municipal ordinance is intended to protect children, enhance their morals, promote their health, safeguard their safety, improve their education, or otherwise promote the general welfare. In fact, the effect of the ordinance may be the opposite. With the price of movie tickets suddenly within the reach of many children, they may neglect their studies or use money intended for food or school supplies to enter moviehouses. Movie owners who are compelled to accept half prices for a newly increased group of young patrons will be tempted to allow them to enter moviehouses indiscriminately, including those where scenes of violence, crime, or even sex are portrayed. Addiction of the young to movie going is definitely injurious to their health.

The avowed purpose of the ordinance--to ease the burden of costs for parents who have to shell out the same amount of money for the admission of their children as they would for themselves is not covered by police power. If the city cannot compel refreshment parlors to charge half-prices for hamburgers, soft drinks, pizzas, or cakes consumed by children by what authority can it impose the obligation of similarly easing parents' burdens upon the owners of moviehouses? As discussed by the minority opinion, the legislature may not., under the guise of protecting the public interest, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. The imposition enacted by the municipal board of Butuan City has not been justified by its proponents as a restriction necessary for public health or public welfare. No reasonable relationship has been shown between a valid purpose and the proper means to accomplish it. I hesitate, however, to make a brief for owners of theatres and expound a laissez faire approach insofar as their businesses are concerned. Movie houses may not be public utilities but as places of entertainment affected with a certain degree of public interest, they are subject to reasonable regulation. That regulation is stronger and more restrictive than that of regular or ordinary businesses. The following citation for instance, is pure obiter insofar as half-prices for minors are concerned: ... [T]he proprietors of a theater can open and close their place at will, and no one can make lawful complaint. They can charge what they choose for admission to their theater. They can limit the number admitted. They can refuse to sell tickets and collect the price of admission at the door. They can preserve order and enforce quiet while the performance is going on. They can make it a part of the contract and a condition of admission, by giving due notice and printing the condition in the ticket that no one shall be admitted under 21 years of age, or that men only or women only shall be admitted, or that a woman cannot enter unless she is accompanied by a male escort, and the like. The proprietors, in the control of their business, may regulate the terms of admission in any reasonable way. If those terms are not satisfactory, no one is obliged to buy a ticket or make the contract. If the terms are satisfactory, and the contract is made, the minds of the parties meet upon the condition, and the purchaser impliedly promises to perform it. (Collister v. Hayman, 76 N.E. 20,183 N.Y. 250, 253, 1 L.R.A. [N.S.] 1188, 11 Am. St. Rep. 740, An Cas. 344). I see no reason at this time why we should pass upon situations that are not before us or warn municipal governments beforehand to avoid enacting certain regulations when nobody knows exactly what circumstances may call for those regulations. For instance, A theater ticket has been described to be either a mere license, revocable at the will of the proprietor of the theater or it may be evidence of a contract whereby, for a valuable consideration, the purchaser has acquired the right to enter the theater and observe the performance on condition that he behaves properly (Law of the State.

26

Screen and Radio by Marchetti, 1939, ec., page 268). Such ticket, therefore, represents a right, positive or conditional, as the case may be, according to the terms of the original contract of sale. This right is clearly a right of property. The ticket which represents that right is also, necessarily, a species of property. As such, the owner thereof, in the absence of any condition to the contrary y in the contract by which he obtained it, has the clear right to dispose of it, to sell it to whom he pleases and at such price as he can obtain Ibids, citing Ex-parte Quarg, 84 Pac., 766,149 Cal. 79, 80, 5 L.R.A. [N.S], 183, 117 Am. St. Rep. 11 5, 9 Ann. Ca. 747; Also People v. Steele, 231, III. 340, 344, 14 R.A. [N.S.] 361, 121 Am. St. Rep. 321, 83 N.E. 236). .... xxx xxx xxx .... A lawful business or calling may not, under the guise of regulation, be unreasonably interfered with even by the exercise of police power. (Ogden City v. Leo, 54 Utah 556, 182 P. 530) A police measure for the regulation of the conduct, control and operation of a business should not encroach upon the legitimate and lawful exercise by the citizens of their property rights (Pampanga Bus Co., Inc. v. Municipality of Tarlac, 3 SCRA 816). The right of the owner to fix a price at which his property shall be sold or used is an inherent attribute of the property itself and, as such, within the protection of the due process clause (Tyson and Bro.--United Theater Ticket Officers, Inc. v. Banton, supra). Hence the proprietors of a theater have a right to manage their property in their own way, to fix what prices of admission they think most for their own advantage, and that ally person who did not approve could stay away (Ibid, citing v. Clifford v. Brandon, 2 Campb. 358, 368.). may be interpreted as carte blanche for movie owners to practically ignore municipal regulation and do as they please. More appropriate to my maid is to state that while tile Butuan City ordinance is invalid, it does not necessarily follow that all forms of regulation are proscribed. We have ruled in People v. Chan (65 Phil. 612): In the first place, it must be noted that there can be no doubt that the City of Manila exercises police power, by delegation and that in the exercise of that power it is authorized to enact ordinances for, the regulation of the operation of theatres and cinematographs (sec. 2444(m) and (ee) of the Revised Administrative Code: U.S. v. Gomez Jesus, 31 Phil. 218; U.S. v. Pompeya, 31 Phil. 245). On April 17, 1935, Ordinance No. 2347 was approved. In section 1 it provides that all first run theatres or cinematographs should register their seating capacity with the City Treasurer, and in section 1 it prohibits the sale of tickets in said theatres or cinematographs in excess of their registered seating capacity. Before the approval of Ordinance No. 2347, Ordinance No. 2188, approved on July 22, 1933, was in force, section 1 of which divides cinematographs into three different

classes: first, second and third. The first class includes those located on certain and specified streets like Rosario, Escolta, etc., which exhibit films for the first time; those belonging to the second class are those which, not being located on said streets, also exhibit films for the first time, and those which, being located on said streets, regularly show films for the second time or which have the exclusive right to show secondhand films; and the third class comprehends all those which are not included in the first and second classes. xxx xxx xxx To the foregoing must be added, and this is of common knowledge, that the films which are shown for the first time attract a large attendance, and the theatre or cinematograph, whether it is first or second class, presenting shows for the first time, would be suffocatingly overcrowded if the number of tickets were not limited. This is the reason for the prohibition of the sale of tickets in excess of the seating capacity. The prohibition applies with equal force wherever the same reason exists, that is, to first and second class theatres which show films for the first time. (at pp. 612- 613) There being a rational basis for the restriction of sales of tickets beyond seating capacity, the ordinance is perfectly valid. The same is true for the situation found in Samson v. Mayor of Bacolod City (60 SCRA 274): When it is further remembered that insofar as movie houses and other places of amusement are concerned. (According to Section 17[1] of the City Charter of Bacolod, Commonwealth Act No. 326 119381: 'To regulate and fix the amount of the fees for the following: ... theatres, theatrical performances, cinematographs, public exhibitions, circuses and all other performances and places of amusements ....") the least doubt cannot be entertained as to the validity of a measure prohibiting a proprietor, lessee or operator of an amusement place to admit two or more persons with only one admission ticket, not only in the interest of preventing fraud insofar as municipal taxes are concerned but also in accordance with public health, public safety and the general welfare. (Cf. People v. Chan, 65 Phil. 611 [1938]). An American Supreme Court decision, Western Turf Association v. Greenberg, (204 US 359 [1907] the opinion being penned by Justice Harlan is equally illuminating: 'The statute is only a regulation of places of public entertainment and amusement upon terms of equal and exact justice to everyone holding a ticket of admission, and who is not, at the time, under the influence of liquor, or boisterous in conduct, or of lewd and immoral character. .... Such a regulation, in itself just, is likewise promotive of peace and good order among those who attend places of public entertainment and amusement. It is neither an arbitrary exertion of the state's inherent or governmental power, nor a violation of any right secured by the constitution of the United States. (at pp. 363364). The City of Butuan tries to justify the challenged ordinance by invoking police power. The invocation is improper. The definitions of police power, including its exercise based on the general welfare clause, are emphasized to show that the respondents' arguments have no merit

27

Police power is inherent in the State but not in municipal corporations. For a municipal corporation to exercise police power, there must be a legislative grant which necessarily also sets the limits for the exercise of the power. In the Philippines, the grant of authority to the municipality to exercise police power is embodied in Section 2238 of the Revised Administrative Code, otherwise known as the General Welfare Clause. Chartered cities are granted similar authority in their respective charters The general welfare clause has two branches. The first authorizes the municipal council to enact such ordinances and make such regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal council by law. The second branch authorizes the municipality to enact such ordinances as may be necessary and proper for the health and safety, promote the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and inhabitants thereof, and for the protection of property therein. (U.S. v. Salaveria 39 Phil. 103). This Court has generally been liberal in sustaining municipal action based on the general welfare clause. In the case before us, however, there appears to be no basis for sustaining the ordinance even on a generous interpretation of the general welfare clause. Republic SUPREME Manila FIRST DIVISION of the Philippines COURT

DAVID DULNUAN, AVELINO PUGUON, LUCAS GUMAWI, LUISA ABBAC, CATHRIN GUWAY, CLARITA TAYABAN, FLORA JAVERA, RANDY SICOAN, FELIZA PUTAKI, CORAZON P. DULNUAN, NENA D. BULLONG, ERMELYN GUWAY, GILBERT BUTALE, JOSEPH B. BULLONG, FRANCISCO PATNAAN, JR., SHERWIN DUGAY, TIRSO GULLINGAY, BENEDICT T. NABALLIN, RAMON PUN-ADWAN, ALFONSO DULNUAN, CARMEN D. BUTALE, LOLITA ANSIBEY, ABRAHAM DULNUAN, ARLYNDA BUTALE, MODESTO A. ANSIBEY, EDUARDO LUGAY, ANTONIO HUMIWAT, ALFREDO PUMIHIC, MIKE TINO, TONY CABARROGUIS, BASILIO TAMLIWOK, JR., NESTOR TANGID, ALEJO TUGUINAY, BENITO LORENZO, RUDY BAHIWAG, ANALIZA BUTALE, NALLEM LUBYOC, JOSEPH DUHAYON, RAFAEL CAMPOL, MANUEL PUMALO, DELFIN AGALOOS, PABLO CAYANGA, PERFECTO SISON, ELIAS NATAMA, LITO PUMALO, SEVERINA DUGAY, GABRIEL PAKAYAO, JEOFFREY SINDAP, FELIX TICUAN, MARIANO S. MADDELA, MENZI TICAWA, DOMINGA DUGAY, JOE BOLINEY, JASON ASANG, TOMMY ATENYAYO, ALEJO AGMALIW, DIZON AGMALIW, EDDIE ATOS, FELIMON BLANCO, DARRIL DIGOY, LUCAS BUAY, ARTEMIO BRAZIL, NICANOR MODI, LUIS REDULFIN, NESTOR JUSTINO, JAIME CUMILA, BENEDICT GUINID, EDITHA ANIN, INOH-YABAN BANDAO, LUIS BAYWONG, FELIPE DUHALNGON, PETER BENNEL, JOSEPH T. BUNGGALAN, JIMMY B. KIMAYONG, HENRY PUGUON, PEDRO BUHONG, BUGAN NADIAHAN, SR., MARIA EDEN ORLINO, SPC, PERLA VISSORO, and BISHOP RAMON VILLENA, Petitioners, vs. ELISEA GOZUN, in her capacity as SECRETARY of the DEPARTMENT OF ENVIRONMENT and NATURAL RESOURCES (DENR), HORACIO RAMOS, in his capacity as Director of the Mines and Geosciences Bureau (MGB-DENR), ALBERTO ROMULO, in his capacity as the Executive Secretary of the Office of the President, RICHARD N. FERRER, in his capacity as Acting Undersecretary of the Office of the President, IAN HEATH SANDERCOCK, in his capacity as President of CLIMAX-ARIMCO Mining Corporation. Respondents. DECISION CHICO-NAZARIO, J.:

G.R. No. 157882

March 30, 2006 This petition for prohibition and mandamus under Rule 65 of the Rules of Court assails the constitutionality of Republic Act No. 7942 otherwise known as the Philippine Mining Act of 1995, together with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the Financial and Technical Assistance Agreement (FTAA) entered into on 20 June 1994 by the Republic of the Philippines and Arimco Mining Corporation (AMC), a corporation established under the laws of Australia and owned by its nationals. On 25 July 1987, then President Corazon C. Aquino promulgated Executive Order No. 279 which authorized the DENR Secretary to accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts of agreements involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, which, upon appropriate recommendation of the Secretary, the President may execute with the foreign proponent. On 3 March 1995, then President Fidel V. Ramos signed into law Rep. Act No. 7942 entitled, "An Act Instituting A New System of Mineral Resources Exploration, Development, Utilization and Conservation," otherwise known as the Philippine Mining Act of 1995.

DIDIPIO EARTH-SAVERS MULTI-PURPOSE ASSOCIATION, INCORPORATED (DESAMA), MANUEL BUTIC, CESAR MARIANO, LAURO ABANCE, BEN TAYABAN, ANTONIO DINGCOG, TEDDY B. KIMAYONG, ALONZO ANANAYO, ANTONIO MALAN-UYA, JOSE BAHAG, ANDRES INLAB, RUFINO LICYAYO, ALFREDO CULHI, CATALILNA INABYUHAN, GUAY DUMMANG, GINA PULIDO, EDWIN ANSIBEY, CORAZON SICUAN, LOPEZ DUMULAG, FREDDIE AYDINON, VILMA JOSE, FLORENTINA MADDAWAT, LINDA DINGCOG, ELMER SICUAN, GARY ANSIBEY, JIMMY MADDAWAT, JIMMY GUAY, ALFREDO CUT-ING, ANGELINA UDAN, OSCAR INLAB, JUANITA CUT-ING, ALBERT PINKIHAN, CECILIA TAYABAN, CRISTA BINWAK, PEDRO DUGAY, SR., EDUARDO ANANAYO, ROBIN INLAB, JR., LORENZO PULIDO, TOMAS BINWAG, EVELYN BUYA, JAIME DINGCOG, DINAOAN CUT-ING, PEDRO DONATO, MYRNA GUAY, FLORA ANSIBEY, GRACE DINAMLING, EDUARDO MENCIAS, ROSENDA JACOB, SIONITA DINGCOG, GLORIA JACOB, MAXIMA GUAY, RODRIGO PAGGADUT, MARINA ANSIBEY, TOLENTINO INLAB, RUBEN DULNUAN, GERONIMO LICYAYO, LEONCIO CUMTI, MARY DULNUAN, FELISA BALANBAN, MYRNA DUYAN, MARY MALAN-UYA, PRUDENCIO ANSIBEY, GUILLERMO GUAY, MARGARITA CULHI, ALADIN ANSIBEY, PABLO DUYAN, PEDRO PUGUON, JULIAN INLAB, JOSEPH NACULON, ROGER BAJITA, DINAON GUAY, JAIME ANANAYO, MARY ANSIBEY, LINA ANANAYO, MAURA DUYAPAT, ARTEMEO ANANAYO, MARY BABLING, NORA ANSIBEY,

28

On 15 August 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 23, Series of 1995, containing the implementing guidelines of Rep. Act No. 7942. This was soon superseded by DAO No. 96-40, s. 1996, which took effect on 23 January 1997 after due publication. Previously, however, or specifically on 20 June 1994, President Ramos executed an FTAA with AMC over a total land area of 37,000 hectares covering the provinces of Nueva Vizcaya and Quirino. Included in this area is Barangay Dipidio, Kasibu, Nueva Vizcaya. Subsequently, AMC consolidated with Climax Mining Limited to form a single company that now goes under the new name of Climax-Arimco Mining Corporation (CAMC), the controlling 99% of stockholders of which are Australian nationals. On 7 September 2001, counsels for petitioners filed a demand letter addressed to then DENR Secretary Heherson Alvarez, for the cancellation of the CAMC FTAA for the primary reason that Rep. Act No. 7942 and its Implementing Rules and Regulations DAO 96-40 are unconstitutional. The Office of the Executive Secretary was also furnished a copy of the said letter. There being no response to both letters, another letter of the same content dated 17 June 2002 was sent to President Gloria Macapagal Arroyo. This letter was indorsed to the DENR Secretary and eventually referred to the Panel of Arbitrators of the Mines and Geosciences Bureau (MGB), Regional Office No. 02, Tuguegarao, Cagayan, for further action. On 12 November 2002, counsels for petitioners received a letter from the Panel of Arbitrators of the MGB requiring the petitioners to comply with the Rules of the Panel of Arbitrators before the letter may be acted upon. Yet again, counsels for petitioners sent President Arroyo another demand letter dated 8 November 2002. Said letter was again forwarded to the DENR Secretary who referred the same to the MGB, Quezon City. In a letter dated 19 February 2003, the MGB rejected the demand of counsels for petitioners for the cancellation of the CAMC FTAA.1avvphil.net Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining order. They pray that the Court issue an order: 1. enjoining public respondents from acting on any application for FTAA; 2. declaring unconstitutional the Philippine Mining Act of 1995 and its Implementing Rules and Regulations; 3. canceling the FTAA issued to CAMC. In their memorandum petitioners pose the following issues: I

Whether or not Republic Act No. 7942 and the CAMC FTAA are void because they allow the unjust and unlawful taking of property without payment of just compensation , in violation of Section 9, Article III of the Constitution. II Whether or not the Mining Act and its Implementing Rules and Regulations are void and unconstitutional for sanctioning an unconstitutional administrative process of determining just compensation. III Whether or not the State, through Republic Act No. 7942 and the CAMC FTAA, abdicated its primary responsibility to the full control and supervision over natural resources. IV Whether or not the respondents interpretation of the role of wholly foreign and foreign -owned corporations in their involvement in mining enterprises, violates paragraph 4, section 2, Article XII of the Constitution. V WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS.1 Before going to the substantive issues, the procedural question raised by public respondents shall first be dealt with. Public respondents are of the view that petitioners eminent domain claim is not ripe for adjudication as they fail to allege that CAMC has actually taken their properties nor do they allege that their property rights have been endangered or are in danger on account of CAMCs FTAA. In effect, public respondents insist that the issue of eminent domain is not a justiciable controversy which this Court can take cognizance of. A justiciable controversy is defined as a definite and concrete dispute touching on the legal relations of parties having adverse legal interests which may be resolved by a court of law through the application of a law. 2 Thus, courts have no judicial power to review cases involving political questions and as a rule, will desist from taking cognizance of speculative or hypothetical cases, advisory opinions and cases that have become moot.3 The Constitution is quite explicit on this matter.4 It provides that judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable. Pursuant to this constitutional mandate, courts, through the power of judicial review, are to entertain only real disputes between conflicting parties through the application of law. For the courts to exercise the power of judicial review, the following must be extant (1) there must be an actual case calling for the exercise of judicial power; (2) the question must be ripe for adjudication; and (3) the person challenging must have the "standing." 5 An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute. 6 There must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence.

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Closely related to the second requisite is that the question must be ripe for adjudication. A question is considered ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it.7 The third requisite is legal standing or locus standi. It is defined as a personal or substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged, alleging more than a generalized grievance.8 The gist of the question of standing is whether a party alleges "such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions."9 Unless a person is injuriously affected in any of his constitutional rights by the operation of statute or ordinance, he has no standing.10 In the instant case, there exists a live controversy involving a clash of legal rights as Rep. Act No. 7942 has been enacted, DAO 96-40 has been approved and an FTAAs have been entered into. The FTAA holders have already been operating in various provinces of the country. Among them is CAMC which operates in the provinces of Nueva Vizcaya and Quirino where numerous individuals including the petitioners are imperiled of being ousted from their landholdings in view of the CAMC FTAA. In light of this, the court cannot await the adverse consequences of the law in order to consider the controversy actual and ripe for judicial intervention. 11 Actual eviction of the land owners and occupants need not happen for this Court to intervene. As held in Pimentel, Jr. v. Hon. Aguirre12: By the mere enactment of the questioned law or the approval of the challenged act, the dispute is said to have ripened into a judicial controversy even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty. 13 Petitioners embrace various segments of the society. These include Didipio Earth-Savers Multi-Purpose Association, Inc., an organization of farmers and indigenous peoples organized under Philippine laws, representing a community actually affected by the mining activities of CAMC, as well as other residents of areas affected by the mining activities of CAMC. These petitioners have the standing to raise the constitutionality of the questioned FTAA as they allege a personal and substantial injury.14 They assert that they are affected by the mining activities of CAMC. Likewise, they are under imminent threat of being displaced from their landholdings as a result of the implementation of the questioned FTAA. They thus meet the appropriate case requirement as they assert an interest adverse to that of respondents who, on the other hand, claim the validity of the assailed statute and the FTAA of CAMC. Besides, the transcendental importance of the issues raised and the magnitude of the public interest involved will have a bearing on the countrys economy which is to a greater extent dependent upon the mining industry. Also affected by the resolution of this case are the proprietary rights of numerous residents in the mining contract areas as well as the social existence of indigenous peoples which are threatened. Based on these considerations, this Court deems it proper to take cognizance of the instant petition. Having resolved the procedural question, the constitutionality of the law under attack must be addressed squarely. First Substantive Issue: Validity of Section 76 of Rep. Act No. 7942 and DAO 96-40

In seeking to nullify Rep. Act No. 7942 and its implementing rules DAO 96-40 as unconstitutional, petitioners set their sight on Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 which they claim allow the unlawful and unjust "taking" of private property for private purpose in contradiction with Section 9, Article III of the 1987 Constitution mandating that private property shall not be taken except for public use and the corresponding payment of just compensation. They assert that public respondent DENR, through the Mining Act and its Implementing Rules and Regulations, cannot, on its own, permit entry into a private property and allow taking of land without payment of just compensation. Interpreting Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40, juxtaposed with the concept of taking of property for purposes of eminent domain in the case of Republic v. Vda. de Castellvi, 15 petitioners assert that there is indeed a "taking" upon entry into private lands and concession areas. Republic v. Vda. de Castellvi defines "taking" under the concept of eminent domain as entering upon private property for more than a momentary period, and, under the warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as to substantially oust the owner and deprive him of all beneficial enjoyment thereof. From the criteria set forth in the cited case, petitioners claim that the entry into a private property by CAMC, pursuant to its FTAA, is for more than a momentary period, i.e., for 25 years, and renewable for another 25 years; that the entry into the property is under the warrant or color of legal authority pursuant to the FTAA executed between the government and CAMC; and that the entry substantially ousts the owner or possessor and deprives him of all beneficial enjoyment of the property. These facts, according to the petitioners, amount to taking. As such, petitioners question the exercise of the power of eminent domain as unwarranted because respondents failed to prove that the entry into private property is devoted for public use. Petitioners also stress that even without the doctrine in the Castellvi case, the nature of the mining activity, the extent of the land area covered by the CAMC FTAA and the various rights granted to the proponent or the FTAA holder, such as (a) the right of possession of the Exploration Contract Area, with full right of ingress and egress and the right to occupy the same; (b) the right not to be prevented from entry into private lands by surface owners and/or occupants thereof when prospecting, exploring and exploiting for minerals therein; (c) the right to enjoy easement rights, the use of timber, water and other natural resources in the Exploration Contract Area; (d) the right of possession of the Mining Area, with full right of ingress and egress and the right to occupy the same; and (e) the right to enjoy easement rights, water and other natural resources in the Mining Area, result in a taking of private property. Petitioners quickly add that even assuming arguendo that there is no absolute, physical taking, at the very least, Section 76 establishes a legal easement upon the surface owners, occupants and concessionaires of a mining contract area sufficient to deprive them of enjoyment and use of the property and that such burden imposed by the legal easement falls within the purview of eminent domain. To further bolster their claim that the legal easement established is equivalent to taking, petitioners cite the case of National Power Corporation v. Gutierrez16 holding that the easement of right-of-way imposed against the use of the land for an indefinite period is a taking under the power of eminent domain. Traversing petitioners assertion, public respondents argue that Section 76 is not a taking provision but a va lid exercise of the police power and by virtue of which, the state may prescribe regulations to promote the health, morals, peace, education, good order, safety and general welfare of the people. This government regulation

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involves the adjustment of rights for the public good and that this adjustment curtails some potential for the use or economic exploitation of private property. Public respondents concluded that "to require compensation in all such circumstances would compel the government to regulate by purchase." Public respondents are inclined to believe that by entering private lands and concession areas, FTAA holders do not oust the owners thereof nor deprive them of all beneficial enjoyment of their properties as the said entry merely establishes a legal easement upon surface owners, occupants and concessionaires of a mining contract area. Taking in Eminent Domain Distinguished from Regulation in Police Power The power of eminent domain is the inherent right of the state (and of those entities to which the power has been lawfully delegated) to condemn private property to public use upon payment of just compensation. 17 On the other hand, police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property.18 Although both police power and the power of eminent domain have the general welfare for their object, and recent trends show a mingling19 of the two with the latter being used as an implement of the former, there are still traditional distinctions between the two. Property condemned under police power is usually noxious or intended for a noxious purpose; hence, no compensation shall be paid.20 Likewise, in the exercise of police power, property rights of private individuals are subjected to restraints and burdens in order to secure the general comfort, health, and prosperity of the state. Thus, an ordinance prohibiting theaters from selling tickets in excess of their seating capacity (which would result in the diminution of profits of the theater-owners) was upheld valid as this would promote the comfort, convenience and safety of the customers.21 In U.S. v. Toribio,22 the court upheld the provisions of Act No. 1147, a statute regulating the slaughter of carabao for the purpose of conserving an adequate supply of draft animals, as a valid exercise of police power, notwithstanding the property rights impairment that the ordinance imposed on cattle owners. A zoning ordinance prohibiting the operation of a lumber yard within certain areas was assailed as unconstitutional in that it was an invasion of the property rights of the lumber yard owners in People v. de Guzman. 23 The Court nonetheless ruled that the regulation was a valid exercise of police power. A similar ruling was arrived at in Seng Kee S Co. v. Earnshaw and Piatt24 where an ordinance divided the City of Manila into industrial and residential areas. A thorough scrutiny of the extant jurisprudence leads to a cogent deduction that where a property interest is merely restricted because the continued use thereof would be injurious to public welfare, or where property is destroyed because its continued existence would be injurious to public interest, there is no compensable taking. 25 However, when a property interest is appropriated and applied to some public purpose, there is compensable taking.26 According to noted constitutionalist, Fr. Joaquin Bernas, SJ, in the exercise of its police power regulation, the state restricts the use of private property, but none of the property interests in the bundle of rights which constitute ownership is appropriated for use by or for the benefit of the public.27 Use of the property by the owner was limited, but no aspect of the property is used by or for the public. 28 The deprivation of use can in fact be total and it will not constitute compensable taking if nobody else acquires use of the property or any interest therein. 29 If, however, in the regulation of the use of the property, somebody else acquires the use or interest thereof, such restriction constitutes compensable taking. Thus, in City Government of Quezon City v. Ericta,30 it was argued by the local government that an ordinance requiring private cemeteries to reserve 6% of their total areas for the burial of paupers was a valid exercise of the police power under the general welfare clause. This court did not agree in

the contention, ruling that property taken under the police power is sought to be destroyed and not, as in this case, to be devoted to a public use. It further declared that the ordinance in question was actually a taking of private property without just compensation of a certain area from a private cemetery to benefit paupers who are charges of the local government. Being an exercise of eminent domain without provision for the payment of just compensation, the same was rendered invalid as it violated the principles governing eminent domain. In People v. Fajardo,31 the municipal mayor refused Fajardo permission to build a house on his own land on the ground that the proposed structure would destroy the view or beauty of the public plaza. The ordinance relied upon by the mayor prohibited the construction of any building that would destroy the view of the plaza from the highway. The court ruled that the municipal ordinance under the guise of police power permanently divest owners of the beneficial use of their property for the benefit of the public; hence, considered as a taking under the power of eminent domain that could not be countenanced without payment of just compensation to the affected owners. In this case, what the municipality wanted was to impose an easement on the property in order to preserve the view or beauty of the public plaza, which was a form of utilization of Fajardos property for public benefit. 32 While the power of eminent domain often results in the appropriation of title to or possession of property, it need not always be the case. Taking may include trespass without actual eviction of the owner, material impairment of the value of the property or prevention of the ordinary uses for which the property was intended such as the establishment of an easement.33 In Ayala de Roxas v. City of Manila,34 it was held that the imposition of burden over a private property through easement was considered taking; hence, payment of just compensation is required. The Court declared: And, considering that the easement intended to be established, whatever may be the object thereof, is not merely a real right that will encumber the property, but is one tending to prevent the exclusive use of one portion of the same, by expropriating it for public use which, be it what it may, can not be accomplished unless the owner of the property condemned or seized be previously and duly indemnified, it is proper to protect the appellant by means of the remedy employed in such cases, as it is only adequate remedy when no other legal action can be resorted to, against an intent which is nothing short of an arbitrary restriction imposed by the city by virtue of the coercive power with which the same is invested. And in the case of National Power Corporation v. Gutierrez,35 despite the NPCs protestation that the owners were not totally deprived of the use of the land and could still plant the same crops as long as they did not come into contact with the wires, the Court nevertheless held that the easement of right-of-way was a taking under the power of eminent domain. The Court said: In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period deprives private respondents of its ordinary use. A case exemplifying an instance of compensable taking which does not entail transfer of title is Republic v. Philippine Long Distance Telephone Co.36 Here, the Bureau of Telecommunications, a government instrumentality, had contracted with the PLDT for the interconnection between the Government Telephone System and that of the PLDT, so that the former could make use of the lines and facilities of the PLDT. In its desire to expand services to government offices, the Bureau of Telecommunications demanded to expand its use of the PLDT lines. Disagreement ensued on the terms of the contract for the use of the PLDT facilities. The Court ruminated:

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Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of the condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement right of way. 37 In Republic v. Castellvi,38 this Court had the occasion to spell out the requisites of taking in eminent domain, to wit: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period. (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. As shown by the foregoing jurisprudence, a regulation which substantially deprives the owner of his proprietary rights and restricts the beneficial use and enjoyment for public use amounts to compensable taking. In the case under consideration, the entry referred to in Section 76 and the easement rights under Section 75 of Rep. Act No. 7942 as well as the various rights to CAMC under its FTAA are no different from the deprivation of proprietary rights in the cases discussed which this Court considered as taking. Section 75 of the law in question reads: Easement Rights. - When mining areas are so situated that for purposes of more convenient mining operations it is necessary to build, construct or install on the mining areas or lands owned, occupied or leased by other persons, such infrastructure as roads, railroads, mills, waste dump sites, tailing ponds, warehouses, staging or storage areas and port facilities, tramways, runways, airports, electric transmission, telephone or telegraph lines, dams and their normal flood and catchment areas, sites for water wells, ditches, canals, new river beds, pipelines, flumes, cuts, shafts, tunnels, or mills, the contractor, upon payment of just compensation, shall be entitled to enter and occupy said mining areas or lands. Section 76 provides: Entry into private lands and concession areas Subject to prior notification, holders of mining rights shall not be prevented from entry into private lands and concession areas by surface owners, occupants, or concessionaires when conducting mining operations therein. The CAMC FTAA grants in favor of CAMC the right of possession of the Exploration Contract Area, the full right of ingress and egress and the right to occupy the same. It also bestows CAMC the right not to be prevented from entry into private lands by surface owners or occupants thereof when prospecting, exploring and exploiting minerals therein.

The entry referred to in Section 76 is not just a simple right-of-way which is ordinarily allowed under the provisions of the Civil Code. Here, the holders of mining rights enter private lands for purposes of conducting mining activities such as exploration, extraction and processing of minerals. Mining right holders build mine infrastructure, dig mine shafts and connecting tunnels, prepare tailing ponds, storage areas and vehicle depots, install their machinery, equipment and sewer systems. On top of this, under Section 75, easement rights are accorded to them where they may build warehouses, port facilities, electric transmission, railroads and other infrastructures necessary for mining operations. All these will definitely oust the owners or occupants of the affected areas the beneficial ownership of their lands. Without a doubt, taking occurs once mining operations commence. Section 76 of Rep. Act No. 7942 is a Taking Provision Moreover, it would not be amiss to revisit the history of mining laws of this country which would help us understand Section 76 of Rep. Act No. 7942. This provision is first found in Section 27 of Commonwealth Act No. 137 which took effect on 7 November 1936, viz: Before entering private lands the prospector shall first apply in writing for written permission of the private owner, claimant, or holder thereof, and in case of refusal by such private owner, claimant, or holder to grant such permission, or in case of disagreement as to the amount of compensation to be paid for such privilege of prospecting therein, the amount of such compensation shall be fixed by agreement among the prospector, the Director of the Bureau of Mines and the surface owner, and in case of their failure to unanimously agree as to the amount of compensation, all questions at issue shall be determined by the Court of First Instance. Similarly, the pertinent provision of Presidential Decree No. 463, otherwise known as "The Mineral Resources Development Decree of 1974," provides: SECTION 12. Entry to Public and Private Lands. A person who desires to conduct prospecting or other mining operations within public lands covered by concessions or rights other than mining shall first obtain the written permission of the government official concerned before entering such lands. In the case of private lands, the written permission of the owner or possessor of the land must be obtained before entering such lands. In either case, if said permission is denied, the Director, at the request of the interested person may intercede with the owner or possessor of the land. If the intercession fails, the interested person may bring suit in the Court of First Instance of the province where the land is situated. If the court finds the request justified, it shall issue an order granting the permission after fixing the amount of compensation and/or rental due the owner or possessor: Provided, That pending final adjudication of such amount, the court shall upon recommendation of the Director permit the interested person to enter, prospect and/or undertake other mining operations on the disputed land upon posting by such interested person of a bond with the court which the latter shall consider adequate to answer for any damage to the owner or possessor of the land resulting from such entry, prospecting or any other mining operations. Hampered by the difficulties and delays in securing surface rights for the entry into private lands for purposes of mining operations, Presidential Decree No. 512 dated 19 July 1974 was passed into law in order to achieve full and accelerated mineral resources development. Thus, Presidential Decree No. 512 provides for a new system of surface rights acquisition by mining prospectors and claimants. Whereas in Commonwealth Act No. 137 and Presidential Decree No. 463 eminent domain may only be exercised in order that the mining claimants can build,

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construct or install roads, railroads, mills, warehouses and other facilities, this time, the power of eminent domain may now be invoked by mining operators for the entry, acquisition and use of private lands, viz: SECTION 1. Mineral prospecting, location, exploration, development and exploitation is hereby declared of public use and benefit, and for which the power of eminent domain may be invoked and exercised for the entry, acquisition and use of private lands. x x x. The evolution of mining laws gives positive indication that mining operators who are qualified to own lands were granted the authority to exercise eminent domain for the entry, acquisition, and use of private lands in areas open for mining operations. This grant of authority extant in Section 1 of Presidential Decree No. 512 is not expressly repealed by Section 76 of Rep. Act No. 7942; and neither are the former statutes impliedly repealed by the former. These two provisions can stand together even if Section 76 of Rep. Act No. 7942 does not spell out the grant of the privilege to exercise eminent domain which was present in the old law. It is an established rule in statutory construction that in order that one law may operate to repeal another law, the two laws must be inconsistent.39 The former must be so repugnant as to be irreconciliable with the latter act. Simply because a latter enactment may relate to the same subject matter as that of an earlier statute is not of itself sufficient to cause an implied repeal of the latter, since the new law may be cumulative or a continuation of the old one. As has been the ruled, repeals by implication are not favored, and will not be decreed unless it is manifest that the legislature so intended.40 As laws are presumed to be passed with deliberation and with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in passing a statute it was not intended to interfere with or abrogate any former law relating to the same matter, unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or unless the reason for the earlier act is beyond peradventure removed.41 Hence, every effort must be used to make all acts stand and if, by any reasonable construction, they can be reconciled, the latter act will not operate as a repeal of the earlier. Considering that Section 1 of Presidential Decree No. 512 granted the qualified mining operators the authority to exercise eminent domain and since this grant of authority is deemed incorporated in Section 76 of Rep. Act No. 7942, the inescapable conclusion is that the latter provision is a taking provision. While this Court declares that the assailed provision is a taking provision, this does not mean that it is unconstitutional on the ground that it allows taking of private property without the determination of public use and the payment of just compensation. The taking to be valid must be for public use.42 Public use as a requirement for the valid exercise of the power of eminent domain is now synonymous with public interest, public benefit, public welfare and public convenience. 43 It includes the broader notion of indirect public benefit or advantage. Public use as traditionally understood as "actual use by the public" has already been abandoned.44 Mining industry plays a pivotal role in the economic development of the country and is a vital tool in the governments thrust of accelerated recovery.45 The importance of the mining industry for national development is expressed in Presidential Decree No. 463:

WHEREAS, mineral production is a major support of the national economy, and therefore the intensified discovery, exploration, development and wise utilization of the countrys mineral resources are urgently needed for national development. Irrefragably, mining is an industry which is of public benefit. That public use is negated by the fact that the state would be taking private properties for the benefit of private mining firms or mining contractors is not at all true. In Heirs of Juancho Ardona v. Reyes, 46 petitioners therein contended that the promotion of tourism is not for public use because private concessionaires would be allowed to maintain various facilities such as restaurants, hotels, stores, etc., inside the tourist area. The Court thus contemplated: The rule in Berman v. Parker [348 U.S. 25; 99 L. ed. 27] of deference to legislative policy even if such policy might mean taking from one private person and conferring on another private person applies as well in the Philippines. ". . . Once the object is within the authority of Congress, the means by which it will be attained is also for Congress to determine. Here one of the means chosen is the use of private enterprise for redevelopment of the area. Appellants argue that this makes the project a taking from one businessman for the benefit of another businessman. But the means of executing the project are for Congress and Congress alone to determine, once the public purpose has been established. x x x"47 Petitioners further maintain that the states discretion to decide when to take private property is reduced contractually by Section 13.5 of the CAMC FTAA, which reads: If the CONTRACTOR so requests at its option, the GOVERNMENT shall use its offices and legal powers to assist in the acquisition at reasonable cost of any surface areas or rights required by the CONTRACTOR at the CONTRACTORs cost to carry out the Mineral Exploration and the Mining Operations herein. All obligations, payments and expenses arising from, or incident to, such agreements or acquisition of right shall be for the account of the CONTRACTOR and shall be recoverable as Operating Expense. According to petitioners, the government is reduced to a sub-contractor upon the request of the private respondent, and on account of the foregoing provision, the contractor can compel the government to exercise its power of eminent domain thereby derogating the latters power to expropriate property. The provision of the FTAA in question lays down the ways and means by which the foreign-owned contractor, disqualified to own land, identifies to the government the specific surface areas within the FTAA contract area to be acquired for the mine infrastructure.48 The government then acquires ownership of the surface land areas on behalf of the contractor, through a voluntary transaction in order to enable the latter to proceed to fully implement the FTAA. Eminent domain is not yet called for at this stage since there are still various avenues by which surface rights can be acquired other than expropriation. The FTAA provision under attack merely facilitates the implementation of the FTAA given to CAMC and shields it from violating the Anti-Dummy Law. Hence, when confronted with the same question in La Bugal-BLaan Tribal Association, Inc. v. Ramos,49 the Court answered:

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Clearly, petitioners have needlessly jumped to unwarranted conclusions, without being aware of the rationale for the said provision. That provision does not call for the exercise of the power of eminent domain -- and determination of just compensation is not an issue -- as much as it calls for a qualified party to acquire the surface rights on behalf of a foreign-owned contractor. Rather than having the foreign contractor act through a dummy corporation, having the State do the purchasing is a better alternative. This will at least cause the government to be aware of such transaction/s and foster transparency in the contractors dealings with the local property owners. The government, then, will not act as a subcontractor of the contractor; rather, it will facilitate the transaction and enable the parties to avoid a technical violation of the Anti-Dummy Law. There is also no basis for the claim that the Mining Law and its implementing rules and regulations do not provide for just compensation in expropriating private properties. Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for the payment of just compensation: Section 76. xxx Provided, that any damage to the property of the surface owner, occupant, or concessionaire as a consequence of such operations shall be properly compensated as may be provided for in the implementing rules and regulations. Section 107. Compensation of the Surface Owner and Occupant- Any damage done to the property of the surface owners, occupant, or concessionaire thereof as a consequence of the mining operations or as a result of the construction or installation of the infrastructure mentioned in 104 above shall be properly and justly compensated. Such compensation shall be based on the agreement entered into between the holder of mining rights and the surface owner, occupant or concessionaire thereof, where appropriate, in accordance with P.D. No. 512. (Emphasis supplied.) Second Substantive Issue: Power of Courts to Determine Just Compensation Closely-knit to the issue of taking is the determination of just compensation. It is contended that Rep. Act No. 7942 and Section 107 of DAO 96-40 encroach on the power of the trial courts to determine just compensation in eminent domain cases inasmuch as the same determination of proper compensation are cognizable only by the Panel of Arbitrators. The question on the judicial determination of just compensation has been settled in the case of Export Processing Zone Authority v. Dulay50 wherein the court declared that the determination of just compensation in eminent domain cases is a judicial function. Even as the executive department or the legislature may make the initial determinations, the same cannot prevail over the courts findings. Implementing Section 76 of Rep. Act No. 7942, Section 105 of DAO 96-40 states that holder(s) of mining right(s) shall not be prevented from entry into its/their contract/mining areas for the purpose of exploration, development, and/or utilization. That in cases where surface owners of the lands, occupants or concessionaires refuse to allow the permit holder or contractor entry, the latter shall bring the matter before the Panel of Arbitrators for proper disposition. Section 106 states that voluntary agreements between the two parties permitting the mining right holders to enter and use the surface owners lands shall be registered with the Regional Office of the MGB. In connection with Section 106, Section 107 provides that the compensation for the damage done to the surface

owner, occupant or concessionaire as a consequence of mining operations or as a result of the construction or installation of the infrastructure shall be properly and justly compensated and that such compensation shall be based on the agreement between the holder of mining rights and surface owner, occupant or concessionaire, or where appropriate, in accordance with Presidential Decree No. 512. In cases where there is disagreement to the compensation or where there is no agreement, the matter shall be brought before the Panel of Arbitrators. Section 206 of the implementing rules and regulations provides an aggrieved party the remedy to appeal the decision of the Panel of Arbitrators to the Mines Adjudication Board, and the latters decision may be reviewed by the Supreme Court by filing a petition for review on certiorari. 51 An examination of the foregoing provisions gives no indication that the courts are excluded from taking cognizance of expropriation cases under the mining law. The disagreement referred to in Section 107 does not involve the exercise of eminent domain, rather it contemplates of a situation wherein the permit holders are allowed by the surface owners entry into the latters lands and disagreement ensues as regarding the proper compensation for the allowed entry and use of the private lands. Noticeably, the provision points to a voluntary sale or transaction, but not to an involuntary sale. The legislature, in enacting the mining act, is presumed to have deliberated with full knowledge of all existing laws and jurisprudence on the subject. Thus, it is but reasonable to conclude that in passing such statute it was in accord with the existing laws and jurisprudence on the jurisdiction of courts in the determination of just compensation and that it was not intended to interfere with or abrogate any former law relating to the same matter. Indeed, there is nothing in the provisions of the assailed law and its implementing rules and regulations that exclude the courts from their jurisdiction to determine just compensation in expropriation proceedings involving mining operations. Although Section 105 confers upon the Panel of Arbitrators the authority to decide cases where surface owners, occupants, concessionaires refuse permit holders entry, thus, necessitating involuntary taking, this does not mean that the determination of the just compensation by the Panel of Arbitrators or the Mines Adjudication Board is final and conclusive. The determination is only preliminary unless accepted by all parties concerned. There is nothing wrong with the grant of primary jurisdiction by the Panel of Arbitrators or the Mines Adjudication Board to determine in a preliminary matter the reasonable compensation due the affected landowners or occupants.52 The original and exclusive jurisdiction of the courts to decide determination of just compensation remains intact despite the preliminary determination made by the administrative agency. As held in Philippine Veterans Bank v. Court of Appeals53: The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the question is first passed upon by the DAR, as the judicial proceedings are not a continuation of the administrative determination. Third Substantive Issue: Sufficient Control by the State Over Mining Operations Anent the third issue, petitioners charge that Rep. Act No. 7942, as well as its Implementing Rules and Regulations, makes it possible for FTAA contracts to cede over to a fully foreign-owned corporation full control and management of mining enterprises, with the result that the State is allegedly reduced to a passive regulator dependent on submitted plans and reports, with weak review and audit powers. The State is not acting as the supposed owner of the natural resources for and on behalf of the Filipino people; it practically has little effective say in the decisions made by the enterprise. In effect, petitioners asserted that the law, the implementing regulations, and the CAMC FTAA cede beneficial ownership of the mineral resources to the foreign contractor. It must be noted that this argument was already raised in La Bugal-BLaan Tribal Association, Inc. v. Ramos,54 where the Court answered in the following manner:

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RA 7942 provides for the states control and supervision over mining operations. The following p rovisions thereof establish the mechanism of inspection and visitorial rights over mining operations and institute reportorial requirements in this manner: 1. Sec. 8 which provides for the DENRs power of over -all supervision and periodic review for "the conservation, management, development and proper use of the States mineral resources"; 2. Sec. 9 which authorizes the Mines and Geosciences Bureau (MGB) under the DENR to exercise "direct charge in the administration and disposition of mineral resources", and empowers the MGB to "monitor the compliance by the contractor of the terms and conditions of the mineral agreements", "confiscate surety and performance bonds", and deputize whenever necessary any member or unit of the Phil. National Police, barangay, duly registered non-governmental organization (NGO) or any qualified person to police mining activities; 3. Sec. 66 which vests in the Regional Director "exclusive jurisdiction over safety inspections of all installations, whether surface or underground", utilized in mining operations. 4. Sec. 35, which incorporates into all FTAAs the following terms, conditions and warranties: "(g) Mining operations shall be conducted in accordance with the provisions of the Act and its IRR. "(h) Work programs and minimum expenditures commitments. xxxx "(k) Requiring proponent to effectively use appropriate anti-pollution technology and facilities to protect the environment and restore or rehabilitate mined-out areas. "(l) The contractors shall furnish the Government records of geologic, accounting and other relevant data for its mining operation, and that books of accounts and records shall be open for inspection by the government. x x x. "(m) Requiring the proponent to dispose of the minerals at the highest price and more advantageous terms and conditions. xxxx "(o) Such other terms and conditions consistent with the Constitution and with this Act as the Secretary may deem to be for the best interest of the State and the welfare of the Filipino people." The foregoing provisions of Section 35 of RA 7942 are also reflected and implemented in Section 56 (g), (h), (l), (m) and (n) of the Implementing Rules, DAO 96-40. Moreover, RA 7942 and DAO 96-40 also provide various stipulations confirming the governments control over mining enterprises:

o o o o o o

o o o

The contractor is to relinquish to the government those portions of the contract area not needed for mining operations and not covered by any declaration of mining feasibility (Section 35-e, RA 7942; Section 60, DAO 96-40). The contractor must comply with the provisions pertaining to mine safety, health and environmental protection (Chapter XI, RA 7942; Chapters XV and XVI, DAO 96-40). For violation of any of its terms and conditions, government may cancel an FTAA. (Chapter XVII, RA 7942; Chapter XXIV, DAO 96-40). An FTAA contractor is obliged to open its books of accounts and records for 0inspection by the government (Section 56-m, DAO 96-40). An FTAA contractor has to dispose of the minerals and by-products at the highest market price and register with the MGB a copy of the sales agreement (Section 56-n, DAO 96-40). MGB is mandated to monitor the contractors compliance with the terms and conditions of the FTAA; and to deputize, when necessary, any member or unit of the Philippine National Police, the barangay or a DENR-accredited nongovernmental organization to police mining activities (Section 7-d and -f, DAO 96-40). An FTAA cannot be transferred or assigned without prior approval by the President (Section 40, RA 7942; Section 66, DAO 96-40). A mining project under an FTAA cannot proceed to the construction/development/utilization stage, unless its Declaration of Mining Project Feasibility has been approved by government (Section 24, RA 7942). The Declaration of Mining Project Feasibility filed by the contractor cannot be approved without submission of the following documents: 1. Approved mining project feasibility study (Section 53-d, DAO 96-40) 2. Approved three-year work program (Section 53-a-4, DAO 96-40) 3. Environmental compliance certificate (Section 70, RA 7942) 4. Approved environmental protection and enhancement program (Section 69, RA 7942) 5. Approval by the Sangguniang Panlalawigan/Bayan/Barangay (Section 70, RA 7942; Section 27, RA 7160) 6. Free and prior informed consent by the indigenous peoples concerned, including payment of royalties through a Memorandum of Agreement (Section 16, RA 7942; Section 59, RA 8371)

o o

The FTAA contractor is obliged to assist in the development of its mining community, promotion of the general welfare of its inhabitants, and development of science and mining technology (Section 57, RA 7942). The FTAA contractor is obliged to submit reports (on quarterly, semi-annual or annual basis as the case may be; per Section 270, DAO 96-40), pertaining to the following: 1. Exploration 2. Drilling 3. Mineral resources and reserves

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o o

4. Energy consumption 5. Production 6. Sales and marketing 7. Employment 8. Payment of taxes, royalties, fees and other Government Shares 9. Mine safety, health and environment 10. Land use 11. Social development 12. Explosives consumption An FTAA pertaining to areas within government reservations cannot be granted without a written clearance from the government agencies concerned (Section 19, RA 7942; Section 54, DAO 96-40). An FTAA contractor is required to post a financial guarantee bond in favor of the government in an amount equivalent to its expenditures obligations for any particular year. This requirement is apart from the representations and warranties of the contractor that it has access to all the financing, managerial and technical expertise and technology necessary to carry out the objectives of the FTAA (Section 35-b, -e, and -f, RA 7942). Other reports to be submitted by the contractor, as required under DAO 96-40, are as follows: an environmental report on the rehabilitation of the mined-out area and/or mine waste/tailing covered area, and anti-pollution measures undertaken (Section 35-a-2); annual reports of the mining operations and records of geologic accounting (Section 56-m); annual progress reports and final report of exploration activities (Section 56-2). Other programs required to be submitted by the contractor, pursuant to DAO 96-40, are the following: a safety and health program (Section 144); an environmental work program (Section 168); an annual environmental protection and enhancement program (Section 171).

Overall, considering the provisions of the statute and the regulations just discussed, we believe that the State definitely possesses the means by which it can have the ultimate word in the operation of the enterprise, set directions and objectives, and detect deviations and noncompliance by the contractor; likewise, it has the capability to enforce compliance and to impose sanctions, should the occasion therefor arise. In other words, the FTAA contractor is not free to do whatever it pleases and get away with it; on the contrary, it will have to follow the government line if it wants to stay in the enterprise. Ineluctably then, RA 7942 and DAO 96-40 vest in the government more than a sufficient degree of control and supervision over the conduct of mining operations. Fourth Substantive Issue: The Proper Interpretation of the Constitutional Phrase "Agreements Involving Either Technical or Financial Assistance In interpreting the first and fourth paragraphs of Section 2, Article XII of the Constitution, petitioners set forth the argument that foreign corporations are barred from making decisions on the conduct of operations and the management of the mining project. The first paragraph of Section 2, Article XII reads: x x x The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production sharing agreements with Filipino citizens, or corporations or associations at least sixty percentum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty five years, renewable for not more than twenty five years, and under such terms and conditions as may be provided by law x x x. The fourth paragraph of Section 2, Article XII provides: The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country x x x. Petitioners maintain that the first paragraph bars aliens and foreign-owned corporations from entering into any direct arrangement with the government including those which involve co-production, joint venture or production sharing agreements. They likewise insist that the fourth paragraph allows foreign-owned corporations to participate in the large-scale exploration, development and utilization of natural resources, but such participation, however, is merely limited to an agreement for either financial or technical assistance only. Again, this issue has already been succinctly passed upon by this Court in La Bugal-BLaan Tribal Association, Inc. v. Ramos.55 In discrediting such argument, the Court ratiocinated: Petitioners claim that the phrase "agreements x x x involving either technical or financial assistance" simply means technical assistance or financial assistance agreements, nothing more and nothing else. They insist that there is no ambiguity in the phrase, and that a plain reading of paragraph 4 quoted above leads to the inescapable conclusion that what a foreign-owned corporation may enter into with the government is merely an agreement for either financial or technical assistance only, for the large-scale exploration, development and utilization of

The foregoing gamut of requirements, regulations, restrictions and limitations imposed upon the FTAA contractor by the statute and regulations easily overturns petitioners contention. The setup under RA 7942 and DAO 96 -40 hardly relegates the State to the role of a "passive regulator" dependent on submitted plans and reports. On the contrary, the government agencies concerned are empowered to approve or disapprove -- hence, to influence, direct and change -- the various work programs and the corresponding minimum expenditure commitments for each of the exploration, development and utilization phases of the mining enterprise. Once these plans and reports are approved, the contractor is bound to comply with its commitments therein. Figures for mineral production and sales are regularly monitored and subjected to government review, in order to ensure that the products and by-products are disposed of at the best prices possible; even copies of sales agreements have to be submitted to and registered with MGB. And the contractor is mandated to open its books of accounts and records for scrutiny, so as to enable the State to determine if the government share has been fully paid. The State may likewise compel the contractors compliance with mandatory requirements on mine safety, health and environmental protection, and the use of anti-pollution technology and facilities. Moreover, the contractor is also obligated to assist in the development of the mining community and to pay royalties to the indigenous peoples concerned. Cancellation of the FTAA may be the penalty for violation of any of its terms and conditions and/or noncompliance with statutes or regulations. This general, all-around, multipurpose sanction is no trifling matter, especially to a contractor who may have yet to recover the tens or hundreds of millions of dollars sunk into a mining project.

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minerals, petroleum and other mineral oils; such a limitation, they argue, excludes foreign management and operation of a mining enterprise. This restrictive interpretation, petitioners believe, is in line with the general policy enunciated by the Constitution reserving to Filipino citizens and corporations the use and enjoyment of the countrys natural resources. They maintain that this Courts Decision of January 27, 2004 correctly declared the WMCP FTAA, along with pertinent provisions of RA 7942, void for allowing a foreign contractor to have direct and exclusive management of a mining enterprise. Allowing such a privilege not only runs counter to the "full control and supervision" that the State is constitutionally mandated to exercise over the exploration, d evelopment and utilization of the countrys natural resources; doing so also vests in the foreign company "beneficial ownership" of our mineral resources. It will be recalled that the Decision of January 27, 2004 zeroed in on "management or other forms of assistance" or other activities associated with the "service contracts" of the martial law regime, since "the management or operation of mining activities by foreign contractors, which is the primary feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution sought to eradicate." xxxx We do not see how applying a strictly literal or verba legis interpretation of paragraph 4 could inexorably lead to the conclusions arrived at in the ponencia. First, the drafters choice of words -- their use of the phrase agreements x x x involving either technical or financial assistance -- does not indicate the intent to exclude other modes of assistance. The drafters opted to use involving when they could have simply said agreements for financial or technical assistance, if that was their intention to begin with. In this case, the limitation would be very clear and no further debate would ensue. In contrast, the use of the word "involving" signifies the possibility of the inclusion of other forms of assistance or activities having to do with, otherwise related to or compatible with financial or technical assistance. The word "involving" as used in this context has three connotations that can be differentiated thus: one, the sense of "concerning," "having to do with," or "affecting"; two, "entailing," "requiring," "implying" or "necessitating"; and three, "including," "containing" or "comprising." Plainly, none of the three connotations convey a sense of exclusivity. Moreover, the word "involving," when understood in the sense of "including," as in including technical or financial assistance, necessarily implies that there are activities other than those that are being included. In other words, if an agreement includes technical or financial assistance, there is apart from such assistance -- something else already in, and covered or may be covered by, the said agreement. In short, it allows for the possibility that matters, other than those explicitly mentioned, could be made part of the agreement. Thus, we are now led to the conclusion that the use of the word "involving" implies that these agreements with foreign corporations are not limited to mere financial or technical assistance. The difference in sense becomes very apparent when we juxtapose "agreements for technical or financial assistance" against "agreements including technical or financial assistance." This much is unalterably clear in a verba legis approach. Second, if the real intention of the drafters was to confine foreign corporations to financial or technical assistance and nothing more, their language would have certainly been so unmistakably restrictive and stringent as to leave no doubt in anyones mind about their true intent. For example, they would h ave used the sentence foreign corporations are absolutely prohibited from involvement in the management or operation of mining or similar ventures or words of similar import. A search for such stringent wording yields negative results. Thus, we come to

the inevitable conclusion that there was a conscious and deliberate decision to avoid the use of restrictive wording that bespeaks an intent not to use the expression "agreements x x x involving either technical or financial assistance" in an exclusionary and limiting manner. Fifth Substantive Issue: Service Contracts Not Deconstitutionalized Lastly, petitioners stress that the service contract regime under the 1973 Constitution is expressly prohibited under the 1987 Constitution as the term service contracts found in the former was deleted in the latter to avoid the circumvention of constitutional prohibitions that were prevalent in the 1987 Constitution. According to them, the framers of the 1987 Constitution only intended for foreign-owned corporations to provide either technical assistance or financial assistance. Upon perusal of the CAMC FTAA, petitioners are of the opinion that the same is a replica of the service contract agreements that the present constitution allegedly prohibit. Again, this contention is not well-taken. The mere fact that the term service contracts found in the 1973 Constitution was not carried over to the present constitution, sans any categorical statement banning service contracts in mining activities, does not mean that service contracts as understood in the 1973 Constitution was eradicated in the 1987 Constitution.56 The 1987 Constitution allows the continued use of service contracts with foreign corporations as contractors who would invest in and operate and manage extractive enterprises, subject to the full control and supervision of the State; this time, however, safety measures were put in place to prevent abuses of the past regime.57 We ruled, thus: To our mind, however, such intent cannot be definitively and conclusively established from the mere failure to carry the same expression or term over to the new Constitution, absent a more specific, explicit and unequivocal statement to that effect. What petitioners seek (a complete ban on foreign participation in the management of mining operations, as previously allowed by the earlier Constitutions) is nothing short of bringing about a momentous sea change in the economic and developmental policies; and the fundamentally capitalist, freeenterprise philosophy of our government. We cannot imagine such a radical shift being undertaken by our government, to the great prejudice of the mining sector in particular and our economy in general, merely on the basis of the omission of the terms service contract from or the failure to carry them over to the new Constitution. There has to be a much more definite and even unarguable basis for such a drastic reversal of policies. xxxx The foregoing are mere fragments of the framers lengthy discussions of the provision dealing with agreements x x x involving either technical or financial assistance, which ultimately became paragraph 4 of Section 2 of Article XII of the Constitution. Beyond any doubt, the members of the ConCom were actually debating about the martiallaw-era service contracts for which they were crafting appropriate safeguards. In the voting that led to the approval of Article XII by the ConCom, the explanations given by Commissioners Gascon, Garcia and Tadeo indicated that they had voted to reject this provision on account of their objections to the "constitutionalization" of the "service contract" concept. Mr. Gascon said, "I felt that if we would constitutionalize any provision on service contracts, this should always be with the concurrence of Congress and not guided only by a general law to be promulgated by Congress." Mr. Garcia explained, "Service contracts are given constitutional legitimization in Sec. 3, even when they have been proven to be inimical to the interests of the nation, providing, as they do, the legal loophole for the exploitation of

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our natural resources for the benefit of foreign interests." Likewise, Mr. Tadeo cited inter alia the fact that service contracts continued to subsist, enabling foreign interests to benefit from our natural resources. It was hardly likely that these gentlemen would have objected so strenuously, had the provision called for mere technical or financial assistance and nothing more. The deliberations of the ConCom and some commissioners explanation of their votes leave no room for doubt that the service contract concept precisely underpinned the commissioners understanding of the "agreements involving either technical or financial assistance." xxxx From the foregoing, we are impelled to conclude that the phrase agreements involving either technical or financial assistance, referred to in paragraph 4, are in fact service contracts. But unlike those of the 1973 variety, the new ones are between foreign corporations acting as contractors on the one hand; and on the other, the government as principal or "owner" of the works. In the new service contracts, the foreign contractors provide capital, technology and technical know-how, and managerial expertise in the creation and operation of large-scale mining/extractive enterprises; and the government, through its agencies (DENR, MGB), actively exercises control and supervision over the entire operation. xxxx It is therefore reasonable and unavoidable to make the following conclusion, based on the above arguments. As written by the framers and ratified and adopted by the people, the Constitution allows the continued use of service contracts with foreign corporations -- as contractors who would invest in and operate and manage extractive enterprises, subject to the full control and supervision of the State -- sans the abuses of the past regime. The purpose is clear: to develop and utilize our mineral, petroleum and other resources on a large scale for the immediate and tangible benefit of the Filipino people.58 WHEREFORE, the instant petition for prohibition and mandamus is hereby DISMISSED. Section 76 of Republic Act No. 7942 and Section 107 of DAO 96-40; Republic Act No. 7942 and its Implementing Rules and Regulations contained in DAO 96-40 insofar as they relate to financial and technical assistance agreements referred to in paragraph 4 of Section 2 of Article XII of the Constitution are NOT UNCONSTITUTIONAL. SO ORDERED. Republic SUPREME Manila EN BANC G.R. No. 70484 January 29, 1988 ROMAN C. TUASON and REMEDIOS V. TUASON, by attorney-in-fact Trinidad S. Viado, petitioners, of the Philippines COURT

vs. REGISTER OF DEEDS, CALOOCAN City, MINISTRY OF JUSTICE, and the NATIONAL TREASURER, respondents. TOMASA BARTOLOME, in her own behalf and in behalf of the other members of the "Consuelo Heights Homeowners Association," petitioners-intervenors. Orlando A. Rayos for petitioners-intervenors. The Solicitor General for respondents. NARVASA, J.: A more despotic, capricious, oppressive and unjustifiable exercise of government power than that manifested in this case can scarcely be found in the sordid annals of the martial law regime. Relief to the victims must be as it is hereby extended by the grant to them of the extraordinary writ of certiorari and prohibition condemning as unconstitutional, and annulling and perpetually enjoining the acts complained of. Petitioner spouses, the Tuasons, were retired public school teachers. On April 6, 1965, with funds pooled from their retirement benefits and savings, they bought from Carmel Farms, Inc. (hereafter simply, Carmel) a piece of land measuring about 8,756 square meters, in the latter's subdivision in Barrio Makatipo, Caloocan City. In virtue of this sale, Carmel's Torrens title (No. 64007) over the lot was cancelled and a new one (No. 8314) issued in the name of the Tuasons. The Tuasons took possession of their property. Some eight (8) years thereafter, the Tuasons' travails began. They woke up one morning to discover that by presidential flat, they were no longer the owners of the land they had purchased with their hardearned money, and that their land and the other lots in the subdivision had been "declared open for disposition and sale to the members of the Malacanang Homeowners Association, Inc., the present bona fide occupants thereof." On September 14, 1973-a year almost to the day after the declaration of martial law Mr. Ferdinand Marcos, then president of the country, invoking his emergency powers, issued Presidential Decree No. 293 with immediate effect. The decree invalidated inter alia the title of the Tuasons' vendor, Carmel, which had earlier purchased from the Government the land it had subsequently subdivided into several lots for sale to the public (the Tuasons being among the buyers). The land bought by Carmel was part of the Tala Estate (one of the so-called "Friar Lands"). Carmel had bought the land under Act No. 1120 and C.A. No. 32, as amended. Under these statutes: 1) a bona fide settler or occupant was allowed to purchase (if he did not wish to lease) the portion occupied by him at the price fixed by the Government, in cash or on installment; the interested buyer was given a certificate of sale, which was regarded as an agreement by him to pay the purchase price in the and at the interest specified, the acceptance of such certificate making the occupant a debtor of the government;

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2) until the price was fully paid however, title was reserved in the Government, and any sale or encumbrance made by the purchaser prior to such full payment was explicitly declared to 'be invalid as against the Government ... and ... in all respects subordinate to its prior claim;" 3) in the event of default by a purchaser to pay any installment of purchase money and interest thereon, the Chief of the Bureau of Public Lands (now Director of Lands) had the duty at once to protect the Government from loss by bringing suit to obtain judicial authority to enforce the Government's lien on the "and by selling it in the same manner as for foreclosure of mortgages, the purchaser at such sale being deemed to acquire a good and indefeasible title, and the proceeds of the sale being applied to the payment of the costs of the court and all installments due or to become due; and 4) in the event of completion of payment, the Government transferred title to the land to the purchaser "by proper instrument of conveyance," the certificate of title over the land to issue and become effective 1 in the manner provided by the Land Registration Act. Said Presidential Decree No. 293 made the finding price. It adjudged that
2

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation 1081, dated September 21, 1972, and General Order No. 1, dated September 22, 1972, do hereby order and decree that any and all sales contracts between the government and the original purchasers, are hereby cancelled, and those between the latter and the subsequent transferees, and any and all transfers thereafter, covering lots 979, 981, 982, 985, 988, 989, 990, 991 new, 1226, 1228, 1230, and 980-C-2 (LRC PSD1730), all of Tala Estate, Caloocan City, are hereby declared invalid and null and void ab initio as against the Government; that Transfer Certificates of Title Nos. 62603, 62604, 62605, covering lots 1, 2 and 3, PCS-4383, all in the name of Carmel Farms, Inc., which are a consolidation and subdivision survey of the lots hereinbefore enumerated, are declared invalid and considered cancelled as against the Government; and that said lots are declared open for disposition and sale to the members of the Malacanang Homeowners Association, Inc., the present bona fide occupants thereof, pursuant to Commonwealth Act No. 32, as amended. On the strength of this presidential decree, the Register of Deeds of Caloocan City caused the inscription on the Tuasons' title, TCT No. 8314, of the following: MEMORANDUM. Pursuant to Presidential Decree No. 293, this certificate of title is declared invalid and null and void ab initio and considered cancelled as against the Government and the property described herein is declared open for disposition and sale to the members of the Malacanang Homeowners Association, Inc. The Tuason Spouses thereupon filed with this Court a petition for certiorari assailing the Marcos decree as an arbitrary measure which deprived them of their property in favor of a selected group, in violation 5 not only of the constitutional provisions on due process and eminent domain but also of the provisions 6 of the Land Registration Act on the indefeasibility of Torrens titles; and they prayed that the Register of Deeds be directed to cancel the derogatory inscription on their title and restore its efficacy, or in the alternative, that they be compensated for the loss from the Assurance Fund. Mr. Marcos' Solicitor General sought to sustain the decree. In his comment on the petition, he questioned the propriety of the remedy of certiorari resorted to by the petitioners, it not appearing that the public respondents were being sued as judicial or quasi-judicial officers who had acted without or in excess of their jurisdiction, or with grave abuse of discretion. He opined that the petitioner spouses had 8 no cause to complain of unjust deprivation of property because in legal contemplation they had never become owners thereof because of non-payment of the purchase price by their predecessor-in-interest; and the decree was justifiable under the social justice clause of the Constitution and the police power, being in response to the pressing housing need of the employees of the Office of the President who were left homeless and landless after they were asked to vacate Malacanang Park where they had theretofore been residing. He expressed the view, too, that petitioner spouses were not entitled to recover anything from the Assurance Fund. Petitions for intervention have of late been filed by sixty-four (64) persons, members of the "Consuelo Heights Homeowners Association" headed by Tomasa Bartolome, on the claim that they, too, had been
7

that Carmel had failed to complete payment of the

... according to the records of the Bureau of Lands, neither the original purchasers nor their subsequent transferees have made full payment of all installments of the purchase money and interest on the lots claimed by the Carmel Farms, Inc., including 3 those on which the dwellings of the members of said Association stand. Hence, title to said land has remained with the Government, and the land now occupied by the members of said association has never ceased to form part of the property of the Republic of the Philippines, any and all acts affecting said land and purporting to segregate it from the said property of the Republic of the Philippines being therefore null and void ab initio as against the law and public policy. Upon this adjudgment, Mr. Marcos invalidated the titles of Carmel Farms, Inc. and all those derived therefrom, and declared as aforestated "the members of the Malacanang Homeowners Association, Inc. the present bona fide occupants" of the lots which, in consequence, thereby became open to them for 4 "disposition and sale ... pursuant to Commonwealth Act No. 32, as amended." It seems to have completely escaped Mr. Marcos' attention that his decree contained contradictory declarations. While acknowledging on the one hand that the lots in the Carmel Subdivision were occupied by the buyers thereof, and in fact the latter's dwellings stood thereon, he states on the other that the "members of the Malacanang Homeowners Association, Inc. (are) the present bona fide occupants" of all said lots. The latter averment is not only essentially inconsistent with the former but is both a physical and legal fallacy. Well known is the rule of physics that two objects cannot occupy the same space at the same time. And the absurdity of the subsumed proposition is self-evident for persons not in possession of land, who probably have not even set foot thereon, cannot be deemed "occupants" thereof, much less "bona fide" occupants. But this notwithstanding, and upon the factual premise already indicated, Mr. Marcos disposed of the land of the petitioner spouses and others similarly situated as they, in the following imperious manner:

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divested of their lands by the same Presidential Decree No. 293, adopting as their own the allegations and prayer embodied in the Tuasons' petition. The procedural issue is quite easily disposed of. It is true that the extraodinary writ of certiorari may properly issue to nullify only judicial or quasi-judicial acts, unlike the writ of prohibition which may be directed against acts either judicial or ministerial. Section 1, Rule 65 of the Rules of Court deals with the writ of certiorari in relation to "any tribunal, board or officer exercising judicial functions, while Section 2 of the same Rule treats of the writ of prohibition in relation to "proceedings of any tribunal, corporation, board, or person ... exercising functions judicial or ministerial." But the petition will be shown upon analysis to be in reality directed against an unlawful exercise of judicial power. The decree reveals that Mr. Marcos exercised an obviously judicial function. He made a determination of facts, and applied the law to those facts, declaring what the legal rights of the parties were in the 10 premises. These acts essentially constitute a judicial function, or an exercise of jurisdiction which 11 is the power and authority to hear or try and decide or determine a cause. He adjudged it to be an established fact that neither the original purchasers nor their subsequent transferees have made full payment of all installments of the purchase money and interest on the lots claimed by Carmel Farms, Inc., including those on which the dwellings of the members of ... (the) Association (of homeowners) stand." And applying the law to that situation, he made the adjudication that "title to said land has remained with the Government, and the land now occupied by the members of said association has never ceased to form part of the property of the Republic of the Philippines," and that 'any and all acts affecting said land and purporting to segregate it from the said property of the Republic ... (were) null and void ab initio as against the law and public policy. These acts may thus be properly struck down by the writ of certiorari, because done by an officer in the performance of what in essence is a judicial function, if it be shown that the acts were done without or in excess of jurisdiction, or with grave abuse of discretion. Since Mr. Marcos was never vested with judicial power, such power, as everyone knows, being vested in the Supreme Court and such inferior courts as 12 may be established by law the judicial acts done by him were in the circumstances indisputably perpetrated without jurisdiction. The acts were completely alien to his office as chief executive, and utterly beyond the permissible scope of the legislative power that he had assumed as head of the martial law regime. Moreover, he had assumed to exercise power i.e. determined the relevant facts and applied the law thereto without a trial at which all interested parties were accorded the opportunity to adduce evidence to furnish the basis for a determination of the facts material to the controversy. He made the finding ostensibly on the basis of "the records of the Bureau of Lands." Prescinding from the fact that there is no indication whatever the nature and reliability of these records and that they are in no sense conclusive, it is undeniable that the petitioner Tuasons (and the petitioners in intervention) were never confronted with those records and afforded a chance to dispute their trustworthiness and present countervailing evidence. This is yet another fatal defect. The adjudication was patently and grossly violative of the right to due process to which the petitioners are entitled in virtue of the Constitution. Mr. Marcos, in other words, not only arrogated unto himself a power never granted to him by the Constitution or the laws but had in addition exercised it unconstitutionally. In any event, this Court has it in its power to treat the petition for certiorari as one for prohibition if the 13 averments of the former sufficiently made out a case for the latter. Considered in this wise, it will also
9

appear that an executive officer had acted without jurisdiction exercised judicial power not granted to him by the Constitution or the laws and had furthermore performed the act in violation of the constitutional rights of the parties thereby affected. The Court will grant such relief as may be proper and efficacious in the premises even if not specifically sought or set out in the prayer of the appropriate pleading, the permissible relief being determined after all not by the prayer but by the basic averments 14 of the parties' pleadings. There is no dispute about the fact that title to the land purchased by Carmel was actually issued to it by the Government. This of course gives rise to the strong presumption that official duty has been regularly 15 performed, that official duty being in this case the ascertainment by the Chief of the Bureau of Public Lands of the fulfillment of the condition prescribed by law for such issuance, i.e., the payment in full of the price, together with all accrued interest. Against this presumption there is no evidence. It must hence be accorded full sway in these proceedings. Furthermore, the title having been duly issued to Carmel, it became "effective in the manner provided in section one hundred and twenty-two of the Land 16 Registration Act." It may well be the fact that Carmel really did fail to make full payment of the price of the land purchased by it from the Government pursuant to the provisions of Act 1120. This is a possibility that cannot be totally discounted. If this be the fact, the Government may bring suit to recover the unpaid installments and interest, invalidate any sale or encumbrance involving the land subject of the sale, and enforce the lien of the Government against the land by selling the same in the manner provided by Act Numbered 17 One Hundred and Ninety for the foreclosure of mortgages. This it can do despite the lapse of a considerable period of time. Prescription does not lie against the Government. But until and unless such a suit is brought and results in a judgment favorable to the Government, the acquisition of title by Carmel and the purchases by the petitioners and the petitioners-intervenors from it of portions of the land covered by its original title must be respected. At any rate, the eventuation of that contingency will not and cannot in any manner affect this Court's conclusion, herein affirmed, of the unconstitutionality and invalidity of Presidential Decree No. 293, and the absolute lack of any right to the land or any portion thereof on the part of the members of the so-called "Malacanang Homeowners Association, Inc." The decree was not as claimed a licit instance of the application of social justice principles or the exercise of police power. It was in truth a disguised, vile stratagem deliberately resorted to favor a few individuals, in callous and disdainful disregard of the rights of others. It was in reality a taking of private property without due process and without compensation whatever, from persons relying on the indefeasibility of their titles in accordance with and as explicitly guaranteed by law. One last word, respecting the petitioners in intervention, Their petition to intervene substantially fulfilled 18 the requirements laid down for a class suit and was consequently given due course by the Court. They are therefore covered by this judgment. WHEREFORE, Presidential Decree No. 293 is declared to be unconstitutional and void ab initio in all its parts. The public respondents are commanded to cancel the inscription on the titles of the petitioners and the petitioners in intervention of the memorandum declaring their titles null and void and declaring the property therein respectively described open for disposition and sale to the members of the Malacanang Homeowners Association, Inc. to do whatever else is needful to restore the titles to full effect and efficacy; and henceforth to refrain, cease and desist from implementing any provision or part of said Presidential Decree No. 293. No pronouncement as to costs.

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Yap, Fernan, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes JJ., concur. Separate Opinions TEEHANKEE, C.J., concurring: I concur fully in the main opinion forcefully written by Mr. Justice Narvasa and the separate opinion of Mr. Justice Feliciano depicting the unparalleled "despotic, capricious, oppressive and unjustifiable exercise of government power" by the deposed President Ferdinand E. Marcos, as struck down by the Court's unanimous judgment in the case at bar. To be sure, this is but one of the many unconstitutional and void Presidential Decrees of the past unlamented regime which perforce have been so annulled and relief granted to the victims, as they are brought to the Court's attention. These arbitrary, capricious and oppressive decrees, tailored to suit the deposed President's every wish and whim, were the product of unrestrained power, as the deposed President took over the entire government with the imposition of martial law in September, 1972. Such unrestrained exercise of power was heightened by the Court's majority pronouncement in April, 1983 (even as martial law had been lifted at least on paper two years earlier by Proclamation No. 2045 in January, 1981) that in times of grave emergencies, "The President takes absolute command, for the very life of the nation and its government, which, incidentally, includes the courts, is in grave peril. In so doing, the President is answerable only to his conscience, the people and to God. For their part, in giving him the supreme mandate as their President, the people can only trust and pray that, giving him their own loyalty with 1 utmost patriotism, the President will not fail them." It certainly cannot be gainsaid that such judicial abdication turned back the clock to lese majeste and dismantled the intricate system of reenforcing rules, principles and procedures that have evolved through centuries of struggle for the more efficacious protection through independent courts of the individual's right to life, liberty and property and due process of law, so that they would no longer have to depend upon prayers for the purpose. This concurrence is to express the fervent prayer that we have learned well our lesson that absolute power corrupts absolutely and that as Thomas Jefferson warned (which sadly proved to be true in our case), "a single consolidated government would become the most corrupt government on earth." We have won back our freedoms and restored democracy with three great departments of government, and separation of powers and checks and balances. As Rizal taught us, freedom must be nurtured and cherished, not abused, else we lose or forfeit it. We must reconsecrate ourselves to the supremacy of the Rule of Law and renew once more our faith in and adherence to the force of law, rather than the law of force-for only in the Rule of Law may a democracy survive and flourish. This means selfless adherence by all to the basics, for as Brandeis aptly expressed it, "Democracy is a serious undertaking. It is more difficult to maintain than to achieve. It demands continuous sacrifice by the individual and more exigent obedience to the moral law than any other form of government." FELICIANO, J., concurring:

I quite agree with the constitutional law analysis of my learned brother in the Court, Mr. Justice Narvasa, in his eloquent opinion. I should like simply to add that Presidential Decree No. 293 is constitutionally offensive for still another reason: it constitutes a bill of attainder, prohibited not only under the 1935 and 1987 Constitutions but also under the 1973 Constitution. Bills of attainder are an ancient instrument of tyranny. In England a few centuries back, Parliament would at times enact bills or statutes which declared certain persons attainted and their blood corrupted so that it lost all heritable quality (Ex Parte Garland, 4 Wall. 333, 18 L.Ed. 366 [1867]). In more modem terms, a bill of attainder is essentially a usurpation of judicial power by a legislative body. It envisages and effects the imposition of a penalty the deprivation of life or liberty or property not by the ordinary processes of judicial trial, but by legislative fiat. While cast in the form of special legislation, a bill of attainder (or bill of pains and penalties, if it prescribed a penalty other than death) is in intent and effect a penal judgment visited upon an Identified person or group of persons (and not upon the general community) Without a prior charge or demand, without notice and healing, without an opportunity to defend, without any of the civilized forms and safeguards of the judicial process as we know it ( People v. Ferrer, 48 SCRA 382 [1972]; Cummings and Missouri, 4 Wall. 277, 18 L.Ed. 356 [1867]; U.S. v. Lovett, 328, U.S. 303, 90 L.Ed. 1252 [1945]; U.S. v. Brown, 381 U.S. 437, 14 L.Ed. 2d. 484 [1965]. Such is the archetypal bill of attainder wielded as a means of legislative oppression. P.D. No. 293 has clearly been cast from the mould. Former President Marcos, by establishing martial law, undertook to assume legislative powers in addition to his regular powers as Chief Executive. He consolidated in his own person the powers of the Presidency and the powers of Congress. Such was the theory underlying the streams of decrees, executive orders, executive proclamations, letters of instruction and the like that he released upon the nation. The emergence of Presidential Decree No. 293 into public light underscores the fact that Mr. Marcos also purported at times to exercise judicial prerogatives. If one viewed PD No. 293 as issued by Mr. Marcos in his presidential capacity, as it were, the decree is constitutionally vitiated as an exercise of a power judicial power- deliberately denied to the Chief Executive by the Constitution. This is made clear in Mr. Justice Narvasa's opinion. If one viewed PD No. 293 as rendered by Mr. Marcos in his other, assumed i.e. legislative capacity, the decree is similarly fundamentally flawed as a bill of attainder and ultimately, again, as an assumption unto himself of a power and authority clearly withheld by the Constitution from both the Chief Executive and the legislative body and lodged elsewhere in our Constitutional system. I vote for the nullification of PD No. 293 by the grant of certiorari. Separate Opinions TEEHANKEE, C.J., concurring: I concur fully in the main opinion forcefully written by Mr. Justice Narvasa and the separate opinion of Mr. Justice Feliciano depicting the unparalleled "despotic, capricious, oppressive and unjustifiable exercise of government power" by the deposed President Ferdinand E. Marcos, as struck down by the Court's unanimous judgment in the case at bar. To be sure, this is but one of the many unconstitutional and void Presidential Decrees of the past unlamented regime which perforce have been so annulled and relief granted to the victims, as they are brought to the Court's attention.

41

These arbitrary, capricious and oppressive decrees, tailored to suit the deposed President's every wish and whim, were the product of unrestrained power, as the deposed President took over the entire government with the imposition of martial law in September, 1972. Such unrestrained exercise of power was heightened by the Court's majority pronouncement in April, 1983 (even as martial law had been lifted at least on paper two years earlier by Proclamation No. 2045 in January, 1981) that in times of grave emergencies, "The President takes absolute command, for the very life of the nation and its government, which, incidentally, includes the courts, is in grave peril. In so doing, the President is answerable only to his conscience, the people and to God. For their part, in giving him the supreme mandate as their President, the people can only trust and pray that, giving him their own loyalty with 1 utmost patriotism, the President will not fail them." It certainly cannot be gainsaid that such judicial abdication turned back the clock to lese majeste and dismantled the intricate system of reenforcing rules, principles and procedures that have evolved through centuries of struggle for the more efficacious protection through independent courts of the individual's right to life, liberty and property and due process of law, so that they would no longer have to depend upon prayers for the purpose. This concurrence is to express the fervent prayer that we have learned well our lesson that absolute power corrupts absolutely and that as Thomas Jefferson warned (which sadly proved to be true in our case), "a single consolidated government would become the most corrupt government on earth." We have won back our freedoms and restored democracy with three great departments of government, and separation of powers and checks and balances. As Rizal taught us, freedom must be nurtured and cherished, not abused, else we lose or forfeit it. We must reconsecrate ourselves to the supremacy of the Rule of Law and renew once more our faith in and adherence to the force of law, rather than the law of force-for only in the Rule of Law may a democracy survive and flourish. This means selfless adherence by all to the basics, for as Brandeis aptly expressed it, "Democracy is a serious undertaking. It is more difficult to maintain than to achieve. It demands continuous sacrifice by the individual and more exigent obedience to the moral law than any other form of government." FELICIANO, J., concurring: I quite agree with the constitutional law analysis of my learned brother in the Court, Mr. Justice Narvasa, in his eloquent opinion. I should like simply to add that Presidential Decree No. 293 is constitutionally offensive for still another reason: it constitutes a bill of attainder, prohibited not only under the 1935 and 1987 Constitutions but also under the 1973 Constitution. Bills of attainder are an ancient instrument of tyranny. In England a few centuries back, Parliament would at times enact bills or statutes which declared certain persons attainted and their blood corrupted so that it lost all heritable quality (Ex Parte Garland, 4 Wall. 333, 18 L.Ed. 366 [1867]). In more modem terms, a bill of attainder is essentially a usurpation of judicial power by a legislative body. It envisages and effects the imposition of a penalty the deprivation of life or liberty or property not by the ordinary processes of judicial trial, but by legislative fiat. While cast in the form of special legislation, a bill of attainder (or bill of pains and penalties, if it prescribed a penalty other than death) is in intent and effect a penal judgment visited upon an Identified person or group of persons (and not upon the general community) Without a prior charge or demand, without notice and healing, without an opportunity to defend, without any of the civilized forms and safeguards of the judicial process as we know it ( People

v. Ferrer, 48 SCRA 382 [1972]; Cummings and Missouri, 4 Wall. 277, 18 L.Ed. 356 [1867]; U.S. v. Lovett, 328, U.S. 303, 90 L.Ed. 1252 [1945]; U.S. v. Brown, 381 U.S. 437, 14 L.Ed. 2d. 484 [1965]. Such is the archetypal bill of attainder wielded as a means of legislative oppression. P.D. No. 293 has clearly been cast from the mould. Former President Marcos, by establishing martial law, undertook to assume legislative powers in addition to his regular powers as Chief Executive. He consolidated in his own person the powers of the Presidency and the powers of Congress. Such was the theory underlying the streams of decrees, executive orders, executive proclamations, letters of instruction and the like that he released upon the nation. The emergence of Presidential Decree No. 293 into public light underscores the fact that Mr. Marcos also purported at times to exercise judicial prerogatives. If one viewed PD No. 293 as issued by Mr. Marcos in his presidential capacity, as it were, the decree is constitutionally vitiated as an exercise of a power judicial power- deliberately denied to the Chief Executive by the Constitution. This is made clear in Mr. Justice Narvasa's opinion. If one viewed PD No. 293 as rendered by Mr. Marcos in his other, assumed i.e. legislative capacity, the decree is similarly fundamentally flawed as a bill of attainder and ultimately, again, as an assumption unto himself of a power and authority clearly withheld by the Constitution from both the Chief Executive and the legislative body and lodged elsewhere in our Constitutional system. I vote for the nullification of PD No. 293 by the grant of certiorari. Republic SUPREME Manila EN BANC G.R. No. 134577 November 18, 1998 SEN. MIRIAM DEFENSOR SANTIAGO and SEN. FRANCISCO S. TATAD, vs. SEN. TEOFISTO T. GUINGONA, JR. and SEN. MARCELO B. FERNAN, respondents. PANGANIBAN, J.: The principle of separation of powers ordains that each of the three great branches of government has exclusive cognizance of and is supreme in matters falling within its own constitutionally allocated sphere. Constitutional respect and a becoming regard for she sovereign acts, of a coequal branch prevents this Court from prying into the internal workings of the Senate. Where no provision of the Constitution or the laws or even the Rules of the Senate is clearly shown to have been violated, disregarded or overlooked, grave abuse of discretion cannot be imputed to Senate officials for acts done within their competence and authority. This Court will be neither a tyrant nor a wimp; rather, it will remain steadfast and judicious in upholding the rule and majesty of the law. The Case petitioners, of the Philippines COURT

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On July 31, 1998, Senators Miriam Defensor Santiago and Francisco S. Tatad instituted an original petition for quo warranto under Rule 66, Section 5, Rules of Court, seeking the ouster of Senator Teofisto T. Guingona, Jr. as minority leader of the Senate and the declaration of Senator Tatad as the rightful minority leader. On August 4, 1998, the Court, upon receipt of the Petition, required the respondents and the solicitor general "to file COMMENT thereon within a non-extendible period of fifteen (15) days from notice." On August 25, 1998, both respondents and the solicitor general submitted their respective Comments. In compliance with a Resolution of the Court dated September 1, 1998, petitioners filed their Consolidated Reply on September 23, 1998. Noting said pleading, this Court gave due course to the petition and deemed the controversy submitted for decision, without need of memoranda, on September 29, 1998. In the regular course, the regional trial courts and this Court have concurrent jurisdiction to hear and decide petitions for quo warranto (as well as certiorari, prohibition and mandamus), and a basic 2 deference to the hierarchy of courts impels a filing of such petitions in the lower tribunals. However, for special and important reasons or for exceptional and compelling circumstances, as in the present case, 3 this Court has allowed exceptions to this doctrine. In fact, original petitions for certiorari, prohibition, 4 mandamus and quo warranto assailing acts of legislative officers like the Senate President and the 5 Speaker of the House have been recognized as exceptions to this rule. The Facts The Senate of the Philippines, with Sen. John Henry R. Osmea as presiding officer, convened on July 27, 1998 for the first regular session of the eleventh Congress. At the time, in terms of party affiliation, 6 the composition of the Senate was as follows: 10 members Laban ng Masang Pilipino (LAMP) 7 members Lakas-National Union of Christian Democrats-United Muslim Democrats of the Philippines (Lakas-NUCDUMDP) 1 member Liberal Party (LP) 1 member Aksyon Demokrasya 1 member People's Reform Party (PRP) 1 member Gabay Bayan 2 members Independent 23 total number of senators (The last six members are all classified by petitioners as "independent".) On the agenda for the day was the election of officers. Nominated by Sen. Blas F. Ople to the position of Senate President was Sen. Marcelo B. Fernan. Sen. Francisco S. Tatad was also nominated to the 8 same position by Sen. Miriam Defenser Santiago. By a vote of 20 to 2, Senator Fernan was declared the duly elected President of the Senate.
7 1

The following were likewise elected: Senator Ople as president pro tempore, and Sen. Franklin M. Drilon as majority leader. Senator Tatad thereafter manifested that, with the agreement of Senator Santiago, allegedly the only other member of the minority, he was assuming the position of minority leader. He explained that those who had voted for Senator Fernan comprised the "majority," while only those who had voted for him, the losing nominee, belonged to the "minority." During the discussion on who should constitute the Senate "minority," Sen. Juan M. Flavier manifested that the senators belonging to the Lakas-NUCD-UMDP Party numbering seven (7) and, thus, also a minority had chosen Senator Guingona as the minority leader. No consensus on the matter was arrived at. The following session day, the debate on the question continued, with Senators Santiago and Tatad delivering privilege speeches. On the third session day, the Senate met in caucus, but still failed to resolve the issue. On July 30, 1998, the majority leader informed the body chat he was in receipt of a letter signed by the 9 seven Lakas-NUCD-UMDP senators, stating that they had elected Senator Guingona as the minority leader. By virtue thereof, the Senate President formally recognized Senator Guingona as the minority leader of the Senate. The following day, Senators Santiago and Tatad filed before this Court the subject petition for quo warranto, alleging in the main that Senator Guingona had been usurping, unlawfully holding and exercising the position of Senate minority leader, a position that, according to them, rightfully belonged to Senator Tatad. Issues From the parties' pleadings, the Court formulated the following issues for resolution: 1. Does the Court have jurisdiction over the petition? 2. Was there an actual violation of the Constitution? 3. Was Respondent Guingona usurping, unlawfully holding and exercising the position of Senate minority leader? 4. Did Respondent Fernan act with grave abuse of discretion in recognizing Respondent Guingona as the minority leader? The Court's Ruling After a close perusal of the pleadings and a careful deliberation on the arguments, pro and con, the Court finds that no constitutional or legal infirmity or grave abuse of discretion attended the recognition of and the assumption into office by Respondent Guingona as the Senate minority leader.
10

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First Issue: The Court's Jurisdiction Petitioners principally invoke Avelino v. Cuenco 11 in arguing that this Court has jurisdiction to settle the issue of who is the lawful Senate minority leader. They submit that the definitions of "majority" and "minority" involve an interpretation of the Constitution, specifically Section 16 (1), Article VI thereof, stating that "[t]he Senate shall elect its President and the House of Representatives its Speaker, by a majority vote of all its respective Members." Respondents and the solicitor general, in their separate Comments, contend in common that the issue of who is the lawful Senate minority leader is an internal matter pertaining exclusively to the domain of the legislature, over which the Court cannot exercise jurisdiction without transgressing the principle of separation of powers. Allegedly, no constitutional issue is involved, as the fundamental law does not provide for the office of a minority leader in the Senate. The legislature alone has the full discretion to provide for such office and, in that event, to determine the procedure of selecting its occupant. Respondents also maintain that Avelino cannot apply, because there exists no question involving an interpretation or application of the Constitution, the laws or even the Rules of the Senate; neither are there "peculiar circumstances" impelling the Court to assume jurisdiction over the petition. The solicitor general adds that there is not even any legislative practice to support the petitioners' theory that a senator who votes for the winning Senate President is precluded from becoming the minority leader. To resolve the issue of jurisdiction, this Court carefully reviewed and deliberated on the various important cases involving this very important and basic question, which it has ruled upon in the past. The early case Avelino v. Cuenco cautiously tackled the scope of the Court's power of judicial review; that is, questions involving an interpretation or application of a provision of the Constitution or the law, including the rules of either house of Congress. Within this scope falls the jurisdiction of the Court over questions on the validity of legislative or executive acts that are political in nature, whenever the tribunal 12 "finds constitutionally imposed limits on powers or functions conferred upon political bodies." In the aforementioned case, the Court initially declined to resolve the question of who was the rightful Senate President, since it was deemed a political controversy falling exclusively within the domain of the Senate. Upon a motion for reconsideration, however, the Court ultimately assumed jurisdiction (1) "in the light of subsequent events which justify its intervention;" and (2) because the resolution of the issue hinged on the interpretation of the constitutional provision on the presence of a quorum to hold a 13 session and therein elect a Senate President. Justice Feria elucidated in his Concurring Opinion: "[I] concur with the majority that this Court has jurisdiction over cases like the present . . . so as to establish in this country the judicial supremacy, with the Supreme Court as the final arbiter, to see that no one branch or agency of the government 14 transcends the Constitution, not only in justiceable but political questions as well." Justice Perfecto, also concurring, said in part:

Indeed there is no denying that the situation, as obtaining in the upper chamber of Congress, is highly explosive. It had echoed in the House of Representatives. It has already involved the President of the Philippines. The situation has created a veritable national crisis, and it is apparent that solution cannot be expected from any quarter other than this Supreme Court, upon which the hopes of the people for an effective 15 settlement are pinned. . . . This case raises vital constitutional questions which no one can settle or decide if 16 this Court should refuse to decide them. . . . The constitutional question of quorum should not be left unanswered.
18 17

In Taada v. Cueno, this Court endeavored to define political question. And we said that "it refers to 'those questions which, under the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full discretionary authority has been delegated to the legislative or executive branch of the government.' It is concerned with issues dependent upon the wisdom, not [the] 19 legality, of a particular measure." The Court ruled that the validity of the selection of members of the Senate Electoral Tribunal by the senators was not a political question. The choice of these members did not depend on the Senate's "full 20 discretionary authority," but was subject to mandatory constitutional limitations. Thus, the Court held that not only was it clearly within its jurisdiction to pass upon the validity of the selection proceedings, but it was also its duty to consider and determine the issue. In another landmark case, Lansang v. Garcia, Chief Justice Roberto Concepcion wrote that the Court "had authority to and should inquire into the existence of the factual bases required by the Constitution for the suspension of the privilege of the writ [of habeas corpus]." This ruling was made in spite of the 22 23 previous pronouncements in Barcelon v. Baker and Montenegro v. Castaeda that "the authority to decide whether the exigency has arisen requiring suspension (of the privilege . . .) belongs to the President and his 'decision is final and conclusive' upon the courts and upon all other persons." But the Chief Justice cautioned: "the function of the Court is merely to check not to supplant the Executive, or to ascertain merely whether he has gone beyond the constitutional limits of his jurisdiction, not to exercise the power vested in him or to determine the wisdom of his act." The eminent Chief Justice aptly explained later in Javellana v. Executive Secretary:
24 21

The reason why the issue under consideration and other issues of similar character are justiciable, not political, is plain and simple. One of the principal bases of the nonjusticiability of so-called political questions is the principle of separation of powers characteristic of the presidential system of government the functions of which are classified or divided, by reason of their nature, into three (3) categories, namely, 1) those involving the making of laws, which are allocated to the legislative department; 2) those concerning mainly with the enforcement of such laws and of judicial decisions applying and/or interpreting the same, which belong to the executive department; and 3) those dealing with the settlement of disputes, controversies or conflicts involving rights, duties or prerogatives that are legally demandable and enforceable, which are apportioned to courts of justice. Within its own sphere but

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only within such sphere each department is supreme and independent of the others, and each is devoid of authority not only to encroach upon the powers or field of action assigned to any of the other departments, but also to inquire into or pass upon the advisability or wisdom of the acts performed, measures taken or decisions made by the other departments provided that such acts, measures or decisions are within the area allocated thereto by the Constitution. Accordingly, when the grant of power is qualified, conditional or subject to limitations, the issue of whether or not the prescribed qualifications or conditions have been met, or the limitations respected is justiciable or non-political, the crux of the problem being one of legality or validity of the contested act, not its wisdom. Otherwise, said qualifications, conditions or limitations particularly those prescribed by the Constitution would be set at naught. What is more, the judicial inquiry into such issue and the settlement thereof are the main functions of the courts of justice under the presidential form of government adopted in our 1935 Constitution, and the system of checks and balances, one of its basic predicates. As a consequence, we have neither the authority nor the discretion to decline passing upon said issue, but are under the ineluctable obligation made particularly more exacting and peremptory by our oath, as members of the highest Court of the land, to support and defend the Constitution to settle it. This explains why, in Miller v. Johnson [92 Ky. 589, 18 SW 522, 523], it was held that courts have a " duty, rather than a power," to determine whether another branch of the government has "kept within constitutional limits." Unlike our previous constitutions, the 1987 Constitution is explicit in defining the scope of judicial power. The present Constitution now fortifies the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. It speaks of judicial prerogative in terms of duty, viz.: Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
25

and will strike it down only on either of two grounds: (1) unconstitutionality or illegality and (2) grave abuse of discretion. Earlier in Co v. Electoral Tribunal of the House of Representatives (HRET), the Court refused to reverse a decision of the HRET, in the absence of a showing that said tribunal had committed grave abuse of discretion amounting to lack of jurisdiction. The Court ruled that full authority had been conferred upon the electoral tribunals of the House of Representatives and of the Senate as sole judges of all contests relating to the election, the returns, and the qualifications of their respective members. 31 Such jurisdiction is original and exclusive. The Court may inquire into a decision or resolution of said tribunals only if such "decision or resolution was rendered without or in excess of jurisdiction, or with 32 grave abuse of discretion" Recently, the Court, in Arroyo v. De Venecia, was asked to reexamine the enrolled bill doctrine and to look beyond the certification of the Speaker of the House of Representatives that the bill, which was later enacted as Republic Act 8240, was properly approved by the legislative body. Petitioners claimed that certain procedural rules of the House had been breached in the passage of the bill. They averred further that a violation of the constitutionally mandated House rules was a violation of the Constitution itself. The Court, however, dismissed the petition, because the matter complained of concerned the internal 34 procedures of the House, with which the Court had no concern. It enucleated: It would-be an unwarranted invasion of the prerogative of a coequal department for this Court either to set aside a legislative action as void because the Court thinks the House has disregarded its own rules of procedure, or to allow those defeated in the political arena to seek a rematch in the judicial forum when petitioners can find their remedy in that department itself. The Court has not been invested with a roving commission to inquire into complaints, real or imagined, of legislative skullduggery. It would be acting in excess of its power and would itself be guilty of grave abuse of discretion were it to do so. . . . In the absence of anything to the contrary, the Court must assume that Congress or any House thereof acted in the good faith belief that its conduct was permitted by its rules, and deference rather than disrespect is due the judgment of that body. In the instant controversy, the petitioners one of whom is Senator Santiago, a well-known constitutionalist try to hew closely to these jurisprudential parameters. They claim that Section 16 (1), Article VI of the constitution, has not been observed in the selection of the Senate minority leader. They also invoke the Court's "expanded" judicial power "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of respondents. Dissenting in part, Mr. Justice Vicente V. Mendoza submits that the Court has no jurisdiction over the petition. Well-settled is the doctrine, however, that jurisdiction over the subject matter of a case is determined by the allegations of the complaint or petition, regardless of whether the plaintiff or petitioner 35 is entitled to the relief asserted. In light of the aforesaid allegations of petitioners, it is clear that this Court has jurisdiction over the petition. It is well within the power and jurisdiction of the Court to inquire whether indeed the Senate or its officials committed a violation of the Constitution or gravely abused their discretion in the exercise of their functions and prerogatives.
33 30

This express definition has resulted in clearer and more resolute pronouncements of the Court. Daza v. 26 27 28 Singson, Coseteng v. Mitra, Jr. and Guingona Jr. v. Gonzales similarly resolved issues assailing the acts of the leaders of both houses of Congress in apportioning among political parties the seats to which each chamber was entitled in the Commission on Appointments. The Court held that the issue was justiciable, "even if the question were political in nature," since it involved "the legality, not the wisdom, of the manner of filling the Commission on Appointments as prescribed by [Section 18, Article VI of] the Constitution." The same question of jurisdiction was raised in Taada v. Angara, wherein the petitioners sought to nullify the Senate's concurrence in the ratification of the World Trade Organization (WTO) Agreement. The Court ruled: "Where an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute." The Court en banc unanimously stressed that in taking jurisdiction over petitions questioning, an act of the political departments of government, it will not review the wisdom, merits or propriety of such action,
29

45

Second Issue: Violation of the Constitution Having assumed jurisdiction over the petition, we now go to the next crucial question: In recognizing Respondent Guingona as the Senate minority leader, did the Senate or its officials, particularly Senate President Fernan, violate the Constitution or the laws? Petitioners answer the above question in the affirmative. They contend that the constitutional provision requiring the election of the Senate President "by majority vote of all members" carries with it a judicial duty to determine the concepts of "majority" and "minority," as well as who may elect a minority leader. They argue that "majority" in the aforequoted constitutional provision refers to that group of senators who (1) voted for the winning Senate President and (2) accepted committee chairmanships. Accordingly, those who voted for the losing nominee and accepted no such chairmanships comprise the minority, to whom the right to determine the minority leader belongs. As a result, petitioners assert, Respondent Guingona cannot be the legitimate minority leader, since he voted for Respondent Fernan as Senate President. Furthermore, the members of the Lakas-NUCD-UMDP cannot choose the minority leader, because they did not belong to the minority, having voted for Fernan and accepted committee chairmanships. We believe, however, that the interpretation proposed by petitioners finds no clear support from the Constitution, the laws, the Rules of the Senate or even from practices of the Upper House. The term "majority" has been judicially defined a number of times. When referring to a certain number out of a total or aggregate, it simply "means the number greater than half or more than half of any total." 36 The plain and unambiguous words of the subject constitutional clause simply mean that the Senate President must obtain the votes of more than one half of all the senators. Not by any construal does it thereby delineate who comprise the "majority," much less the "minority," in the said body. And there is no showing that the framers of our Constitution had in mind other than the usual meanings of these terms. In effect, while the Constitution mandates that the President of the Senate must be elected by a number constituting more than one half of all the members thereof, it does not provide that the members who will not vote for him shall ipso facto constitute the "minority," who could thereby elect the minority leader. Verily, no law or regulation states that the defeated candidate shall automatically become the minority leader. The Comment of Respondent Guingona furnishes some relevant precedents, which were not contested in petitioners' Reply. During the eighth Congress, which was the first to convene after the ratification of the 1987 Constitution, the nomination of Sen. Jovito R Salonga as Senate President was 38 seconded by a member of the minority, then Sen. Joseph E. Estrada. During the ninth regular session, when Sen. Edgardo J. Angara assumed the Senate presidency in 1993, a consensus was 39 reached to assign committee chairmanships to all senators, including those belonging to the minority. This practice continued during the tenth Congress, where even the minority leader was allowed to chair 40 a committee. History would also show that the "majority" in either house of Congress has referred to the political party to which the most number of lawmakers belonged, while the "minority" normally referred to a party with a lesser number of members.
37

Let us go back to the definitions of the terms "majority" and "minority." Majority may also refer to "the 41 group, party, or faction with the larger number of votes," not necessarily more than one half. This is sometimes referred to as plurality. In contrast, minority is "a group, party, or faction with a smaller 42 number of votes or adherents than the majority." Between two unequal parts or numbers comprising a whole or totality, the greater number would obviously be the majority while the lesser would be the minority. But where there are more than two unequal groupings, it is not as easy to say which is the minority entitled to select the leader representing all the minorities. In a government with a multi-party system such as in the Philippines (as pointed out by petitioners themselves), there could be several minority parties, one of which has to be indentified by the Comelec as the "dominant minority party" for purposes of the general elections. In the prevailing composition of the present Senate, members either belong to different political parties or are independent. No constitutional or statutory provision prescribe which of the many minority groups or the independents or a combination thereof has the right to select the minority leader. While the Constitution is explicit on the manner of electing a Senate President and a House Speaker, it is, however, dead silent on the manner of selecting the other officers in both chambers of Congress. All that the Charter says is that "[e]ach House shall choose such other officers as it may deem necessary." 43 To our mind, the method of choosing who will be such other officers is merely a derivative of the exercise of the prerogative conferred by the aforequoted constitutional provision. Therefore, such method must be prescribed by the Senate itself, not by this Court. In this regard, the Constitution vests in each house of Congress the power "to determine the rules of its 44 proceedings." Pursuant thereto, the Senate formulated and adopted a set of rules to govern its 45 internal affairs. Pertinent to the instant case are Rules I and II thereof, which provide: Rule I ELECTIVE OFFICERS Sec 1. The Senate shall elect, in the manner hereinafter provided, a President, a President Pro Tempore, a Secretary, and a Sergeant-at-Arms. These officers shall take their oath of office before entering into the discharge of their duties. Rule II ELECTION OF OFFICER Sec. 2. The officers of the Senate shall be elected by the majority vote of all its Members. Should there be more than one candidate for the same office, a nominal vote shall be taken; otherwise, the elections shall be by viva voce or by resolution. Notably, the Rules of the Senate do not provide for the positions of majority and minority leaders. Neither is there an open clause providing specifically for such offices and prescribing the manner of creating them or of choosing the holders thereof, At any rate, such offices, by tradition and long

46

practice, are actually extant. But, in the absence of constitutional or statutory guidelines or specific rules, this Court is devoid of any basis upon which to determine the legality of the acts of the Senate relative thereto. On grounds of respect for the basic concept of separation of powers, courts may not intervene in the internal affairs of the legislature; it is not within the province of courts to direct Congress 46 how to do its work. Paraphrasing the words of Justice Florentino P. Feliciano, this Court is of the opinion that where no specific, operable norms and standards are shown to exist, then the legislature must be given a real and effective opportunity to fashion and promulgate as well as to implement them, 47 before the courts may intervene. Needless to state, legislative rules, unlike statutory laws, do not have the imprints of permanence and obligatoriness during their effectivity. In fact, they "are subject to revocation, modification or waiver at 48 the pleasure of the body adopting them." Being merely matters of procedure, their observance are of 49 no concern to the courts, for said rules may be waived or disregarded by the legislative body at will, upon the concurrence of a majority. In view of the foregoing, Congress verily has the power and prerogative to provide for such officers as it may deem. And it is certainly within its own jurisdiction and discretion to prescribe the parameters for the exercise of this prerogative. This Court has no authority to interfere and unilaterally intrude into that exclusive realm, without running afoul of constitutional principles that it is bound to protect and uphold the very duty that justifies the Court's being. Constitutional respect and a becoming regard for the sovereign acts of a coequal branch prevents this Court from prying into the internal workings of the Senate. To repeat, this Court will be neither a tyrant nor a wimp; rather, it will remain steadfast and judicious in upholding the rule and majesty of the law. To accede, then, to the interpretation of petitioners would practically amount to judicial legislation, a clear breach of the constitutional doctrine of separation of powers. If for this argument alone, the petition would easily fail. While no provision of the Constitution or the laws or the rules and even the practice of the Senate was violated, and while the judiciary is without power to decide matters over which full discretionary authority has been lodged in the legislative department, this Court may still inquire whether an act of Congress or 50 its officials has been made with grave abuse of discretion. This is the plain implication of Section 1, Article VIII of the Constitution, which expressly confers upon the judiciary the power and the duty not only "to settle actual controversies involving rights which are legally demandable and enforceable," but likewise "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." Explaining the above-quoted clause, former Chief Justice Concepcion, who was a member of the 1986 51 Constitutional Commission, said in part: . . . the powers of government are generally considered divided into three branches: the Legislative, the Executive and the Judiciary. Each one is supreme within its own sphere and independent of the others. Because of that supremacy[, the] power to determine whether a given law is valid or not is vested in courts of justice. Briefly stated, courts of justice determine the limits of power of the agencies and offices of the government as well as those of its officers. In other words, the judiciary

is the final arbiter on the question whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass judgment on matters of this nature. This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter evade the duty to settle matters of this nature, by claiming that such matters constitute a political question. With this paradigm, we now examine the two other issues challenging the actions, first, of Respondent Guingona and, second, of Respondent Fernan. Third Issue: Usurpation of Office Usurpation generally refers to unauthorized arbitrary assumption and exercise of power by one 53 without color of title or who is not entitled by law thereto. A quo warranto proceeding is the proper legal remedy to determine the right or title to the contested public office and to oust the holder from its 54 55 enjoyment. The action may be brought by the solicitor general or a public prosecutor or any person claiming to be entitled to the public office or position usurped or unlawfully held or exercised by another. 56 The action shall be brought against the person who allegedly usurped, intruded into or is unlawfully 57 holding of exercising such office. In order for a quo warranto proceeding to be successful, the person suing must show that he or she has a clear right to the contested office or to use or exercise the functions of the office allegedly usurped or 58 unlawfully held by the respondent. In this case, petitioners present no sufficient proof of a clear and indubitable franchise to the office of the Senate minority leader. As discussed earlier, the specific norms or standards that may be used in determining who may lawfully occupy the disputed position has not been laid down by the Constitution, the statutes, or the Senate itself in which the power has been vested. Absent any clear-cut guideline, in no way can it be said that illegality or irregularity tainted Respondent Guingona's assumption and exercise of the powers of the office of Senate minority leader. Furthermore, no grave abuse of discretion has been shown to characterize any of his specific acts as minority leader. Fourth Issue: Fernan's Recognition of Guingona The all-embracing and plenary power and duty of the Court "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government" is restricted only by the definition and confines of the term "grave abuse of discretion."
52

47

By grave abuse of discretion is meant such capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion and 59 hostility. By the above standard, we hold that Respondent Fernan did not gravely abuse his discretion as Senate President in recognizing Respondent Guingona as the minority leader. Let us recall that the latter belongs to one of the minority parties in the Senate, the Lakas-NUCD-UMDP. By unanimous resolution of the members of this party that he be the minority leader, he was recognized as such by the Senate President. Such formal recognition by Respondent Fernan came only after at least two Senate sessions and a caucus, wherein both sides were liberally allowed to articulate their standpoints. Under these circumstances, we believe that the Senate President cannot be accused of "capricious or whimsical exercise of judgment" or of "an arbitrary and despotic manner by reason of passion or hostility." Where no provision of the Constitution, the laws or even the rules of the Senate has been clearly shown to have been violated, disregarded or overlooked, grave abuse of discretion cannot be imputed to Senate officials for acts done within their competence and authority. WHEREFORE, for the above reasons, the petition is hereby DISMISSED. SO ORDERED. Republic SUPREME Manila EN BANC G.R. No. L-23825 December 24, 1965 PELAEZ, petitioner, of the Philippines COURT

instituted the present special civil action, for a writ of prohibition with preliminary injunction, against the Auditor General, to restrain him, as well as his representatives and agents, from passing in audit any expenditure of public funds in implementation of said executive orders and/or any disbursement by said municipalities. Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68 has been impliedly repealed by Republic Act No. 2370 and constitutes an undue delegation of legislative power. Respondent maintains the contrary view and avers that the present action is premature and that not all proper parties referring to the officials of the new political subdivisions in question have been impleaded. Subsequently, the mayors of several municipalities adversely affected by the aforementioned executive orders because the latter have taken away from the former the barrios composing the new political subdivisions intervened in the case. Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando were allowed to and did appear as amici curiae. The third paragraph of Section 3 of Republic Act No. 2370, reads: Barrios shall not be created or their boundaries altered nor their names changed except under the provisions of this Act or by Act of Congress. Pursuant to the first two (2) paragraphs of the same Section 3: All barrios existing at the time of the passage of this Act shall come under the provisions hereof. Upon petition of a majority of the voters in the areas affected, a new barrio may be created or the name of an existing one may be changed by the provincial board of the province, upon recommendation of the council of the municipality or municipalities in which the proposed barrio is stipulated. The recommendation of the municipal council shall be embodied in a resolution approved by at least twothirds of the entire membership of the said council: Provided, however, That no new barrio may be created if its population is less than five hundred persons. Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be created or their boundaries altered nor their names changed" except by Act of Congress or of the corresponding provincial board "upon petition of a majority of the voters in the areas affected" and the "recommendation of the council of the municipality or municipalities in which the proposed barrio is situated." Petitioner argues, accordingly: "If the President, under this new law, cannot even create a barrio, can he create a municipality which is composed of several barrios, since barrios are units of municipalities?" Respondent answers in the affirmative, upon the theory that a new municipality can be created without creating new barrios, such as, by placing old barrios under the jurisdiction of the new municipality. This theory overlooks, however, the main import of the petitioner's argument, which is that the statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to create municipalities, each of which consists of several barrios. The cogency and force of this argument is too obvious to be denied or even questioned. Founded upon logic and experience, it cannot be offset except by a clear manifestation of the intent of Congress to the contrary, and no such manifestation, subsequent to the passage of Republic Act No. 2379, has been brought to our attention.

EMMANUEL vs. THE AUDITOR GENERAL, respondent. Zulueta, Gonzales, Paculdo Office of the Solicitor General for respondent. CONCEPCION, J.:

and

Associates

for

petitioner.

During the period from September 4 to October 29, 1964 the President of the Philippines, purporting to act pursuant to Section 68 of the Revised Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-three (33) municipalities enumerated in the margin.1 Soon after the date last mentioned, or on November 10, 1964 petitioner Emmanuel Pelaez, as Vice President of the Philippines and as taxpayer,

48

Moreover, section 68 of the Revised Administrative Code, upon which the disputed executive orders are based, provides: The (Governor-General) President of the Philippines may by executive order define the boundary, or boundaries, of any province, subprovince, municipality, [township] municipal district, or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a province, into such portions as may be required, merge any of such subdivisions or portions with another, name any new subdivision so created, and may change the seat of government within any subdivision to such place therein as the public welfare may require: Provided, That the authorization of the (Philippine Legislature) Congress of the Philippines shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or more subprovinces. When action by the (GovernorGeneral) President of the Philippines in accordance herewith makes necessary a change of the territory under the jurisdiction of any administrative officer or any judicial officer, the (Governor-General) President of the Philippines, with the recommendation and advice of the head of the Department having executive control of such officer, shall redistrict the territory of the several officers affected and assign such officers to the new districts so formed. Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of the funds and obligations of the divisions thereby affected shall be made in such manner as may be recommended by the (Insular Auditor) Auditor General and approved by the (Governor-General) President of the Philippines. Respondent alleges that the power of the President to create municipalities under this section does not amount to an undue delegation of legislative power, relying upon Municipality of Cardona vs. Municipality of Binagonan (36 Phil. 547), which, he claims, has settled it. Such claim is untenable, for said case involved, not the creation of a new municipality, but a mere transfer of territory from an already existing municipality (Cardona) to another municipality (Binagonan), likewise, existing at the time of and prior to said transfer (See Gov't of the P.I. ex rel. Municipality of Cardona vs. Municipality, of Binagonan [34 Phil. 518, 519-5201) in consequence of the fixing and definition, pursuant to Act No. 1748, of the common boundaries of two municipalities. It is obvious, however, that, whereas the power to fix such common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature involving, as it does, the adoption of means and ways to carry into effect the law creating said municipalities the authority to create municipal corporations is essentially legislative in nature. In the language of other courts, it is "strictly a legislative function" (State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2, 1959) or "solely and exclusively the exercise of legislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of Washington has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409), "municipal corporations are purely the creatures of statutes." Although1a Congress may delegate to another branch of the Government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the delegate2 and (b) fix a standard the limits of which are sufficiently determinate or determinable to which the delegate must conform in the performance of his functions.2a Indeed, without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the essence of every law; and, without the aforementioned standard, there would be no means to determine, with

reasonable certainty, whether the delegate has acted within or beyond the scope of his authority. 2b Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also and this is worse to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our Republican system. Section 68 of the Revised Administrative Code does not meet these well settled requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to. In this connection, we do not overlook the fact that, under the last clause of the first sentence of Section 68, the President: ... may change the seat of the government within any subdivision to such place therein as the public welfare may require. It is apparent, however, from the language of this clause, that the phrase "as the public welfare may require" qualified, not the clauses preceding the one just quoted, but only the place to which the seat of the government may be transferred. This fact becomes more apparent when we consider that said Section 68 was originally Section 1 of Act No. 1748,3 which provided that, "whenever in the judgment of the Governor-General the public welfare requires, he may, by executive order," effect the changes enumerated therein (as in said section 68), including the change of the seat of the government "to such place ... as the public interest requires." The opening statement of said Section 1 of Act No. 1748 which was not included in Section 68 of the Revised Administrative Code governed the time at which, or the conditions under which, the powers therein conferred could be exercised; whereas the last part of the first sentence of said section referred exclusively to the place to which the seat of the government was to be transferred. At any rate, the conclusion would be the same, insofar as the case at bar is concerned, even if we assumed that the phrase "as the public welfare may require," in said Section 68, qualifies all other clauses thereof. It is true that in Calalang vs. Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public interest," respectively, as sufficient standards for a valid delegation of the authority to execute the law. But, the doctrine laid down in these cases as all judicial pronouncements must be construed in relation to the specific facts and issues involved therein, outside of which they do not constitute precedents and have no binding effect.4 The law construed in the Calalang case conferred upon the Director of Public Works, with the approval of the Secretary of Public Works and Communications, the power to issue rules and regulations to promote safe transit upon national roads and streets. Upon the other hand, the Rosenthal case referred to the authority of the Insular Treasurer, under Act No. 2581, to issue and cancel certificates or permits for the sale of speculative securities. Both cases involved grants to administrative officers of powers related to the exercise of their administrative functions, calling for the determination of questions of fact. Such is not the nature of the powers dealt with in section 68. As above indicated, the creation of municipalities, is not an administrative function, but one which is essentially and eminently legislative in character. The question of whether or not "public interest" demands the exercise of such power is not one of fact. it is "purely a legislative question "(Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-349). As the Supreme Court of Wisconsin has aptly characterized it, "the question as to whether incorporation is for the best interest of the community in any case is emphatically a question of public policy and statecraft" (In re Village of North Milwaukee, 67 N.W. 1033, 10351037).

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For this reason, courts of justice have annulled, as constituting undue delegation of legislative powers, state laws granting the judicial department, the power to determine whether certain territories should be annexed to a particular municipality (Udall vs. Severn, supra, 258-359); or vesting in a Commission the right to determine the plan and frame of government of proposed villages and what functions shall be exercised by the same, although the powers and functions of the village are specifically limited by statute (In re Municipal Charters, 86 Atl. 307308); or conferring upon courts the authority to declare a given town or village incorporated, and designate its metes and bounds, upon petition of a majority of the taxable inhabitants thereof, setting forth the area desired to be included in such village (Territory ex rel Kelly vs. Stewart, 23 Pac. 405-409); or authorizing the territory of a town, containing a given area and population, to be incorporated as a town, on certain steps being taken by the inhabitants thereof and on certain determination by a court and subsequent vote of the inhabitants in favor thereof, insofar as the court is allowed to determine whether the lands embraced in the petition "ought justly" to be included in the village, and whether the interest of the inhabitants will be promoted by such incorporation, and to enlarge and diminish the boundaries of the proposed village "as justice may require" (In re Villages of North Milwaukee, 67 N.W. 1035-1037); or creating a Municipal Board of Control which shall determine whether or not the laying out, construction or operation of a toll road is in the "public interest" and whether the requirements of the law had been complied with, in which case the board shall enter an order creating a municipal corporation and fixing the name of the same (Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310). Insofar as the validity of a delegation of power by Congress to the President is concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is quite relevant to the one at bar. The Schechter case involved the constitutionality of Section 3 of the National Industrial Recovery Act authorizing the President of the United States to approve "codes of fair competition" submitted to him by one or more trade or industrial associations or corporations which "impose no inequitable restrictions on admission to membership therein and are truly representative," provided that such codes are not designed "to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and will tend to effectuate the policy" of said Act. The Federal Supreme Court held: To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without precedent. It supplies no standards for any trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate administrative procedure. Instead of prescribing rules of conduct, it authorizes the making of codes to prescribe them. For that legislative undertaking, Sec. 3 sets up no standards, aside from the statement of the general aims of rehabilitation, correction and expansion described in Sec. 1. In view of the scope of that broad declaration, and of the nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered. We think that the code making authority thus conferred is an unconstitutional delegation of legislative power. If the term "unfair competition" is so broad as to vest in the President a discretion that is "virtually unfettered." and, consequently, tantamount to a delegation of legislative power, it is obvious that "public welfare," which has even a broader connotation, leads to the same result. In fact, if the validity of the delegation of powers made in Section 68 were upheld, there would no longer be any legal impediment to a statutory grant of authority to the President to do anything which, in his opinion, may be required by public welfare or public interest. Such grant of authority would be a virtual abdication of the powers of Congress in favor of the Executive, and would bring about a total collapse of the democratic system established by our Constitution, which it is the special duty and privilege of this Court to uphold.

It may not be amiss to note that the executive orders in question were issued after the legislative bills for the creation of the municipalities involved in this case had failed to pass Congress . A better proof of the fact that the issuance of said executive orders entails the exercise of purely legislative functions can hardly be given. Again, Section 10 (1) of Article VII of our fundamental law ordains: The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed. The power of control under this provision implies the right of the President to interfere in the exercise of such discretion as may be vested by law in the officers of the executive departments, bureaus, or offices of the national government, as well as to act in lieu of such officers. This power is denied by the Constitution to the Executive, insofar as local governments are concerned. With respect to the latter, the fundamental law permits him to wield no more authority than that of checking whether said local governments or the officers thereof perform their duties as provided by statutory enactments. Hence, the President cannot interfere with local governments, so long as the same or its officers act Within the scope of their authority. He may not enact an ordinance which the municipal council has failed or refused to pass, even if it had thereby violated a duty imposed thereto by law, although he may see to it that the corresponding provincial officials take appropriate disciplinary action therefor. Neither may he vote, set aside or annul an ordinance passed by said council within the scope of its jurisdiction, no matter how patently unwise it may be. He may not even suspend an elective official of a regular municipality or take any disciplinary action against him, except on appeal from a decision of the corresponding provincial board. 5 Upon the other hand if the President could create a municipality, he could, in effect, remove any of its officials, by creating a new municipality and including therein the barrio in which the official concerned resides, for his office would thereby become vacant.6 Thus, by merely brandishing the power to create a new municipality (if he had it), without actually creating it, he could compel local officials to submit to his dictation, thereby, in effect, exercising over them the power of control denied to him by the Constitution. Then, also, the power of control of the President over executive departments, bureaus or offices implies no more than the authority to assume directly the functions thereof or to interfere in the exercise of discretion by its officials. Manifestly, such control does not include the authority either to abolish an executive department or bureau, or to create a new one. As a consequence, the alleged power of the President to create municipal corporations would necessarily connote the exercise by him of an authority even greater than that of control which he has over the executive departments, bureaus or offices. In other words, Section 68 of the Revised Administrative Code does not merely fail to comply with the constitutional mandate above quoted. Instead of giving the President less power over local governments than that vested in him over the executive departments, bureaus or offices, it reverses the process and does the exact opposite, by conferring upon him more power over municipal corporations than that which he has over said executive departments, bureaus or offices. In short, even if it did entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enactment.7

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There are only two (2) other points left for consideration, namely, respondent's claim (a) that "not all the proper parties" referring to the officers of the newly created municipalities "have been impleaded in this case," and (b) that "the present petition is premature." As regards the first point, suffice it to say that the records do not show, and the parties do not claim, that the officers of any of said municipalities have been appointed or elected and assumed office. At any rate, the Solicitor General, who has appeared on behalf of respondent Auditor General, is the officer authorized by law "to act and represent the Government of the Philippines, its offices and agents, in any official investigation, proceeding or matter requiring the services of a lawyer" (Section 1661, Revised Administrative Code), and, in connection with the creation of the aforementioned municipalities, which involves a political, not proprietary, function, said local officials, if any, are mere agents or representatives of the national government. Their interest in the case at bar has, accordingly, been, in effect, duly represented.8 With respect to the second point, respondent alleges that he has not as yet acted on any of the executive order & in question and has not intimated how he would act in connection therewith. It is, however, a matter of common, public knowledge, subject to judicial cognizance, that the President has, for many years, issued executive orders creating municipal corporations and that the same have been organized and in actual operation, thus indicating, without peradventure of doubt, that the expenditures incidental thereto have been sanctioned, approved or passed in audit by the General Auditing Office and its officials. There is no reason to believe, therefore, that respondent would adopt a different policy as regards the new municipalities involved in this case, in the absence of an allegation to such effect, and none has been made by him. WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and the respondent permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the municipalities above referred to. It is so ordered. Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur. Zaldivar, J., took no part.

Administrative Code. And Chief Executives since then up to the present continued to avail of said provision, time and again invoking it to issue executive orders providing for the creation of municipalities. From September 4, 1964 to October 29, 1964 the President of the Philippines issued executive orders to create thirty-three municipalities pursuant to Section 68 of the Revised Administrative Code. Public funds thereby stood to be disbursed in implementation of said executive orders. Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed in this Court a petition for prohibition with preliminary injunction against the Auditor General. It seeks to restrain the respondent or any person acting in his behalf, from passing in audit any expenditure of public funds in implementation of the executive orders aforementioned. Petitioner contends that the President has no power to create a municipality by executive order. It is argued that Section 68 of the Revised Administrative Code of 1917, so far as it purports to grant any such power, is invalid or, at the least, already repealed, in light of the Philippine Constitution and Republic Act 2370 (The Barrio Charter). Section 68 is again reproduced hereunder for convenience: SEC. 68. General authority of [Governor-General) President of the Philippines to fix boundaries and make new subdivisions. The [Governor-General] President of the Philippines may by executive order define the boundary, or boundaries, of any province, subprovince, municipality, [township] municipal district, or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a province, into such portions as may be required, merge any of such subdivisions or portions with another, name any new subdivision so created, and may change the seat of government within any subdivision to such place therein as the public welfare may require: Provided, That the authorization of the [Philippine Legislature] Congress of the Philippines shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or more subprovinces. When action by the [Governor-General] President of the Philippines in accordance herewith makes necessary a change of the territory under the jurisdiction of any administrative officer or any judicial officer, the [Governor-General] President of the Philippines, with the recommendation and advice of the head of the Department having executive control of such officer, shall redistrict the territory of the several officers to the new districts so formed. Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of the funds and obligations of the divisions thereby affected shall be made in such manner as may be recommended by the [Insular Auditor] Auditor General and approved by the [Governor-General] President of the Philippines. From such working I believe that power to create a municipality is included: to "separate any political division other than a province, into such portions as may be required, merge any such subdivisions or portions with another, name any new subdivision so created." The issue, however, is whether the legislature can validly delegate to the Executive such power.

Separate Opinions BENGZON, J.P., J., concurring and dissenting: A sign of progress in a developing nation is the rise of new municipalities. Fostering their rapid growth has long been the aim pursued by all three branches of our Government. So it was that the Governor-General during the time of the Jones Law was given authority by the Legislature (Act No. 1748) to act upon certain details with respect to said local governments, such as fixing of boundaries, subdivisions and mergers. And the Supreme Court, within the framework of the Jones Law, ruled in 1917 that the execution or implementation of such details, did not entail abdication of legislative power (Government vs. Municipality of Binagonan, 34 Phil. 518; Municipality of Cardona vs. Municipality of Binagonan, 36 Phil. 547). Subsequently, Act No. 1748's aforesaid statutory authorization was embodied in Section 68 of the Revised

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The power to create a municipality is legislative in character. American authorities have therefore favored the view that it cannot be delegated; that what is delegable is not the power to create municipalities but only the power to determine the existence of facts under which creation of a municipality will result (37 Am. Jur. 628). The test is said to lie in whether the statute allows any discretion on the delegate as to whether the municipal corporation should be created. If so, there is an attempted delegation of legislative power and the statute is invalid (Ibid.). Now Section 68 no doubt gives the President such discretion, since it says that the President "may by executive order" exercise the powers therein granted. Furthermore, Section 5 of the same Code states: SEC. 5. Exercise of administrative discretion The exercise of the permissive powers of all executive or administrative officers and bodies is based upon discretion, and when such officer or body is given authority to do any act but not required to do such act, the doing of the same shall be dependent on a sound discretion to be exercised for the good of the service and benefit of the public, whether so expressed in the statute giving the authority or not. Under the prevailing rule in the United States and Section 68 is of American origin the provision in question would be an invalid attempt to delegate purely legislative powers, contrary to the principle of separation of powers. It is very pertinent that Section 68 should be considered with the stream of history in mind. A proper knowledge of the past is the only adequate background for the present. Section 68 was adopted half a century ago. Political change, two world wars, the recognition of our independence and rightful place in the family of nations, have since taken place. In 1917 the Philippines had for its Organic Act the Jones Law. And under the setup ordained therein no strict separation of powers was adhered to. Consequently, Section 68 was not constitutionally objectionable at the time of its enactment. The advent of the Philippine Constitution in 1935 however altered the situation. For not only was separation of powers strictly ordained, except only in specific instances therein provided, but the power of the Chief Executive over local governments suffered an explicit reduction. Formerly, Section 21 of the Jones Law provided that the Governor-General "shall have general supervision and control of all the departments and bureaus of the government in the Philippine Islands." Now Section 10 (1), Article VII of the Philippine Constitution provides: "The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed. In short, the power of control over local governments had now been taken away from the Chief Executive. Again, to fully understand the significance of this provision, one must trace its development and growth. As early as April 7, 1900 President McKinley of the United States, in his Instructions to the Second Philippine Commission, laid down the policy that our municipal governments should be "subject to the least degree of supervision and control" on the part of the national government. Said supervision and control was to be confined within the "narrowest limits" or so much only as "may be necessary to secure and enforce faithful and efficient administration by local officers." And the national government "shall have no direct administration except of matters of purely general concern." (See Hebron v. Reyes, L-9158, July 28, 1958.)

All this had one aim, to enable the Filipinos to acquire experience in the art of self-government, with the end in view of later allowing them to assume complete management and control of the administration of their local affairs. Such aim is the policy now embodied in Section 10 (1), Article VII of the Constitution (Rodriguez v. Montinola, 50 O.G. 4820). It is the evident decree of the Constitution, therefore, that the President shall have no power of control over local governments. Accordingly, Congress cannot by law grant him such power (Hebron v. Reyes, supra). And any such power formerly granted under the Jones Law thereby became unavoidably inconsistent with the Philippine Constitution. It remains to examine the relation of the power to create and the power to control local governments. Said relationship has already been passed upon by this Court in Hebron v. Reyes, supra. In said case, it was ruled that the power to control is an incident of the power to create or abolish municipalities. Respondent's view, therefore, that creating municipalities and controlling their local governments are "two worlds apart," is untenable. And since as stated, the power to control local governments can no longer be conferred on or exercised by the President, it follows a fortiori that the power to create them, all the more cannot be so conferred or exercised. I am compelled to conclude, therefore, that Section 10 (1), Article VII of the Constitution has repealed Section 68 of the Revised Administrative Code as far as the latter empowers the President to create local governments. Repeal by the Constitution of prior statutes inconsistent with it has already been sustained in De los Santos v. MaIlare, 87 Phil. 289. And it was there held that such repeal differs from a declaration of unconstitutionality of a posterior legislation, so much so that only a majority vote of the Court is needed to sustain a finding of repeal. Since the Constitution repealed Section 68 as far back as 1935, it is academic to ask whether Republic Act 2370 likewise has provisions in conflict with Section 68 so as to repeal it. Suffice it to state, at any rate, that statutory prohibition on the President from creating a barrio does not, in my opinion, warrant the inference of statutory prohibition for creating a municipality. For although municipalities consist of barrios, there is nothing in the statute that would preclude creation of new municipalities out of pre-existing barrios. It is not contrary to the logic of local autonomy to be able to create larger political units and unable to create smaller ones. For as long ago observed in President McKinley's Instructions to the Second Philippine Commission, greater autonomy is to be imparted to the smaller of the two political units. The smaller the unit of local government, the lesser is the need for the national government's intervention in its political affairs. Furthermore, for practical reasons, local autonomy cannot be given from the top downwards. The national government, in such a case, could still exercise power over the supposedly autonomous unit, e.g., municipalities, by exercising it over the smaller units that comprise them, e.g., the barrios. A realistic program of decentralization therefore calls for autonomy from the bottom upwards, so that it is not surprising for Congress to deny the national government some power over barrios without denying it over municipalities. For this reason, I disagree with the majority view that because the President could not create a barrio under Republic Act 2370, a fortiori he cannot create a municipality. It is my view, therefore, that the Constitution, and not Republic Act 2370, repealed Section 68 of the Revised Administrative Code's provision giving the President authority to create local governments. And for this reason I agree with the ruling in the majority opinion that the executive orders in question are null and void.

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In thus ruling, the Court is but sustaining the fulfillment of our historic desire to be free and independent under a republican form of government, and exercising a function derived from the very sovereignty that it upholds. Executive orders declared null and void. Makalintal and Regala, JJ., concur. Republic SUPREME Manila EN BANC G.R. No. 157036 June 9, 2004 of the Philippines COURT

THE NPA WILL FIND IT MORE DIFFICULT TO CARRY OUT THEIR PLOTS IF OUR LAW ENFORCEMENT AGENCIES CAN RID THEMSELVES OF RASCALS IN UNIFORM, AND ALSO IF WE ENFORCE A GUN BAN IN PUBLIC PLACES. THUS, I AM DIRECTING THE PNP CHIEF TO SUSPEND INDEFINITELY THE ISSUANCE OF PERMIT TO CARRY FIREARMS IN PUBLIC PLACES. THE ISSUANCE OF PERMITS WILL NOW BE LIMITED ONLY TO OWNERSHIP AND POSSESSION OF GUNS AND NOT TO CARRYING THEM IN PUBLIC PLACES. FROM NOW ON, ONLY THE UNIFORMED MEN IN THE MILITARY AND AUTHORIZED LAW ENFORCEMENT OFFICERS CAN CARRY FIREARMS IN PUBLIC PLACES, AND ONLY PURSUANT TO EXISTING LAW. CIVILIAN OWNERS MAY NO LONGER BRING THEIR FIREARMS OUTSIDE THEIR RESIDENCES. THOSE WHO WANT TO USE THEIR GUNS FOR TARGET PRACTICE WILL BE GIVEN SPECIAL AND TEMPORARY PERMITS FROM TIME TO TIME ONLY FOR THAT PURPOSE. AND THEY MAY NOT LOAD THEIR GUNS WITH BULLETS UNTIL THEY ARE IN THE PREMISES OF THE FIRING RANGE. WE CANNOT DISREGARD THE PARAMOUNT NEED FOR LAW AND ORDER. JUST AS WE CANNOT BE HEEDLESS OF OUR PEOPLES ASPIRATIONS FOR PEACE." Acting on President Arroyos directive, respondent Ebdane issued the assailed Guidelines quoted as follows: "TO : All Concerned FROM : Chief, PNP SUBJECT : Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of Residence. DATE : January 31, 2003 1. Reference: PD 1866 dated June 29, 1983 and its Implementing Rules and Regulations. 2. General: The possession and carrying of firearms outside of residence is a privilege granted by the State to its citizens for their individual protection against all threats of lawlessness and security. As a rule, persons who are lawful holders of firearms (regular license, special permit, certificate of registration or MR) are prohibited from carrying their firearms outside of residence. However, the Chief, Philippine National Police may, in meritorious cases as determined by him and under conditions as he may impose, authorize such person or persons to carry firearms outside of residence. 3. Purposes:

FRANCISCO I. CHAVEZ Petitioner, vs. HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE SECRETARY; DIRECTOR GENERAL HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS THE CHIEF OF THE PNP, ET. AL., respondents. DECISION SANDOVAL-GUTIERREZ, J.: The right of individuals to bear arms is not absolute, but is subject to regulation. The maintenance of peace and order1 and the protection of the people against violence are constitutional duties of the State, and the right to bear arms is to be construed in connection and in harmony with these constitutional duties. Before us is a petition for prohibition and injunction seeking to enjoin the implementation of the "Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of Residence"2 (Guidelines) issued on January 31, 2003, by respondent Hermogenes E. Ebdane, Jr., Chief of the Philippine National Police (PNP). The facts are undisputed: In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members of the PNP stressing the need for a nationwide gun ban in all public places to avert the rising crime incidents. She directed the then PNP Chief, respondent Ebdane, to suspend the issuance of Permits to Carry Firearms Outside of Residence (PTCFOR), thus: "THERE IS ALSO NEED TO FOCUS ON THE HIGH PROFILE CRIMES THAT TEND TO DISTURB THE PSYCHOLOGICAL PERIMETERS OF THE COMMUNITY THE LATEST BEING THE KILLING OF FORMER NPA LEADER ROLLY KINTANAR. I UNDERSTAND WE ALREADY HAVE THE IDENTITY OF THE CULPRIT. LET US BRING THEM TO THE BAR OF JUSTICE.

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This Memorandum prescribes the guidelines in the implementation of the ban on the carrying of firearms outside of residence as provided for in the Implementing Rules and Regulations, Presidential Decree No. 1866, dated June 29, 1983 and as directed by PGMA . It also prescribes the conditions, requirements and procedures under which exemption from the ban may be granted. 4. Specific Instructions on the Ban on the Carrying of Firearms: a. All PTCFOR are hereby revoked. Authorized holders of licensed firearms covered with valid PTCFOR may re-apply for a new PTCFOR in accordance with the conditions hereinafter prescribed. b. All holders of licensed or government firearms are hereby prohibited from carrying their firearms outside their residence except those covered with mission/letter orders and duty detail orders issued by competent authority pursuant to Section 5, IRR, PD 1866, provided, that the said exception shall pertain only to organic and regular employees. 5. The following persons may be authorized to carry firearms outside of residence. a. All persons whose application for a new PTCFOR has been approved, provided, that the persons and security of those so authorized are under actual threat, or by the nature of their position, occupation and profession are under imminent danger. b. All organic and regular employees with Mission/Letter Orders granted by their respective agencies so authorized pursuant to Section 5, IRR, PD 1866, provided, that such Mission/Letter Orders is valid only for the duration of the official mission which in no case shall be more than ten (10) days. c. All guards covered with Duty Detail Orders granted by their respective security agencies so authorized pursuant to Section 4, IRR, PD 1866, provided, that such DDO shall in no case exceed 24-hour duration. d. Members of duly recognized Gun Clubs issued Permit to Transport (PTT) by the PNP for purposes of practice and competition, provided, that such firearms while in transit must not be loaded with ammunition and secured in an appropriate box or case detached from the person. e. Authorized members of the Diplomatic Corps. 6. Requirements for issuance of new PTCFOR: a. Written request by the applicant addressed to Chief, PNP stating his qualification to possess firearm and the reasons why he needs to carry firearm outside of residence. b. Xerox copy of current firearm license duly authenticated by Records Branch, FED; c. Proof of actual threat, the details of which should be issued by the Chief of Police/Provincial or City Directors and duly validated by C, RIID; d. Copy of Drug Test Clearance, duly authenticated by the Drug Testing Center, if photocopied; e. Copy of DI/ RIID clearance, duly authenticated by ODI/RIID, if photocopied; f. Copy of Neuro-Psychiatric Clearance duly authenticated by NP Testing Center, if photocopied; g. Copy of Certificate of Attendance to a Gun Safety Seminar, duly validated by Chief, Operations Branch, FED; h. NBI Clearance; i. Two (2) ID pictures (2" x 2") taken not earlier than one (1) year from date of filing of application; and j. Proof of Payment

7. Procedures: a. Applications may be filed directly to the Office of the PTCFOR Secretariat in Camp Crame. In the provinces, the applications may also be submitted to the Police Regional Offices (PROs) and Provincial/City Police Offices (P/CPOs) for initial processing before they are forwarded to the office of the PTCFOR Secretariat. The processors, after ascertaining that the documentary requirements are in order, shall issue the Order of Payment (OP) indicating the amount of fees payable by the applicant, who in turn shall pay the fees to the Land Bank. b. Applications, which are duly processed and prepared in accordance with existing rules and regulations, shall be forwarded to the OCPNP for approval. c. Upon approval of the application, OCPNP will issue PTCFOR valid for one (1) year from date of issue. d. Applications for renewal of PTCFOR shall be processed in accordance with the provisions of par. 6 above. e. Application for possession and carrying of firearms by diplomats in the Philippines shall be processed in accordance with NHQ PNP Memo dated September 25, 2000, with Subj: Possession and Carrying of Firearms by Diplomats in the Philippines. 8. Restrictions in the Carrying of Firearms: a. The firearm must not be displayed or exposed to public view, except those authorized in uniform and in the performance of their official duties. b. The firearm shall not be brought inside public drinking and amusement places, and all other commercial or public establishments." Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued, requested the Department of Interior and Local Government (DILG) to reconsider the implementation of the assailed Guidelines. However, his request was denied. Thus, he filed the present petition impleading public respondents Ebdane, as Chief of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as Chief of the PNPFirearms and Explosives Division. He anchored his petition on the following grounds: "I THE PRESIDENT HAS NO POWER OR AUTHORITY MUCH LESS BY A MERE SPEECH TO ALTER, MODIFY OR AMEND THE LAW ON FIREARMS BY IMPOSING A GUN BAN AND CANCELING EXISTING PERMITS FOR GUNS TO BE CARRIED OUTSIDE RESIDENCES. II OFFICIALLY, THERE IS NO PRESIDENTIAL ISSUANCE ON THE GUN BAN; THE PRESIDENTIAL SPEECH NEVER INVOKED POLICE POWER TO JUSTIFY THE GUN BAN; THE PRESIDENTS VERBAL DECLARATION ON GUN BAN VIOLATED THE PEOPLES RIGHT TO PROTECT LIFE AND THEIR PROPERTY RIGHT TO CARRY FIREARMS. III THE PNP CHIEF HAS NO POWER OR AUTHORITY TO ISSUE THE QUESTIONED GUIDELINES BECAUSE: 1) THERE IS NO LAW, STATUTE OR EXECUTIVE ORDER WHICH GRANTS THE PNP CHIEF THE AUTHORITY TO PROMULGATE THE PNP GUIDELINES. 2) THE IMPLEMENTING RULES AND REGULATIONS OF PD 1866 CANNOT BE THE SUBJECT OF ANOTHER SET OF IMPLEMENTING GUIDELINES.

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3) THE PRESIDENTS SPEECH CANNOT BE A BASIS FOR THE PROMULGATION OF IMPLEMENTNG GUIDELINES ON THE GUN BAN. IV ASSUMING ARGUENDO, THAT THE PNP GUIDELINES IMPLEMENT PD 1866, AND THE AMENDMENTS THERETO, THE PNP CHIEF STILL HAS NO POWER OR AUTHORITY TO ISSUE THE SAME BECAUSE 1) PER SEC 6, RA 8294, WHICH AMENDS PD 1866, THE IRR SHALL BE PROMULGATED JOINTLY BY THE DOJ AND THE DILG. 2) SEC. 8, PD 1866 STATES THAT THE IRR SHALL BE PROMULGATED BY THE CHIEF OF THE PHILIPPINE CONSTABULARY. V THE PNP GUIDELINES VIOLATE THE DUE PROCESS CLAUSE OF THE CONSTITUTION BECAUSE: 1) THE RIGHT TO OWN AND CARRY A FIREARM IS NECESSARILY INTERTWINED WITH THE PEOPLES INHERENT RIGHT TO LIFE AND TO PROTECT LIFE. THUS, THE PNP GUIDELINES DEPRIVE PETITIONER OF THIS RIGHT WITHOUT DUE PROCESS OF LAW FOR: A) THE PNP GUIDELINES DEPRIVE PETITIONER OF HIS MOST POTENT, IF NOT HIS ONLY, MEANS TO DEFEND HIMSELF. B) THE QUESTIONED GUIDELINES STRIPPED PETITIONER OF HIS MEANS OF PROTECTION AGAINST CRIME DESPITE THE FACT THAT THE STATE COULD NOT POSSIBLY PROTECT ITS CITIZENS DUE TO THE INADEQUACY AND INEFFICIENCY OF THE POLICE FORCE. 2) THE OWNESHIP AND CARRYING OF FIREARMS ARE CONSTITUTIONALLY PROTECTED PROPERTY RIGHTS WHICH CANNOT BE TAKEN AWAY WITHOUT DUE PROCESS OF LAW AND WITHOUT JUST CAUSE. VI ASSUMING ARGUENDO, THAT THE PNP GUIDELINES WERE ISSUED IN THE EXERCISE OF POLICE POWER, THE SAME IS AN INVALID EXERCISE THEREOF SINCE THE MEANS USED THEREFOR ARE UNREASONABLE AND UNNCESSARY FOR THE ACCOMPLISHMENT OF ITS PURPOSE TO DETER AND PREVENT CRIME THEREBY BECOMING UNDULY OPPRESSIVE TO LAW-ABIDING GUN-OWNERS.

VII THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND CONFISCATORY SINCE IT REVOKED ALL EXISTING PERMITS TO CARRY WITHOUT, HOWEVER, REFUNDING THE PAYMENT THE PNP RECEIVED FROM THOSE WHO ALREADY PAID THEREFOR. VIII THE PNP GUIDELINES VIOLATE THE EQUAL PROTECTION CLAUSE OF THE CONSTITUTION BECAUSE THEY ARE DIRECTED AT AND OPPRESSIVE ONLY TO LAWABIDING GUN OWNERS WHILE LEAVING OTHER GUN-OWNERS THE LAWBREAKERS (KIDNAPPERS, ROBBERS, HOLD-UPPERS, MNLF, MILF, ABU SAYYAF COLLECTIVELY, AND NPA) UNTOUCHED. IX THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND UNFAIR BECAUSE THEY WERE IMPLEMENTED LONG BEFORE THEY WERE PUBLISHED. X THE PNP GUIDELINES ARE EFFECTIVELY AN EX POST FACTO LAW SINCE THEY APPLY RETROACTIVELY AND PUNISH ALL THOSE WHO WERE ALREADY GRANTED PERMITS TO CARRY OUTSIDE OF RESIDENCE LONG BEFORE THEIR PROMULGATION." Petitioners submissions may be synthesized into five (5) major issues: First, whether respondent Ebdane is authorized to issue the assailed Guidelines; Second, whether the citizens right to bear arms is a constitutional right?; Third, whether the revocation of petitioners PTCFOR pursuant to the assailed Guidelines is a violation of his right to property?; Fourth, whether the issuance of the assailed Guidelines is a valid exercise of police power?; and Fifth, whether the assailed Guidelines constitute an ex post facto law? The Solicitor General seeks the dismissal of the petition pursuant to the doctrine of hierarchy of courts. Nonetheless, in refutation of petitioners arguments, he contends that: (1) the PNP Chief is authorized to issue the assailed Guidelines; (2) petitioner does not have a constitutional right to own and carry firearms; (3) the assailed Guidelines do not violate the due process clause of the Constitution; and (4) the assailed Guidelines do not constitute an ex post facto law.

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Initially, we must resolve the procedural barrier. On the alleged breach of the doctrine of hierarchy of courts, suffice it to say that the doctrine is not an iron-clad dictum. In several instances where this Court was confronted with cases of national interest and of serious implications, it never hesitated to set aside the rule and proceed with the judicial determination of the cases. 3 The case at bar is of similar import as it involves the citizens right to bear arms. I Authority of the PNP Chief Relying on the principle of separation of powers, petitioner argues that only Congress can withhold his right to bear arms. In revoking all existing PTCFOR, President Arroyo and respondent Ebdane transgressed the settled principle and arrogated upon themselves a power they do not possess the legislative power. We are not persuaded. It is true that under our constitutional system, the powers of government are distributed among three coordinate and substantially independent departments: the legislative, the executive and the judiciary. Each has exclusive cognizance of the matters within its jurisdiction and is supreme within its own sphere. 4 Pertinently, the power to make laws the legislative power is vested in Congress.5 Congress may not escape its duties and responsibilities by delegating that power to any other body or authority. Any attempt to abdicate the power is unconstitutional and void, on the principle that "delegata potestas non potest delegari" "delegated power may not be delegated."6 The rule which forbids the delegation of legislative power, however, is not absolute and inflexible . It admits of exceptions. An exception sanctioned by immemorial practice permits the legislative body to delegate its licensing power to certain persons, municipal corporations, towns, boards, councils, commissions, commissioners, auditors, bureaus and directors.7 Such licensing power includes the power to promulgate necessary rules and regulations.8 The evolution of our laws on firearms shows that since the early days of our Republic, the legislatures tendency was always towards the delegation of power. Act No. 1780, 9 delegated upon the Governor-General (now the President) the authority (1) to approve or disapprove applications of any person for a license to deal in firearms or to possess the same for personal protection, hunting and other lawful purposes; and (2) to revoke such license any time.10 Further, it authorized him to issue regulations which he may deem necessary for the proper enforcement of the Act.11 With the enactment of Act No. 2711, the "Revised Administrative Code of 1917," the laws on firearms were integrated.12 The Act retained the authority of the Governor General provided in Act No. 1780. Subsequently, the growing complexity in the Office of the Governor-General resulted in the delegation of his authority to the Chief of the Constabulary. On January 21, 1919, Acting Governor-General Charles E. Yeater issued Executive Order No. 813 authorizing and directing the Chief of Constabulary to act on his behalf in approving and disapproving applications for personal, special and hunting licenses. This was followed by Executive Order No. 6114 designating the Philippine Constabulary (PC) as the government custodian of all firearms, ammunitions and explosives. Executive Order No. 215,15 issued by President Diosdado Macapagal on December 3, 1965, granted the Chief of the Constabulary, not only the authority to approve or disapprove

applications for personal, special and hunting license, but also the authority to revoke the same. With the foregoing developments, it is accurate to say that the Chief of the Constabulary had exercised the authority for a long time. In fact, subsequent issuances such as Sections 2 and 3 of the Implementing Rules and Regulations of Presidential Decree No. 186616 perpetuate such authority of the Chief of the Constabulary. Section 2 specifically provides that any person or entity desiring to possess any firearm "shall first secure the necessary permit/license/authority from the Chief of the Constabulary." With regard to the issuance of PTCFOR, Section 3 imparts: "The Chief of Constabulary may, in meritorious cases as determined by him and under such conditions as he may impose, authorize lawful holders of firearms to carry them outside of residence." These provisions are issued pursuant to the general power granted by P.D. No. 1866 empowering him to promulgate rules and regulations for the effective implementation of the decree.17 At this juncture, it bears emphasis that P.D. No. 1866 is the chief law governing possession of firearms in the Philippines and that it was issued by President Ferdinand E. Marcos in the exercise of his legislative power.18 In an attempt to evade the application of the above-mentioned laws and regulations, petitioner argues that the "Chief of the PNP" is not the same as the "Chief of the Constabulary," the PC being a mere unit or component of the newly established PNP. He contends further that Republic Act No. 829419 amended P.D. No. 1866 such that the authority to issue rules and regulations regarding firearms is now jointly vested in the Department of Justice and the DILG, not the Chief of the Constabulary. 20 Petitioners submission is bereft of merit. By virtue of Republic Act No. 6975,21 the Philippine National Police (PNP) absorbed the Philippine Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the Constabulary and, therefore, assumed the latters licensing authority. Section 24 thereof specifies, as one of PNPs powers, the issuance of licenses for the possession of firearms and explosives in accordance with law.22 This is in conjunction with the PNP Chiefs "power to issue detailed implementing policies and instructions" on such "matters as may be necessary to effectively carry out the functions, powers and duties" of the PNP. 23 Contrary to petitioners contention, R.A. No. 8294 does not divest the Chief of the Constabulary (now the PNP Chief) of his authority to promulgate rules and regulations for the effective implementation of P.D. No. 1866. For one, R.A. No. 8294 did not repeal entirely P.D. No. 1866. It merely provides for the reduction of penalties for illegal possession of firearms. Thus, the provision of P.D. No. 1866 granting to the Chief of the Constabulary the authority to issue rules and regulations regarding firearms remains effective. Correspondingly, the Implementing Rules and Regulations dated September 15, 1997 jointly issued by the Department of Justice and the DILG pursuant to Section 6 of R.A. No. 8294 deal only with the automatic review, by the Director of the Bureau of Corrections or the Warden of a provincial or city jail, of the records of convicts for violations of P.D. No. 1866. The Rules seek to give effect to the beneficent provisions of R.A. No. 8294, thereby ensuring the early release and reintegration of the convicts into the community. Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the assailed guidelines. Corollarily, petitioner disputes President Arroyos declaration of a nationwide gun ban, arguing that "she has no authority to alter, modify, or amend the law on firearms through a mere speech." First, it must be emphasized that President Arroyos speech was just an expression of her policy and a direct ive to her subordinate. It cannot, therefore, be argued that President Arroyo enacted a law through a mere speech. Second, at the apex of the entire executive officialdom is the President. Section 17, Article VII of the Constitution specifies his power as Chief Executive, thus: "The President shall have control of all the executive departments,

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bureaus and offices. He shall ensure that the laws be faithfully executed." As Chief Executive, President Arroyo holds the steering wheel that controls the course of her government. She lays down policies in the execution of her plans and programs. Whatever policy she chooses, she has her subordinates to implement them. In short, she has the power of control. Whenever a specific function is entrusted by law or regulation to her subordinate, she may act directly or merely direct the performance of a duty .24 Thus, when President Arroyo directed respondent Ebdane to suspend the issuance of PTCFOR, she was just directing a subordinate to perform an assigned duty. Such act is well within the prerogative of her office. II Right to bear arms: Constitutional or Statutory? Petitioner earnestly contends that his right to bear arms is a constitutionally-protected right. This, he mainly anchors on various American authorities. We therefore find it imperative to determine the nature of the right in light of American jurisprudence. The bearing of arms is a tradition deeply rooted in the English and American society. It antedates not only the American Constitution but also the discovery of firearms.25 A provision commonly invoked by the American people to justify their possession of firearms is the Second Amendment of the Constitution of the United States of America, which reads: "A well regulated militia, being necessary for the security of free state, the right of the people to keep and bear Arms, shall not be infringed." An examination of the historical background of the foregoing provision shows that it pertains to the citizens "collective right" to take arms in defense of the State, not to the citizens "individual right" to own and possess arms. The setting under which the right was contemplated has a profound connection with the keeping and maintenance of a militia or an armed citizenry. That this is how the right was construed is evident in early American cases. The first case involving the interpretation of the Second Amendment that reached the United States Supreme Court is United States vs. Miller.26 Here, the indictment charged the defendants with transporting an unregistered "Stevens shotgun" without the required stamped written order, contrary to the National Firearms Act. The defendants filed a demurrer challenging the facial validity of the indictment on the ground that the National Firearms Act offends the inhibition of the Second Amendment. The District Court sustained the demurrer and quashed the indictment. On appeal, the Supreme Court interpreted the right to bear arms under the Second Amendment as referring to the collective right of those comprising the Militia a body of citizens enrolled for military discipline. It does not pertain to the individual right of citizen to bear arm. Miller expresses its holding as follows: "In the absence of any evidence tending to show that possession or use of a shotgun having a barrel of less than eighteen inches in length at this time has some reasonable relationship to the preservation or efficiency of a well regulated militia, we cannot say that the Second Amendment guarantees the right to keep and bear such an instrument. Certainly it is not within judicial notice that this weapon is any part of the ordinary military equipment or that its use could contribute to the common defense.

The same doctrine was re-echoed in Cases vs. United States.27 Here, the Circuit Court of Appeals held that the Federal Firearms Act, as applied to appellant, does not conflict with the Second Amendment. It ruled that: "While [appellants] weapon may be capable of military use, or while at least familiarity with it might be regarded as of value in training a person to use a comparable weapon of military type and caliber, still there is no evidence that the appellant was or ever had been a member of any military organization or that his use of the weapon under the circumstances disclosed was in preparation for a military career. In fact, the only inference possible is that the appellant at the time charged in the indictment was in possession of, transporting, and using the firearm and ammunition purely and simply on a frolic of his own and without any thought or intention of contributing to the efficiency of the well regulated militia which the Second amendment was designed to foster as necessary to the security of a free state." With the foregoing jurisprudence, it is erroneous to assume that the US Constitution grants upon the American people the right to bear arms. In a more explicit language, the United States vs. Cruikshank28 decreed: "The right of the people to keep and bear arms is not a right granted by the Constitution. Neither is it in any way dependent upon that instrument." Likewise, in People vs. Persce,29 the Court of Appeals said: "Neither is there any constitutional provision securing the right to bear arms which prohibits legislation with reference to such weapons as are specifically before us for consideration. The provision in the Constitution of the United States that the right of the people to keep and bear arms shall not be infringed is not designed to control legislation by the state." With more reason, the right to bear arms cannot be classified as fundamental under the 1987 Philippine Constitution. Our Constitution contains no provision similar to the Second Amendment, as we aptly observed in the early case of United States vs. Villareal:30 "The only contention of counsel which would appear to necessitate comment is the claim that the statute penalizing the carrying of concealed weapons and prohibiting the keeping and the use of firearms without a license, is in violation of the provisions of section 5 of the Philippine Bill of Rights. Counsel does not expressly rely upon the prohibition in the United States Constitution against the infringement of the right of the people of the United States to keep and bear arms (U. S. Constitution, amendment 2), which is not included in the Philippine Bill. But it may be well, in passing, to point out that in no event could this constitutional guaranty have any bearing on the case at bar, not only because it has not been expressly extended to the Philippine Islands, but also because it has been uniformly held that both this and similar provisions in State constitutions apply only to arms used in civilized warfare (see cases cited in 40 Cyc., 853, note 18); x x x." Evidently, possession of firearms by the citizens in the Philippines is the exception, not the rule. The right to bear arms is a mere statutory privilege, not a constitutional right. It is a mere statutory creation. What then are the laws that grant such right to the Filipinos? The first real firearm law is Act No. 1780 enacted by the Philippine Commission on October 12, 1907. It was passed to regulate the importation, acquisition, possession, use and transfer of firearms. Section 9 thereof provides: "SECTION 9. Any person desiring to possess one or more firearms for personal protection, or for use in hunting or other lawful purposes only, and ammunition therefor, shall make application for a license to possess such firearm or firearms or ammunition as hereinafter provided. Upon making

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such application, and before receiving the license, the applicant shall make a cash deposit in the postal savings bank in the sum of one hundred pesos for each firearm for which the license is to be issued, or in lieu thereof he may give a bond in such form as the Governor-General may prescribe, payable to the Government of the Philippine Islands, in the sum of two hundred pesos for each such firearm: PROVIDED, HOWEVER, That persons who are actually members of gun clubs, duly formed and organized at the time of the passage of this Act, who at such time have a license to possess firearms, shall not be required to make the deposit or give the bond prescribed by this section, and the bond duly executed by such person in accordance with existing law shall continue to be security for the safekeeping of such arms." The foregoing provision was restated in Section 88731 of Act No. 2711 that integrated the firearm laws. Thereafter, President Ferdinand E. Marcos issued P.D. No. 1866. It codified the laws on illegal possession, manufacture, dealing in, acquisition of firearms, ammunitions or explosives and imposed stiffer penalties for their violation. R.A. No. 8294 amended some of the provisions of P.D. No. 1866 by reducing the imposable penalties. Being a mere statutory creation, the right to bear arms cannot be considered an inalienable or absolute right. III Vested Property Right Section 1, Article III of the Constitution provides that "no person shall be deprived of life, liberty or property without due process of law." Petitioner invokes this provision, asserting that the revocation of his PTCFOR pursuant to the assailed Guidelines deprived him of his "vested property right" without due process of law and in violation of the equal protection of law. Petitioner cannot find solace to the above-quoted Constitutional provision. In evaluating a due process claim, the first and foremost consideration must be whether life, liberty or property interest exists.32 The bulk of jurisprudence is that a license authorizing a person to enjoy a certain privilege is neither a property nor property right. In Tan vs. The Director of Forestry,33 we ruled that "a license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right." In a more emphatic pronouncement, we held in Oposa vs. Factoran, Jr.34 that: "Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due process clause of the Constitution." Petitioner, in arguing that his PTCFOR is a constitutionally protected property right, relied heavily on Bell vs. Burson35 wherein the U.S. Supreme Court ruled that "once a license is issued, continued possession may become essential in the pursuit of livelihood. Suspension of issued licenses thus involves state action that adjudicates important interest of the licensees." Petitioners reliance on Bell is misplaced. This case involves a drivers license, not a license to bear arms. The catena of American jurisprudence involving license to bear arms is perfectly in accord with our ruling that a PTCFOR is neither a property nor a property right. In Erdelyi vs. OBrien,36 the plaintiff who was denied a license to carry a firearm brought suit against the defendant who was the Chief of Police of the City of Manhattan Beach,

on the ground that the denial violated her constitutional rights to due process and equal protection of the laws. The United States Court of Appeals Ninth Circuit ruled that Erdelyi did not have a property interest in obtaining a license to carry a firearm, ratiocinating as follows: "Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise whenever a person has only an abstract need or desire for, or unilateral expectation of a benefit. x x x Rather, they arise from legitimate claims of entitlement defined by existing rules or understanding that stem from an independent source, such as state law. x x x Concealed weapons are closely regulated by the State of California. x x x Whether the statute creates a property interest in concealed weapons licenses depends largely upon the extent to which the statute contains mandatory language that restricts the discretion of the [issuing authority] to deny licenses to applicants who claim to meet the minimum eligibility requirements. x x x Where state law gives the issuing authority broad discretion to grant or deny license application in a closely regulated field, initial applicants do not have a property right in such licenses protected by the Fourteenth Amendment. See Jacobson, supra, 627 F.2d at 180 (gaming license under Nevada law);" Similar doctrine was announced in Potts vs. City of Philadelphia, 37 Conway vs. King,38 Nichols vs. County of Sta. Clara,39 and Gross vs. Norton.40 These cases enunciated that the test whether the statute creates a property right or interest depends largely on the extent of discretion granted to the issuing authority. In our jurisdiction, the PNP Chief is granted broad discretion in the issuance of PTCFOR. This is evident from the tenor of the Implementing Rules and Regulations of P.D. No. 1866 which state that "the Chief of Constabulary may, in meritorious cases as determined by him and under such conditions as he may impose, authorize lawful holders of firearms to carry them outside of residence." Following the American doctrine, it is indeed logical to say that a PTCFOR does not constitute a property right protected under our Constitution. Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked any time. It does not confer an absolute right, but only a personal privilege to be exercised under existing restrictions, and such as may thereafter be reasonably imposed.41 A licensee takes his license subject to such conditions as the Legislature sees fit to impose, and one of the statutory conditions of this license is that it might be revoked by the selectmen at their pleasure. Such a license is not a contract, and a revocation of it does not deprive the defendant of any property, immunity, or privilege within the meaning of these words in the Declaration of Rights.42 The US Supreme Court, in Doyle vs. Continental Ins. Co,43 held: "The correlative power to revoke or recall a permission is a necessary consequence of the main power. A mere license by the State is always revocable." The foregoing jurisprudence has been resonating in the Philippines as early as 1908. Thus, in The Government of the Philippine Islands vs. Amechazurra44 we ruled: "x x x no private person is bound to keep arms. Whether he does or not is entirely optional with himself, but if, for his own convenience or pleasure, he desires to possess arms, he must do so upon such terms as the Government sees fit to impose, for the right to keep and bear arms is not secured to him by law. The Government can impose upon him such terms as it pleases. If he is not satisfied with the terms imposed, he should decline to accept them, but, if for the purpose of securing possession of the arms he does agree to such conditions, he must fulfill them." IV

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Police Power At any rate, assuming that petitioners PTCFOR constitutes a property right protected by the Constitution, the same cannot be considered as absolute as to be placed beyond the reach of the States police power. All property in the state is held subject to its general regulations, necessary to the common good and general welfare. In a number of cases, we laid down the test to determine the validity of a police measure, thus: (1) The interests of the public generally, as distinguished from those of a particular class, require the exercise of the police power; and (2) The means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. Deeper reflection will reveal that the test merely reiterates the essence of the constitutional guarantees of substantive due process, equal protection, and non-impairment of property rights. It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and order in the society. Owing to the proliferation of crimes, particularly those committed by the New Peoples Army (NPA), which tends to disturb the peace of the community, President Arroyo deemed it best to impose a nationwide gun ban. Undeniably, the motivating factor in the issuance of the assailed Guidelines is the interest of the public in general. The only question that can then arise is whether the means employed are appropriate and reasonably necessary for the accomplishment of the purpose and are not unduly oppressive. In the instant case, the assailed Guidelines do not entirely prohibit possession of firearms. What they proscribe is merely the carrying of firearms outside of residence. However, those who wish to carry their firearms outside of their residences may re-apply for a new PTCFOR. This we believe is a reasonable regulation. If the carrying of firearms is regulated, necessarily, crime incidents will be curtailed. Criminals carry their weapon to hunt for their victims; they do not wait in the comfort of their homes. With the revocation of all PTCFOR, it would be difficult for criminals to roam around with their guns. On the other hand, it would be easier for the PNP to apprehend them. Notably, laws regulating the acquisition or possession of guns have frequently been upheld as reasonable exercise of the police power.45 In State vs. Reams,46 it was held that the legislature may regulate the right to bear arms in a manner conducive to the public peace. With the promotion of public peace as its objective and the revocation of all PTCFOR as the means, we are convinced that the issuance of the assailed Guidelines constitutes a reasonable exercise of police power. The ruling in United States vs. Villareal, 47 is relevant, thus: "We think there can be no question as to the reasonableness of a statutory regulation prohibiting the carrying of concealed weapons as a police measure well calculated to restrict the too frequent resort to such weapons in moments of anger and excitement. We do not doubt that the strict enforcement of such a regulation would tend to increase the security of life and limb, and to suppress crime and lawlessness, in any community wherein the practice of carrying concealed weapons prevails, and this without being unduly oppressive upon the individual owners of these weapons. It follows that its enactment by the legislature is a proper and legitimate exercise of the police power of the state."

V Ex post facto law In Mekin vs. Wolfe,48 an ex post facto law has been defined as one (a) which makes an action done before the passing of the law and which was innocent when done criminal, and punishes such action; or (b) which aggravates a crime or makes it greater than it was when committed; or (c) which changes the punishment and inflicts a greater punishment than the law annexed to the crime when it was committed; or (d) which alters the legal rules of evidence and receives less or different testimony than the law required at the time of the commission of the offense in order to convict the defendant. We see no reason to devote much discussion on the matter. Ex post facto law prohibits retrospectivity of penal laws.49 The assailed Guidelines cannot be considered as an ex post facto law because it is prospective in its application. Contrary to petitioners argument, it would not result in the puni shment of acts previously committed. WHEREFORE, the petition is hereby DISMISSED. SO ORDERED. Davide, Jr., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, CarpioMorales, Callejo, Sr., Azcuna, and Tinga, JJ., concur. Republic SUPREME Manila FIRST DIVISION G.R. No. L-47088 July 10, 1981 CONSOLACION DUQUE SALONGA, assisted by her husband WENCESLAO SALONGA, plaintiffappellant, vs. JULITA B. FARRALES, and THE SHERIFF OF OLONGAPO CITY, defendants-appellees. FERNANDEZ, J.: This is an appeal certified to this Court by the Court of Appeals from the decision of the Court of First Instance of Zambales and Olongapo City, Third Judicial District, Branch III, Olongapo City, in Civil Case No. 1144-0, entitled "Consolacion Duque Salonga, assisted by her husband, Wenceslao Salonga, Plaintiff, versus Julita B. Farrales, and The Sheriff of Olongapo City, Defendants," the dispositive part of which reads:
1

of

the

Philippines COURT

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FOR THE REASONS GIVEN, judgment is hereby rendered dismissing plaintiff's complaint, as well as defendants' counterclaim. Costs against plaintiff.

parties; in order to prevent the infliction of irreparable injury to plaintiff; and in order that whatever judgment may be rendered in this case, may not become moot, academic, illusory and ineffectual, and c) Granting plaintiff such other relief conformable to law, justice and equity;

SO ORDERED.

The records disclose that on January 2, 1973; the appellant, Consolacion Duque Salonga assisted by her husband, filed a complaint against Julita B. Farrales and the Sheriff of Olongapo City with the Court of First Instance of Zambales and Olongapo City, Third Judicial District, Branch III, Olongapo City, seeking the following relief: WHEREFORE, plaintiff most respectfully prays for the following relief: a) Ordering defendant Julita Farrales to sell to plaintiff the parcel of land containing an area of 156 Square Meters, more or less, where the house of strong materials of plaintiff exists. b) Ordering the defendants not to disturb nor interfere in the peaceful possession or occupation of the land by plaintiff, until a final decision is rendered in this case. c) Ordering defendants jointly and severally to pay costs; and d) Granting plaintiff such other relief conformable to law, justice and equity. Sta. Rita, Olongapo City, December 28, 1972.
3

that on January 9, 1973, plaintiff-appellant, Salonga filed an urgent petition for the issuance of a writ of 4 preliminary injunction which was duly amended on January 16, 1973, with the following prayer: WHEREFORE, plaintiff assisted by counsel most respectfully prays the Hon. Court the following relief: a) That a restraining order be issued pending resolution of the instant petition for issuance of a Writ of Preliminary Injunction enjoining defendants, particularly the Sheriff of Olongapo City to restrain from enforcing the Writ of Execution issued in connection with the judgment rendered in Civil Case 650 for ejectment in the City Court of Olongapo City; b) That after due hearing of the present amended petition, a Writ of Preliminary Injunction conditioned upon a reasonable bond be issued enjoining the defendants, particularly, the Sheriff of Olongapo City, to restrain from enforcing the Writ of Execution issued in connection with the judgment rendered in Civil Case No. 650 for ejectment in the City Court of Olongapo City, in order to maintain the status of the

that on January 22, 1973, the court a quo issued an order temporarily restraining the carrying out of the writ of execution issued pursuant to the judgment rendered by the City Court of Olongapo City in Civil Case No. 650, a suit for ejectment filed by defendant-appellee Farrales against five defendants, among 5 whom the herein appellant, Consolacion Duque Salonga; that on January 23, 1973, defendantappellee Farrales filed a motion to deny the motion for the issuance of a preliminary injunction for being 6 vague and her answer with counterclaim to the complaint; that an opposition to the amended petition for the issuance of a writ of preliminary injunction was also filed by the defendant-appellee Farrales on 7 January 25, 1973; that in an order dated January 20, 1973, the court a quo denied the petition for the 8 issuance of a preliminary injunction and lifted the restraining order issued on January 22, 1973; that plaintiff-appellant moved for reconsideration of the order denying the motion for issuance of a 9 preliminary injunction on January 5, 1973; which was also denied by the court a quo on February 21, 10 1973; that after the trial on the merits of Civil Case No. 1144-0, the trial court rendered the judgment 11 under review, dismissing plaintiff's complaint; that on August 13, 1973, the plaintiff, Consolacion 12 Duque Salonga, appealed from the said decision to the Court of Appeals; that on February 25, 1974, the plaintiff-appellant, Consolacion Duque Salonga, filed with the Court of Appeals a motion for the 13 issuance of a writ of preliminary injunction in aid of appeal; that in a resolution dated March 6, 1974, the Court of Appeals denied the said motion on the ground that "the writ of preliminary injunction prayed for being intended to restrain the enforcement of the writ of execution issued in Civil Case No. 650 for Ejectment, which is not involved in this appeal, and there being no justification for the issuance of the 14 writ ... " that on January 13, 1975, the defendant-appellee Julita B. Farrales filed a motion to dismiss the appeal on the ground that the appeal has become moot and academic because "the house of the plaintiffs-appellants, subject matter of this appeal was demolished on October 21, 1974, Annex "A", Sheriff's return and the land where this house was built was delivered to her and she is now the one in 15 possession ... ; that the plaintiffs-appellants having failed to comment on the said motion to dismiss 16 when required by the Court of Appeals in its resolution dated January 16, 1975, the Court of Appeals 17 resolved to submit the motion for decision in a resolution dated April 17, 1975; and that, likewise, the plaintiffs-appellants having failed to show cause why the case should not be submitted for decision without the benefit of appellant's reply brief when required to do so in a Court of Appeals resolution 18 dated May 14, 1975, the Court of Appeals resolved on July 8, 1975 to submit the case for decision 19 without the benefit of appellants' reply brief. In a resolution promulgated on September 15, 1977 the Court of Appeals certified the case to the 20 Supreme Court because the issue raised in the appeal is purely legal. The plaintiffs-appellants assign the following errors: I THE COURT A QUO SERIOUSLY ERRED IN DISMISSING APPELLANTS' COMPLAINT AND IN DENYING SAID APPELLANTS' RELIEF TO PURCHASE FROM DEFENDANT-APPELLEE JULITA FARRALES THE PIECE OF LAND IN QUESTION.

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II THE COURT A QUO SERIOUSLY ERRED IN NOT APPLYING TO THE SUIT AT BAR, SECTION 6, UNDER ARTICLE 11 OF THE NEW CONSTITUTION, WHICH CONTROLS, DELIMITS AND REGULATES PROPERTY RIGHTS AND PRIVATE 21 GAINS. The main legal question involved in this appeal is whether or not the court a quo erred in dismissing the complaint for specific performance or the ground that there exists no legally enforceable compromise agreement upon which the defendant-appellee Farrales can be compelled to sell the piece of land in question to plaintiff-appellant, Consolacion Duque Salonga. The facts, as found by the trial court, are: At the pre-trial conference, the parties stipulated on the following facts (1) THAT the personal circumstances of the parties as alleged in the complaint are admitted: (2) THAT defendant Farrales is the titled owner of a parcel of residential land situated in Sta. Rita, Olongapo City, Identity of which is not disputed, formerly acquired by her from one Leoncio Dytuco who, in turn, acquired the same from the Corpuz Family of which only 361 square meters, more or less, not actually belong to said defendant after portions thereof had been sold to Marciala Zarsadias, Catalino Pascual and Rosanna Quiocson*; (*Per Deed of Absolute Sale, Exhibit B, the vendee is actually Dionisio Quiocson); 3) THAT even prior to the acquisition by defendant Farrales (if the land aforesaid, plaintiff was already in possession as lessee of some 156 square meters thereof, on which she had erected a house, paying rentals thereon first to the original owners and later to defendant Farrales. (4) THAT, sometime prior to November, 1968, defendant Farrales filed an ejectment case for non-payment of rentals against plaintiff and her husband-jointly with other lessees of other portions of the land, to wit, Jorge Carvajal, Catalino Pascua, Marciala Zarsadias, and the spouses Cesar and Rosalina Quiocson - Civil Case No. 650 of the Olongapo City Court, Branch 1, in which, on November 20, 1968, and reiterated on February 4, 1970, a decision was rendered in favor of defendant Farrales and ordering the therein defendants, including plaintiff herein and her husband, to vacate the portion occupied by them and to pay rentals in arrears, attorney's fees and costs; (5) THAT the decision aforesaid was elevated on appeal to the Court of First Instance of Zambales and Olongapo City, Civil Case No. 581-0 thereof, and, in a Decision dated November 11, 1971 of Branch III thereof, the same was affirmed with modification only as to the amount of rentals arrears to be paid; (6) THAT the affirmatory decision of the Court of First Instance aforesaid is now final and executory the records of the case had been remanded to the Court for execution,

and the corresponding writ of execution had been issued partially satisfied, as far as plaintiff herein is concerned, by the payment of all rentals in arrears although the removal of said plaintiff's house from the land still remains to be carried out by defendant Sheriff: and (7) THAT, even before the rendition of the affirmatory decision of the Court of First Instance, by common consent amongst themselves defendant sold to Catalino Pascua, Marciala Zarsadias and the spouses Cesar and Rosalina Quiocson the areas respectly occupied by them; while, with respect to Jorge Carvajal, in a suit thereafter filed between him and defendant Farrales, a compromise. agreement was entered into whereunder said defendant undertook to pay for Carvajal's house on her land, so that the decision aforesaid is now being executed, as far as ejectment is concerned, 22 only against plaintiff herein. (Pre-Trial Order, May 17, 1973, pp. 2-5) The lower court explained its conclusion thus: ... From the very allegations of the complaint, it is clearly admitted 5. That plaintiff herein, in view of the sale to three tenants defendants of the portions of land occupied by each of said three tenant-defendants, by defendant Julita B. Farrales, also offered to purchase from said defendant the area of One Hundred FiftySix (156) Square Meters, more or less, where plaintiff's house of strong materials exists, but, defendant Julita B. Farrales, despite the fact that said plaintiff's order to purchase was just, fair and reasonable persistently refused such offer, and instead insisted to execute the judgment rendered in the ejectment case, before the City Court of Olongapo City, thru the herein defendant Sheriff of Olongapo City, with the sole and only purpose of causing damage and prejudice to the plaintiff (Complaint, p. 3 emphasis supplied). Being a judicial admission, the foregoing binds plaintiff who cannot subsequently take a position contradictory thereto or inconsistent therewith (Section 2, Rule 129, Rules of Court; McDaniel vs. Apacible, 44 Phil. 248 Cunanan vs. Amparo, 80 Phil., 227). Hence, if plaintiff's offer to purchase was, as aforesaid persistently refused by defendant, it is obvious that no meeting of the and, took place and, accordingly, no contract, either to sell or of sale, was ever perfected between them. This is only firmed up even more by plaintiff's admission on the witness stand that no agreement respecting the purchase and sale of the disputed land was finalized because, while defendant Farrales purportedly wanted payment in cash, plaintiff did not have any money for that purpose and neither were negotiations ever had respecting any possible arrangement for payment in installments. On all fours to the case at bar, therefore, is Velasco et al., vs. Court of Appeals, et al, G.R. No. L-31018, June 29, 1973, which was a case for specific performance to compel the therein respondent Magdalena Estate, Inc. to sell a parcel of land to petitioner per an alleged contract of sale in which the Supreme Court ruled: It is not difficult to glean from the aforequoted averments that the petitioners themselves admit that they and the respondent still had

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to meet and agree on how and when the down payment and the installment payments were to be paid. Such being the situation, it cannot, therefore be said that a definite and firm sales agreement between the parties had been perfected over the lot in question. Indeed this Court has already ruled before that a definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding and enforceable contract of sale. Since contracts are enforceable only from the moment of perfection (Articles 1315 and 1475, Civil Code of the Philippines; Pacific Oxygen and Acetylene Co. vs. Central Bank, G.R. No. L-21881, March 1, 1968; Atkins, Kroll and Co., Inc. vs. B. Cua Hian Teck G.R. No. L-9817, January 31, 1958), and there is here no perfected contract at all, it goes without saying that plaintiff has absolutely nothing to enforce against defendant Farrales, and the fact that defendant Farrales previously sold portions of the land to other lessees similarly situated as plaintiff herein, does not change the situation because, as to said other lessees, a perfected contract existed - which is not 23 the case with plaintiff. The trial court found as a fact that no compromise agreement to sell the land in question was ever 24 perfected between the defendant-appellee as vendor and the plaintiffs-appellants as vendees. It is elementary that consent is an essential element for the existence of a contract, and where it is wanting, the contract is non-existent. The essence of consent is the conformity of the parties on the terms of the contract, the acceptance by one of the offer made by the other. The contract to sell is a bilateral contract. Where there is merely an offer by one party, without the acceptance of the other, 25 there is no consent. It appears in this case that the offeree, the defendant-appellee Julita B. Farrales not only did not accept, but rejected the offer of plaintiffs-appellants, spouses Salonga to buy the land in question. There being no consent there is. therefore, no contract to sell to speak of. Likewise, it must be borne in mind that the alleged compromise agreement to sell the land in question is 26 unenforceable under the Statute of Frauds, and thus, renders all the more ineffective the action for specific performance in the court a quo. Moreover, as correctly found by the trial court, the plaintiffs-appellants, as lessees, are neither builders in good faith nor in bad faith. Their rights are governed not by Article 448 but by Art. 1678 of the New 27 Civil Code. As lessees, they may remove the improvements should the lessor refuse to reimburse 28 them, but the lessee does not have the right to buy the land. Anent the appellants' claim that since the appellee sold to the three (3) other defendants in the ejectment suit the three (3) portions of the land in question occupied by them, it follows that "she must also sell that portion of the land where appellants' residential house was found to appellants" is unmeritorious. The trial court correctly ruled that the fact that defendant-appellee sold portions of the land to the other lessees similarly situated as plaintiffs-appellants Salonga does not change the

situation because as to said other lessees, a perfected contract of sale existed which, as previously 29 shown was not the case with the plaintiff. As to the contention that Sec. 6, Article II of the New Constitution is applicable to the case at bar, it must be remembered that social justice cannot be invoked to trample on the rights of property owners who under our Constitution and laws are also entitled to protection. The social justice consecrated in our constitution was not intended to take away rights from a person and give them to another who is not entitled thereto. Evidently, the plea for social justice cannot nullify the law on obligations and contracts, and is, therefore, beyond the power of the Court to grant. There is no showing that the trial court committed any reversible error. WHEREFORE, the appeal is DISMISSED for lack of merit and the judgment appealed from is hereby affirmed, without pronouncement as to costs. SO ORDERED Teehankee (Chairman), Makasiar, Guerrero and Melencio-Herrera, JJ., concur. Republic SUPREME Manila EN BANC G.R. No. 101083 July 30, 1993 JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by their parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor, represented by her parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed FLORES, minors and represented by their parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and represented by their parents GEORGE and MYRA MISA, BENJAMIN ALAN V. PESIGAN, minor, represented by his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented by her parents FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO, minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor, represented by his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all surnamed SAENZ, minors, represented by their parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors, represented by their parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE VICTORIA, all surnamed ENDRIGA, minors, represented by their parents BALTAZAR and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors, represented by their parents ANTONIO and of the Philippines COURT

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MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all surnamed CARDAMA, minors, represented by their parents MARIO and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA, minors and represented by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all surnamed BIBAL, minors, represented by their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners, vs. THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of Environment and Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC, Makati, Branch 66, respondents. Oposa Law Office for petitioners. The Solicitor General for respondents. DAVIDE, JR., J.: In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners dramatically associate with the twin concepts of "inter-generational responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the said petitioners have a cause of action to "prevent the misappropriation or impairment" of Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth." The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia, engaging in concerted action geared for the protection of our environment and natural resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural Resources (DENR). His substitution in this petition by the new Secretary, the 1 Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the petitioners. The 2 3 complaint was instituted as a taxpayers' class suit and alleges that the plaintiffs "are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource treasure that is the country's virgin tropical forests." The same was filed for themselves and others who are equally concerned about the preservation of said resource but are "so numerous that it is impracticable to bring them all before the Court." The minors further asseverate that they "represent 4 their generation as well as generations yet unborn." Consequently, it is prayed for that judgment be rendered: . . . ordering defendant, his agents, representatives and other persons acting in his behalf to (1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements. and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."
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The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species of flora and fauna may be found; these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the habitat of indigenous Philippine cultures which have existed, endured and flourished since time immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses; the distortion and disturbance of this balance as a consequence of deforestation have resulted in a host of environmental tragedies, such as (a) water shortages resulting from drying up of the water table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of the water table as a result of the intrusion therein of salt water, incontrovertible examples of which may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded estimated at one billion (1,000,000,000) cubic meters per annum approximately the size of the entire island of Catanduanes, (d) the endangering and extinction of the country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and consequential destruction of corals and other aquatic life leading to a critical reduction in marine resource productivity, (g) recurrent spells of drought as is presently experienced by the entire country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i) the floodings of lowlands and agricultural plains arising from the absence of the absorbent mechanism of forests, (j) the siltation and shortening of the lifespan of multibillion peso dams constructed and operated for the purpose of supplying water for domestic uses, irrigation and the generation of electric power, and (k) the reduction of the earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic changes such as the phenomenon of global warming, otherwise known as the "greenhouse effect." Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so capable of unquestionable demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding, they expressed their intention to present expert witnesses as well as documentary, photographic and film evidence in the course of the trial. As their cause of action, they specifically allege that: CAUSE OF ACTION 7. Plaintiffs replead by reference the foregoing allegations. 8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests constituting roughly 53% of the country's land mass.

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9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said rainforests or four per cent (4.0%) of the country's land area. 10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of immature and uneconomical secondary growth forests. 11. Public records reveal that the defendant's, predecessors have granted timber license agreements ('TLA's') to various corporations to cut the aggregate area of 3.89 million hectares for commercial logging purposes. A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A". 12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour nighttime, Saturdays, Sundays and holidays included the Philippines will be bereft of forest resources after the end of this ensuing decade, if not earlier. 13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued trend of deforestation to the plaintiff minor's generation and to generations yet unborn are evident and incontrovertible. As a matter of fact, the environmental damages enumerated in paragraph 6 hereof are already being felt, experienced and suffered by the generation of plaintiff adults. 14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands will work great damage and irreparable injury to plaintiffs especially plaintiff minors and their successors who may never see, use, benefit from and enjoy this rare and unique natural resource treasure. This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he holds in trust for the benefit of plaintiff minors and succeeding generations. 15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to protection by the State in its capacity as the parens patriae. 16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990, plaintiffs served upon defendant a final demand to cancel all logging permits in the country. A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage and extreme prejudice of plaintiffs. 18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren and devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had been abundantly blessed with. 19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the policy of the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and enjoyable harmony with each other; (b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and; (c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-being. (P.D. 1151, 6 June 1977) 20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the Constitutional policy of the State to a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient use of natural resources ( sic)." (Section 1, Article XII of the Constitution); b. "protect the nation's marine wealth." (Section 2, ibid); c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV, id.); d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature." (Section 16, Article II, id.) 21. Finally, defendant's act is contrary to the highest law of humankind the natural law and violative of plaintiffs' right to self-preservation and perpetuation. 22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the unabated hemorrhage of the country's vital life support systems 6 and continued rape of Mother Earth.

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On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a political question which properly pertains to the legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's abuse of discretion. On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. In the said order, not only was the defendant's claim that the complaint states no cause of action against him and that it raises a political question sustained, the respondent Judge further ruled that the granting of the relief prayed for would result in the impairment of contracts which is prohibited by the fundamental law of the land. Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this Court to rescind and set aside the dismissal order on the ground that the respondent Judge gravely abused his discretion in dismissing the action. Again, the parents of the plaintiffs-minors 8 not only represent their children, but have also joined the latter in this case. On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf of the respondents and the petitioners filed a reply thereto. Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient allegations concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and healthful ecology, the concept of generational genocide in Criminal Law and the concept of man's inalienable right to selfpreservation and self-perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard the people's right to a healthful environment. It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber License Agreements (TLAs) to cover more areas for logging than what is available involves a judicial question. Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the same does not apply in this case because TLAs are not contracts. They likewise submit that even if TLAs may be considered protected by the said clause, it is well settled that they may still be revoked by the State when the public interest so requires. On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right violated by the respondent Secretary for which any relief is provided by law. They see nothing in the complaint but vague and nebulous allegations concerning an "environmental right" which supposedly entitles the petitioners to the "protection by the state in its capacity as parens patriae." Such allegations, according to them, do not reveal a valid cause of action. They then reiterate the theory that
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the question of whether logging should be permitted in the country is a political question which should be properly addressed to the executive or legislative branches of Government. They therefore assert that the petitioners' resources is not to file an action to court, but to lobby before Congress for the passage of a bill that would ban logging totally. As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without due process of law. Once issued, a TLA remains effective for a certain period of time usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor cancelled unless the holder has been found, after due notice and hearing, to have violated the terms of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs indiscriminately cancelled without the requisite hearing would be violative of the requirements of due process. Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as a class suit. The original defendant and the present respondents did not take issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit. The subject matter of the complaint is of common and general interest not just to several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are numerous and representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the latter being but an incident to the former. This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as hereinafter expounded, considers 9 the "rhythm and harmony of nature." Nature means the created world in its entirety. Such rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their exploration, development and utilization be equitably 10 accessible to the present as well as future generations. Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound environment constitutes, at the same time, the performance of their obligation to ensure the protection of that right for the generations to come. The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition. After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues raised and arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the respondent Judge's challenged order for having been issued with grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions of the said order reads as follows:

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xxx xxx xxx After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of alleging, with sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that the Complaint is replete with vague assumptions and vague conclusions based on unverified data. In fine, plaintiffs fail to state a cause of action in its Complaint against the herein defendant. Furthermore, the Court firmly believes that the matter before it, being impressed with political color and involving a matter of public policy, may not be taken cognizance of by this Court without doing violence to the sacred principle of "Separation of Powers" of the three (3) co-equal branches of the Government. The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do otherwise would amount to "impairment of contracts" abhored (sic) by the 11 fundamental law. We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a specific legal right involved or a specific legal wrong committed, and that the complaint is replete with vague assumptions and conclusions based on unverified data. A reading of the complaint itself belies these conclusions. The complaint focuses on one specific fundamental legal right the right to a balanced and healthful ecology which, for the first time in our nation's constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly provides: Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature. This right unites with the right to health which is provided for in the preceding section of the same article: Sec. 15. The State shall protect and promote the right to health of the people and instill health consciousness among them. While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly stressed by the petitioners the advancement of which may even be said to predate all governments

and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the second, the day would not be too far when all else would be lost not only for the present generation, but also for those to come generations which stand to inherit nothing but parched earth incapable of sustaining life. The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment. During the debates on this right in one of the plenary sessions of the 1986 Constitutional Commission, the following exchange transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question: MR. VILLACORTA: Does this section mandate the State to provide sanctions against all forms of pollution air, water and noise pollution? MR. AZCUNA: Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the correlative duty of not impairing the same and, therefore, sanctions may be provided for impairment of 12 environmental balance. The said right implies, among many other things, the judicious management and conservation of the country's forests. Without such forests, the ecological or environmental balance would be irreversiby disrupted. Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related provisions of the Constitution concerning the conservation, development and 13 utilization of the country's natural resources, then President Corazon C. Aquino promulgated on 10 14 June 1987 E.O. No. 192, Section 4 of which expressly mandates that the Department of Environment and Natural Resources "shall be the primary government agency responsible for the conservation, management, development and proper use of the country's environment and natural resources, specifically forest and grazing lands, mineral, resources, including those in reservation and watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos." Section 3 thereof makes the following statement of policy: Sec. 3. Declaration of Policy. It is hereby declared the policy of the State to ensure the sustainable use, development, management, renewal, and conservation of the country's forest, mineral, land, off-shore areas and other natural resources, including

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the protection and enhancement of the quality of the environment, and equitable access of the different segments of the population to the development and the use of the country's natural resources, not only for the present generation but for future generations as well. It is also the policy of the state to recognize and apply a true value system including social and environmental cost implications relative to their utilization, development and conservation of our natural resources. This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987, 15 specifically in Section 1 thereof which reads: Sec. 1. Declaration of Policy. (1) The State shall ensure, for the benefit of the Filipino people, the full exploration and development as well as the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources, consistent with the necessity of maintaining a sound ecological balance and protecting and enhancing the quality of the environment and the objective of making the exploration, development and utilization of such natural resources equitably accessible to the different segments of the present as well as future generations. (2) The State shall likewise recognize and apply a true value system that takes into account social and environmental cost implications relative to the utilization, development and conservation of our natural resources. The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the quality of the environment." Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the DENR; however, it makes particular reference to the fact of the agency's being subject to law and higher authority. Said section provides: Sec. 2. Mandate. (1) The Department of Environment and Natural Resources shall be primarily responsible for the implementation of the foregoing policy. (2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional mandate to control and supervise the exploration, development, utilization, and conservation of the country's natural resources. Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy formulation, and have defined the powers and functions of the DENR. It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former "declared a continuing policy of the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other requirements of present and future generations of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to 16 a life of dignity and well-being." As its goal, it speaks of the "responsibilities of each generation as

trustee and guardian of the environment for succeeding generations." hand, gave flesh to the said policy.

17

The latter statute, on the other

Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the DENR's duty under its mandate and by virtue of its powers and functions under E.O. No. 192 and the Administrative Code of 1987 to protect and advance the said right. A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of discretion, violated their right to a balanced and healthful ecology; hence, the full protection thereof requires that no further TLAs should be renewed or granted. A cause of action is defined as: . . . an act or omission of one party in violation of the legal right or rights of the other; and its essential elements are legal right of the plaintiff, correlative obligation of the 18 defendant, and act or omission of the defendant in violation of said legal right. It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to 19 state a cause of action, the question submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint itself. No other matter should be considered; furthermore, the truth of falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be true, may the court 20 21 render a valid judgment in accordance with the prayer in the complaint? In Militante vs. Edrosolano, this Court laid down the rule that the judiciary should "exercise the utmost care and circumspection in passing upon a motion to dismiss on the ground of the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute." After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as well as the specific averments under the sub-heading CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as party defendants, the grantees thereof for they are indispensable parties. The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by the executive or legislative branches of Government is not squarely put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The second paragraph of section 1, Article VIII of the Constitution states that:

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Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. Commenting on this provision in his book, Philippine Political Law, distinguished member of this Court, says:
22

public interest and welfare. He was aware that as correctly pointed out by the petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D. No. 705) which provides: . . . Provided, That when the national interest so requires, the President may amend, modify, replace or rescind any contract, concession, permit, licenses or any other form of privilege granted herein . . . Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protested by the due process clause of the Constitution. 25 In Tan vs. Director of Forestry, this Court held: . . . A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case. A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576). We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary:
26

Mr. Justice Isagani A. Cruz, a

The first part of the authority represents the traditional concept of judicial power, involving the settlement of conflicting rights as conferred as law. The second part of the authority represents a broadening of judicial power to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of the political departments of the government. As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid for lack or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the meaning of "grave abuse of discretion," which is a very elastic phrase that can expand or contract according to the disposition of the judiciary. In Daza vs. Singson,
23

Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that, even if we were to assume that the issue presented before us was political in nature, we would still not be precluded from revolving it under the expanded jurisdiction conferred upon us that now covers, in proper cases, even the political question. Article VII, Section 1, of the Constitution clearly provides: . .. The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in the Constitution. The court a quo declared that: The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do otherwise would amount to "impairment of contracts" abhored (sic) by the 24 fundamental law. We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits and advantages to the timber license holders because he would have forever bound the Government to strictly respect the said licenses according to their terms and conditions regardless of changes in policy and the demands of

. . . Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause [ See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302]. Since timber licenses are not contracts, the non-impairment clause, which reads: Sec. 10. No law impairing, the obligation of contracts shall be passed. cannot be invoked. In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further
27

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that a law has actually been passed mandating cancellations or modifications, the same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very nature and purpose, such as law could have only been passed in the exercise of the police power of the state for the purpose of advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler 28 Corp. this Court stated: The freedom of contract, under our system of government, is not meant to be absolute. The same is understood to be subject to reasonable legislative regulation aimed at the promotion of public health, moral, safety and welfare. In other words, the constitutional guaranty of non-impairment of obligations of contract is limited by the exercise of the police power of the State, in the interest of public health, safety, moral and general welfare. The reason for this is emphatically set forth in Nebia vs. New York, 30 Insurance Co. vs. Auditor General, to wit:
29

Separate Opinions FELICIANO, J., concurring I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one of the most important cases decided by this Court in the last few years. The seminal principles laid down in this decision are likely to influence profoundly the direction and course of the protection and management of the environment, which of course embraces the utilization of all the natural resources in the territorial base of our polity. I have therefore sought to clarify, basically to myself, what the Court appears to be saying. The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly regarded as a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the suit. Because of the very broadness of the concept of "class" here involved membership in this "class" appears to embrace everyone living in the country whether now or in the future it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to require public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly concerned and the private persons or entities operating in the field or sector of activity involved. Whether such beneficiaries' right of action may be found under any and all circumstances, or whether some failure to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior exhaustion of administrative remedies"), is not discussed in the decision and presumably is left for future determination in an appropriate case. The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right the right to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced and healthful ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in character, I suggest, with very great respect, that it cannot be characterized as "specific," without doing excessive violence to language. It is in fact very difficult to fashion language more comprehensive in scope and generalized in character than a right to "a balanced and healthful ecology." The list of particular claims which can be subsumed under this rubic appears to be entirely open-ended: prevention and control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea resources through the use of dynamite or cyanide and other chemicals; contamination of ground water resources; loss of certain species of fauna and flora; and so on. The other statements pointed out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 all appear to be formulations of policy, as general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right to a balanced and healthful ecology") and 15 ("the right to health").

quoted in Philippine American Life

Under our form of government the use of property and the making of contracts are normally matters of private and not of public concern. The general rule is that both shall be free of governmental interference. But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the private right is that of the public to regulate it in the common interest. In short, the non-impairment clause must yield to the police power of the state.
31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving new timber licenses for, save in cases of renewal, no contract would have as of yet existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to it as a matter of right. WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may therefore amend their complaint to implead as defendants the holders or grantees of the questioned timber license agreements. No pronouncement as to costs. SO ORDERED. Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur. Narvasa, C.J., Puno and Vitug, JJ., took no part.

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P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a compendious collection of more "specific environment management policies" and "environment quality standards" (fourth "Whereas" clause, Preamble) relating to an extremely wide range of topics: (a) air quality management; (b) water quality management; (c) land use management; (d) natural resources management and conservation embracing: (i) fisheries and aquatic resources; (ii) wild life; (iii) forestry and soil conservation; (iv) flood control and natural calamities; (v) energy development; (vi) conservation and utilization of surface and ground water (vii) mineral resources Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular provision or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right which petitioners are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government agency charged with the formulation and implementation of guidelines and programs dealing with each of the headings and subheadings mentioned above. The Philippine Environment Code does not, in other words, appear to contemplate action on the part of private persons who are beneficiaries of implementation of that Code. As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of the Constitution are self-executing and judicially enforceable even in their present form. The implications of this doctrine will have to be explored in future cases; those implications are too large and far-reaching in nature even to be hinted at here. My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of a significantly lower order of generality than Article II (15) of the Constitution that is or may be violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment granting all or part of the relief prayed for. To my mind, the Court should be understood as simply saying that such a more specific legal right or rights may well exist in our corpus of law, considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss. It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend themselves intelligently and effectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads: Section 1. . . . Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis supplied) When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and economic policy making. At least in respect of the vast area of environmental protection and management, our courts have no claim to special technical competence and experience and professional qualification. Where no specific, operable norms and standards are shown to exist, then the policy making departments the legislative and executive departments must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them before the courts should intervene. My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's petitioners demand public respondents should cancel, must be impleaded in the proceedings below. It might be asked that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of one or more of the specific terms and conditions of their concession agreements (and this, petitioners implicitly assume), what will those companies litigate about? The answer I suggest is that they may seek to dispute the existence of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus between petitioners' specific legal rights and the claimed wrongful acts or failures to act of public respondent administrative agency. They may also controvert the appropriateness of the remedy or remedies demanded by petitioners, under all the circumstances which exist. I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our territory, is of extreme importance for the country. The doctrines set out in the Court's decision issued today should, however, be subjected to closer examination. # Separate Opinions FELICIANO, J., concurring I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one of the most important cases decided by this Court in the last few years. The seminal principles laid down in this decision are likely to influence profoundly the direction and course of the protection and management of the environment, which of course embraces the utilization of all the

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natural resources in the territorial base of our polity. I have therefore sought to clarify, basically to myself, what the Court appears to be saying. The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly regarded as a class suit. I understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the suit. Because of the very broadness of the concept of "class" here involved membership in this "class" appears to embrace everyone living in the country whether now or in the future it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to require public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly concerned and the private persons or entities operating in the field or sector of activity involved. Whether such beneficiaries' right of action may be found under any and all circumstances, or whether some failure to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior exhaustion of administrative remedies"), is not discussed in the decision and presumably is left for future determination in an appropriate case. The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right the right to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced and healthful ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in character, I suggest, with very great respect, that it cannot be characterized as "specific," without doing excessive violence to language. It is in fact very difficult to fashion language more comprehensive in scope and generalized in character than a right to "a balanced and healthful ecology." The list of particular claims which can be subsumed under this rubic appears to be entirely open-ended: prevention and control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea resources through the use of dynamite or cyanide and other chemicals; contamination of ground water resources; loss of certain species of fauna and flora; and so on. The other statements pointed out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 all appear to be formulations of policy, as general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right to a balanced and healthful ecology") and 15 ("the right to health"). P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a compendious collection of more "specific environment management policies" and "environment quality standards" (fourth "Whereas" clause, Preamble) relating to an extremely wide range of topics: (a) air quality management; (b) water quality management; (c) land use management; (d) natural resources management and conservation embracing: (i) fisheries and aquatic resources;

(ii) wild life; (iii) forestry and soil conservation; (iv) flood control and natural calamities; (v) energy development; (vi) conservation and utilization of surface and ground water (vii) mineral resources Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular provision or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right which petitioners are seeking to enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government agency charged with the formulation and implementation of guidelines and programs dealing with each of the headings and subheadings mentioned above. The Philippine Environment Code does not, in other words, appear to contemplate action on the part of private persons who are beneficiaries of implementation of that Code. As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of the Constitution are self-executing and judicially enforceable even in their present form. The implications of this doctrine will have to be explored in future cases; those implications are too large and far-reaching in nature even to be hinted at here. My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of a significantly lower order of generality than Article II (15) of the Constitution that is or may be violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment granting all or part of the relief prayed for. To my mind, the Court should be understood as simply saying that such a more specific legal right or rights may well exist in our corpus of law, considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss. It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend themselves intelligently and effectively; in other words, there are due process dimensions to this matter. The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads: Section 1. . . . Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government . (Emphasis supplied)

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When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and economic policy making. At least in respect of the vast area of environmental protection and management, our courts have no claim to special technical competence and experience and professional qualification. Where no specific, operable norms and standards are shown to exist, then the policy making departments the legislative and executive departments must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them before the courts should intervene. My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's petitioners demand public respondents should cancel, must be impleaded in the proceedings below. It might be asked that, if petitioners' entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of one or more of the specific terms and conditions of their concession agreements (and this, petitioners implicitly assume), what will those companies litigate about? The answer I suggest is that they may seek to dispute the existence of the specific legal right petitioners should allege, as well as the reality of the claimed factual nexus between petitioners' specific legal rights and the claimed wrongful acts or failures to act of public respondent administrative agency. They may also controvert the appropriateness of the remedy or remedies demanded by petitioners, under all the circumstances which exist. I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our territory, is of extreme importance for the country. The doctrines set out in the Court's decision issued today should, however, be subjected to closer examination. Republic SUPREME Manila EN BANC G.R. No. 94571 April 22, 1991 TEOFISTO T. GUINGONA, JR. and AQUILINO Q. PIMENTEL, JR., petitioners, vs. HON. GUILLERMO CARAGUE, in his capacity as Secretary, Budget & Management, HON. ROZALINA S. CAJUCOM in her capacity as National Treasurer and COMMISSION ON AUDIT, respondents. Ramon A. Gonzales for petitioners. GANCAYCO, J.:p This is a case of first impression whereby petitioners question the constitutionality of the automatic appropriation for debt service in the 1990 budget. of the Philippines COURT

As alleged in the petition, the facts are as follows: The 1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8 Billion for debt service) and P155.3 Billion appropriated under Republic Act No. 6831, otherwise known as the General 1 Appropriations Act, or a total of P233.5 Billion, while the appropriations for the Department of 2 Education, Culture and Sports amount to P27,017,813,000.00. The said automatic appropriation for debt service is authorized by P.D. No. 81, entitled "Amending Certain Provisions of Republic Act Numbered Four Thousand Eight Hundred Sixty, as Amended (Re: Foreign Borrowing Act)," by P.D. No. 1177, entitled "Revising the Budget Process in Order to Institutionalize the Budgetary Innovations of the New Society," and by P.D. No. 1967, entitled "An Act Strenghthening the Guarantee and Payment Positions of the Republic of the Philippines on Its Contingent Liabilities Arising out of Relent and Guaranteed Loan by Appropriating Funds For The Purpose. There can be no question that petitioners as Senators of the Republic of the Philippines may bring this 3 suit where a constitutional issue is raised. Indeed, even a taxpayer has personality to restrain unlawful expenditure of public funds. The petitioner seek the declaration of the unconstitutionality of P.D. No. 81, Sections 31 of P.D. 1177, and P.D. No. 1967. The petition also seeks to restrain the disbursement for debt service under the 1990 budget pursuant to said decrees. Respondents contend that the petition involves a pure political question which is the repeal or amendment of said laws addressed to the judgment, wisdom and patriotism of the legislative body and not this Court. In Gonzales, the main issue was the unconstitutionality of the presidential veto of certain provision particularly Section 16 of the General Appropriations Act of 1990, R.A. No. 6831. This Court, in disposing of the issue, stated The political question doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit constitutional boundaries has been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means does away with the applicability of the principle in appropriate cases. Sec. 1. The judicial power shad be vested in one Supreme Court and in such lower courts as may be established by law. Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
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With the Senate maintaining that the President's veto is unconstitutional and that charge being controverted, there is an actual case or justiciable controversy between the Upper House of Congress and the executive department that may be taken cognizance of by this Court. The questions raised in the instant petition are I. IS THE APPROPRIATION OF P86 BILLION IN THE P233 BILLION 1990 BUDGET VIOLATIVE OF SECTION 5, ARTICLE XIV OF THE CONSTITUTION? II. ARE PD No. 81, PD No. 1177 AND PD No. 1967 STILL OPERATIVE UNDER THE CONSTITUTION? III. ARE THEY VIOLATIVE 6 CONSTITUTION? OF SECTION 29(l), ARTICLE VI OF THE

one budgetary priority in the sense that any proposed increase for public schoolteachers had to be multiplied many times by the number of government employees in general and their equitable claims to any pay standardization such that the pay rate of teachers is hopelessly pegged to the rate of government workers in general. This, he stated, foredoomed the prospect of a significant pay increase for teachers. Mr. Ople pointed out that the recognition by the Constitution of the highest priority for public schoolteachers, and by implication, for all teachers, would ensure that the President and Congress would be strongly urged by a constitutional mandate to grant to them such a level of remuneration and other incentives that would make teaching competitive again and attractive to the best available talents in the nation. Finally, Mr. Ople recalled that before World War II, teaching competed most successfully against all other career choices for the best and the brightest of the younger generation. It is for this reason, he stated, that his proposed amendment if approved, would ensure that teaching would be restored to its lost glory as the career of choice for the most talented and most public-spirited of the younger generation in the sense that it would become the countervailing measure against the continued decline of teaching and the wholesale desertion of this noble profession presently taking place. He further stated that this would ensure that the future and the quality of the population would be asserted as a top priority against many clamorous and importunate but less important claims of the present. (Journal of the Constitutional Commission, Vol. II, p. 1172) However, as against this constitutional intention, P86 Billion is appropriated for debt service while only P27 Billion is appropriated for the Department of Education in the 1990 budget. It plain, therefore, that the said appropriation for debt services is 7 inconsistent with the Constitution, hence, viod (Art. 7, New Civil Code). While it is true that under Section 5(5), Article XIV of the Constitution Congress is mandated to "assign the highest budgetary priority to education" in order to "insure that teaching will attract and retain its rightful share of the best available talents through adequate remuneration and other means of job satisfaction and fulfillment," it does not thereby follow that the hands of Congress are so hamstrung as to deprive it the power to respond to the imperatives of the national interest and for the attainment of other state policies or objectives. As aptly observed by respondents, since 1985, the budget for education has tripled to upgrade and improve the facility of the public school system. The compensation of teachers has been doubled. The amount of 8 P29,740,611,000.00 set aside for the Department of Education, Culture and Sports under the General

There is thus a justiciable controversy raised in the petition which this Court may properly take cognizance of On the first issue, the petitioners aver According to Sec. 5, Art. XIV of the Constitution: (5) The State shall assign the highest budgetary priority to education and ensure that teaching will attract and retain its rightful share of the best available talents through adequate remuneration and other means of job satisfaction and fulfillment. The reason behind the said provision is stated, thus: In explaining his proposed amendment, Mr. Ople stated that all the great and sincere piety professed by every President and every Congress of the Philippines since the end of World War II for the economic welfare of the public schoolteachers always ended up in failure and this failure, he stated, had caused mass defection of the best and brightest teachers to other careers, including menial jobs in overseas employment and concerted actions by them to project their grievances, mainly over low pay and abject working conditions. He pointed to the high expectations generated by the February Revolution, especially keen among public schoolteachers, which at present exacerbate these long frustrated hopes. Mr. Ople stated that despite the sincerity of all administrations that tried vainly to respond to the needs of the teachers, the central problem that always defeated their pious intentions was really the

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Appropriations Act (R.A. No. 6831), is the highest budgetary allocation among all department budgets. This is a clear compliance with the aforesaid constitutional mandate according highest priority to education. Having faithfully complied therewith, Congress is certainly not without any power, guided only by its good judgment, to provide an appropriation, that can reasonably service our enormous debt, the greater portion of which was inherited from the previous administration. It is not only a matter of honor and to protect the credit standing of the country. More especially, the very survival of our economy is at stake. Thus, if in the process Congress appropriated an amount for debt service bigger than the share allocated to education, the Court finds and so holds that said appropriation cannot be thereby assailed as unconstitutional. Now to the second issue. The petitioners made the following observations: To begin with, Rep. Act 4860 entitled "AN ACT AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO OBTAIN SUCH FOREIGN LOANS AND CREDITS, OR TO INCUR SUCH FOREIGN INDEBTEDNESS, AS MAY BE NECESSARY TO FINANCE APPROVED ECONOMIC DEVELOPMENT PURPOSES OR PROJECTS, AND TO GUARANTEE, IN BEHALF OF THE REPUBLIC OF THE PHILIPPINES, FOREIGN LOANS OBTAINED OR BONDS ISSUED BY CORPORATIONS OWNED OR CONTROLLED BY THE GOVERNMENT OF THE PHILIPPINES FOR ECONOMIC DEVELOPMENT PURPOSES INCLUDING THOSE INCURRED FOR PURPOSES OF RELENDING TO THE PRIVATE SECTOR, APPROPRIATING THE NECESSARY FUNDS THEREFOR, AND FOR OTHER PURPOSES, provides: Sec. 2. The total amount of loans, credits and indebtedness, excluding interests, which the President of the Philippines is authorized to incur under this Act shall not exceed one billion United States dollars or its equivalent in other foreign currencies at the exchange rate prevailing at the time the loans, credits and indebtedness are incurred: Provided, however, That the total loans, credits and indebtedness incurred under this Act shall not exceed two hundred fifty million in the fiscal year of the approval of this Act, and two hundred fifty million every fiscal year thereafter, all in United States dollars or its equivalent in other currencies. Sec. 5. It shall be the duty of the President, within thirty days after the opening of every regular session, to report to the Congress the amount of loans, credits and indebtedness contracted, as well as the guarantees extended, and the purposes and projects for which the loans, credits and indebtedness were incurred, and the guarantees extended, as well as such loans which may be reloaned to Filipino owned or controlled corporations and similar purposes. Sec. 6. The Congress shall appropriate the necessary amount out of any funds in the National Treasury not otherwise appropriated, to

cover the payment of the principal and interest on such loans, credits or indebtedness as and when they shall become due. However, after the declaration of martial law, President Marcos issued PD 81 amending Section 6, thus: Sec. 7. Section six of the same Act is hereby further amended to read as follows: Sec. 6. Any provision of law to the contrary notwithstanding, and in order to enable the Republic of the Philippines to pay the principal, interest, taxes and other normal banking charges on the loans, credits or indebtedness, or on the bonds, debentures, securities or other evidences of indebtedness sold in international markets incurred under the authority of this Act, the proceeds of which are deemed appropriated for the projects, all the revenue realized from the projects financed by such loans, credits or indebtedness, or on the bonds, debentures, securities or other evidences of indebtedness, shall be turned over in full, after deducting actual and necessary expenses for the operation and maintenance of said projects, to the National Treasury by the government office, agency or instrumentality, or government-owned or controlled corporation concerned, which is hereby appropriated for the purpose as and when they shall become due. In case the revenue realized is insufficient to cover the principal, interest and other charges, such portion of the budgetary savings as may be necessary to cover the balance or deficiency shall be set aside exclusively for the purpose by the government office, agency or instrumentality, or governmentowned or controlled corporation concerned: Provided, That, if there still remains a deficiency, such amount necessary to cover the payment of the principal and interest on such loans, credit or indebtedness as and when they shall become due is hereby appropriated out of any funds in the national treasury not otherwise appropriated : ... President Marcos also issued PD 1177, which provides:

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Sec. 31. Automatic appropriations. All expenditures for (a) personnel retirement premiums, government service insurance, and other similar fixed expenditures, (b) principal and interest on public debt, (c) national government guarantees of obligations which are drawn upon, are automatically appropriated; Provided, that no obligations shall be incurred or payments made from funds thus automatically appropriated except as issued in the form of regular budgetary allotments. and PD 1967, which provides: Sec. 1. There is hereby appropriated, out of any funds in the National Treasury not otherwise appropriated, such amounts as may be necessary to effect payments on foreign or domestic loans, or foreign or domestic loans whereon creditors make a call on the direct and indirect guarantee of the Republic of the Philippines, obtained by: a. The Republic of the Philippines the proceeds of which were relent to government-owned or controlled corporations and/or government financial institutions; b. government-owned or controlled corporations and/or government financial institutions the proceeds of which were relent to public or private institutions; c. government-owned or controlled corporations and/or financial institutions and guaranteed by the Republic of the Philippines; d. other public or private institutions and guaranteed by government-owned or controlled corporations and/or government financial institutions. Sec. 2. All repayments made by borrower institutions on the loans for whose account advances were made by the National Treasury will revert to the General Fund. Sec. 3. In the event that any borrower institution is unable to settle the advances made out of the appropriation provided therein, the Treasurer of the Philippines shall make the proper recommendation to the Minister of Finance on whether such advances shall be treated as equity or subsidy of the National Government to the institution concerned, which shall be considered in the budgetary program of the Government. In the "Budget of Expenditures and Sources of Financing Fiscal Year 1990," which accompanied her budget message to Congress, the President of the Philippines, Corazon C. Aquino, stated: Sources Appropriation

The P233.5 billion budget proposed for fiscal year 1990 will require P132.1 billion of new programmed appropriations out of a total P155.3 billion in new legislative authorization from Congress. The rest of the budget, totalling P101.4 billion, will be sourced from existing appropriations: P98.4 billion from Automatic Appropriations and P3.0 billion from Continuing Appropriations (Fig. 4). And according to Figure 4, . . ., P86.8 billion out of the P98.4 Billion are programmed for debt service. In other words, the President had, on her own, determined and set aside the said amount of P98.4 Billion with the rest of the appropriations of P155.3 9 Billion to be determined and fixed by Congress, which is now Rep. Act 6831. Petitioners argue that the said automatic appropriations under the aforesaid decrees of then President Marcos became functus oficio when he was ousted in February, 1986; that upon the expiration of the one-man legislature in the person of President Marcos, the legislative power was restored to Congress on February 2, 1987 when the Constitution was ratified by the people; that there is a need for a new legislation by Congress providing for automatic appropriation, but Congress, up to the present, has not approved any such law; and thus the said P86.8 Billion automatic appropriation in the 1990 budget is an administrative act that rests on no law, and thus, it cannot be enforced. Moreover, petitioners contend that assuming arguendo that P.D. No. 81, P.D. No. 1177 and P.D. No. 1967 did not expire with the ouster of President Marcos, after the adoption of the 1987 Constitution, the said decrees are inoperative under Section 3, Article XVIII which provides Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions, and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed, or revoked." (Emphasis supplied.) They then point out that since the said decrees are inconsistent with Section 24, Article VI of the Constitution, i.e., Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments . (Emphasis supplied.) whereby bills have to be approved by the President, then a law must be passed by Congress to authorize said automatic appropriation. Further, petitioners state said decrees violate Section 29(l) of Article VI of the Constitution which provides as follows Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an appropriation made by law. They assert that there must be definiteness, certainty and exactness in an appropriation, otherwise it is an undue delegation of legislative power to the President who determines in advance the amount 12 appropriated for the debt service.
11 10

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The Court is not persuaded. Section 3, Article XVIII of the Constitution recognizes that "All existing laws, decrees, executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with the Constitution shall remain operative until amended, repealed or revoked ." This transitory provision of the Constitution has precisely been adopted by its framers to preserve the social order so that legislation by the then President Marcos may be recognized. Such laws are to remain in force and effect unless they are inconsistent with the Constitution or, are otherwise amended, repealed or revoked. An examination of the aforecited presidential decrees show the clear intent that the amounts needed to cover the payment of the principal and interest on all foreign loans, including those guaranteed by the national government, should be made available when they shall become due precisely without the necessity of periodic enactments of separate laws appropriating funds therefor, since both the periods and necessities are incapable of determination in advance. The automatic appropriation provides the flexibility for the effective execution of debt management policies. Its political wisdom has been convincingly discussed by the Solicitor General as he argues . . . First, for example, it enables the Government to take advantage of a favorable turn of market conditions by redeeming high-interest securities and borrowing at lower rates, or to shift from short-term to long-term instruments, or to enter into arrangements that could lighten our outstanding debt burden debt-to-equity, debt to asset, debt-to-debt or other such schemes. Second, the automatic appropriation obviates the serious difficulties in debt servicing arising from any deviation from what has been previously programmed. The annual debt service estimates, which are usually made one year in advance, are based on a mathematical set or matrix or, in layman's parlance, "basket" of foreign exchange and interest rate assumptions which may significantly differ from actual rates not even in proportion to changes on the basis of the assumptions. Absent an automatic appropriation clause, the Philippine Government has to await and depend upon Congressional action, which by the time this comes, may no longer be responsive to the intended conditions which in the meantime may have already drastically changed. In the meantime, also, delayed payments and arrearages may have supervened, only to worsen our debt service-tototal expenditure ratio in the budget due to penalties and/or demand for immediate payment even before due dates. Clearly, the claim that payment of the loans and indebtedness is conditioned upon the continuance of the person of President Marcos and his legislative power goes against the intent and purpose of the law. The purpose is foreseen to subsist with or without 13 the person of Marcos. The argument of petitioners that the said presidential decrees did not meet the requirement and are therefore inconsistent with Sections 24 and 27 of Article VI of the Constitution which requires, among others, that "all appropriations, . . . bills authorizing increase of public debt" must be passed by Congress and approved by the President is untenable. Certainly, the framers of the Constitution did not

contemplate that existing laws in the statute books including existing presidential decrees appropriating public money are reduced to mere "bills" that must again go through the legislative million The only reasonable interpretation of said provisions of the Constitution which refer to "bills" is that they mean appropriation measures still to be passed by Congress. If the intention of the framers thereof were otherwise they should have expressed their decision in a more direct or express manner. Well-known is the rule that repeal or amendment by implication is frowned upon. Equally fundamental is the principle that construction of the Constitution and law is generally applied prospectively and not retrospectively unless it is so clearly stated. On the third issue that there is undue delegation of legislative power, in Edu vs. Ericta, this to say
14

this Court had

What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal them; the test is the completeness of the statute in all its terms and provisions when it leaves the hands of the legislature. To determine whether or not there is an undue delegation of legislative power, the inequity must be directed to the scope and definiteness of the measure enacted. The legislature does not abdicate its function when it describes what job must be done, who is to do it, and what is the scope of his authority. For a complex economy, that may indeed be the only way in which legislative process can go forward . . . To avoid the taint of unlawful delegation there must be a standard, which implies at the very least that the legislature itself determines matters of principle and lays down fundamental policy . . . The standard may be either express or implied . . . from the policy and purpose of the act considered as whole . . . In People vs. Vera, this Court said "the true distinction is between the delegation of power to make the law, which necessarily involves discretion as to what the law shall be, and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made." Ideally, the law must be complete in all its essential terms and conditions when it leaves the legislature so that there will be nothing left for the delegate to do when it reaches him except enforce it. If there are gaps in the law that will prevent its enforcement unless they are first filled, the delegate will then have been given the opportunity to step in the shoes of the legislature and exercise a discretion essentially 16 legislative in order to repair the omissions. This is invalid delegation. The Court finds that in this case the questioned laws are complete in all their essential terms and conditions and sufficient standards are indicated therein. The legislative intention in R.A. No. 4860, as amended, Section 31 of P.D. No. 1177 and P.D. No. 1967 is that the amount needed should be automatically set aside in order to enable the Republic of the Philippines to pay the principal, interest, taxes and other normal banking charges on the loans, credits
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or indebtedness incurred as guaranteed by it when they shall become due without the need to enact a separate law appropriating funds therefor as the need arises. The purpose of these laws is to enable the government to make prompt payment and/or advances for all loans to protect and maintain the credit standing of the country. Although the subject presidential decrees do not state specific amounts to be paid, necessitated by the very nature of the problem being addressed, the amounts nevertheless are made certain by the legislative parameters provided in the decrees. The Executive is not of unlimited discretion as to the amounts to be disbursed for debt servicing. The mandate is to pay only the principal, interest, taxes and other normal banking charges on the loans, credits or indebtedness, or on the bonds, debentures or security or other evidences of indebtedness sold in international markets incurred by virtue of the law, as and when they shall become due. No uncertainty arises in executive implementation as the limit will be the exact amounts as shown by the books of the Treasury. The Government budgetary process has been graphically described to consist of four major phases as aptly discussed by the Solicitor General: The Government budgeting process consists of four major phases: 1. Budget preparation. The first step is essentially tasked upon the Executive Branch and covers the estimation of government revenues, the determination of budgetary priorities and activities within the constraints imposed by available revenues and by borrowing limits, and the translation of desired priorities and activities into expenditure levels. Budget preparation starts with the budget call issued by the Department of Budget and Management. Each agency is required to submit agency budget estimates in line with the requirements consistent with the general ceilings set by the Development Budget Coordinating Council (DBCC). With regard to debt servicing, the DBCC staff, based on the macro-economic projections of interest rates (e.g. LIBOR rate) and estimated sources of domestic and foreign financing, estimates debt service levels. Upon issuance of budget call, the Bureau of Treasury computes for the interest and principal payments for the year for all direct national government borrowings and other liabilities assumed by the same. 2. Legislative authorization. At this stage, Congress enters the picture and deliberates or acts on the budget proposals of the President, and Congress in the exercise of its own judgment and wisdom formulates an appropriation act precisely following the process established by the Constitution, which specifies that no money may be paid from the Treasury except in accordance with an appropriation made by law. Debt service is not included in the General Appropriation Act, since authorization therefor already exists under RA No. 4860 and 245, as amended and PD 1967. Precisely in the fight of this subsisting authorization as embodied in said Republic

Acts and PD for debt service, Congress does not concern itself with details for implementation by the Executive, but largely with annual levels and approval thereof upon due deliberations as part of the whole obligation program for the year. Upon such approval, Congress has spoken and cannot be said to have delegated its wisdom to the Executive, on whose part lies the implementation or execution of the legislative wisdom. 3. Budget Execution. Tasked on the Executive, the third phase of the budget process covers the various operational aspects of budgeting. The establishment of obligation authority ceilings, the evaluation of work and financial plans for individual activities, the continuing review of government fiscal position, the regulation of funds releases, the implementation of cash payment schedules, and other related activities comprise this phase of the budget cycle. Release from the debt service fired is triggered by a request of the Bureau of the Treasury for allotments from the Department of Budget and Management, one quarter in advance of payment schedule, to ensure prompt payments. The Bureau of Treasury, upon receiving official billings from the creditors, remits payments to creditors through the Central Bank or to the Sinking Fund established for government security issues (Annex F). 4. Budget accountability. The fourth phase refers to the evaluation of actual performance and initially approved work targets, obligations incurred, personnel hired and work accomplished are compared with the targets set at the time the agency budgets were approved. There being no undue delegation of legislative power as clearly above shown, petitioners insist nevertheless that subject presidential decrees constitute undue delegation of legislative power to the executive on the alleged ground that the appropriations therein are not exact, certain or definite, invoking in support therefor the Constitution of Nebraska, the constitution under which the case of State v. Moore, 69 NW 974, cited by petitioners, was decided. Unlike the Constitution of Nebraska, however, our Constitution does not require a definite, certain, exact or "specific appropriation made by law." Section 29, Article VI of our 1987 Constitution omits any of these words and simply states: Section 29(l). No money shall be paid out of the treasury except in pursuance of an appropriation made by law. More significantly, there is no provision in our Constitution that provides or prescribes any particular form of words or religious recitals in which an authorization or appropriation by Congress shall be made, except that it be "made by law," such as precisely the authorization or appropriation under the questioned presidential decrees. In other words, in terms of time horizons, an appropriation may be made impliedly (as by past but subsisting legislations) as well as expressly for the current fiscal year (as by enactment of laws by the present Congress), just as said appropriation may be made in general as well as in specific terms. The Congressional

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authorization may be embodied in annual laws, such as a general appropriations act or in special provisions of laws of general or special application which appropriate public funds for specific public purposes, such as the questioned decrees. An appropriation measure is sufficient if the legislative intention clearly and certainly appears from the language employed (In re Continuing Appropriations, 32 P. 272), 17 whether in the past or in the present. Thus, in accordance with Section 22, Article VII of the 1987 Constitution, President Corazon C. Aquino submitted to Congress the Budget of Expenditures and Sources of Financing for the Fiscal Year 1990. The proposed 1990 expenditure program covering the estimated obligation that will be incurred by the national government during the fiscal year amounts to P233.5 Billion. Of the proposed budget, P86.8 is set aside for debt servicing as follows: National Government Debt Service Expenditures, 1990 (in million pesos) Domestic Foreign Total RA 245, as RA 4860 amended as amended, PD 1967 Interest Payments P36,861 P18,570 P55,431 Principal Amortization 16,310 15,077 31,387 18 Total P53,171 P33,647 P86,818 as authorized under P.D. 1967 and R.A. 4860 and 245, as amended. The Court, therefor, finds that R.A. No. 4860, as amended by P.D. No. 81, Section 31 of P.D. 1177 and P.D. No. 1967 constitute lawful authorizations or appropriations, unless they are repealed or otherwise amended by Congress. The Executive was thus merely complying with the duty to implement the same. There can be no question as to the patriotism and good motive of petitioners in filing this petition. Unfortunately, the petition must fail on the constitutional and legal issues raised. As to whether or not the country should honor its international debt, more especially the enormous amount that had been incurred by the past administration, which appears to be the ultimate objective of the petition, is not an issue that is presented or proposed to be addressed by the Court. Indeed, it is more of a political decision for Congress and the Executive to determine in the exercise of their wisdom and sound discretion. WHEREFORE, the petition is DISMISSED, without pronouncement as to costs. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Feliciano, Bidin, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

Separate Opinions PARAS, J., dissenting: I dissent. Any law that undermines our economy and therefore our security is per se unconstitutional. CRUZ, J., dissenting: I regret I must dissent. One of the essential requirements of a valid appropriation is that the amount appropriated must be certain, which means that the sum authorized to be released should either be determinate or at least determinable. As has been uniformly held: It is essential to the validity of an appropriation law that it should state the exact amount appropriated or the maximum sum from which the authorized expenses shall be paid, otherwise it would be void for uncertainty, since the legislative power over appropriation in effect could have been delegated in such case to the recipient of the funds appropriated or to the official authorized to spend them. (State v. Eggers, 16 L.R.A., N.S. 630; State v. La Grave, 41 Pac. 1075). Thus, a law which provided that there should be paid out of the State Treasury to any person, firm or corporation engaged in the manufacture of sugar in that State the sum of five-eights of one per cent per pound upon each pound manufactured under the conditions and restrictions of the Act was held as invalid appropriation for lack of certainty in the amount to be paid out of the Treasury, the legislature having failed to fix the amount to be appropriated. (State of Nebraska v. Moore, 50 Neb. 88, cited in Gonzales, Phil. Political Law, p. 213). The presidential decrees on which the respondents rely do not satisfy this requirement. Section 7 of P.D. 81 provides that "all the revenue realized from the projects financed by such loans," after deducting the actual and necessary operating and maintenance expenses, is appropriated for servicing the foreign debts. The same sections says that in case of deficiency, " such amount necessary to cover the payment of the principal and interest on such loans, credit or indebteedness as and when they shall become due is hereby appropriated." Section 31 of P.D. 1717 provides that " all expenditures for the payment of the principal and interest on public debt" are automatically appropriated. Section 1 of P.D. 1967 appropriates "such amounts as may be necessary to effect payments on foreign or domestic loans."

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It is easy to see that in none of these decrees is the amount appropriated fixed, either by an exact figure or by an indication at least of its maximum. The ponencia says that "the amounts are made certain by the legislative parameters provided in the degree." I am afraid I do not see those parameters. I see only the appropriation of " all the revenue derived from the projects financed by such loans" and "such amounts as may be necessary to effect payment on foreign or domestic loans" or "the principal and interest on public debt, as and when they shall become due." All these are uncertain. Even President Marcos as a legislator, did not know how much he was appropriating.

representatives of the people. To construe the term "lay" in the above provision to mean the decrees issued by then President Marcos would, in effect, be supporting a continuing governance of a large segment of the Philippine economy by a past regime which, as every one knows, centralized for a good number of years legislative and executive powers in only one person. Besides, these decrees issued by President Marcos relative to debt service were tailored for the periods covered by said decrees. Today it is Congress that should determine and approve the proper appropriations for debt servicing, as this is a matter of policy that, in my opinion, pertains to the legislative department, as the policy determining body of the Government. Separate Opinions

The ponencia assures us that "no uncertainty arises in executive implementation as the limit will be the exact amounts as shown by the books of the Treasury." That is cold comfort, indeed, if we consider that it is the Treasury itself that is sought to be limited by the requirement for certainty. The intention precisely is to prevent the disbursement of public funds by the Treasury itself from "running riot." We surely cannot defend an appropriation, say, of "such amounts as may be necessary for the construction of a bridge across the Pasig River" even if the exact cost may be shown later by the books of the Treasury. This would be no different from the uncertain appropriations the Court is here sustaining. I think it is a mistake for this government to justify its acts on the basis of the decrees of President Marcos. These are on the whole tainted with authoritarianism and enfeebled by lack of proper study and draftmanship, let alone suspect motives. I suggest that these decrees must be reviewed carefully and whenever proper, set aright by necessary modification or outright revocation. Instead, the respondents are invoking them blindly. Sarmiento, J., concurs. PADILLA, J., dissenting I join Mr. Justice Cruz in his dissent. I only wish to add the following: Section 29(l), Article VI of the 1987 Constitution provides: Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an appropriation made by law. It is quite obvious from this provision that there must first be a law enacted by Congress (and approved by the President) appropriating a particular sum or sums before payment thereof from the Treasury can be made. If the above constitutional provision is to be meaningful and effective at all, I believe that the law appropriating a particular sum or sums for debt service, whether involving domestic or foreign loans of the Government, should be enacted by the Congress, composed of the most recently elected

PARAS, J., dissenting: I dissent. Any law that undermines our economy and therefore our security is per se unconstitutional. CRUZ, J., dissenting: I regret I must dissent. One of the essential requirements of a valid appropriation is that the amount appropriated must be certain, which means that the sum authorized to be released should either be determinate or at least determinable. As has been uniformly held: It is essential to the validity of an appropriation law that it should state the exact amount appropriated or the maximum sum from which the authorized expenses shall be paid, otherwise it would be void for uncertainty, since the legislative power over appropriation in effect could have been delegated in such case to the recipient of the funds appropriated or to the official authorized to spend them. (State v. Eggers, 16 L.R.A., N.S. 630; State v. La Grave, 41 Pac. 1075). Thus, a law which provided that there should be paid out of the State Treasury to any person, firm or corporation engaged in the manufacture of sugar in that State the sum of five-eights of one per cent per pound upon each pound manufactured under the conditions and restrictions of the Act was held as invalid appropriation for lack of certainty in the amount to be paid out of the Treasury, the legislature having failed to fix the amount to be appropriated. (State of Nebraska v. Moore, 50 Neb. 88, cited in Gonzales, Phil. Political Law, p. 213). The presidential decrees on which the respondents rely do not satisfy this requirement. Section 7 of P.D. 81 provides that "all the revenue realized from the projects financed by such loans," after deducting the actual and necessary operating and maintenance expenses, is appropriated for servicing the foreign debts.

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The same sections says that in case of deficiency, "such amount necessary to cover the payment of the principal and interest on such loans, credit or indebteedness as and when they shall become due is hereby appropriated." Section 31 of P.D. 1717 provides that " all expenditures for the payment of the principal and interest on public debt" are automatically appropriated. Section 1 of P.D. 1967 appropriates "such amounts as may be necessary to effect payments on foreign or domestic loans." It is easy to see that in none of these decrees is the amount appropriated fixed, either by an exact figure or by an indication at least of its maximum. The ponencia says that "the amounts are made certain by the legislative parameters provided in the degree." I am afraid I do not see those parameters. I see only the appropriation of "all the revenue derived from the projects financed by such loans" and "such amounts as may be necessary to effect payment on foreign or domestic loans" or "the principal and interest on public debt, as and when they shall become due." All these are uncertain. Even President Marcos as a legislator, did not know how much he was appropriating. The ponencia assures us that "no uncertainty arises in executive implementation as the limit will be the exact amounts as shown by the books of the Treasury." That is cold comfort, indeed, if we consider that it is the Treasury itself that is sought to be limited by the requirement for certainty. The intention precisely is to prevent the disbursement of public funds by the Treasury itself from "running riot." We surely cannot defend an appropriation, say, of "such amounts as may be necessary for the construction of a bridge across the Pasig River" even if the exact cost may be shown later by the books of the Treasury. This would be no different from the uncertain appropriations the Court is here sustaining. I think it is a mistake for this government to justify its acts on the basis of the decrees of President Marcos. These are on the whole tainted with authoritarianism and enfeebled by lack of proper study and draftmanship, let alone suspect motives. I suggest that these decrees must be reviewed carefully and whenever proper, set aright by necessary modification or outright revocation. Instead, the respondents are invoking them blindly. Sarmiento, J., concurs. PADILLA, J., dissenting I join Mr. Justice Cruz in his dissent. I only wish to add the following: Section 29(l), Article VI of the 1987 Constitution provides:

Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an appropriation made by law. It is quite obvious from this provision that there must first be a law enacted by Congress (and approved by the President) appropriating a particular sum or sums before payment thereof from the Treasury can be made. If the above constitutional provision is to be meaningful and effective at all, I believe that the law appropriating a particular sum or sums for debt service, whether involving domestic or foreign loans of the Government, should be enacted by the Congress, composed of the most recently elected representatives of the people. To construe the term "lay" in the above provision to mean the decrees issued by then President Marcos would, in effect, be supporting a continuing governance of a large segment of the Philippine economy by a past regime which, as every one knows, centralized for a good number of years legislative and executive powers in only one person. Besides, these decrees issued by President Marcos relative to debt service were tailored for the periods covered by said decrees. Today it is Congress that should determine and approve the proper appropriations for debt servicing, as this is a matter of policy that, in my opinion, pertains to the legislative department, as the policy determining body of the Government. Republic SUPREME Manila FIRST DIVISION G.R. No. 120095 August 5, 1996 JMM PROMOTION AND MANAGEMENT, INC., and KARY INTERNATIONAL, INC., petitioner, vs. HON. COURT OF APPEALS, HON. MA. NIEVES CONFESSOR, then Secretary of the Department of Labor and Employment, HON. JOSE BRILLANTES, in his capacity as acting Secretary of the Department of Labor and Employment and HON. FELICISIMO JOSON, in his capacity as Administrator of the Philippine Overseas Employment Administration, respondents. KAPUNAN, J.:p The limits of government regulation under the State's police power are once again at the vortex of the instant controversy. Assailed is the government's power to control deployment of female entertainers to Japan by requiring an Artist Record Book (ARB) as a precondition to the processing by the POEA of any contract for overseas employment. By contending that the right to overseas employment is a property right within the meaning of the Constitution, petitioners vigorously aver that deprivation thereof allegedly through the onerous requirement of an ARB violates the due process clause and constitutes an invalid exercise of the police power. The factual antecedents are undisputed. of the Philippines COURT

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Following the much-publicized death of Maricris Sioson in 1991, former President Corazon C. Aquino ordered a total ban against the deployment of performing artists to Japan and other foreign destinations. The ban was, however, rescinded after leaders of the overseas employment industry promised to extend full support for a program aimed at removing kinks in the system of deployment. In its place, the government, through the Secretary of Labor and Employment, subsequently issued Department Order No. 28, creating the Entertainment Industry Advisory Council (EIAC), which was tasked with issuing guidelines on the training, testing certification and deployment of performing artists abroad. Pursuant to the EIAC's recommendations, the Secretary of Labor, on January 6, 1994, issued Department Order No. 3 establishing various procedures and requirements for screening performing artists under a new system of training, testing, certification and deployment of the former. Performing artists successfully hurdling the test, training and certification requirement were to be issued an Artist's Record Book (ARB), a necessary prerequisite to processing of any contract of employment by the POEA. Upon request of the industry, implementation of the process, originally scheduled for April 1, 1994, was moved to October 1, 1994. Thereafter, the Department of Labor, following the EIAC's recommendation, issued a series of orders fine-tuning and implementing the new system. Prominent among these orders were the following issuances: 1. Department Order No. 3-A, providing for additional guidelines on the training, testing, certification and deployment of performing artists. 2. Department Order No. 3-B, pertaining to the Artist Record Book (ARB) requirement, which could be processed only after the artist could show proof of academic and skills training and has passed the required tests. 3. Department Order No. 3-E, providing the minimum salary a performing artist ought to received (not less than US$600.00 for those bound for Japan) and the authorized deductions therefrom. 4. Department Order No. 3-F, providing for the guidelines on the issuance and use of the ARB by returning performing artists who, unlike new artists, shall only undergo a Special Orientation Program (shorter than the basic program) although they must pass the academic test. In Civil Case No. 95-72750, the Federation of Entertainment Talent Managers of the Philippines (FETMOP), on January 27, 1995 filed a class suit assailing these department orders, principally contending that said orders 1) violated the constitutional right to travel; 2) abridged existing contracts for employment; and 3) deprived individual artists of their licenses without due process of law. FETMOP, likewise, averred that the issuance of the Artist Record Book (ARB) was discriminatory and illegal and "in gross violation of the constitutional right... to life liberty and property." Said Federation consequently prayed for the issuance of a writ of preliminary injunction against the aforestated orders.
1

On February 2, 1992, JMM Promotion and Management, Inc. Kary International, Inc., herein petitioners, filed a Motion for Intervention in said civil case, which was granted by the trial court in an Order dated 15 February, 1995. However, on February 21, 1995, the trial court issued an Order denying petitioners' prayed for a writ of preliminary injunction and dismissed the complaint. On appeal from the trial court's Order, respondent court, in CA G.R. SP No. 36713 dismissed the same. Tracing the circumstances which led to the issuance of the ARB requirement and the assailed Department Order, respondent court concluded that the issuance constituted a valid exercise by the state of the police power. We agree. The latin maxim salus populi est surprema lex embodies the character of the entire spectrum of public laws aimed at promoting the general welfare of the people under the State's police 2 power. As an inherent attribute of sovereignty which virtually "extends to all public needs," 3 this "least limitable" of governmental powers grants a wide panoply of instruments through which the state, as parens patriae gives effect to a host of its regulatory powers. Describing the nature and scope of the police power, Justice Malcolm, in the early case of 4 Rubi v. Provincial Board of Mindoro wrote: "The police power of the State," one court has said... is a power coextensive with selfprotection, and is not inaptly termed "the law of overruling necessity." It may be said to be that inherent and plenary power in the state which enables it to prohibit all things hurtful to the comfort, safety and welfare of society." Carried onward by the current of legislature, the judiciary rarely attempts to dam the onrushing power of legislative discretion, provided the purposes of the law do not go beyond the great principles that mean security for the public welfare or do not arbitrarily interfere with 5 the right of the individual. Thus, police power concerns government enactments which precisely interfere with personal liberty or property in order to promote the general welfare or the common good. As the assailed Department Order enjoys a presumed validity, it follows that the burden rests upon petitioners to demonstrate that the said order, particularly, its ARB requirement, does not enhance the public welfare or was exercised arbitrarily or unreasonably. A thorough review of the facts and circumstances leading to the issuance of the assailed orders compels us to rule that the Artist Record Book requirement and the questioned Department Order related to its issuance were issued by the Secretary of Labor pursuant to a valid exercise of the police power. In 1984, the Philippines emerged as the largest labor sending country in Asia dwarfing the labor export of countries with mammoth populations such as India and China. According to the National Statistics Office, this diaspora was augmented annually by over 450,000 documented

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and clandestine or illegal (undocumented) workers who left the country for various destinations abroad, lured by higher salaries, better work opportunities and sometimes better living conditions. Of the hundreds of thousands of workers who left the country for greener pastures in the last few years, women composed slightly close to half of those deployed, constituting 47% 6 between 1987-1991, exceeding this proportion (58%) by the end of 1991, the year former President Aquino instituted the ban on deployment of performing artists to Japan and other countries as a result of the gruesome death of Filipino entertainer Maricris Sioson. It was during the same period that this Court took judicial notice not only of the trend, but also of the fact that most of our women, a large number employed as domestic helpers and 7 entertainers, worked under exploitative conditions "marked by physical and personal abuse." Even then, we noted that "[t]he sordid tales of maltreatment suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies of returning 8 workers" compelled "urgent government action." Pursuant to the alarming number of reports that a significant number of Filipina performing artists ended up as prostitutes abroad (many of whom were beaten, drugged and forced into prostitution), and following the deaths of number of these women, the government began instituting measures aimed at deploying only those individuals who met set standards which would qualify them as legitimate performing artists. In spite of these measures, however, a number of our countrymen have nonetheless fallen victim to unscrupulous recruiters, ending up as virtual slaves controlled by foreign crime syndicates and forced into jobs other than those indicated in their employment contracts. Worse, some of our women have been forced into prostitution. Thus, after a number of inadequate and failed accreditation schemes, the Secretary of Labor issued on August 16, 1993, D.O. No. 28, establishing the Entertainment Industry Advisory 9 Council (EIAC), the policy advisory body of DOLE on entertainment industry matters. Acting on the recommendations of the said body, the Secretary of Labor, on January 6, 1994, issued the assailed orders. These orders embodied EIAC's Resolution No. 1, which called for guidelines on screening, testing and accrediting performing overseas Filipino artists. 10 Significantly, as the respondent court noted, petitioners were duly represented in the EIAC, which gave the recommendations on which the ARB and other requirements were based. Clearly, the welfare of Filipino performing artists, particularly the women was paramount in the issuance of Department Order No. 3. Short of a total and absolute ban against the deployment of performing artists to "high risk" destinations, a measure which would only drive recruitment further underground, the new scheme at the very least rationalizes the method of screening performing artists by requiring reasonable educational and artistic skills from them and limits deployment to only those individuals adequately prepared for the unpredictable demands of employment as artists abroad. It cannot be gainsaid that this scheme at least lessens the room for exploitation by unscrupulous individuals and agencies. Moreover, here or abroad, selection of performing artists is usually accomplished by auditions, where those deemed unfit are usually weeded out through a process which is inherently

subjective and vulnerable to bias and differences in taste. The ARB requirement goes one step further, however, attempting to minimize the subjectivity of the process by defining the minimum skills required from entertainers and performing artists. As the Solicitor General observed, this should be easily met by experienced artists possessing merely basic skills. The test are aimed at segregating real artists or performers from those passing themselves off as such, eager to accept any available job and therefore exposing themselves to possible exploitation. As to the other provisions of Department Order No. 3 questioned by petitioners, we see nothing wrong with the requirements for document and booking confirmation (D.O. 3-C), a minimum salary scale (D.O. 3-E), or the requirement for registration of returning performers. The requirement for a venue certificate or other documents evidencing the place and nature or work allows the government closer monitoring of foreign employers and helps keep our entertainers away from prostitution fronts and other worksites associated with unsavory, immoral, illegal or exploitative practices. Parenthetically, none of these issuances appear to us, by any stretch of the imagination, even remotely unreasonable or arbitrary. They address a felt need of according greater protection for an oft-exploited segment of our OCW's. They respond to the industry's demand for clearer and more practicable rules and guidelines. Many of these provisions were fleshed out following recommendations by, and after consultations with, the affected sectors and non-government organizations. On the whole, they are aimed at enhancing the safety and security of entertainers and artists bound for Japan and other destinations, without stifling the industry's concerns for expansion and growth. In any event, apart from the State's police power, the Constitution itself mandates government to extend the fullest protection to our overseas workers. The basic constitutional statement on labor, embodied in Section 18 of Article II of the Constitution provides: Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. More emphatically, the social justice provisions on labor of the 1987 Constitution in its first paragraph states: The State shall afford full protection to labor, local and overseas, organized and unorganized and promote full employment and equality of employment opportunities for all. Obviously, protection to labor does not indicate promotion of employment alone. Under the welfare and social justice provisions of the Constitution, the promotion of full employment, while desirable, cannot take a backseat to the government's constitutional duty to provide mechanisms for the protection of our workforce, local or overseas. As this Court explained in 11 Philippine Association of Service Exporters (PASEI) v . Drilon, in reference to the recurring problems faced by our overseas workers: What concerns the Constitution more paramountly is that such an employment be above all, decent, just, and humane. It is bad enough that the country has to send its sons and daughters to strange lands because it cannot satisfy their employment

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needs at home. Under these circumstances, the Government is duty-adequate protection, personally and economically, while away from home. We now go to petitioners' assertion that the police power cannot, nevertheless, abridge the right of our performing workers to return to work abroad after having earlier qualified under the old process, because, having previously been accredited, their accreditation became a "property right," protected by the due process clause. We find this contention untenable. A profession, trade of calling is a property right within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally 12 constitutes an actionable wrong. Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas , it must of course be within the legitimate range of legislative action to define the mode and manner in which every 13 one may so use of his own property so as not to pose injury to himself or others. In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures is certainly much 14 wider. To pretend that licensing or accreditation requirements violates the due process clause is to ignore the settled practice, under the mantle of the police power, of regulating entry to the practice of various trades or professions. Professionals leaving for abroad are required to pass rigid written and practical exams before they are deemed fit to practice their trade. Seamen are required to take tests determining their seamanship. Locally, the Professional Regulation Commission has began to require previously licensed doctors and other professionals to furnish documentary proof that they has either re-trained or had undertaken continuing education courses as a requirement for renewal of their licenses. It is not claimed that these requirements pose an unwarranted deprivation of a property right under the due process clause. So long as professionals and other workers meet reasonable regulatory standards no such deprivation exists. Finally, it is a futile gesture on the part of petitioners to invoke the non-impairment clause of the Constitution to support their argument that the government cannot enact the assailed regulatory measures because they abridge the freedom to contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that "[t]he non-impairment clause of the 15 Constitution... must yield to the loftier purposes targeted by the government." Equally important, into every contract is read provisions of existing law, and always, a reservation of the police power for so long as the agreement deals with a subject impressed with the public welfare. A last point. Petitioners suggest that the singling out of entertainers and performing artists under the assailed department orders constitutes class legislation which violates the equal protection clause of the Constitution. We do not agree.

The equal protection clause is directed principally against undue favor and individual or class privilege. It is not intended to prohibit legislation which is limited to the object to which it is directed or by the territory in which it is to operate. It does not require absolute equality, but merely that all persons be treated alike under like conditions both as to privileges conferred 16 and liabilities imposed. We have held, time and again, that the equal protection clause of the Constitution does not forbid classification for so long as such classification is based on real and substantial differences having a reasonable relation to the subject of the particular 1 legislation. 7 If classification is germane to the purpose of the law, concerns all members of the class, and applies equally to present and future conditions, the classification does not violate the equal protection guarantee. In the case at bar, the challenged Department Order clearly applies to all performing artists and entertainers destined for jobs abroad. These orders, we stressed hereinfore, further the Constitutional mandate requiring government to protect our workforce, particularly those who may be prone to abuse and exploitation as they are beyond the physical reach of government regulatory agencies. The tragic incidents must somehow stop, but short of absolutely curtailing the right of these performers and entertainers to work abroad, the assailed measures enable our government to assume a measure of control. WHEREFORE, finding no reversible error in the decision sought to be reviewed, petition is hereby DENIED. SO ORDERED. Republic SUPREME Manila EN BANC G.R. No. 110526 February 10, 1998 ASSOCIATION OF PHILIPPINE COCONUT vs. PHILIPPINE COCONUT AUTHORITY, respondent. MENDOZA, J.: At issue in this case is the validity of a resolution, dated March 24, 1993, of the Philippine Coconut Authority in which it declares that it will no longer require those wishing to engage in coconut processing to apply to it for a license or permit as a condition for engaging in such business. Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as APCD) brought this suit for certiorari and mandamus against respondent Philippine Coconut Authority (PCA) to invalidate the latter's Board Resolution No. 018-93 and the certificates of registration issued under it on the ground that the resolution in question is beyond the power of the PCA to adopt, and to compel said DESICCATORS, petitioner, of the Philippines COURT

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administrative agency to comply instead with the mandatory provisions of statutes regulating the desiccated coconut industry, in particular, and the coconut industry, in general. As disclosed by the parties' pleadings, the facts are as follows: On November 5, 1992, seven desiccated coconut processing companies belonging to the APCD brought suit in the Regional Trial Court, National Capital Judicial Region in Makati, Metro Manila, to enjoin the PCA from issuing permits to certain applicants for the establishment of new desiccated coconut processing plants. Petitioner alleged that the issuance of licenses to the applicants would violate PCA's Administrative Order No. 02, series of 1991, as the applicants were seeking permits to 1 operate in areas considered "congested" under the administrative order. On November 6, 1992, the trial court issued a temporary restraining order and, on November 25, 1992, a writ of preliminary injunction, enjoining the PCA from processing and issuing licenses to Primex Products, Inc., Coco Manila, Superstar (Candelaria) and Superstar (Davao) upon the posting of a bond 2 in the amount of P100,000.00. Subsequently and while the case was pending in the Regional Trial Court, the Governing Board of the PCA issued on March 24, 1993 Resolution No. 018-93, providing for the withdrawal of the Philippine Coconut Authority from all regulation of the coconut product processing industry. While it continues the registration of coconut product processors, the registration would be limited to the "monitoring" of their volumes of production and administration of quality standards. The full text of the resolution reads: RESOLUTION NO. POLICY DECLARATION THE ESTABLISHMENT OF PROCESSING PLANTS 018-93 DEREGULATING COCONUT

with PCA and the latter shall no longer issue any form of license or permit as condition prior to establishment or operation of such mills or plants; RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards with the corresponding service fees/charges. ADOPTED this 24th day of March 1993, at Quezon City.
3

The PCA then proceeded to issue "certificates of registration" to those wishing to operate desiccated coconut processing plants, prompting petitioner to appeal to the Office of the President of the Philippines on April 26, 1993 not to approve the resolution in question. Despite follow-up letters sent on May 25 and June 2, 1993, petitioner received no reply from the Office of the President. The "certificates of registration" issued in the meantime by the PCA has enabled a number of new coconut mills to operate. Hence this petition. Petitioner alleges: I RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY AN ADMINISTRATIVE BODY. II ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS WITHOUT ANY BASIS, ARBITRARY, UNREASONABLE AND THEREFORE IN VIOLATION OF SUBSTANTIVE DUE PROCESS OF LAW. III

NEW

WHEREAS, it is the policy of the State to promote free enterprise unhampered by protective regulations and unnecessary bureaucratic red tapes; WHEREAS, the deregulation of certain sectors of the coconut industry, such as marketing of coconut oils pursuant to Presidential Decree No. 1960, the lifting of export and commodity clearances under Executive Order No. 1016, and relaxation of regulated capacity for the desiccated coconut sector pursuant to Presidential Memorandum of February 11, 1988, has become a centerpiece of the present dispensation; WHEREAS, the issuance of permits or licenses prior to business operation is a form of regulation which is not provided in the charter of nor included among the powers of the PCA; WHEREAS, the Governing Board of PCA has determined to follow and further support the deregulation policy and effort of the government to promote free enterprise; NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product processor/factory, coconut fiber plant or any similar coconut processing plant to apply

IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED THE PROCEDURAL DUE PROCESS REQUIREMENT OF CONSULTATION PROVIDED IN PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO. 826 AND PCA ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991. On the other hand, in addition to answering petitioner's arguments, respondent PCA alleges that this petition should be denied on the ground that petitioner has a pending appeal before the Office of the President. Respondent accuses petitioner of forum-shopping in filing this petition and of failing to exhaust available administrative remedies before coming to this Court. Respondent anchors its argument on the general rule that one who brings an action under Rule 65 must show that one has no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law. I.

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The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The resolution in question was issued by the PCA in the exercise of its rule-making or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine. The exhaustion doctrine stands as a bar to 4 an action which is not yet complete and it is clear, in the case at bar, that after its promulgation the resolution of the PCA abandoning regulation of the desiccated coconut industry became effective. To be sure, the PCA is under the direct supervision of the President of the Philippines but there is nothing in P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining the powers and functions of the PCA which requires rules and regulations issued by it to be approved by the President before they become effective. In any event, although the APCD has appealed the resolution in question to the Office of the President, considering the fact that two months after they had sent their first letter on April 26, 1993 they still had to hear from the President's office, meanwhile respondent PCA was issuing certificates of registration indiscriminately to new coconut millers, we hold that petitioner was justified in filing this case on June 5 6 25, 1993. Indeed, after writing the Office of the President on April 26, 1993 petitioner sent inquiries to 7 8 that office not once, but twice, on May 26, 1993 and on June 2, 1993, but petitioner did not receive any reply. II. We now turn to the merit of the present petition. The Philippine Coconut Authority was originally created by P.D. 232 on June 30, 1973, to take over the powers and functions of the Coconut Coordinating Council, the Philippine Coconut Administration and the Philippine Coconut Research Institute. On June 11, 1978, by P.D. No. 1468, it was made "an independent public corporation . . . directly reporting to, 9 and supervised by, the President of the Philippines," and charged with carrying out the State's policy "to promote the rapid integrated development and growth of the coconut and other palm oil industry in all its aspects and to ensure that the coconut farmers become direct participants in, and beneficiaries of, 10 11 such development and growth." through a regulatory scheme set up by law. Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of new coconut processing plants and, four months later, phased out some of the existing ones in view of overproduction in the coconut industry which resulted in cut-throat competition, underselling and smuggling of poor quality products and ultimately in the decline of the export performance of coconutbased commodities. The establishment of new plants could be authorized only upon determination by the PCA of the existence of certain economic conditions and the approval of the President of the Philippines. Thus, Executive Order No. 826, dated August 28, 1982, provided: Sec. 1. Prohibition. Except as herein provided, no government agency or instrumentality shall hereafter authorize, approve or grant any permit or license for the establishment or operation of new desiccated coconut processing plants, including the importation of machinery or equipment for the purpose. In the event of a need to establish a new plant, or expand the capacity, relocate or upgrade the efficiencies of any existing desiccated plant, the Philippine Coconut Authority may, upon proper determination of such need and evaluation of the condition relating to:

a. the existing market demand; b. the production capacity prevailing in the country or locality; c. the level and flow of raw materials; and d. other circumstances which may affect the growth or viability of the industry concerned, authorize or grant the application for, the establishment or expansion of capacity, relocation or upgrading of efficiencies of such desiccated coconut processing plant, subject to the approval of the President. On December 6, 1982, a phase-out of some of the existing plants was ordered by the government after finding that "a mere freeze in the present capacity of existing plants will not afford a viable solution to the problem considering that the total available limited market is not adequate to support all the existing 12 processing plants, making it imperative to reduce the number of existing processing plants." 13 Accordingly, it was ordered: Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be necessary to reduce the number of existing desiccated coconut processing plants to a level which will insure the survival of the remaining plants. The Authority is hereby directed to determine which of the existing processing plants should be phased out and to enter into appropriate contracts with such plants for the above purpose. It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the establishment and operation of additional DCN plants, in view of the increased demand for desiccated coconut products in the world's markets, particularly in Germany, the Netherlands and Australia. Even then, the opening of new plants was made subject to "such implementing guidelines to be set forth by the Authority" and "subject to the final approval of the President." The guidelines promulgated by the PCA, as embodied in Administrative Order No. 002, series of 1991, inter alia authorized the opening of new plants in "non-congested areas only as declared by the PCA" and subject to compliance by applicants with "all procedures and requirements for registration under Administrative Order No. 003, series of 1981 and this Order." In addition, as the opening of new plants was premised on the increased global demand for desiccated coconut products, the new entrants were required to submit sworn statements of the names and addresses of prospective foreign buyers. This form of "deregulation" was approved by President Aquino in her memorandum, dated February 11, 1988, to the PCA. Affirming the regulatory scheme, the President stated in her memorandum: It appears that pursuant to Executive Order No. 826 providing measures for the protection of the Desiccated Coconut Industry, the Philippine Coconut Authority evaluated the conditions relating to: (a) the existing market demands; (b) the production capacity prevailing in the country or locality; (c) the level and flow of raw materials; and (d) other circumstances which may affect the growth or viability of the industry concerned and that the result of such evaluation favored the expansion of production and market of desiccated coconut products.

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In view hereof and the favorable recommendation of the Secretary of Agriculture, the deregulation of the Desiccated Coconut Industry as recommended in Resolution No. 058-87 14 adopted by the PCA Governing Board on October 28, 1987 (sic) is hereby approved. These measures the restriction in 1982 on entry into the field, the reduction the same year of the number of the existing coconut mills and then the lifting of the restrictions in 1987 were adopted within the framework of regulation as established by law "to promote the rapid integrated development and growth of the coconut and other palm oil industry in all its aspects and to ensure that the coconut 15 farmers become direct participants in, and beneficiaries of, such development and growth." Contrary to the assertion in the dissent, the power given to the Philippine Coconut Authority and before it to the Philippine Coconut Administration "to formulate and adopt a general program of development for 16 the coconut and other palm oils industry" is not a roving commission to adopt any program deemed necessary to promote the development of the coconut and other palm oils industry, but one to be exercised in the context of this regulatory structure. In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned resolution which allows not only the indiscriminate opening of new coconut processing plants but the virtual dismantling of the regulatory infrastructure whereby, forsaking controls theretofore placed in its keeping, the PCA limits its function to the innocuous one of "monitoring" compliance by coconut millers with quality standards and volumes of production. In effect, the PCA would simply be compiling statistical data on these matters, but in case of violations of standards there would be nothing much it would do. The field would be left without an umpire who would retire to the bleachers to become a mere spectator. As the PCA provided in its Resolution No. 018-93: NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and the latter shall no longer issue any form of license or permit as condition prior to establishment or operation of such mills or plants; RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards with the corresponding service fees/charges. The issue is not whether the PCA has the power to adopt this resolution to carry out its mandate under the law "to promote the accelerated growth and development of the coconut and other palm oil 17 industry." The issue rather is whether it can renounce the power to regulate implicit in the law creating it for that is what the resolution in question actually is. Under Art. II, 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA is "To formulate and adopt a general program of development for the coconut and other palm oil industry in all its aspects." By limiting the purpose of registration to merely "monitoring volumes of production [and] administration of quality standards" of coconut processing plants, the PCA in effect abdicates its role and leaves it almost completely to market forces how the coconut industry will develop. Art. II, 3 of P.D. No. 1468 further requires the PCA:

(h) To regulate the marketing and the exportation of copra and its by-products by establishing standards for domestic trade and export and, thereafter, to conduct an inspection of all copra and its by-products proposed for export to determine if they conform to the standards established; Instead of determining the qualifications of market players and preventing the entry into the field of those who are unfit, the PCA now relies entirely on competition with all its wastefulness and inefficiency to do the weeding out, in its naive belief in survival of the fittest. The result can very well be a repeat of 1982 when free enterprise degenerated into a "free-for-all," resulting in cut-throat competition, underselling, the production of inferior products and the like, which badly affected the foreign trade performance of the coconut industry. Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other statutory provisions, particularly those of P.D. No. 1644, to wit: Sec. 1. The Philippine Coconut Authority shall have full power and authority to regulate the marketing and export of copra, coconut oil and their by-products, in furtherance of the steps being taken to rationalize the coconut oil milling industry. Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine Coconut Authority may initiate and implement such measures as may be necessary to attain the rationalization of the coconut oil milling industry, including, but not limited to, the following measures: (a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil and their byproducts; (b) Prescription of quality standards; (c) Establishment of maximum quantities for particular periods and particular markets; (d) Inspection and survey of export shipments through an independent international superintendent or surveyor. In the exercise of its powers hereunder, the Philippine Coconut Authority shall consult with, and be guided by, the recommendation of the coconut farmers, through corporations owned or controlled by them through the Coconut Industry Investment Fund and the private corporation authorized to be organized under Letter of Instructions No. 926. and the Revised Coconut Code (P.D. No. 1468), Art. II, 3, to wit: (m) Except in respect of entities owned or controlled by the Government or by the coconut farmers under Sections 9 and 10, Article III hereof, the Authority shall have full power and authority to regulate the production, distribution and utilization of all subsidized coconut-based products, and to require the submission of such reports or documents as may be deemed necessary by the Authority to ascertain whether the levy payments and/or subsidy claims are

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due and correct and whether the subsidized products are distributed among, and utilized by, the consumers authorized by the Authority. The dissent seems to be saying that in the same way that restrictions on entry into the field were imposed in 1982 and then relaxed in 1987, they can be totally lifted now without prejudice to reimposing them in the future should it become necessary to do so. There is really no renunciation of the power to regulate, it is claimed. Trimming down of PCA's function to registration is not an abdication of the power to regulate but is regulation itself. But how can this be done when, under Resolution No. 018-93, the PCA no longer requires a license as condition for the establishment or operation of a plant? If a number of processing firms go to areas which are already congested, the PCA cannot stop them from doing so. If there is overproduction, the PCA cannot order a cut back in their production. This is because the licensing system is the mechanism for regulation. Without it the PCA will not be able to regulate coconut plants or mills. In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy of free enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red tape" as justification for abolishing the licensing system. There can be no quarrel with the elimination of "unnecessary red tape." That is within the power of the PCA to do and indeed it should eliminate red tape. Its success in doing so will be applauded. But free enterprise does not call for removal of "protective regulations." Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic 18 19 principle. Although the present Constitution enshrines free enterprise as a policy, it nonetheless reserves to the government the power to intervene whenever necessary to promote the general welfare. This is clear from the following provisions of Art. XII of the Constitution which, so far as pertinent, state: Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands. Sec. 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. (Emphasis added). At all events, any change in policy must be made by the legislative department of the government. The regulatory system has been set up by law. It is beyond the power of an administrative agency to dismantle it. Indeed, petitioner charges the PCA of seeking to render moot a case filed by some of its members questioning the grant of licenses to certain parties by adopting the resolution in question. It is alleged that members of petitioner complained to the court that the PCA had authorized the establishment and operation of new plants in areas which were already crowded, in violation of its Administrative Order No. 002, series of 1991. In response, the Regional Trial Court issued a writ of preliminary injunction, enjoining the PCA from issuing licenses to the private respondent in that case. These allegations of petitioner have not been denied here. It would thus seem that instead of defending its decision to allow new entrants into the field against petitioner's claim that the PCA decision violated the guidelines in Administrative Order No. 002, series of 1991, the PCA adopted the resolution in question to render the case moot. In so doing, the PCA abdicated its function of regulation and left the

field to untrammeled competition that is likely to resurrect the evils of cut-throat competition, underselling and overproduction which in 1982 required the temporary closing of the field to new players in order to save the industry. The PCA cannot rely on the memorandum of then President Aquino for authority to adopt the resolution in question. As already stated, what President Aquino approved in 1988 was the establishment and 20 operation of new DCN plants subject to the guidelines to be drawn by the PCA. In the first place, she could not have intended to amend the several laws already mentioned, which set up the regulatory system, by a mere memoranda to the PCA. In the second place, even if that had been her intention, her act would be without effect considering that, when she issued the memorandum in question on 21 February 11, 1988, she was no longer vested with legislative authority. WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all certificates of registration issued under it are hereby declared NULL and VOID for having been issued in excess of the power of the Philippine Coconut Authority to adopt or issue. SO ORDERED. Narvasa, C.J., Regalado, Davide, Jr., Puno, Kapunan, Francisco, Panganiban and Martinez, JJ., concur. Separate Opinions ROMERO, J., dissenting; The past decade, a distinct worldwide trend towards economic deregulation has been evident. Both developed and developing countries have seriously considered, and extensively adopted, various measures for this purpose. The Philippines has been no exception. To this end, the Philippine Coconut Authority (PCA) issued Board Resolution No. 018-93 (PCA-BR No 1 018-93) dated March 24, 1993, deregulating the coconut processing plant industry. The Association of Philippine Desiccators (APCD) has filed this instant petition for prohibition and mandamus under Rule 65 of the Rules of Court seeking the annulment of said resolution. APCD questions the validity of PCA-BR No. 018-93 for being violative of the principle of non-delegability of legislative power. It contends that in issuing the resolution deregulating the coconut industry, the PCA exercised legislative discretion, which has not been delegated to it by Congress. It adds that when PCA 2 deregulated the coconut industry, it ran counter to the very laws which mandated it to regulate and rationalize the industry. We see no merit in this contention. PCA's authority to issue PCA-BR No. 018-93 is clearly provided in Section 3(a) of P.D. No. 232, reading as follows: . . . To formulate and adopt a general program of development for the coconut and other palm oil industry.

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Similar grants of authority were made in subsequent amendatory laws.

1987 Constitution was designed to meet, not only contemporary events, but also future and unknown 23 circumstances. It is worth mentioning that the PCA, after conducting its studies, adopted the policy of deregulation to further enhance the coconut industry competition, since any continuation of the restrictive regulation in 24 the industry would have detrimental effects. This is in consonance with the constitutional mandate 25 that the State must "adopt measures that help make them (locally produced goods) competitive." Undoubtedly, an "agency, in light of changing circumstances, is free to alter interpretative and policy views reflected in regulations construing an underlying statute, so long as any changed construction of the statute is consistent with express congressional intent or embodies a permissible reading of the 26 statute." Furthermore, the Constitution is cognizant of the realities of global interdependency, as it requires the pursuit of "a trade policy that serves the general welfare and utilizes all forms and arrangements of 27 exchanges on the basis of equality and reciprocity." In sum, the policy of deregulation must be determined by the circumstances prevailing in a certain 28 situation. As we have stressed in the past, this Court is only concerned with the question of authority, not the wisdom of the measure involved which falls within the province of the Legislature. The ponencia presents the issue: whether it is within the power of the PCA to renounce the power to regulate implicit in the law creating it (P.D. No. 232). (It is to be pointed out that this issue was not included in the Assignment of Errors of Petitioner). Underlying this formulation is the assumption/admission that PCA has the power to regulate the coconut industry, as in fact the power is bestowed upon it by its organic act, P.D. No. 232, viz. "to promote the rapid integrated development and growth of the coconut and other palm oils in industry in all its aspects and to ensure that the coconut farmers become direct participants in, and beneficiaries of, such development and growth." Its broad mandate is "to formulate and adopt a general program of development for the coconut and other palm oils industry." It avers that this "legislative scheme" was disregarded when the PCA adopted on March 24, 1993 assailed Resolution which is effect liberalized the registration and licensing requirements for granting of permits to operate new coconut plants. But this was effected pursuant to the October 1987 PCA Board Resolution laying down the policy of deregulating the industry and authorizing creation of additional desiccated coconut plants. the the 23, the

In this regard, we have ruled that legislative discretion, as to the substantive contents of a law, cannot be delegated. What may be delegated is the discretion to determine how the law is to be enforced, not what the law should be, a prerogative of the legislature which it can neither abdicate nor surrender to 4 the delegate. The principle is based on the separation and allocation of powers among the three 5 departments of government. Thus, there are two accepted tests to determine whether or not there is a valid delegation of legislative power, namely, the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or limitations in the law to map out the boundaries of the delegate's authority and 6 prevent the delegation from running amiss. We have accepted as sufficient standards "interest of law and order," "adequate and efficient 8 9 10 11 instruction," "public interest," "justice and equity," "public convenience and welfare," "simplicity, 12 13 economy and efficiency," "standardization and regulation of medical education," and "fair and 14 equitable employment practices." Consequently, the standard may be expressed or implied. In the former, the non delegation objection is easily met. The standard though does not have to be spelled out 15 but need only be implied from the policy and purpose of the act considered as a whole. It may also be 16 found in other statutes on the same subject as that of the challenged legislation. In no uncertain terms must it be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying out the provisions of a law. The power of administrative agencies is confined to implementing the law or putting it into effect. Corollary to this 17 guideline is that administrative regulation cannot extend the law and amend a legislative enactment. In the instant case, we believe that the PCA did not overstep the limits of its power in issuing the assailed resolution. We need not belabor the point that one of the economic goals of our country is the 18 increased productivity of goods and services provided by the nation for the benefit of the people, since from a purely economic standpoint, the increase in agricultural productivity is of fundamental 19 importance. Considering the responsibilities and powers assigned to the PCA, as well as its underlying policy, namely, that "the economic well-being of a major part of the population depends to a large extent on the viability of the industry and its improvement in the areas of production, processing and marketing," the irresistible conclusion is that PCA-BR No. 018-93 is a valid exercise of delegated legislation by the PCA. Such resolution is in harmony with the objectives sought to be achieved by the laws regarding the coconut industry, particularly "to promote accelerated growth and development of the coconut and other 20 palm oil industry," and "rapid integrated development and growth of the coconut and other palm oil 21 industry." These are sufficient standards to guide the PCA. Thus, measures to achieve these policies are better left to the administrative agencies tasked with implementing them. It must be stressed that with increasing global trade and business and major upheavals in technology and communications, the time has come for administrative policies and regulations to adapt to ever22 changing business needs rather than to accommodate traditional acts of the legislature. Even the
7

As with any administrative agency established to promote the growth and development of any industry, the PCA has considerable latitude to adopt policies designed to accelerate the attainment of this objective and corollarily, to lay down rules and regulations to implement the same. We can take judicial notice of the fact that during its 25 years of existence, the PCA has achieved enough experience and expertise to introduce measures which shall ensure the dominant role of the crop as a major dollarproducing industry, including the manipulation of market forces to our comparative advantage, certainly an area beyond the Court's ken. Hence, guided by guidelines already laid down, it responded to regional developments by:

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(1) taking cognizance of the overproduction in the industry and curtailing the expansion of coconut processing plants in 1982, within reasonable limits and with safeguards (hence the issuance of Executive Order Nos. 826 on August 28, 1982 and No. 854 on December 6, 1982); (2) five years later, responding to the demand for desiccated coconut products in the world market, liberalized its former policy by deregulating the industry and authorizing the creation of additional desiccated coconut plants in 1987; (3) complementing and supplementing (2), by easing registration and licensing requirements in 1993. It bears repeating that the above measures were not taken arbitrarily but in careful compliance with guidelines incorporated in the Executive Orders and subject to the favorable recommendation of the Secretary of Agriculture and the approval of the President. The crux of the ponencia is that, in the process of opening doors to foreign markets, the PCA " limited itself to merely monitoring their volumes of production and administration of quality standards, in effect abdicating its role and leaving it almost totally to market forces to define how the industry will develop." Actually, the relevant provisions in the disputed resolution reads: Resolved further, that the PCA shall limit itself only to simply registering the aforementioned coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards with the corresponding service fees/charges . For the sake of clarity and accuracy, it is to be stressed that the PCA did not limit itself "merely to monitoring . . ." as the ponencia states, but to "registering the . . . processors for the purpose of monitoring their volumes of production and administration of quality standards. . . ." In the actual words of the Resolution, the PCA recognizes its principal function of registration so as to be able to monitor the production and administer quality standards, both objectives of which are not merely nominal or minimal, but substantial, even vital, aspects of the power to regulate. Put differently, there is no renunciation of the power to regulate, for the regulation is essentially recognized and accomplished through the registration function which enables the PCA to keep track of the volume of production and the observance of quality standards by new entrants into the industry. In sum, trimming down its functions to registration is not an abdication of the power to regulate but is regulation itself. If the PCA, in light of the crucial developments in the regional and domestic coconut industry decides to open wide its doors, allow the free entry of other players and the interplay of competitive forces to shape the configuration of the industry, who are we to declare such policy as one characterized by "wastefulness and inefficiency . . . based on its naive faith in survival of the fittest." Is not this a blatant incursion by the Court into the economic arena which is better left to the administrative agency precisely tasked to promote the growth of the industry, through the exercise of its studied discretion? To be sure, those operators already in the field, such as the petitioner members of the Association of Philippine Coconut Desiccators, are expected to vigorously protest and work for the nullity of what they perceive as an obnoxious, life threatening policy. But instead of opposing what the PCA views as a timely, well-

considered move, the healthy competition should spur them to improving their product and elevating the standards they have imposed on themselves. If, in the course of its monitoring which is a piece of the regulatory function, the PCA should detect a violation of its guidelines that would result in a lowering of the quality of the product, or unfairness to other players, surely, it is not powerless to impose sanctions, as categorically provided in P.D. 1469, P.D. 1644, Adm. Order No. 003, Series of 1981 and Adm. Order No. 002, Series of 1991. Any administrative agency is empowered to establish its implementing rules, together with sanctions guaranteed to ensure the observance of such rules, else it would be a mere "toothless" entity. The ponencia prognosticates, "The result can very well be a repeat of 1982 when free enterprise degenerated into a 'free-for-all,' resulting in cutthroat competition, underselling, the production of inferior products and the like, which badly affected the foreign trade performance of our coconut industry." Are we not encroaching on legislative domain in questioning the wisdom of the action taken by the PCA which was accorded a broad mandate by the Congress? Moreover, let us bear in mind that during those "abnormal times," forces other than merely economic, e.g. political, dominated the economy effectively supporting, even favoring, destructive capitalistic monopolies and, in the process suppressing healthy competition. Not to forget, too, that we cannot close our eyes and ignore the world-wide trend towards globalization in the economy, as in other fields, as in fact the Court recognized this economic reality in its decision in the Oil Deregulation Case. With the unrelenting march of globalization in our economy, the Philippines must find its market niches and be able to adapt to these inevitable changes, for the Asia-Pacific rim is bound to become a truly dynamic region in the economic, political and cultural arenas in the coming millennium. ACCORDINGLY, the petition should be DISMISSED. Bellosillo, Melo, Vitug, Quisumbing and Purisima, JJ., dissent. Separate Opinions ROMERO, J., dissenting; The past decade, a distinct worldwide trend towards economic deregulation has been evident. Both developed and developing countries have seriously considered, and extensively adopted, various measures for this purpose. The Philippines has been no exception. To this end, the Philippine Coconut Authority (PCA) issued Board Resolution No. 018-93 (PCA-BR No 1 018-93) dated March 24, 1993, deregulating the coconut processing plant industry. The Association of Philippine Desiccators (APCD) has filed this instant petition for prohibition and mandamus under Rule 65 of the Rules of Court seeking the annulment of said resolution.

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APCD questions the validity of PCA-BR No. 018-93 for being violative of the principle of non-delegability of legislative power. It contends that in issuing the resolution deregulating the coconut industry, the PCA exercised legislative discretion, which has not been delegated to it by Congress. It adds that when PCA 2 deregulated the coconut industry, it ran counter to the very laws which mandated it to regulate and rationalize the industry. We see no merit in this contention. PCA's authority to issue PCA-BR No. 018-93 is clearly provided in Section 3(a) of P.D. No. 232, reading as follows: . . . To formulate and adopt a general program of development for the coconut and other palm oil industry. Similar grants of authority were made in subsequent amendatory laws.
3

Considering the responsibilities and powers assigned to the PCA, as well as its underlying policy, namely, that "the economic well-being of a major part of the population depends to a large extent on the viability of the industry and its improvement in the areas of production, processing and marketing," the irresistible conclusion is that PCA-BR No. 018-93 is a valid exercise of delegated legislation by the PCA. Such resolution is in harmony with the objectives sought to be achieved by the laws regarding the coconut industry, particularly "to promote accelerated growth and development of the coconut and other 20 palm oil industry," and "rapid integrated development and growth of the coconut and other palm oil 21 industry." These are sufficient standards to guide the PCA. Thus, measures to achieve these policies are better left to the administrative agencies tasked with implementing them. It must be stressed that with increasing global trade and business and major upheavals in technology and communications, the time has come for administrative policies and regulations to adapt to ever22 changing business needs rather than to accommodate traditional acts of the legislature. Even the 1987 Constitution was designed to meet, not only contemporary events, but also future and unknown 23 circumstances. It is worth mentioning that the PCA, after conducting its studies, adopted the policy of deregulation to further enhance the coconut industry competition, since any continuation of the restrictive regulation in 24 the industry would have detrimental effects. This is in consonance with the constitutional mandate 25 that the State must "adopt measures that help make them (locally produced goods) competitive." Undoubtedly, an "agency, in light of changing circumstances, is free to alter interpretative and policy views reflected in regulations construing an underlying statute, so long as any changed construction of the statute is consistent with express congressional intent or embodies a permissible reading of the 26 statute." Furthermore, the Constitution is cognizant of the realities of global interdependency, as it requires the pursuit of "a trade policy that serves the general welfare and utilizes all forms and arrangements of 27 exchanges on the basis of equality and reciprocity." In sum, the policy of deregulation must be determined by the circumstances prevailing in a certain 28 situation. As we have stressed in the past, this Court is only concerned with the question of authority, not the wisdom of the measure involved which falls within the province of the Legislature. The ponencia presents the issue: whether it is within the power of the PCA to renounce the power to regulate implicit in the law creating it (P.D. No. 232). (It is to be pointed out that this issue was not included in the Assignment of Errors of Petitioner). Underlying this formulation is the assumption/admission that PCA has the power to regulate the coconut industry, as in fact the power is bestowed upon it by its organic act, P.D. No. 232, viz. "to promote the rapid integrated development and growth of the coconut and other palm oils in industry in all its aspects and to ensure that the coconut farmers become direct participants in, and beneficiaries of, such development and growth." Its broad mandate is "to formulate and adopt a general program of development for the coconut and other palm oils industry." It avers that this "legislative scheme" was disregarded when the PCA adopted on March 24, 1993 the assailed Resolution which is effect liberalized the registration and licensing requirements for the granting of permits to operate new coconut plants. But this was effected pursuant to the October 23,

In this regard, we have ruled that legislative discretion, as to the substantive contents of a law, cannot be delegated. What may be delegated is the discretion to determine how the law is to be enforced, not what the law should be, a prerogative of the legislature which it can neither abdicate nor surrender to 4 the delegate. The principle is based on the separation and allocation of powers among the three 5 departments of government. Thus, there are two accepted tests to determine whether or not there is a valid delegation of legislative power, namely, the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or limitations in the law to map out the boundaries of the delegate's authority and 6 prevent the delegation from running amiss. We have accepted as sufficient standards "interest of law and order," "adequate and efficient 8 9 10 11 instruction," "public interest," "justice and equity," "public convenience and welfare," "simplicity, 12 13 economy and efficiency," "standardization and regulation of medical education," and "fair and 14 equitable employment practices." Consequently, the standard may be expressed or implied. In the former, the non delegation objection is easily met. The standard though does not have to be spelled out 15 but need only be implied from the policy and purpose of the act considered as a whole. It may also be 16 found in other statutes on the same subject as that of the challenged legislation. In no uncertain terms must it be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying out the provisions of a law. The power of administrative agencies is confined to implementing the law or putting it into effect. Corollary to this 17 guideline is that administrative regulation cannot extend the law and amend a legislative enactment. In the instant case, we believe that the PCA did not overstep the limits of its power in issuing the assailed resolution. We need not belabor the point that one of the economic goals of our country is the 18 increased productivity of goods and services provided by the nation for the benefit of the people, since from a purely economic standpoint, the increase in agricultural productivity is of fundamental 19 importance.
7

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1987 PCA Board Resolution laying down the policy of deregulating the industry and authorizing the creation of additional desiccated coconut plants. As with any administrative agency established to promote the growth and development of any industry, the PCA has considerable latitude to adopt policies designed to accelerate the attainment of this objective and corollarily, to lay down rules and regulations to implement the same. We can take judicial notice of the fact that during its 25 years of existence, the PCA has achieved enough experience and expertise to introduce measures which shall ensure the dominant role of the crop as a major dollarproducing industry, including the manipulation of market forces to our comparative advantage, certainly an area beyond the Court's ken. Hence, guided by guidelines already laid down, it responded to regional developments by: (1) taking cognizance of the overproduction in the industry and curtailing the expansion of coconut processing plants in 1982, within reasonable limits and with safeguards (hence the issuance of Executive Order Nos. 826 on August 28, 1982 and No. 854 on December 6, 1982); (2) five years later, responding to the demand for desiccated coconut products in the world market, liberalized its former policy by deregulating the industry and authorizing the creation of additional desiccated coconut plants in 1987; (3) complementing and supplementing (2), by easing registration and licensing requirements in 1993. It bears repeating that the above measures were not taken arbitrarily but in careful compliance with guidelines incorporated in the Executive Orders and subject to the favorable recommendation of the Secretary of Agriculture and the approval of the President. The crux of the ponencia is that, in the process of opening doors to foreign markets, the PCA " limited itself to merely monitoring their volumes of production and administration of quality standards , in effect abdicating its role and leaving it almost totally to market forces to define how the industry will develop." Actually, the relevant provisions in the disputed resolution reads: Resolved further, that the PCA shall limit itself only to simply registering the aforementioned coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards with the corresponding service fees/charges . For the sake of clarity and accuracy, it is to be stressed that the PCA did not limit itself "merely to monitoring . . ." as the ponencia states, but to "registering the . . . processors for the purpose of monitoring their volumes of production and administration of quality standards. . . ." In the actual words of the Resolution, the PCA recognizes its principal function of registration so as to be able to monitor the production and administer quality standards, both objectives of which are not merely nominal or minimal, but substantial, even vital, aspects of the power to regulate. Put differently, there is no renunciation of the power to regulate, for the regulation is essentially recognized and

accomplished through the registration function which enables the PCA to keep track of the volume of production and the observance of quality standards by new entrants into the industry. In sum, trimming down its functions to registration is not an abdication of the power to regulate but is regulation itself. If the PCA, in light of the crucial developments in the regional and domestic coconut industry decides to open wide its doors, allow the free entry of other players and the interplay of competitive forces to shape the configuration of the industry, who are we to declare such policy as one characterized by "wastefulness and inefficiency . . . based on its naive faith in survival of the fittest." Is not this a blatant incursion by the Court into the economic arena which is better left to the administrative agency precisely tasked to promote the growth of the industry, through the exercise of its studied discretion? To be sure, those operators already in the field, such as the petitioner members of the Association of Philippine Coconut Desiccators, are expected to vigorously protest and work for the nullity of what they perceive as an obnoxious, life threatening policy. But instead of opposing what the PCA views as a timely, wellconsidered move, the healthy competition should spur them to improving their product and elevating the standards they have imposed on themselves. If, in the course of its monitoring which is a piece of the regulatory function, the PCA should detect a violation of its guidelines that would result in a lowering of the quality of the product, or unfairness to other players, surely, it is not powerless to impose sanctions, as categorically provided in P.D. 1469, P.D. 1644, Adm. Order No. 003, Series of 1981 and Adm. Order No. 002, Series of 1991. Any administrative agency is empowered to establish its implementing rules, together with sanctions guaranteed to ensure the observance of such rules, else it would be a mere "toothless" entity. The ponencia prognosticates, "The result can very well be a repeat of 1982 when free enterprise degenerated into a 'free-for-all,' resulting in cutthroat competition, underselling, the production of inferior products and the like, which badly affected the foreign trade performance of our coconut industry." Are we not encroaching on legislative domain in questioning the wisdom of the action taken by the PCA which was accorded a broad mandate by the Congress? Moreover, let us bear in mind that during those "abnormal times," forces other than merely economic, e.g. political, dominated the economy effectively supporting, even favoring, destructive capitalistic monopolies and, in the process suppressing healthy competition. Not to forget, too, that we cannot close our eyes and ignore the world-wide trend towards globalization in the economy, as in other fields, as in fact the Court recognized this economic reality in its decision in the Oil Deregulation Case. With the unrelenting march of globalization in our economy, the Philippines must find its market niches and be able to adapt to these inevitable changes, for the Asia-Pacific rim is bound to become a truly dynamic region in the economic, political and cultural arenas in the coming millennium. ACCORDINGLY, the petition should be DISMISSED. Bellosillo, Melo, Vitug, Quisumbing and Purisima, JJ., dissent. Footnotes

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Republic SUPREME Manila SECOND DIVISION G.R. No. 129093

of

the

Philippines COURT

As a result of this resolution of denial, respondent Calvento filed a complaint for declaratory relief with prayer for preliminary injunction and temporary restraining order. In the said complaint, respondent Calvento asked the Regional Trial Court of San Pedro Laguna, Branch 93, for the following reliefs: (1) a preliminary injunction or temporary restraining order, ordering the defendants to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon. Municipal Mayor Calixto R Cataquiz to issue a business permit for the operation of a lotto outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995. On February 10, 1997, the respondent judge, Francisco Dizon Pao, promulgated his decision enjoining the petitioners from implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995. The dispositive portion of said decision reads: WHEREFORE, premises considered, defendants, their agents and representatives are hereby enjoined from implementing or enforcing resolution or kapasiyahan blg. 508, T. 1995 of the Sangguniang Panlalawigan ng Laguna prohibiting the operation of the lotto in the province of Laguna. SO ORDERED.4 Petitioners filed a motion for reconsideration which was subsequently denied in an Order dated April 21, 1997, which reads: Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and the Sangguniang Panlalawigan of Laguna, thru counsel, with the opposition filed by plaintiff's counsel and the comment thereto filed by counsel for the defendants which were duly noted, the Court hereby denies the motion for lack of merit. SO ORDERED.5

August 30, 2001

HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and HON. CALIXTO CATAQUIZ, petitioners, vs. HON. FRANCISCO DIZON PAO and TONY CALVENTO, respondents. QUISUMBING, J.: For our resolution is a petition for review on certiorari seeking the reversal of the decision 1 dated February 10, 1997 of the Regional Trial Court of San Pedro, Laguna, Branch 93, enjoining petitioners from implementing or enforcing Kapasiyahan Bilang 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna and its subsequent Order 2 dated April 21, 1997 denying petitioners' motion for reconsideration. On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for a mayor's permit to open the lotto outlet. This was denied by Mayor Cataquiz in a letter dated February 19, 1996. The ground for said denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T. 1995 which was issued on September 18, 1995. The ordinance reads: ISANG KAPASIYAHAN TINUTUTULAN ANG MGA "ILLEGAL GAMBLING" LALO NA ANG LOTTO SA LALAWIGAN NG LAGUNA SAPAGKA'T, ang sugal dito sa lalawigan ng Laguna ay talamak na;

On May 23, 1997, petitioners filed this petition alleging that the following errors were committed by the respondent trial court: I

SAPAGKA'T, ang sugal ay nagdudulot ng masasamang impluwensiya lalo't higit sa mga kabataan; KUNG KAYA'T DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at Kgg. Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano at buong pagkakaisang sinangayunan ng lahat ng dumalo sa pulong; II IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano mang uri ng sugal dito sa lalawigan ng Laguna lalo't higit ang Lotto; IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang pinuno ng Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-ibayuhin ang pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng Laguna lalo na ang "Jueteng".3 THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY THE PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR PROGRAM MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR OFFICES, PRIOR CONSULTATION AND APPROVAL BY THE LOCAL GOVERNMENT UNITS CONCERNED AND OTHER CONCERNED SECTORS IS REQUIRED. THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE SANGGUNIANG PANLALAWIGAN OF LAGUNA PROHIBITING THE OPERATION OF THE LOTTO IN THE PROVINCE OF LAGUNA.

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Petitioners contend that the assailed resolution is a valid policy declaration of the Provincial Government of Laguna of its vehement objection to the operation of lotto and all forms of gambling. It is likewise a valid exercise of the provincial government's police power under the General Welfare Clause of Republic Act 7160, otherwise known as the Local Government Code of 1991.6 They also maintain that respondent's lotto operation is illegal because no prior consultations and approval by the local government were sought before it was implemented contrary to the express provisions of Sections 2 (c) and 27 of R.A. 7160.7 For his part, respondent Calvento argues that the questioned resolution is, in effect, a curtailment of the power of the state since in this case the national legislature itself had already declared lotto as legal and permitted its operations around the country.8 As for the allegation that no prior consultations and approval were sought from the sangguniang panlalawigan of Laguna, respondent Calvento contends this is not mandatory since such a requirement is merely stated as a declaration of policy and not a self-executing provision of the Local Government Code of 1991.9 He also states that his operation of the lotto system is legal because of the authority given to him by the PCSO, which in turn had been granted a franchise to operate the lotto by Congress.10 The Office of the Solicitor General (OSG), for the State, contends that the Provincial Government of Laguna has no power to prohibit a form of gambling which has been authorized by the national government. 11 He argues that this is based on the principle that ordinances should not contravene statutes as municipal governments are merely agents of the national government. The local councils exercise only delegated legislative powers which have been conferred on them by Congress. This being the case, these councils, as delegates, cannot be superior to the principal or exercise powers higher than those of the latter. The OSG also adds that the question of whether gambling should be permitted is for Congress to determine, taking into account national and local interests. Since Congress has allowed the PCSO to operate lotteries which PCSO seeks to conduct in Laguna, pursuant to its legislative grant of authority, the province's Sangguniang Panlalawigan cannot nullify the exercise of said authority by preventing something already allowed by Congress. The issues to be resolved now are the following: (1) whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a mayor's permit based thereon are valid; and (2) whether prior consultations and approval by the concerned Sanggunian are needed before a lotto system can be operated in a given local government unit. The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a mayor's permit for the operation of a lotto outlet in favor of private respondent. According to the mayor, he based his decision on an existing ordinance prohibiting the operation of lotto in the province of Laguna. The ordinance, however, merely states the "objection" of the council to the said game. It is but a mere policy statement on the part of the local council, which is not self-executing. Nor could it serve as a valid ground to prohibit the operation of the lotto system in the province of Laguna. Even petitioners admit as much when they stated in their petition that: 5.7. The terms of the Resolution and the validity thereof are express and clear. The Resolution is a policy declaration of the Provincial Government of Laguna of its vehement opposition and/or objection to the operation of and/or all forms of gambling including the Lotto operation in the Province of Laguna.12 As a policy statement expressing the local government's objection to the lotto, such resolution is valid. This is part of the local government's autonomy to air its views which may be contrary to that of the national government's. However, this freedom to exercise contrary views does not mean that local governments may actually enact

ordinances that go against laws duly enacted by Congress. Given this premise, the assailed resolution in this case could not and should not be interpreted as a measure or ordinance prohibiting the operation of lotto. The game of lotto is a game of chance duly authorized by the national government through an Act of Congress. Republic Act 1169, as amended by Batas Pambansa Blg. 42, is the law which grants a franchise to the PCSO and allows it to operate the lotteries. The pertinent provision reads: SECTION 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries, and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. This statute remains valid today. While lotto is clearly a game of chance, the national government deems it wise and proper to permit it. Hence, the Sangguniang Panlalawigan of Laguna, a local government unit, cannot issue a resolution or an ordinance that would seek to prohibit permits. Stated otherwise, what the national legislature expressly allows by law, such as lotto, a provincial board may not disallow by ordinance or resolution. In our system of government, the power of local government units to legislate and enact ordinances and resolutions is merely a delegated power coming from Congress. As held in Tatel vs. Virac,13 ordinances should not contravene an existing statute enacted by Congress. The reasons for this is obvious, as elucidated in Magtajas v. Pryce Properties Corp.14 Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred upon them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the state, and the corporation could not prevent it. We know of no limitation on the right so far as the corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature (citing Clinton vs. Ceder Rapids, etc. Railroad Co., 24 Iowa 455). Nothing in the present constitutional provision enhancing local autonomy dictates a different conclusion. The basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without

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meaning to detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax (citing Art. X, Sec. 5, Constitution), which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it. 15 Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy granted to local governments will necessarily be limited and confined within the extent allowed by the central authority. Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization". It does not make local governments sovereign within the state or an "imperium in imperio".16 To conclude our resolution of the first issue, respondent mayor of San Pedro, cannot avail of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of Laguna as justification to prohibit lotto in his municipality. For said resolution is nothing but an expression of the local legislative unit concerned. The Board's enactment, like spring water, could not rise above its source of power, the national legislature. As for the second issue, we hold that petitioners erred in declaring that Sections 2 (c) and 27 of Republic Act 7160, otherwise known as the Local Government Code of 1991, apply mandatorily in the setting up of lotto outlets around the country. These provisions state: SECTION 2. Declaration of Policy. . . . (c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government units, non-governmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions. SECTION 27. Prior Consultations Required. No project or program shall be implemented by government authorities unless the consultations mentioned in Section 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained; Provided, that occupants in areas where such projects are to be implemented shall not be evicted unless, appropriate relocation sites have been provided, in accordance with the provisions of the Constitution. From a careful reading of said provisions, we find that these apply only to national programs and/or projects which are to be implemented in a particular local community. Lotto is neither a program nor a project of the national government, but of a charitable institution, the PCSO. Though sanctioned by the national government, it is far fetched to say that lotto falls within the contemplation of Sections 2 (c) and 27 of the Local Government Code. Section 27 of the Code should be read in conjunction with Section 26 thereof.17 Section 26 reads: SECTION 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. - It shall be the duty of every national agency or government-owned or controlled corporation authorizing or involved in the planning and implementation of any project or program that may cause pollution,

climatic change, depletion of non-renewable resources, loss of crop land, range-land, or forest cover, and extinction of animal or plant species, to consult with the local government units, nongovernmental organizations, and other sectors concerned and explain the goals and objectives of the project or program, its impact upon the people and the community in terms of environmental or ecological balance, and the measures that will be undertaken to prevent or minimize the adverse effects thereof. Thus, the projects and programs mentioned in Section 27 should be interpreted to mean projects and programs whose effects are among those enumerated in Section 26 and 27, to wit, those that: (1) may cause pollution; (2) may bring about climatic change; (3) may cause the depletion of non-renewable resources; (4) may result in loss of crop land, range-land, or forest cover; (5) may eradicate certain animal or plant species from the face of the planet; and (6) other projects or programs that may call for the eviction of a particular group of people residing in the locality where these will be implemented. Obviously, none of these effects will be produced by the introduction of lotto in the province of Laguna. Moreover, the argument regarding lack of consultation raised by petitioners is clearly an afterthought on their part. There is no indication in the letter of Mayor Cataquiz that this was one of the reasons for his refusal to issue a permit. That refusal was predicated solely but erroneously on the provisions of Kapasiyahan Blg. 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna. In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz from enforcing or implementing the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang Panlalawigan of Laguna. That resolution expresses merely a policy statement of the Laguna provincial board. It possesses no binding legal force nor requires any act of implementation. It provides no sufficient legal basis for respondent mayor's refusal to issue the permit sought by private respondent in connection with a legitimate business activity authorized by a law passed by Congress. WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional Trial Court of San Pedro, Laguna enjoining the petitioners from implementing or enforcing Resolution or Kapasiyahan Blg. 508, T. 1995, of the Provincial Board of Laguna is hereby AFFIRMED. No costs. SO ORDERED. Republic SUPREME Manila SECOND DIVISION G.R. No. L-50320 March 30, 1988 PHILIPPINE APPAREL, WORKERS UNION, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION APPAREL PHILIPPINE APPAREL, INC., respondents. RESOLUTION of the Philippines COURT

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PARAS, J. : This is a classic case of dilatory tactics employed to obstruct justice. On July 31, 1981, this Court rendered Judgment in this case, the dispositive portion of which reads: WHEREFORE, the writ of certiorari is hereby granted, the decision of the respondent Commission is hereby set aside, and private respondent is hereby directed to pay, in addition to the increased allowance provided for in P.D. 1123, the negotiated wage increase of P0.80 daily effective April 1, 1977 as well as all other wage increases embodied in the collective bargaining agreement, to all covered employees. Costs against private respondent. This decision, is immediately executory (p. 178, rec.). A motion for reconsideration of the July 31, 1981 decision. this Court was filed by private respondent. Petitioner, through the Paterno D. Menzon Law Office, filed a comment thereon. This Court, on October 21, 1981 denied the aforesaid motion for reconsideration and the denial was declared final Entry of judgment was made on October 30, 1981 (Rollo, p. 244). On December 18, 1981 the respondent NLRC issued an order, through Labor Arbiter Antonio Tria Tirona, directing the Chief of the Research and Information Division of the NLRC to designate a SocioEconomic Analyst to compute the awards due the members of the petitioner union in accordance with the final disposition of this case. On January 10, 1983 petitioner flied an "Urgent Manifestation and Motion" claiming that despite its filing of a motion for execution dated November 12, 1981, a manifestation and motion dated February 10, 1982, and another manifestation and motion dated February 26, 1982, the execution arm of public respondent NLRC continued to fail to implement the decision of this Court. Petitioner prayed that those obstructing the implementation of the decision be declared in contempt, especially the president of Bagong Pilipino Philippine Apparel Workers' Union (BPPAWU) and private respondent PAI for circumventing the final decision of this Court by offering members of petitioner the amount of P500 each as full payment of their claims in the instant case. The respondent NLRC, in its Comment on petitioner's "Urgent Manifestation and Motion" explained that it could not issue a writ of execution because the actual or exact amounts of the various awards due the members of the petitioner union could not be determined. For that matter, even with the submission of the "Report of Examiner" prepared by the Research and Information Division of the NLRC, it was not possible for the NLRC to issue a writ of execution in full satisfaction of the judgment of this Court because said "Report of Examiner" did not include the computation of the amounts due for the months of May, June, November and December 1978, and January and February 1980 as the pertinent records covering those periods were not available at the time of the preparation of the Report. Adding confusion was the fact that even before the submission of the "Report of Examiner," private respondent PAI had already made payments in satisfaction of this Court's decision to some of the members of the petitioner union. Moreover, after the submission of the Reports, and notwithstanding its exception to the findings therein, private respondent PAI continued to make payments to the other members of the union.

Respondent PAI offered the payment to petitioner's counsel but the latter refused to accept the payment because the amount offered left some 88 members of the petitioner unpaid. Petitioner's counsel was willing to accept the money only as partial payment, but not as full payment as PAI wanted it to be. On October 27, 1983, this Court issued an order requiring private respondent PAI to comply fully with this Court's decision of July 31, 1981; to pay the members of the petitioner the amount of P695,413.17, with 10% thereof to be deducted as attorney's fees payable to the Menzon Law Office; to make available, within ten (10) days from notice thereof, to public respondent its payrolls corresponding to the unpaid periods, for the latter to prepare immediately a computation within thirty (30.1 days from receipt of such payrolls; and, thereafter, to pay members of petitioner the remaining backwages within ten (1 0) days from receipt of such computation. In that same order of October 27, 1983, the BPPAWU, Atty. Luis D. Flores and respondent Philippine Apparel, Inc. were adjudged guilty of contempt and were ordered to pay one thousand pesos (Pl,000) each within ten (10) days from notice thereof. The Court justified its ruling as follows: ...The judgment in this case has already become final and executory and as such the prevailing party as a matter of right is entitled to a writ of execution. What seems to be the problem in this case is that execution of the judgment cannot be had at the earliest possible time, since a computation of the amount due the members of petitioner must first be undertaken. The Report of the Examiner indicating the amount due them was submitted only after one and a half years, so that in the meantime, negotiations on how the judgment may be executed were made. It is the posture of the Paterno D. Menzon Law Office that the judgment cannot be negotiated, hence any act to subvert it is contemptuous. We agree, The attempts of the BPPAWU and its counsel and respondent company to render the decision of this Court meaningless by paying the backwages of the affected employees in a lesser amount clearly manifest a willful disregard on their part, of the authority of this Court as the final arbiter of cases brought to it. The series of acts by the BPPAWU from the outset, where they caused the 'Kapahintulutan' to be circulated and signed by workers declaring as invalid any acts of petitioner union and its counsel to the time they campaigned for the workers to receive the amount of P300.00 or P500.00 but with the concomitant obligation to release the company from any further liability showed disrespect for the administration of justice. The BPPAWU and its counsel cannot pretend that they are just being more protective to the employees when they encouraged them to receive the amount of P300.00 or P500.00. They know too well that said amount is much less than that to be received by the employees after computing all the backwages if the decision is executed. It would have been laudable had not the company pressed the workers to sign the quitclaims and release of which the BPPAWU cannot pretend to be unaware, for the payment could be taken as initial compliance with the judgment with the balance to be paid by the company when the final computation of the backwages has been finished and submitted by the Research and Information Division of the National Labor Relations Commission. Indeed, their questionable acts do not sit well with a desire to implement the decision of this Court. If the BPPAWU is really after the welfare of the

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employees, they will not leave any stone unturned to get the best for them by giving effect to the decision of this Court. In our decision, we have ordered the company to pay the negotiated wage increase of P0.80 daily effective April 1, 1977. As per petitioner's; computation, as may be gleaned from the urgent motion for issuance of a restraining order dated March 11, 1982, on backwages alone, not counting adjustments in overtime pay and other benefits, each employee is entitled to receive at the very least of Pl,248.00 (P0.80 x 26 working days x 12 months x 5 years from 1977 to 1982) [p. 281, recli If we shall include the backwages corresponding from January, 1983 to the present, the same will definitely be higher than Pl,248.00. Clearly, the offer by the company, supported by the BPPAWU to pay the employees in the amount of P300.00 or P500.00 as full and final payment is unjust to them, especially if We shall consider that some employees did not have the alternative but to accept the payment because they were in a tight financial condition. Such move cannot he sanctioned by this Court, for otherwise giving effect to the award of backwages would be left to the whim of the losing company taking advantage of the rationale behind the decision in Mercury Drug Co. v. CIR (L-23357, promulgated April 30, 1974, 56 SCRA 695), the quitclaims and releases signed by the employees are considered null and void. The employees are therefore still entitled to the difference between what is due them and the amount they received. Another important consideration is that if We countenance such act, the sanctity of the contract validly entered into by the parties which as in this case was interpreted by this Court, will be violated. Rollo, pp. 382-384) In their obvious attempts to derail the implementation of this Court's decision which had long become final and executory as far back as over six years ago on October 21, 1981, private respondents endlessly belabored this Court's ruling finding them guilty of contempt. Enough is enough. If there is anything that needs to be done in this case, it is the fun and complete implementation of this Court's final and executory decision. PREMISES CONSIDERED, We hereby enjoin the respondent NLRC to fully implement this Court's Resolution dated October 27,1983, with these modifications: (a) To pay members of the petitioner the partial backwages in the amount of P695,413.17 plus legal interest computed from the time the decision became final (October 21, 1981) until fully paid, with 10% thereof to be deducted as attorney's fees payable to the Menzon Law Office, less the amount that respondent company may have paid to some members of the petitioner union; and (b) The BPPAWU Atty. Luis D. Flores and respondent Philippine Apparel, Inc. are hereby adjudged guilty of contempt and are ordered to pay TEN THOUSAND (P10,000.00) PESOS each within ten (10) days from notice thereof. This resolution is immediately executory. SO ORDERED.

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